Forum: Local Power Struggles Become a National Issue

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The telecommunications industry continues to experienceevolutionary changes with respect to its technical, business and regulatory environments.

Advancements in technology -- especially in the digitalenvironment -- continue at a mind-boggling pace, with no indication of a slowdown. Thecircumstances present unique challenges that require the application of creative andresourceful problem-solving measures, tempered with a charge of social responsibility.

The present landscape is not exclusive to those working inthe industry. Those employed in the public sector face nearly identical challenges. Whatis becoming increasingly clear is the need for a genuine commitment by industry leadersand officials at all levels of government to establish mechanisms for meaningful dialogueand to find a means to work cooperatively.

Educating each other to better understand respective issuesand to reach compromises, so that the American public can realize the benefits that a trueand effective competitive telecommunications marketplace can offer, is attainable.

A positive initiative toward reaching this idealistic goalwas made by the Federal Communications Commission with the establishment of an FCC Stateand Local Government Advisory Committee. The committee's initial policy statement,submitted to the agency nearly a year ago, contained a number of essential principles,including: "State and local governments are trustees of the public'srights-of-way. Rights-of-way are real estate property rights of substantial economic valueand interest to local communities. The public has a right to fair compensation foroccupancy and use of its property."
It's apparent that this principle is affirmed by Section 253(c) of theTelecommunications Act of 1996, which states, "Nothing in this section affects theauthority of a state or local government to manage the public rights-of-way or to requirefair and reasonable compensation from telecommunications providers on a competitivelyneutral and nondiscriminatory basis."

This section was added by an overwhelming majority on thefloor of the U.S. House of Representatives prior to enactment, largely as a result of aconcerted and cooperative effort by numerous local-government organizations; theirrespective leaders and members; and local elected officials. At the time, it was realizedthat the effort to protect local-government rights would need to be continued, primarilyin FCC rulemaking proceedings and respective state legislatures.

Nowhere is the impact of the development of thetelecommunications industry greater than at the local level. Municipalities areexperiencing unparalleled demand for the use and permanent occupancy of publicrights-of-way (PROW), due largely to the growth of the telecommunications industry.

This circumstance encourages more intrusions in the PROW,which, in turn, lends itself to effects such as lessening the life expectancy of new andrecently resurfaced streets due to increased street cuts.

An essential need of the industry at this point in time isoccupancy of local PROW to accommodate industry infrastructure. Given the fact that thereis no viable alternative, the industry would be well-served to acknowledge thatrights-of-way are a finite community resource that have been required, that have beenimproved and that continue to be maintained by local governments on behalf of theircitizens.

It is rather incredulous that the industry -- primarilytelcos -- endeavors to alienate local-government officials by entering into activitiesthat demonstrate an unwillingness to accept the role and authority of local governments asaffirmed by the Telecommunications Act. Indeed, it appears that the industry isstrategically attempting to minimize the role of local governments in these matters.

The industry routinely petitions the FCC to pre-emptlocal-government authority in rulemaking proceedings, while at the same time continuing tointroduce industry-sponsored bills at the state level throughout the country, with theirprinciple aim being to obtain "rent-free" use of local PROW.

The ink had barely dried on the Telecommunications Act of1996 when a coalition of telcos in the state of Colorado successfully lobbied the statelegislature to enact Senate Bill 96-10 (SB 10) on April 12, 1996. This legislation affectsmunicipal authority in Colorado over use of the PROW by telecommunications providers,other than cable operators. In addition to limiting the sorts of taxes, fees or charges ofa monetary nature that may be collected for use of the PROW, the bill prohibits anyprovision of in-kind services.

Traditional local-government police powers have not beendiminished by SB 10, and a mechanism for a nominal amount of cost recovery to localgovernments is provided for. The resulting effects of the legislation, however, providefor rent-free use and occupancy of PROW by telecommunications providers, while largelylimiting compensation to local jurisdictions to fees and charges related to the grantingor administering of permits.

Given these factors, it is disingenuous that SB 10 enabledthe state to receive compensation for the use of its PROW, while prohibiting localgovernments to do so, other than previously described. Indeed, the Colorado Department ofTransportation will soon be offering access to interstate rights-of-way and other fixedassets for installation of above- and below-ground telecommunications infrastructure inexchange for in-kind services and/or cash compensation.

This is inconsistent with Section 253(c) of theTelecommunications Act, which states that both state and local governments have authorityin these matters. Fair and reasonable compensation for the use of the PROW is notexclusive to state government, as SB 10 provides.

It remains the position of the Colorado Municipal League,the Greater Metro Telecommunications Consortium and the City and County of Denver that SB10 appears to limit municipal authority beyond the limitations of the TelecommunicationsAct, and that it is inconsistent with certain articles of the Colorado Constitutionpertaining to local-government authority in these matters.

The repercussions of SB 10 continue to be felt by localgovernments throughout the country. Industry-sponsored state legislation similar to thatenacted in Colorado has either been passed, is pending, or has been introduced in themajority of states in this country.

On Sept. 23, 1997, the City and County of Denver passed anordinance requiring that all facilities-based telecommunications providers, other thanfranchised cable operators, obtain a private-use permit for PROW occupancy. City officialsacknowledged that the state legislature enacted a law that seeks to limit certainauthority of the city relative to the use of its PROW and to fees charged for that use.However, it was the position of the city that the state law was inconsistent with articlesof the state constitution and with Denver's Home Rule Charter. Litigation ensued,beginning with a temporary-restraining-order hearing in District Court on Jan. 28, 1998.

A number of telephone-service providers, led by theregional Bell operating company serving the area, have brought suit against the city,seeking declaratory, injunctive and monetary relief. The industry's position is thatthe ordinance violates Colorado statutory and constitutional law, including provisions ofSB 10, related to compensation and in-kind service requirements; and that application andreporting requirements are so burdensome that the industry is unable to comply.

The city's steadfast position remains that theordinance is consistent with Denver's City Charter, the state constitution and theaffirmations of local authority as granted by the Telecommunications Act.

This situation is not an isolated incident, as similarlitigation for nearly identical reasons is pending in district courts in various statesthroughout the country.

The industry regularly claims that local governments arebarriers to entry. These claims are not only nearsighted, but largely unsubstantiated.Local governments by and large realize what a tremendous economic-development tool anadvanced telecommunications infrastructure can provide, and they work diligently withindustry representatives to reasonably accommodate their needs while protectingcitizens' interests.

More than a year ago, officials from the City and County ofDenver began working with a wireless-industry task force to address issues concerning theimpact of the placement of cellular- and digital-wireless-telephone-serviceproviders' facilities in the community. The major issues were zoning and land use;tower proliferation; and frequency interference with police, fire and emergency signals.As opposed to being a "barrier to entry," city staff endeavored to work with theindustry task force and to draft an ordinance that was fair and reasonable to allconcerned parties.

The deregulated, competitive telecommunications environmentthat we have entered into is presently wrought with litigation arising largely fromdisputes as to the interpretation of the Telecommunications Act. Contentions overrights-of-way use and the ability of local governments to regulate and receivecompensation for that use are being impacted by the industry's campaign to limit andpre-empt local-government authority. It would be refreshing and welcomed if industry andlocal government made a commitment to reconcile differences by whatever means necessary.

What is ultimately at stake are not profit margins, but therealization of the tremendous social responsibility that all concerned parties share. Thefinal results of our actions will shape with who and how the American people communicateand access information well into the next century. This is worth a commitment tocompromise and constructive dialogue leading to resolution.

Dean Smits is director of the Office of Telecommunications,City and County of Denver.

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