01-21-2000 Workshop Meeting
The Cb of
Aventura
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2999 NE 191" Stred. Suite~OO Avmtura. FL 33180
City Commission
Workshop Meeting
January 21,20009:00 AM.
Executive Conference Room
AGENDA
1. Telecommunications Ordinance
2. A ventura Hospital
3. Founders Park Gazebo Design
4. Office Building Signage
5. A ventura Blvd Entrance Features
6. Mall Signage
7. Board Reports
Next Meeting -
February 25, 2000
Gun Free Zone
Defibrillators
Ojus Study (Commissioner Beskin)
HE 19ft' Street Crossing (Commissioner Cohen)
Library
This meeting is open to the public. In accordance with the Americans with Disabilities Act of 1990, all persons who are
disabled and who need special accommodations to participate in this meeting because of that disability should contact
the Office of the City Clerk, 305-466-8901, not later than two days prior to such proceeding.
..
402 341 6000 P.01/04
FRASER, STRYKER, MEUSEY, OLSON,
BOYER & BLOCHl P.C.
500 Energy Plaza
409 South 17"' Street
Omaha, NE 68 J 02-2663
(402) 34J-6000
Telecopier (402) 341-8290
PLEASE DELIVER IMMEDIATELY
TO:
Braulio Baez
Ty Keller
Bill Hunt
305/530-9417
214/443-2750
720/888-5134
FROM:
Julia Plucker Schwartz
DATE:
January 20, 2000
PAGES (including cover page): 4
COMMENTS:
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!f you experience any problem! in re:::eiving these pages, please -.::a.!: Deni.ic Bc;kmau at (402) 34] -6000, ex!. 213, ns
soon as possible.
CLIENT:
Level 3 Communications
RE;
.Genesis
CLIENT NO.;
10&7&/29754
Original to follow by mail:
,
No
CONFIDENTIALITY NOTE
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....n.' ......... ................... .Lw',::,,,,,
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rRASER & STRYKER
402 341 6000 P.02/B4
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FRAsER STRYKER MEUSEY OLSON BOYER & BLOCH, PC
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DlRBCT DIAL: 402978.s3043
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'niLEFAX 402.34/.8790
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Janl1lll')' 20, 2000
VM FACSIMILE (305) 530-9417
Mr, Braulio Baez
Leibowitz & Associates, P.A.
Suite 1450
Suntrust International Center
One Southeast Third Avenue
Miami, Florida 33131-1715
City of A ventura Mayor & City Commissioners
City of Aventura
2999 N.E. 191 Street
Aventura, Florida 33180
Re: City of Aventura's Proposed Telecommunications Ordinance
Dear Mayor, City Commissioners & Mr. Baez:
Our firm represents Level 3 Communications, LLC ("Level 3"), a competitive
local exchange provider installing a state-of-the-art fiber-optic network and offering
telecommunications services throughout the country, including the Miami metropolitan
area. It has come to our attention through meetings with other municipalities, that the
City of Aventura is considering a Telecommunications Ordinance. We have obtained a
copy of this Ordinance and understand that a workshop has been scheduled to discuss this
matter on Friday, Janl1lll')' 21, 2000.' .
Unfortunately, dl1e to the short notice of the workshop date, we are unable to
attend the meeting in person; however, after review of the Proposed Telecommunications
Ordinance, we offer the following comments:
· Section 3(B)(2)(a)-(d): The information required under the City's
application process is overly burdensome and includes information
deemed confidential and proprietaIy. Under Florida statute and
relevant caselaw, the City has authority to require a
telecommunications provider to comply with reasonable rules and
regulations to manage rights of way and collect fees. Fla. Stat.,
OMAHA
DENvER.
<'
~A~-20-2000 16:22
402 341 6000
FRASER & STRYKER
.9337.401. This gives the City authority to require a reasonable
application process and impose other reasonable requirements before
allowing a company to place facilities in City rights-of-way. Courts
have repeatedly disallowed burdensome applications and
requirements. Bell Atlantic-Marvland. Inc. v. Prince George's Countv,
49 F.Supp. 2d 805 (D.Md. May 24,1999); BellSouth
Telecommunications. Inc. v. Citv of Coral Snrinl!:s, 42 F.Supp. 2d
1304 (S.D. Fla. Ian 25. 1999). Some of the information requested in
these sections, such as facility design and location of potential routes,
is considered confidential and proprietary information and would
hinder competition if released to a municipality subject to open records
laws.
· Section S(F): Requiring an application fee in the amount oU 1 0.000
is excessive and in violation of Fla. Stat. 9337.401(3). Ifsuch an
amount is charged, it must be credited against the 1 % revenue
payments, as provided in the statute.
. Section 6: The inspection proviSions in this section seem overly
broad, considering that a municipality is only allowed inspection of a
company's records and books for verification of payments required
under the Ordinance. The Proposed Ordinance states that the City
shall have the right to inspect records "if such records relate to the
calculation of Franchisee fee payment or any other payments due to
the City or to proper performance of anv terms of a Franchise"
(emphasis added). Also, the annual reporting requirements, including
but not limited to, financial statements, maps, and lists of officers are
overly burdensome and beyond the scope of the City's authority.
Specifically, the information requested in subpart (E) is considered
confidential and proprietary information.
. Section 71H1; The last sentence of this section should be clarified to
state that upon abandonment of Facilities by Franchisee, the company
is no longer liable, financially or otherwise, for those Facilities if City
decides that alteration or removal is necessary.
. Section 1l! This section should be modified to allow transfer or
assignment to an affiliate. subsidiary, or purchaser of substantially all
assets of the company without the City's consent. Also, for reasons
noted above, the fee required in subpart (E) should be offset by the 1%
fee requirement, as required by Fla. Stat. Section 337.401(3).
. Section lUE); The second sentence in this subpart must include the
same language as provided in the first sentence regarding exception
from indemnification for acts of misconduct or negligence by the City,
P.03/04
r.;
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.
t JAN-20-2000 16:22
~ I . .
FRASER & STRYKER
402 341 6000 P.04/04
its officials, boards, Commission, Commission members, agent or
employees.
. Section 13: Ibis section should include an exemption from the
requirement of a security fund for those companies which can prove
financial viability or, at the minimum, should include only a security
fund for a stated period oftime (not over the entire length of the
Ordinance term).
. Section 14: The construction bond should be based on the cost of
construction. This section allows the City Manager to modify the
amount based on the "value" of the construction; this language should
be changed to reflect the cost-based standard.
Thank you for the opportunity to comment on the Proposed Telecommunications
Ordinance. We apologize for being unable to attend the workshop. Please call me at
(402) 978-5343 with any questions or to discuss the above comments. I would appreciate
being updated on the status of this Ordinance after the workshop.
Very Truly Yours,
qW1ct Sot~
Julia Plucxer Schwartz
FOR THE FIRM
co: Bill Hunt, Level 3 Communications, LLC
Ty Keller, Level 3 Communications, LLC
218669
TOTAL P.04
,
LEIBOWITZ & ASSOCIATES, P.A.
f
BRAULIO L. BAEZ
JOSEPH A. BEL!SLE
lLA L. f"ELD
MATTHEW L. LEIBOWITZ
CAROLINE A. SORET
SUITE 1450
SUNTRUST INTE:RNATrONAL CENTER
ONE SOUTHEAST THIRD AVENUE
MIAMI, FLORIDA 3313H715
TELEPHONE (305) 530-1322
TELECOPIER (305)530-9417
E-MAIL Broadfaw@aol.com
January 14,2000
VL4 HAND DELIVERY
Mr. Eric M. Soroka
City of A ventura
2999 NE 191" Street, Suite 500
Aventura, FL 33180
RE: City of A ventura. Prooosed Telecom Ordinance
Dear Eric:
Per the City's request, please find attached nine (9) notebooks relating to the issues under
discussion for the proposed Telecommunications Ordinance for the City of Aventura.
The first section of the notebook (tabs 1-4) includes the proposed Ordinance, the existing
BellSouth Franchise, a comparison thereof, and a summary of the issues that was previously
provided to the City.
Section 2 of the notebook includes the recently received industry comments (tabs 5-7) and
our evaluation and analysis (tab 8) which summarizes and responds to the industry's position.
The next section of the notebook includes background documentation, cases, and selected
federal and state statutes.
The remaining section deals with the simplified communications tax that is under negotiation
in Tallahassee. This section includes the latest, unofficial proposed amendments prepared by the
Florida League of Cities (tab 29) which was released on Tuesday of this week. This represents the
most current municipal position on the proposed legislation.
While we recognize that this issue is extremely complex, even for experts, we have tried,
wherever possible, to provide the material and analysis in a simplified manner. Nevertheless, we
are sure that there will be numerous questions to be answered at the workshop. If you or any of the
Commissioners have any questions in advance of the workshop, we will be happy to respond
E: \2000\A venlura\Lclters\ESoroka_ T e1ecomOrdinance_ 2.0 114. wpd
January 14,2000 (I :22pm)
,
I
Letter to Mr. Eric M. Soroka
January 14, 2000
Page 2
accordingly.
If you have any questions, please contact us.
Sincerely,
LJt 0)JjuW ff'iv' bmo cW6/~
Matthew L. Leibowitz
E:\2000\Aventura\l..etlcrs\ESoroka-TeleC01nOrdinance_2.0 114.wpd
lamlal)' 14,:WOO(I:22pm)
LEIBOWITZ & AsSOCIATES, P.A.
SUITE 1450, ONE SOUTHEAST THIRD AVENUE, MIAMI, FLORIDA 33131-1715. TELEPHONE (305) 530-1322
Tab No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
II.
12.
13.
14.
IS.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
T ABLE OF CONTENTS
PROPOSED ORDINANCE
City of Aventura Proposed Telecommunications Ordinance
City of Aventura Ordinance 97-02 (BellSouth Franchise)
Comparison of Ordinance 97-02 and Proposed Telecommunications Ordinance
Memorandum summarizing issues of proposed Telecommunications Ordinance
(9/26/99)
INDUSTRY COMMENTS AND L&A ANAL YSIS
Letter from BellSouth Telecommunications, Inc. (1/3/00) - Comments regarding
proposed Telecommunications Ordinance; Supplemental Comments (1/13/00)
Letter on behalf ofTCG - South Florida (1/3/00) - Comments to proposed
Telecommunications Ordinance
Letter on behalf of TCG- South Florida (1/7/00) - Supplemental Comments on
proposed Telecommunications Ordinance
Memorandum from Leibowitz & Associates, P.A. in response to industry
comments (1/12/00)
BACKGROUND MATERIALS AND CASES
Miami-Dade County Telecommunications Ordinance ( adopted by County
Commission 12/16/99)
Broward County Telecommunications Ordinance 1999-48 (enacted 9/7/99)
BellSoutb Telecommunications, Inc. v. Broward County - Motion for Temporary
Injunction and Complaint for Injunctive and Declaratory Relief (Broward Circuit
Court - Case No. 99020672)
Coral Springs Ordinance No. 97-114 (adopted 5/20/97)
Summary of Cases
BellSoutb Telecommunications. Inc. v. City of Coral SDrings. Florida
BellSoutb Telecommunications. Inc. v. Town of Palm Beach. Florida
Omnipoint Communications. Inc. v. Port Authoritv New York and New Jersev
Bell Atlantic -Maryland. Inc. v. Prince George's County. Marvland
AT&T Communications of Southwest. Inc. v. City of Dallas. Texas
TCG Detroit v. City of Dearbom. Michigan
In re: TCI Cablevision of Oakland County. Inc.
AT&T Communications of the Southwest. Inc. v. City of Austin. Texas
Santa Rosa County v. Gulf Power ComDanv
Florida Power Corooration v. Seminole County
SELECTED FEDERAL AND STATE STATUTES
Federal Pole Attachment Act, 47 USC Section 224
Federal Telecommunications Act of 1996, 47 USC Section 253
Selected Florida constitutional provisions and statutes
Tab No.
27.
28.
29.
30.
31.
SIMPLIFIED COMMUNICA nONS TAX
"Simplifying Communications Taxation in Florida: Overview and Issues,"
prepared by staff of the Florida House of Representatives Committee on Utilities
and Communications (October 1999)
Outline of presentation given by Miami-Dade County staff at Florida International
University ( 1999)
Florida League of Cities - unofficial proposed amendments to Chapter 337,
Florida Statutes, regarding rights-of-way (III 1/00)
Florida League of Cities - unofficial proposed amendments to Chapter 166,
Florida Statutes, regarding simplified communications tax (12/13/99)
Summary of simplified tax issues provided by Orange County staff
"
DRAFT - November 29,1999
CITY OF A VENTURA, FLORIDA
TELECOMMUNICA nONS ORDINANCE
Table of Contents
Section
Section 1. Title. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2. Definitions.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 3. Grant of Franchise. ................................................ 7
Section 4. Terms and Limits of Franchise. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 5. Franchise Fee Payments. ........................................... 1 a
Section 6. Review and Inspection of Books and Records. .......................... 14
Section 7. UndergroWld Installation; Relocation ................................. 17
Section 8. Use of Rights-Of-Way. ............................................ 19
Section 9. Written Acceptance by the Franchisee. ................................ 22
Section 10. Compliance with Other Laws; Police Power. ...........................22
Section II. Transfer of Control; Sale or Assignment. .............................. 22
Section 12. Insurance; Surety; Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 13. Security Fund. ...................................................27
Section 14. Construction Bond. ...............................................29
Section 15. Enforcement Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 16. Revocation or Termination of Franchise. ..............................32
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Section 17.
Section 18.
Section 19.
Section 20.
Section 21.
Section 22.
Section 23.
Section 24.
DRAFT - November 29, 1999
Renewal of Franchise. ............................................. 35
Municipal Ownership of Telecommunications Facility. . . . . . . . . . . . . . . . . . . . 36
Force Majeure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Repeal of Conflicting Ordinances. ...................................38
Savings. ....................................................... 38
Severability. ........................... . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Reservation of Rights. ......................................... 38&39
Effective Date. .................................................. 39
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ORDINANCE NO. 1999
AN ORDINANCE OF THE CITY OF A VENTURA, FLORIDA,
PROVIDING THE TERMS AND CONDITIONS FOR THE
ERECTING, CONSTRUCTING, MAINTAINING AND
OPERATING OF A TELECOMMUNICATIONS FACILITY IN,
ON, ACROSS, ABOVE OR IN ANY MANNER WHATSOEVER
USING THE CITY'S PUBLIC RIGHTS OF WAY FOR THE
PROVISION OF TELECOMMUNICATIONS SERVICE;
PROVIDING ASSURANCES THAT THE CITY'S PUBLIC
RIGHTS OF WAY ARE USED IN THE PUBLIC INTEREST;
PROVIDING FOR CONFORMANCE WITH APPLICABLE LAW;
PROVIDING FOR MUNICIPAL OWNERSHIP OF A
TELECOMMUNICATIONS SYSTEM; PROvIDING A SAVINGS
CLAUSE; PROVIDING FOR CODIFICATION; PROVIDING FOR
REPEAL OF ORDINANCES IN CONFLICT; PROVIDING AN
EFFECTIVE DATE.
WHEREAS, the City Commission of the City of A ventura has determined it is in the public
interest of the City to permit the placement of one (I) or more Telecommunications Systems or
Facilities in the Public Rights-Of-Way of the City; and
WHEREAS, it is the intent of the City Commission to encourage competition by providing
access to the Public Rights-Of-Way to the City on a nondiscriminatory basis; and
WHEREAS, Section 364.0361, Florida Statutes, requires that a local government treat
Telecommunications Companies in a nondiscriminatory manner when exercising the authority to
grant franchises to Telecommunications Companies; and
WHEREAS, it is the intention of the City Commission to recognize the interests of
Telecommunications Service Providers to install their facilities in Public Rights-Of- Way as ameans
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DRAFT - November 29, 1999
of promoting the use of such technology for the good of the people of the City; and
WHEREAS, it is the intent of the City Commission to exercise the City's authority over the
access ofT elecommunications Service Providers and their occupancy of the Public Rights-Of- Way;
and
WHEREAS, these policies are in complete accord with both the letter and the spirit of the
Communications Act of 1934, as amended; and
WHEREAS, the enactment of the Telecommunications Act of 1996, amendments to
applicable statutes of the State of Florida and developments in telecommunications technology and
services have resulted in an increase in the number of persons certified by the Florida Public Service
Commission to provide Telecommunications Services; and
WHEREAS, various Telecommunications Service Providers have requested the right to
occupy the Public Rights-Of-Way of the City for the purpose of installing, maintaining and operating
Telecommunications Systems or Facilities; and
WHEREAS, it is the City's intent to treat each Telecommunications Service Provider on a
competitively neutral and nondiscriminatory basis in granting telecommunications franchises for use
of the City's Public Rights-Of-Way; and
WHEREAS, it is the intent of the City to exercise its authority to impose fees and adopt
reasonable rules and regulations to the fullest extent allowed by Federal and State law.
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BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF A VENTURA,
FLORIDA, AS FOLLOWS:
Section 1. Title.
This Ordinance shall be known and may be cited as the City of Aventura
Telecommunications Ordinance.
Section 2. Definitions.
For the purpose of this Ordinance, the following terms, phrases, words and derivations shall
have the meanings given herein. When not inconsistent with the context, words used in the present
tense include the future tense, words in the plural number include the singular number, and words
in the singular number include the plural number. The words "shall" and "will" are mandatory, and
"may" is permissive. Words not otherwise defined herein or in any franchise agreement that might
be granted hereunder shall be given the meaning set forth in the Communications Act of 1934, 47
U.S.C. 9 151 et seQ., and as that Act may hereinafter be amended (collectively the "Communications
Act"), and, if not defined therein, as defined by Florida Statute; and, if not defined therein, be
construed to mean the common and ordinary meaning.
A. "Affiliate" means any person which directly or indirectly owns or controls any part
of a Franchisee, any person which a Franchisee directly or indirectly, in whole or in part, owns or
controls, or any person under common ownership or control with a Franchisee.
B. "City" means the City of Aventura, an incorporated municipality of the State of
Florida, in its present form or in any later reorganized, consolidated, or enlarged form.
C. "Franchise" means the permission granted by the City to a Franchisee in a Franchise
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Agreement to construct, maintain, operate and use Telecommunications Facilities in the Public
Rights-Of- Way within the Franchise Area. The term does not include any license or permit that may
be required by this Ordinance or other laws, ordinances or regulations of the City for the privilege
of transacting and carrying on a business within the City or for disturbing or carrying out any work
in the Public Rights-Of-Way.
D. "Franchise Agreement" means a contract entered into in accordance with the
provisions of this Ordinance between the City and a Franchisee that sets forth the terms and
conditions under which the Franchise will be exercised.
E. "Franchisee" means any person granted a franchise pursuant to this Ordinance who
has entered into a Franchise Agreement with the City.
F. "Grantor" shall mean the City of Aventura.
G. "Gross Receipts" shall mean all cash, credits or property of any kind or nature
without deductions, reported as revenue items to the Franchisee's audited income statements arising
from, or attributable to the sale, lease, rental, barter or exchange of Telecommunications Service and
equipment by Franchisee within the Franchise Area or in any way derived from the operation of its
Telecommunications Facility including, but not limited to, any interconnection between the
Franchisee's System and any system whatsoever. Unless otherwise expressly prohibited by
applicable law, the sum shall be the minimum basis for computing the gross receipts on Recurring
Local Service Revenues imposed pursuant to any Franchise granted in accordance with this
Ordinance and the City reserves the right to amend the definition contained herein as permitted by
applicable law.
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H. "Law" means any local, State or Federal legislative, judicial or administrative order,
certificate, decision, statute, constitution, Ordinance, resolution, regulation, rule, tariff, guideline or
other requirements, as amended, now in effect or subsequently enacted or issued including, but not
limited to, the Communications Act of 1934, 47 U.S.c. S 151 et seq. as amended by the
Telecommunications Act of1996, Pub L. No. 104-104 S 101(a), 110 Stat. 70 codified at 47 U.S.c.,
and all orders, rules, tariffs, guidelines and regulations issued by the Federal Communications
Commission or the governing State authority pursuant thereto.
1. "Person" means any individual, corporation, partnership, association, joint venture,
organization or legal entity of any kind, and any lawful trustee, successor, assignee, transferee or
personal representative thereof, but shall not mean the City.
J. "PSC" means the Florida Public Service Commission.
K. "Public Rights-Of-Way" means the surface, the airspace above the surface and the
area below the surface of any public street, highway, road, boulevard, concourse, driveway, freeway,
thoroughfare, parkway, sidewalk, bridge, tunnel, park, waterway, dock, bulkhead, wharf, pier, court,
lane, path, alley, way, drive, circle, easement, public place, or any other property in which the City
holds any kind of property interest or over which the City exercises any type of lawful control.
"Public Rights-OC-Way" shall not include any real or personal City property except as described
above and shall not include City buildings, fixtures, and other structures or improvements, regardless
of whether they are situated in the Public Rights-Of-Way.
L. "Recurring Local Service Revenues" means revenues from the monthly recurring
charges for local service, including but not limited to (I) recurring basic area revenues derived from
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the provision of flat-rated basic area services; (2) recurring optional extended area revenues derived
from the provision of optional extended area services; (3) local private line revenues derived from
local services which provide communication between specific locations, either through dedicated
circuits, private switching arrangements, predefined transmission paths, whether virtual or physical,
or any other method of providing such services; (4) revenues derived from charges for access to local
exchange facilities, except as provided herein; and (5) other local service revenues from the
provision of secondary features that are integrated with the telecommunications network, including,
without limitation, services such as call forwarding, call waiting, and touchtone line service. Except
as provided herein, revenues from all recurring local services provided by a Franchisee over a
Telecommunications Facility or System in the Public Rights-of- Way shall constitute recurring local
service revenues subject to this Ordinance. Recurring local service revenues do not include revenues
from (I) toll charges for the transmission of voice, data, video, or other information; (2) access
charges paid by carriers for origination and/or termination of toll telephone service as defined in
Section 203.oJ 2(7), Florida Statutes, or other charges required by the Federal Communications
Commi~sion which are directly passed through to end users; (3) interstate service; (4) ancillary
services such as directory advertising, directory assistance, detailed billing services, inside wire
maintenance plans, bad check charges, and non-recurring charges for installation, move, changes or
termination services; (5) cellular mobile telephone or telecommunications services; or specialized
mobile telephone or telecommunications service; or specialized mobile telephone or
telecommunications services; or specialized mobile radio, or pagers or paging service, or related
ancillary services; (6) public telephone charges collected on site; (7) teletypewriter or computer
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DRAFT - November 29, 1999
exchange services as defined in Section 203.012(6), Florida Statutes; or (8) local message rated
(message, unit or time basis) and minutes of use charges in excess of the minimum flat-rated charges
for similar services.
M. "Telecommunications Company" has the meaning set forth in Section 364.02(12),
Florida Statutes, as amended. The term "Telecommunications Company" does not include an open
video system.
N. "Telecommunications Service" shall include, without limitation, local service, toll
servIce as defined in Section 203.oJ 2(7) Florida Statutes, telegram or telegraph service,
teletypewriter service, private communication service as defined in Section 203.012(4) Florida
Statutes, or any other provision of two-way communications services to the public for hire.
"Telecommunications Service", as contemplated herein, does not include the provision of service
via an open video system, which shall require separate authorizations from the City.
O. "Telecommunications Service Provider" shall refer to any person providing
Telecommunications Services, as defined herein, through the use of a Telecommunications Facility.
P. "Telecommunications Facilities", "Facilities" or "Systems" means cables,
conduits, converters, splice boxes, cabinets, handholds, manholes, vaults, equipment, drains, surface
location markers, appurtenances, and related facilities located, to be located, used, or to be used, by
the telecommunications provider in the Public Rights-Of- Way of the City and used or useful for the
transmission of Telecommunications Services.
Section 3. Grant of Franchise.
A. Unless otherwise authorized by applicable law, it shall be unlawful for any person to
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construct, maintain or operate a Telecommunications System or Facility upon, along, under and over
the Public Rights-Of- Way without having obtained permission in the form of a Franchise from the
City Commission pursuant to this Ordinance or other such Ordinance of the City as may be
applicable.
B. Application for a Franchise. In order to obtain an initial or renewal franchise, a
Telecommunications Service Provider must apply for a franchise. The application must contain the
following information, and such information as the City may from time to time require.
(I) Identity of the applicant; the names of the person or persons authorized
to act on behalf of the applicant with respect to the application, and the Franchise when granted; the
persons who exercise working control over the applicant;
(2) A proposal for construction of a telecommunications facility if any,
that sets forth at least the following:
(a) For purposes of determining the fee structure applicable to the
Applicant under Section 337.401, Florida Statutes, and this ordinance a description of the services
that are ,to be provided over the Facility.
(b) The location of proposed Facility and facility design, including
a description of the miles of plant to be installed, where it is to be located, and the size of Facilities
and equipment that will be located in, on, over, or above the Rights-Of-Way.
(c) A description of the manner in which the System will be
installed, the time required to construct the System, and the expected effect on Rights-Of-Way usage,
including information on the ability of the Rights-Of-Way to accommodate the proposed Systems,
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if available. Also, if appropriate given the System proposed, an estimate of the availability of space
in existing conduits and an estimate of the cost of any necessary rearrangement of existing Facilities
shall be included. Such plan shall include the timetable for construction for each phase of the
project, and the areas of the City which will be affected.
(d) In the case of a Telecommunications Service Provider
converting its facilities and seeking a new franchise to offer other services, a description, where
appropriate, of how services will be converted from existing Facilities to new Facilities, and what
will be done with existing Facilities.
C. The City may request such additional information as it finds reasonably necessary to
review an application, and require such modifications to the system proposed as may be necessary
in the exercise of the City's authority to manage its Rights-of-way. This section does not authorize
the City to exercise authority it does not otherwise have under applicable law. Once the information
required by the City has been provided, the application shall be promptly reviewed, and shall be
granted if the City finds that:
(I) The applicant accepts the modifications required by the City to its proposed
system or facility, if any.
(2) The applicant enters into a franchise agreement with the City, under which
applicant shall agree to comply with the City's reasonable regulations of its Rights-of-Way,
including but not limited to the fees for use of those Rights-of-Way.
(3) The Applicant shall comply with any conditions precedent to the effectiveness
of the Franchise Agreement.
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D. Upon execution and City adoption of a Franchise Agreement, a Telecommunications
Service Provider is granted a non-exclusive Franchise solely to construct, maintain, and operate
Telecommunications Facilities necessary for the provision of Telecommunications Service upon,
along, under, and over the Public Rights-Of-Way of the City. For any other use of the
Telecommunications Facility, a Telecommunications Service Provider must obtain authorization
from the City, unless the City is expressly prohibited by applicable law from requiring such
authorization.
E. Any Franchise Agreement executed pursuant to this Ordinance will incorporate by
reference all the terms and conditions of this Ordinance. A Franchise granted hereunder shall not
be construed to convey title, equitable or legal, in the Rights-Of-Way of the City. The grant of rights
under a franchise is only the personal right to occupy the Public Rights-Of- Way for the purposes and
for the period stated therein.
F. Failure to comply with this Section shall constitute a material violation of the
Ordinance and shall subject the Franchisee to the appropriate Enforcement Remedies including
revocation of the Franchise.
Section 4. Terms and Limits of Franchise.
The Grantor may grant a non-exclusive Franchise for a period not to exceed ten (I 0) years.
For purposes of this Ordinance, the Franchise Area shall constitute the entire area within the legal
boundaries of the City and such other areas as may hereinafter be annexed or incorporated by the
City during the term of the Franchise.
Section 5. Franchise Fee Payments.
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A. In consideration for the rights, privileges and permission granted herein, a
Telecommunications Company subject to a franchise granted hereunder shall pay to the City
annually a sum equal to one percent (1%) of Gross Receipts of the Franchisee on Recurring Local
Service Revenues for services provided within the corporate limits of the City. Included within such
one percent (1 %) maximum fee or consideration are all taxes, licenses, fees, in-kind contributions
accepted pursuant to Florida Statute 337.40 I (5), and other impositions except ad valorem taxes and
amounts for assessments for special benefits, such as sidewalks, street pavings, and similar
improvements, and occupational license taxes levied or imposed by the City upon a Franchisee. In
the event that applicable law currently permits or is amended to permit the City to collect a Franchise
fee higher than I %, or permits the City to calculate the Franchise fee on revenues not specified
herein, the Franchisee agrees to automatically increase its Franchise fee payments to the City to that
higher amount on the effective date of such law. In the event applicable law is amended to reqire
the City to collect a Franchise fee lower than the current statutory limit, the City shall take all
necessary steps to conform the requirements hereof to applicable law. All of the aforestated
payments shall be made to the City quarterly or as may otherwise be set forth in a Franchise
Agreement, with such payments made within thiJ::ty (30) days following the end of each calendar
quarter. Payments received after the 31" day shall be subject to interest and late charges of I \1,%
per month.
B. In the event a Telecommunications Company provides Telecommunications Services
defined as toll services in Section 203.012 (7), Florida Statutes, as a condition for granting
permission to occupy or use the Public Rights-Of-Way of the City, the Franchisee shall pay to the
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City annually no less than five hundred dollars ($500) per linear mile of any cable, fiber optic, or
other pathway that makes physical use of the municipal Rights-Of-Way. Any fee or other
consideration imposed by this subsection in excess of Five Hundred Dollars ($500) per linear mile
shall be applied in a nondiscriminatory manner and shall not exceed the sum of:
(I) Costs directly related to the inconvenience or impairment solely caused by the
disturbance of the municipal Rights-Of-Way;
(2) The reasonable cost of the regulatory activity of the municipality; and
(3) The proportionate share of cost of land for such street, alley or other public
way attributable to utilization of the Public Rights-Of-Way by a Telecommunications Service
Provider.
The fee or other consideration imposed pursuant to this subsection shall not apply in any
manner to any Telecommunications Company which provides Telecommunications Services as
defined in Section 203.oJ 2 (3), Florida Statutes for any services provided by such
Telecommunications Company.
C. In the event a person provides Telecommunications Services other than as defined
in Section 203.012(3) or (7), Florida Statutes, as a condition for granting permission to occupy or
use the Public Rights-Of-Way of the City, the Franchisee shall pay to the City annually no less than
five percent (5%) of gross revenues of the Franchisee for services provided within the corporate
limits of the City unless otherwise prohibited by law, in which case, Franchisee shall pay the
maximum fee allowed by law. For purposes of this Subsection, "gross revenues" shall mean all cash
credits or property of any kind or nature without deductions, reported as revenue items to the
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Franchisee's audited income statements, arising from, or attributable to the sale, rental, lease, barter
or exchange of Telecommunications Services and equipment by Franchisee within the Franchise
Area or in any way derived from the operation of its Telecommunications Facility including, but not
limited to, any interconnection between the Franchisee's Facility or System and any system
whatsoever. This minimum annual Franchise Fee is in addition to any other application fees,
renewal fees, transfer fees, and any State, county or City taxes or assessments. The franchise fee
specified herein is the minimum fair market value for the grant of a franchise for use of the Public
Rights-Of-Way, including all public easements, and other entitlements to use, occupy or traverse
public property, for the purpose of operating a Telecommunications Facility.
D. Unless otherwise prohibited by Federal or State law, if Franchisee makes payments
to another jurisdiction in Florida at a higher rate or on a broader base of gross receipts during the
term(s) of agreement entered into with the City, the Franchisee agrees to pay to the City such higher
amount, effective on the date Franchisee makes such payments to another jurisdiction.
E. Except to the extent prohibited by applicable law: (a) The franchise fee payments to
be made, pursuant to this Section shall not be deemed to be in the nature of a tax; (b) Such franchise
fee payments shall be in addition to any and all taxes of a general applicability and not applicable
solely to Telecommunications Services within the City or other fees or charges which a Franchisee
shall be required to pay to the City or to any State or Federal agency or authority, as required herein
or by law, all of which shall be separate and distinct obligations of a Franchisee unless prohibited
by applicable Federal, State or local law; (c) a Franchisee shall not have or make any claim for any
deduction or other credit of all or any part of the amount of said franchise fee payments from or
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against any of said City taxes or other fees or charges of general applicability which a Franchisee is
required to pay to the City, except as required by law; and (d) The franchise fee specified herein is
the minimum fair market value for the grant of a franchise for use of the Public Rights-Of-Way,
including all public easements, for the purpose of operating a Telecommunications Facility.
F. Except as prohibited by applicable law, in addition to the aforestated franchise fee,
a Franchisee shall reimburse the City for all reasonable costs including, but not limited to, consultant
costs, attorney's fees, accounting fees, and engineering fees related to the grant, modification,
transfer, or renewal of any Franchise granted hereunder. Therefore, upon submission of a request
for the grant of a Franchise Agreement or the renewal of a Franchise Agreement, Grantee shall make
a non-refundable payment to the City in the amount of ten thousand dollars ($10,000). The
Franchisee shall pay the actual cost of these enumerated fees which exceed ten thousand ($10,000)
dollars upon invoice by the City. The purpose of this filing fee is to defray the City's costs
reasonably incurred in processing the request.
Section 6. Review and Inspection of Books and Records.
A. The City may, at its option, upon ten (10) days notice to the Franchisee, but in no
event more often than once per year, examine the records and accounting files, and such other books
and records, if such records relate to the calculation of Franchisee fee payments or any other
payments due to the City or to proper performance of any terms of a Franchise. The examination
of such books, accounts, records or other materials necessary for determination of compliance with
the terms, provisions, and requirements of a Franchise shall be during regular hours of business of
the Franchisee at an office of the Franchisee located within the City, or at another location
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satisfactory to the City. In the event that the City, pursuant to an audit, determines that there exists
a discrepancy in the amount paid and the amount owed to the City by the Franchisee in excess of2%,
Franchisee shall pay all reasonable costs, fees and expenses of the audit.
B. No later than June 30th of each year, a Franchisee shall provide the City an annual
report concerning the previous calendar year that includes at minimum the following:
(I) A financial statement, including a statement of income, and a statement of
sources of revenues. The statement shall be audited if Franchisee has audited statements performed
in its normal course of business. If not, the statement shall be certified by the Franchisee's chief
financial officer or other duly authorized financial officer of the Franchisee. The statement shall
include notes that specify all significant accounting policies and practices upon which it is based.
A summary shall be provided comparing the current year with the previous two (2) years of the
Franchise. This requirement shall not apply to Telecommunications Service Providers making
payments to the City under Section 5 B or D hereof.
(2) A copy of updated maps depicting the location of the Telecommunications
Facilities, showing areas served, locations of all trunk lines and feeder lines in the City, and an
estimate of the availability of space in conduits. Upon request by the City, such maps shall be
provided to the City in digitized form, at Franchisee's expense.
(3) If the Franchisee is a corporation, a list of officers and members of the board
of directors; the officers and members of the board of directors of any parent corporation; and if the
Franchisee or its parent corporation's stock or ownership interests are publicly traded, a copy of its
most recent annual report.
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(4) If the Franchisee is a partnership, a list of the partners, including any limited
partners, and their addresses; and if the general partner is a corporation, a list of the officers and
members of the board of directors or the corporate general partner, and the officers and directors of
any parent corporation; and where the general partner or its parent corporation's ownership interests
are publicly traded, a copy of its most recent annual report.
C. Upon reasonable request, a Franchisee shall provide the following documents to the
City as received or filed, without regard to whether the documents are filed by the Franchisee or an
Affiliate:
(I) Annual report of the Franchisee or its parent or any Affiliate of
Franchisee which controls Franchisee and issues an annual report.
(2) Any and all pleadings, petitions, applications, communications, reports
and documents (collectively referred to as "filings") submitted by or on behalf of the Franchisee to
the Federal Communications Commission, Securities and Exchange Commission, Florida Public
Service Commission or any other State or Federal agency, court or regulatory commission which
filings may impact the Franchisee's operation of the Franchisee's Telecommunications System in
the City or that may impact the City's rights or obligations under this Ordinance or the Franchise
Agreement issued pursuant to this Ordinance and any and all responses, if any, to the above
mentioned filings.
(3) Any and all notices of hearing, deficiency, forfeiture, or documents
instituting any investigation, civil or criminal proceeding issued by any State or Federal agency
regarding the Franchisee, any Affiliate of the Franchisee, the Franchisee's Telecommunications
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Facilities or the Franchisee's use of Telecommunications Facilities; provided, however, that any such
notice or documents relating to an Affiliate of Franchisee need to be provided only to the extent the
same may directly affect or bear on Franchisee's operations in the City.
(4) Any request for protection under bankruptcy laws, or any judgment
related to a declaration of bankruptcy.
D. Notwithstanding anything to the contrary, the Franchisee agrees to provide the City,
within thirty (30) days of filing or receipt of such, any document that may adversely impact the
construction, operation or maintenance of the Franchisee's Facilities or use of Facilities.
E. A Franchisee under Section 5A or B hereof shall annually certify to the City that it
is not leasing excess capacity on the Telecommunications System or Facilities, or leasing dark fiber
on the System.
F. In addition, the City may, at its option, and upon reasonable notice to the Franchisee,
inspect the Franchisee's Facilities or the Facilities that the Franchisee uses in the City, to ensure the
safety of its residents.
G. The City agrees to keep any documentation, books and records of the Franchisee
confidential to the extent required under Florida Statutes.
Section 7. Underground Installation; Relocation.
A. Consistent with applicable law, a Franchisee may install Telecommunications
Facilities above ground in areas where existing utility facilities are above ground and shall install
Telecommunications Facilities underground in areas where existing utility facilities are or will be
installed underground.
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B. Every Telecommunications Service Provider which places or constructs
telecommunications facilities underground shall maintain appropriate participation in the regional
notification center for subsurface installations. A Franchisee shall provide locate for the City at no
cost to the City, to the extent consistent with applicable law.
C. Any Telecommunications Facilities heretofore or hereafter placed upon, under, over,
or along any Public Rights-of-Way that is found by the City to be unreasonably interfering in any
way with the convenient, safe or continuous use or the maintenance, improvement, extension or
expansion, of such Public Rights-of-Way, shall, upon thirty (30) days written notice to the
Franchisee or its agent, be removed or relocated by such Franchisee at its own expense except as
explicitly provided under applicable law. The City Manager, may waive or extend the time within
which a Franchisee shall remove or relocate a Telecommunications Facility, for good cause shown.
D. Whenever an order of the City requires such removal or change in the location of any
Telecommunications Facility from the Public Rights-of-Way, and the Franchisee fails to remove or
change the same at its own expense to conform to the order within the time stated in the notice, the
City shall proceed to cause the Telecommunications Facility to be removed. The expense thereby
incurred shall be paid out of any money available therefor, and such expense shall be charged against
the owner of the Telecommunications Facility and levied and collected and paid to the City.
E. Whenever it shall be necessary for the City to remove or relocate any
Telecommunications Facility, the owner of the Telecommunications Facility, or the owner's chief
agent, shall be given notice of such removal or relocation and an order requiring the payment of the
costs thereof, and shall be given reasonable time, which shall not be less than twenty (20) nor more
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than thirty (30) days in which to appear before the City Commission to contest the reasonableness
of the order. Should the owner or the owner's representative not appear, the determination of the
cost to the owner shall be final.
F. A final order of the City shall constitute a lien on any property of the owner and may
be enforced by filing an authenticated copy of the order in the office of the Clerk of the Circuit Court
of the County wherein the owner's property is located.
G. The City retains the right and privilege to cut or move any Facilities located within
the Public Rights-Of- Way of the City, as the City Manager in his/her sole discretion may determine
to be necessary, appropriate or useful in response to any public health or safety emergency. If
circumstances permit, the municipality shall attempt to notify the Franchisee, if known, prior to
cutting or removing a Facility and shall notify the Franchisee, if known, after cutting or removing
a Facility.
H. Upon abandonment of a Facility within the Public Rights-Of-Way of the City, the
Franchisee shall notify the City within ninety (90) days. Following receipt of such notice the City
may direct the Franchisee to remove all or any portion of the Facility if the City determines that such
removal will be in the best interest of the public health, safety and welfare. In the event that the City
does not direct the removal of the abandoned Facility by the Franchisee, the Franchisee, by its notice
of abandonment to the City, shall be deemed to consent to the alteration or removal of all or any
portion of the Facility by another utility or person.
Section 8. Use of Rights-Of-Way.
A. Franchisee agrees at all times to comply with and abide by all applicable provisions
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of the State statutes, and local laws including, but not limited to, applicable zoning regulations not
inconsistent with State and Federal laws. No person shall construct any Facility on, over, above,
along, upon, under, across, or within any Public Right-of- Way which (1) changes the location of the
Facility, (2) adds a new Facility, (3) materially increases the amount of area or space occupied by
the Facility on, over, above, along, under across or within the Public Rights-Of-Way, or otherwise
disrupts the Public Rights-of-way without first filing an application with and obtaining a permit from
the City therefor, except as otherwise provided in this Ordinance. In case of the repair or
maintenance of an existing facility, the City may impose lesser requirements than those set forth
herein. Unless otherwise required by the City Code, no permit shall be required for installation and
maintenance of service connections to customers' premises where there will be no disruption of the
Public Rights-Of-Way.
B. All of Franchisee's Facilities shall be installed, located and maintained so as not to
unreasonably interfere with the use of the Public Rights-Of- Way by the traveling public and to cause
minimum interference with the rights and convenience of property owners who adjoin any of the
Public Rights-Of-Way. The City may issue such rules and regulations concerning the installation
and maintenance of a Telecommunications Facility in the Public Rights-Of-Way, as may be
consistent with the applicable Law. Such rules and regulations may include, but are not limited to,
reasonable requirements and restrictions with respect to height, width and diameter of said Facilities.
C. All safety practices required by applicable Law or accepted industry practices and
standards shall be used during construction, maintenance, and repair of the Telecommunications
Facilities.
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D. In the event that at any time during the term of the rights granted herein the City shall
lawfully elect to alter, or change the grade of, any Public Rights-Of-Way, a Telecommunications
Provider, upon reasonable notice by the City, shall make any necessary removals, relaying and
relocations of its Telecommunications Facilities at its own expense in accordance with applicable
law.
E. Franchisee shall obtain any and all required permits and pay any and all required fees
before commencing any construction on or otherwise disturbing any Public Rights-Of-Way as a
result of its construction or operations. Franchisee shall, at its own expense, restore such property
to as good a condition as existed prior to Franchisee's commencement of work. If such restoration
is not performed in a reasonable and satisfactory manner within thirty (30) calendar days after the
completion of construction, the City may, after prior written notice to Franchisee, cause the repairs
to be made at Franchisee's expense. A permit from the City authorizes a Franchisee to undertake
only certain activities in accordance with this Ordinance on City Rights-of- Way, and does not create
a property right or grant authority to impinge upon the rights of others who may have an interest in
the Public Rights-Of-Way.
F. Every Telecommunications Facility located in the Public Rights-Of-Way shall be
subject to the City's periodic inspection, upon no less than three (3) days written notice to Franchise,
for compliance with this Ordinance, any Franchise Agreement, or any applicable provisions of the
City Code.
G. Franchisee shall not place its facilities so as to interfere unreasonably with any other
person lawfully using the Public Rights-Of-Way serving the residents of the City.
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H. Franchisee shall not permit any facilities to be affixed to any poles or other facilities
owned or otherwise under the control of Franchisee that would, in any manner, effect a modification
of said Facility including, but not limited to, increasing its height, width or depth, notwithstanding,
whether such equipment is the property of Franchisee or a third party without prior approval of the
City Manager. In no event shall Franchisee permit any such modification in violation of City zoning
regulations now in effect or as may hereafter be amended.
Section 9. Written Acceptance by the Franchisee.
A Franchisee shall, within ten (10) days prior to the effective date of a Franchise, provide an
executed acknowledgment of the binding effect of the terms and conditions of this Ordinance and
the Franchise to the City Manager in the form designated by the City. Such acknowledgment shall
be executed by a duly authorized officer of Franchisee and shall represent the Franchise Agreement
between the Franchisee and the City of A ventura.
Section 10. Compliance with Other Laws; Police Power.
Franchisee shall at all times be subject to and shall comply with all applicable Federal, State
and local laws. Franchisee shall at all times be subject to all lawful exercises of the police power
of the City, to the extent not inconsistent with applicable laws.
Section 11. Transfer of Control; Sale or Assignment.
A. Except in the case of a pro forma transfer as described in (b) below, the Franchisee
shall not sell, assign, or otherwise transfer any portion of its Facilities to another, nor transfer any
rights pursuant to a Franchise Agreement to another without the prior written approval of the City
Commission, which shall not be unreasonably withheld or denied. Requests for transfer shall be
filed in the office of the City Manager and shall include: I) a statement that the Assignee or the
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Transferee has accepted this Ordinance and will operate pursuant to a Franchise Agreement and
agrees to be bound by each and every one of the terms and provisions thereof; 2) proof that the
Assignee or Transferee has met the insurance and indemnification requirements of this Ordinance
and any Franchise agreement; and 3) proof that the Assignee or Transferee has complied with all
Federal and State laws with regard to the transfer of a Certificate of Public Convenience and
Necessity. If the rights granted herein are transferred or assigned by the Franchisee to any third party
incident to a transfer, sale or assignment of the Franchisee's Facilities, the Transferee or Assignee
shall be obligated to comply with all of the terms and conditions of this Ordinance and any
applicable Franchise Agreement.
B. An application for approval of a pro forma Transfer of a Franchise shall be considered
granted on the thirty-first (31 Sl) calendar day following the filing of such application with the City
unless, prior to that date, the City notifies the Franchisee to the contrary. An application for approval
of a pro forma Transfer of a Franchise shall clearly identifY the application as such, describe the
proposed transaction, and explain why the Applicant believes the Transfer is pro forma. A transfer
shall be considered "pro forma" if it involves a Transfer to a Person, group of Persons or business
entity wholly owned or controlled by the Franchisee and shall not result in a change in the control
or ownership of the Franchisee or Franchisee's system.
C. When considering an application for transfer of a Franchise, in addition to those
determinations set forth in Section 3, the City must also determine that:
(I) there will be no adverse effect on the City's interest in the franchise;
(2) transferee agrees to be bound by all the conditions of the franchise, and to
assume all the obligations of its predecessor; and
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(3) any outstanding compliance and compensation issues are resolved or
preserved to the satisfaction of the City.
D. Notwithstanding anything in this Ordinance, pledges in trust or mortgages or other
hypothecations of the assets of the Franchisee to secure the construction operation or repair of its
Telecommunications Facilities may be made without the City's prior consent hereunder, except that
no such pledge, mortgage or other hypothecation may be made if such arrangement would in any way
prevent the Franchisee or its successor from complying with the terms of a Franchise granted
hereunder, or with this Ordinance or any provision of the City Code. Any mortgage, pledge, lease
or other encumbrance of the Telecommunications Facilities shall be subject and subordinate to the
rights of the City in this Ordinance or other applicable law.
E. Requests for approval of a proposed transfer, sale or assignment shall be accompanied
by a payment of $5,000.00 to cover the City's administrative costs in processing the transfer, sale
or assignment.
Section 12. Insurance; Surety; Indemnification.
A. A Franchisee shall maintain, and by its acceptance of the Franchise specifically agrees
that it will maintain throughout the entire term of the Franchise including any renewals thereof, the
following liability insurance coverage insuring the Franchisee and naming the City as an additional
insured; worker's compensation and employer liability insurance to meet all requirements of Florida
law and general comprehensive liability insurance with respect to the construction, operation and
maintenance of the Telecommunications Facilities, and the conduct of Franchisee's business in the
City, in the minimum amounts of:
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(I) $250,000 for property damage in anyone accident:
(2) $500,000 for personal bodily injury to anyone person: and
(3) $1,000,000 for personal bodily injury in anyone accident.
B. All insurance policies shall be with sureties qualified to do business in the State of
Florida; shall be with sureties with a minimum rating of A-I in Best's Key Rating Guide,
Property/Casualty Edition except as provided in (D) below. The City may require coverage and
amounts in excess of the above minimums where necessary to reflect changing liability exposure and
limits or where required by law.
C. A Franchisee shall keep on file with the City certificates of insurance which
certificates shall indicate evidence of payment of the required premiums and shall indicate that the
City, its officers, boards, Commission, Commission members, agents and employees are listed as
additional insureds. In the event of a potential claim such that the City claims insurance coverage,
Franchisee shall immediately respond to all reasonable requests by the City for information with
respect to the scope of the insurance coverage.
D. All insurance policies shall further provide that any cancellation or reduction in
coverage shall not be effective unless thirty (30) days prior written notice thereof has been given to
the City. A Franchisee shall not cancel any required insurance policy without submission of proof
that the Franchisee has obtained alternative insurance satisfactory to the City which complies with
this Ordinance. A Franchisee may self-insure all or a portion of the insurance coverage and limit
requirements required by this Section. A Franchisee that self-insures is not required, to the extent
of such self-insurance, to comply with the requirement for the naming of additional insureds under
this Section. A Franchisee that elects to self-insure shall provide to the City evidence sufficient to
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demonstrate its financial ability to self-insure the insurance coverage and limit requirements required
under this Section, such as evidence that the Franchisee is a "private self insurer" under the Workers
Compensation Act. For purposes of this Section, "self-insure" shall also include a Franchisee which
insures through a "captive insurer" as defined in Section 628.90 I, Florida Statutes.
E. A Franchisee shall, at its sole cost and expense, indemnifY, hold harmless, and defend
the City, its officials, boards, Commission, Commission members, agents, and employees, against
any and all claims, suits, causes of action, proceedings, judgments for damages or equitable relief,
and costs and expenses arising out of the construction, maintenance or operation of its
Telecommunications System or Facilities, the conduct of Franchisee's business in the City, or in any
way arising out of the Franchisee's enjoyment or exercise of a Franchise granted hereunder,
regardless of whether the act or omission complained of is authorized, allowed or prohibited by this
Ordinance or a Franchise agreement, provided, however, that Franchisee's obligation hereunder shall
not extend to any claims caused by the misconduct or negligence of the City, its officials, boards,
Commission, Commission members, agents or employees. In addition, and notwithstanding anything
to the contrary, any Franchisee granted a renewal of a Franchise on or after the effective date of this
Ordinance shall indemnifY and hold harmless the City, its officials, boards, Commission,
Commission members, agents or employees from any claim arising by a third party under Federal
or State law. This provision includes, but is not limited to, the City's reasonable attorneys' fees
incurred in defending against any such claim, suit or proceedings; and claims arising out of copyright
infringements or a failure by the Franchisee to secure consents from the owners, authorized
distributors, or providers of telecommunications services, and claims against the Franchisee for
invasion of the right or privacy, defamation of any person, firm or corporation, or the violation or
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infringement of any copyright, trade mark, trade name, service mark or patent, or of any other right
of any person, firm, or corporation. City agrees to notifY Franchisee, in writing, within ten (10) days
of City receiving notice, of any issue it determines may require indemnification. Nothing in this
section shall prohibit the City from participating in the defense of any litigation by its own counsel
and at its own cost ifin the City's reasonable belief there exists or may exist a conflict, potential
conflict or appearance of a conflict.
Section 13. Security Fund.
A. A Franchise agreement may provide that, prior to the Franchise becoming effective,
the Franchisee shall post with the City a security fund. Such fund may be in the form of a cash
deposit, letter of credit, corporate guarantee, indemnity bond or surety bond as determined by the
City Manager in his/her sole discretion. The security fund will be used to ensure the Franchisee's
faithful performance of and compliance with all provisions of this Ordinance, the Franchise
agreement, and other applicable law, and compliance with all orders, permits and directions of the
City, and the payment by the Franchisee of any claims, liens, fees, or taxes due the City which arise
by reason of the construction, operation or maintenance of the system. The amount of the security
fund shall be no less than Twenty-five Thousand Dollars ($25,000.00), which is the minimum
amount that the City determines is necessary to protect the public, to provide adequate incentive to
the Franchisee to comply with this Ordinance and the Franchise agreement, and to enable the City
to effectively enforce compliance therewith. The amount of the security fund may be modified in
a Franchise Agreement in the City's sole discretion, based on factors including but not limited to,
written recommendations from other local franchising authorities that regulate the Franchisee and
the Franchisee's compliance and/or noncompliance with the regulations promulgated by other
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franchising authorities. The Franchise Agreement shall provide for the procedures to be followed
with respect to the security fund. Neither the posting of the cash deposit or filing of an indemnity
bond or any form of surety bond with the City, nor the receipt of any damages recovered by the City
thereunder, shall be construed to excuse faithful performance by the Franchisee or limit the liability
of the Franchisee under the terms of its Franchise for damages, either to the full amount of the bond
or otherwise.
B. Notwithstanding any of the above, the City, upon thirty (30) days advance written
notice clearly stating the reason for, and its intention to exercise withdrawal rights under this
Subsection, may withdraw an amount from the Security Fund, provided that the Franchisee has not
reimbursed the City for such amount within the thirty (30) days notice period. Withdrawals may be
made if the Franchisee:
(I) Fails to make any payment required to be made by the Franchisee hereunder;
(2) Fails to pay any liens relating to the facilities that are due and unpaid;
(3) Fails to reimburse the City for any damages, claims, costs or expenses which
the City has been compelled to payor incur by reason of any action or non-performance by the
Franchisee; or
(4) Fails to comply with any provision of this Ordinance or Franchise Agreement,
which failure the City determines can be remedied by an expenditure of an amount from the Security
Fund.
C. Within thirty (30) days after receipt of written notice from the City that any amount
has been withdrawn from the Security Fund, the Franchisee shall restore the Security Fund to the
amount specified in this Section.
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D. The rights reserved to the City with respect to the security fund or an indemnity bond
are in addition to all other rights of the City, whether reserved by this Ordinance or authorized by
other law or the Franchise agreement, and no action, proceeding or exercise of a right with respect
to such security fund or indemnity bond will affect any other right the City may have.
Section 14. Construction Bond.
A. A Franchise agreement shall provide that, prior to performing any work in the Public
Rights-of- Way, a Franchisee shall establish in the City's favor a construction bond in an amount
specified in the Franchise Agreement or other authorization as necessary to ensure the Franchisee's
faithful performance of the construction, upgrade, rebuild or other work. The amount of the
construction bond shall be no less than Fifty Thousand Dollars ($50,000.00). The amount of the
construction bond may be modified in a Franchise Agreement, in the City Manager's sole discretion,
based on the amount, the value of the construction to take place in the Public Rights-Of-Way, and
any previous history of the Franchisee concerning construction within the Public Rights-of- Way of
the City.
B. In the event a Franchisee subject to such a construction bond fails to complete the
work in a safe, timely and competent manner in accord with the provisions of the Franchise
Agreement, there shall be recoverable, jointly and severally from the principal and surety of the
bond, any damages or loss suffered by the City as a result, including the full amount of any
compensation, indemnification or cost of removal or abandomnent of any property of the Franchisee,
or the cost of completing the work, plus a reasonable allowance for attorneys' fees, up to the full
amount of the bond. The City may also recover against the bond any amount recoverable against the
security fund pursuant to Section 13 hereof where such amount exceeds that available under the
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security fund.
C. A Franchise agreement may specifY that no less than six (6) months after the
completion of the construction of the Telecommunications Facility and payment of all construction
obligations to the satisfaction of the City, the City may eliminate the bond. However, the City may
subsequently require a new bond for any subsequent work in the Public Rights-Of-Way.
D. The construction bond shall be issued by a surety having a minimum rating of A-I
in Best's Key Rating Guide, Property/Casualty Edition; shall be subject to the approval of the City
Attorney; and shall provide that:
"This bond may not be canceled, or allowed to lapse, until sixty (60)
days after receipt by the City, by certified mail, return receipt
requested, of a written notice from the issuer of the bond of intent to
cancel or not to renew".
E. The rights reserved by the City with respect to any construction bond established
pursuant to this section are in addition to all other rights and remedies the City may have under this
Ordinance, the Franchise Agreement, or at law or equity.
F. When the Franchise terminates forreasons including, but not limited to, revocation,
any security will be maintained by the Franchisee for one (I) year from the date of termination and
the remaining fund will be returned to Franchisee one (I) year from the termination date of the
Franchise, provided there is no outstanding default or unpaid amounts owed to the City by
Franchisee.
G. The rights reserved to the City under this section are in addition to all other rights of
the City, whether reserved in this Ordinance or Franchisee Agreement, or authorized by other law,
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and no action, proceeding or exercise of a right with respect to the construction bond will affect any
other right the City may have.
Section 15. Enforcement Remedies.
A. In addition to other remedies available at law or equity or provided in this Ordinance,
or in any Franchise Agreement, failure by the Franchisee to comply with any of the provisions, terms
and conditions of the Franchise granted hereunder may result in a revocation of the Franchise, or,
in the alternative, at the discretion of the City, the City may impose liquidated damages for any
violation by a Franchisee of this Ordinance, a Franchise Agreement, or law applicable to users and/or
occupants of the Public Rights-Of-Way, which damages may be difficult to quantify but shall be
determined in an amount no less than One Hundred Dollars ($100.00) per day per violation.
B. Before imposing a fine pursuant to this Section, the City shall give Franchisee written
notice of the violation and its intention to assess such damages, which notice shall contain a
description of the alleged violation. Following receipt of such notice, Franchisee shall have thirty
(30) days to cure the violation and the City shall make good faith reasonable efforts to assist the
Franchisee in resolving the violation. If the violation is not cured within that thirty (30) day period,
the City may collect all fines owed, beginning with the first day of the violation, either by removing
such amount from the security fund or through any other means allowed by law.
C. In addition to any other remedies available at law or equity or provided in this
Ordinance or in any Franchise Agreement, the City may apply anyone or combination of the
following remedies in the event a Franchisee violates this Ordinance, its Franchise Agreement,
applicable State or Federal law, or applicable local law or order:
(I) Franchisee's failure to comply with Sections 3A, 0 and/or E herein shall result
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in imposition ofliquidated damages to be paid by the Franchisee to the City in an amount of not less
than One Thousand Dollars ($1,000.00) per day or part thereof that the violation continues.
(2) Revoke the franchise pursuant to the procedures specified in Section 16
hereof.
(3) In addition to or instead of any other remedy, the City may seek legal or
equitable relief from any court of competent jurisdiction.
D. In determining which remedy or remedies are appropriate, the City shall take into
consideration the nature of the violation, the person or persons bearing the impact of the violation,
the nature of the remedy required in order to prevent further violations, and such other matters as the
City determines are appropriate to the public interest.
E. Failure of the City to enforce any requirements of a Franchise Agreement or this
Ordinance shall not constitute a waiver of the City's right to enforce that violation or subsequent
violations of the same type or to seek appropriate enforcement remedies.
F. In any proceeding wherein there exists an issue with respect to a Franchisee's
perform,ance of its obligations pursuant to this Ordinance, the Franchisee has, throughout any such
proceedings and appeals thereof, the burden of proving that said Franchisee is in compliance with
the terms of this Ordinance. The City Commission may find a Franchisee that does not demonstrate
compliance with the terms and conditions of this Ordinance in default and apply anyone or
combination of the remedies otherwise authorized by this Ordinance.
Section 16. Revocation or Termination of Franchise.
A. A Franchise may be revoked by the City Commission for Franchisee's failure to
construct, operate or maintain the Telecommunications System or Facility as required by this
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Ordinance or the Franchise Agreement, or for any other material violation of this Ordinance or
material breach of the Franchise Agreement or material violation of Federal, State, or local law. To
invoke the provisions of this subsection A, the City shall give the Franchisee written notice, by
certified mail at the last known address, that Franchisee is in material violation of this Ordinance or
material breach of the Franchise Agreement and describe the nature of the alleged violation or breach
with specificity. If within thirty (30) calendar days following receipt of such written notice from the
City to the Franchisee, the Franchisee has not cured such violation or breach, or has not commenced
corrective action and such corrective action has not been actively and expeditiously pursued, the City
may give written notice to the Franchisee of its intent to revoke the Franchise, stating its reasons.
B. Prior to revoking a Franchise under subsection A hereof, the City Commission shall
hold a public hearing, upon thirty (30) days' calendar notice, at which time the Franchisee and the
public shall be given an opportunity to be heard. Following the public hearing the City Commission
may determine whether to revoke the Franchise based on evidence presented at the hearing, and other
evidence of record. If the City Commission determines to revoke a Franchise it shall issue a written
decision setting forth the reasons for its decisions. A copy of such decision shall be transmitted to
the Franchisee.
C. Notwithstanding subsections A and B hereof, any Franchise may, at the option of the
City following a public hearing before the City Commission, be revoked 120 calendar days after an
assignment for the benefit of creditors or the appointment of a receiver or trustee to take over the
business of the Franchisee, whether a receivership, reorganization, bankruptcy assignment for the
benefit of creditors, or other action or proceeding unless within that 120 day period: (I) such
assignment, receivership, or trusteeship has been vacated; or (2) such assignee, receiver, or trustee
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has fully complied with the terms and conditions of this Ordinance and Franchise Agreement and
has executed an agreement, approved by a court of competent jurisdiction, to be bound by the terms
and conditions of this Ordinance and the Franchise Agreement.
D. In the event of foreclosure or other judicial sale of any of the facilities, equipment,
or property of a Franchisee, the City may revoke the Franchise, following a public hearing before
the City Commission, by serving notice upon the Franchisee or the successful bidder at the sale, in
which event the Franchise and all rights and privileges of the Franchisee will be revoked and will
terminate thirty (30) calendar days after serving such notice, unless the successful bidder has
obtained the necessary certificates, and other authorizations pursuant to applicable State, Federal
and local laws, and: (I) the City has approved the transfer of the Franchise to the successful bidder;
or (2) the successful bidder has covenanted and agreed with the City to assume and be bound by the
terms and conditions of the Franchise Agreement and this Ordinance.
E. If the City revokes the Franchise, or for any other reason a Franchisee abandons,
terminates or fails to operate or maintain its facilities for a period of six (6) months following
Franchisee's decertification as a Telecommunications Company by the PSC, if applicable, the
following procedures and rights are effective: (1) the City may require the former Franchisee to
remove its facilities and equipment at the former Franchisee's expense; ifthe former Franchisee fails
to do so within a reasonable period of time, the City may have the removal done at the former
Franchisee's and/or surety's expense; (2) the City, by resolution of the City Commission, may
acquire ownership or effect the transfer of the Telecommunications Facility or System subject to the
limitations set forth in Section 18 herein and in any Franchise Agreement; or (3) if a
Telecommunications System is abandoned by a Franchisee the City may sell, assign, or transfer all
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or part of the assets of the System subject to the limitations set forth in Section 18 herein or in any
Franchise Agreement. Nothing herein shall be construed to limit the City's right to petition the PSC
for appropriate relief in the case of a Telecommunications Company which abandons, terminates or
fails to operate or maintain a Facility within the Franchise Area for a period of twenty-four (24)
months.
F. No adverse action against the Franchisee may be taken by the City, pursuant to this
Section, without notice and a public hearing at which the Franchisee is given an opportunity to
participate.
Section 17. Renewal of Franchise.
A. Upon receipt of the renewal application within sixty (60) days of the expiration of an
existing Franchise, the City shall publish notice of its receipt and make copies available to the public.
The City, following prior public notice, may hold one or more public hearings on the renewal
application.
B. The City Commission shall consider the renewal application at a public hearing at
which the City Commission will either (1) pass a resolution agreeing to renew the Franchise, subject
to negotiation of a Franchise Agreement satisfactory to the City and a Franchisee; or (2) pass a
resolution that makes an assessment that the Franchise shall not be renewed.
C. The City reserves the right to consider any and all violations of Federal, State, and
local law and any and all pending violations of this Ordinance or of a Franchise granted pursuant to
such Ordinance in determining whether or not to grant the renewal of a Franchise.
D. The City shall grant a renewal application upon a finding that:
(1) The City and the Franchisee shall agree on the terms of the Franchise
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Agreement before such renewal becomes effective.
(2) Any outstanding compliance and compensation Issues are resolved or
preserved to the satisfaction of the City.
E. If a renewal of a Franchise is lawfully denied, the City may acquire ownership of the
Telecommunications System or Facility, or effect the transfer of the ownership of the System or
"
Facility, or effect the transfer to another person upon approval of the City Commission subject to the
limitations set forth in Section 18 herein and in any Franchise Agreement. The City may not acquire
ownership of the System or Facility, or approve a transfer during an appeal of a denial for renewal.
F. If a renewal of a Franchise is lawfully denied and no appeal to a court is pending, and
the City does not purchase the Telecommunications System or Facility, or effect the transfer of the
Telecommunications System or Facility to another person, the City may require the former
Franchisee to remove its Facilities and equipment at the former Franchisee's expense. If the former
Franchisee fails to do so within a reasonable period oftime, the City may have the removal done at
the former Franchisee's or surety's expense.
Section 18. Municipal Ownership of Telecommunications Facility.
A. Upon the revocation of the Franchise, or termination thereof where a Franchisee has
not given timely written notice to the City that it will seek renewal of the Franchise pursuant to
Section 17 hereof, the City shall have the right and privilege, at its option, to purchase the
Telecommunications Facility hereby authorized, or other property used under or in connection with
a Franchise granted hereunder, or such part of such property as the City may desire to purchase at
a valuation of the property real and personal desired, which valuation shall represent the fair market
value.
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B. A Franchise Agreement may provide that an entity other than the City has the first
option to purchase or to receive in a transfer agreement the Telecommunications Facility in the
event that a Franchise is terminated, revoked, not renewed or transferred. Any such entity granted
a first option to purchase or receive the Telecommunications System or Facility must agree in writing
on or before the effective date of the purchase or transfer that it agrees to be bound by all terms and
conditions of this Ordinance and any Franchise granted pursuant to this Ordinance and all applicable
Federal, State and local laws. Any such entity granted a first option to purchase or to receive the
Telecommunications Facility must obtain all necessary franchises, permits, certificates, licenses and
other authorizations required by applicable Federal, State and local law prior to purchasing or
receiving the Telecommunications Facilities. The first option to purchase or to receive the
Telecommunications Facility shall be null and void if the option holder does not fulfill all
obligations under this Ordinance, a Franchise Agreement, and all laws applicable to users and
occupants of the Public Rights-Of-Way.
Section 19. Force Majeure.
In the event a Franchisee's performance of or compliance with any of the provisions of this
Ordinance or the Franchisee's Franchise Agreement is prevented by a cause or event not within the
Franchisee's control, such inability to perform or comply shall be deemed excused and no penalties
or sanctions shall be imposed as a result thereof, provided, however, that Franchisee uses all
practicable means to expeditiously cure or correct any such inability to perform or comply. For
purposes of this Ordinance and any Franchise Agreement granted or renewed hereunder, causes or
events not within a Franchisee's control shall include, without limitation, acts of God, floods,
earthquakes, landslides, hurricanes, fires and other natural disasters, acts of public enemies, riots or
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civil disturbances, sabotage, strikes and restraints imposed by order of a governmental agency or
court. Causes or events within Franchisee's control, and thus not falling within this Section, shall
include, without limitation, Franchisee's financial inability to perform or comply, economic hardship,
and misfeasance, malfeasance or nonfeasance by any of Franchisee's directors, officers, employees,
contractors or agents.
Section 20. Repeal of Conflicting Ordinances.
All Ordinances or part of Ordinances, and all resolutions or part of resolutions in conflict
herewith be and the same are hereby repealed to the extent of such conflict.
Section 21. Savings.
All fees, charges and financial obligations previously accrued pursuant to any Ordinances and
resolutions repealed pursuant to Section 20 above shall continue to be due and owing until paid.
Section 22. Severability.
The provisions of this Ordinance are declared to be severable and if any section, sentence,
clause or phrase of this Ordinance shall, for any reason, be held to be invalid or unconstitutional,
such decision shall not affect the validity of the remaining sections, sentences, clauses, and phrases
of this Ordinance but shall remain in effect, it being the legislative intent that this Ordinance shall
stand notwithstanding the invalidity of any part.
Section 23. Reservation of Rights.
A. Both the City and the Franchisee reserve and may seek any and all remedies available
at Law. Neither the City nor the Franchisee shall be deemed to have waived any rights or remedies
at Law by virtue of accepting a Franchise Agreement pursuant to this Ordinance.
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B. The City reserves the right to amend this Ordinance as it shall find necessary in the
lawful exercise of its police powers.
C. Any additional regulations adopted by the City that are applicable to an entity
erecting, constructing, maintaining or operating facilities in the Public Rights-Of- Way shall be
incorporated into this Ordinance and complied with by all Franchisees within thirty (30) days of the
date of adoption of such additional regulations unless imposition of such regulations would be
otherwise prohibited by applicable Law.
Section 24. Effective Date.
This Ordinance shall be effective immediately upon second reading and final adoption this
day of
,1999.
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, ' 1
~u'-23-9B 09:26A CITY M~
,GER
305 46(' n9
P_02
'Y
APPENDIX A-FRANCHISES
Art. II, ~ 2
ARTICLE II. BELLSOUTH TELECOMMUNICATIONS, INC_'
ORDINANCE NO. 97-02
AN ORDINANCE OF THE CITY OF AVENTURA, FLORIDA, REPEALING ORDINANCE
NO. 96-26; GRANTING TO BELLSOUTH TELECOMMUNICATIONS, INC., A
NONEXCLUSIVE FRANCHISE IN THE CITY OF AVENTURA; AUTHORIZING BELLSOUTH
TELECOMMUNICATIONS. INC., TO USE THE PUBLIC RIGHTS-OF-WAY AND STREETS
OF THE CITY, FOR THE PURPOSE OF ERECTING, CONSTRUCTING, MAINTAINING
AND OPERATING LINES OF TELEPHONE EQUIPMENT THEREON AND THEREUN-
DER; PROVIDING FOR A FRANCHISE FEE; PROVIDING THE TERMS AND CONDI-
TIONS OF SUCH GRANT; PROVIDING FOR SEVERABILITY; PROVIDING FOR INCLU-
SION IN THE CODE; AND PROVIDING FOR AN EFFECTIVE DATE
Whereas, the City of Aventura finds it in the public interest to retain control oV~r the use
of public rights-of-way by providers of telephone services to ensure against interference with
the public convenience, to promote aesthetic considerations, to promote planned and efficient
use of limited right-of-way apace, and to protect the public authority over right-of-way
property; and
Whereas, the City of Aventura finds that the granting ofnonelCclusive franchises is the best
means of assuring that the interests of the City of Aventura are promoted.
Now, therefore, be it ordained by the City Council of the City of Aventura, Florida, that:
Section 1. Grant of franchise.
Permission is hereby granted to BeIlSouth Telecommunications, Inc., its SucceSSors and
assigns (the "company") to construct, maintain and operate lines of telephone and telegraph
equlpment, including the necessary conduits, poles, cables, electrical conductors, fiber optics
and digital technology fixtures upon, along, under and over the public roads, streets, and
rights-of-way of the City of Aventura, Florida, as its telephone and telegraph business may
from.' time to time require.
Section 2. Term and limits of franchise.
This nonexclusive franchise granted by this ordinance, if accepted by the company, shall be
in force and effect for a period of 15 years from and after its passage, provided, however, by
written notice within 90 days prior to the fifth and tenth anniversaries hereof, either party
may commence negotiations for modification of the consideration paid by the company to the
City set forth in section 3 herein. If new terms cannot thereafter be agreed upon, either party
may terminate this franchise upon an additional 90 days notice to the other party. The
permission granted by this franchise covers the follOWing geographic area: The corporate
limits of the City of Aventura as set forth in the Charter of the City of Aventura, as amended
from time to time. Company agrees that the limits of the franchise are subject to expansion or
.Editor's note-Printed herein is Ord. No. 97-02, adopted on January 7, 1997.
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Art. II. ~ 2
AVENTURA CODE
reduction by annexation and contraction of municipal boundaries and that the company has no
vested right in a specific area. The City shall notify the company of any annexation or
contraction of municipal boundaries and provide the company a map of the new boundaries in
a timely manner. The company shall take prompt action to implement computations and
corresponding payments to annexation or contraction and notify City of effective date of same.
Section 3. Franchise fee; payments.
In consideralion of the right. and privileges herein granted, and to defray the cost of
regulating the company's activities under this franchise, the company shall pay to the City
annually a sum equal to one percent of the gross receipts of the company on recurring local
service revenues for services provided within the corJMlrate limits of the City by the company.
Included within such one percent maximum fee or consideration are all taxes, licenses, fees,
and other impositions except ad valorem taxes and amounts for assessments for special
benefits, such as sidewalks, street pavings. and similar~..irnprovementa and occupational
license taxes levied or imposed by the City upon the company. The annual payment shall be
made to the City for each year that the permission granted herein is in effect and shall be made
to the City in four installments. The first, second and third installments ofthe annual payment
shall be based upon the gross receipts for the first, second and third quarters, respectively, of
the fiscal year and shall be made no later than 60 days following the end of these periods. 'rhe
fourth installment of the annual payment shall be made no later than 60 days following the
eno of such fisl'ai yea:-, and shall be hased upon such gross receipts for the fiscal year but shall
be adjusted to reflect payment of the first three installments and any credits not previously
taken. For purposes of this payment, such fiscal year shall end on September 30. The first such
payment shall be based uJMln receipts for the quarter of October, November and December
1996, and shall be made on or before January 31, 1997. Payments shall be payable to the City
of Aventura, Attention: Finance Support Services Department, during regular business hours
of the City.
Section 4. Review of billing recon:\s.
If the City wishes to verify the payments to the City under this ordinance, the company shall
permit the City or a designated representative of the City, upon reasonable advance written
notice, to review the company's billing and payment records, upon which the payments were
based, during nannal business hours at tile locatio." of the company where such records are
maintained. However. no company records may be laken from the company's premises, and the
City shall maintain the confidentiality of the information disclosed in these records and use
the infonnation solely for the purposes of verif~ng payments by the company. Such company
records shall be maintained by the company for the period prescribed by the Federal
Communications Commission and/or the Florida Public Service Commission.
Section 5. Transferability.
[f the rights granted herein to the company are transferred or assigned by the company to
any third party incident to a sale or olher transfer of the company's system or ptant, the
transferee or assignee shall be obligated to comply with all of the terms and conditions of this
ordinance.
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APPENDIX A-FRANCHISES
Art. II, ~ 9
Section 6, Forfeiture.
Failure on the part of the company to comply in any substantial respect with any of the
material provisions of this agreement shall be grounds for a forfeiture of the pennission
granted herein, but no such forfeiture shall take effect if the reasonableness or propriety
thereof is protested by the company, until a court of competent jurisdiction (with right of
appeal in either party) shsll have found that the company failed to comply in a substantial
respect with any of the material provisions of this ordinance, The company shall have six
months aller the final determination of the question to make good the default, before a
forfeiture shall result, with the right in the City at its discretion t.o grant such additional time
to the company for compliance as necessities in the case require.
Section 7. Hold harmless.
The company shall indemnify the City against and assume all liabilities for damages wltich
may arise or accrue to the City for any injury to persons or damage to property from the doing
of any work herein authorized, or the neglect of the company or any ofits employees to comply
with any ordinance regulating the use of the streets of the City, and the acceptance by the
company of this ordinance shall be an agreement by it to pay to the City any sum of money for
which the City may become liable from or by any reason of such injury or damage, including
reasonable attorneys' fees incurred by City.
Section !I. Unde<'ll'ound installation.
The company shall install underground extensions of telephone distribution lines in new
residential !ubdivisions over five units or new multiple occupancy buildings where all other
utilities will also be installed underground. Such installation shall be provided in accordance
with and subject to the requirements of applicable statutes, and the Florida Public Service
Commission rules and regulations, including any requirements applicable to the applicant for
such services, such as the provision of necessary rights-or-way or easements.
Section 9. Excavation maintenance and restoration.
The work under this ordinance shall be done subject to the supervision of the City. The
company shall replace or properly re-lay and repair any sidewalk, street,lawn, landscaping or
swale that may be displaced by reason of such work. Except where law requires the cost to be
borne by City, whenever the company shall cause any opening or alteration to be made in any
of the streets or public places within the City for the purpose of installing, maintaining,
operating or repairing its equipment, such work shall be completed at the company's expense
within a reasonable time and the company shall upon the completion of stich work restore such
portion of the streets or other public places to substantially the same condition as it was before
the opening or alteration was so made and will promptly remove any debris. Upon failure of
the company to perform said repair or restoration, after 20 days' notice provided in writing by
the City to the company. the City may repair such portions of the sidewalk, street, lawn,
landscaping or swale that may have be>.:n disturbed by the company and collect the cost so
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Art. n, ~ 9
AVENTURA CODE
incurred from the company_ The City shall promptly provide to the company all permits,
licenses and other authorizations reasonably necessary for the purpose of installing, main-
taining, operating and repairing the system and facilities_
Section 10. Use of streets and rigbts-of.way.
All poles, wires, cables, underground conduits, manholes and other fIxtures erected by the
company in, upon, along, across, above, over and under the public roads, streets and
rights-of.way within the corporate limits of the City shall be so located as not to unreasonably
interfere with the use of the streets, avenues, alleys, and public rights-<lf.way by the traveling
public and to cause minimum interference with the rights or reasonable convenience of
property owners who adjoin any of the said roads, streets and public rights-of-way.
Section 11. Complaints.
All complaints shall be addressed or resolved by the company in accordance with the Florida
Public Service Commission rules and regulations if applicable_
Section 12. Successors and assigns.
Wheneve::- !J! this ordinil:Jce either the City or the (;Ompa~'lY i~ fI:amed or referred to, it shaH
be deemed to include the respective successor, successors or assigns of either, and all rights,
privileges and obligations herein conferred shall bind and inure to the benefIt of such
successor, successors or assigns of the City or the company.
Section 13. City's right to regulate use or streets not abrogated.
Nothing in this ordinance shall be construed a. a surrender by the City of its right or power
to pass ordinances regulating the use of its streets in accordance with City's police powers or
property rights, provided, however, that "'Jch regulation shall not be inconsistent with the
rights. granted herein.
Sectioo 14. Written acceptance by the company.
The company shall, within 45 days after this ordinance lakes effect, file a written
acceptance of the ordinance with the City Manager.
Section 15. Severability.
The provisions of this ordinance are declared to be severable and jf any section, sentence,
clause or phrase of this ordinance shall for any reason be held to be invalid or unconstitutional,
such decision shall not affect the validity of the remaining sections, sentences, clauses, and
phrases of this ordinance but they shall remain in effect, it being the legislative intent that this
ordinance shall stand notwithstanding the invalidity of any part.
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APPENDIX A-FRANCHISES
Art. II, ~ 17
Section 16. Repeal.
Ordinance No, 96-26 concerning the same subject matter as this ordinance is hereby
repealed.
Section 17. Effective date.
This ordinance shall be effective immediately upon adoption on second reading.
CDkl:J
~
Issue
1.
Recurring
Local
Service
Revenues
2.
Review of
Records and
Audit
Rights.
Comparison of City of Aventura
Ordinance 97-02 (BellSouth Franchise)
and the Proposed Telecommunications Ordinance
Existing Bel/South Franchise
Neither the existing BellSouth
franchise, nor current applicable
law, defines the term "recurring
local service." As competition
spurs the development of new, and
often unanticipated, services, a
lack of definition, combined with
lack of adequate information (see
Issue 2 below), creates uncertainty
as to the adequacy of franchise fee
payments, with no means of
addressing that uncertainty.
Section 4 of the BellSouth
Franchise reserves the City's right
"to review the Company's billing
and payment records, upon which
the payments were based...." The
language implies that if a payment
was not based on a certain record,
BellSouth would not be obligated to
provide that information for review.
Therefore, the language III the
existing Franchise limits
BellSouth's obligation to provide
records for inspection by the City to
only those which, in the Company's
discretion, were used to a calculate
the payments due to the City.
\\225\dala\] 999\Aventura'Memos\side,by ,sidetelecomwpd
Page 1
Proposed Telecommunications
Ordinance
Section 2 ofthe proposed ordinance
contains a definition of recurring local
service which seeks to lend certainty to
the reven\le base used to calculate
franchise fees, and also address future
advances in services.
Section 6 of the proposed ordinance
reserves the City's rights to inspect on an
annual basis all books and records which
relate to the calculation ofthe franchise fee
payments, or any other payments to the
City, or to proper performance of any
terms of the franchise. In addition, the
ordinance also establishes that in the event
the City audits the Company's books and
determines that there is an underpayment
of franchise fees to the City in excess of
two (2%) percent, the Company shall pay
all reasonable costs and expenses of the
audit.
3.
Transfers.
4.
Revocation
and
Forfeiture.
Section 5 of the existing BellSouth Section 11 of the proposed ordinance
franchise states that if the rights of reserves the City's authority to consider
the franchise are transferred or the transfer of rights under the franchise in
assigned by BellSouth to any third the context of addressing any outstanding
party, such third party shall be noncompliance by the existing franchisee,
obligated to comply with all of the and securmg the acceptance of the
terms and conditions of the franchise's terms and conditions by the
franchise. The provision does not proposed transferee.
address any unrnet obligations by
the transferor (BellSouth) and any
methods to address such existing
issues of noncompliance.
Section 6 of the BellSouth Section 16 of the proposed ordinance
franchise establishes that the establishes procedures which the City must
Company's noncompliance "in any undertake in order to revoke the franchise
substantial respect" with material for material violation of its terms, and/or
provisions of the franchise shall be Federal, state or local law. This Section
grounds for forfeiture. Only a establishes specific notice and hearing
Court can determine that the requirements m order to effect the
Company has failed to comply with revocation. In addition, the section
a provision of the franchise. It is addresses any relief from appropriate state
unclear as to the process or agencies which may be necessary in order
procedure which the City must to overcome a telecommunications
follow, if any, to effect the company's legal right to access to a City's
revocation and subsequent rights-of-way pursuant to Federal law.
forfeiture of the Company's rights
under the franchise.
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Page 2
5.
Construction
and
Maintenance
6.
Enforcement
Remedies.
Section 9 of the existing BellSouth
franchise sets forth the obligations
of the franchisee to replace and
restore the rights-of-way incident to
its construction of facilities within
the rights-of-way. The last sentence
states that the City "shall promptly
provide all permits, licenses and
other authorizations necessary for
the purpose of installing,
maintaining, and operating and
repairing the system and facilities."
The language seems to
unconditionally commit the City to
provide permits to BellSouth for
construction of its facilities. There
is no corresponding obligation of
BellSouth to follow the permitting
procedures of the City.
None.
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Page 3
Section 8 of the proposed ordinance in
part, obligates the franchisee to comply
with and abide by all applicable provisions
of state and local law, including applicable
zomng regulations and permitting
procedures. This section further obligates
the franchisee to obtain any and all
required permits and pay any and all
required fees before commencing any
construction on the public right-of-way.
To the extent that a franchisee fails to
comply with the terms of a franchise or the
ordinance, certain remedies in the way of
fines would be available to the City under
the ordinance. The existing BellSouth
franchise only offers revocation as a
remedy for a material violation of the
terms of the franchise. This fails to
address the possibility of other violations
which may not rise to the level of material
and therefore not merit revocation, but still
affect the City's management of its rights-
of-way.
7.
Securi ty
Fund.
8.
Renewal of
Franchise.
None
None
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Page 4
The proposed ordinance establishes a
requirement for a telecommunications
service provider to establish a security
fund, in the form of cash, bond or
corporate guaranty, in order to ensure the
provider's compliance with the terms of
the ordinance and franchise. The security
fund establishes an available source of
funds to address violations of the terms of
the franchise, including any penalties or
liquidated damages that may be assessed
as a result. This Issue may be of
importance to the City, in light of the fact
that competition will result In new
providers increasing demand for access to
the City's rights-of-way, thereby
increasing the risk of noncompliance or
violations of the terms of a franchise.
The proposed ordinance establishes a
procedure by which franchises will be
renewed with the City. It sets forth
specific criteria which will be considered
consistent with applicable law, such as the
status of a franchisee's compliance with its
current franchise.
~
MEMORANDUM
TO:
Eric Soroka, City Manager
City of A ventura
FROM:
Braulio L. Baez
RE:
Telecommunications Issues
DATE:
September 26, 1999
The primary objective of the Telecommunications Act of 1996 was to increase competition
in the telecommunications field at the local level and to facilitate the availability of new services by
removing legal barriers to companies seeking to expand their existing business to other
telecommunications markets. The immediate impact of these provisions on state and local
governments has been an increase in demand for franchises and use of the public rights of way. The
1996 Act specifically states that prior cable and telecommunications laws remain unchanged unless
expressly modified, impaired or superceded by the Act or amendments thereto. Therefore, previous
laws regarding franchising and private use ofrights of way were not changed by the Act.
From the standpoint oflocal government, perhaps the most important provision in the 1996
Act is Section 253. Subsection (a) states, "In General. - No State or local statute or regulation or
other State or local legal requirement, may prohibit or have the effect of prohibiting the ability of any
entity to provide any interstate or intrastate telecommunications service." However, subsection (c)
preserves the right of a state or local government to manage the public rights of way and to obtain
reasonable nondiscriminatory compensation from telecommunications providers.
Section 337.40 I, Florida Statutes governs the authority oflocal governmental entities over
the operations of telecommunications companies and their occupancy of roads and rights-of-way.
The bill does not affect the current authority municipalities have to impose fees, i.e., one percent
(I %) of gross receipts on recurring local service revenues or at least $500.00 per linear mile for
certain pathways using rights-of-ways, nor does the bill grant telecommunications providers an
absolute right to occupy public rights-of-way. In fact, any such occupancy is subject to a municipal
government's reasonable regulations.
\\225\data\ I 999'Avenlura\ROW Ordinance\Memos\Soroka. TelecomIssues.0926. \'<lld
The proposed telecommunications ordinance being considered by the City of A ventura seeks
to attain three goals; (I) establishment of a level playing field over which the increased presence of
competitive telecommunications providers will use the City's rights-of-way to provide service to the
residents of the City; (2) establish reasonable regulations to manage the City's rights-of-way; and
(3) fix the nondiscriminatory compensation to be paid to the City by telecommunications service
providers for occupation of the City's rights-of-way.
The following is a brief summary of issues concerning the City's proposed
telecommunications ordinance over which participating telecommunications providers continue to
object.
I. Municipal authority. Telecommunications companies gon't want franchises, and believe
any franchise is beyond the constitutional authority of a municipality. Telecoms believe all
the authority they need to operate ANYWHERE is a PSC certificate, arguing that Section
337.401 only requires them to get a permit (construction or otherwise) to occupy the rights-
of-way. However, Section 364.0361, Florida Statutes, specifically recognizes that cities must
be non-discriminatory and competitively neutral "when exercising their authority to grant
franchises to a telecommunications company."
2. Application fees/cost recovery. Telecommunications companies point to several cases
which hold that City's may only charge fees sufficient to recover costs of managing their
rights-of-way (See Coral Springs, Dallas, Prince George). Section 337.401(5) states that
a municipality may not levy any tax, fee or other charge on a telecommunications company
for operation as a telecommunications company within the municipality, other than the
statutory I % fee on recurring local service revenues (or, in the case of toll service providers,
$500 per linear mile). Based on these cases and statutes, telecommunications companies
invariably object to the imposition of non-refundable application fees and other cost recovery
requirements. At least one provider has commented that at minimum such application fees
and/or cost recovery should be credited against the 1% franchise fee. The municipalities'
position is that such fees are not for operation as a telecommunications company within the
city, but rather for costs of processing and considering an application for a franchise with the
city. There is no case law directly concerning this issue.
3. Transfer/renewal provisions. Telecommunications companies maintain they have the right
to transfer a franchise with no review or involvement by the city, and that renewal is
guaranteed by the Telecommunications Act and state law, by virtue of the prohibition on an
absolute bar to access on the public rights-of-way. Federal and state law both guarantee
access to rights-of-way by certificated telecommunications companies, subject to reasonable
regulations. Some Courts have left alone transfer provisions which have been challenged,
while other Courts, citing the arbitrary and burdensome effect of certain transfer provisions,
have invalidated such provisions. (See Coral Springs, Prince George County) At best,
transfer provisions are evaluated on a case-by-case basis. But their importance cannot be
overlooked in terms of providing a mechanism to address non-compliance issues of the
current franchisee, as well as to secure the compliance of the proposed transferee. Renewal
\\225\data\ 1999\Avenlura\ROW Ordinance\Memos\Soroka- T e1ecomlssues,0926, wpd
provisions are trickier still, again given the access rights contained in the
Telecommunications Act and Chapter 364, Florida Statutes. Incumbent LECs like BellSouth
believe that regardless of what their present authorization says in terms of duration, that
authorization is perpetual. In AT&T Communications of the South West. Inc.. v. City of
Dallas. (N.D. Texas. June 8. 1998), the court held that a City can require that a
telecommunications company obtain a franchise and pay a reasonable franchise fee based on
the use of the City's rights-of-way for companies' planned use of its existing fiber optic
facilities to provide a new service. This holding could support cities on the issue of LECs
and their incumbency in the absence of a previous franchise by permitting a City to require
a franchise moving forward.
The proposed ordinance, under Sections 23 and 24, establishes specific procedures
for considering renewal and/or transfer applications. Generally, the processes involve
obtaining information, and consideration of any outstanding compliance and compensation
issues. Rather than act as a barrier to entry in the City's telecommunications market, which
would be contrary to Federal and State law, the processes are designed to consider the only
two conditions which can be placed on a Franchisee, as set forth in the Coral Springs case,
(I) adherence to the reasonable regulations of the City concerning management of its rights-
of-way; and (2) payment of the required franchise fee.
4. Security FundIBonding requirements. Every telecommunications provider assures a city
that it will never fail in its obligations under a franchise. Whether those claims are true or
not, a City should establish requirements which will safeguard compliance by all future
providers on a level playing field. All of these provisions have been upheld by the Courts
in several cases. (See Coral Springs) Sections -II and -12, respectively, set forth the terms
under which such security funds and construction bonds are required, also establishing
minimum amounts for the same.
5. Use ofrights-of-way. The court in AT&T Communications of the Southwest Inc.. v. City
of Austin (W.O. Texas 1997) held that a provider that does not install or own facilities in the
City's rights-of-way is not "using" the rights-of-way, and therefore not subject to a city's
requirement of a franchise (also, Prince George County) . Holdings such as this threaten the
future revenue streams of the cities, since it is believed that most cable system operators
lease or plan to lease excess capacity on their system to competitive telecommunications
providers. The Cable Act defines "cable service" as the "one way transmission to
subscribers of video programming or other programming service and subscriber interaction
if any..." (emphasis added). If the lease of dark fiber by a cable operator is not a cable
service, the five percent franchise fee chargeable to a cable operator for cable services
provided within the City is not applicable to revenues derived from the lease of that excess
capacity. All of these factors combined could lead to an effective bypass of the
municipality's authority to collect franchise fees. To the extent that competition emerges in
the form ofCLECs "leasing" facilities from LECs, or otherwise leasing dark fiber from cable
companies, any franchise fee revenues lost due to a franchised provider's competitive losses
are not directly replaced by franchise fee revenues from other franchised competitors. Note
\\225\data\ 1999\Aventura\ROW Ordinance\Memos\$oroka- Telecomlssues.0926. wpd
that electric utilities also own considerable amounts of fiber-optic installed in rights-of-way
as part of their internal "command-and-control" system, with sufficient excess capacity to
offer to competitive telecommunications providers.
Specifically, the proposed ordinance is also applicable to entities which place
facilities in the right-of-way to provide services other than local exchange or toll. In
addition, Section -05(0) of the proposed ordinance seeks to address this potential bypass, by
requiring that any Person providing service other than local or toll service, (i.e., leasing
excess capacity or dark fiber) using facilities in the right-of-way is subject to a 5% franchise
fee.
6. Recurring local service revenues. Generally, telecommunications companies will try to
limit the base upon which franchise fees are calculated, usually to "basic local
telecommunications service," which does not include the more profitable services which will
be provided in the City (i.e., "vertical sevices" like call-waiting; data transmission).
Everything local that is provided through the wire on a recurring (i.e. flat-rated) basis should
be included in the revenue base subject to franchise fees. Based on discussions with
providers, the term "recurring local services", previously only a term of art, has been defined
in the ordinance, under Section -02.
In addition, the issue has been raised over the inclusion of services provided via the
lease of unbundled networks elements (UNEs) as part of the revenue base subject the one
(I %) percent franchise fee. CLECs argue that to the extent it is providing services through
the lease ofILEC or other facilities, or through the purchase of UNEs from the ILEC, the
CLEC should not be liable for franchise fees on revenues derived from the provision ofthose
services within the City. In maintaining this position, the CLEC's want to draw a distinction
between services which they provide via their own facilities and services which they provide
via "resale" of unbundled services bought wholesale from the ILEC.
CLECs cite to the Dallas case for the proposition that the lease of an ILEC's
facilities, and likewise, the purchase of unbundled networks elements from the ILEC, does
not constitute the use of public rights-of-way, the revenues of which are therefore not subject
to franchise fees. In the Dallas case, the Court held that a company (T eligent), which did not
own facilities in the public rights-of-way, but rather merely leased the facilities of the
incumbent provider, was not "using" the public rights-of-way, and therefore could not be
required to obtain a franchise from the City. However, the Court further stated that should
a Company interconnect or combine a UNE purchased from a third party with a facility
owned by that Company which occupies the rights-of-way, the City would not be prevented
in requiring a franchise from that Company presumably by virtue by its connection to the
rights-of-way. The Court's ruling therefore, implies some distinction between providers that
own no facilities in the rights-of-way and providers that provide service using a combination
of leased facilities or unbundled network elements with its own facilities in rights-of-way.
Since Section 337.401, Florida Statutes, merely states that in the event a municipality
requires a fee in exchange for permission to occupy the rights-of-way that fee is limited to
\\125\dala\ 1 999IAventuraIROW Ordinance\MemosISoroka- Telecomlssues0926. wpd
one percent (I %), State law has no reference as to the distinction between services provided
over leased facilities or via unbundled network elements, and services provided using the
Company's own facilities in the rights-of-way. It would seem, therefore, that as long as the
threshold of 337.401 is met, actually owning facilities in the rights-of-way and therefore
being subject to a municipality's franchise requirement, the permissible fee is applicable to
all recurring local service revenues.
A secondary issue is the questions of whether an incumbent LEC (i.e. BellSouth) is
or will be recovering franchise fees through its UNE rates and/or wholesale rates charged to
CLECs, and ifso are they forwarding such fees for revenues from the sale ofUNEs lease of
facilities, or resale services to the City. Based on conversations with PSC staff, it is
understood that franchise fees, taxes and other costs of doing business are recovered as part
of UNE and resale rates. This fact would favor a CLEC's position against payment or
franchise fees based on the fact that a CLEC would in fact be paying franchise fees through
its purchase ofUNEs.
7. Reporting Requirements. Telecommunications providers generally object to any
requirement that information be provided, such as financial statements, lists of officers and
directors, and copies of pleadings, petitions and/or other documents submitted to other
regulatory bodies as excessive and overreaching and beyond a City's authority under Federal
and State law. (See Coral Springs Case). The Coral Springs Court validated among other
things requirements that providers report notices of deficiency or forfeiture related to the
operation offacilities, as well as copies of any request for protection under bankruptcy laws.
Any reporting requirement would have to reasonably related to the City's management of its
rights-of-way. For example, requiring updated maps depicting the locations of a provider's
telecommunications facilities is reasonably related to the management of the rights-of-way,
as well as requiring any documents that would adversely impact the construction operation
or maintenance of the franchisee's facilities. The proposed ordinance's reporting
requirements can be found in Section -17, and seek to gather information which will help the
City to assess a Franchisee's compliance with the terms of the Ordinance and/or a franchise
agreement.
8. Undergrounding of facilities. Telecommunications providers generally object to any
requirement that facilities be installed underground as being in violation of established case
law, and preempted by State law. The Florida Public Service Commission has exclusive
jurisdiction over telecommunications companies to regulate rates and services as well as
extension of facilities. Under PSC Rule 25-4.088, telecommunications companies are
required to install all new distribution facilities to residential and multiple occupancy areas
underground, provided that such requirement would not apply where electric distribution
systems will be installed overhead. Under PSC 25-6.074, a goverrunental authority may
require an electric utility to place distribution facilities underground. By extension, a
goverrunental authoriry can require that telecommunications facilities be placed underground
by virtue of their authority to require the placement of electric facilities underground. The
proposed ordinance, in Section -07, seeks to remain consistent with Federal and State law
225\oala\ 1 999\Aventura\ROW Ordinance\Memos\Soroka- Telecomlssues.0926. wpd
by requiring undergrounding only where existing facilities are or will be installed
underground.
The following is a brief outline of relevant case law concerning many of the issues identified above.
Comments in bold arc offered to highlight issues and information.
AT&T Communications of the South West Inc.. v. City of Austin (W.D. Texas 1997)
I. A provider that does not install or own facilities in the City's rights-of-way is not "using" the
rights-of-way. As previously discussed, to the extent that competition emerges in the
form of CLECs "leasing" unbundled network elements from LECs, or otherwise
leasing dark fiber from cable companies, any franchise fee revenues lost due to a
franchised provider's competitive losses are not directly replaced by franchise fee
revenues from other franchised competitors.
AT&T Communications of the South West. Inc.. v. City of Dallas. (N.D. Texas. June 8.
1998)
I. A City can require that AT&T obtain a franchise and pay a reasonable franchise fee based
on the use of the City's rights-of-way for companies' planned use of its existing fiber optic
facilities to provide a new service. This holding could support cities on the issue
frequently raised hy incumbent LECs (i.e. BellSouth) that their incumbency in the
absence of a previous franchise precludes a city from requiring a franchise moving
forward.
2. Section 253 of the Telecommunications Act does not require City to impose same fee on all
providers.
3. City does not have power to require comprehensive franchise application; to consider factors
such as technical and organizational qualifications; or place conditions on franchise unrelated
to use of City's rights-of-way.
4. Local governments have authority to require franchises from telecommunications service
providers and exercise authority pursuant to 253(b).
Tca Detroit v. City of Dearborn (E.D. Michigan. August 14. 1998)
I. City has right to charge "rent" for rights-of-way.
2. City does not violate Section 253 by imposing comparable but not identical agreements.
This may allow cities the flexibility to take into account a provider's prior history with
the city, under certain circumstances.
\225\dala\ 1999\Avenlura\ROW Ordinance\Memos\$oroka- T elecomlssues.0926......vd
BellSouth Telecommunications Inc.. v. Citv of Coral Springs (S.D. Florida. January 1999)
1. Indemnification, insurance, bonding and security funds all fall within the FCC's
interpretation of "managing the rights-of-way."
2. A franchise must only be conditioned on a telecommunications company's agreement to
comply with the City's reasonable regulations of its rights-of-way and the fees for use of
those rights-of-way.
3. Enforcement remedies provide the mechanism for the City to enforce an Ordinance and are
valid.
4. Transfer provisions in the ordinance were not invalidated.
5. City may take possession of some or all franchisee's facility in the public rights-of-way upon
termination or forfeiture of the franchise.
6. The City's discretionary right to purchase the system as contained in the original franchise
ordinance was invalidated. This invalidation was in part based on the Court's view that,
contrary to the City's argument that a franchise was a contract, since the "contract" was a
municipal ordinance, such terms and provisions in the ordinance were subject to later
preemption by changes in State and Federal law and therefore not protected by the contract's
clause of the constitution. This raises the issue of whether to grant franchises by
resolution and not ordinances.
BellSouth v. City ofChatanooga (E.D. Tefill.. 1998)
I. "One of the most important characteristics and distinguishing features of a tax is that it is
designed and imposed for the purpose of raising general revenue." This case deals almost
exclusively with the notion of "when is a fee really a tax?" The Court's analysis may
jeopardize a municipality's ability to freely use franchise fees, since a city's ability to
use franchise fees for other than regulatory costs could be proofthat such fees were not
directly related to regulatory costs. However, the fact that the 1 % franchise fee in
Florida is statutorily established, may remove any such question, barring a
constitutional challenge of the statute itself, of whether the compensation authorized
by Sec. 337.401 is a fee or a tax.
Alachua County v. State of Florida. (Mav 13. 1999. Supreme Court of Florida)
1. Court asks the question: "Why would a business negotiate a franchise agreement that would
allow it to run a business it already has the right to operate, and why would it do so when the
other party expressly states that it will give nothing in exchange for imposition of a fee?"
"225\dala\ 1999lAventura\ROW Ordinance\Memos\Soroka- Telecomlssues 0926 wpd
This is a common question from incumbent LEes. However, the question may not be
applicable in the case of telecommunications providers, since the municipality's right
to charge and collect a fee is statutorily established under Sec. 337.401. Further, as
Section 364.0361 implicitly recognizes by its language requiring nondiscriminatory
treatment of telecommunications providers in the award of franchises, as well as
several of the cases previously mentioned herein, a municipality's right to require a
franchise from telecommunications companies is unquestioned.
Bell Atlantic-Maryland v. Prince George's Countv. Maryland (District of Maryland. June
1999)
1. "Any process for entry that imposes burdensome requirements on telecommunications
companies and vests significant discretion in local governmental decision-makers to grant
or deny permission to use the public rights-of-way 'may... have the effect of prohibiting' the
provision of telecommunications services in violation of the [Telecommunications Act]."
2. Courts will look at the totality of the Ordinance to determine whether it creates a "substantial
and unlawful barrier" to entry into a given market.
3. Appropriate benchmark is not the value of a Franchisee's privilege to use the rights-of-way,
but rather the cost of maintaining and improving the rights-of-way which a franchisee
actually occupies.
4. Unless a telecommunications company physically impacts the public rights-of-way by
installing, moditying, or removing telecommunications lines and facilities, it is not using the
rights-of-way within the meaning of Section 253( c).
'\225\dala\ I 999IAventuraIROW Ordinance\Memos\Soroka- Telecomlssues.0926,wpd
\t)
Janual)' 3, 2000
SellSouth relecomP1Ul'tlc.tiDn., Inc_
MUHum TowllIr BIJilding
Suil1ll1910
1 SO West FIIgla, SlnsEll
Miami, Florida 33130
Phono(30513C7-5570
Focaimilo (305) 375-0209
Shlron II. Lllbmln
Attorney
VIA FACSIMILE AND U.S. MAIL
Mr. Braulio Baez
Leibowitz & Associates, P.A.
Sui Ie 1450
Suntrustlnternational Cenler
One Southeast Third Avenue
Miami, Florida 33131-1715
Re: BellSouth's Comments Regarding the City of Aventura's
Proposed Telecommunications Ordinance
Dear Braulio:
BellSouth Telecommunications, Inc. ("BeIlSouth") appreciates the opportunity to provide
comments regarding the City of Avenlura's revised, proposed Telecommunications Ordinance
(the "Ordinance"), a draft (dated 11/29/99) of which we received from you on December 20,
J999.
Part (l) of lhi$ letter provides BellSouth's general commenls regarding the Ordinance,
and Part (2) of Ihis lotter provides more specific commenls regarding particular Ordinance
provisions based upon those general comments.
(1) Genenl COUlBlentl.
BellSouth objects to certain provisions in the Ordinance because they (a) exceed the
City's authority under its police power to manage ils public rights-of-way, (b) are pre-empled by
state Dr federal law or (c) encroach upon the jurisdiction and authority of Ihe Public Service
Commission ("PSC") and the Federal Communications Commission ("FCC").
A lelecommunications ordinance enacted by a municipality in Florida is invalid to the
extent that it includes other than reasonable rules or regulations to manage City rights-of-way and
collecl fees from Ielecommunications companies in accordance with Section 337.401(3), Florida
Stalules. Fla. Stat. ~ 337.401; BellSouth Telecommunications, Inc. v. Tnwn of Palm Beach,
1999 U.S. Disl. LEXIS 16904 (S.D. fla. Sepl. 28, 1999) (appeals pending); BellSouth
Telecommunications. Inc. v. City of Coral Springs, 42 f.Supp.2d 1304 (S.D. Fla. Jan. 25, 1999)
(appeals pending).
The mere fact tbatlhc Ordinance purports to make it unlawful for any penon 10 operate a
telecommunications facility upon City rights-of-way absent receipt of a "!\-anchis'" (as sucb term
is defined in the OrdinlUlce) renders it inconsistent with Section 337.401(7), Florida Statutes.
cited by the Palm Beach and Corn} Springs courts. Pursuant to that section, a company such as
Mr. Braulio Baez
Page 2 of7
January 3, 2000
Bell South may continue to occupy the City', rights-of-way absent any additional consent or '\
"franchise" from the City. subject to any reasonnble rules Or regulations that the City m.y adopt
to manage use of rights-of-way and collection of fccs in accordance with the section. See also
Section 362.01, Florida Statutes. II is BellSouth's position, as supported by statutes and case law
(referenced below). that the Or<linance includes other than such reasonable rules and regulations.
The City may impose reasonable rules and regulatiollS, collect such fccs and
appropriately exercise its pOlice power without enacting an ordinance such as the Ordinllnce
which is inconsistent with applicable law.
.'
A growing number of cases support the principles referenced above and, accordingly,
strike down municipal ordinance provisions that exceed the subject municipality's authority.
Palm Beach and Coral Springs (cited above); Bell Atlantic-Maryland, Inc. v. Prince Geor~e's
County, 49 F.Supp. 2d 805 (O.Md. May 24, 1999); AT&T Communicationl of tbe SO\ltbwest,
Jnc. v. City ofOall.s. 52 F.Supp. 2d 763 (N.D. Tex. May 17. 1999); AT&T Communications of
the Southwest. Inc. v. City of Dallas, 8 F.Supp.2d 582 (N.D. Tex. June 8, 1998); City of
Chattanoo~a v. BellSouth Telecommunications, Inc. et ai, 1 F.Supp.2d 809 (E.D. Tenn. Jan. 26,
1998); AT&T Communications of the Southwest, Inc. v. City of Austin, 975 F.SupP. 928 (W.D.
Telt. Aug. 21, 1997); City of Hawarden II. US West Communications, Inc., 590 N.W.2d 504 (Ia.
Sup. Cl. 1999). The FCC has expressed concern that local regulation should not reach beyond
tl8ditional rights-of-way matters and seek to impose a "redundant third-lier of
telecommunications regulation" aspiring to govern relationships among telecommunications
providers or the rates, terms and conditions of service or impose requirements that constitute a
barrier to entrY inconsistent with Section 253 of the Federal Telecommunications Act of 1996
(the "IT An). reI Cablevision of Oakland County, Inc" Memo,andum Opinion and O,der. FCC
97-331 (Sept. 19.1997).
Comments regarding particular Ordinance provisions based upon Ihese genel8l
comments follow.
(1) Comments Re~lfdlng Particular Ordlnanee Provisions,
(a) Whereas Clauses. The Fifth Whereas clause is inconsistent with Section 253(a) of the ITA
and Section 337.401(6), Fla. Stat, as it effectively provides that the City bas authority over
access of providers to the City service territory (Section 253(a) provides that a local
government regulalion may not probibit or have tbe effect of probibiting the ability of an
entity to provide telecommunications service). The Sixth Whereas clause is incorrect, as the
Ordinance policies are not in accord with the FT A. Refcrence in the Eighth Whereas clause
to, and other references in the Ordinance to, "operations" of a telecommunications provider
(including in the definition of "Fl1lllchise") whicb suggest City regulation oller opel8tions of
"Franchisees" should be deleted; the PSC has exclusive jurisdiction over opel8lions. A local
government can only impose reasonable rules for managing rights-of-way and collecllawful
charges from telecommunications providers. The Ninth Whereas clause is objectionable
based upon the comments in p.rt (c)( I ) below.
(b) Section 1. (1) the definition of "Affiliale" should be deleted. as it has no relevance 10
managing rights-of-way or collection of fees; (2) the definitions and use of "Franchise,"
Mr. BlllUlio Bae2
Page J of?
Janual)' 3, 2000
"Flllllchise Agreement" and "Franchisee" are inappropriate for the reasons discussed in part
(c)( I) below; (3) the definition of "Gross Receipts" exceeds the appropriate fee base set folth
in Section 337.40 I, Fla. Stat. (it seems that the telID is used only in Section S(A) in the phrase
"one percent (I %) of Gros> Receipts of lhe Franchisee on Recurring Local Service
Revenues," such that Gross Receipts should be defined. if at aU, merely as receipts from
Recurring Local Service Revenues); (4) by inclusion of references to PSC, fedC1'll1 and state
laws in the definition of "Law," the City impermissibly purports to extend its jurisdiction to
require compliance with these laws and punish for non-compliance; (5) the definition of
"Public Rights-of-Way" should not include "easements," as this term includes private nnd
utility easements that are not designed for the traveling public or tbe appropriate subject of
City regulation regarding use of rights-of-way; (6) the definition of "Recurring Local Service
Revenues" differs from the definition prel/iously agreed upon by BellSouth and other
indUilll)' members; and (7) tbe defmition of "Telecommunications Facilities" differs
significantly from Section 364.02(13), Florida Statutes.
(e) Secdnn 3.
(I) This section regarding the gmnt of a "franchise" is inconsistent with applicable law,
including Section 337.401, Fla. Stal., existing City Ordinance 97.02 and the Prince
Geo~e 's, Dallas, Palm Beach and Coral Springs eases. The law provides that BellSouth
has the continuing right to use City rights-of-way under Section 337.401(7), Fla. Stat.
and that the City has no authority beyond requiring a telecommunications provider to
comply with TCasonable rules and regulations to manage rights-of-way and collect fees
in accordance with Section 337.401, Fla. Stat. (as discussed in Plll't (1) of this letter
above). We are not certain of the intent of the language "[ulnless otherwise authorized
by applicable law" which modifies the franchise requirement, This language should
contemplate Section 337.401(7), Fia. Slat, such that it exempts companics that fall
within the language in that subsection from all franchise-related requirements. Case law
has held invalid "franchise" and related ordinance provisions similar to those in the
Ordinance. I Further, any such rules regarding use would be, it seems, more
approprialely set forth in public works department permits/policies
(2) The application requirements are invalid for the reasons discussed in part (c)(1)
immediately above. Also, the requirements demand the provision of information
I For example, Prince Georl(e's held that "franchise" requirements including a burdensome
application process and reporting requirements created a substantial and unlawful barrier 10 entl)'
into the telecommunications market in violation of Section 253(a) of the FTA. The case further
held that the ordinance provisions improperly imposed requirements unrelated to providers' use
of rigbls-of-way. The eoult objected.to requirements for providers to include in applications and
reports information unrelated to such use (such as fUlBncial information and technical
information) and ordinance provisions granting lhe local government entity the power to gl1lJlt or
deny a "franchise" based upon a wide range of discretionary factors. The Ordin.nce suffers from
lhe same problems. Coral Sprin2s held that the grant of a "franchise" may be conditioned only
on a provider's agreemenllo comply with reason.ble rules 10 UlBnage righls-of-way and fees for
use of rights-of-way (and then proceeded to strike down provisions such as those in the
Ordinance).
Mr. Braulio Baez
Page 4 of7
January 3. 2000
regarding a provider's services, systems (such as facility design and space in e)(isting
conduils) and operations. which infonnation is exclusively within the jurisdiction of the
PSC. thereby purporting to regulate such matlers in violation of applicable law. See
Section 337.401(6), Fla. Stat; see also Palm Beach (stating that a municipality does not
have the authority to request information regarding systems, plans or purposes of
telecommunication< facilities). The infonnalion is, in some cases, proprietary without
any protection from disclosure under public records lalll. Also, certain requirements do
not make sense. For example, Section 3(B)(2)(e) asks for ~an eSlimate of any necessary
rearrangement of existing Facilities" - what does this me8ll? Section 3(B)(2)(e) also
requests an estimate of the availability of space in existing conduits; tbis information
relates to operations, is exclusively within PSC jurisdiction under state law and is
proprietary without public records protection (see Palm Bea.ch whicb held that the
Town's requirements regarding installation of conduit in excess of 8 provider's own
requirements are unenforceable, as they are .operational requirements forb1dden by state
law). In connection with the installation and maintenance of facilities, the information
needed for managing rights-of-way is required, and given, under the permitting process
currently in effect.
(3) Section 3(C) provides that the City may request "such additional infonnation as it finds
reasonably necessary to review an application," essentially granting to the City
unlimited discretion to request and use any information in considering an application,
whether or not properly related to managing rights-of-way (the Prince George's case,
see footnote I, held an application process granting such discretion invalid). Section
3(C) further srates that the applicant must "accept [any] modifications required by the
Clly to its proposed system" and ~comply with any conditions precedent to the
effectiveness of [a] Franchise Agreement" granting further unlimited discretion,
unrelated to reasonable regujation of rights-af-way, to the City and further infringinl!
upon lhe exclusive jurisdiction of the PSC.
(d) SocriDD 4_ A term IimilBtion on a "fnmchise" is inconsistent with Section 337.401(7), Fla.
StaL which provides continuing, unlimited pennission to a company such as Bell South to use
City rights-of-way.
(e) SecdoD S. We are not certain ofthe intent for inclusion of the phrase "subject to a fl1lnchise
gT8llted hereunder" in subpart (A) of this section. Please advise as to the meaning of the
subpart. The last sentences of subparts (C) and (E) (specifically stating that charges imposed
by tbe Ordinance are the "minimum fair market value" for the gr8llt of a franchise and use
rights) are objectionable, There is no authority for such characterization. Section 337.401,
Fla. Stal. does not characterize the charges as rent. Coral Springs held invalid the language
in subpart (al of subpart (El. Any amounts imposed upon a provider under subpart (F),
including the application fee, must be credited against 1 % payments, as required by seclion
337.401(3), Fla. SIB!. The Ordinance does not currently provide for tbis credit (in fact, it
specifies "non-refundable payment") in violation of Section 337.40 I, Fla. Slat.
(I) Secllon 6. The inspection requirements in this section are inconsistent with applicable law to
the extent they allow for inspection of a provider's books and records for other than verifying
paymenlS required under thu Ordinance Rnd ensuring safety of the traveling public. We
I~U. 1":>0 ,~~O/t:.Jt:.JO
Mr. Braulio Baez
PageS of 7
January J, 2000
object to payment of audit expenses as specified in the Ordinance. The Ordinance requires
annual reports from providers that (I) include information not needed for managing rights-of-
way, relate to subjects exclusively within PSC or FCC jurisdiction and is proprietary and (2)
are burdensome (so as to constitute a potential barrier to entry in violation of the ITA). As
discussed in footnote 1. Prince George's held similar reporting requirements invalid.
Requiring an estimate of the availability of space in conduils in annual reports is invalid for
Ihe reasons discussed in part (c){2) above. Based upon information provided to the City in
connection with permitting processes, the City will already have information n:ganling
location of facilities, such thai requiring such information in maps in annual reports is
burdensome and unnecessary. Sections 6{C) and 6{D) include overbroad provisions tbat
require a company 10 provide to the City documenls that an: unrelated to managing rights-of-
way and/or are exclusively wilhin Ihe jurisdiction of the PSC. Section 6(E) asks for an
annual certification to the City Ihal a company is not leasing excess capacity on its system or
leasing dark fiber on tbe System; this information is not needed feir the City 10 manage rights-
of-way, is proprietary andlor is within the exclusive jurisdiction of the PSC.
(g) SectloD 7. Subpart (A) contains undergrounding requirements in violation of applicable law,
including PSC Rules and Florida Power COrpDl1ltion v. Seminole County, 579 So. 2d IDS
(Fla. 1991) (providing thaI the exclusive jurisdiction of the PSC to regulate rates and services
of public utilities preempts the authority of a city to require a company to place its lines
underground and, accordingly, is inconsistent with a eilY exercising its discretion to require
undergrounding in certain instances). Subpart (B) which requires that a company provide
locates for tbe City at no cost to the City requires in-kind compensation in violation of
Section 337.401(5), Fla. Stat. (tbe fael thai such language is modified by "to the extenl
consistent with applicable law" provides some comfort but, as the language is in violation of
law, il should be deleted in full). Subparts (D) and {El need to be qualified by the following
proviso: "except as explicitly provided under applicable law, for example, Section 337.403,
Fla. Stat." Section 337.403 sets forth limited circumstances where a company must, at its
expense, relocate its facilities upon request by a city; subparts (D) and (E) are incoDsistent
with the statute. Subpart (H) should be revised 10 clarify that any alteration or removal by the
City as sel forth in the final line of the section will nol be at the provider's cost.
(b) SeelloD S. Subpart (A) should not refer to zoning regulations. as they are not applicable to
work in rights-of-way. We requesl thaI the last senlenee of subpart (A) be revised 10 refer to
"minimal disruption" instead of "no disruption" (we believe this is consistent with the City's
intent. and the "no disruption" standard is impossible to satisfy). The last sentence of subpart
(B) and second to last senlence in subpart (H) musl be deleted, .. they purport to regulate the
height, width and diameter of a provider's facilities, mailers exclusively within PSC
jurisdiction under applicable law. Further, subpart (lI) is inconsistent with 47 V.S.C.
224{f){ 1) regarding pole attachments and exceeds Ihe City's police power (it seems designed
to control aesthetics nol to manage rights-of-way) and it presents practical problems, as il
requires City Commission approval for the referenced allachmenls. Subpart (F) allOWing for
inspection for compliance with the Ordinance is invalid to the extent that the Ordinance terms
th.t are the subject of the "compliance" are invalid and also \0 [he extent of inspection of a
provider's operations (see Palm Beach invalidating requirements for inspection of operations
due to contlict with Section 337.401(6), Fla. Stat, providing that operations are exclusively
within PSC jurisdiction). We request that subpart (E) be revised to provide for an exception
Mr. BJ1lulio Baez
Page 6 01'7
January 3. 2000
to the 30-day post completion restoration requirements in the event of special circumstances.
as may be approved by the City Manager or public works department.
(I) SedloD 9. This section regarding written acceptance by "franchisee" is invalid for the same
reasons that the grant of "franchise" requirement is invalid. as discussed above.
U> Section 11. The transfer requirements in this section are invalid for Ihe same reasons the
granl of "franchise" and application requirements are invalid. as discussed above.
(k) Section 11. Subpart (E) must be revised to include in the second sentence the same
"provided however" clause (limiting indemnity obligalioos) as is included in the first
sentence. See Woods v. City of Pal at lea. 63 So. 2d 636 (Fla. 1953). Further, indemnification
should not extend to "operalions" of a provider in the City but should relate only to claims
arising from work in rights-of-way.
(\) Section. 13 and 14. The securily fund and bonding requiremenls impose a co&l upon
providers in excess of the 1% muimurn allowed under Florida law. If the requirements are
retained despite tbis comment, Section 13 should be revised to clarifY that the City Manager
has Ihe discretion to reduce or eliminate the 525,000 minimum referenced in the third
sentence of the section (the third sentence which does not allow for discretion does not "lie
in" with the fourth sentence which seems to provide such discretion). Further, the discretion
under Sections 13 and 14 sbould be exercised based upon the !inancial stability of the
provider (in other words, fmaneially stable providers should be exempted from any security
fund requirements). In this regard. reference to fmancially stability u a factor to be
considered should be added to aach section. Any bond posted should be based upon the cost
of construction (the $50,000 minimum bond requirement is inconsistent with a cost-based
standard). Section 14(A) refers to modifieation of the bond amount by the City Manager
based upon the "value" of construction, but this should refer to "cost" not "value" and it fails
to require a east-based standard (it just allows for discretion based upon "value").
(m) Seellon 15, The enforcement remedies in this Section exceed the City's police power to
impose reasonable rules regarding use of rights-of-way. Lawful remedies are provided by
Sections 166.0415 and 162.09. Florida Statutes. The liquidated damages provisions in
subparts (A) and (C)( I) are, in particular, impermissible. Revocation as an enforcement
remedy is impermissible as discussed in part (n) below.
(n) Secllons 16 and 17. Section 16 regarding revocation or termination ofa "t'nmchise" should
be stricken. The City does not have the authority to seize and sell a provider's property, and
the City cannot revoke from BeUSouth its statutory right under Florida law to use City righls-
of-way, Revocation triggered by a violation of the Ordinance or a "franchise agreement" is
invalid based upon for example. Coral Springs and Prince George's. which hold invalid
ordinance provisions similar to those in the Ordinance (if the underlying provisions are
invalid, so too is revocation based upon violation of them). Section 17 setting forth renewal
application requirements is invalid for the same reasons as the initial application nnd
ufranchiseu requircDlenls are invalid, 89 discussed above.
td1/ld..i/l::l1j It,: 12
riU. (::;<b r-uuu/ UUb
Mr. Braulio Baez
l'age7of7
January 3, 2000
(oj Seerlon 18. Municipal ownership provisioos such as those in this section e~ceed the City's
police power to reasonably regulate use of rights-of-way and are invalid. See Coral Sprinlls,
42 F.Supp. al 1311.
In light of Qur (and, we expect. other industJy members') concem& regarding the
Ordinance, we request that the City, at a minimum, hold a workshop for industry members and
City representalives to further discuss the proposed Ordinance.
Sincerely,
~~
Sharon Liebman
cc: David Wolpin, Weiss Serota Helfman Pastoriza & Guedes, P.A.
W. Tee Holloway, Manager, BellSouth Corporate & External Affairs
Dorian Denburg, BellSoulh Legal
01/13/00 10:36
NO.969 P002/004
January [3,2000
BellSauth Tellcornm..nlntlanl. Inc.
Museum Tawilr Building
Sl.Iite1910
150 We.t Flegler Strut
Miami. Fh~rid. 33130
Phon8(305) 347.5570
Focsimil. (305) 375-0209
Sho,on R. L18~mon
Attorney
VIA FACSIMILE AND U.S. MAIL
Mr. Braulio Baez
Leibowitz & Associatcs, fA
Suite 1450
Sun trust International Center
One Southeast Third Avenue
Miami, Florida 33131.1715
Re: BellSouth's Comments Regarding the City of Aventura's
Proposed Telecommunications Ordinance
Dear Braulio:
This letter is in follow-up to our January 3, 2000 letters to you and the Mayor and
Commissioners regarding the City of Aventura's proposed telecommunications ordinance
("Ordinance") and first reading of the Ordinance on January 4, 2000. We look forward to
participating in the January 21, 2000 workshop regarding the Ordinance scheduled by the
Commission at first reading.
This letter addresses your October 8, 1999 and December 13, 1999 letters to Eric Soroka,
City Manager, and David Wolpin. counsel for the City, respectively. We obtained these lellen
subsequent to our January 3, 2000 correspondence.
Your October 8, 1999 letter attaches a comparison of existing Ordinance No. 97-02
(referred to in your letter as the e"isting BellSauth "francbise") and sections of the proposed
Ordinance. Your letter also e"presses three fundamental purposes of the proposed Ordinance, all
of which refer to the City's authority over "access" to rights-of-way. for reasons further
expressed in our January 3, 2000 lettcr 10 you, this reference is inconsistent with applicable law.
The City docs not have authority over "access" but, rather, over reasonable regulation of rights-
of-way. Under state law, lbe federal Telecommunications Act and casc law referenced in our
January 3, 2000 leller. ccrtain or all, as may be applicable, telecommunications providcrs have
the continuing right to "aeees.' to City rights-of-way (subject to reasonable rules and regulations
and payment of amollnts in accordance with stale law).
Specific comments regarding the comparison attached to your October 8, 1999 letter are
provided below. We nOle that the comparison docs not refer to Section 13 of e~isting City
Ordinance No. 97-02 which provides as follows:
Nothing in this Ordinancc shall be construed as a surrender by the City of
its right or power to pass ordinances regulating the use of its streets in
accordance with [the] City's police powers or property rights, provided,
however that such regula/ion shall not be inconsistent with the righls
granted herein. (emphasis added).
131/13/00 Hi:.5b
NO.969 P003/~~4
Mr. Bl1lulio Baez
Page 2
JanulllY 13, 2000
Cenain provisions of Ihe proposed Ordinance are in,'onsislenl with the rights gnmted in
existing City Ordinance No. 97'()2. For example, tbe requirement in the proposed Ordinance that
BellSouth apply for and obtain a fmnchise for Ihe right to use the rights-of-way is inconsistent
with Ihe rights previously granted to BellSouth in 97-02 for 15 years commencing JanUIIfY 1997.
So, enacting the Ordinance will contlict with the City Code as well as the olher applicable law
referenced in our prior eorrespondence.1 We question whether Section 20 of tbe proposed
Ordinance, which indicates that existing City Ordinllllm in conflict are repealed to the extent of
the conflict, resolves this inconsistency, since Section 13 of 97-02 is exisling City law and
prohibits a repeal whicb conflicts with the rights granted in 97-02.
We also note the absence of reference in the comparison to numerous sections of the
Ordinance that are not comparable to any sections in 97-02 or to the eight categories identified in
the comparison. In other words, the proposed Ordinance includes many objectionable provisions
that arc nol designed to "beef up" terms in 97-02. Rather, tbey are far in excess of the terms and
rules set forth in 97-02 and impermissibly impose upon telecommunications companies other
than reasonable rules to regulale rights-of-way, as they infringe upon the elC:clusive jurisdiction of
the PSC or FCC, exceed the City's authorilY, require information not needed to manage rights-of-
way or are otherwise ineonsistenl with applicable law (see our January 3, 2000 letter for more
specifie comments). The comparison, also, does not retlect the City's current permitting
processes for work in rights-of-way, which currently impose requirements on cOlDpanies in
connection with such work for the City', management of its rights-of-way.
Examples of excessive and objectionable provisions in the proposed Ordinance are:
. City Commission approval of pole attachments (Section 8H);
. undergtounding requirements in Section 7;
. provision of locates to the City at no cost (Section 7B); and
. relocation of facilities at City request (without limitation as to the reason) at the
expense of telecommunications companies, without regard to Section 337.403, Fla.
Stat. which limits the circumstances under which companies must bear such expense
(Section 7D),
Additional examples include the franchise application and reporting requirements in
Sections 3B and 6B-C of the Ordinance, respectively, which require a company 10:
. modify its facilities as directed by the City;
. comply with "any conditions precedent" to the effectiveness of a "franchise
agreement" as may be included by the City;
I This applicable law include, Section 337.401 (7). Fla. Stst. Note that the BellSeuth Telecommunications,
Inc. v. Town of Palm Beach case stales that a t998 amendment (0 this s18Me "msde cleor that any
telecommunications company that hIlS obtBlned permission to occupy or is otherwise lawfully occupying
the roads or rights-of-way of a municipality on May 22, 1998, ',hall not b. required to obtain additional
consent to continue such lawful occupation of thOle roads or rights-or-wIIY,' ex.ccpt that a municipality
may impose a. fee or reasonably regulate the use of the rights-of-way'" BellSol.l1h is one such
telecommunications compilllY. and the franchise requirements in the proposed Ordinance require mat
BellSouth "obtain additional consent" in violation ofthi::l Qt.ate law.
l'lU. ~o~ .UU'-f/ UU--;
Mr, Braulio Baez
Page 3
January 13, 2000
. offer infonnation about space in existing conduits;
. certify that a company is not leasing ex.cess capacity on its facilities: and
. provide copies of all communications and filings with Ihe FCC, SEC, PSC or any
other agency, court or commission "which filings may impact the Franchisee's
operation of (its System] in the City. . . ."
Proposed Ordinance provisions are, in many cases, in conflict with decided eases,
overbroad and not narrowly tailored to gather only informalion appropriate for, and rellllcd to,
management of rights-of-way. Our January 3. 2000 letter provides additional examples.
Finally, although certain proposed Ordinance provisions referenced in the comparison
might, as mentioned in your October 8, 1999 letter. "add" to the City's interests under 97-02,
they are inconsistent with applicable law. In this regard. we refer specifically to the transfer
provisions, revocation provisions and renewal provisions in the proposed Ordinance, which are
objectionable for the reasons as are the initial franchise requirements (see. for example, the
BellSouth Telecommunications, Inc. v. Town of Palm Beach case which states that revocation
procedures that have the effect of prohibiting the ability of any entity to provide
telecommunications service are inconsistent with the federal Telecommunications Act and that
transitional provisions requiring application for a franchise under an ordinance are invalid 10 the
extent they conflict with Section 337.401(7), Fla. Stat.}.
We are unaware of support for the recommendatioll contained in your December 13,
1999 letter that that the City enact the proposed Ordinance prior 10 consideration of unified
telecommunications la~ legislation by the Florida Legislature during its upcoming session. You
suggest that the City's failure to do so will result in a .it\llltion where Ihe City has less authority
or is entitled 10 less revenue under the tax than it would if the City were to enact the proposed
Ordinance. We helieve your suggestion is without merit. You may I<now that BellSouth, other
industry members, the Florida League of Cities, Florida Association of Cnunties, County and
City representalives and other interested parties have been wotking together on Ihis legislation.
Involved parties with whom we have spoken disagree with such suggestion ill your Jetter. As
staled ill our January 3, 2000 Jetter to the Mayor and City Commissioners. the current proposed
simplified tax legislation does not support the need to enact an ordinance such as the Ordinance
for the Cily to protect or maximize its revenues under the tax.
Sincerely,
~\~
Sharon Liebman
cc: Richard Weiss and David Wolpin, Weiss Serota Helfman Pasloriza 8:. Ouedes, PA
W. Tee Holloway, Manager, BellSouth Corporate 8:. External Affam
Dorian Denburg, BcllSouth Legal
~
LawOfhces
HOLLAND & KNIGHT LLP
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January 3,2000
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AND BY U.S. MAIL
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Re: TCG South Florida - Comments to Proposed City of
Aventura Telecommunications Ordinance
Dear Braulio:
Thank you for forwarding to our office a copy of the most recent draft City
of Aventura Telecommunications Ordinance (the "Ordinance"). We have had an
opportunity to review the draft Ordinance and offer the following comments for
your consideration on behalf of our client, TCG South Florida (''TCG'').
1. Page 4, Section 2(G) - This subsection contains the definition of
"Gross Receipts." TCG objects to this definition as it exceeds that contemplated
by Section 337.401(3), Florida Statutes. We suggest that the definition of Gross
Receipts include only those receipts on "Recurring Local Service Revenues" as
provided by Section 337.401(3), Florida Statutes, and as provided in the
Ordinance.
2. Pages 5 through 7, Section 2(L) - This subsection contains the
definition of ''Recurring Local Service Revenues". We note that the definition
has changed slightly from that used in other drafts prepared by your office and
would appreciate it if you would explain the reason for the revisions.
Braulio Baez, Esquire
January 3, 2000
Page 2
3. Pages 8 and 10, Section 3(A) and (D) - Throughout these
subsections, as well as in other provisions of the Ordinance, the City appears to
assert authority over the operations of a provider within the City. Section
337.401(6), Florida Statutes, explicitly provides that the City may not use its
authority over the placement of facilities in the right-of-way as a means of
exercising regulatory authority over the operations of telecommunication
companies such as TCG. Rather, oversight over operations and certification of
telecommunications companies is within the sole jurisdiction of the Florida
Public Service Commission ("FPSC"). As such, any provision in the Ordinance
which purports to assert authority over a certificated telecommunications
company should be deleted.
4. Pages 8 through 9, Section 3(B) - This subsection requires that
certain information be provided to the City as part of any application for a
franchise. Specifically, TCG is concerned that the information requested
concerning the location of the proposed facilities, the facility design, area
locations, the size of facilities and equipment to be constructed, availability of
space in existing conduits, and timing of construction may be premature at the
application stage. TCG will be better able to provide this specific information at
the permitting stage which would occur later. Furthermore, TCG is concerned
that if it were required to provide such information at this stage it will lead to
the disclosure of proprietary information.
5. Page 9, Section 3(C) - TCG would appreciate it if the City would
specifically provide a time frame within which a franchise will be granted by the
City once the application is complete, i.e. thirty (30) days. Additionally, TCG
objects to any provision that would allow the City to modify its proposed system
or facility. Section 337.401(6) provides that:
A local government entity may not use its authority over the
placement of facilities in its roads and rights-of-way as a basis
for asserting or exercising regulatory control over a
telecommunications company regarding matters within the
exclusive jurisdiction of the Florida Public Service Commission
or the Federal Communications Commission, including, but not
limited to, the operations, systems, qualifications, services,
service quality, service territory, and prices of a
telecommunications company.
Braulio Baez, Esquire
January 3, 2000
Page 3
Fla. Stat. 337.401(6) (1999). Thus, the City is preempted from exercising any
control over TCG's operations or systems.
6. Pages 12 through 13, Section 5(C) - This subsection provides for the
payment of an annual fee in the event a telecommunications company is not
providing services as defined in Section 203.012(3) or (7), Florida Statutes. TCG
objects to this provision as exceeding the City's authority under both federal and
state law and as further clarified in the Final DeClaratory Judgment and
Omnibus Order on Summary Judgment entered by the Honorable William P.
Dimitrouleas in the action styled BellSouth Telecommunications, Inc. v. Citv of
Coral Sorings, Florida, Case No. 97-7010-CIV-DIMITROULEAS. Section
337.401 does not provide the City a legal basis for levying the fee set out in this
subsection.
7. Page 13, Section 5(D) - TCG objects to this subsection as
overreaching and excessive.
8. Page 14, Section 5(F) - This subsection contemplates the payment
by TCG of a non-refundable fee to the City in the amount of $10,000.00 upon the
submission of a request for a grant of Franchise Agreement or a renewal of a
Franchise Agreement with the City. TCG objects to the payment of any fee that
is in excess of the actual costs incurred by the City to review the application
submitted by a telecommunications company. Furthermore, any fee levied by
the City should be tied to the limitations placed on the City by Section 337.401,
i.e. the fee should be a credit against the fees charged in Section 5(A) of the
proposed Ordinance.
9. Pages 15 through 17, Section 6(B) - This subsection requires a
provider to submit an annual report to the City containing information,
including but not limited to the following: (a) a list of officers and directors,
limited partners and partners of the company, (b) copies of any pleadings,
petitions, applications and/or other documents submitted by or on behalf of the
franchisee to the FCC, SEC, FPSC, and (c) any and all notices of hearings,
deficiency, forfeiture of other documents instituting any investigation whether
civil or criminal by any state or federal agency regarding the franchisee. TCG
would object to the City's requirement that this information be provided as
excessive and overreaching and beyond the City's authority under both federal
and state law and as further clarified by the Court in the BellSouth decision.
Braulio Baez, Esquire
January 3, 2000
Page 4
10. Page 17, Section 6(D) - This subsection requires a Franchisee to
provide to the City "any document that may adversely impact the construction,
operation or maintenance of the Franchisee's Facilities". TCG objects to this
language as it is overly broad and vague.
11. Page 17, Section 6(E) - This subsection would require TCG to
annually certify that it not leasing excess capacity or dark fiber to third parties.
As a lessee, a provider would not be "occupying" or otherwise using the City's
rights-of-way. Current case law prohibits the City from levying a fee on a
provider that leases facilities. See AT&T Communications of the Southwest, Inc.
v. City of Dallas, Texas, -- F.Supp.2d --, 1999 WL 386168 (N.D.Tex., July 7,
1998); Bell Atlantic-Maryland, Inc. v. Prince George's County, Maryland, n
F.Supp.2d n, 1999 WL 343646 (D.Md., May 24, 1999). Accordingly, TCG
suggests that this subsection be deleted.
12. Page 18, Section 7(B) - We would appreciate it if you could clarify
what is meant by the last sentence in this subsection.
13. Page 18, Section 7(D) - This subsection should be clarified to
provide that relocation or removal expenses are to be paid by the Franchisee
only as provided by applicable law.
14. Page 19, Section 7(G) - This subsection should be clarified to more
specifically outline those instances when the City would be allowed to cut and/or
remove a provider's facilities. As currently written, the subsection is somewhat
vague and could lead to situations wherein a provider's service is unnecessarily
interrupted.
15. Page 20, Section 8(B) - The last two sentences to this subsection
contemplate the City's adoption of rules and regulations that may include
reasonable "requirements and restrictions with respect to height, width and
diameter of' a provider's facilities. TCG objects to this language as it violates
the express language found in Section 337.401(6) and impedes upon the
regulatory authority preempted to the FPSC.
16. Page 21, Section 8(E) - The first sentence of this subsection seems
to be duplicative of language contained in Section 8(A). Additionally, to comply
Braulio Baez, Esquire
January 3, 2000
Page 5
with the prOVISIOns of Section 337.401, any permit fees should be credited
against the fee paid by TCG pursuant to Section 5(A) of the Ordinance.
17. Page 22, Section 8(H) - TeG objects to this subsection to the extent
that it would preclude TCG from attaching its facilities to existing poles or to
place its facilities within existing conduit. Federal and state law contemplates
that existing utilities shall provide telecommunications carriers non-
discriminatory access to any "pole, duct, conduit or right-of-way owned or
controlled by it." See 47 D.S.C. Section 224(t)(1).
18. Page 22, Section 9 - This section contemplates the written
acceptance of the Franchise by a provider in the form designated by the City. To
the extent the City has drafted any such form document, we would appreciate if
a copy could be provided to us for our review and comment.
19. Pages 22 through 23, Section ll(A) - This subsection deals with
transfers of control, sale or assignment. TCG requests that this subsection be
amended to permit the assignment of the franchise, without the consent of the
City, to (a) a subsidiary, affiliate or parent company; (b) any firm or corporation
which franchisee controls, is controlled by, or is under common control with; (c)
any partnership in which it has majority interest; or (d) to any entity which
succeeds to all or substantially all of its assets whether by merger, sale or
otherwise, as long as the successor entity has the appropriate authorizations
required by the FCC and/or the FPSC. Other types of transfers we understand
may be subject to written consent of the City which shall not be unreasonably
withheld or denied.
20. Pages 25 through 26, Sections 12(B) and (D) . These subsections
recognize the insurance policies made be. procured through "captive insurers".
We would appreciate it if the last sentence of subsection (D) was amended to
provide "as defined in Section 628.901, Florida Statutes, or as otherwise
provided by law".
21. Page 25, Section 12(C) - TCG objects to the requirement that it
document or provide evidence of the payment of insurance premiums. We
assume that the City is requiring this documentation to ensure that the policies
of insurance required by the proposed Ordinance are maintained. This
Braulio Baez, Esquire
January 3, 2000
Page 6
documentation is duplicative and unnecessary as certificates of insurance are
required to be maintained with the City.
22. Pages 25 through 26, Section 12(E) . This subsection sets out the
indemnification in favor of the City. TCG objects to the second sentence in
subsection 12(E) as it appears to indemnify the City against any claim which
could be made against the City that it violates federal or state law.
23. Pages 27 through 29, Section 13 . This section contemplates the
establishment and maintenance of a security fund by a provider in favor of the
City. TCG objects to the provisions of this section. A security fund is not
necessary as the City is adequately protected through various enforcement
provisions set out in the proposed Ordinance to assure compliance with the
Ordinance.
24. Page 29, Section 14(A) - This subsection contemplates the posting
of a cOnstructiOn bond in favor of the City prior to performing any work in the
Public Righta.of-Way. In general, TCG does not object to the posting of a
cOnstructiOn bond as long as the bond is tied to the value of the work being
performed in the City's rights-of-way and provided the bond is released upOn the
completion of construction.
25. Pages 30 and 31, Section 14(B) and Section 14(F) - In light of TCG's
objection against the establishment of a security fund of any type, it objects to
subsection 14(F) and the last sentence in subsection 14(B).
26. Pages 31 and 32, Section 15(A) and Section 15(C)(I) - These
subsections contemplate the payment of liquidated damages to the City. As
stated in Paragraph 23 of this letter, TCG in general objects to any provision,
including liquidated damages, which exceed what is reasonably necessary to
adequately secure TCG's obligations to the City as required by law.
27. Pages 31 through 32, Section 15(B) . To the extent the City allows a
cure period, TCG suggests provision should be made that allows a lOnger period
than the thirty (30) days provided in the Ordinance in the event circumstances
warrant.
28. Page 35 and Pages 37 through 38, Section 16(E) and Section 18 _
These provisions contemplate the purchase of TCG's facilities in the event of a
Braulio Baez, Esquire
January 3, 2000
Page 7
revocation or a termination of the Franchise. TCG objects wholesale to these
provisions as excessive, overreaching and beyond the City's authority under
federal and state law to impose as demonstrated by the BellSouth decision.
The foregoing represents the most significant comments that we were able
to discern based upon our review of the Ordinance. As there are still significant
concerns surrounding the Ordinance, we would appreciate a deferral of this
matter from the January 4, 2000 City Commission agenda and request that a
further workshop be held where the City and industry can further discuss this
matter.
Again, we thank you for your time and consideration with respect to this
matter.
Very truly yours,
HOLLAND & KNIGHT LLP
p~tl,/
fCe-
Janna P. Lhota
For the Firm
c City Attorney David Wolpin (via fax)
FTLl#467895 vI
1\
LawOllices (-
HOLLAND & KNIGHT LLP
('
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January 7, 2000
VIA HAND DELIVERY
Braulio Baez, Esquire
Leibowitz & Associates, PA
SunTrust International Center
Suite 1450
One Southeast Third Avenue
Miami, Florida 33131-1715
Orlando
Providence
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Representa!iveOflices
BoenosAires
Tel Aviv
Re: TCG South Florida - Supplemental Comments to
Proposed City of Aventura Telecommunications
Ordinance
Dear Braulio:
Set out below are further comments to the proposed City of Aventura
Telecommunications Ordinance (the "Ordinance") dated November 29, 1999 and
received by our office on December 20, 1999. These comments supplement the
comments made on behalf of our client, TCG South Florida ("TCG") in the letter
to you dated January 3,2000, a copy of which is attached hereto.
1. Throughout the Ordinance, the City appears to assert authority
over the operations of a telecommunications company. Section 337.401(6),
Florida Statutes, explicitly provides that the City may not use its authority over
the placement of facilities in the right-of-way as a means of exercising regulatory
authority over the operations of telecommunication companies such as TCG.
Rather, oversight over operations and certification of telecommunications
companies is within the sole jurisdiction of the Florida Public Service
Commission ("FPSC"). See also BellSouth Telecommunications. Inv. v. Town of
Palm Beach, Case No. 98-8232-CIV-DIMITROULEAS (invalidating certain
requirements that related to the operations of telecommunications providers as
violative of Section 337.401(6), Florida Statutes); see also 47 U.S.C. s253(a) and
f
(
Braulio Baez, Esquire
January 7, 2000
Page 2
(c) (no local requirement may have the effect of "prohibiting the ability of any
entity to provide any interstate or intrastate telecommunications service.").
Thus, any provision in the Ordinance which purports to assert authority over a
certificated telecommunications company's operations should be deleted.
2. Page 9, Section 3(C) and Page 20, Section S(B) - As in the
preceding paragraph, these provisions attempt to regulate TCG's system design
(i.e. size of facilities, etc.) which directly impacts upon TCG's operations. Again,
TCG objects to this language as it violates the express language found in Section
337.401(6), Florida Statutes, and impedes upon the regulatory authority
preempted to the FPSC. Section 337.401(6), Florida Statutes, provides that:
A local government entity may not use its authority over the
placement of facilities in its roads and rights-of-way as a basis
for asserting or exercising regulatory control over a
telecommunications company regarding matters within the
exchlsive jurisdiction of the Florida Public Service CommiHsion
or the Federal Communications Commission, including, but not
limited to, the operations, systems, qualifications, services,
service quality, service territory, and prices of a
telecommunications company.
Fla. Stat. 337.401(6) (1999) (emphasis added); see also BellSouth
Telecommunications. Inc. v. Town of Palm Beach, supra, and BellSouth
Telecommunications. Inc. v. Citv of Coral Spring:s, Case No. 97-7010-CIV-
DIMIJ'ROULEAS. Thus, any reference in the Ordinance which purports to
exercise control over TCG's facilities' or system design must be deleted as the
City due to the express preemption in favor of the FPSC.
3. Pages 12 through 13, Section 5(C) - This subsection provides for the
payment of an annual fee in the event a telecommunications company is not
providing services as defined in Section 203.012(3) or (7), Florida Statutes. TCG
objects to this provision as exceeding the City's authority under both federal and
state law. Section 253(c) of the Telecommunications Act of 1996 allows state or
local governments to manage the public rights-of-way and to require fair and
reasonable compensation from telecommunication providers. 47 D.S.C. 9253(c).
In Florida, all matters relating to telecommunication providers has been
expressly preempted to the FPSC. Section 364.01(2), Florida Statutes, provides:
("
(
Braulio Baez, Esquire
January 7, 2000
Page 3
It is the legislative intent to give exclusive
jurisdiction in all matters set forth in this chapter
to the Florida Public Service Commission in
regulating telecommunications companies, and
such preemption shall supersede any local or
special act or municipal charter where any conflict
of authority may exist. However, the provisions of
this chapter shall not affect the authority and
powers granted in s. 166.231(9) and s. 337.401.
Fla. Stat. 9364.01(2) (1999); see also Santa Rosa Countv v. Gulf Power Co., 635
So.2d 96, 101 (Fla. 1st DCA 1994). Thus, the only grant of authority to the City
is found in Sections 166.231(9) and 337.401, Florida Statutes. No where in these
statutory sections is there authorization for the fee provided by subsection 5(C).
4. Page 14, Section 5(F) - This subsection contemplates the payment
hy TCG of a non-refundahle fee to the City in the amount of $10,000.00 upon the
submission of a request for a grant of Franchise Agreement or a renewal of a
Franchise Agreement with the City. As an initial matter, fees paid to a local
government which are not in the nature of an authorized tax must be reasonably
related to the purpose for which they are levied and bear a rational nexus
between the service to be delivered and administrative cost incurred by the local
government in delivering the service. The only regulatory fees a municipality
may properly impose are "reasonable business, professional, and occupational
regulatory fees, commensurate with the cost of the regulatory activity." See Fla.
Stat.. 9 166.221 (1999). The City must also show a reasonable connection or
rational nexus between the expenditure of the funds collected and the benefits
accruing to the party upon whom the fee.is imposed. Hollvwood. Inc. v. Broward
Countv, 431 So.2d 606, 611-612 (Fla. 4th DCA 1983), rev. denied, 440 So.2d 351
(Fla. 1983).
Here, it appears that the $10,000 application fee may have been
arbitrarily determined, not subject to an analysis of the reasonableness of the
fee imposed and the costs incurred by the City. Where the fee charged by a
municipality has no such nexus or logical bearing then it amounts to a tax,
regardless of the name assigned to it by the municipality. See Citv of Tarpon
Springs v. Tarpon Springs Arcade Ltd., 585 So.2d 324, 326 (Fla. 2d DCA 1991),
rev. denied, 593 So.2d 1051 (Fla. 1991). Finally, any fee levied by the City
(
(
Braulio Baez, Esquire
January 7, 2000
Page 4
should be tied to the limitations placed on the City by Section 337.401, Florida
Statutes, i.e. the fee should be a credit against the fees charged in Section 5(A) of
the proposed Ordinance.
5. Pages 8 through 9, Section 3(B) and Pages 15 through 17, Section
6(B) - These subsections require that certain information be provided to the
City as part of any application for a franchise or annual report to be filed once
the franchise is granted by the City. As the City is subject to the provisions of
Chapter 119, Florida Statutes, TCG is concerned that proprietary information
which may be contained in these documents will be subject to public disclosure.
This is especially true as the only exemptions relate to information received by
the City in connection with an audit under Section 166.231(9)(c), Florida
Statutes, and an exemption found in Section 119.07(3)(1'), Florida Statutes,
relating the name, address and telephone numbers of its customers which may
be found in information provided to the City.
We look forward to discuss these and other matters at the City
Commission workshop schedule for January 21, 2000. As always, should you
have any questions concerning the foregoing, please do not hesitate to contact
my office.
Again, we thank you for your time and consideration with respect to this
matter.
Very truly yours,
HOLLAND & KNIGHT LLP
r~1'fiIa f ~ c-b--
By: Susan F. Delegk!
For the Firm
c City Attorney David Wolpin (via fax)
LEIBOWITZ & ASSOCIATES, P.A.
BRAULIO L. BAEZ
JOSEPH A. BELISLE
ILA L. FELO
MATTHEW L. LEIBOWITZ
CAROLINE A. SORET
SUITE 1450
SUNTRUST INTERNATIONAL CEN'"ER
ONE SOUTHEAST THIRD AVENUE
MIAMI, FLORIDA 33131-1715
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MEMORANDUM
TO:
Eric M. Soroka
FROM:
Braulio L. Baez
RE:
Proposed Telecommunications Ordinance Issues
DATE:
January 13,2000
At the meeting held on January 4, 2000, the City Commission passed on first reading a
proposed telecommunications ordinance for the City of Aventura. The Commission further fixed
the dare of January 24, 2000 to hold a workshop where Commissioners, industry members, and City
staff could discuss industry objections to the provisions contained in the proposed Ordinance, prior
to its placement on the agenda for adoption. The City has asked that the City's telecommunications
counsel provide responses to the industry's written comments, which were submitted on January 3,
2000, and to include those responses as part of a comprehensive information packet to be provided
to the City Commission and staff.
The proposed telecommunications ordinance being considered by the City of A ventura seeks
to attain three goals; (1) establishment of a level playing field over which the increased presence of
competitive telecommunications providers will use the City's rights-of-way to provide service to the
residents of the City; (2) establish reasonable regulations to manage the City's rights-of-way; and
(3) fix the nondiscriminatory compensation to be paid to the City by telecommunications service
providers for occupation of the City's rights-of-way.
The responses to industry comments contained herein have been consolidated for the City's
convenience, and are organized by general topic, as set forth below:
I. Municipal Authority: Franchises. Transfers/Renewals: Operations.
BellSouth's primary objection to the proposed ordinance concerns the alleged absence of City
Memo to Eric Soroka
Proposed Telecommunications Ordinance Issues
January 13,2000
Page 2
authority to require BellSouth, as an incumbent local exchange carrier (ILEC)!, to obtain a franchise.
In support of its argument, BellSouth states that the requirement of a franchise is inconsistent with
Section 337.401(7), Florida Statutes, which states that a telecommunications company that has
obtained permission to occupy the rights-of-way of the City or is otherwise lawfully occupying the
rights-of-way of the City on the effective date of the statute,
"... shall not be required to obtain additional consent to continue such
lawful occupation of those roads or rights-of-way; however, nothing
in this subsection shall be interpreted to limit the power of a
municipality to impose a fee or adopt or enforce reasonable rules or
regulations as provided in this section." (Emphasis added)
BellSouth's interpretation of Section 337.401 (7), Florida Statutes, would thus provide a
telecommunications company occupying the City's rights-of-way; at the time of the enactment of
the statute, a perpetual right of occupation precluding the need for any further authorization to
occupy the City's rights-of-way into the future. Pursuant to Ordinance 97-02, the City granted
BellSouth a nonexclusive franchise to use the City's public rights-of-way for the installation,
maintenance and operation of lines of telephone equipment. The franchise has a term of 15 years,
expiring in 2012. The existing BellSouth franchise, at Section 13, reserves the City's authority to
pass ordinances regulating the use of its rights-of-way, and to have those ordinances apply to
BellSouth to the extent not inconsistent with the rights already granted. The proposed Ordinance
contains provisions on issues which are not addressed in the BellSouth .franchise, and as reasonable
regulations of the rights-of-way, would be applicable even to BellSouth. Upon expiration of an
existing franchise, a renewal franchise would constitute the only consent, not an "additional
consent."
'In addition, BellSouth's interpretation of the statute creates conflict with several other
provisions of Florida law, as well as the Florida Constitution. Article VIII, Section 2(b) of the
Florida Constitution grants municipal government the authority to exercise "governmental, corporate
and proprietary powers to enable them to conduct municipal government, perform municipal
functions and render municipal services, and may exercise any power for municipal purposes except
as otherwise provided by law." (Emphasis added) In Section 166.021, Florida Statutes, the
Legislature expresses its intent to secure for municipalities the broadest exercise of powers "for
municipal governmental, corporate, or proprietary purposes not expressly prohibited by the
! (LEC is used to identifY the provider which serves the area prior to local competition. BellSouth is the
only ILEC in Aventura. By law, BellSouth must provide service within its traditional service area to anyone who
requests it. All other local exchange companies, such as TCa, Ameritech, MCI-Metro and others are competitive
local exchange companies (CLECs), and do not have this responsibility.
E :\2000IA venlura\T e1ecom\Rcsponse.lo.commenls. wpd
LEIBOWITZ & ASSOCIATES, P.A.
SUITE 1450, ONE SOUTHEAST THIRD AVENUE, MIAMI, FLORIDA 33131-1715. TELEPHONE (305) 530-1322
Memo to Eric Soroka
Proposed Telecommunications Ordinance Issues
January 13, 2000
Page 3
constitution, general or special law, or county charter and to remove any limitations, judicially
imposed or otherwise, on the exercise of home rule powers other than those so expressly prohibited."
Neither the constitution, general or special law, or the county charter, including Section 337.401 (7),
Florida Statutes, contains an express prohibition concerning a City's grant of a franchises to
telecommunications companies for use of the rights-of-way. Furthermore, Section 337.401(3),
Florida Statutes, recognizes the authority of municipalities to enter into franchise or other agreements
with telecommunications companies. Lastly, Section 364.0361, Florida Statutes, requires a local
government to treat telecommunications companies in a nondiscriminatory manner "when exercising
its authority to grant franchises to a telecommunications company..."
BellSouth's claim, therefore, that the City is precluded from requiring a franchise or other
authorization by virtue ofthe Company's pre-existing occupancy ofthe right-of-way is inconsistent
with the well established authority of a municipality to require franchises or other agreements from
telecommunications companies, and is inconsistent with Florida law requiring non-discriminatory
treatment of telecommunications companies when granting franchises for access to the public right-
of-way. Based on a consistent interpretation of applicable laws, any of Bell South's objections to the
City's requirement of a franchise which claim a perpetual right of access based on an existing prior
authorization pursuant to Section 337.401(7), Florida Statutes, are invalid. There are no cases
supporting the companies on this issue, and in fact, the Coral Springs and Town of Palm Beach cases
held similar franchise requirements valid in their entirety.
An argument has been raised that the fifth "Whereas" clause is inconsistent with Section
253(a) of the Telecommunications Actof1996, 47 V.S.C. 253(a), in that "it effectively provides that
the City has authority over access of providers to the City service territory." This is not the case.
The clause in the proposed Ordinance states that it is the intent of the City to exercise its authority
over the access and occupancy by telecommunications providers of the City's public rights-of-way.
In fact, Section 253( c) specifically recognizes that nothing in Section 253 affects "the authority of
a State or local government to manage the public rights-of-way or to require fair and reasonable
compensation from telecommunications providers...."
Industry members further object to the repeated inclusion of the word "operation" throughout
the proposed Ordinance, as a suggestion of "City regulation over operations" of telecommunications
companies. The companies correctly point out that the Florida Public Service Commission (FPSC)
has exclusive jurisdiction over the operations oftelecommunications companies. However, any use
of the word "operation" in the proposed Ordinance is in the context of a telecommunications
company's use of the public rights-of-way of the City, and not in reference to the operations ofa
telecommunications company as a provider of service, a clearly distinguishable intent and purpose.
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LEIBOWITZ & ASSOCIATES, P.A.
SUITE; 1450, ONE SOUTHEAST THIRD AVENUE, MIAMI, FLORIDA 33131-1715 . TELEPHONE (305) 530-1322
Memo to Eric Soroka
Proposed Telecommunications Ordinance Issues
January 13, 2000
Page 4
Telecommunications companies maintain they have the right to transfer a franchise with no
review or involvement by the city, and that renewal is guaranteed by the Telecommunications Act
and state law, by virtue of the prohibition of an absolute bar to access on the public rights-of-way.
While it is true that Federal and state law both guarantee access to rights-of-way by certificated
telecommunications companies, subject to reasonable regulations, some courts have left intact
transfer provisions which have been challenged, while other courts, citing the arbitrary and
burdensome effect of certain transfer provisions, have invalidated such provisions. (See Coral
Springs, Prince George County)
The proposed Ordinance, under Sections I] and ] 7, establishes specific procedures for
considering transfer and/or renewal applications, respectively. Generally, the processes involve
obtaining information, and consideration only of any outstanding compliance and compensation
issues. Rather than act as a barrier to entry in the City's telecommunications market, which would
be contrary to Federal and State law, the processes are designed to consider the only two conditions
which can be placed on a Franchisee, as set forth in the Coral Springs case, (I) adherence to the
reasonable regulations of the City concerning management of its rights-of-way; and (2) payment of
the required franchise fee.
2. Comoensation: Franchise Fees. Recurring Local Services.
The industry members question the definition of "Gross Receipts" in the proposed Ordinance,
asserting that the definition exceeds the appropriate fee base set forth in Section 337.40 I (3), Florida
Statutes, and further suggest that the definition is unnecessary. The use of the term in the proposed
Ordinance tracks that of the statute. However, while the appropriate fee base established in the
statute is "recurring local service revenues," this critical term is undefined.
Thus, the proposed Ordinance includes a definition of "Recurring Local Service Revenues,"
to which the companies object on the basis that it differs from definitions previously agreed to by
them and other industry members. It is unclear as to the specific objections which BellSouth, the
incumbent local exchange carrier (ILEC), and TCG, a competitive local exchange carrier (CLEC)
may have with the proposed definition. However, the inclusion ofthe stated revenues in the pool
of revenues subject to franchise fees was designed to address in a fair and equitable manner the
potential bypass of franchise fees and requirements brought about by the advent of competition in
the local market, as well as recent court decisions.
With respect to lost franchise fees, the court inA T & T Communications of the Southwest Inc.,
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LEIBOWITZ & ASSOCIATES, P.A.
SUITE 1450, ONE SOUTHEAST THIRD AVENUE, MIAMI, FLORIDA 33131-1715. TELEPHONE (305) 530-1322
Memo to Eric Soroka
Proposed Telecommunications Ordinance Issues
January 13,2000
Page 5
v. City of Austin held that a provider that does not install or own facilities in a city's rights-of-way
is not "using" the rights-of-way, and therefore not subject to a city's requirement of a franchise (see
also, Prince George County, Dallas). To the extent that competition emerges in the form ofCLECs
"leasing" facilities from LECs, or leasing dark fiber or excess capacity in the right-of-way from cable
companies, any franchise fee revenues lost due to a franchised provider's competitive losses are not
directly replaced by franchise fee revenues from other franchised competitors?
Another issue previously raised by the industry with respect to recurring local services is the
inclusion of services provided via the lease of unbundled network elements (ONEs)' as part of the
revenue base subject the one (I %) percent franchise fee. Some CLECs argue that to the extent it is
providing services through the lease of ILEC or other facilities, or through the purchase of ONEs
from the ILEC, the CLEC should not be liable for franchise fees on revenues derived from the
provision of those services within the City. In maintaining this position, the CLEC's want to draw
a distinction between services which they provide via their own facilities and services which they
provide via "resale" of unbundled services bought wholesale from the ILEe.
CLECs cite the Dallas case for the proposition that the lease of an ILEC's facilities, and
likewise, the purchase of ONEs from the ILEC, does not constitute the use of public rights-of-way,
. the revenues of which are therefore not subject to franchise fees. In the Dallas case, the Court held
that a company which did not own facilities in the public rights-of-way, but rather merely leased the
facilities of the incumbent provider, was not "using" the public rights-of-way, and therefore could
not be required to obtain a franchise from the City. However, the Court further stated that should
a company interconnect or combine a ONE purchased from a third party with a facility owned by that
company which occupies the rights-of-way, the City would not be prevented in requiring a franchise
from sl.\ch company, presumably by virtue by its connection to the rights-of-way. The Court's ruling
therefore, implies some distinction between providers that own no facilities in the rights-of-way and
providers that provide service using a combination of leased facilities or unbundled network
elements with its own facilities in rights-of-way. In this context, Section 337.401(3), Florida
2 Note also that electric utilities own considerable amounts of fiber-optic installed in rights-of-way as part of
their internal "command-and-control" system, with sufficient excess capacity to offer to competitive
telecommunications providers. Recently, Florida Power & Light was granted a certificate by the PSC as an
alternative access vendor, a fonn of telecommunications provider. Therefore, it is important to clarify this issue to
avoid future loss of revenue from carriers such as FP&L AA V and others.
JUNEs are pieces that comprise the network of a provider, whether services or facilities, which are offered
separately (unbundled) to CLECs so these competitive providers can then combine them with their own network
elements to provide service to their customers. For example, a CLEC which owns a switch, but no wires, could
purchase that missing component from another provider in order to complete its network to provide service.
E :\2000IA vcntura \T c1ecom\Rcsponsc.lo .comments, wpd
LEIBOWITZ & ASSOCIATES, P.A.
SUITE 1450, ONE SOUTHEAST THIRD AVENUE, MIAMI, FLORIDA 33131-1715. TELEPHONE (305) 530-1322
Memo to Eric Soroka
Proposed Telecommunications Ordinance Issues
January 13,2000
Page 6
Statutes, merely states that in the event a municipality requires a fee in exchange for permission to
occupy the rights-of-way that fee is limited to one percent (I %). State law has no reference as to the
distinction between services provided over leased facilities or via unbundled network elements, and
services provided using the Company's own facilities in the rights-of-way. Therefore, as long as
the threshold of337.401 is met, actually owning facilities in the rights-of-way and therefore being
subject to a municipality's franchise requirement, the permissible fee is applicable to all recurring
local service revenues of a telecommunications company.
A no less important issue is the question of whether an ILEC (i.e. BellSouth) is or will be
recovering franchise fees through its UNE rates and/or wholesale rates charged to CLECs, and if so,
are they forwarding such fees for revenues from the sale of UNE's, lease of facilities, or resale
services to the City. Based on conversations with PSC staff, it is understood that franchise fees,
taxes and other costs of doing business are recovered as part ofUNE and resale rates. To the extent
that franchise fees are included in UNE and wholesale rates, revenues from the provision of such
services are properly included in the pool of revenues subject to franchise fees.
BellSouth inquired as to the phrase "subject to a franchise hereunder" in Section 5(A) ofthe
proposed Ordinance. The phrase is intended as an acknowledgment that, given the existing
compensation structure established by Florida law, the franchise fee structure is based on the nature
of service being provided, and it is contemplated that franchises will be granted for providers of
services other than local services.
BellSouth further objected to the inclusion of references to "minimum fair market value" in
the proposed Ordinance. Specifically, the Company asserts that there is no authority for the
characterization of the franchise fee payment as "rent". This position stems from the view, popular
among industry members, that section 337.40 I is a statute of authorization, rather than a statute of
limitation. As previously stated, the Florida Constitution grants to municipalities authority to
exercise proprietarv powers. Even 337.40 I itself refers to the I % fee as "consideration". Section
364.0361, Florida Statutes refers to "compensation" for the grant of franchises. Thus it is clear that
fees for use of the rights-of-way are compensatory in nature, and that the statutory 1% is a limitation
on that compensation. (See also Omnipoint)
Likewise, TCG objected to Section 5C of the proposed Ordinance, which establishes a
compensation rate for providers which are not providing local or toll services as defined in Florida
Statutes. The company states that Section 337.401 does not provide a legal basis for levying such
a fee. There are several points to be made in this regard. Section 337.401, as stated above, is a
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LEIBOWITZ & ASSOCIATES, P.A.
SUITE 1450, ONE SOUTHEAST THIRD AVENUE, MIAMI, FLORIDA 33131-1715. TELEPHONE (305) 530-1322
Memo to Eric Soroka
Proposed Telecommunications Ordinance Issues
January 13, 2000
Page 7
statute of limitation. The legal basis for the imposition of such fees stems from the constitutional
authority granted to municipalities to exercise proprietary powers. The limitations of Sections
337.401(3) and (7) apply only to "telecommunications companies," as that term is defined in the
statutes. It is possible for a person to provide telecommunications services, as defined in the
proposed ordinance, yet not be a telecommunications company under the law. For example, electric
utilities and cable companies own considerable fiber-optic assets installed in the rights-of-way. If
that utility or cable company provides the use of its telecommunications facilities only to certificated
telecommunications companies, such provision of telecommunications services, and the utility or
cable company providing them, are not subject to regulation as a telecommunications company.
Their telecommunications facilities are still, however, in the City's rights-of-way, and without this
provision no franchise fees would be paid to the City.
Further, the current compensation scheme imposed by Section 337.40 I only recognizes two
types of service, local and toll. The definition oflocal service alone does not encompass the growing
variations of service available from telecommunications companies. Therefore, absent the proposed
ordinance, there is no scheme or obligation placed on these services which are not local or toll.
The industry objects to the requirement of a non-refundable application fee under Section 5F
of the proposed Ordinance. Telecommunications companies point to several cases which hold that
a city may only charge fees sufficient to recover costs of managing their rights-of-way (See Coral
Springs, Dallas, Prince George). Section 337.40 I (5) states that a municipality may not levy any tax,
fee or other charge on a telecommunications company for operation as a telecommunications
company within the municipality, or which is in any way related to using roads or rights-of-way,
other than the statutory I % fee on recurring local service revenues (or, in the case of toll service
providers, no less than $500 per linear mile). However, a reasonable application fee is not for
operation as a telecommunications company within the City, but rather reimbursement of the costs
of processing an application for a franchise from the City. Note also that the Coral Springs court
left intact an unspecified non-refundable application fee.
3. Information: Applications: Reports.
At least one provider objects to the inclusion ofthe term "Affiliate", as it is used in Section
6( C) of the proposed Ordinance, on the claim that such requirement has no relevance to management
of the rights-of-way. Specifically, Section 6(C) ofthe proposed Ordinance requires a Franchisee to
provide certain information to the City "without regard to whether the documents are filed by the
Franchisee or an Affiliate." Section 6(C)(1) requires an annual report of the Franchisee or its parent
E:\2000\Aventura\Telccom\Response_lo.comments,wpd
LEIBOWITZ & ASSOCIATES, P.A.
SUITE 1450, ONE SOUTHEAST THIRD AVENUE, MIAMI, FLORIDA 33131-1715. TELEPHONE (305) 530-1322
Memo to Eric Soroka
Proposed Telecommunications Ordinance Issues
January 13,2000
Page 8
"or any Affiliate of Franchisee which controls Franchisee..." Section 6(C)(3) requires a Franchisee
to provide the City with notices and documents concerning hearings or other proceedings by any
State or Federal agency regarding the Franchisee, any Affiliate of the Franchisee, the Franchisee's
Telecommunications Facilities or the Franchisee's use of Telecommunications Facilities within the
City. Disclosure of a federal or state regulatory or other proceeding which may directly impact a
Franchisee's installation, maintenance and operation offacilities in the City's public rights-of-way,
and thereby its compliance with the reasonable regulations and obligations under a franchise, are
clearly relevant to the management of the public rights-of-way, whether by a Franchisee or an
Affiliate. In addition, please note that any such notice or documents relating to an Affiliate of
Franchisee need to be provided only to the extent the same may directly affect or bear on
Franchisee's operations in the City.
The companies also offered comments on the provisions in Section 3B of the proposed
Ordinance, which set forth the information required as part of an application for a franchise. While
TCG stated that the information required may be premature at the application stage for competitive
and other reasons, their comments did not object to the provision of the information. On the other
hand. BellSouth maintains that requiring information regarding the proposed services to bc provided
over the facilities, the proposed design of the facilities or system, and remaining available space in
existing conduit, constitute regulation of the operations ofthe Company, which is preempted by state
law to the Florida Public Service Commission (FPSC). The companies' objections are unfounded.
Information regarding proposed services is necessary to determine what compensation is
appropriate under Florida law. Information regarding the system design and available conduit space
is directly related to management of the City's Rights-of-Way, in that such information allows the
City to determine whether the proposed design will interfere with existing facilities already
occupying the given right-of-way, and would ailow the City and provider to consider alternatives to
preserve the interests of all involved. Substantially similar provisions were found valid by the court
in both the Coral Springs and Town of Palm Beach cases.
The companies further object to provisions found in Section 3C of the proposed Ordinance
which establish definite criteria for review of franchise applications. They complain of unfettered
discretion on the part of the City, when in fact, .the provisions establish an affirmative duty by the
City to grant a franchise conditioned only upon the necessary modifications of system design, if any,
to accommodate the existing burdens on the rights-of-way, and the execution of a franchise
agreement binding a franchise to comply with the terms of the Ordinance. Similar provisions and
conditions have been validated in the Coral Springs case. TCG's suggestion that a definite time
frame within which to grant the application be included within the Ordinance is not umeasonable,
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LEIBOWITZ & ASSOCIATES. P.A.
SUITE 1450, ONE SOUTHEAST THIRD AVENUE, MIAMI, FLORIDA 33131-1715. TELEPHONE (305) 530-1322
Memo to Eric Soroka
Proposed Telecommunications Ordinance Issues
January 13, 2000
Page 9
however, any provision should provide the City additional time where necessary.
4. Use of Rights-of-Wav: Installation. Relocation. Undergrounding.
Telecommunications providers generally object to any requirement that facilities be installed
underground as being in violation of established case law, and preempted by state law. However,
the City still has authority in this regard. The Florida Public Service Commission has exclusive
jurisdiction over telecommunications companies to regulate rates and services as well as extension
offacilities. Under PSC Rule 25-4.088, telecommunications companies are required to install all
new distribution facilities to residential and multiple occupancy areas underground, provided that
such requirement would not apply where electric distribution systems will be installed overhead.
In addition, under PSC 25-6.074, a governmental authority may require an electric utility to place
future distribution facilities underground. (See also, Seminole County) By extension, a governmental
authority can require that telecommunications facilities be placed underground by virtue of their
authority to ensure the placement of electric facilities underground.
BellSouth, in particular, cited the case of Florida Power Corporation v. Seminole County,
which held that the FPSC's authority over the rates and services of utilities preempts the authority
of a city to require a company to place its facilities underground. However, the Florida Supreme
Court in this case also stated that its ruling did not limit the ability of cities to require future facilities
to be placed underground. The proposed Ordinance, in Section 7, is consistent with Federal and
State law in requiring undergrounding only where existing facilities are or will be installed
underground. Further, the provisions concerning the relocation or removal of facilities track
Sections 337.402-.404, Florida Statutes.
The industry objects to subsection 8H, which requires a franchisee to seek prior approval
from the City for any modification of an existing facility brought about by placement of additional
facilities upon or in any existing pole or conduit. 47 USC Section 224( c)(1) states that where such
matters are regulated by a State, the Commission shall not have jurisdiction with respect to rates,
terms and conditions or access to poles, ducts, conduits and rights of way as provided in 47 USC
Section 224(f). Under Section 364.16, Florida Statutes, requires that each local exchange
telecommunications company "provide access to... its telecommunications facilities to any other
provider of local exchange telecommunications services requesting such access... at
nondiscriminatory prices, rates, terms, and conditions established by the procedures set forth in s.
364.162." Thus, the state has exercised its authority to regulate the terms and conditions of access
to the telecommunications facilities of telecommunications companies. However, Section
337.401 (1), Florida Statutes authorizes local government entities to prescribe and enforce reasonable
E:\2000\Aventura\Telccom\Respollse.to.comments_\'ipd
LEIBOWITZ & ASSOCIATES, EA.
SUITE 1450, ONE SOUTHEAST THIRD AVENUE, MIAMI, FLORIDA 33131-1715. TELEPHONE (305) 530-1322
Memo to Eric Soroka
Proposed Telecommunications Ordinance Issues
January 13, 2000
Page 10
rules and regulations with reference to the placing and maintaining of telephone or telegraph lines,
pole lines, poles or other structures in the right-of-way. Therefore, under Section 337.40 I (I), Florida
Statutes, the legislature has delegated to local governments an authority which the State has authority
under federal law to reserve for itself. These provisions therefore, are not preempted by the Pole
Attachment Act and are not inconsistent with federal law.
5. Securitv Funds. Bonding. Indemnification and Enforcement.
With respect to the provisions concerning security funds and bonding, similar provisions
have been upheld by the courts in several cases. (See Coral Springs) Sections 13 and 14,
respectively, set forth the terms under which such security funds and construction bonds are required,
also establishing minimum amounts for the same. If the City were to adhere to industry suggestions
that discretion concerning security funds and bonding requirements should be exercised based on
financial stability, such discretion would constitute an impermissible determination of financial
qualifications of a telecommunications company, preempted by state law. Rather, the proposed
Ordinance considers alternative criteria such as value of the construction to be performed, and the
Franchisee's previous history with work in the public right-of-way.
With regard to the industry comments regarding provisions in the proposed Ordinance which
establish enforcement remedies for non-compliance with the terms of the Ordinance or a franchise
agreement, the Coral Springs court validated similar provisions in their entirety, which included
revocation as a remedy.
The suggested changes for subsection 12E, concerning the limitation on indemnification to
exclude claims caused by the misconduct or negligence of the City, are reasonable and should be
incorporated.
Finally, the companies strenuously object to the purchase provisions in Section 18 of the
proposed Ordinance, which establish a method for the City to address the presence of facilities in
the rights-of-way after a lawful revocation or termination and non-renewal has occurred. The
provisions of this section do not represent an absolute right by the City to purchase, at its discretion,
the facilities or system of the Franchisee. The right to purchase arises only after the lawful
revocation or termination of a franchise, and is therefore subject to procedures which preserve the
due process rights of any franchisee. Furthermore, a franchise agreement may reserve a Franchisee's
right to transfer the facilities to another, subject to the provisions of the Ordinance. This provision
is therefore distinguishable from the purchase provision that was struck down in the Coral Springs
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LEIBOWITZ & ASSOCIATES. P.A.
SUITE 1450, ONE SOUTHEAST THIRD AVENUE, MIAMI, FLORIDA 33131-1715. TELEPHONE (305) 530-1322
Memo to Eric Soroka
Proposed Telecommunications Ordinance Issues
January 13, 2000
Page 11
case, which only afforded the possibility of a purchase by the City, and where the City could invoke
its right at any time.
6. Miscellaneous Provisions.
One provider objected to the definition of "Law" in the proposed Ordinance, on the basis that
references to the Telecommunications Act of 1996, FCC rules and decisions, state statutes and other
applicable laws, operate to extend the City's jurisdiction to require compliance with these laws, and
further to "punish" a Franchisee for non-compliance. Section 10 of the proposed Ordinance states
that a Franchisee shall be subject to and shall comply with all applicable Federal, State and local
laws. It is common in local ordinances to acknowledge the applicability offederal and state laws and
regulations.
The industry suggests that "easements" should not be included in the definition of "Public
Rights-of-Way," as the term "includes private and utility easements that are not designed for the
traveling public," and as such are not appropriate for inclusion in the City's regulation of the public
rights-of-way. However, the City has authority to grant access to any property which it owns or
controls and has the legal right to convey an interest or rights over. Therefore, the suggestion that
the provisions of the proposed Ordinance should apply only that which is accessible by the traveling
public is inappropriate. Nevertheless, the concern raised over the possible grant of rights by the City
to property which is or may be inconsistent with existing property rights vested in third parties is
valid and should be addressed by an exclusionofpriv<lte easements from the definition.
E: \2000IA ventura\ T eleCOIn\Responsc, to, comments. wpd
LEIBOWITZ & ASSOCIATES, P.A.
SUITE 1450, ONE SOUTHEAST THIRD AVENUE, MIAMI, FLORIDA 33131-1715. TELEPHONE (305) 530-1322
c\
(
MEMORANDUM
{
J:
M. R. Stierheim
County Manager
DATE:
SUBJECT:
FROM: Sheila Rushton, Director
Consumer Services Department
I am submitting a substitute ordinance establishing regulations for telecommunications providers
utilizing rights-of-way in unincorporated Miami-Dade County. This item passed on first reading
at the November 16, 1999, BCC meeting..
Attachments
c: Alina Tejeda Hudak, Senior Assistant to the County Manager
Cathy Grimes Peel, Assistant Director, Consumer Services Department
Mario Goderich, Director, Consumer Protection Division
ASCII
FILE
28111116.txt
(
Agenda Item No.
Page 2
MEMORANDUM
TO:
Honorable Chairperson and Members
Board of County Commissioners
DATE:
SUBJECT:
FROM: M. R. Stierheim
County Manager
This substitute ordinance reflects changes recommended bv representatives of the
telecommunications industry through written comments. meetings. and workshops conducted bv
the Consumer Seryices Department. This substitute differs from the original in that it (])
clarifies that license fees that are paid bv companies that provide long distance services may be
paid annually rather than auarterlv as per state statute; (2) eliminates a provision that reauired
companies that provide both local and long distance services to pav license fees based on a
percentage of grOSS receipts as well as on a linear foot basis as per state statute: (3) eliminates a
mandatory in-kind service reauirement and replaces it with a voluntary provision to conform to
state statute; (4) simplifies and streamlines the reporting reauirements and the procedures to
obtain or transfer a license; (5) amends the indemnification provision; (6) eliminates criminal
penahies: and (7) clarifies the language of other provisions.
RECOMMENDATION
It is recommended that the Board approve the attached ordinance which establishes competitively
neutral and nondiscriminatory regulations governing the use by telecommunications companies
of public rights-of-way in unincorporated Miami-Dade County. The ordinance enables
telecommunications companies to use rights-of-ways, establishes a simple licensing mechanism,
and requires payment of license fees (rent) for occupancy of public property for commercial use.
The ordinance further contains provisions for insurance, bonding, indemnification, audits,
reports, standards of construction and safety, and enforcement remedies including civil penalties,
and preserves theCounty's right to enforce and enact consumer protection measures.
BACKGROUND
Congress enacted the Telecommunications Act of 1996, the first major overhaul of federal
telecommunications laws in 62 years. Designed to encourage competition among all types of
communications companies, the Act opened local telephone service to competition and allowed
the Regional Bell Operating Companies (RBOCs) to enter new lines of business. Miami-Dade
County was instrumental in a successful nationwide effort to preserve local government authority
to manage and receive fair and reasonable compensation for use of the public rights-of-way by
telecommunications companies, as long as those local laws are applied on a competitively neutral
and nondiscriminatory basis.
(
(
Agenda Item No.
Page 3
In 1995, the Florida Legislature amended F.S. 364 Telecommunications Services in anticipation
of the passage of federal legislation. The Legislature found that the competitive provision of
Honorable Chairperson and Members
Board of County Commissioners
Page 2
telecommunications services, including local telephone service, was in the public interest and
sought to encourage the introduction of new telecommunications services while retaining certain
regulatory oversight relating to consumer protection and the development of fair and effective
competition. In concert with federal law, state law provides that local governments treat each
telecommunications company in a nondiscriminatory manner when establishing conditions or
compensation for the use of public rights-of-way or other public.property.
State law limits the amount of compensation a telecommunications company can be assessed for
use of public rights-of-way to one (I) percent of gross receipts on local recurring service or to a
fee based on actual linear feet of any cable that makes physical use of the rights-of-way for long
distance service.
Following the changes to federal and state law, various telecommunications companies
approached the County seeking authorization to use unincorporated area rights-of-way.
However, unlike rights-of-way users like cable television and electric service, the Miami-Dade
County Code has no licensing mechanism for such use.
Therefore, on July 9, 1997, the Board adopted Resolution R-813-97 which authorized interim
agreements with telecommunications companies. These agreements grant permission to use
rights-of-ways, require payment of a fee for this use and provided a temporary solution to
facilitate commencement of construction. Eight companies (Metropolitan Fiber SystemslMCI
WorldCom, Sprint, NEXTLINK, TCG, Qwest, Williams, Level 3, and e.spire) currently have
interim agreements.
As was stated in the recommendation that accompanied Resolution R-813-97, the agreements
were "interim" pending the submission of a more permanent business licensing mechanism in the
form of an ordinance for consideration by the Board. The agreements will expire upon the
enactment of an ordinance governing telecommunications. The proposed ordinance is similar to
the provisions of the interim agreements.
The Board should be aware of several issues. First, the proposed ordinance will and must apply
uniformly to all telecommunications companies that use unincorporated rights-of-way, including
the incumbent local telephone service provider. The unincorporated municipal service area is the
only "municipal" area in the County that does not license or franchise the incumbent local
telephone service provider or collect the I % fee allowed under state law. Recently,
municipalities like Coral Gables have enacted similar ordinances as the one being proposed to
address the new telecommunications providers that have entered the market. Broward County
enacted an ordinance in September. If all telecommunications users of the rights-of-way are not
treated equally, then the ordinance cannot apply to any telecommunications provider and the
interim agreements will expire.
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Second, it is important the Board act before the upcoming state legislative session. It is
anticipated that the Florida legislature will consider a bill to eliminate all local collections of fees
and taxes from telecommunications providers in favor of a single unified tax collected by the
Honorable Chairperson and Members
Board of County Commissioners
Page 3
state. The Florida Department of Revenue would then redistribute those collections to local
governments based upon an as yet undetermined formula. If passed, industry supported scenarios
for redistribution will penalize local governments who have not imposed every fee or tax they are
allowed to impose under existing law. The penalty could come in the form of a reduced
distribution to that local government and/or a forced reduction in ad valorem taxes. It is in the
County's interest to act before the session to ensure the County preserves its future collections
and ensure the County receives its fair share of the distribution.
Three workshops were held with industry leading up to the interim agreements. Three
subsequent workshops were conducted in October, November and December, 1999. Although
not in agreement on all issues, to the extent possible, concerns expressed by the industry have
been addressed and most of their recommendations have been incorporated into the substitute.
FISCAL IMPACT
It is anticipated that the County will collect approximately $2,000,000 in license fees annually as
a result of the ordinance. Expenses associated with the Consumer Services Department's
administration of the ordinance, which administers the interim agreements, will be minimal.
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Approved
Veto
Override
Mavor
Agenda Item No.
ORDINANCE NO.
AN ORDINANCE REGULATING TELECOMMUNICATIONS
COMPANIES' USE OF THE PUBLIC RIGHTS-OF-WAY;
REQUIRING A LICENSE AND LICENSE FEES; PROVIDING
FOR TERM OF LICENSE, TRANSFERS, RENEWALS,
AUDITS, AND REPORTS; PROVIDING SAFETY AND
CONSTRUCTION STANDARDS; REQUIRING INSURANCE,
BONDING AND INDEMNIFICATION; PROVIDING
TERMINATION; PROVIDING CONSUMER PROTECTION;
PROVIDING ENFORCEMENT REMEDIES AND APPEALS;
AMENDING CHAPTER 8CC-IO PROVIDING FOR CIVIL
PENALTIES; PROVIDING SEVERABILITY, INCLUSION IN
THE CODE, AND AN EFFECTIVE DATE
BE IT ORDAINED BY THE BOARD OF COUNTY COMMISSIONERS OF
MIAMI-DADE COUNTY, FLORIDA:
Section I.
Chapter 8AA of the Code of Miami-Dade County, Florida, is hereby
I
amended to read as follows:
>>Article 1.<< CABLE TELEVISION REGULATIONS
*
*
*
>>Secs. 8AA-79 - 8AA-99. Reserved.<<
I Words stricken through and/or [[double bracketed]] shall be deleted. Words underscored and/or
>>double arrowed<< constitute the amendment proposed. Remaining provisions are now in effect
and remain unchanged.
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Agenda Item No.
Page 6
Section 2.
Article II of Chapter 8AA of the Code of Miami-Dade County, Florida, is
hereby created to read as follows:
Article II. TELECOMMUNICATIONS REGULATIONS
Sec.8AA-lOO.
Definitions.
(a) "Consumer Services Department" means the Consumer
Services Department of Miami-Dade County or such other
department or officer assigned by the County to administer licenses
issued pursuant to this Article.
(b) "Director" shall be the Director of the Consumer
Services Department or his or her designee.
(c) "Gross Receipts" shall mean all revenues received by the
Licensee on recurring local service revenues for services provided
within the unincorporated limits of Miami-Dade County.
(d) "Public Rights-ol-Way" shall mean public streets, rights-
of-way and public easements including the area on, over, or under
the surface in the unincorporated areas and the public streets,
rights-of-way and easements for which Miami-Dade County Public
Works Department has primary jurisdiction for issuing permits.
(e) "Telecommunications Company, Carrier, or Provider"
includes every corporation, partnership, person, trustees, or
receivers appointed by any court whatsoever, and every political
subdivision in the state, offering two-way telecommunications
service to the public for hire within this state by the use of a
telecommunications facility. The term "telecommunications
company" does not include an entity which provides a
telecommunications facility exclusively to a certificated
telecommunications company, a commercial mobile radio service
provider, a facsimile transmission service, a private computer data
network company not offering service to the public for hire, a cable
television company providing cable service as defined in 47 V.S.C.
522, or an open video system as defined in 47 C. F. R., Part 76 as
amended from time to time.
(f) "Telecommunications Services" includes all
telecommunication related services by a Telecommunications
Company including, but not limited to, local telephone service,
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private communications service, local exchange telephone service,
interexchange carriers, international telecommunications carriers,
toll telephone service, alternate access vendor and all other
providers of basic local telecommunications services, non-basic
telecommunications services and all other telecommunications
services including all telecommunications services authorized by
the Florida Public Service Commission.
(g) "Telecommunications System" means a system utilized
by a Telecommunications Company to provide
Telecommunications Services.
Sec.8AA-lOl.
License Required.
A license from Miami-Dade County is required to commence
or engage in the construction, maintenance of, or occupation of
the public right-of-way with, a system designed to deliver
Telecommunications Services by utilizing the public rights-of-way.
No public rights-of-way construction permits shall be issued to a
telecommunications company without a telecommunications
license issued \mder this Chapter.
Sec. 8AA- 102.
Rights Granted by License.
(a) Subject to all existing permitting processes, the Licensee
is authorized to occupy, install, lay, erect, construct, remove,
relocate and maintain in, on, over or upon any and all of the public
right-of-ways, as they now exist or may be hereafter constructed,
opened, laid out or extended within the present limits of the
County, or in such territory as may be hereafter added to,
consolidated or annexed to unincorporated Miami-Dade County,
any and all such conduits, cables, fiber optic lines, poles, wires,
supports and other structures and appurtenances as may be
reasonably necessary for the construction, maintenance and
operation of a Telecommunications System. Except as provided
above, this License does not convey the right to attach cable or
conduit to poles, or occupy or use real or personal property owned
by Miami-Dade County, including, but not limited to, the Metrorail
and Metromover system.
(b) Any License granted under this ordinance shall be non-
exclusive, and the issuance of a License will not expressly or
implicitly preclude the County from issuance of other licenses to
Telecommunications Companies or affect the County's right to
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authorize use of public rights-of-way for other lawful purposes to
other persons as it determines appropriate.
(c) This License authorizes the Licensee to use the public
rights-of-way to provide Telecommunications Services only. Use
of the public rights-of-way for any other purpose requires separate
authorization.
Sec.8AA-I03.
Term and Limited Right to Renewal.
(a) No License, including a renewal Licens~, shall be issued
for a term longer than seven (7) years.
(b) A Licensee shall have a right to renew provided: (I)
Licensee is authorized by the controlling regulatory authority to
provide Telecommunications Services in Miami-Dade County; and
(2) Licensee has complied with all material provisions of the
License. A material breach shall not be the basis for a refusal to
renew unless the Licensee has been provided sixty days written
notice and opportunity to cure and has failed to do so, and the
malerial breach presents a clear and present danger to the public or
other users of the public rights-of-way or significantly impairs the
County's ability to manage the public rights-of-way for the safety,
health and welfare of the general public or other users of the public
rights-of-way. Modifications to the License including new terms,
provisions, or conditions as allowed by the prevailing law at the
time of renewal may also be required by the County upon renewal.
A License may be renewed for additional successive periods not to
exceed seven (7) years.
Sec.8AA-104.
License Fees.
(a) The Licensee shall pay to the County compensation for
the use of the public rights-of-way granted pursuant to this license
a license fee:
(I) For telecommunications companies providing
recurring local service one percent (I %) of its
Gross Receipts.
(2) For telecommunications companies providing only
toll telephone service 12.5~ quarterly per linear
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foot of metallic cable, fibet optic cable, or other pathway that
makes physical use of the right-of-way.
(3) For telecommunications companies that provide
neither recurring local service or toll telephone
service 12.5~ quarterly per linear foot of metallic
cable, fiber optic cable, or other pathway that makes
physical use of the right-of-way.
(b) The license fee shall be due quarterly based upon the
Licensee's preceding quarter. The quarterly fees shall be submitted
according to the following schedule: January-March fees due May
lOth; April-June fees due August lOth; July-September fees due
November 10th; October-December fees due February lOth of each
year. Where authorized by statute, fees paid under Section 8AA-
104(a)(2) & (3) may be paid on an annual basis in which event the
fees shall be due no later than February 10th of each year.
Accompanying each payment of license fees, the Licensee shall file
a report, on a form provided by the Director, of its calculation of
the license fee payment, setting forth how the fees were calculated.
(c) Nothing herein will prohibit the County from accepting
in-kind payments of equipment, appurtenances or services in lieu
of cash payments.
(d) The County shall be authorized to unilaterally amend this
Article and increase the license fee to the maximum license fee
authorized by law.
(e) If the license fee is not received by the County within
such period, the Licensee shall pay interest on any such unpaid
portion thereof at the rate of twelve (12%) per year, from the day
payment is due until the date of payment to the County. The
Licensee shall reimburse the County for attorney's fees in an
amount set by the Court in any judicial proceedings to collect these
fees provided the amount collected exceeds the amount paid by
5%.
(f) The license fee shall constitute minimum rent due from
each telecommunications company occupying the right-of-way.
The sums of money to be paid by the Licensee to the County under
this Section are compensation and consideration for the use by the
Licensee of County streets and other ways for the construction,
maintenance and occupation of the System and are not taxes, as
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allowed by the Florida Constitution, the general or special laws of
the State of Florida or any other ordinances of the County.
Payment of this license fee shall not exempt the Licensee from the
payment of any other license fee, permit fee, tax or charge on the
business, occupation, property, activity, or income of the Licensee
that may be imposed by Local, State, or Federal law, to the extent
allowed by State law.
Sec. 8AA- 105.
Audits; Inspection of Records.
All amounts paid under this section shall be subject to audit
and recomputation by the County. Upon reasonable notice, the
Licensee shall make available to the County once per year, during
normal business hours and at the licensee's local office, the books,
records and accounts and other documentation of the Licensee
(hereinafter collectively referred to as the "Reports") that are
necessary to determine the accuracy of the calculations upon
which the license fee payment is based. The Licensee shall
maintain its records in such a manner as to clearly distinguish
between revenues and/or linear foot calculations derived from
operations in unincorporated Miami-Dade County and such
revenues and/or linear foot calculations derived from operations in
the municipalities and other jurisdictions. Miami-Dade County
may waive this requirement with any particular licensee if an
agreement is reached that other methods will be utilized such as
audit sampling techniques which can clearly isolate revenues
and/or linear foot calculations to which the County is entitled. In
the event the Reports are not made available within Miami-Dade
County, the Licensee shall reimburse the County for the reasonable
travel expense of the County's representative resulting from said
representative's travel to the location where the Reports are
maintained. The County shall maintain all books, records,
accounts and other documentation of Licensee in strictest
confidence to the extent allowed under the Public Records Act and
other applicable Florida laws.
Sec.8AA-I06.
Annual Reports.
Within three (3) months of the close of its fiscal year, the
Licensee shall file an annual report to the Director that includes the
following information:
(I) A report that details the data used to calculate the
license fees which shall be of sufficient scope to
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Page II
allow independent ascertainment of the Licensee's
compliance with the license fee requirements of this
chapter. The underlying data in such reports shall
be prepared in accordance with Generally Accepted
Accounting Principles (GAAP).
(2) The full legal name of the Licensee as of that date.
(3) On a street map provided by Miami-Dade County,
Licensee shall indicate the routes of its system built
after the effective date of this Ordihance.
Sec. 8AA-1 07. License Application Procedure; Information Required.
(A) To obtain a license under this Article a person shall apply
to the Director. To be acceptable for filing, an original and two
(2) copies of the application must be submitted and be
accompanied by the application filing fee where required.
(B) Each application for an initial License shali set [OIth the
following:
(I) The name, address and telephone number of the
applicant.
(2) A statement of the corporate or other business
organization of the applicant, and the names,
business addresses, and telephone numbers of
contact persons who are authorized to represent the
licensee during the application process and the
name, business address, and telephone number of
the primary contact person during the term of the
license.
(3) Identification of the applicant's fiscal year calendar.
(4) A description of the general nature and size ofthe
proposed telecommunication system's plant and
equipment that licensee intends to have occupy the
public rights-of-way, including a list with
descriptions of the appurtenances such as manholes,
pedestals, handholes, controlled environmental
vaults, etc.
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Agenda Item No.
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(5) A copy of Federal and/or State certification
authorizing the applicant to provide
telecommunications services.
(6) A copy of any administrative or legal decision in
which the licensee was determined to have violated
a law or regulation governing the use of the public
rights-of-way.
(C) Within thirty (30) calendar days after the awarding of the
License, the Licensee shall file with the Director its written
acceptance of the License, together with the insurance policy and
bonding documents required by this ordinance, and its agreement
to be bound by and to comply with all requirements pursuant to the
provisions of this ordinance and the License.
Sec. 8AA-108.Application Fee.
Each application for registration, renewal registration, and
duplicate registration shaH be on a forrn prescribed by the Director
and shall be accompanied by a fee in such amount as shall be
established by administrative order of the County Manager. The
fee shall not exceed the reasonable amount to cover the
administrative cost to process such application. Said fee shall be
effective upon approval by the Commission.
Sec.8AA-109.
Issuance of License.
(a) The Director has the authority to and shall grant a license
to a applicant who files a completed application, complies with the
application requirements herein, and pays the required application
fee; provided however, the Director shall have the authority to
deny a license if the applicant fails to meet the application
requirements or the proposed use of the public rights-of-way
presents a danger to the general public and other users of the public
rights-of-way.
Sec. 8AA-ll O.
Transfers.
(a) Any transfer of a license shall be subject to the
application requirements of Section 8AA-107, 108, 109.
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(b) Transfer ofa License shall mean (1) assignment, sale or
transfer of more than thirty (30) percent of the stock, partnership
shares or assets of the Licensee to a person other than the Licensee;
(2) assignment, sale or transfer of more than forty (40) percent of
the ownership of any parent corporation, parent entity or holding
company that owns, or by ownership of other entities, controls the
Licensee; or (3) the transfer of any interest that results in the
change of effective control of the Licensee.
(c) This section does not apply to any restructure,
recapitalization or refinancing which does not change the effective
control of the Licensee; in such transfer, the Licensee shall give
prior notice to the Director within thirty (30) days prior to such
transfer.
(d) Approval by the Director of a transfer of a License does
not constitute a waiver or release of any of the rights of the County
under this Article.
Sec. SAA-Ill.
Use of County Public Rights-of-Way;
Construction Requirements; Alteration of
the System; Access by County.
Subject to all applicable provisions of the County, the Licensee
may perform all necessary work to construct, occupy and maintain
its Telecommunications System. The Licensee must comply at all
times with all policies, procedures and directives of the Public
Works Department, the Planning and Zoning Department and the
Building Department. Prior to the installation, placement or
removal of any conduits, cables or pole lines, facilities, or the start
of any other type of construction on the County's public rights-of-
way, the Licensee shall, pursuant to the requirements of existing or
subsequently enacted County ordinances, obtain all permits from,
and pay all fees to, the Public Works Department, the Planning and
Zoning Department and the Building Department. The issuance of
a permit by the County shall not be construed by the Licensee as a
warranty that the placement by the Licensee of its conduits, cables
or pole lines, facilities, or the start of construction, is in compliance
with any applicable rules, regulations or laws. All construction and
maintenance of the Licensee's facilities within County public
rights-of-way incident to Licensee's provision of service shall,
regardless of who performs installation and/or construction, be and
remain the responsibility of the Licensee.
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Sec.8AA-112.
Right to use Easement and Streets Not
Warranted.
It is understood that there may be from time to time within the
County various public rights-of-way which the County does not
have the unqualified right to authorize Licensee to use; therefore,
in granting this License, the County does not warrant or represent
as to any particular easement, right-of-way, or portion of a right-
of-way or easement, that it has the right to authorize the Licensee
to install or maintain portions of its system thereiI}.
Sec.8AA-I13.
Other Agreements, Permits and Easements
Requirements.
Nothing in this Article or License shall be construed to require
the County to assume any responsibility for the securing of any
right-of-way, easements, or other rights which may be required by
the Licensee for the installation of its Telecommunications System,
nor shall the County be responsible for securing any permits or
agreements with other persons or utilities.
Sec.8AA-114.
No Property Rights Conveyed.
Nothing in this Article or in the License shall grant to the
License holder any right of property in County-owned property or
public rights-of-way, nor shall the County be compelled to
maintain any of its property or public rights-of-way any longer
than, or in any other fashion than in the County's judgment, its own
business or needs may require.
Sec.8AA-115.
Location/Relocation of Facilities.
(a) Unless controlling law provides otherwise, the Licensee's
system shall be installed underground in areas where existing
power or telephone facilities are underground. Ifboth power and
telephone facilities are installed above ground, the Licensee may
install its facilities underground or above ground, at its discretion.
(b) Licensee shall not place any fixtures or equipment where
the same will interfere with any existing gas, electric, CATV,
telephone, sewer, drainage, or water lines, fixtures or equipment.
The Licensee shall locate its lines and equipment in such a manner
as not to interfere unnecessarily with the usual travel on streets;
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Agenda Item No.
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with the installation or operation of gas, electric, CATV, telephone,
water, drainage, or sewer line equipment, or with the rights of
owners of property which abuts any public right-of-way.
(c) Unless controlling law provides otherwise, Licensees
shall relocate any above ground portion of their systems
underground in any easement or right-of-way area where existing
power or telephone facilities are hereafter so relocated. Any such
relocation shall be at the Licensee's expense, and such relocation
shall be accomplished concurrently with relocation of any such
power and telephone facilities.
(d) The Licensee shall have the authority to trim trees upon
or overhanging streets, alleys, sidewalks and public ways and
places of the County so as to prevent the branches of such trees
from coming in contact with the wires and cables of the Licensee,
in a manner approved by and acceptable to the County. When the
County determines such trimming is necessary to protect the health
safety and welfare of the public, such trimming may be done by it
or under its supervision and direction at the expense of the
Licensee, if prior notification has been given to the Licensee and
Licensee thereafter failed to respond.
(e) Licensee shall promptly and at the Licensee's own
expense protect, support, temporarily disconnect, remove, modifY
or relocate any part of their system when required by the County by
reason of traffic conditions, public safety, road construction,
change of street grade, installation of sewers, drains, water pipes,
power lines, signal devices, tracks, any other type of County
improvement project, or to accommodate the abandonment of any
street. Such work shall be completed no later than 30 days after
receiving notice from the County or such longer period as may be
agreed to by the County. In the event such contingency occurs, and
the Licensee fails to remove or modifY its system, the County may,
upon notice to Licensee, make the necessary removals and charge
the Licensee for the cost. Nothing in this Section shall be
construed to waive any rights the Licensee may have under state or
federal law to be reimbursed for relocation expenses.
(t) Each Licensee shall, on the request of any person holding
a building moving permit issued by the County, temporarily
remove, raise or lower its wires to permit the moving of buildings.
The expense of such temporary removal or raising or lowering of
wires shall be paid by the person requesting same, and the Licensee
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Agenda Item No.
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shall have the authority to require such payment in advance.
Licensee shall be given not less than seven (7) days advance notice
to arrange for such temporary wire changes.
(g) When placed underground, all service lines, drops, or
laterals that connect the end user customer to the Licensee's
distribution system shall be buried as follows: (a) on easements and
public rights-of-way at the depth as established by the Public
Works manual or regulations; and (b) on private property at a
sufficient depth so that no portion of the line is exposed. The
Director may impose a specific depth requiremen.t for such lines on
private property.
(h) Except for relocation expenses when authorized by state
or federal law, the License holder shall not be entitled to any
compensation for damages from the County as a result of having to
remove or relocate its property, lines and cable from such public
property or public rights-of-way in the event the County determines
that a necessity exists for such removal or relocation.
Sec. 8AA-l 16.
Work in the Public Right-of- Way and Easements.
(a) A Licensee must obtain any required permits before
performing any work that disturbs or impacts the public rights-of-
way, except in emergencies in which case Licensee can obtain
permits after the emergency work is completed. Licensee must
restore the public rights-of-way to their former condition in a
manner approved by the County. If such restoration is not
satisfactorily performed within a reasonable time, the County, after
prior notice to the Licensee, may cause the repairs to be made at
the expense of the Licensee. All additional or reoccurring repairs
required as a result of the Licensee's work may also be made by the
County or its agents at the expense of the Licensee if Licensee fails
to perform such repairs.
(b) All personnel utilized by the Licensee in the construction
of the Licensee's system shall possess identification providing the
individual's name, their employer's name, and the Licensee's name
and telephone number.
(c) The Licensee shall join and maintain a continuous
membership in a utility notification one call system and use its
services prior to construction.
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(d) Only licensed, certified or registered contractors duly
authorized to perform such work in Miami-Dade County may be
utilized for construction.
Sec. BAA-Il7.
Safety.
(a) Licensee's work performance, equipment, and job sites
shall be in compliance with all applicable County, State and federal
requirements and shall conform to the provisions of the public
works manual. A Licensee's work, while in progress, shall be
properly protected at all times with suitable barricades, flags,
lights, flares or other devices as are required by the Manual on
Uniform Traffic Control Devices (FOOT) and/or any requirements
of the Public Works Department to protect all members of the
public having occasion to use the portion of the streets involved or
adjacent property.
(b) The Licensee shall at all times employ due care and shall
install, maintain and use commonly accepted methods and devices
for preventing failures and accidents which are likely to cause
da.1Ilage, injuries or nuisances to the public. All of Licensee's
structures and all lines, equipment and connection in, over, under
and upon the public rights-of-way of the County wherever situated
or located shall at all times be kept and maintained in a safe,
suitable, substantial condition, and in good order and repair.
Sec. SAA-IIS.
County's Right to Inspect.
The County shall have the right to inspect the Licensee's
system located in the public rights-of-way and its installation,
construction, and maintenance to insure compliance with the terms
of this License.
Sec.8AA-119.
Unauthorized Work.
Any conduits, cables or pole lines installed or placed without
first having obtained the permits herein before provided for shall
be removed within ten (10) days following written notice by the
County. Failure to comply following written notice may result in
the removal of the conduits, cables or poles by order of the Public
Works Department and the cost of removal shall be borne and paid
by the Licensee. When permits are required, all work done without
permits will cease until all permits are pulled and fees paid.
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Sec.8AA-l20.
Protection of County Property.
The Licensee shall not in any way displace, damage or destroy
any sewer, water main, pipe or any other facilities belonging to the
County without the consent of the County; and the Licensee shall
be liable to the County for the cost of any repairs made necessary
by any such displacement, damage or destruction and shall pay
such costs upon demand.
Sec.8AA-121.
Electrical Standards.
..
All facilities shall be constructed and maintained in accordance
with the National Electrical Code and the National Electrical
Safety Code in force at the time of the effective date of this article
and as amended.
Sec.8AA-122.
Emergency.
In an emergency that affects the public safety, as determined by
the County, when the Licensee or its representative is immediately
unavailable or wlable to provide the necessary immediate repairs to
any portion of the public rights-of-way that is damaged due to any
faults or settled or sunken areas that may develop in any area over,
around or adjacent to same, the County, when apprised of such an
emergency, shall have the right to make the repairs with the total
cost of same being charged to the Licensee.
Sec.8AA-123.
Service to the County.
If controlling law changes to require the Licensee, or to
authorize Miami-Dade County to require the Licensee, to provide
telecommunications services or facilities to schools, hospitals,
govemment or other public facilities, Miami-Dade County reserves
the right to require such service or facilities.
Sec.8AA-124.
Insurance.
(a) The Licensee shall provide, pay for and maintain,
throughout the term of its License, and with companies satisfactory
to the County, the types of insurance described herein. All
insurance shall be from responsible companies duly authorized to
do business in the State of Florida and having a financial rating in
Best's Insurance Guide of AX or better. The insurance coverage
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obtained by the Licensee shall be approved by the Risk
Management Division of the General Services Administration. All
liability policies shall provide that the County is an additional
insured as to the operations under this License and shall provide
the severability of interest provision. The required coverages must
be evidenced by properly executed Certificates of Insurance. The
Certificates must be manually signed by the authorized
representative of the insurance Licensee. Thirty (30) days advance
written notice by registered or certified mail must be given to the
County of any cancellation, intent not to renew or reduction in the
policy coverages, which notice shall be sent by registered mail to
the Consumer Services Department. Companies issuing the
insurance policies shall have no recourse against the County for
payment of any premiums or assessments, and same shall be the
sole responsibility of the Licensee.
(b) The limits of coverage of insurance required shall be not
less than the following:
(I) Worker's Compensation and Employer's Liability
Insurance as required by Florida Statutes.
(2) Comprehensive General Liability Bodily injury and
property damage - $1,000,000 combined single
limit each occurrence.
(3) Automobile Liability Bodily injury and property
damage - $1,000,000 combined single limit each
accident covering all owned, non-owned, and hired vehicles.
(c) Upon thirty (30) days notice, the insurance coverage and
policy requirements may be changed and increased from time to
time at the discretion of the Board of County Commissioners to
reflect changing liability exposure and limits.
(d) These insurance requirements may be met by evidence of
participation of a bona-fide captive insurance or self insurance
program that is established and regulated by a governmental entity.
Sec.8AA-125.
Faithful Performance and Payment Bond.
The Licensee shall within thirty days of the effective date of a
License granted under this ordinance, furnish to the Consumer
Services Department a performance bond or an irrevocable letter of
(
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Agenda Item No.
Page 20
credit issued by a Florida bank or i' federally insured lending
institution in the amount of one hundred thousand dollars
($100,000). Such bond shall be maintained by the Licensee
throughout the term of the License. The Licensee shall pay all
premiums and keep the bond in full effect and force at all times
throughout the term of the License, including, if necessary, the
time required for removal of all the Licensees' system installed in
the County's streets, and for one year after the License expires or is
terminated. The bond shall contain a provision that it shall not be
terminated or otherwise allowed to expire without 30 days prior
written notice first being given to the Director and the Risk
Manager. The performance bond or letter of credit shall be used to
guarantee the compliance with performance requirements and
payment of all sums which may become due to the County under
this chapter. The Licensee shall maintain a copy of the bond on
file with the County along with written evidence of the required
premIums.
Sec.8AA-126.
Indemnification.
The Licensee shall indemnif; and hold the Count; arId its
officers, directors, agents, servants, employees, successors, and
assigns harmless of and from any and all claims for personal injury,
death or property damage, any other losses, damages, charges or
expenses, including attorneys, fees, wimess fees, court costs and
the reasonable value of any services rendered by any officer or
employee of the County, and any orders, judgments or decrees
which may be entered which arise or are alleged to have arisen out
of, in connection with or attributable to, the Licensee's
maintenance, occupation, placement, repair, relocation or removal
by the Licensee of any portion of the telecommunications system,
excepting only those claims resulting from the negligence of the
County. The Licensee shall undertake at its own expense the
defense of any action which may be brought against the County for
damages, injunctive relief or for any other cause of action arising
or alleged to have arisen out of, in connection with or attributable
to, the foregoing and, in the event any final judgment therein
should be rendered against the County resulting from the
foregoing, the Licensee shall promptly pay the final judgment
together with all costs relating thereto; the Licensee being allowed,
however, an appeal or appeals to the appropriate court or courts
from the judgment rendered in any such suit or action upon the
filing of such supersedeas bond to the extent required to prevent
levy or judgment against the County during such appeal or appeals.
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Agenda Item No.
Page 21
Sec.8AA-127.
Termination.
The County may declare a forfeiture and termination of, and
revoke and cancel all rights granted under this License if (a) a
federal/state authority suspends, denies, or revokes a
telecommunications company's certification to provide
telecommunications services; (b) the licensee's use of the public
rights-of-way presents a danger to the general public and other
users of the public rights-of-way; or, (c) the Licensee has
abandoned its system. Prior to such termination by the County
resulting from a violation by the Licensee of any of the provisions
of this Article, the Licensee shall be served by the County with a
written notice setting forth all matters pertinent to such violation,
and describing the action of the County with respect thereto. The
Licensee shall have sixty (60) days after service of such notice
within which to cure the violation, or within which to present a
plan, satisfactory to the County, to accomplish the same. In the
event of such termination, the Licensee shall, within a reasonable
time following demand by the County, remove or abandon the
telecommunications system and take such steps as are necessary to
render every portion of the telecommunications system remaining
within the public rights-of-way of the County safe, and shall
thereupon be deemed to have abandoned same in its entirety; and
the same shall thereupon become the sole property of the County
without payment to the Licensee. If Miami-Dade County agrees to
abandonment, the Licensee shall incur, from that time forward, no
future obligations with respect to the telecommunications system.
Sec.8AA-128.
Continuing Police Powers.
The Licensee shall at all times during the life of the License be
subject to all lawful exercise of the police power of the County and
to all lawful nondiscriminatory regulations as the County
subsequently enacts based upon its existing powers or additional
powers given it in the future.
Sec.8AA-129.
Consumer Protection.
Miami-Dade County may oversee compliance with all
applicable consumer protection laws and regulations, including the
enforcement of Chapter 8A, Business Regulations, of the Code of
Miami-Dade County and may participate in any federal, state and
(
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Agenda Item No.
Page 22
local proceedings involving or on behalf of consumers in Miami-
Dade County. Miami-Dade County reserves the right to enact
additional consumer protection provisions to the extent authorized
by state and federal law.
Sec.8AA-l30.
Failure to Enforce License.
The Licensee shall not be excused from complying with any of
the terms and conditions of this Article by any failure of the
County, upon anyone or more occasions, to require the Licensee's
performance or compliance with anyone or more of such terms or
conditions.
Sec.8AA-l31.
Future Rules by the Director.
The Director reserves the right to promulgate rules, regulations,
and procedures to implement the intention of this article.
Sec. 8AA-132.
Authority of the Director.
(a) The Director shall have the responsibility for overseeing
the day-to-day administration of this article and authorizations
granted hereunder. The Director, or any member of the Director's
staff so designated by the Director, may administer oaths, certify to
official acts, issue subpoenas, and compel the attendance of
witnesses and the production of papers, account books, contracts,
documents and other records, data or information, when necessary,
convenient, or appropriate in the discharge of the duties of his
office. The Director shall be empowered to take all administrative
actions on behalf of the County, including adopting forms for
application and reporting and other administrative procedures as
are necessary.
(b) The Director shall have the authority to initiate legal
actions in the name of Miami-Dade County through the County
Attorney, seeking declaratory judgment, injunctive, equitable, and
legal relief to enforce the provisions of this Article.
Sec.8AA-133.
Director's Settlement Authority.
The Director is hereby authorized to resolve by settlement any
notice of violation or lawsuit initiated by the Director. In deciding
to settle a dispute over an alleged violation, the County shall
consider: (I) the probability of success in proving the violation;
(
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Agenda Item No.
Page 23
(2) the nature and seriousness of the violation; (3) the licensee's
past history concerning similar violations; (4) mitigating factors;
and (5) the licensee's success in resolving the dispute with affected
customers.
Sec.8AA-134.
Appeals of actions, decisions or
(a) Any Licensee who is aggrieved by any final action,
decision or determination of the Director pursuant to this article
may appeal to a hearing officer. Appeal shall be initiated by filing
a written notice of appeal with the Director within fifteen (15) days
after the date of the action, decision or determination complained
of. The written notice of appeal shall set forth the nature and date
of the action, decision or determination to be reviewed and a brief
summary of the grounds for the appeal. Upon such filing, an
administrative hearing shall be scheduled and heard by a hearing
officer pursuant to Section 8CC of the Code of Miami- Dade
County, Florida. The Hearing Officer shall set the matter for
hearing on the earliest practicable regularly scheduled hearing date
or as soon as possible, but no sooner than ten (10) days after the
request has been filed and shall cause notice of thc hearing to be
served upon the aggrieved party by first class mail. The notice may
include, but not be limited to, the applicable Sections of 8CC-
6(b)(2) through (9) of the Code of Miami-Dade County, Florida.
The hearing officer shall hear and consider all relevant facts in
accordance with the procedures set forth in Sections 8CC-6(e), (t),
(g), (i), (j), (k), (I), (m)(2), and (n) of the Code of Miami-Dade
County (any reference in these sections to Inspector shall mean
"Director" and to violator shall mean "the person filing the
appeal"), and may affirm, modifY or reverse the action, decision or
determination appealed from. The decision of the Hearing Officer
shall constitute final administrative review and no rehearing shall
be permitted. Nothing herein shall be construed to prevent or
prohibit the Director from instituting any civil action or proceeding
authorized by this Article at any time.
b) The Director, the Dade County Consumer Advocate, or
any Licensee who is aggrieved by any decision of the Hearing
Officer may appeal a final order of the Hearing Officer by filing a
notice of appeal in the Circuit Court in and for Miami-Dade
County, Florida, in accordance with procedures and within the time
provided by the Florida Rules of Appellate Procedure for review of
administrative action. The words "action," "decision" and
"determination" as used herein shall not include the filing or
determinations of
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Agenda Item No.
Page 24
institution of any action, conference or proceeding by the Director
in any court otherwise.
(c) Any regulated person making the appeal shall be
required to pay the Director a fee, to be established by
administrative order of the County Manager, to defray the costs of
preparing the record on appeal. Said fee shall be effective upon
approval by the Commission.
Section 8AA-135.Civil penalties.
In addition to any other judicial or administrative remedies or
penalties provided by law, rule, regulation or ordinance, any person
who violates any of the provisions of this article, any cease and
desist order of the Director, any notice to correct a violation or any
assurance of voluntary compliance pursuant to Section 8A-82.1 of
the Code and this Article with respect to matters regulated under
this Article or any other lawful order of the Director or any
condition, limitation, or restriction of a telecommunications license
issued by the Director, shall be subject to the judicial imposition
and recovery of a civil pcnalty in an amount of not more than tcn
thousand dollars ($10,000.00) per offense. Each day during any
portion of which such violation occurs or continues to occur
constitutes a separate offense. Such monies recovered by the
Director shall be deposited in a separate county fund to be used
exclusively for enforcement of this Article. For purposes of this
Article, all references to Chapter 8A in Section 8A-82.1 shall mean
this Article.
Sec. 8AA-136.Enforcement procedure; remedies;
attorney's fees; costs.
(a) It shall be unlawful for any person to violate any of the
provisions of this article. In addition to any other judicial or
administrative remedies provided by law, rule, regulation,
ordinance, or this article, the Director shall have the following
judicial remedies available to enforce the provisions of this article:
(I) The Director may institute a civil action in a court of
competent jurisdiction to seek temporary or permanent
declaratory or injunctive relief to enforce compliance
with or prohibit the violation of any of the provisions ofethis article.
(
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Agenda Item No.
Page 25
(2) The Director may institute a civil action in a court of
competent jurisdiction to impose and recover a civil
penalty in an amount of not more than ten thousand
dollars ($10,000.00) for each violation of any of the
provisions of this article. Each day during any portion
of which such violation occurs or continues to occur
constitutes a separate violation. The right of trial by jury
shall be available in any court to determine both
liability for and the amount of the civil penalties to be
imposed and recovered hereunder.
(3) The Director may institute a civil action in a court of
competent jurisdiction to seek restitution and other
equitable relief to recover any sums and costs
expended by the Director for tracing, investigating,
preventing, controlling, abating or remedying any
violation of any of the provisions of this article.
(b) Upon the rendition of a judgment or decree by any ofthe
courts of this state against any person and in favor of the Director
under any of the provisions of this article, the trial court, or, in the
event of an appeal in which the Director prevails, the appellate
court, shall adjudge or decree against said person and in favor of
the Director a reasonable sum as fees or compensation for the
Director's attorney prosecuting the suit in which the recovery is
had. Where so awarded, compensation or fees of the attorney shall
be included in the judgment or decree rendered in the case. This
provision shall apply to all civil actions, legal or equitable, filed
after the effective date of this article by the Director.
(c) All the judicial and administrative remedies in this article
are independent and cumulative.
Section 3.
Section 8CC-10 of the Code of Miami-Dade County is hereby amended to
read as follows:
Section
Description of Violation
Penalty
*
*
*
>>8AA-IOl
Failure to obtain a Telecommunications License $5.000.00
8AA-I05.106
Failure to complv with record and reporting
500.00
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Agenda Item No.
Page 26
requirements
BAA-I 10
Failure to obtain approval to transfer a License 2.500.00
8AA-II L 115 (a)-(O.
116.117.118.119.120.
121
Failure to comply with construction and safety 500.00
requirements
8AA-115(g)
Failure to bury distribution svstem 100.00
8AA-124
Failure to Maintain Insurance 500.00
8AA-I25
Failure to maintain Faithful Performance bond or 500.00
letter of credit
.
.
.
Section 4.
If any section, subsection, sentence, clause or provision of this ordinance
is held invalid, the remainder of this ordinance shall not bt> affected by such invalidity.
Section 5.
It is the intention of the Board of County Commissioners, and it is hereby
ordained that the provisions of this ordinance, including any sunset provision, shall become and
be made a part of the Code of Miami-Dade County, Florida. The sections of this ordinance may
be renumbered or relettered to accomplish such intention, and the word "ordinance" may be
changed to "section," "article," or other appropriate word.
Section 6.
This ordinance shall become effective ten (10) days after the date of
enactment unless vetoed by the Mayor, and if vetoed, shall become effective only upon an
override by this Board.
Section 7.
This ordinance does not contain a sunset provision.
(
PASSED AND ADOPTED:
Approved by County Attorney as
to form and legal sufficiency:
Prepared by:
f
Agenda Item No.
Page 27
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ORDINANCE NO 1999-48
AN ORDINANCE OF THE BOARD OF COUNTY
COMMISSIONERS OF BROWARD COUNTY FLORIDA
PROVIDING FOR THE ISSUANCE OF LICENSES TO
TELECOMMUNICATIONS SERVICE PROVIDERS USING
RIGHTS-OF-WAY OF BROWARD COUNTY: ESTABLISHING
REQUIREMENTS AND CONDITIONS UPON THE USE OF
RIGHTS-OF-WAY BY SUCH PROVIDERS: ESTABLISHING
PROCEDURES FOR FILING AN APPLICATION FOR A
LICENSE AND FEES FOR SUCH LICENSES, AMENDING
SECTION 8%-16, BROWARD COUNTY CODE, RELATING TO
SCHEDULE OF CIVIL PENAL TIES TO PROVIDE FOR THE
INCLUSION OF A NEW SUBSECTION FOR VIOLATIONS OF
THIS ORDINANCE: PROVIDING FOR SEVERABiliTY:
PROVIDING FOR INCLUSION IN THE CODE, AND
PROVIDING FOR AN EFFECTIVE DATE
(Sponsored by the Board of County Commissioners)
WHEREAS, the Telecommunications Act of 1996, Publ L. No 104-104 (1996),
requires local governments to permit use of the public flghts-ot-way by telecommunication
companies 10 serve the general public and recognizes the authoflty ot local governments
to regulate the use ot their flghts-ot-way by said telecommunication companies and to
'ece:v,= feW and reaso:1able ccmpe.1sat:or: for saId use or. a C0mpetlll\i~ly neJtral ana
nondlscnmlnatory basis, and
WHEREAS, Broward County (the "County") IS authorized by state and local law to
control the use ot rights-ot-way wlthm the County, to regulate the use ot flghts-ot-way by
telecommunications systems utilizmg such flghts-ot-way, and to assess tees tor the use of
SUCh flghts-of-way pursuant to Section 337401, Floflda Statutes, and to home rule power:
and
WHEREAS, the flghts-ol-way subject to the control otthe County (1) are wilcal to
the travel ot persons and the transport of gOOds and otheftanglbles In the bUSiness and
24
SOCial lite of the community by all citizens: (2) can be partially occupied by utilities and
25
other publiC service entities tor facilities used in the delivery, conveyance, and transmission
26
of utility and public services rendered to the public for profit, and for the enhancement of the
27
healtn, weltare, and general economiC well-being of the County and ItS Citizens, (3) are a
28
unique and phYSIcally limited resource and proper management by the County IS necessary
29
to maXimize effiCiency, mInimize the costs to the taxpayers of the toregomg uses, and to
30
minimize the InconvenIence to and negative effects upon the public from such facilities'
31
'nstructlon, placement, relocation, and maintenance In the flghts-ot-way, (4) are Intended
,or publiC uses and must be managed and controlled consistently With that intent, and
jJj
-,-
WHEREAS, the right to place facilities and fixtures In such nghts-of-way for the
2 business of providing telecommunication services for hire is a valuable economic nghtto use
3 a unique public resource that has been acquired and is maintained at great expense to the
4 County and its taxpayers, the economic benefit of which should be shared with the
5 taxpayers of the County; and
6 WHEREAS, the County finds that it is In the interest of the public to establish
7 standards for licenslt!9 such operators of telecommunications systems in a manner which
8 (1) protects the interest of the public heath, safety and welfare of the citizens of the County
9 and compensates the County for the cost of establishing, maintaining, regulating, and
10 enforcing these protections; (2) compensates the County for the cost of establishing,
11 maintaining, and regulating of the use of public proper1y; (3) establishes terms and
12 conditions under which an operator of a telecommunications system may use rights-of-way
13 of the County to serve the public, (4) fully protects the public and the County from any harm
14 that may flow from such priva'te use of the Countys rights-of-way; (5) protects and carnes
15 out the regulatory authority over nghts-of-way of the County In a manner consistent with
I
federal and state law, and (6) otherwise protects the public's Interest in the development and
17 use of the County's Infrastructure; and
18 WHEREAS, cer1ain rights-of-way are operated, maintained, and controlled by the
19 Broward County Aviation Depar1ment (the -Aviation Depar1ment") and are subject to
20 additional restrictions, including the federal requirements that all revenues generated by an
21 alrpor1 be retained by the airport in a separate fund; and
22 WHEREAS, the County finds that It IS appropnate for vanous operators to obtain
23 separate licenses based on the type of service provided in order to ensure that similarly
24 situated operators can be treated as similarly as possible and to avoid confusion as to
25 regulatory authonty applicable to use of the County nght-of-way, NOW. THEREFORE,
26 BE IT ORDAINED BY THE BROWARD COUNTY BOARD OF COUNTY
27 COMMISSIONERS OF BROWARD COUNTY, FLORIDA
28
Section 1
Section _ of the Broward County Code of Ordinances is hereby
29 created to read as follows
30
31
TITLE I - GENERAL
Sec. 1.01
Intent and Purpose.
It IS the Intent of the County to promote the publiC health. safety, and general welfare
33 by prOViding for the use of Sroward County n9hts-of-way. to adopt and administer regulations
-2-
,
consistent with state and federal law including Section 337401, Flonda Statutes County
2 home-rule authonty, and the Federal Communlcalions Commission gUidelines and
3 regulations In accordance with the provlsion~ of the Telecommunications Act of 1996 to
4 provide for the payment of fees and other valuable consideralion by licensee to the Counry
5 for the cost of establishing, maintaining, and regulating the use olthe County's nghts-of-way
6 and for the privilege of uSing the County's nghts-ol-way for construcling and maintaining
7 telecommunicalions lacllitles; and to establish standards lor the maintenance and regulation
8 01 nghts-of-way In the County lor all licenses granted after the effective dale of thiS
9 ordinance In regulaling rights-ai-way, the County shall be governed by and shall comply
10 with all controlling lederal, state, and local laws and regulations
11 Sec. 1.02 Name and Scope.
12 ThiS ordinance shall be known as the Sroward County Telecommunications
13 Ordinance It shall be applicable to all licenses Issued on or after the effective date 01 thiS
14 ordinance
Sec. l.QJ Definitions.
For the purposes of thiS ordinance, the following terms, phrases, words, and
17 abbreviations shall have the meanings given herein, unless otherwise expressly stated.
18 When not inconsistent with the context, words used in the present tense include the future
19 tense; words In the plural number Include the singular number; words In the Singular number
20 Include the plural number; and words defined In upper and lower case shall have the same
21 mea ring as words In all lower case. The words "and" and "0(' may be readconJunctlvely or
22 diSjunctively The words "shall" and "will" are mandatory, and "may" is permiSSive Unless
23 otherwise expressly stated, words not defined in this ordinance, shall be given the meaning
24 set forth in Chapter 203, Flonda Statutes, and, if not defined therein, their common and
25 ordinary meaning References to governmental entities (whether persons or entities) refer
26 to those enlitles or their successors in authority II specific proviSions of law referred to
27 hereIn are renumbered. then the reference shall be read to refer to the renumbered
28 prOVision. References to laws, ordinances or regulations shall be interpreted broadly to
29 cover government actions, however nominated, and Include laws. ordinances and
30 regulations now In force or hereInafter enacted or amended.
."
(a)
Affiliate means a person that (directly or Indirectly) owns or controls, 15 owned
.)&0 oJr controlled by. or IS under common ownership or control With, another person
33
-3-
(b) Annual occupancy fee means an annual per linear foot charge established by
2 resolution of the Soard against (1) the operator of telecommunications facilities, and (2) the
3 owner of a private communications system.
4
(c)
Application means an informational document that must be completed and
5 filed for an initial authonzation to use the nghts-of-way, for a modification: for a transfer, or
6 for a renewal. All application forms may be obtained from Sroward County's Office of
7 Information Technology
8
Boardnieans the Soard of County Commlssloners.for Sroward County, Flonda,
(d)
9 the governing body for Sroward County government.
10
(e)
Construcllon, operation or repair and similar formulations of those terms mean
11 the named actions interpreted broadly, encompassing, among other things, Installation,
12 extenSion, maintenance, replacement of components, relocation, under grounding, grading,
13 site preparation, adjusting, testing, make-ready, and excavation.
14
(I)
FCC means the Federal Communications Commission or ItS designee
15 (g) Gross receipts means gross receipts as defined in Section 203012, Flonda
I
, Statutes, as may be amended from lime to lime.
17
(h)
License means the authonzation granted by the County to an operator of a
18 telecommunications facility or a private communications system to utilize a particular,
19 discrete and limited portion of the rights-of-way solely for the purpose of enabling the
20 operator to construct, operate or repalf Its telecommunications facility or pnvate
21 communications system.
22
(I)
Llpense Agreement means a contract entered into in accordance with the
23 pro~isions of this ordinance between the County and a licensee that sets forth, subject to this
24 ordinance, the terms and conditions under which a license will be exerCised.
25
U)
Licensee means a person holding a license granted by resolution of the Soard
26 pursuant to thiS ordinance.
27
(k)
License area means the specific area' of the County that a licensee IS
28 authonzed to use the nghts-of-way under the terms of thiS license agreement
29
(I)
Mimmum Standards means those standards set forth in Chapter 25, Part I, of
30 the Sroward County Administrative Code enlitled "Minimum Standards Applicable to Public
31 Rights-of-Way Under Sroward County Junsdictlon:' as may be amended from time to time
by resolution of the Soard.
33
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(m) Operator, when used with reference to a telecommunications facility, means
2 a person (1) who owns a telecommunications facility: (2) who otherwise controls or IS
3 responsible for, through any arrangement, the management and operation of such a facility
4 A licensee shall be referred to herein as an operator
5
(n)
Person means any individual, corporation, partnership. associatIon, jOint stock
6 company, trust, or any other legal entity, but not the County
7
(0)
Private communications system means a facility placed, In whole or In part, In
8 the rights-of-way for the provision of telecommunications for a .private bUSiness or personal
9 use but not er"lcompassing in any respect the proviSion of telecommunication services
10
(p)
Private communications system owner means a person who owns or leases
11 a private communications faCility.
12
(q)
Rights-of-way has the meaning given to -Public rights-of-way. In the Minimum
13 Standards. The term ng"ts-of-way shall also include all of the airport rights-of-way located
14 at any County-owned airport tnat are operated. maintained, and controlled by the AViation
15 Department. which airport rights-of-way are used or to be used for ingress or egress.
,eluding, but not limited to any and all roadways, alleys, thoroughfares, walkways, bikeways,
17 or paths No reference herein, or in any license agreement, to rights-of-way shall be deemed
18 to be a representation or guarantee by the County that its interest or other right to control the
19 use of suCh property is suffiCient to permit its use for such purposes, and a licensee shall be
20 deemed to gain only those rights to use as are properly in the County and properly granted
21 by the County to the licensee and as the County may have the undisputed right and power
22 to gl~e
23
(r)
Transfer means any transaction in which: (1) all or a portion of the
24 telecommunications faCility is sold or assigned (except a sale or assignment that results In
25 removal of a particular portion of the facility from the rights-of-way), (2) there IS any change,
26 acqUISition, direct or Indirect transfer of control of the licensee, or (3) the rights and/or
27 obligations held by the licensee under the license are transferred, sold, aSSigned, or leased,
28 In whole or In part, directly or Indirectly, to another party. In succeeding prOVISions of thiS
29 ordinance, all these activIties are referred to as license transfers.
30
(s)
TelecommUnications facility means a facility that IS used to prOVide one or more
31 telecommunication services, any portion of whiCh occupies rights-of-way The term
,communications facility Includes cable, fiber optiC, condUit, pathway or other supporting
33 structures. and assOCiated facilities used to transmit telecommunications Signals
-5-
(
(t)
Telecommul"calion sefVJces has the meaning given In Section 203012(5).
2 Florida Statutes.
3
(u)
User means any person lawfully receiving for any purpose any service provided
4 by the telecommunications operator.
5 Sec. 1.04 Purpose and Characteristics.
6
(a)
In order to ensure as far as possible and appropriate that persons providing
7 similar services are treated similarly. considering differences In circumstances. and to comply
8 with reqUirements of state and federal law. the County shall require persons. to obtain a
9 license for use of County rights-of-way. The revocation of a liceMse for one particular type
10 of service in and of itself will not affect the authority of,a license holder to continue to prOVide
11 other types of services for which It holds a franchise or license. No license granted by the
12 Board shall be exclusive
13
(b)
The granting of license by the County shall not convey title, equitable or legal.
14 in the rights-of.way. The right granted is only the right to occupy rights-of-way for the
, 5 purposes and for the period stated In the license and the right may not be alienated.
,^ aSSigned. or transferred Without the prior written consent of the County
I I
1 ( (c) The fact thal.arparticular telecommunications facility may be used for multiple
18 purposes does not obviate the need to obtain a license or franchise for other purposes By
19 way of illustration and not limitation. a cable operator of a cable system must obtain a cable
20 franchise. and. if the operator elects to provide telecommunication services over the same
21 facilities. the operator must first obtain a telecommunications license.
22 Sec. 1.05 License Required.
23
(a)
An operator of a telecommunications facility covered by this section shall apply
24 for and obtain a license (in accordance with this ordinance) prior to constructing a
25 telecommunications facility Within the rights-of-way. An operator of a telecommunications
26 facility Within the County rlghts-of.way on the date of enactment of this ordinance shall apply
27 for a license Within three (3) months of the effective date of this ordinance. An application
28 for a license shall be submitted to the County in accordance With the prOVisions of Title" of
29 this ordinance.
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(b)
Every private communications system owner must obtain a license as prOVided
31 for In Title III of this ordinance.
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(c) The license may be amended from time to time to Include additional areas of
2 rrghts-of-way the licensee proposes to use and which are not currently Identified on the
3 Ilcensee's eXisting license
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(d)
No license shall be transferred or assigned In whole or In part by licensee
5 without prior approval of the County. which approval shall not be unreasonably withheld.
6 Any transfer of a license shall be subject to the application requirements of Trlle II of thiS
7 Ordinance
8 Sec. 1.06 Reseller.
g A reseller IS a person who has entered Into an agreement with a licensee to utilize the
10 Ilcensee's telecommunications facility to provide telecommunications services. A reseller is
11 not required to obtain a separate license. so long as it does not own underlying facilities in
12 the rights-of-way and IS not involved In construction or repair of the underlying facilities in the
13 rights-of-way A licensee shall be required to provide the Chief Information Officer of the
14 County'S Office of Information Technology with thirty (30) days written notice. sent by
15 certified mail. follOWing ItS deciSion to permit another person providing telecommunication
eNlces to utilize ItS telecommunications facility Within the nghts-of-way If licensee IS
,( allOWing the use of airport rights-of-way by a reseller, the licensee shall also provide thirty
18 (30) days written notice, sent by certified mail, to the Director of the AViation Department In
19 accordance With the requirements set forth in this section. Notwithstanding a licensee's rrght
20 to permit a reseller to use ItS telecommunicatrons faCility, the licensee shall remain
21 responSible for all terms and conditions contained In this ordinance
22 Sec. 1.07 Term of License.
23 The license shall be for a specified term set forth in the license No license issued
24 under this ordinance shall be for a term greater than five (5) years The County may
25 terminate the license In the event that the right-of-way is closed, abandoned, vacated,
26 discontinued, or reconstructed
27 Sec. 1.08 Compensation Required.
28 (a) General The County shall require persons using ItS rights-of-way to prOVide
29 telecommunications facilities and pnvate communications system owners to pay
30 compensation therefor. as prOVided for in this ordinance, to (1) ensure that the County, as
31 far as pOSSible. 's compensated for the rights granted, to use property over which It exerCises
Itrol, or which IS held In publiC trust, (2) to ensure that the County IS compensated for
3JI expenses arrslng from the use of that property. the regulation of the use and the cost to
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acqUire, construct and maintain the rights-of-way areas, and (3) to ensure that similarly
2 situated persons providing the same services are treated similarly, as far as is possible and
3 appropriate considering differences in circumstances,
4 (b) Annual Occupancy Fee
5 (1) Each licensee shall pay to the County annually for the use of the rights-of-way
6 a fee based on the total per linear foot of cable, r,ber optic, conduit, or other
7 pathway using the rights-of-way. The annual occupancy fee shall be based
8 upon usage of all of the rights-of-way, as der,ned herein, whether located in
9 unincorporated Sroward County or within incorporated municipal boundaries
10 and calculated as provided for in subsection (b)(4)e below. The County shall
11 establish from time to time by resolution of the Board the annual occupancy
12 fees to be paid by licensees for use of the rights-of-way calculated on a per
13 linear foot basis. Fees with respect to use of rights-of-way operated,
14 maintained, and controlled by the AViation Department shall be paid to the
15 AViation Department.
I" (2) If a licensee has gross receipts on recurring local service revenues for services
I, provided within unincorporated Sroward Counly then the annual occupancy
18 fee shall not exceed one (1) percent of gross receipts, on recurring local
19 service revenues for services provided within the limits of the unincorporated
20 areas of the County less payments made by licensee for all County taxes,
21 licenses, fees, and other impositions paid to County, and the value of any in-
22 kind contributions made by licensee to County, but excluding ad valorem
23 taxes and amounts paid for assessments for special benents such as
24 sidewalks, street paving, and similar Improvements and occupational license
25 taxes or the maximum permitted by state or federal law
26 (3) Each licensee subject to the restrictions of Section 108(b)(2), unless a license
27 agreement provides otherwise, shall provide a statement with each quarterly
28 payment showing the manner in which the limitation on the fee was
29 calculated on a monthly basis. A quarterly report shall be submitted in a form
30 provided by the County which provides detailed Information on gross receipts
31 received by the licensee on recurring local ser\lice revenues from operations
:t" of the licensee in unincorporated Broward County and credits claimed. Each
quarterly statement shall be Signed by a representative of the licensee
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authorized to sign the returns who shall certify that the statement IS, to the best
of signor's knowledge and belief, true and correct
Except as provided for herein, all licensees which are subject to section
1 08(b)2) shall, within ninety (90) days following the end of the calendar year,
submit a specIal report by an Independent auditor, or licensee's chief financial
officer or other officer authorized by licensee to sign tax returns se~lng forth
gross receipts on recurring local service revenues received by the licensee
within unincorporated Broward County and de~criblng what revenues were
,ncluded and excluded In the fee calculation, and any adjustments made to
gross receipts and describing the amounts and types of any sums to be
credited to the annual occupancy fee The County may, from time to time, and
upon reasonable advance wri~en notice, Inspect and audit any and all books
and records reasonably necessary to the determination of whether fees have
been accurately computed and paid
General Rules for Payment of Annual Occupancy Fees
a
Each licensee shall pay the fee descrrbed In subsection (bl( 1) above on
a quarterly baSIS based on a calendar year for the preceding quarter
The quarterly payments shall be submitted according to the following
schedule January-March payments due April 25, April-June payments
due July 25: July-September payments due October 25, and October-
December payments due January 25 of each year Initial and final
payments shall be prorated for any portion of the quarter at the
beginning or end of the term of the license In the event an error by the
licensee results In an overpayment of a license fee, the County may, at
ItS sole option, credit the overpayment to the next payment due or
spread the credit over a period equal to the periOd over which the error
occurred.
Unless a license agreement prOVides otherwise, each license fee
payment shall be accompanied by a statement shOWing the manner In
which the fee was calculated on a monthly baSIS
Accrual of the license fee shall begin on the effective date of the
issuance of the license
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d.
The license charges shall apply to all telecommunication facilities using
the rights-of-way
Subject to Section 1.08(b)(2), the license fee is calculated based on the
following:
e
The license fee shall be calculated based on the rights-of-way
fee resolution as approved by the Soard and on the actual
usage of the rights-of-way for the placement of
telecommunication facilities Identified In the license..agreement
as verified by as-bUilt maps and County inspection.
For the purposes of this Q(dlnance, linear feet on which the fees
are due shall be measured by the length of cable, conduit or
other pathway either owned or controlled by any
telecommunication facility. All measurements shall be calculated
to the nearest foot by rounding up, where applicable
The licensee shall be charged for all cable, condUit or other
pathway in place at the lime the quarterly license fee is due to
I
the County. Where an existing Iicensli is amended to include
additional usage of the rights-of-way, the licensee shall be
charged an additional fee based upon the amended total per
linear foot usage of the rights-of-way
The licensee shall submit with the license fee a quarterly report in a
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form provided by the County which provides detailed information on all
aerial and underground usage of the rights-of-way, including any
amended areas that have been approved by the County within that
quarter. The report shall list by category eXisting or any newly amended
aerial and underground installations on a per linear foot basis in the
rights-of-way areas of Sroward County
Each quarterly payment shall be accompanied by a summary form
provided by the County, with a cover letter on company letterhead
which contains a statement by an officer of the licensee certifying that
the information and computation of the payment amount shown on the
summary form are true and accurate
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Alllrcense fees listed In this section shall apply at the same rate for all
aeflal and underground cable, fiber Optic or other pathway Installed by
the licensee following approval by the County
The County may accept compensation as In-kind services from an
operator of a telecommunications facility, provided, that the County
shall not accept In-kind payments from any operator without prOViding
other Ircense applicants that apply or have applred within twelve (12)
months an opportunity to make an equivalent in-kind payment. Such
In-kind services shall be negotiated In good faith and set forth In the
onglnal Ircense agreement or any amendment thereto between the
licensee and the County.
No acceptance of payment shall be construed as a release or as an
accord and satisfaction of any claim the County may have for further
sums payable under this ordinance or for the performance of any other
oblrgation hereunder
Nothing in this section shalllrmlt the licensee's Ilabllrty to pay other local
taxes, fees, charges, or assessments to the County and other taxing
and governmental authorities.
The annual occupancy fee is not a payment In lieu of any tax, fee or
other assessment except as specifically provided in this ordinance, or
as requlfed by applicable law. By way of example, and not Irmltatlon,
flghts-of-way permit fees and bUSiness license taxes are not waived
and remain applrcable.
All annual occupancy fees which are not paid when due and payable
hereunder shall bear interest at the statutory interest rate applrcable to
Judgments, until paid Payment of Interest IS In addition to any
applrcable penalties as may' be proVided by law or County ordinance
The compensation paid by each licensee shall be subject to publrc
disclosure by the County
A licensee may elect to pay ItS annual occupancy fee annually In
advance, on the date that the first quarterly payment would othelWlse
be due. together with the quarterly reports then due A licensee which
elects to pay annually shall not be required to fite any other quarter!y
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reports In the event that a licensee which IS sublect to the cap
2 provided at seclion 1 08(b)(2) elects to make annual payments, the
3 licensee shall file the first quarter reports reqUired and shall file the
4 annual report reqUIred by section 1.08(b)(4) Any credit, overpayment
5 or under-payment by any licensee shall be applied to the annual
6 occupancy fee due for the year following the prior annual payment
7 Sec, 1,09 Application to Persons Providing Different Types of Services_
8 The fact that a fee is paid on one type of service prOVided-over a telecommunicalions
9 facility does not excuse an operator from its duty to pay fees on other types of services
10 provided over that same facility as required by this ordinance or other County ordinances.
11 As an example, and not as a limitation of the foregoing, a cable operator who pays a
12 franchise fee on revenues derived from the prOVision of cable services must pay a fee under
13 section 108 of this ordinance to the extent that the operator maintainS telecommunication
14 facilities. likeWise, the operator of a telecommunications facility must pay a franchise fee
15 under Sroward County Code, Article XVII, Cable TV Regulations, to the extent It provides
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'able services to subSCribers via a cable system.
Sec, 1,10 General Conditions Upon Use of Rights'Of.way_
(a)
Responsibility for Costs. An operator, or its contractors or subcontractors, who
1 g is required to perform under this section shall do so at ItS OWn cost. If an operator falls to
20 perform work that it is required to perform within the time provided for performance, the
21 County may perform the work, and bill the operator therefor. The operator shall pay the
22 amo~nts billed wllhin thirty (30) days. Prior to performing work pursuant to this section, the
23 COUlity shall give the operator notice and a reasonable opportunity to cure, provided
24 however that no nolice shall be required in the event that the failure presents an Immediate
25 threat to public health, safety or welfare as determined by the County in its sole discretion.
26 (b) Right to use rights-of-way not warranted. II is understood that there may from
27 time to time be within the County various rlghts-ol-way which the County does not have the
28 unqualified rlght:o authorize the operator to use; therefore, in granting a license, the County
29 does not warrant or represent that it has the right. as to any particular right-of-way, or portion
30 of a right-of-way, to authorize the operator to Install or maintain portions of ItS system therein,
31 and In each case the burden and responsibility for making such determlnalion In advance
f the Installation shall be upon the operator
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(c)
Responsibilities of Operator
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(1) In Installing, maintaining, operating, or removing Its telecommunication facility
2 In, upon, or from any County right-of-way, the operator shall ensure'
3 a. That the safety, functioning, and appearance of the right-of-way and the
4 convenience and safety of users of the rights-of-way and other persons
5 not be adversely affected by the Installation, ccnstructlon, or removal
6 of the telecommunication facility
7 b That the cost of the installation. construction, operation, or removal of
8 tlie telecommunication facility shall be borne by the operator or user, or
9 a combination of such parties
10 c. That the damages caused by the Installation, construction, operation,
11 or removal of such telecommunication facility by the operator shall be
12 the responsibility of the operator
13 (2) Nothing herein shall be construed to prohibit or prevent any property owner
14 from constructing, installing, or continuing to maintain and operate a private
15 communications facility subject to the provIsions of Title III of this ordinance
provided, however, that the construction, Installation, maintenance, and
17 operation of such private communications facility shall not prevent an operator
18 of a telecommunications facility from constructing. Installing, maintaining, and
19 operating ItS facility.
20 (3) This section IS not intended to, and nothing herein shall be construed to,
21 preclude appropriate payments, arrangements, or agreements for the use by
22 op"rators of other utilities' facilities and equipment, including pole attachment
23 and condUit agreements.
24 (d) Other agreements, permit and easement reqUirements The County shall not
25 be reqUired to assume any responsibility for securing any rights-of-way, easements, or other
26 rights which may be required of the licensee for the installation of a telecommunications
27 facility, nor shall the County be responsible for securing any permits or agreements with
28 other persons or utilities.
29 (e) No property rights conveyed Nothing In thiS ordinance or In the license shall
30 grant to the holder any property rights In County-owned property or rights-of-way, nor shall
31 the County be compelled to maintain any of ItS property or rights-of-way any longer than, or
any other fashion than, the County. In its Judgment. may requIre for Its own needs. In
33 addition, the licensee shall not be entllled to any compensation fordamages from the County
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as a result of having to remove or relocate Its property, lines and cables from such public
2 property or rights-of-way in the event the County determines that a necessity eXists for such
3 removal or relocation.
4 (I) Construction Permits Required The licensee shall apply for and obtain permits
5 for construction as required by the County prior to the commencement of construction,
6 (g) Prior Approval by the County Notwithstanding any provision to the contrary
7 in this ordinance, the licensee must COmply at all times With all poliCies, procedures and
8 directives of the County's Public Works Department and, in the.case of alfport rights-of-way,
9 any poliCies, procedures, and dlfectlves of the AVlalion Departm'ent. Except for Individual
10 service drops outside the rl9hts-of-way, the licensee Shall not erect any pole, run any cable,
11 condUit, fiber optiC or other pathway, nor shall any construclion on flghts-of-way related to
12 the delivery of telecommunication services be commenced Without the prior approval of the
13 County's PubliC Works Department, Engineering D,v,Sion or the Aviation Department if the
14 construction is on airport rights-of-way Prior to the Issuance of such approval and permit,
15 the licensee shall submit to the County's Public Works Department, Engineering Division or,
In the case of alfport rights-of-way, to the Avialion Department,!the following:
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(1)
If required by the County, hard copies of construction plans in a digital format
acceptable to the County, If prepared, utilizing Computer Aided
Drafting/Geographic Information Systems ("CAD/GIS") or another automated
system capable of exporting a file compatible With CAD/GIS, of the proposed
telecommunications faCility Illustrating plant routing and utility pOles to be
utilized, and
As a prerequisite to the issuance of a rlghts.of.way permit by the County, a
performance and maintenance bond as required by Administrative Code,
InclUding the Minimum Standards, shall be prOVided for any and all work
performed In the rights-of-way to ensure proper restoration and maintenance
of the rights-of-way and to provide a one (1) year warranty maintenance
period,
County's Right to Inspect. The County shall have and maintain the right to
(2)
30 inspect the Installation and construclion operations, as well as the maintenance operations
31 of the licensee's telecommunications faCility to ensure the proper performance of the terms
of this ordinance
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(I) JOint or Common Use of Poles The licensee shall be encouraged to enter Into
2 agreements for the joint or common use of poles or other Wire holding structures where poles
3 or other wire holc~lng structures already exist for use In serving the County or serving the
4 public convenience. No location of any pole or wire holding structure of the licensee shall
"5 be a vested interest. and such pole or structure shall be removed or modified by the licensee
6 at ItS own expense, to the extent required by state or local law
7 U) Notwithstanding any other provision of this ordinance, pledges in trust or
8 mOrlgages of the asseis of a licensed telecommunications facillty'to secure the construction,
9 operation or repair of the system may be made without application and without the County's
10 prior consent, except, no such arrangement may be made If it would in any respect or under
11 any condition prevent the telecommunications facility operator or any successor from
12 complYing with the license and applicable law No arrangement may permit a third party to
13 succeed to the Interest of the operator, or to own or control the telecommunications facility,
14 without the prior consent of the County. Any morlgage, pledge or lease shall be subJect and
15 <ubordlnate to the rights of the County under this ordinance or other applicable 'aw
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(3)
(k)
(1)
Location or Relocation of FacIlities
A licensee's telecommunications facility may be Installed above ground in
areas where existing power or other facilities are above ground, and shall be
Installed underground in areas where eXisting power and other facilities are
Installed underground. If both power and other facilities are Installed above
ground, a licensee shall install Its facIlities underground at the request of a
resIdent or properly owner when the resident or property owner agrees to pay
the additional cost of such installation.
A licensee shall not place any fixtures or equipment where the same will
Interfere With any eXisting gas, electriC, CATV, telephone, sewer, drainage or
water lines, fixtures or equipment or other users haVing rights to place a facility
within rights-of-way. The licensee shall locate ItS lines and equipment In such
a manner as not to Interfere unnecessarily With the usual travel on rights-of-
way, With the installation or operation of gas, electriC, CATV, telephone, water,
drainage, or sewer lines equipment, or With the rights or reasonable
convenIence of owners af property whIch abut any (Ights-of-way
A licensee shall have the authorlly to trim trees upon or overhanging, streets,
alleys, sidewalks and rights-of-way so as to prevent the branches of such trees
(2)
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from coming in contact with the wires and cables' of the licensee In a manner
approved by and acceptable to the County If the County notifies the licensee
of the need for tree trrmming and the licensee fails to take the appropriate
action within a time preSCribed by the County. the County may, at its oplion,
cause such trimming to be done by the County or by a third party under the
County's supervision and direction at the expense of the licensee.
A licensee shall promptly, at its own expense, protect, temporarily disconnect,
remove: modify or relocate any part of its facility when reqUired by the County
by reason of its unreasonably interfering in any way'with the convenient, safe,
ar continuous use, or the maintenance, tmprovement. extension, or expansion
(5)
of rights-of-way or for any other reason reqUired by applicable law, upon thirty
(30) days' written notice.
A licensee shall, at the request of any person holding a building moving permit
issued by the County. temporarily raise or lower its wires to permit the moving
of the bUllding(s). The expense of such temporary removal or raising or
lowering of wires shall be paid by the person requesting same, and the
licensee shall have the authority to require such payment In advance. A
licensee shall be given not less than forty-eight (48) hours advance notice to
19 arrange for such temporary wrre changes.
20 (6) With regard to underground construction, all cables shall be burred at a
21 sufficient depth so that no portion of the service drop IS exposed or vIsible.
22 ; (I) Work in the Rights-of-Way. All materials, installations, and construction in any
23 rights-of-way under the County's jurisdiction shall be in accordance with the Minimum
24 Standards.
25 (1)
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A licensee shall obtain any required rights-of-way permits before causing any
damage or disturbance to rights-of-way as a result of its construction or
operations and shall restore the property to ItS former condition in a manner
approved by the County. If such restoration is not performed or is not
satisfactorily performed the County, after ten (10) days prior notice to the
licensee, may cause the repairs to be made at the expense of the licensee
Prior to performing worl< pursuant to thiS section, the County shall give the
operator notice and a reasonable opportunity to cure provided however that
no notice shall be required In the event that the failure presents an immediate
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(2)
threat to public health, safety or welfare as determined by the County In Its
sole discretIon. All additIonal or reoccurring repairs required as a result ot the
unsatisfactory work may also be made by the County at the expense of Ihe
licensee
A licensee granted permission to install and operate a telecommunicatIons
faCility in Sroward County nghts-of-way, except in the event of an emergency,
shall provide at least seven (7) days (or such shorter periOd as the County may
accept) 'pnor notice to the reSidents of affected area, as determined by the
County, when construction crews will be performing construction or
maintenance that Will block a travel lane used by reSidents of the affected
nghts-of-way for more than two (2) hours Such notification Will by mall or
through the placement of notices on the front doorknobs of the reSidences in
the affected area, with such notices providing the name and telephone
number of the Iic~nsee.
All vehicles utilized by a licensee or Its contractors or subcontractors In the
construction of a telecommunications facility shall be clearly marked providing
the name of the licensee, contractor or subcontractor and, If applicable, the
Sroward County occupational license number as required by the Sroward
County Code of Ordinances. All personnel employed by a licensee or its
contractors or subcontractors in the construction of a telecommunications
facility shall possess idenlificatlon providing the employee's name and the
name and telephone number of the licensee or Its .contractors or
subcontractors.
(3)
:4 (4) The licensee must ulilize any authonzed underground locate service pnor to
25 any excavation or demolition activities conducted In construction of the
: 6 telecommunications facility Only state licensed and/or Sroward County
7 certified contractors may be utilized 'for this construction.
8 (5) All underground crossings of paved roadways shall be made by the directional
- 9 bore method unless the Sroward County Englneenng D,vIs,on approves an
10 alternate method pnor to the construclion.
(m) Safety of the Public.
(') A licensee's work. performance, eqUIpment and Job sites shall be In complIance
at all tImes with all applicable county, state and federal requirements and shall
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conform to the provisions of the Minimum ~tandards. All work while in
progress shall be properly protected at all times with suitable barricades, flags,
lights, flares, or other devices as are reqUIred by the United States Department
of Transportalion's Manual of Uniform Traffic Control Devices (MUTCD), latest
edition, or any reqUIrements of the County's Public Works Department to
protect all members of the public while such work is being performed.
A licensee shall al all times employ due care and shall install, maintain and
use commonly accepted methods and devices for preventing failures and
accidents which are likely to cause damage, Injuries or nuisances to the public,
All structures and all lines, equipment .and connections in, over, under and
upon the rights-of-way of the County wherever situated or located shall at all
times be kept and maintained In a safe, suitable, substantial condition, and in
good order and repair.
Removal Required To the extent that It is determined by the County to be In
(n)
15 the besllnterest of the health, safety, and welfare of the public, a licensee shall allts own
expense, upon notice, promptly remove from the rights-of-way covered by this ordinance all
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(0)
(1)
Restoration Required,
In the event of such removal as referenced In subsection (n) above, the
licensee shall promptly and reasonably restore the rights-of-way area from
which such property was removed to the condition eXisting prior to the
disruption of the rights-of-way area and In accordance with the Minimum
Standards.
If a licensee falls to properly and promptly restore the area, the County, at lis
election, may restore the rights-of-way area and cause forfeiture of the
permanent performance bond In order to reimburse the County for any costs
and expenses it incurs for restoririg the area. Prior to performing work
pursuant to this section, the County shall give the operator notice and a
reasonable opportUnity to cure as provided in section 1.10(1)(2) provided
however that no notice shall be required in the event that the failure presents
an immediate threat to public health, safety or welfare as determined by the
County in Its sole discretion
(2)
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Sec 1.11 Indemnification; Insurance Requirements.
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Indemnification.
The County may not enter Into any license agreement, or otherwise authorize
any telecommunications facility operator to use the rights-of-way until and
unless the County obtains an adequate indemnity from such operator The
Indemnity shall at least
a Release the County, Its officers, agents and employees from and
against any and all liability and responsibility In or arising out of the
construction, operation or maintenance of the telecommunications
facility Each telecommunlcalions faCility operator must further agree
not to sue the County or seek any monetary damages or such other
relief in connection with the above-mentioned matters:
Indemnify, hold harmless, and at the County Attorney's option, defend
or pay foe an attorney selected by the County Attorney to defend the
County, ItS officers, agents, and employees against any and all claims,
losses, liabilities and expenditures of any kind, Including attorneys fees,
court costs, and expenses, accruing or resulting from any and all
claims, demands, or causes of action of any nature whatsoever
resulting from injuries or damage sustained by any person or property
by virtue of the operator's construction, operation or maintenance of the
telecommunications facility: and
(a)
(1)
b
c PrOVide that the covenants and representations relating to the
Indemnification prOVISion shall survive the expiratIon or termrnation of
any license agreement entered into with the County and continue In full
force and effect as to the operator's responsibility to Indemnify
Insurance, Policy limits,
Within thirty (30) days after the effective date of the license, and prior to any
operations under the license, the operator shall provide the County with proof
of the required insurance, The operator shall maintain said Insurance
throughout the term of the license and said insurance shall include, at a
minImum. the fOllOWIng types of Insurance coverage In amounts not less than
shown
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5
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2
3
4
a
Workers' compensation Coverage -10 apply for all employees for
slatutory limits In compliance with the applicable state and federal laws
The policy must include Employers' Liability with a minimum limit of
$100,00000 each aCCident.
b.
Comprehensive general liability
Shall have minimum limits of
$1,000,000.00 per occurrence combrned single limit for bodily injUry
liability and property damage liability This shall Include premises
and/or operations, Independent contractors, and subcontr~ctors and/or
completed operations, broad form property damage, explOSion collapse
c
and underground (XCU) coverage, and a contractual liability
endorsement.
BUSiness auto policy Shall have mrnimum limits of $500,000.00 per
occurrence combrned single limit for bodily injUry liability and property
damage liability This shall Include owned, non.owned, and hired
vehicles
d.
In lieu of subsections (b)( 1)a through (1 )c. above, a licensee may self
!
rnsure the foregOing requirements 16lelf Insured status must be
confirmed With certification of same by presentation of finanCial
statements which are not more than one (1) year old, and signed by the
chief finanCial officer of the licensee Information contained therein IS
(2)
subject to review and approval by the County's Risk Management
Division. A State of Flonda self insurance certification l!t not satisfactory
or adequate certification under this option
The Insurance certificate obtained by a licensee in compliance with this section
shall be approved by the County's Risk Management DIVision and shall be
filed and maintained With the County Administrator or deSignee during the term
of the license. The certificate of insurance shall prOVide thirty (30) days pnor
wntten notice to the County of any change, cancellation and/or non-renewal
(3)
of the policY(les)
Upon thirty (30) days notice, insurance requirements may be changed and
Increased from time 10 time at the discretion of the Board to reflect changing
liability exposure and limits
If
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(4) Nothing herein's Intended as a limitation to the extent of any legal liability of
2 the licensee.
3 (5) Resident Company and Agent All insurance poliCies, letters of credit and
4 bonds as are reqUired of a licensee in this section shall be wl1tten by a
5 company or companies authol1zed and qualified to do bUSiness In the state of
6 Florida, and have a minimum rating of "A" In Best's Rating GUide
7 (6) Certificates and Renewals. Certificates and renewals of all Insurance
8 coverage reqUired shall be promptly filed by th~ licensee with..rhe County
9 Administrator or deSignee. Renewal certificates shall be filed with the County
10 no less than thirty (30) days prior to th~ policy expiration date.
11 (7) Additional Insured. Broward County shall be included as an addil10nallnsured
12 on the ComprehenSive General Liability.
13 (8) Premium Payment Companies issuing the Insurance policy(ies) shall have no
14 recourse against the County for payment of any premiums or assessments,
15 and same shall be the sole responsibility of the license_e.
(9) Neither the provisions of thiS section, nor the acceptance of any bond by the
County pursuant to this ordinance, nor any damages received by the County
18 thereunder, shall be construed to excuse performance by a licensee or limit
19 the iiability of a licensee for damages to the full amount of the bond or
20 otherwise.
21 (10) If the operator has an eXisting certificate of insurance filed With Broward
22 County as a prerequIsite to prOVide other services such as cable teleVISion or
23 open Video systems. the operator's insurer may amend the current certificate
24 filed With Sroward County to include the additional related entities authol1zed
25 by the County to provide telecommunication services The County's Risk
26 Management D,VIs,on may require an increase in the amount of coverage of
27 policY(les) limits
28 (c) Permanent Performance and Payment Sond. Each licensee shall within thirty
29 (30) days of the effective date of an initial license granted under this ordinance or Within thirty
30 (30) days of the granting of the transfer of a license, furnish to the County a performance
3' biJnd or an IIrevocable letter of credit issued by a Flol1da bank or a federally Insured lending
;tltutlon In the amount of One Hundred Thousand Dollars ($ 100,00000) The performance
001 bond or letter of credit shall be used to guarantee the compliance With performance
-21-
requICemenls and payment of all sums which may become dJe to the County under this
2 ordinance The performance bond or letter of credit shall be maintained In the full amount
3 specified herein throughout the term of the license and for one (1) year after the license
4 expICes or IS terminated, without reduction or allowances for any amounts which are
5 Withdrawn or paid pursuant to this ordinance.
6
(d)
All requICed insurance coverages and policies shall be Without a deductible
7 unless approved by the County's Risk Management DivIsion.
8 Sec, 1,12 Enforcement and Remedies
9
(al
Office of Information Technology Responsible for Administration. The County's
10 Office of Information Technology is responsible for enforcing and admlnistenng this
11 ordinance, and its Chief Information Officer or designee is authorized to give any notice
12 reqUired by law or under any license agreement The Chief Information Officer or designee
13 is authonzed to seek Information from any operator relative to this ordinance, to establish
14 forms for submission of applLcatlons and other information, and to take all other actions
15 necessary or appropnale to the admlnlstratron of this ordinance. Licenses shall only be
Issued or revoked by action of the Board. If licensee is occuPYing airport nghts-of-way, then
17 the County's AViation Department shall be responsible for enforcIng and admlnistenng this
18 ordinance In accordance with the requtrements set forth In this section
19
(b)
Minimum Contents of Every License Agreement In addition to satisfying the
20 other applicable requirements of Tilles I-III of thiS ordinance, every license agreement
21 pertaining to the provision of telecommunication services shall contain the following
22 prO~ISlons
23
24
25
26
27
28
29
30
31
33
(1)
The granting of any license, or any prOVISion thereof, shall not constitute a
waiver or bar to the exercise of any governmental nght or power, pOlice power,
or regulatory power of the County as may eXist at the time the license IS issued
or thereafter obtained
The license granted by the Board grants the fight to occupy the flghts-ot-way
solely for the purpose of prOViding telecommunication services described In the
(2)
license.
(3)
The granting of a license by the County shall not convey title, equitable or
legal, In the flghts-of-way. The fight granted IS only the fight to occupy flghts-
of-way for the purposes and for the peflod stated In, the license and the right
,
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may not be alienated, assigned, or transferred except as permIttee by this
2 ordinance
3 (4) An applicalion for a transfer of a license shall be completed on form(s)
4 supplied by the Office of Information Technology and submitted In accordance
5 with Tille II of this ordinance, except that, If the Information provided by the
6 transferor under Title II remains accurate, the transferee may simply cross-
1 reference the earlier application
8 (5) Approp~ate provIsions for enforcement, compensation, and protection of the
9 publiC, consistent with the other provisions of this ordinance.
10 Sec. 1.13 Theft, Vandalism, Tampering;,Violation,
11 (a) It IS unlawful pursuant to Section 812.14, Florida Statutes, and a violation of
12 this ordinance for any person to
13 (1) Willfully alter, tamper with, Injure, or knOWingly suffer to be Injured any conduIt,
14 Wile, line, cable, transformer, amplifier, or other apparatus or deVice belonging
15 to a utility line service In such a manner as to cause loss or damage
(2) Make or cause to be made any connection with any wire without the consent
of the utility
18 (3) Use or receive the direct benefit from the use of a utility knOWing, or under
19 such circumstances as would induce a reasonable person to believe, that such
20 dllect benefits have resulted from any tamperrng with, alterrng of, or injUry to
21 any connection, wire, conduit, line, cable, transformer, amplifier, or other
22 apparatus or deVice owned, operated, or controlled by such utility, for the
23 purpose of avoiding payment.
24 (b) The actual possession by a person on property of any device or alteration
25 which effects the diverSion or use of the services of a utIlity so as to avoid the registration
26 of suCh use by the utility or so as to otherwise avoid the reporting of use of such service for
27 payment shall be prrma facie evidence of a violation of this section by such person, however,
28 thiS presumption does not apply unless:
29 (1) The presence of such a deVice or alteration can be attributed only to a
30 deliberate act In furtherance of an Intent to avoid payment for utility services;
31 (2) The person charged has received the dllect benefit of the reduction of the cost
, - of such utility services: and
3JI
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(
2
(3)
The customer or recipient of the utilIty servIces ~as received the direct benefit
of such utility service for at least one full billing cycle
4
3 Sec. 1.14 Revocation; County's Right of Revocation.
(a)
The County reserves the right to suspend or revoke a license and all rights and
5 privileges granted thereunder in the event anyone of the following occurs'
6
7
8
9
10
11
12
13
14
15
17
18
(1)
The licensee, after sixty (60) days notice of a violation sent by certified mall by
the County Administrator or deSignee, continues to vIolate any material
provISion set forth In this ordinance or the license agreement (:ntered Into
pursuant to this ordinance; provided, however. that'the notice period shall be
thirty (30) days in the event that such viola lion IS (i) the failure to make a
required payment, (ii) the failure to submit to an audit, or (iii) the failure to
provide the quarterly report required by section 1.08(3) or the annual report
required by section 108(4)
(2)
The licensee becomes insolvent, unable or unwilling to pay ItS debts, or
makes an assignment for the benefit of creditors,
The licensee practices any fraud or deceit upon the County In connecllon with
I
(3)
(4)
ItS responslbllilies under ItS license, or
The licensee fails to commence any required construction, If applicable, within
19 one (1) year from the date of the grant of ItS license
20 ThiS subsection shall not apply to permit the County to revoke a license to the extent
21 such revocation IS prohibited by federal bankruptcy law
22
(b)
PrQcedures for Revocation. A license may be revoked by the County in
23 acc';'dance with the following procedures:
24
25
26
27
28
29
30
31
33
(1)
(2)
The County Administrator or designee shall notify the licensee. in Writing, of
the exact nature of the alleged violation(s) constituting grounds for revocation
and give the licensee sixty (60) days, or such other greater amount of time as
the County Administrator or designee may 'speclfy, to correct such vlolation(s)
or to present facts and argument refuting the alleged vlolation(s).
If within the designated time the licensee does not remedy and/or cease the
alleged violalion, or If corrective action IS not being actively and expeditiously
pursued, the Board, after a public hearing, may revoke the license If It
determines that such action is warranted
'<
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(c)
1
(3)
Prior to the public hearing. the Board'may order an administrative heanng.
The County Administrator shall initiate an administrative proceeding by IssuIng
an order which establishes the Issues to be addressed In the hearing and the
procedures to be followed. and the County Administrator may appoint a
hearing officer for the hearing Said hearing officer shall be a member of good
standing of The Florida Bar engaged in the private practice of law In Broward.
Miami-Dade or Palm Beach County with experience In areas related to
lelecommunlcalions issues. Upon complelion ef the hearing, .,the hearing
officer shall Issue a recommended order Parties to the hearing and the public
shall have thirty (30) calendar days to ,comment on the recommended order
after ItS Issuance Within thirty (30) days after the receipt of comments, the
County Administrator may submit recommendations to the Board on whether
to revoke the license.
(4)
Following Ihe public hearing, the Board shall determine whether or not to
revoke the license based on the recommended order of the hearing officer, Ihe
eVidence and argument presented at the hearing, any recommendations of the
County Administrator, and other eVidence of record.
The Board's
determination shall be reflected in a written opinion setting forth the reasons
for Its decision.
(5)
In the event of foreclosure or other JudiCIal sale of any of the facilities,
equipment or property ot the licensee located In the County rights-of-way, the
County may revoke the license, follOWing a public hearing gefore the Board,
by serving notice upon the licensee and the successful bidder, In which event
the license and all rights and privileges of the license Will be revoked ninety
(90) calendar days after sel\ling such notice. unless.
a
The County has approved the transfer of the license to Ihe successful
bidder; and
The successful bidder has covenanted and agreed With the County to
assume and be bound by the terms and condilions of the license.
Effect of Termlnalion or Forieiture. Upon termlnalion of a license. whether by
b
31 e.ICplratlon, revocation, forfeIture or otherwIse, the licensee shall be obligated to cease uSing
~ telecommunicatIons facilitIes for the purposes authorized by the license or to remove
""I some or all of Ihe Ilcensee's facilities from the rlghts-ot-way and restore the rlghts-ot-way 10
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,
the" proper condition. Should the licensee neglect, refuse, or fail to remove such faCility, the
2 County may remove the faCility at the expense of the licensee. The obligation of the licensee
3 to remove facilities shall survive the termlnallon of the license for a period of two (2) years.
4 Notwithstanding the above, the County may not reqUire the licensee to remove any facllilles
5 that are used to prOVide another service for which the licensee holds a valid franchise or
6 license Issued by the County.
7
(d)
Remedies Cumulative All remedies under this ordinance and pursuant to any
8 license agreement are cumulative unless othelWlse expressly. stated. The ex~rcise of one
9 remedy shall not foreclose use of another, nor shall the exercise of a remedy or the payment
10 of penalties relieve an operator of its obligations to comply with its license. Remedies may
11 be used singly or in combination, In addition, the County may exercise any rights it has at
12 law or equity. Recovery by the County of any amounts under insurance, the performance
13 bond, or letter of credit, or othelWlse does not limit an operator's duty to indemnify the
14 Cocnty In any way; nor shall such recovery relieve an operator of its obligations under a
151 license, limit the amounts owed to the County, or In any respect prevent the County from
~xerclslng any other nght or remedy It may have.
17
18
Sec. 1,15 Access to Books and Records,
,,'
(a)
Each operator shall provide the County access to all books and records related
19 to the construction, operation, maintenance or repair of the telecommunications facility so
20 that the County may inspect and copy these books and records for the purpose of
21 determining compliance with this ordinance. An operator is responsible for obtaining or
22 maintaining the. necessary possession or control of all books and records related to the
23 construcllon, operation, maintenance or repair of the telecommunications facility, so that it
24 can produce the documents upon request. Books and records shall be maintained for a
25 penod of five (5) years, except that (1) any record that IS a public record shall be maintained
26 for a greater penod of time If reqUIred by state law and (2) a license agreement may specify
27 a shorter period of time If not In conftlct With state law for certain categories of voluminous
28 books and records where the informallon contained therein can be derived simply from other
29 matenals.
30
(b)
For purposes of thiS ordinance, the term "books and. records" shall be read
31 expanSively to Include Information In whatever format stored. Books and records requested
;hall be produced to the County Administrator or deSignee, except as prOVided In a license
33 agreement or pursuant to subsection (c) below
"',
.26.
(c) If any books and records are too voluminous, or for secunty reasons cannot
2 be copied and moved, then a telecommunications faCility operator may request that the
3 inspection lake place at some olher location mutually agreed to by the County and the
4 operator, provided that (1) Ihe operator must make necessary arrangements for cOPYing
5 documents selected by the County after its review; and (2) the operator must pay all travel
6 and additional copYing expenses Incurred by the County (above those that would have been
7 Incurred had the documents been produced In the County) In Inspecting those documents
8 or having those documents inspected by a County designee . .
9 (d) Without limiting the foregoing, the operator of a telecommunications faCility
10 shall provide the County with the following information or, in the case of documents created
11 by the operator or its affiliate, filing within ten (10) days of receipt:
12 (1) notices of defiCiency or forfeiture related to the operation of the
13 telecommunications faCility; and
14 (2) copies of any request for protection under bankruptcy laws, or any Judgment
15 related to a declaration of bankruptcy by the licensee or by any partnership or
corporation that owns or controls the licensee directly or Indirectly.
17 (e) Retention of Records; Relation to Privacy Rights. Each telecommunications
18 facility operator shall take all reasonable steps required, If any, to ensure that it IS able to
19 provide the County all Information which must be provided or may be requested under thiS
20 ordinance, a license agreement, or applicable law Each operator shall be responSible for
21 proViding the County With only the Information that it IS permitted by law to disclose.
22 ; (f) RePorts The County may require operators of telecommurl1cations facilities
23 to maintain records and prepare reports relevant to determining the compliance of the
24 telecommunications facility operator with the terms and conditions of this ordinance and the
25 license agreement
26 (g) Maps Each telecommunications facility operator shall maintain accurate maps
27 and Improvement plans (It being understood that such maps and plans may not be to scale)
28 which show the location, Size, and a general description of all facilities installed In the rlghts-
29 of-way and any power supply sources (including voltages and connections). Maps shall be
30 based upon accurate as-bUilt data to verify location. The operator shall provide a map to the
31 County shOWing the location of Its faCilities as described In sections 1 1 O(f) and (g), as may
e applicable New maps shall be promptly submlned to the County when the facility
33 expands or IS relocated Copies of as-built maps In a digital format acceptable to the County,
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1
If prepared, utilizing CAD/GIS or other automated system capable of exporting a file
2 comp'!tlble with CAD/GIS, shall be submitted to the County's Engineering Division, If the as-
3 bUilt maps include arrport rights-of-way, such as-built maps shall be submitted to the AViation
4 Department.
5
(h)
Compliance With Laws Each operator shall comply With all applicable laws
6 heretofore and hereafter adopted or established durrng the entrre term of its license
7
0)
No Waiver. The failure of the County to Insist on timely performance or
8 compliance by any operator shall not constitute a waiver of the County's right to later insist
9 on timely performance or compliance by that operator or any othe; person holding a license,
10
U)
Powers Reserved, The County expressly reserves the right to amend this
11 ordinance from time-to-time in the exercise of its lawful powers and shall, at a mrnimum,
12 review all malters related to the Sroward County Telecommunications Ordinance every three
13 (3) years
14 Sec. 1.16 Transitional Provisions.
15 The operator of any telecommunications facility which IS requrred to be licensed lInder
liS ordinance, shall have three (3) months from the effective d'!te of this ordinance to file
17 one (1) or more applications for a license under this orliihance, Any operator of a
18 telecommunications facility who timely files such an application shall not be subject to
19 penalties under this ordinance for failure to have such a license as long as the application
20 remains pending,
21
22
23
TJTLE 11-
APPLlCA TlON PROCESS FOR
TELECOMMUNICA TION FACILITIES
Sec. 1.17 Application for Initial Issue, Renewal, Transfer or Modification of
a License.
24
25
26
(a) Requirement to file application for Initial, renewal, transfer or modification of a
license In order to obtain an initial, renewal, transfer or modification of a license. an
27
28
operator of a telecommunications faCility must file an application With the County's Office of
Information Technology in accordance with the requrrements of Tilles I_III of this ordinance
The application must contain such information as the County may from time to time require
29
AIt application forms may be obtarned from the County's Office of Information TechnOlogy,
30
If the applrcatlon IS for the use of airport rights-of-way then application as required by th'ls
31
'ection shall be made to the AViation Department,
33
:("t'
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(b) Contents of an Application for a License To be accepted for filing, a'
2 applications for an initial, renewal, transfer or modification of a license shall contain?
3 original and two (2) copies of a completed application All applications shall be submlt:ed
4 to the Chief Informatron Officer of the County's Office of Information Technology or
5 designee The County has the right to request additional information If the application IS
6 incomplete All applications shall be available for public Inspection All applications shall
7 Include the names and addresses of persons authorized to act on behalf of the applicant With
8 respect to the application.
9 rc) An application may be filed by any person on that person's own Initiative or in
10 response to a request for proposals by the County
11 (d) License Application Filing Fee.
12 (1) Every application shall be accompanied by a nonrefundable application fee
13 established by resolution of the Board and Incorporated Into the Broward
14 County Administrative Code
15 (2) An applicant who is awarded a license shall pay to the County a sum of money
sufficient to reimburse the County for all publication expenses It Incurred In
17 connection With the granting of the speCific license pursuant to the prOVisions
18 of this ordinance. Such payment shall be made to County within thirty (30)
19 days after the County furnishes the licensee With a written statement of such
20 expenses. All checks shall be made payable to the Board of County of County
21 CommiSSioners for Broward County, Florrda, and delivered to the Chief
22 Information Officer of the County's Office of Information Technology or
23 deSignee.
24 (3) Where the County's out-of-pocket costs in conSidering the appllcatron exceed
25 the amount of the application filing fee, such costs shall be paid by the
26 applicant Within thirty (30) calendar days of the date of the Board's resolution
27 approving the application and award of the license, the County Administrator
28 must notify the approved applicant of the amount of any such costs and its
29 method of calculation. If the costs are not paid Within SIXty (60) calendar days
30 of the date of the Board resolution approving the application, any license
31 approved by the Board shall be deemed null and VOid Payment under protest
of the costs shall be a prerequiSite to contesting the amount of the out-of-
33
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2
3
(e)
(1)
,
pocket costs Amounts paid under this subsection shall be amortized over the
term of the license and shall be applied as credit against the license fee.
license Modification
Each application requesting modification of a license shall, at a minimUm, set
5 forth the Information contained In subsection (b) below. To be deemed acceptable for filing,
6 an oflglnal and two (2) copies of the application shall be submitted to the County
7 accompanied by the required application fee
8
9
10
11
12
13
14
15
I
1f
18
19
4
(2)
(3)
Each application shall contain,
a.
The specific modification requested,
The justification for the requested modification, including the impact of
the requested modification on the use of the nghts-ot-way, and the
impact on the applicant If the modification is denied;
A statement whether the modification is sought pursuant to federal or
state law.and, If so, a demonstration that the requested modification
meets all the reqUlfements of that law, and
Any other Information deemed necessary by the County In order for the
County to make a determination regarding Ihe use and regulation of its
flghts.of-way.
No application fee shall be required where the modification is required to bflng
b.
c.
d.
21
20 the license into conformity with any state, federal or local law or regulation
Applications for Transfer. Any operator requesting a transfer of a license must
(I)
22 sub!nit an application in accordance with the requirements set forth In subsection (d) above.
23 However, if the proposed transferee has already submitted an application and been awarded
24 a license pursuant to this ordinance, to the extent information provided by the proposed
25 transferee is accurate at the time of the request of the transfer, the proposed transferor may
26 simply cross-reference the proposed transferee's earlier application
27
(g)
The County Administrator, or designee shall prepare a report to the Board
28 regarding the Initial Issue, modification, renewal or transfer of a license to an applicant The
29 report shall consider and respond to any comments received by the County regarding the
30 application and shall contain the County Administrator's recommendations as to the award
31 or denial of the application
(h) County Review of Application The County may request such additional
33 ,Information as It finds necessary In the review process and require such modifications to the
.30-
'/ proposed use of County's flghts-of-way as may be necessary and lawful In the exercise of
2 the County's authonty over telecommunications facllilres and/or County roads and flghts-of-
3 way Once the ,nformat,on required by the County has been provided, the application shall
4 be promptly reviewed by the County and shall be granted by the Board If It finds that
5
6
7
(1)
The applicant has the qualifications to construct, operate, maintain and repair
the proposed telecommunications facility In conformity with applicable law
The applicant has demonstrated compliance with state and federal law and
With alllhe requirements for a license provided.in thiS ordinance
The applicant accepts the modifications requlfed by the County to its proposed
telecommunications facility
The applicant enters into a license agreement and complies With any
conditions precedent to its effectiveness.
In the case of a transfer of a license, the County must also determine that:
(2)
8
g
10
11
12
13
(3)
(4)
(5)
14
15
there wlll'be no adverse effect on the use and regulation of the County's
flghts-of-way, or the County's Interest In the license:
proposed transferee agrees to be bound by all the conditions of the
license and to assume all the obligations of ItS predecessor, and
any outstanding compliance and compensation Issues are resolved or
preserved to the satisfaction of the County
An applicant shall not be Issued a license If It files or. In the prevIous three (3)
a.
b
17
18
19
20
c.
(I)
21 years, has filed mateflally misleading Information in an application submitted 10 the County;
22 or in application IS Incomplete because it does not contain Information that the applicant
23 lawfully is requlfed to proVide
24
U)
Denial of a License The County's denial of an 'applicatlon shall be supported
25 by wfltten findings which may include among other things, past performance of the licensee
26 and findings of a mateflal Violation of thiS ordinance, which shall be provided to the applicant
27 The County shall provide a reasonable opportunity to an applicant to show that it would be
28 Inappropflate for the County to deny the applicant an inllral Issue, renewal, transfer, or
29 modification of a license under thiS ordinance. A material violalron of this ordinance shall be
30 deemed to eXist In the event any of the following exists or has occurred
31
(1)
Fadure to pay license fees pursuant to of thIS ordinance,
(2) Operatmg in a manner Inconsistent with the license;
33
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(
I
(3) Failure to perlorm work within the flghts-of-way pursuant to the reqUIrements
2 of seclion 1.11 of this ordinance,
3 (4) Failure to provide insurance and bonding requirements pursuant to section
4 1.11 of this ordinance;
5 (5) Permitting a reseller to use a licensee's telecommunication facilities within the
6 flghts-of-way without providing written notice to the County pursuant to thiS
7 ordinance, or
8 (6) Failurelo qualify under any provisions of this ordinance.
9 (k) Acceptance of License. Within thirty (30) calendar days after the Board adopts
10 a resolution granting a license, the applicant shall file with the County Administrator a written
" acceptance of the license, together with the insurance pOlicies and bonding documents
, 2 required by thiS ordinance, and its executed written license agreement. All material
13 statements and declarations contamed in the application shall be .incorporated in the
14 applicant's written license ag<"eement by reference as conditions of the license. Such
15 acceptance and agreement shall be m a form approved by the Office of the County Attorney
\ TITLE III. PRIVATE COMMUNICATIONS FACILITIES
17 Sec. 1,18 Private Communications Facilities.
18 (a) Applicalion for License. A person desiring to construct, install, operate,
19 replace, reconstruct, or mamtain a pflvate communications system in Broward County is
20 reqUired to obtain a license from the County. The license shall only authorize placement of
21 the system in a specific portion of the rights-of-way for a limited and specific purpose and
22 tim~ in connecliqn with the person's busmess; however, It shall not encompass, in whole or
23 in p~rt, the carriage of telecommunications for hire in the ~ights.of-way. Such application
24 shall be in the form identified in Title II of this ordinance and must be accompanied by a filing
25 fee, the amount of which shall be fixed by resolution of the Board as may be amended from
26 time to time.
27 (b) Conditions of license. Any license shall be subject to such conditions as the
28 County may from time to time establish, shall be expressly subordinate to the use of the
29 flghts-of-way by operators of telecommunications facilities, and shall otherwise conform to
30 the reqUIrements of this ordinance. Subject to the foregoing, the provisions of Title I, Title
31 II, and Title III of thiS ordinance shall be applicable to a private communications system as
( It were a telecommunications facIlity
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(c) Compensation The owner of a pnvate communications facility shall pay an
2 annual occupancy fee for use of the nghts-of-way The fee for a private communications
3 facility shall be paid under the same terms and conditions as established for license fees
4 In Title I of this ordinance
5 TITLE IV -. MISCELLANEOUS
6 Sec. 1.19 Captions.
7 The captions to sections throughout this ordinance are intended solely to facilitate
8 reading and reference to the sections and provisions of this ordinance. Such captions shall
9 not affect the meaning or interpretation of this ordinance
10 Sec. 1.20 Calculation of Time.
11 Unless otherwise indicated. when the performance or dOing of any act. duty. matter.
12 or payment IS required under thiS ordinance or any license agreement. and a penod of time
13 for the fulfillment of same is prescnbed herein. the time shall be computed so as to exclude
14 the first and Include the last day of the prescribed lime period.
15 Sec. 1.21 Penalties.
(a) A violation of certain provisions of this ordinance may subject a person 10 CIVil
17 penalties pursuant to Chapter 8Y, of the Sroward County Code.
18 (b) Any person who violates any provision of this ordinance may be prosecuted
19 by the State Attorney's Office in the same manner as misdemeanors are prosecuted
20 pursuant to sections 775082 or 775.083, Flonda Statutes Such a Violation may be
21 prosecuted In the name of the state In a court haVing junsdlctlon of misdemeanors by the
22 pro~ecutlng attorney thereof, and upon conviction shall be punished by a fine not to exceed
23 Five Hundred Dollars ($500.00) or by imprisonment in a county Jail for a definite lerm not to
24 exceed sixty (60) days or by both such fine and impnsonment.
25 Sec. 1.22 Liability in case of emergency.
26 If. at any time in case of fire, police action, disaster. or other emergency, It shall
27 appear necessary in the reasonable judgment of the County to cut, move. or otherwise
28 Interfere With any of the wires, cables. amplifiers, appliances. or appurtenances thereto of
29 the licensee. the County shall not be liable for any injUry or damage to such property and
30 equipment of the licensee as a result of such cutting, moving. or Interference If state or
31 federal emergency funds are available. the County will reimburse licensee to the extent
~ossible
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Section 2. Amendment to Section 8'1.-16, Broward County Code.
2 Seclion 8:1,-16 of the Broward County Code of Ordinances is hereby amended as
3 follows to include a new subsection relating to civil penalties for violations of this ordinance:
4 Sec. 8'1.-16. Schedule ot civil penalties.
5 The following table sets forth the code vioiations for which civil penalties may be cited
6 under this article The descriptions of violations are provided for purposes of generai
7 identification only. Where specific code provisions apply, the same are indicated fallowing
8 the respective Violation description Amendments affecting the numbering of tho;! referenced
9 sections, shall not affect the validity of the fines. References to "sec. - shall mean a section
1 0 of the Broward County Code of Ordinances.
11
12
13
14
15
I
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
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Violation
Telecommunications Penallies for each violation shall be:
(1)
Fine
First Reoeat Violation
Operating a telecommunications $250.00
facility Without a Broward County
license (secs 105. 1 17. and 1.18)
$SOO.OO
(2) Failure to obtain approval
to transfer a license
(sec 1.17)
(3) Failure to provide written nolice
of reseller utilizing operator's
telecommunicalions facility
(sec. 106)
(4) Failure to comply with records
and reporting requirements
(secs 108 and 1.15)
(5) Fqllure to pay license fees In
timely manner (sec. 108)
(6) Failure to comply With
construction and rights-
of-way requirements
(sec 1 10)
(7) Failure to submit
construction plan (sec. 110)
(8) Failure to properly Identify
vehicles and field personnel
(sec. 1.10)
(9) Failure to maintain bond
or letter of credit (sec. 1 11)
(10) Failure to maintain Insurance
coverage reqUirements (sec. 1.11)
(11) F ail~re to prOVide updated
as-built maps (sec 1 15)
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25000
500.00
2S0.00
SOOOO
2S000
500 00
2S0 00
- SOO.OO
250.00
500 00
2S0.00
SOO.OO
2S0.00
SOO.OO
2S000
500.00
250 00
500 00
250.00
500.00
Section 3.
SEVERABILITY.
2 If any section, sentence. clause or phrase of this ordinance IS held to be Invalid or
3 unconstllutlonal by any court of competent jurisdiction, then said holding shall in no way
4 affect the validity of the remaining portions of this ordinance,
5
Section 4.
INCLUSION IN CODE.
6 It is the intention of the Board of County Commissioners that the provisions of this
7 ordinance shall become and be made a pan of the Sroward County Code, and that the
8 sections of this ordinance may be renumbered or relettered and the word "ordinance" may
9 be changed 10 "section:' "anlcle," or such other appropriate ward or phrase In order to
1 0 accomplish such Intentions.
11
Section 5.
EFFECTIVE DA TE.
12 The provisions of this ordinance shall become effective thirty (30) days following
13 enactment of this ordinance by the Board.
14 ENACTED Sepcember 1, t999
15 FILED WITH DEPARTMENT OF STATE Septe,u,er 13. 1999
EFFECTIVE Septe,u,er 13. 1999
I I PURPOSE: To create a new chapter in the Broward County Code of Ordinances
18 providing for the issuance of a license to an operator of a telecommUnications facility for use
19 of the County's rights-of-way.
20
21
22
23
24
25
26
27
28
29
30
31 LEUADL.smc
. "cmred cln
131199
., J6-426
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IN THE CIRCUIT COURT OF THE 17 TH .JU)ICI~
IN AND FOR BROW ARD COUNTY, FLORIDA
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BELLSOUTH TELECOMMUNICATIONS,
INC.
CASE NO.
S3\}~06'72
Plaintiff,
BROWARD COUNTY, FLORIDA,
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MOTION FOR TEMPORARY INJUNCTION
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Plaintiff, BELLSOUTH TELECOMMUNICATIONS, INC., files this motion for
temporary injunction and says:
I. This case challenges an attempt by BROW ARD COUNTY to create an improper
and unauthorized third tier of telecommunications regulation prohibited by law. Specifically,
BROW ARD has enacted a comprehensive telecommllnications ordinance containing numerous
unlawful requirements which must be satisfied by BELLSOUTH in order to operate in the
county rights-of-way.
2. At the 'heart ofthe problem here is Section 1.08 of the ordinance which imposes
on BELLSOUTH an "occupancy" fee for use of county rights-of-way. Not only is such a fee
unauthorized under the Florida Statutes, but it is directly at odds with Florida Statutes 9 362.0 I,
which gives BELLSOUTH the right to occupy and operate in the rights-of-way of this county
free of such a charge, and Florida Statutes Chapter 364, which confers exclusive jurisdiction over
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telecommunications companies to the Florida Public Service Commission. ill Santa Ros"
County v. Gulf power Co., 635 So. 2d 96 (Fla. I" DCA 1994).
3. In addition, the ordinance contains numerous other provisions -- listed in detail in
paragraph 19 of the complaint -- which are also impermissible under Florida law. These include,
but are not limited to, a requirement that BELLSOUTH obtain a license in order to operate in the
county rights-of-way; county review of BELLSOUTH's technical qualifications; county
oversight of arrangements between BELLSOUTH and resellers; onerous notice and reporting
requirements; county control over any transfer of BELL SOUTH's license; and the imposition of
civil and criminal penalties including forfeiture if BELLSOUTH does not comply with every
term of the ordinance. Such matters are within the exclusive jurisdiction of the Florida Public
Service Commission and are therefore preempted under Florida Statutes Chapter 364. Moreover,
the requirement that BELLSOUTH indemnify BROW ARD for its own negligence is contrary to
Florida law.
4. The BROW ARD ordinance is also unlawful in that it deprives BELLSOUTH of
vested property and contract rights protected by the due process and contract clauses of the
Florida and United States Constitutions; it unduly interferes with interstate commerce; and it
exceeds ,the permissible scope of local regulation under Section 253 of the Federal
Telecommunications Act of 1996.
5. BELLSOUTH seeks this temporary injunction because it will likely succeed on
the merits in the litigation, it will suffer irreparable injury unless BROW ARD is prevented
immediately from imposing its unlawful conditions, and it has no adequate remedy at law.
Moreover, BROW ARD will not be harmed in any way by the entry of an injunction, and an
injunction would serve the public interest.
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WHEREFORE BELLSOUTH requests that the eourt enter an order which lemporanly
enjoins BROW ARD from enforcing its telecommunications ordinance.
CERTIFICATE OF SERVICE
WE HEREBY CERTIFY that a true and accurate copy of the foregoing was served with
a copy of the summons and complaint upon Suzanne Gunzburger, Chairperson of the Board of
Broward County Commissioners.
HE~CHGORDONHARGROVE
WEIHE & JAMES, P.A.
Attorney for BELLSOUTH
500 East Broward Blvd.
Fort Lauderdale, Florida 33394-3092
Telephone: (954) 527-2800
Facsimile: (954) 524-9481
- and-
Fred A. Walters, Esquire
Dorian S. Denburg, Esquire
Florida Bar No. 350291
BellSouth Teleconununications, Inc.
675 W. Peachtree Street
---u.Suite-4300 - --
Atlanta, Georgia 30375-0001
Telephone: (404) 335-0731
Facsimile: (404) 614-4054
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o . HARGROVE
Florida Bar. No. 173745
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(. ~ ) CIVILCQVERSIIEET r ^ r'.E
The Civil Cover Sheet and the information contained herein neither replaces nor sMa W service of <.
pleadings or other papers as required by law. This form is required for the use afthe Clerk of the Court for the purpose ·
of reporting judicial workload data pursuant to Florida Statute 25.075.
I. CASE STYLE:
Name of Court: 17" Judicial Circui~ Broward County, Florida
990Z0672
vs.
JUDGE:
18
Plaintiff BELLSOUTIl TELECOMMUNICATIONS
CASE NO.
Defendant BROW ARD COUNTY, FLORIDA
II.
TYPE OF CASE: (Place "X" in one box only. If the case fits more than one type case, select the most
defmitive)
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DOMESTIC RELATIONS
TORTS
alliER CIVIL
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_Simplified Dissolution
_Dissolution
_S'lpport-IY-D
_Support. Non- IY-D
_URESA - N-D
_ URESA. Non IY-D
_Domestic Violence
_Other Domestic Violence
_Professional Torts
_Products Liability
__..Auto Negligence
_Other Negligence
Foreclosure
_Eminent Domain
_Other
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III. Is Jury Trial Demanded in Complaint?
_Yes
..L..No
DATE:
/02- ~- If
SIGNATURE OF A TIORNEY FOR PARTY INlTIA TING ACTION
81908\OO2\pleading'civil cover sheet
HEINRICH GORDON HARGROVE
WEIHE & JAMES, P.A.
Broward Financial Centre
500 East Broward Boulevard, Suite 1000
Fort Lauderdale, FL 33394
Ph: 954/527-2800 Fax: 954/524-9481
By:-JJIf 4
~o R. Hargrove
'/ rlorida Bar No. 173745
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IN THE CIRCUIT COURT OF THE 17'" ~<;l\~'r'\-lE:-
IN AND FOR BROWARD COUNT ~LNv C.
BELLSOUTH TELECOMMUNICATIONS,
me.
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. CASE NO.
99020672
18
Plaintiff,
v.
)BROW ARD COUNTY, FLORIDA,
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COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF: ',_
Plaintiff, BELLSOUTH TELECOMMUNICATIONS, me. ("BELLSOUTH"),
sues
defendant, BROW ARD COUNTY ("BROW ARD"), a political subdivision of the state of
'orida, for declaratory and injunctive relief and alleges as follows:
STATEMENT OF THE CASE
1. This case challenges a Florida county's right to enforce an ordinance affecting
telecommunications service and fees in derogation of constitutional and general law. More
specifically, BROW ARD passed Ordinance No. 1999-48, effective on September 13, 1999,
which sets out an extensive regulatory scheme of telecommunications providers and required
compensation from the providers for use of BROW ARD rights-of-way. Additionally,
BROW ARD passed Resolution No. 1999-1099 effective September 7, 1999, which establishes a
schedule of fees "for the privilege of using the public rights-of-way." The purported imposition
of these fees and the creation of a local telecommunications regulatory scheme is in violation of
federal and state law and is in derogation of rights and privileges which BELLSOUTH held long
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fore the ordinance's passage.
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JURISDICTION
2. This court has jurisdiction because the matter in controversy exceeds fifteen
thousand dollars ($15,000) and because declaratory relief is sought pursuant to Florida Statutes S
86.011.
VENUE
3. Venue is proper in Broward County, Florida, pursuant to Florida Statutes 99
47.011 & 47.051.
PARTIES
4. Plaintiff BELLSOUTH is a corporation which is authorized to conduct and does
conduct business within Broward County, Florida. It IS engaged in providing
telecommunications services, as a local exchange carrier and otherwise, within the state of
lorida and is subject to regulation by the Federal Communications Commission ("FCC") and
the Florida Public Service Commission ("FPSC"). BELLSOUTH was incorporated in 1879 as
_. __SQuthem.BeILTelephone ancl]'e~ap!1.Col11pany. BELLSOUTH began operating in Florida in
1880 and has continuously and consistently provided telephone services throughout the state of
Florida. Since. 1911, BELLSOUTH has been subject to pervasive regulation by the Railroad
Commission of Florida and its successor, the Public Service Commission.
5. Defendant BROWARD COUNTY is a political subdivision of the state of
Florida. It was originally formed in 1915, and became a charter county within the state of
2
Florida in 1975 when it elected to undertake "home rule" pursuant to Article VIII, 9 I(g) of the
Florida Constitution and adopted a home rule charter.
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CONDITIONS PRECEDENT
6. All conditions precedent to the tiling of this action have occurred or have been
waived.
FACTUAL ALLEGATIONS
The Statewide Franchise
7. At the time BELLSOUTH began operating in Florida, the state of Florida granted
it a franchise which is perpetual in term, statewide in extent and calls for no payments to the state
or any other entity for its exercise.
8. That perpetual, statewide franchise was granted by 1856, as enhanced by
amendments in 1892, 1903, 1906, and 1927, and gives BELLSOUTH the right to construct its
telephone lines along, upon, above and under the roads or highways within the limits of the state
of Florida.
9. The state granted the franchise in order to induce BELLSOUTH to construct and
extend its telephone lines into and throughout the state so that telephone services would-be-mad_--
available by BELLSOUTH to residents, businesses and govemmental entities within the state as
a result of the capital expenditures by the state or its political subdivisions. BELLSOUTH
accepted the statewide franchise by constructing and extending its telephone lines and facilities
along, upon, above and under roads and highways within the limits of the state and by expending
hundreds of millions of dollars necessary for the infrastructure to provide high quality
telecommunications service. As a result, BELLSOUTH has, at great risk and expense,
constructed and continues to construct a network of telecommunications lines and related
facilities which have provided and continue to provide telecommunications services to the
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geographic area of what is now known as Broward County.
residents. businesses and governmental entities within the slate. including the corporate
10. BELLSOUTH has, by accepting the statewide grant, obtained a vested
contractual and property right to construct and continues to construct its telecommunications
lines along, upon, above, under and over the roads and highways within the limits of the state.
II. BELLSOUTH has continually exercised that franchise to operate since the
1880's.
12. By its statewide grant, the state of Florida intended that BELLSOUTH make full
use of the public roads and highways to accomplish the purpose to provide high quality
telecommunications services throughout the state.
Statewide Rel!ulation of Telecommunications
13. BELLSOL'TH, as a telephone company, is a public service company subject to
the regulatory and exclusive jurisdiction, within the state, of the Florida Public Service
It is the legislative intent to give exclusive jurisdiction in all
matters set forth in this chapter to the Florida Public Service
Commission' in regulating telecommunications companies, and
such preemption shall supersede any local or special act or
municipal charter where any conflict of authority may exist. . . .
Commission pursuant to Florida Statutes Chapter 364. The exclusive power of the Florida
Public Service Commission and the legislative intent is set forth in S364.01(1), which states in
relevant part:
14. The Public Service Commission has exclusive jurisdiction to grant certificates of
necessity and convenience to telephone service providers. Florida Statutes SS 364.32-.37.
15. Florida Statutes S 337.401 also limits local government regulation over a utility's
use of rights-of-way. Subsection (I) limits the "local governmental entities" to prescribing
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"reasonable rules or regulations" with regard to utility compoullC'S' '''rI.l'~lng and m;tlntAlnang"
structures in the rights-of-way. Subsection (2) allows local gO\Cnlmental enlities 10 issue
permits that require utilities to be responsible for any damages they C:llI'C 10 the rights-of-way.
16. In 1998, the Florida legislature revised Florida StatuI<':' ~ 337.401 to clarifY the
extent of the grant of authority to certain govemments. See Senate Statr Analysis and Economic
Statement for CS/CS/SB 1704.
17. The legislature elected to revise the term "municipal autlwrity" to "municipality"
such that Florida Statutes 9 337.401 (3) provides that only a municipalin' may levy a fee which
"may not exceed one percent of the gross receipts on recurring local service revenues for
services provided within the corporate limits of the municipality by such telecommunications
company" as a condition for granting permission to occupy a municipality's rights-of-way.
A local govemmental entity may not use its authority over the
placement of facilities in its roads and rights-of-way as a basis for
asserting or exercising regulatory control over a
telecommunications company regarding matters within the
exclusive jurisdiction of the Florida Public Service Commission or
the Federal Communications Commission, including, but not
limited to, the operations, systems, qualifications, services, service
quality, service territory, and prices of a telecommunications
company.
18. Consistent with the purpose and spirit of Florida Statutes 9 364.01(1), the
legislature made clear in Florida Statutes 9 337.401(6) that a local government may not use its
limited authority as a means to infringe on matters within the exclusive jurisdiction of state and
federal agencies. In this regard, the statute provides:
The legislature also created Florida Statutes 9 337.401(8) which provides that "[e]xcept as
expressly provided in this section, this section does not modi fy . . . the duties of
telecommunications companies under ss. 337.402 - 337.404 . . . Except as expressly provided in
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this section. this section docs not limit or expand whatever pow,," CounllC3 may hJlvc ""JllInll to
roads and rights-of-way."
The BROW ARD Ordinance
19. On or about September 7, 1999, the County Commission of Broward County
enacted Ordinance 1999-48, which has been signed into law and became effective September 13,
1999. The ordinance (a copy of which is attached hereto as Exhibit "A"):
a) Imposes upon BELLSOUTH and all other operators of a
telecommunications facility the obligation to apply for and obtain a license from BROW ARD to
install and operate a telecommunications facility as a precondition to obtaining a construction
permit to construct facilities, notwithstanding the existence of BELLSOUTH's statewide
franchise. (Ordinance SS 1.03 (h); 1.05; 1.10 (t), (I); 1.17) In addition, BELLSOUTH must
"lke a separate application to the Aviation Department for a license to use any airport rights-of-
way. (Ordinance S 1.17(a))
(b) Requires BELLSOUTH, if~should i1J>J:llyJor andobtain-a-license, tOilay
"compensation" to BROW ARD ostensibly to "ensure that the County, as far as possible, is
compensated for the rights granted, to use property over which it exercises control or which is
held in public trust," and to compensate BROW ARD "for expenses arising from the use of that
property, the regulation of the use and the cost to acquire, construct and maintain the rights-of-
way areas." (Ordinance S 1.08 (a)) The annual occupancy fee is to be established from time-to-
time by resolution of the Board of County Commissioners. If a licensee has gross receipts on
recurring local service revenues, the annual occupancy fee shall not exceed one percent of gross
receipts. A copy of the applicable resolution adopted by BROW ARD is attached hereto as
E'-~;bit "B." (Ordinance S 1.08 (b))
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(e) RequIres BELLSOUTlf. as part "f 'Is 4pphe"'lOn for " I Kct'.... I.. .uhnlll
to BROW ARD an application containing "such information as thc County may from time-Io_
time require." BROW ARD "may request such additional information as it finds necessary in the
review process and require such modifications to the proposed use of county's rights-of-way......
(Ordinance 9 I.I 7 (a), (h))
(d) Subjects BELLSOUTH's right to operate as a telecommunications carrier
within BROW ARD to a public hearing based upon the recommendation and discretion of the
County Administrator. The Board of County Commissioners has the right under the ordinance to
determine whether or not BELLSOUTH has "the qualifications to construct, operate, maintain
and repair the proposed telecommunications facility in conformity with applicable law",
whether BELLSOUTH "has demonstrated compliance with state and federal law", and whether
P"::LLSOUTH has "enter[ed] into a license agreement and complies with any conditions
precedent to its effectiveness." These considerations are not reasonably required to advance the
police power of BROW ARD and to maintain th~public ri@1ts-of-way but, rather, are intended
solely for the purpose of regulating telecommunications providers. (Ordinance 9 1.17 (h))
(e) Limits the term of the license to five years and may deny renewal of a
license for permitting a reseller to use its facility without providing written notice to BROW ARD
or to the Aviation Department if the reseller is to be permitted use of airport rights-of-way.
(Ordinance 99 1.06; 1.07; I.I 7 (j)(5))
(I) Disclaims any responsibility on the part of BROWARD to secure any
rights-of-way, easements, or other rights which may be required to install a telecommunications
facility and does not grant any property rights to the telecommunications provider. Further, the
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provider is not entitled to any compensation for relocation "in the event the County determines
that a necessity exists for such removal or relocation." (Ordinance S 1.10 (d)-(e))
(g) Requires BELLSOUTH to file quarterly reports providing "detailed
information on all aerial and underground usage of the rights-of-way", detailing gross receipts
and credits, as well as an annual "special report" signed by an auditor, chief financial officer or
other officer for the provider describing the revenues included and el(cluded, adjustments and
credits. BELLSOUTH also may be required to prepare additional reports "relevant to
determining the compliance of the telecommunications facility operator with the terms and
conditions of this Ordinance and the license agreement." (Ordinance 99 1.08 (b)(3)-(5), (t), (g);
1.15 (t))
(h) Entitles BROW ARD to inspect the "installation and construction
vperations, as well as the maintenance operations of the licensee's telecommunications facility."
(Ordinance 9 1.1 0 (h))
(i) Requires BELLSOUTH to release BROWARD -fromany-liability-in-
connection with the construction, operation or maintenance of a telecommunications facility and
agree not to sueBROWARD for damages. (Ordinance 9 1.I1(a)(I)a.)
(j) Allows BROWARD, shouldBELLSOUTH apply for and obtain a license,
to revoke BELLSOUTH's license ifBELLSOUTH fails to submit a quarterly or annual report or
commence "required construction" or violates "any material provision", despite the fact that the
Ordinance requires BELLSOUTH to manufacture and produce documents it does not generate or
maintain in its normal course of business and which BROWARD has never required to regulate
its rights-of-way. (Ordinance 9 1.14 (a))
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(k) Allows BROW ARD access to "all books and records related to the
construction, operation, maintenance or repair of the telecommunications facility" to determine
compliance with the ordinance. (Ordinance 9 1.15 (a))
(I) Prevents BELLSOUTH from transfening its license without approval by
BROW ARD, notwithstanding the law of Florida which recognizes that the transferability of
public utility franchises is subject only to the exclusive approyal of the Public Service
Commission. (Ordinance 99 1.03(r); 1.05 (d); I.I 7 (t), (h)(5))
(m) Requires that the operator of any telecommunications facility has three
months from effective date to file an application for a license or be subject to penalties, including
criminal penalties. (Ordinance 99 1.16; 1.21 (b))
20. BELLSOUTH repeatedly requested assurances from BROW ARD that criminal
'enalties would not apply if BELLSOUTH did not seek a license under the ordinance.
BROW ARD has refused to issue any verbal or written confirmation that criminal penalties
would not apply. Copies of BELLSOUTH's correspondence seeking this confirmation dated
August 17, 1999 and September 2, 1999 are attached hereto as Exhibits "C" and "D"
respectively.
COUNT 1- DECLARATORY RELIEF
21. Paragraphs I through 20 are incorporated by reference as if fully set forth herein.
22. BELLSOUTH seeks declaratory relief consistent with Florida Statutes 99 86.0 II
& 86.021 because it is in doubt of its rights under BROWARD Ordinance 1999-48 since it
conflicts with existing state and federal law and impinges constitutional rights. Specifically, the
ordinance (a) is preempted under state law, (b) is preempted under federal law, (c) violates the
'tract and due process clauses of the United States and Florida Constitutions; (d) imposes an
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illegal fee \,:hich the county has no PO\VCT to assess; and (c) places an IlIq;al restraint un
interstate commerce. Each point is briefly addressed.
State PreemDtioD
23. The legislative and executive branches of Florida have delegated to the Florida
Public Service Commission the exclusive power to regulate the telecommunications industry as
established in Florida Statutes S 364.0 I, et seq.
24. As such, BROW ARD COUNTY has no authority to impose a license requirement
upon BELLSOUTH or to impose a fee for such use equal to one percent of the revenues
collected from the sale ofIocal telecommunications services.
25. BROW ARD COUNTY has also infringed upon those areas of exclusivity by
1reventing the transfer of the utility property and reserving to itself the power to require
BELLSOUTH to stop serving its subscribers.
IlIel!al Fee ReQuirement
26. The powers delegated to counties by the state of Florida are codified within
Florida Statutes Chapter 125.
27. Nothing in Chapter 125 gives counties any authority to charge a
telecommunications company compensation or an annual occupancy fee for the use of the rights-
of-way. Nor does any other provision of the Florida Statutes give counties such authority.
28. By the terms of Ordinance 1999-48 and Resolution 1999-1099, BROW ARD
purports to impose upon BELLSOUTH a fee which is not related to the extent of use by
BELLSOUTH of the county's rights-of-way; is not related to BROW ARD's cost of regulating
.,~ use by BELLSOUTH of BROW ARD's rights-of-way; is not related to the cost of
maintaining the portion of BROW ARD's rights-of-way occupied by BELLSOUTH; does not
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represent a bargained-for agreement between BROW ARD and BELLSOUTH but was
unilaterally imposed upon telecommunications providers by BROW ARD; and BELLSOUTH
cannot reasonably avoid the fee by removing its equipment and facilities from BROWARD's
rights-of-way due to its obligations as a carrier of last resort.
Impairment of Contract and Due Process Ril!"hts
29. The statewide franchise granted to and currently exercised by BELLSOUTH
imposes no fees, charges or restrictions on BELLSOUTH for its exercise of the rights granted to
it under the state franchise, is not limited in scope and does not require any application to or
further action by BROW ARD for its exercise.
30. BELLSOUTH's statewide franchise is a constitutionally recognized and protected
contract, the obligation of which is protected from interference or impairment by states or
political subdivisions of states.
31. BROWARD's enactment of the ordinance and its attempt to impose or apply the
terms of the ordinance upon BELLSOUTH, as described above, impairs and abrogates
BELLSOUTH's contractual rights in violation of U.S. Cons!. art. I, SIO and Fla. Cons!. art. I,
S I O. In addition, it impairs vested property rights, thereby violating due process. U.S. Cons!.
amend.'XIV and Fla. Cons!. art. I, S 9.
Violation of Commerce Clause
32. Article I, Section 8 of the Constitution of the United States provides that
"Congress shall have the Power. . .[t]o regulate Commerce with foreign Nations, and among the
several States and with the Indian Tribes. . . ." The Commerce Clause prohibits states and their
political subdivisions from enacting laws that interfere with or create obstacles to free trade.
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33. BELLSOUTH is entitled to enjoy the rights secured to it under the Commerce
Clause of the Constitution of the United States which confers upon BELLSOUTH the right to
engage in interstate commerce free from restrictive state and local regulation.
34. BROWARD's enactment of this ordinance and its attempt to impose the terms of
the ordinance upon BELLSOUTH interferes with the free flow of interstate and foreign
commerce, and has and will deprive BELLSOUTH of its right to engage in interstate and
international trade free from restrictive state regulation, in violation of U.S. Const. art. I, 9 8.
Federal PreemDtion
35. The Federal Communications Act of 1934, 47 U.s.c. 9 151, et seq., was enacted
for the purpose of regulating interstate and foreign cOmmerce in wireline communications to
make available an efficient, national and international wire line communications service at
affordable prices. The 1934 Act created the Federal Communications Commission to exo::cute
and enforce the provisions of the 1934 Act.
36. The Federal Telecommunications Act of 1996 ("the 1996 Act"), 47 u.s.c. 9251
et seq., established different regulations to govern interstate and foreign telecommunications
services and created certain duties and obligations of telecommunications companies. That
legislation, alllong other things, promotes competition in local markets, eliminates legal
impediments to local competition and creates a framework for continuing support for a seamless
national network of service at reasonable rates.
37. BELLSOUTH is a telecommunications carrier as described in the federal act.
That act limits state and local governments' authority to restrict the use of rights-of-way.
Specifically, 47 U.S.C. 9 253 (a) provides that no state or local government "may prohibit or
have the effect of prohibiting the ability of any entity to provide telecommunications services."
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47 u.s.c. 9253 (c) preserves "the authority of a state or local government to manage the public
rights-of-way or to require fair and reasonable compensation from telecommunications providers
on a competitively neutral and non-discriminatory basis."
38. The ordinance purports to provide BROW ARD with the right to determine
whether BELLSOUTH has the qualifications to construct, operate, maintain and repair a
telecommunications facility in conformity with applicable law.
39. The services provided by BELLSOUTH are a .critical element of interstate and
foreign communications.
40. The ordinance imposes a third tier scheme of regulation upon BELLSOUTH that
affects BELLSOUTH's ability to provide the services it is required to provide under the Federal
Communications Act of 1934 and the Federal Telecommunications Act of 1996, thereby
interfering with interstate and foreign communications by wire and improperly constructing
barriers to competition.
WHEREFORE BELLSOUTH prays that a judgment be entered in its favor:
a) Declaring that Ordinance 1999-48 and all resolutions or ordinances which attempt
to impose compensation, to assess proprietary fees and to impose regulatory constraints on
BELLSOUTH be deemed unenforceable as a matter oflaw;
b) Directing BROWARD to proceed in good faith to issue BELLSOUTH, in
accordance with proper state and county laws, permits for access to and the ongoing use of all
rights-of-way, easements and public places under BROW ARD's control and jurisdiction,
consistent with the public's health, safety and welfare; and
c) Granting such other relief as the court deems just and equitable, including the
award of attorney's fees and costs to BELLSOUTH.
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COUNT II -INJUNCTIVE RELIEF
41. Paragraphs I through 20 and 22-40 are incorporated by reference as if fully set
forth herein.
42. BELLSOUTH will suffer immediate, special and irreparable harm, different in
kind from the injuries suffered by the general public because it is the primary local
telecommunications provider for most of the citizens of BROW ARD. Acting pursuant to the
statewide grant from the Florida Legislature, BELLSOUTH and its predecessors expended
millions of dollars to construct the necessary infrastructure to provide high quality
telecommunications services to the residents, business and governmental entities in Broward
County as well as throughout the state.
43. BROWARD claims a right under the ordinance to, among other things, abrogate
BELLSOUTH's rights under its vested statewide franchise, force BELLSOUTH to obtain a
license to utilize county rights-of-way, require that BELLSOUTH pay substantial compensation
for rights that BELLSOUTH already possesses, prevent BELLSOUTH from transferring its
facilities without BROWARD's consent, subject BELLSOUTH to the county's purported right
to order BELLSOUTH to remove its equipment and facilities from the county, prevent
BELLSOUTH from operating or maintaining its telecommunications system, and subject
BELLSOUTH to criminal penalties ifit does not apply for a license by December 13,1999.
44. Preventing BELLSOUTH from operating would result in the necessary
termination of telecommunications services to millions of Florida residents and businesses.
Services presently utilized by Florida residents and businesses that rely upon BELLSOUTH's
telecommunications services include local telephone services, emergency services, long distance
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services, internet access services, transport of cable television, facsimile transmission services as
well as numerous other communications-related services.
45. Granting the injunction against the enforcement of the ordinance will serve the
public's interest by facilitating the provision of uninterrupted, high quality telecommunications
at a reasonable cost to the citizens of BROW ARD and will encourage continued competition in
the provision of these services. BROW ARD will suffer no harm if, during the pendency of this
matter, the requested injunctive relief is granted. BELLSOUTH has a substantial likelihood on
prevailing on the merits in that the ordinance is illegal and over broad.
46. There is no adequate remedy at law for BELLSOUTH ifBROWARD attempts to
enforce Ordinance No. 1999-48 against BELLSOUTH by imposing criminal penalties or
preventing BELLSOUTH from providing telecommunications services to the citizens of
BROWARD as provided for in the terms of the ordinance.
WHEREFORE BELLSOUTH prays that a judgment be entered:
a) Preliminarily and permanently enjoining BROW ARD from seeking to enforce the
provisions of Ordinance 1999-48 and Resolution 1999-1099 against BELLSOUTH; and
b) Granting such other relief as the court deems just and equitable, including the
award of attorney's fees and costs to BELLSOUTH.
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Respectfully Submitted,
J R. grove, Esquire
orida Bar No. 173745
Heinrich Gordon Hargrove Weihe & James, P.A.
Attorney for Plaintiff
500 East Broward Blvd.
Fort Lauderdale, Florida 33394-3092
Telephone: (954) 527-2800
Facsimile: (954) 524-9481
- and-
Fred A. Walters, Esquire
Dorian S. Denburg, Esquire
Florida Bar No. 350291
BellSouth Telecommunications, Inc.
675 W. Peachtree Street
Suite 4300
Atlanta, Georgia 30375-0001
Telephone: (404) 335-0731
Facsimile: (404) 614-4054
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I, Adopted 5/20/97
ORDINANCK 97-114
ORDINANCE OF THK CITY COMMISSION OF THB CITY OF COIUL
SPRINGS, FLORIDA CRXATING ClLU'TD 20 or na COOl OF
ORDINANCES OF THE CITY or CORAL SPRINGS, INTITLKD
"TKLKCOKKUNICATIONS., RKGARDING THJ: FRANCHISING AND
LICKNSING OF TBLBCOKKUNICATIONS SERVICE PROVIOBRS OSING
PUB,LIC RIGHTS OF NAY AND PRIVATE COMMUNICATIONS SYSTKHS;
BSTABLISHING RBQUIRKKBNTS AND CONDITIONS OPON THK USE or
PUBLIC RIGHTS OF WAY BY SOCH KNTITIBSI AND KSTABLISHING
PROCBOORll:S FOR PROTBCTING nor PUBLIC I~BRBST IN SOCH
FRANCHISIS AND LICKNSBBSI PROVIDING FOR CONFLICT;
PROVIDING FOR SKVBRABILITY I PROVIDING FOR INCLlJSION;
PROVIDING POR BFFECTIVE DATE.
WHEREAS, the public streets, alleys, easements and other
rights-of-way within the City:
(1) are critical to the travel of persons and the
transport of goods and other tangibles in the business and
social life of the community by all citizens;
(2) can be partially occupied by utilities and Qther
public service entities for facilities used in the deUve:y,
conveyance, and transmission 0' utility and public services
rendered for prOfit, to the enhancement of the health, welfare,
and general economic well-being of the City and its Citizens;
and
(3) are a unique and physically limited resource so t~a:
proper management by the City is necessary to max:~:.ze ::-.~
effiCiency and to minimize the costs to the taxpayers o~ :~~
foregOing uses and to minimize t::e :nconver.ience :0 ::".::
r.ega:ive effects upon the public from such fac::lt:~S'
construction, emplacement, relocation, and maintenance in t~e
rights-of-way; and
(4) are intended for public uses and must be managed ar.d
controlled conaiatent with that intent; and
WHEREAS, the right to place facilities and fixtures :n
such righta-of-way for the business of providing teleco~-
municationa s.rvices for hire, is a val~able economiC rlgh~ :=
use a unique public resource that has been ac~~ired a~d :s
maintained at great expense to the City and its taxpaiers. :~~
economic benefit of WhlCh should be ghare1 with the tax~a/e:s
of tr.e City; and
...."HEREAS. the C:ty of Coral Sprir.gs ("Clt:y"). is'a",;:~or:z~::
by state and local law to control the use of public r:ghts-~~-
way. and to franchise operators of telecommunications sysce-s,
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Adopted 5/20/97
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which use such rights-of-way; and
.lffiEREAS;' .the. City Commission of the City of Coral Spnngs
flnds tnat It lS In the lnterest of the public to franch.se and
to establish standards for franchising such operators and
licensing private communications systems in a manner which
(1) to the extent permitted by state and federal law
provides for a structure that compensates the City for the fai~
market value of such property used while also reservlng the
right to recover ongoing costs associated with the use of that
property;
(2) encourages competition by establishing terms and
- conditions under which an operator of a telecommunicat lons
system, may use valuable public property to serve the publlc;
(3) fully protects the public and the City from any ha~
that may flow from such private use of rights-of-way;
(4) protects and carries out the regulatory authority of
the City, in a manner consistent with federal and state law;
and
(5) otherwise protects the public interests in. the
development and uSe of the City's infrastructure; and
WHEREAS, the City Commission of the.City finds that it is
appropriate for various operators to obtain separate franchlses
based on the type of service provided, in order to ensure that
similarly situated operators can be treated as similarly as
possible, and to avoid confusion as to regulatory authon ':.y
applicable to each type of franchise; and
^'HEREAS, in light of federal and s:ate law. and :::e
c~anges to local procedures required by them, the Cl:Y f:r.~s
that it i. necessary and appropriate to apply the provisloro5
hereof to existing franchisees and licensees as far as ':5
posslble and to apply it to chose with pending applica:ions to
place facilities in public r19hts-of-way for communlcatior.5
purpo... .
NOW. THEREFORI, BE IT ORDAINED BY THE CITY COMMISSION OF 7~2
CITY or CORAL SPRINGS, FLORIDA:
Sect ion 1.
The foregoing ";';HEREAS" clauses are
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and correct and hereby ratified and confirn:ed by ':.~e c:;
C'OfMli SSlon.
Section 2. Chapter 20, Article I of the Code of Crdlr.a:'.ces
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Adopted 5/20/97
1 of the City. of Coral Springs. entitled 'C,eneral'. is hereby
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created to read as follows:
ARTICLR I - GKNRRAL
Sec. 20-1.
Definitions.
(ll Generallv. .or the oUnJoses of this Chaoter. the
Eollowinq terms. ohrases. words. and abbreviations shall have
the meaninqs qiven herein. unless otherwise exoressly stated.
When not inconsistent with the context. words used in the
oresent tense include the future tense: words ln the olural
number include the sinqular number: and words in the slnqular
number include t;he olural number: and the- masculine qender
includes the feminine qender. "And" and "or" may be read
coniunctively or disiunctively. The words "shall" and "will"
are mandatorY. and. "may" is oermissive. Unless otherwise
exoressly stated. words not defined 1n this Ordinance shall be
qiyen the meaninq set forth in Title 47 of the United States
Code. and. if not defined therein. their common and ordinarY
meanina. References to qovernmental entities (whether oersons
or entities) refer to those entities or their successors in
~.ytbority. If soecific orovisions of law referred to h~rein
are renumbered. then the reference shall be read tq ~eter tQ
the renumbered orovision. References to laws. ordinances or
requ!ation. shall be interoreted broadly to cover qovernment
actions. however nominated. and include law.. ordinances and
requlation. now in force or hereinafter enacted or amended. .
(2) Affiliat~. means a oerson that. (directly or
lndirectlYI. owns or con:rols. is o....:-.ed or control~ed :'1. ~r lS
under common ownershio or control wlth. another oerson.
. () I Annual OCCUDclIlCY {e~ means an annua 1 charqe aaa lnst
(al the ooerator of cOlMlunl"cations facilities that are excused
from DayinQ the full franchise fee required u::~e':' ::r.1S
ordin.snce: And (bl the owner of a on v.ste communlcat lons
system. The tee recovers .sn aooortioned sh.sre of the costs to
the City for ~intainina those oortion. of the oublic rlqhts-
of-wAY u.ed bv the ooerator of a communlcations facllitv and
the owner ot .. orivate communlcations system.
(4) Construction. ooerdtion c:' reodir. 'C-:>I1S~:-Jc'::~::.
ODerAtion or reoair" .s::d s:mllar ~~rmulatlor.s of t::a:: :~=-:
mean. the named actlons lnteroreted broadly. enCOt:':3SS:::-:.
a:ncna other chinas. lr.stallatlon. extension. m.slr.':e::a;1O:~.
reo14cement of comeonent s. relocat ion. IJnce:-qrolJndinq. ::'3':! :::-:.
d' . k' ...
slte ore04r4tlOn. a "~stlnq. testlnq. mol e-rea=','. 3~._
eXC4Vatlon.
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<.~ fommunications facility ~efer~ to a
t.e~eco:u~~ca~ions fa~ility or.a p~;:vate comm n'cat"oris SYStem.
bu -doe t- nclud a fran hlse ca m the exten
the same is used to provide cable service.
ranchise ref r to the aut.or'z i_n an~~d uv the
City to a prooerly licensed ooerator of a tele~mmunicatlons
fa i it 'y' the 0 ra r th no - x us'v i~ht to use
public riqhts-of-way in the City to provide. ~~~h Dh;sical
facllities .located therein. tel~c~:llT'lInw:'~cat~on ~~~ ~~~~ 0.- such
other servlce as may be soeclfled 1 t e L__ c:..~~~ ltsel~
within a franchise area. MY such autho~~f~t;~~: ~~ whatever
form aranted. shall not mean or lnclude: ___ _ 0 ~er Dermlt
or authorization re~ired fo.r t~e orlYil~qe o~ ~~n~actinq and
carrYina on a buslness wlthln _the Clty e _r d by the
ordina~ces.and law~ of ~he City: ~iil ~nY ~~~~~i ~~~ement ~~
authorlzatlon req)..I1red ln connectlon wlth ___r___o_ n oubl1...
streets or prooerty includinQ. without 1imi~at;~n. ~en~its and
aareements for placina devices on or ~~ c~\;_. co .duit.s o~
other structures. whether owned by t__ _ t_ or a prl va~~
entity. or for excavatina or oerformina othe~ work i;; 0; alo
public riqhts-of-way.
171 Franchise A<1reement means a contract entered int;~ ie
accordance w~th the orevisions of this. c~a~t;~ ~f~wi~:D t~: ...it;
and a FranchueC! that sC!tsfo.rth. sul:)1e_~ t_ ~ii- ;..;;t;~: ;h:
terms and conditions under WhlCh a Franchlse w___ b_ __e__ls_d",
leI Franchisee refers to a Derson holdina a Franchise
issued under this Chapter. or a. F.ranchi;e 1~:~i~ ~;ior to thlS
Ordinance. sub1ect to the prOV1Slons 0_ S_____ __-7 hereof.
191 Franchise Area means the area of thl!! City that a
franchisee is authorized to serve by its .ranch~~e Aoreeffie~t.
i 1101 FCC means the Federal Communications Commission 0::-
its desionee.
IllI Gra.. Revenue. means any and all revenue. of any
kind. naturtt or torm.
(121 Lic.nse refers to the leaal authorization:
at ~ill. to u.. a particular. discrete a~d 11mit~g
the o~lic riqht.-of-way.
Ill) Ooerac:or. when used with refer~n~~;o a sYs:e~.
refers to .. oerso" (al who orovldes ___lce ::lver a
communicat10n. facll1ty and directly or thro~~~on~ or ,,-ere
afflliates own. a sianlficant i.nterest 1n s;Jch ___111 y; cr :::
.....he otheI"l5e controls or lS resoons1b:e for. th~~,-,qh ~~.'..
a rranqe~nt, the tMnaaement and oDe rat ion 0 f. such a f ac 11: ':'f.
A cerson that leases a communicatlons facll1ty or a soec:~,=
~~rminable
rt lon of
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AdoJ;lted 5/20/97
Dor~ ion of a
telecommunications
telecommunic~tions
ordinance.
communications
services shall
facility ODeracor
orovide
as an
of th 1 s
facll icy to
be treated
for Durooses
(14) Person includes any individual.
Dartnershio. assOClation. ioinc steck comoany.
other 1eqal entity. but not the City.
cOrDOratlon.
trust. or any
(15) Private communications system means a facility olaced
in whole or in oart in the Dubhc rlqht of way for the
orovision of communications in connect ion with a oerson's
business. but not encomoassinq in ar.y resoect the orovision of
telecommunications services.
(16) Private communications system owner means a oerson
that owns or leases a orivate communications facility',
(17) Public ric:rhts-o!.wav mea~s the surface. the area
above. and the area below the surface of any oublic street.
hlqhway, lane. path. alley. sidewalk. boulevard. drive, bridqe,
tunnel. oarkway. waterway. publ ic easement, or similar Drooertv
in which the City now or hereafter holds any property interest.
which, consistent with the purooses for which it was dedicated.
mav be used for the pU.OQse of cc::struct: inCl. oceratim' and
repairina a communications facility, Public riqhts of way do
not include buildings, parkll. or other property owned or leased
by the City. No reference herein, or in any franchise
aqreement. to a public right-of-way shall be deemed to be a
representation or ClUarantee by the City that its interest or
other riaht to control the use of s~ch prooerty is sufficient
to cermit its use for such pl.:rposes. and a franchisee 5::a11 te
deeT.ed to qain only those riqhts to ~se as are prooerly :n the
Cltv and as the City may have che '.1~d:sput~d nqht and ::::'..er :::
q.lye.
(18) Reseller refers to any person that :roYldes
telecommunica~ions service over a communications faclllty for
,"hleh a seoarate Chllrqe is made. where that person does not OWT'.
or lea.e the underlYlnq co~~unicatlon. facility used for t~e
transmission..
(19) T'rMls(er means any transaction ln which: (i) all ::r
a cortion of the eommunicat~or.s fac:lity is sold or !ss:~~e1
(exceot a sale or ass:qn~ent that resl.:lts ln removal ::! !
particular portion of the fac~lity ~rom the oubllC n::::::s.~!.
....ay); (iU o:here is any e~,a:1qe, a:auis~tl0r:. or dlre.:: ~r
lndlreet transfer of control of the ~ranchisee or lice~see; or
'111) the riqhts and/or obl~qatlOnS :"\eld by the franch:s~e.~~
llce~see under the franehlse or l1ee;-:se are cran5~erre:. 5:.~,
aSSlqned. or leased, in ....hole -:;r in cart. dire:::-{
lndirectly. to another Darty. In 'l.:cCeedlnq OrOY1HOr,S:~ :~.~5
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A.dopted 5/20/97
ordinance'. all these activities are retet'red to as franchl~
t rans;ers.
(20) Teleconvnunications facili ty means a facility that lS
used to orovide one or more telecommunications services. any
oortion of which occuoies oubhc riqhts of way. The tent
teleconvnunications facility includes radio transmittinq towel!l.
ocher suooortinq structures. and associated facllities used to
transmit telecommunications siqnals.
(2l) Telecommunications services means the transmission
for hi re. of informat ion in elect'ronic or oot ical form.
includinq. but not limited to. voice. video. or data. whether
or not the- transmission medium is owned by the orovider itself ,
Teleconvnunications service includes teleohone service but does
not include over-the-air broadcasts to the oublic-at-larqe from
facilities licensed by the Federal Convnunications Commission or
any successor thereto. cable service or aDen 'video servlce
licensed or franchised oursuant to Ordinance No. 97-100.
Sec. 20-2.
Franchi.. Reauired.
ill EverY ooe(ator mu~t obtain. M oo(!rator 9f a
telecomrnunlcacions faciJJl~ust obtain a franchise Drior to
constructina a telecommunications facility or orovidinq
telecorrrnunication. services. In addition. everY Drivat4!
communications system owner must obtain a license. S()'xlona':'~'as'~r
it cavs the comoensation reauired. a resel1er may use other's
facilities to conduct. business in the riaht-of-way without
obtainina a written franchise or license. so lona as it does
not own or lease facilities in the riqht-of-way and is nc:
involved in constructlon or reDalr of facilities in the rlqh:-
of-way. The fact that a oar:icular co","unlcations faCllitv :-a','
6e used for mul:lole ourooses does not obviate the ~eed ::)
obtain a tranchis.~ license or other authorizaeion for chose
other ourooses. BY waY of illustration and not limitation. a~
ooerator of I telecommunication. facility must obtain a
seoarate franchise if it wishes to orovide cable service. even
if it use. the same facilities or shires facilities that are
used to orovide telecommunications services. No fra~chlS~ shal:'
become effective without the franchlsee enterlnQ lnto a
franchise lareement with the City,
{21 Puroose and characteristics, The curuose -<
re<J1Jirina authorizatlons by service i. to ensure as far as
oQ9sible and aooroorlate that Oer90". orovidinc S~~l:ar
services are treated Slmllarlv. considerinq differences. l~
ClrC'.lmstances. and to comoly with re<J1Jlreme"ts of federal :~'oi
whlCh may re<J1Jlre the Clty to seoara:. Lts autr,orlty over- ~3C_~
systems from i.ts authority over other orovlders -:~
teleco","unications services. The revocati.on of a fra"chlse ~-:l:'
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and of itself wi11- :'lot affec.
huh of a f anchis h lde n inu 0 erat"
an h r f s stem for which i ho_d~ anothla nanchlse.
No ~ari~iSe shall be exclusive and comOetit~n shall b:
en~~u~aqed. The issuance of a franchise sha~l n;~ ~ffect th~
City's riqht to itself construct. ooerate 0 r oair an_
c::::'!1munications facility. with or without a f~an~his';.
(J) Exceotions. ^ franchise reQUirement may ~ waiveg
for a telecommunicatlons facility. that is ~Ol: deslaned tQ
provide service in the City. and that does n~; orovide~ervic~
in the City: or a facll1ty. such as an an__nna or __le to~
attachments. where the use of the riqht-o:-wa~ i:, de mllm1ci
_For such .facilitie~. the. City may. issu_ a lLense. _Eve~
1 icense lssued. lncludlnq a llcense for a Orlvat_
communications system, shall reauire the l~::nsel; to O~tain :
franchise if it is determined that the .i~c:e d- ~~ ~~ir.q used i~
a manner that creates a comoel: 1 t 1 V_ a_va .a _ for tha~
ooerator or otheOlise unduly discriminates i~ f;vor of suc
ooerator. In any case. t~e licens~ mu~~ ~:~Vid: t:~ if
limitations of license are vlolated. tel _en_ InUit ~ay ~h;
maximum franchise ~ee re~ire.d by Ar.t~c;ef ~ ff~ ~...~~ ~"~:
ChaDter and otheOllse bnnq lesel! l_~_ om_1__ c_ "1_ _hl_
('MR..tH... . .
(41 Nature of arant. l'leither a franchise n~~ : ~~cens~
shall.convev title. eQUitable or.1e~a~~ ~~ ~~~ ~~9h~;-~.-wa~.
The nqht is on1 v the oersonal nqh . _c _ ~.f~,,,'vf -way.
for the DUrooSes and for the Deriod :;~:i~ ~~ ~~~ ~nchise or
license, theriqhtlicense or franchl_ __ !L_ __ 8_1vlded or
subleased.
Sec. Compen..tion Required.
/.. .
F -,~,. ... .._...."._,~..,_~.,._. ',:,1' '__-_~;:."':~:-:-::_':~~"~."_ "" "._~__~,,.' .
i;~~~;~i;;;;;i:rt;:'':;':':':~t;;, ~~~ <
"--
.....hi.. t.. Ie ..,..... '. .etl~'. ~i.. -';'~:~~:iti u<
!~%~ji~l~2~;~~~~:;&'~ ~~ _"< ~.:m
~~~~;<i c:'~~~~~::::r;t~r;' ~~t t~~~~~u~~~~~ C:::~;\t :;~. :~~
or:"He .c.QIMIUR1~Hlon. ~acl1ltle-s--m.~~t D~~ ~r~: ~r~~~~ -=.!E:
ann\Jal"""" OCCUeaRQY Ce.. at" the frallc:-l13l. or ~~ l' _..~
': Al'tlc1Ii'and'.\rtldeli'H !R4 rti::"~Mi~;;a 't;a ': c' >_<:::
:;----, ">-",,",',," ,. . ,
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/'
t>~o"irl<:G.otnel"\.i3c. The fraRcltiae fee aoelie9 ....itltel:lt tC~Il.L~;)
wh8tl:J~r tl:1e .66cratar. .....tJT"IA,.- ,.",... r~Q_l1 ~r is a Era", r
__ __ _ _....... ,...~o;;::o:::'~
lic4)nQA.a Qr \;lSe9 the ri~Rt9 of 'olav Q\lr9'lilr:lt to QI"\n<',., 1"\"""&""'
,llQehsE"ization. Tile CJ.a.u\"'ll~"'C fee 3},411 be basea./QR er........;:t:
/
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8ftalt tc eaitt::~:';. //
A:
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;fl~~~~~~rr!~::iij;:~~!:~~;~~ ·
',~~::i~;~~~~e~::~~r~;a~E;7:~;;!~~(a::~e ~~~~~.'.~~~t~~ :~~ ..
~ -. .
t ~ ADCHc.tion to oersons tha t orovide di Uerent t\ll:es
ot s. ic... The fact that a fee is oaid on one type of
;;r-li;~e ~;';;~ided over a cotmlunicationl facility. does ::c~
::~~: :n ~~~~~~r from ltS duty to oay fees on other tVP~s ~~
e D over that facllltv. ~s an examole. ana ::c:
~~ ~ .~:~t~~;i~~ of the foreoolno. the ooerator ~~ ~
lmlUbl clll:y 'llI;St oav a cab~efranchlse fee :c :~.~
:~;~~t i~ orovides cable services to s~bscribers Vla a ~~=:e
I'L n ~dditlon to the fees recl.:ired hereunder.
(51 General rules (or D<lYmenc: of (ees.
fA) Unless otnet"<<ise soecdied l.n s:ate :~.... ~
trMchise ~g~eement or a license. t~e fees recruit"ed I,lr.ce:- :~:3
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Article ~hall be eaid to the Cit'{ quanerl,y in a sinqle oay,,-.er.:
made not later than forty-five (45) calendar days after tr.e end
of eacn'calendar auarter.
Ie) Unless a franchise aqreement or 1 icense provldes
otherwis~. each payment shall be accompanied by a state!\1en:
showinq he manner in which the eavment was calculated.
eCl No acceptance by the City of any payment shall
be constru~d as an accord that the amount eaid is in fact the
~~rrect amo~nt~ nor shall such accectance of such eayment be
__nst~ed as a release of any claim the City may have for
additional sums payable.
:!;'K!;i1~~~~~~~if:~~.%~~ '
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IE) Within ninety (90) calendar days followinq the
en~ of ~~: ca;:n~~~ ~ear. each oerson ~hich paid a fee ~ise~
uo n q s v e_, or qros& recelots, shall s~mlt a
s~~~:~~~~ ~t~~st;~ i~ ~v a certified public ac:countant or the
c . .. nil __f__~_ of such person, sett1nCl forth oross
;~v;~u;; -;;f the communicat ions faei lity. bv cateQorv. and
d~~~~~~~~~ w~~t reYenu~s were induded .and ~hat reve~ues. l~
a ._ at or der1ved from operat10ns 1n the Clty were
~~~~~d~: i~ ~~~ fee calculation. and an~ ad;ust~ents made '::=
_r ~~ v u . If oavments are late. 1n add1t1on to paYl:-.O
a::~ a~~li~~bi; pe;~lties or da~aqes. the person that o....es t:-:e
f~ s 11 ;iv interest on the amou~t owed at the sta:utc:-:
l'_te~~~t ratel apolicable to 1udqments.
,.,;" .
r~;:"
IF) The City may; upon fifteen (15) calendar days
a~van~: ....;l~~er~f~ti~,;: i~soect and examine any and all books
ah~ ~~c~~~~ .;.;;:o;::~v necessarY to the determination o!
'01 th r accuratelY computed and oa1d.
5~
(0) NotwithstandinQ the foreaoinCl. in the event tr.a:
: ~;:~n ~h~~ i~ obl iCla,ted to pay a fee ceases to erov:::~
e 1 fo y eason 11~cl'~=lnCl as a res'..Ilt of a tra~sfe:-'.
S~~h ~;r;~~ ;~:~l make a fH~al oavme~: of any amounts c.....ed :::
:;'1 City '011_ _~ nlnetv i901 ::alenda: daYS of the dace 1:5
o:;~ratl;;ns l~ the City cease. and sr.all, to the extent t~a:
~~~h fe~s ~~e b:~~d on oro" reve:-,'JeS or oross recelP':S~
:- vide a s_atem of oross reven\,;es for :he calendar 'Ie!:
~h~~~7~ C:e~' ~i~~ ooerat lons ceased..,h1ch statement sr.a~ ~
o t 1 at10n and certl!lca:;lon rea\lHed by SeC'::::~
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"
Adopted 5/20/97
20-)(6)(1::),
Sec. iO-4.
General Condition. Uoon cr.. of Riqhta-of-Wav
(ll Responsibility for costs. ExceDt as exoresslv
Drovided otherwise, in this Ordinance or under State law. any
ac.t that a conununications facility ooerator, its contractors or
s~pcontractors are reauired to perform under thiS Section 20.4
shall be performed at their cost. If a conununications facilitv
ODeratOr fails to perform work that it is reouired to oerform
within the time Drovided for oerformance, the Citv may oerform
the work. and bill the communications facility ooerator
therefor. The conununications facilitv ooerator shall oay the
amounts billed within 30 calendar days. sub;ect to the riqhts,
if any. under Sections 337.403 and 337.404, Florida Statutes.
as amended.
(2) Construction procedures and placement of facilities:
obliqation to minimize interference with use of riahts-of-wav.
(A) The construction. ooeration and reoair of
communications facilities are subiect to the suoervision of all
of the authorities of the City that have iurisdiction in such
matters. and'shall be oerformed in comoliance with all laws.
ordinan~e5, deoartmental rules and reaulations and oractices
affectina such svstem. BY wav of examole. and not limitation.
this includes zonina codes and safety codes. In addition. the
construction. ooeration and reoa.ir shall be oerformed in a
manner consistent with high industrY standards. Persons
enqaqed in the construction. ooeration or reoair of
communications facilities shall exercise reasonable care in the
oerformance of all their actiVities. and use co~~nlv accec:~d
methods and devices for oreventinq failures and accidents that
are l1kely to cause damaae. in,urv, or :luisance to' the ot:i::::::
.or to orooerty.
.
IS) All oermits reo::ruired by the O::ity -:ode ~-
reaulations shall be obtained from the orODer City offic:als
and all redUired Dermit and aS90clated fees oaid before any
work on a cOrmlUnications facility corrrnences. and all wor\<
oerformed shAll be Derformed in strict accordance With s'.Ich
Dermit.. In any Dermit so issued. the City may imDose as ~
condition ot. the arantina of the Dermit such conditions ana
requlations a. may be necessarY to t~e manaaement of t~e r:=~:-
of-way includina. by way of exa~Dle and not li~::a:::~,
conditions reauirina notice to affected orooerty c~~e~s.
cO:lditions imoosed for the ourDose of orotectlna any str~c:~~es
In ~he oublic rlahts-of-way. for the orooer restor4t~C:l o~ s'.::-.
Dubhc r~ahts-of-way. and for the crotectlon of the C::v ;:-.:
the contin~ity of oedestrian a~d "e~ic~lar traffic.
tel WitholJt l1mninq cr.e foreqoinq, all ..,c-:<
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. Adopted 5/20/97
communications facilities within the City shall be performed i~
acc,?rda,:,ce Wl.th aood enaineerina Dract ices. No work on the
facllltl.es ~hall be performed except by experienced and
pr~~i~~~ tralned personnel. The operator of a communications
fa " is responsible for all the acts of its contractors and
subcon~ ractors. and for ensur i na :: ~at l t s cont ractors and
subcon ractors perform all work in comoliance wl~h thlS
ordinance and any aoolicable franchlse aqreement.
(0) Ooerators of communications facilities must
follow City-establ ished recrui rements for placement of
fa~iliti:: ~n ri~s-of-wav. and muse in any event install
fa_iliti i a ma er that minimizes interference wlth the use
of the ~i;hts-of-wav bv others. incluaina others that may be
instaf~fn~ ~un~~~tions facilities. The City may recruire that
facil' 'e ins led at a oarticular tlme. olace. or manner
as ~ i~~dit~~n ~~ ;';cess to a oarticular riaht-of-wav. and may
re" i_v a _ rs usina the riqht-of-wav to coooerate with
others to mi;imi~e adverse imoacts on the riqht-of-wav "hrouah
ioint trenchinq and other arranqements.
lEI In no case may additional ooles or conduit be
installed i7t th~ ~i.qhr.-;;f-wav without the oermission of the
City. Provided ;hae~ this orovision sh~ll not limit riqbts to
~~;~~~~l~: ~~ co~~ui~ ~~~~sslY qra~ted 9Y state or federal
w . r n w ltted to lnstall ooles or condult
i~:t i~ ~~~ ~~~e~~ ~o the re~irement. of 47 U.S.C. Section
or '"'. vet. OrOV1!l10na of state law must lease
~;~a~t~~ i~ ~~~;~ ~~~s or in the conduit to, other~. at a rate
no e t h ate that would be oermltted lf 47 U.S.C.
~ 224 aoolied.
IFI Exceot as City may direct otherwise.
'Tomml..:nicati~nl facilitles may be constructed overr.ead '..::ere
6~;~~ i~~~~ :~~ :l;~tr~c or lines c~ a local exchanqecarr:er
f ...h' b_ _r _ 1990 re overhead. but where both electnc ::>r
s~~~ i~l~~~:;: l~~S are underqround. or are belnq l~ltiallY
~~;~~~ :;;;~g-~~~h~; Iw~=r voluntarilY, o,r ,at the City' 5
io _ c icatlon. facll1tle. shall be
~o~~~~~~:~u:~::;~:~ntd. ~;:~t as City may direct ,otherwise.
wh . ._ . __ v he of the coles uoon ..,hlCh aerul
f~~iiit1e; .~~ lo';;ted moves its olant from overhead to
U~d~~~~~~~~ ;i~~~~~t i~ an area. all communications facllltleS
l . I 1 b~ ~lml1arlY moved 'Jnderqround.
(0) MY and all oubl:c nohts-of'lo'av.
or~~~~tv. ir o:~v:t:u ~r~~~rt;Y ~::r..1S dlsturbed or
d;~~; th ~ n t c 1_ _ 0 at10n or reoalr
c; 'lcati~n. !~~iiit~ ~hall be cromotlv recaire-i
commun1cat1on. fac1l1tY ooeratOrL
o'.;b!.:.c
da:rdc'!'-:
of 3
bv ~~.~
(H) Tree t;0rM11nQ shall be oerformed In st~:::
?aqe 11 at H
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Adopted 5/20/97
accordance with the City Code.
.'
0' Relocation ot tacili ties.
IAI A communications facility ocerator shall. by a
time sDecified bY the City. crotect. succort. temcorarilY
discoMect. relocate. or remove any of its orooertv when
reauired by the City by reason of trafflc conditions: oubhc
safety: oublic rioot-of-way constrJctlon: cublic rloht-oE-wav
reoalr lincludino resurfacinq or wideninol: or for any
municioal oro;ect includinq a chanqe of oublic rioht-of-way
qrade: construction. installation or reoair of sewers. drains.
water cioes. oublicly-owned oower lines. sional lines. tracks.
or any other tvoe of qovernment-owned communications system.
oubl i~ work or imorovement or any qovernment -owned ut il i tv:
oublic riqht-of-way vacation: or for any other ouroose where
the ~rk involved would be aided by the removal or relocation
oE the communications facility. Collectively. such matters are
referred to below as the .oublic work".
1. Exceot in the case of emerqencies. the City
shall orovide written notice desCrlbinQ where the oublic work
i~ t~ b~ oerformed at least thirty nOI calendar davs orior to
till! deadlin~' bv which a communications facility 9perator must
orotect. suooort. tempO~llv disconnect. relocate 9r ~emove
it; i;~iliti~s. A communications facility ODerator may seek an
;xte~;i~~ ~f the time to oerform such tasks where they cannot
b~ ';~~i';~;d in thirty nOI calendar days. and such reauest for
;n ~~t;~sion shall not be unreasonablY refused.
2. In an eme:-oency. or where a communicatior.s
facility creates or is contrlbutinQ to an imminent :!a=:qer t:
~ealth. safety. or orooertv. the City :r.av orotect. SUDoort.
tem~~~ar~l"; dlSconnect. remove. or relocate any or all cutS ;:= .
the communications faclllty wlthout orlor notice. and c~a:-=~
~he communication. facility ooerator for costs incurred. I~
~~;e ;f ~~ch ;m~rqencv. where in the ;udQment of the CltV.
c~~dition.oermit. the City shall reasonably attemot to notlfy
th~ c~mmunications facility ooerator. The determination, as to
wh;t ~;;~;tit~t~. an emerqency is a matter solelY wlthln the
di;~r;ti;;~ ~i the City. ln the exercise of its coHee oowers.
ISI If any oerson (other than a qovernmental entlt.;
that is authorued to olace facll1tleS in the nqht.:::~-....~...
reaue.ts another c~mmunlcatlcr.s facllltv coerao;or recelV::-.:: ::':~
~eaue.t to orotect. sIJocort. temoo:-arllv dlsconnect. :-~':':::...~. ~:-
relocate ltS facll1tleS to accommodate the ccnstr'~:::::::-:.
o;;;~~ion. ~r recalr of tr.e faclll~les ~f such other cersc~~
t~~ ~~mm~~l~~t~Or., faclllty coerator st-.all. after th:r:'I .J.
caie~dar da~s' advance ...ntten not lee. :ake action to e! !ec
~~; ~;~f~~ai ~~:~~e~ r=auested. Unless the matter 19 a~'::rr,::
a v n r state or federa~ law or requlac..., --
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!Adopted 5/20/97
in other cases where the communications facility that is beina
requ~ted to move was not Drooe~lY inst~lled. the cost of the
same shall be borne. by the oa~tv reauestina the orotection.
sUOOQ~t;. temDO~aIT dlsconnect lon. remova 1. o~ relocat ion and at
no charqe to the City.
(Cl A communicat ions faci 1 i ty ooerator shall. on the
reauest of any oerson holdinq a valid permit issued by a
aovernmental authority. temporarily raise or lower its wires to
permlt the movina of buildinqs or other obiects. The exoense
of such temporaIT removal or raisina or lowerina of wires shall
be oaid by the person reauestino the ~ame. A communicatlons
facility operator shall be qiven not less than seven (7)
calendar days advance notice to arranCle for such temoorary wire
chanaes.
(D) A communications facility ooerator may abandon
any property in place uoon notice to the City. unless the Citv
determines. in the exercise of its reasor:able discretion wit~nn
ninety (90) calendar days of the notice of abandonment from the
operator. that the safety. apoearance. functionino or use of
the public riqht-of-way and facilities in the public riqht-of-
way will be adversely affected therebY. in which case the
9gerator must removeJJ;,LR.roperty within I reasonable periOst 0'
time soecified by the City.
(EI If a state statute reauires the City to
comoensate I oerson for the cost of reloclt ion or removal.
nothino in this Chaeter shall be read to abroqate any rlaht
such person may have to that comeensation.
.' .....
--
--.
t~;-~.-;-~..ri' 'O"A"";;"~
8r'~if'enG/,'
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slant i3-b~ eon..t"'Jct.a"'~gBi'Ya - -~
',<!:.}.", .-=:.... ~
(51 Underqrcund Services Alert. Each ooerater -::~ !
cotmlUnicationl faclllty that ~laces ~acll1tleS undera:--::'_:-:::
shall b. I member of the reqlonll netlficatlon center ~::-
s\Jb,urface inlltalhtlon5 (';nderqrQund Servlce, Alert) and 5:-.;1::
(lald ma~lc; the locat 10nS of ltS u:1derq~ound communlca~: :~.S
t;le III tl eS upon :-eC1\Je 5t . 7he oce rat9~ sha 11 lOCH e :: 5
~~cl11tleS tor ~he (ley at no charqe.
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(6) .Publicizinq Wo.rk.
(Ar" Exceot where entrY is oursuant to a cermit
before enterinq onto any orivate orooertv to cerform work. ~
communications facllitv ooerator s~all use its best efforts tQ
contact the orooertv owner or (1n the case of residential
orooertv) the resldent at least one (t) day in advance.. and
describe the work to be oerformed. or as far in advance as ~s
Dosslble. where the entrY is reauired in order to oerform work
that must be comoleted in less than one day.
(81 Each communications facility owner shall orovide
the City a olan for anY initial syscem conscruction. or for any
substantial rebuild. uOQrade or extension of its facility.
which shall show its timetable for construction of each ohase
of the oro;ect. and the areas .of the City that will be-
affected.
(71 No discrimination.
Subiect to State and Federal l3w limitations. if any.
on the City'S authoricy:
1Al A communications facility ocerator shall not
peny service. deny access, or otherwise discriminate a~ainst
subscribers, oroqrarmters. or residents of t::he City on the basts
of race. color. creed. national oriain. sex. aae. conditions of
chvsical handicaD. reliaion. ethnic: backaround. marital status.
or sexual ori@ntation.
(el A communications facUity ooerator shall not
discriminate amona oersons or the Cltv cr take any reta~ia~c~~
actlon aClainst a oerson or the City because of that entlty'S
exercise of any riClht it rr.ay have ur.~er federal. state. :)r
~local law. nor may the ooerator rea\.lire a oerson or the C:ty ::J
'waive such riahts as a condition at ta~ina service.
(Cl A communications facility. ooerator shal~
comely with all federal. state. and locll laws and requlatlOns
aovernina aQUal emolovment OCDortunlties. a. the same may be
from tinw to time amended.
See. 20-5.
ProtectiQn of the City and re.ideot..
(1) Indemnification.
tAl The City may not enter :nto any franchlse. :::-
othe['o/ise authoriz:e any communlcations ~3Clllty ooerator ::: ._5~
the oublic rlqhts of WaY, untll and ~n~ess the City oc:a:~s a~
adea\Jate indemn1ty from such oeerator. The indemnity "'.~s: a:
leHt:
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" "" 1.. release" the" City from and aqainst any ar.q
all llablhty and >:esoonslb1l1ty related to or in any '",a;;
arisi~a out of the communications" facility ooerator's use of
the rlqh~s-of-way or any property lt 1S authori~ed or entitled
to use as a result of the franchlse or other authorization.
2. indemnify and hold harmless the City. Lts
tt"'Jstees. elected and appointed of f icers. aqents. al.d
employees. from and aqainst any and all claims. demands. or
causes of action of whatsoever kind or nature. and the
resultina losses. costs. exoenses. reasonable attorneys' fees.
reasonable paraleqal expenses. liahi lit ies. damaqes. orders.
iudqments. or decrees. sustained by the City or any third carty
arisina out of. or by reason of. or resultina from or of the
acts. errors. or omissions of the communications facility
operator. or its aqents. independent contractors' or employees
related to or in anY way arisinq out of the communications
f:c ;~~~~r~~~~t;~r~~tuiStel~J ~~e u~;a~;s ~o~~~tl tO~ :n:h~r~~=~~~i ;;
or other authorization.
3. oroyide that the covenants and
representations relatinq to the indemnification provision shall
survive the te"t"l\1 of any aareement Ansi. continue in full force
and effect a~ ~o the party's resDonsibility to in4emnifv.
(21 Insurance. The City may not enter into any
franchise. or otherwise authorize any communications facilltv
ooerator to use the public riqhts-of-way. until and unless the
City obtains assurance that such ooerator (and those actinq C~
its behalfl have adeQUate insurance. At a minimum. t~.e
followlno reQUirements must be satisfied.
(AI A communicat ions facU i:y operator" s~,all :'.C:
commence construction or ooeration of the facility WLt~O'';:
obtainino all insurance reauired under this section ar.d
approval of such insurance by Risk Manaae~ent of the City, ~c:
shall a communication. facility ODerator allow any contractor
or subcontractor to cOrmlence work on its contract or sub-
contract until all similar suc~ insurance reQUired of the sa~e
has been obtained and aODroved. The reQUired insurance must te
obtained and maintained for the entire period ::~.e
communication. facllity operator has facilities in the rlqr.:-
of-way. and for a period therea!ter as soeclfied in the 11::-::-.-
coveraoes deSCrlbed below, If the ooerator. lts contractcrs ::
,ubcontractors do not have :he reQUlred lnsurance. the (Lt', -3":
order such entitles to stoO ooeratior.s ~n~l: the lnsu:a~~e :3
cb,alned and aooroved.
(6) Certlflcates of lnsurance. reelectlnq ev:je~:e
ot the remured insurance. shall be tiled ."'lth the Risk ~a:'"3:e:
Coordinator. for entities that are entennq "he market. -"~e
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certif~cates shall be filed prio.r to. the co.mmencement of
7o.ns~ructlen and o.nce a year thereaf~er. and as, pro.vided belew
1n the event o.f a laose 1n co.veraqe. Fo.r ent1ties that have
faciliti'es in the r.iq.ht-o.f-way as o.f ':he effec.tiv:e date ef th1s
chaoter. the cert1f1cate shall be flIed w1thln sixty (60)
calendar days o.f the ado.otio.n o.f this chapter. annually
thereafter. and as oro.vided belo..... i:'\ the event o.f a hose 1n
co.yeraqe. unless a pre-existinq franchise aqreement oreVldes
for filinq o.f certificates in a dif~erent manner.
lC) These certificates o.f insurance shall centain a
pro.visien that coveraqes affo.rded under these oolicies ....ill net
be c~-;'~~led until at least thirty (30) calendar days Drier
writt~~ net ice has been qiven to. the City. Po.licies shall be
i~S~~~ ~~ companies autharized to. do. business under the laws ef
tAe vra-- 'Of Florida. Financial Rat inqs must be no. less than
"~" ,;; the latest editian o.f "Bests Key RatinCl Guide".
oubli~hed bY A.M. Best Guide. Any co.mmunicatians facility
ape~at~~ may self-insure. Self insured status must be
c~~fi;;;d with certificatian o.f same, by presentatian af
f~~;~II~~~ st~t~ments which are nat more than o.ne III year aId
a i _d h~ the Calmnmicat ians F aci! i ty Operatar's Chief
~~a;c~l aft ic~r ar des iClnee. Infarmat ian cantained therein
. -;~i;~t to. review and appraval bv City'S Risk Manaa~ent
Division.
101 In the even~ that the insurance certificate
~~avided i~dicate. that the insurance shall terminate ar laose
;i~~ th; oeriod af this co.ntract. then in that event. the
~~~~;f:~J~~; facility aperatar shall furnish. at least thirty
0) .._ _ d~~s oriar to. the exoi:-ation af the date af such
i~~~~~~~' ~ f;~~W~d certificate a! insurance as oroaf tha:
. I'\(_ ~;;veraCle far the balance af the oeriod af the
f;;~ch~~; ;~ li~ense '..::'\der ....h1C!': cemmunicatians faclll,:',
,ocerates.
lEI "cammunicatians !acility aperato.r. and its
~~~;~:ct~:~ ~r subcantractars enqaCled ~n wa.rk o.n the eoerato.r' s
. ' . an: under ar o.ver cubl1C rlClhts-af-wav. shall
maintain th. tollowina minimum insurance~
1. COMPREHENSIVE GENERAL LIABILITY insurar.ce
to cover liability badilv in,urv and pracertv damaCle.
Emsur.. to. b. cavered are: oremlses. o.OeratlC:':S.
~~~~~;ic~l:~e~ oo:~a~~o.ns. and certaln conI; racts. Co.~er~:e
m w t n currence =aSl'. Wll;h the foll:::.......<J
l~mltS o.t 1iab1lity;
a,
~~di 1~ ~giUrv
i ~~ Occurrer.ce
1. a1 Aqqreqate
51.000. CGQ
3.000.00Q
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b.
Prooerty Oamaqe
i. . Each Occurrence
ii. Annual Aqqreqate
S1. 000. 000
3.000.000
c.
Personal In;ut"V
Annual Aqqreqate
53.000.000
d. Comoleted Ooerations and Products Liability shall be
maintained for twO (2) years after the termi~atlon
of the franchise aareement or license aqreement (In
the case of the communications facility ooerator) or
comoletion of the work {or the communications
faci 1 ity ooerator (in the case of a contractor or
subcontractor) .
e.
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Prooerty Damaae Liabilitv Insurance shall include
c~ver~ae for the followina hazards: X - explosion. C
_ Collapse. U - underqround.
2. WORKERS' COMPENSATION insurance shall be
maintained durina the life of this contract to comoly with
S~~i~~~~ ~imits for all employees. and in the case any work is
s a h cOlMIUnicat ions facH itv operator shall reauire the
~u~c~n~~:c~~;s ~imilarlY to orovide workers' Comoensation
In u a. al the latter's emt1lovees unless such emoloyees
a~~ ~~v~r~~ ~~ ~~e protection a~for~edbv eac~ communications
f i' t e t ~ Each cOlmlUnlcat lons facihtv operator and
it; ~~~tr~~t~~~ ~nd subcontractors shall maintain durina the
life ;;t this oolicv Employers Liabilitv Insurance. The
f~iicwina limits must be maintained:
~:
Workers' Comoensation
Employer'S Liabillty
StatutorY
S 500.000
occurrence
cer
a.
3. COMPREHENSIVE AUTO LIABILITY
Bodilv Iniurv
I~ Each OCcurrence
_1. Annual Aaareaate
51. 000.000
3.000.000
b.
~~O~~;~ Oamaae
h Occurrence
1i. ~;~It Aaareaate
51.000.000
3.000.000
Cove raa. sha 11 i r.c tude O\ofl1ed. h ~ red ar.d non -::.^~.~:
ve!'l~cles.
'f') Each contllunlcat lons t3cll ~ty ooerator sh311 ho:= :~~
Clty. ~~s ~~;~t;~ 3~d ~mol~Yees. harmless on 3ccount of :::L-S
e;r ddm~;e; to oer,ons. orooerty or oremi,es ariSlnq O\,lt at 1:5
c;;s~~~ti~m. ooer.stion or reoair ot it. cO=\,lnl':at::~.S
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facility and name the City as an additional in5~red.
131 Performance/payment bonds, Everv operator of a
~mm~n;~a:ifns facllity may be reauired to obtain per~ormanc~
__nd_ __d_ _f necessarv. pavment,bonds to ensure the falthful
oe~fo~ance ~f lts responslbllltles under thls ordinance and
an. f_a~ChiS~ aqr~ement or license for an initial bUlld. anL
substan_ial rebuild. uOQrade or extension of its faclllty. Qr
..,hen construct ion plans show that there would be more than
1. 000 fe~; o~ open trenchinq in the riqht of way at any qiven
time. T. a__unt of the performance and oavment bonds shall be
~et b~ ~~ ~~t;; Manaqer in liqht of the nature of the work to
~e oe f _ e and is not in lieu of any additional bonds that
may ~; fefI~e~ ~~~~uqh the oermitti:'1q orocess. The bond shall
~e i.. w ~__.~ -:ct-- able to the City attorney. The City may
rom tim 0 _ime increase the amount of the reauired
~e~fo~n~e bOnd to reflect increased risks to the City and to
the oublic.
~~) Securitv fund. Everv communications facility
o~ra r shall e~tablish a 525.000 cash security fund. or
~~;i~~ ;i~ C~ty ~~ \;~evocable letter of credit in the same
~ ~f~~~:; sec:;fm~ -~ e. ~ent of ~ees owed. to secure any other
e e Dr 9 d in a franchlse aareement. and to Dav any
~~~~~: ~e~~ ~r ;;:n~ ~we~ to the City. ,The..l.e~l;~r of chdit
~I~~.L ~. f. n w th an lnS:ltutlon acceotable to the
~~~~ ~~~o;~:: a~i~if:~~o: of ~inanclal manaaement. Should t~e
~~~f'" w n _ - e~urlty fund or letter of credit. It
...1 ~;o~ti.:; n~tif~ the communications facUity ooerator. and
~~~;~~I~f~;~~: f~ciiity ooerator shall DromDtly restore tl':e
f;: d r~. _____;;i credit to the full required amount. ThLS
5 ~~ri~y f~nd/lette; of credlt may be waived or reduced bv t::e
~i~~ f~~ : ~~~~~~ife: or licensee w::ere the City deter.nines ~n
t d' r t" .... 525.000 secur:.:y fund/letter of c:-ed1t :.s
f~~m~;~;:';;:; ~~ ~~c~re t~~reO\Jlred oerformance. The C1tv may
; r~. ti t_ 1m. n reasonable not lce after t::e
~~mm~ni~~;ions facility ocerator ::as had an oooort'~:\lty ':.':>
f~~~/~~ ~~:;~~o~ ~~~iea~e the amount of the r~quired secunty
t r t reflect lncreased nsks to the C~t.{
and to th. Dublic.
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See, 20-6.
Knforcament and Ramod1e..
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(1) Administration. The City manaqer or its desiqnee 1S
re~oOn~~Qle for enfOr~lnq an~ adm1n~ster~nq this chaPter. and
th Cl manaqer or ltS deSlqnee lS authorlzed to qive any
notice reou;:ed by law or under any franchise aqreement. The
Clty manaqn or ltS deSlqne.e lS also au7horized 1::0 seek.
inEor",atlon Er;'m anY communlcatlOns facll1ty ooerator. to
establ ish forms for submission of apolications and other
infor"'ati~n. and to take, a.ll other actions necessarY or
approprla e to the admlnlstratlon of thlS ordinance,
Franchi;e; may only be issued or revoked by action of the City
commlssion.
- (2) - Aoolication for a franchise.
(A) An aoplication must be filed for an initial
franchi~; ~ li~e~e: for a transfer: or for renewal of a
f~anchi;; ~~ li~:n;:. Each en~ity that i~ re~ired to hold a
f.an~hl 0 1 __n_ must subm1t an aopl1cat1on therefore to
the dn;~~ii~ ~n~f:,~;~ depar~ment or as o~herwise desiq~ated
bY t~ C..t.. ': c__ ance w1th the remnrements of T1tles
A~~i~i~s ~~ :~d {ir I: be acce~ted for filina. an oriainal
&__ ___. c__i__ 0 'co lete aool1cation must be submitt~~ to
r.~~ ~t~~~h~~~nq.,.givisI~n~ ~~nancid manaaement deoartment. All
a~~H~:~i shall __ v 'lable for public inso~ction. All
a~~h~;i~i~~~ ;~~~l include the names and, addres~es of persons
a_________ _0 ___ on behalf of the aool1cant wlth respect to
the aoolication.
(B) An aoolication may be filed by any oerson on
~~~~ ~:f=~~' ~ o~ ~~~;tat1Ye ?r, 1n reso~nse to a rem:est !::~
____0_____ T e P_r_____~q Adm1nutrator 15 authOrized to ~ss\;e
.reauests for proposals from time to time.
(e)
nonrefoJndabi~
resolution ot
Everv' aool icat ion shall be accomoanied by a
fe; in amounts established from time to ti~e b'l
the City Commission.
lD) An apolicant that is awarded a franchise or
;;~~~~ '~:ll ~: i; ~h;.City a sum of mo~ev sufficient to
~ . ._ fo 1 0 bllcatlon exoenseS lncurred by It ~r.
~~~~i~J~~v~;~~ ~h~;~~n~ina of a franchlse or license ours~a~~
n f 1 a~t ide, S'..Ich oavment shall be ~3~e
w~~~~~ ;~~rtv ()O) calendar days after the Citv furnlshes :~e
L~-,~~~;wb ~~ l1censee wlc.h a wrltten statement of' S'C':::-,
ex_e:-.L_ _ y __llverY of same to the CleY clerk.
(El :otw~th~"ndi.nq any other orovision of ::-:5
oledg_1 1_ t_st or mort":lcl<lel of the "ssets :~ a
ctlM;) t e t'.
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fr~nchised' or licensed communications facility to secure the
const.x:uction,. operation or reoair of the system may be made
without aoolication and without the Cley'S orior consent;
exceot that no such arranqement may be made if it would in any
resoect under any condition orevent che communlcacions facility
ooerator or any successor from comolYinq with the franchlse or;:
license and aODlicable orovisions of the City Code, nor may any
such arranqement oermi t a thi rd Darty to succeed to the
l::cerest of the ooerator. or to own or control the
communications facility, withouc the orior consent of che Cicy.
AnY mortqaqe, Dledqe or lease shall be sub;ect and subordinate
to the riqhts of the City under this chaoter or other
aoolicable law.
(3) Minimum contents of everY franchise or license. IQ
addition to satisfYinQ the .other acclicable reauirements of
Articles I-III. everY franchise aqreement or license for a
communications facility may contain the followinq orovisions:
IA) The franchise aqreement or license shall orovide
that neither the qrantinq of any franchise or license. or any
oroYision thereof. shall constitute a waiver or bar to the
exercise ot any aovernmental riaht or DOwer. oolice DOwer. or
recrulatoIY DOwer of the City as may exist at the time thll
f r~nchise...i.L.i ssued or thereafter be obtained. .
ISl The franchise aqreement or license shall only
authorize occuoancY of the riaht-of -way to orovide the services
and for theourDoses described in the franchise or license.
leI A. franchise or license shall be a orivileqe that
1S held in the oublic trust and oersonal to the oriql!".a:
franchlsee. The franchlse aqreement or license shall ensure
::hat no transfer of the franchise or license may occ'.Jr.
ehI~~t ~~n~~nie"d;~:ii 1 ~~t w~~ho~;r;::o~:~f: ~~~~~~id~f :~e;~ t~~
contemolated by Se:tion 20-1; 121 (El .
101 The franchise aqreement or license shall ensure
that any oer.on olacinq cOll'(llunication. facilities in the riqht.
of-way will not discrimlnate in hirinq. in contractlnQ, or 1n
the orovil~on of services.
1 . "'" . ~
lEI The franchlse ao:-eerr:ent or lcer.se S..I..
contain aoorooriate crOV1S1ons tor e~torce~nt, comc~~slt~~~.
and orotection of the oubllC. CC::Slstent w1th :::e O::;.,?,
Drovislon, of thu ordir.ance.
(fl The franchlse or licer.se shall te !-::=- ~
s:;eclf~ed tern. set forth ln the franchlse aoree-en::
llcense. No franchise lssued under thlS chacter shall te f':.r 3
term of lonqer than ten years; no license isslJed u:::!er :;.~s
?age 20 of H
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c. Adopted 5/20/97
1 ordinance shall be for a tenn of lonqer than ten Years.
2
3 141 Penalties.
4
S Any person who violates any Pt"ovlSlon of this
6 ordinance shall be fined for each day the vlolation contlnue~
7 in accordance with Chapter 162 of the 1996 Florida Statutes. as
8 amended.
9
10 (5) Revocation. reduction of term. or torteiture at
11 franchise or license.
12
13 (AI Where, after written" not ice and crovidinCl the
14 licensee or franchisee an opportunity to be heard (if such
lS opportunity is timely reauested by a franchisee or licensee).
16 the City finds that the facility is beina operated in
17 substantial violation of this chaPter or substantial violation
19 of the terms of the franchise aClreement or license. the City
19 mav make an appropriate reduction in the remainina term of the
20 franchise or license or to revoke the franchise or license.
21 The City manaCler is authorized to establish and conduct a
22 proceedinCl that comDOrts with the requirements of this Section
23 20-6(51 (AI, and to issue a recommended decision. but any such
24 decision may be aopealed to the City commission. Any aooeal
25 rm~st be filed ....iehio thi.tv DOl calendar davs of the s1~!:!~~
26 of the City ManaCler or it shall be deemed witiv~sL.
27 Notwithstandina the foreqoinCl. the franchise or license may not
29 be rendered or revoked unless the franchisee or licensee:
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30 1. ....a. Cliven notice of the default:
31
32 2, ....as Cliven thirty DOl calendar days to cure t!':e
33 default: and
34
.35 f 3. failed to cure the default. or to cropose a
36 . schedule for curina the defaule acceDeable to the Citv where lt
37 is imcossible co cure the de~ault 1:"1 thirey DOl calendar davs.
39
39 The required notice may be Cliven before the City conducts the
40 proceedina required by this section. No oDDOrtunitv to cure is
41 required for reoeated violations. and fraud .hall be deemed
42 incurable.
43
44 (Sl Notwithstandlna the foreCloinq, the City .,.ay
~5 declare a franchlse or llce~se forfelted where the franc!'::s~e
46 or license.:
47
~9 1. fails to b~Clin to exercise its riClhts under :~.e
49 franchise or llcer-se wlt~nn '" cer-lad sceclEled ln the frar.~~:se
50 ~qreement or llcer.se;
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52 2. stocs cr-ovidwq service i.t is recruir-ed to cr-:'/:-j~
Page 21 of J4
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in che fran~Hise or license:
3. without the Drior consent of the City. transfer~
the franchise or license: or
4. fails to Day any ~ees reauired hereunder.
includinq. but not limited to. annua~ OCCUDanCy fees. franchis~
fees. license fees. aDolication fees. or Dermit fees.
Ie) The City shall qive a franchisee or licensee
thirty (30) calendar days notice of an lntent to declare a
franchise or license forfeited. and shall DrOVlde che
franchisee or licensee an oooortun~ty to show cause ~hy th;
franchise or license should not be !orfelted.
(0) Notwithstandinq the foreaoinq. any franchise or
license may. at the ootion of the City followinq a oublic
hearinq before the City commission. be revoked one hundred
twenty (120) calendar days after an assiqr.ment for the benefic
of creditors or the aooointment of a receiyer or trustee.to
take over the business of the franchisee or licensee. whether
in a receivershiD. reoraanization. bankruotcv assianment for
the benefit of creditors. or other action or Droceedina. unless
within that one hundred twenty (120) calendar day Derlod~
1. 'Such assiqnment. receivershiD or trusteeshio has
been vacated: or
2. Such assiqnee. receiver or trustee has fully
comolied with the terma and conditions of this chaoter and the
franchise aqreement or license and has executed an aqreement.
accroved bv a court havina iurisdict~on. assumina and aareelna
to be bound by the terms and conditio::s of this chaDte'i:' and the
franchlse aqreement or license.
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IE) Notwithstandinq the foreaoinq. in the event of
foreclosure or other iudicial sale of any of the facilit~es.
eauioment or orooerev of a franchisee or licensee. the City may
revoke the franchise or license. followinq a cublic heannq
before the Citv commission. by servinq notice uoon the
franc~isee or licensee and the successful bidder at the sale.
in which event the franchise or licer.se and all riqhts and
orivileaes of the franchise or license will be revoked and .",~::
terminate thirty nO) calendar days a!::er servinq such not::!!.
unless:
1. The Clty has aocroved the transfer of :~!!
tr~~c~:se or license to :he success:~l bidder: and
2. The successful o~dder hCls covenanted a::::
~qreed with the (itv to assume and ~e bound by the ter~s 3:::
?age 22 of )4
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Adopted 5/20/97
1 conditions of the franchise aqreement or the 1ice~se and this
2 chaoe~r.
3
4 (6). Effect of termina tion or forfei ture. t:oon
5 terminat ion or fOrfe i t ure of a 1 icense or franchise. whether by
6 action of the City as provlded above. or by passaqe of time.
7 the franchisee or licensee shall be obliqated to cease USlnq
8 the communications facllities for the purposes authorlxed by
9 the franchise. The City may either take possession of some or
10 all of the licensee's or franchisee's facllities in the publlC
11 riqhes-of-way after furnishinq the communications facility
12 operator wi th wri tten not ice and qrant inq the communlCat ions
13 facility ooerator a reasonable period of time. but in no event
14 more than thirty DO) days to remove same. or reO\l1re the
lS licensee or franchisee or ltS bondinq company to remove some or
16 a 11 of the 1 icensee' s or franchisee's facn it ies from the
17 public riqhts-of-way and restore the public riqhts-of-way to
18 their orooer condition. Should the franchisee or licensee
19 ne~i;ct. refuse. or fail to remove such facility. the City may
20 re~ve the facility at the exoense of the franchisee or
21 licensee. The obliqation. of the licensee or franchisee to
22 r~~ve shall survive the terminal: ion of the franchise or
23 license for a oeriod of two Years. Provided that. the City may
24 n~t take oossession of. or reauire the franchisee or licensee
25 t::l remove. any faciliti..a-~l1_~t are used to orovide an6ther
26 s~rvice for 'dhich the franchisj!e holds a valid fnnchi:le or
27 license issued by the City.
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29 (7) Remedies Cumulative. Remedies Cumulative. All
30 remedies under this chaoter and any franchise aqreement or
31 lic~;;se are cumulative unless otherwise exoressly stated. The
32 ex~~cise of one remedy shall not foreclose use of another. nor
33 shali the exercise of a remedy or the oavmenl: of llauld:lted
jot dam~~es or Denalties rel1eve a comml.:n~cations faclhtv ~pent:l::
35 of its obliqations to comoly wlth its Franchise or !.lcer.se.
36 ." R~m~ies may be used sinql.y or in combination: in additlon. the
37 Citv may exercise any riqhts it has at law or eauitv. Recovery
38 b~ the City of any amounts under insurance. the oerformance
39 bond. the securitvfund or letter of credit. or otherwise does
40 not limit" a COlT'f1\Unicatlons facilitv oDerator's dutv to
41 indemnify the City in anv wav: nor shall such recovery rellev~
42 a communications facilitv ODerator of its obliqatlons under a
43 franchise or license. l1mlt the amounts owed to the CltV. or ~:-.
44 any ra.Dec!: Drevent the Citv from exercisinq any oehe:: ::le:-.: :::-
45 ~~~v it m.ay have. ~othlnq hereln shall be read to !'~::-.::-::~
46 the doubla-recoverv of damaqes.
47
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(8) . Access co books and records.
-. (Al" Each communications facility ooera-tor shall.
uoon thlrty DO) calendar days wr1tten notice. if reasonably
oossible. but in no event less than five (5) business days
written notice. Drovide the City access to all booles anq
records related to the construction. ooeration. or reoair of
the communications facility so that the City may inseect thesa
bocks and records. AnY and all non-oroerietarv or non-
confidential books and records may be coe~ed by the C1ty. To
the maximum extent oermitted by Section 166.231 (10) eel. Flor1da
Statutes. such books and records shall be keet conf1dential and
exemet from the orovisions of Section 119.07(11. Flonda
Statute~. The oeerators' obliqation includes the obliqation.
to the extent that the franchise fees or license fees are. based.
uoon qross revenue or ar099 receiots. to oroduce all books ~nd
records related to revenues derived from the ooeration of the
communications facility. AA ceerator is resoonsible for
obtaininq or main.tainina the necessarY DOssession or control of
all books and records related to the construction. oeeration or
reoair of the communications facility. so that it can oroduce
the documents UDOn reaue!lt. Books and records must be
maintained for a oeriod of five (5) vears. exceDt that anv
record that is a oublic record must be maintained for the
pe::,io(L.A~\ll.Iired bv state la"': and 4 fran<;ht~~ may soec1fy a
shorter oeriod for certain cateQori.e!l of voluminous bookll and
record. where the information contained therein can be derived
simclv from other material..
(9) For OUrDOses of this chaoter. the terms "books
and record.- shall be read exoansivelv to include info~t1on
in ~hatever format stored. Books and records reaues~ed sr.all
be oroduced to the City at City Kall. exceot bv aqree~ent or
oursuant to section 20-6. e81 eCI .
(CI If any books and records are too voluminous. or
for security reason. cannot be cooied and moved. ~~e:1 a
communic.tion. facil itv ooerator may reauest that the
insoectlon t.k. ol.ce at some other location mutually aareed to
by the City .nd the ODerator. orovided that the ooerator must
make n.c....rv arranaement. for cODyina documents selected by
the City after it. review: and the ooerator must oay alltra'lel
~ additional cooyina exoense. incurred by the Clty ~:'.
insDectina tho.. documents or havina those documents ~nscec:ed
by it. deaian...
(01 Without limitlna the ~oreaolna. the ooerator :)f
a co~nication. facility shall orovlde the City the follow:~q
wlthln ten (10) calendar days of the1r receiot or e1:1 t~~.c!se
of documents created by the ooerator or ltS affll1ate' ~:~:~.:::
1. notices of deficiency or for~el:'_!'e
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.elated to the oDe.ation of the communications facility: and
2. copies oe anv reQUest for orotection under
bankruPtcy laws. or anv ll,ldqment related to a decla.ation of
bankruotcy by the operator or bv any partnershio or corooration
that owns or controls the operator directly or indirectlv.
(9) Retention of Records: Relation co Privacy Riqhcs.
!::ach communicat ions fac i 1 i ty operator shall take all reasonable
steps required. ie any. to ensure that it is able to provide
the City all information which must be provided or may be
reQUested under this chapter. a franchise or license aQreement.
or apolicable law. includinq by' orovidinq aoprooriate
Sl,lbscriber pri yacy not ices. Each ooerator shall be resoonsible
for redactinq' any data that apolicable law orevents it from
orovidinq to the City. Nothinq in this section shall be read to
reQUire an ooerator to violate state or federal law protectlnq
subscriber orivacy.
(0) Reoorts. The City may require ooerators of
communications facilities to maintain records. and to oreoare
reoorts relevant to determininq the comoliance of the
communications faci~ity ooerator with the terma and conditions
of this chaoter and a franchise or license aareement.
,
(11) Maas. Each cOlMlunicationil facility ooerator shall
maintain accurate maDS and il1\l)rovement Dlans which show the
location. size. and a aeneral descriDtion of all facilities
installed in the riahts-of-way and, any cower SUDDly sources
(includina voltaqes and connections). MaDS shall be based UDon
oost-construction insDection to verify location. The ODerator
of each communications facility shall orovide a maD to the Cl:Y
showlna the location of its facilities. in such detail ar:d
scale as may be directed bv the Citv enqineer. ~e~ maos sha::
be oromotly submitted to the City when the facility exoands or
'is relocated. CODies of maDS shall be orovided on disk. in a
!ormat sDecified bv the Ci:v enqineer.
021 Comoliancff wi th laws. Each franchisee or licensee
shall comely with all City laws and requlations heretofore a~d
hereafter adooted or established durina the entire term of ~:s
franchi.. or license.
-l ..
(1]) Reservation of duchori cv. The City may ~o a._
china. which art necessarY and convenient in ~he exerClse ==
l~. iurisdiction under ~hlS article. The City manaqer or :~s
desiqnee is hereby authorlled and emoowered to ad1ust. se::_~
or comoromlse anv controversy lnvolvlnq oerformance or cha,~~s
anSlnq from the ooeratlons of any franchlsee or licensee _:-:~:-
ehu Hticle on behalf of ,he City. The City commlSS1C:-, ;',
acceo~. re1ect Qr mQ<hfy ~he decislon of the City manaqer. }:-.::
ehe Cl~y commi,slon may ad1ust. se~~le or comorcmlse }-..
Page 25 of H
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Adopted 5/20/97
contrOversy or cancel anY charqe arisinq from the operations' ;"(
anY franchi~ee or licensee "()r from any provislon of thlll
art ide, .
!l4) No waiver, The failure of the City to insist on
t imel Y performance or comol iance by. any person hOldinq a
l1cense or franchlse shall not constltute a waiver of the
Clty'S nqht to later lnslst 00 tlmely:performance or
compliance by that oerson or any o~her person holdioq s~ch a
license or franchise.
(15) Ordinance not a contract. The City exoressly
reserves the riqht to amend this chaoter from time-to-ti~e In
the exercise of its lawful DOwers. , This and any ordi~ance
adoptinq orovisions of this chaoter shall not be construed to
be a contract. "
Sec. 20-1.
Tran.i~ioftal Provi.ioft', .
(ll Persons ,ooeratincr without a franchise or license.
The operator of any facility. tr.e operation of which is
r~auired to be franchised or licensed under this chaPter. other
than a oerson holdina a lease under Section 20-7 (3). shall have
three months from the effective date of this chapter to file
one or more a091icacionl for a trankbise or a license under
chis chapter. ,\ny ocerator or orivate communications svstem
o;';;;~r timely Ulina such an apolication shall not be sub1ect to
a oenaltv under Section 20-6(4) hereof for failure to have such
a franchise or license as 10na as said acolication remains
oendina.
(2) Persons holdincr franchises or licenses. AnY ce=son
holdina an outstandina franchise or license from the City for
a communications faCility to provide scecified servlces cr for
a prlvate comm~r.ications system may cont~nue to ocerate ~~der
th~ ~xistina franchise or license to the conclusion of lta
ore5~;t term (b~t noc any renewal or extension thereof) wlth
~es~~t, to those activitie. exoressly authorized by the
f~;~~hi.. ~r license: orovided. however. that such franchisee
or licen... may elect at any time to aoely tor a sucersedinq
f;..~chi~; o~ licen.. under chi. chacter. and must seeK.
additional franchise. or license. to orovide other servlces:
and orovided further thac. such eer.on shall be sub;ect to the
qch.r previlion. of this chacter to the extenc permitted by
11.'1. Provid.d further. that lice:,:se. thar. are revocac:!! a::
wiii may be revoked by the City. and the licensee NY be
reauired to obtAin a new license under this chacter.
(]) Persons holdinQ le~ses (er orooertv in the riqr.:-::-
W<lV. A:ny lessee under a lease frc~ the City for an a:-.:~~~a
;i~~ loc~ted 1-;' the riqhr.-of-wav tr.at is valid and in for:e O~
the effective date ot this chaoter ~4Y continue to OCCUCY s~~t
Page 26 of H
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'" Adopted 5/20/97
antenna site to the ~onclusion of the te.m of the lease (bu~
not aQY renewal or ex~ension thereof). in accordance wlth the
te.ms of such lease: provided. however, that such lessee may
elect at.. any time to apply for a supersedinq lease. franchis~
or license under this chapter,
(4) Persons wi th pendinq dpplications. Pending:
applications shall be subiect to this chaPter. A person With
a cendinq application shall be orovided thirty (30) calendar
days from the effective date of this chaPter to submit
additional information to comoly with the reauirements of this
qoverninq aoolications chaoter.
Sec. 20-8. Soecial Rule. For Gove~ent Rntitie..
Nothing herein requires the City to apply the prOV1Slons
of these articles to a government entity if the City determines
that it is not in the public interest to do so, and nothing in
this chapter shall be read to require a government entity to
comply with this chapter, where the City cannot enforce the
chapter against such entity as a matter of law.
Sec.. 20.9 -- 20-20. R...rved.
.
Section 3.
Chapter 20, Artic1~ II of the Code of
26 Ordinance. of the City of Coral Springs, entitled . Special
27 Rule! Applicable to Teleconvnunications Facilities and
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TelecorMtUnications Service Providers., is hereby created t:::
read as follow.:
AJlTICLI II - SPlCIAL ROLlS APPLICABLI TO
TltlCOMMUNICATIONS rACILITII. AND
nUCOIOClnfYCATIONS SIRVICI PltOVIDIRS
Sec. 20-21.
ADollc.tloD for a frLCchl...
(11 Content. ot doolication for initial or renewal
{ranch1le. In order to obtain an initial or !"er.e'oIa~
tr.\~chil.. an ooer,stor ot a telecommunications facillty "";5:
apoly for a franchlse, The aoollcation muse cor-taln ::-,e
(0110..,in<:1 information. and such lnformation as the Clt'/ -:a'/
(rom tlme to time reOUlre.
(Al Ident ity of the ""Dol icant: the oers~~s 'J.-.':
exercIse workinq control over the aoolicant: and the ~ersc~s
~ho control those oerson" to the ~ltimate oarent.
?age 27 of H
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{SO)
t~~~~6~unications
followlna:
A proposal for construction of A
facility, that sets t.orth a1; least the
1. A descriPtion of the services that are to b~
provided over the facility.
2. The location of proposed facilitv an~
facili~y desiqn, includi~a a descriPtt~~ ~; ~hi mil;s ~! ~;an~
to be. l~stalled, ,,:,here 1t 19 t,o be -i~~;~~d i~~ the "~~~ ~~
fac1ht1es and emllPment that w1l1 be _______ ___ on. ov___ __
above the riqhts-of-way,
, 3,_' - A descriPtion of, the ~~~~~ ~~ Whi~~ tr.~ '
System w111 be 1nsta1led, and the t1me re______ __ con ruc_
the system. and the exoected effec; ~n ~~q~i-~~-W~~ ~:aqe~
includina information on the abiliL ~ t. ~~ ~_;~._1!I ~~ W;y to
accommodate the proposed system. includ1__, __ aD 00 late
qiven ~he sYst~m prooosed. a.n estimate of t~e ~v:~~~~~~~~~ ~
space 1n condu1ts and an est1mate of the cos_ 0_ ___ ______.1_
rearranqement of existina facilities.
". A descriotion. where aoorooriat,. of. how
serd~e~ will be cOl1v~rted from :~~~t;~'7 :t~~l;:R:. t~ n~w
fac1l1t1es. and what wlll be done ____ __ll!l____ ____ 1t~_S,
. ;~.~
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~~~ ~.~ re.ee~ ~e~'emerqen<: iUi:1U:~)l'" ';r~d "'f-L-e-;~~~~::::':: ~~
conm16,te. ...... /,,/
~I Preet tAu t~ agDliC:ll':'~ ;. 1.,....~I" CNalif:eEl~.
'~hich creof m\;lst lR~l\J~e Ji EfemQlutnt lQR tRU tfli'a~~ii~d.._. '
"" 1, 1'4<<E't:ee~1ed or il ii a ~lSl::eR ~:;
rcc(:i-,;e. n~(;e~~a&.y &""t1.0l'lzatl1Jf!.5 :?"'!~
,/' 3tat~ allJ federal aut~o'-titie~. \':;, ~.
, "i:~ ~
\1'.. t-', ~._ s:
'" . L' ~- <..J
h4' net 'Sf"-1";"'''''' ,,, eeliJ\J\,;{". (..(-:-~.<.;_.
~:~;~~:~t ;~~~e~~~~;1. i~~~~( o:l1~ ~,~':l:: ~'~~ '
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t.Ra- 11 u_
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Qf tl~~.s art i<::lc. . dl\e- \
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.-.....;"t9-"?~~ 9f its ~--':'li'l!8."'~Afta'11u.~ uot
~?:.::: i~A~om'~~t=~;;;ne t~~ "8~id
(F) An affidavit or declaration of the aoolicant or
authorizea officer thereof certi-fvinq the truth and accuracy of
the information in the aooHcation. and certifyinq that the
aoolication meets all reauirements of aoolicable law.
(2) Addi cion.!l informa cion req.!rdinq affiliaces:
DresUJI1OCions. To the extent that the aool icant is in any
resoect relvinq on the financial or technical resources of
another oerson. includinq another affiliate. the oroofs
reQUired bv sections 20-21(1) ICl- IEl should be orovided for
that oerson. An aoolicant will be oresumed to hav.- the
recr.;isite financial. or technic~l or leglll m.:aHfications to
the extent such qualjfications b~v~een reviewed and aoorQv~g
by the Florida Public Service Commission: or if aoolicant is a
holder of a franchise in the City for a cable system or ooen
. video system. and conduct under other franchise orovides no
basis for additional investiqation. An aoolicant that is
leasinq existinq facilities from a franchised communications
facility ooerator. where the aooHcant will have no
resoonsibi lity for any activity tr.at involves work 1n the
r1qhts-of-wav. may rely uoon t~e franchisee's technlca:
dualHications. and will be oresumed to have the necessary
financial aualifications.
(3) ADplic..tion.t (or cr4rls(er. An aoolication for a
transfer ot. -.. franchise must contain the same information
reQUired bv Section 20-21111. exceot that. if the transferor
subnlitted an ..001 icat ion oursuant to Sect ion 20 -2l! 1). to the
extent information orovided by the transferor under Sectior. 20-
21 (11 (8) remain. accurate. the transferee may simolv cr:::ss-
reference the earller aoollcation.
('I) City review. The City may re<ruest such addico~.a.:
information at it flnds necessarY. and reQU~re 5;':0:::
modltic4tions to the svstem Drooosed as mav be necessary u; ~~.e
exerC1S1 of the Citv', authoritv over te~ecommur.~cat::.-.s
facllitie,. Once the 11lformatlon rea'Jired bv the City hag :e~~.
orovlded. the aoollcatlon shall be cromotlv revlewed and 5..3__
Page 29 0 f H
. , ~ , ., - f \ '""Tl r (',........ \ 'T \ t ~'l
o 97-"; -
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"'\
{;: ,~
,r-'-.
Adopted 5/20/97
be q~anted ~f the City finds that:
4:'
.....
.',"
~~~~~:~~~;f:~~~~t~tt~
.',
"
(81 The aDDlicant acceDts the modifications rl!OUirl!d
by the, City to. its orooose;d system., ~i; ~:~tJ~f di:~ not
authorlze the Cltv to exerClse authorlty it d at ise
haye under aoolicable law.
CCI
and come 1 lea
effectiveness.
Th:i~~Dlia~a:t ~~~~~~i~~tso a o%~~~~~~e a~~ee~~~
.
CDI
determine that:
In the case ot a transf@r.
the City must alsQ
1. there will be no adverse effect 1)n ~
I"Ilthli" ;nt'........,.~ or the C;tv's interest in th~ f;;;;~his-;';:
. 2. transferee aqrees to be bound bv all !:~e
conditions of the franchise and to ass~me ;11 th; obl1qat~or.s
of its oredecessor: and
3. any outs.tandinq comoliance .aSnf~ co,mo;nSatlon
~ssues are resolved or oreserved to the satl___ctlo_ of :~e
City.
CHI An aDclicant shall not be issued a fr:~:~tse If
it files or in the crevious three nl ~~~~: tii;d m~~~.:ally
!!!iI.leadina informat ion in a fran__,:, aoclicat ion or
intentionally withheld information that the ao~li~~;t lawL::'{
is reauired to orovide,
.~. .. . ----
(~) COiWeen3atlerJ. .&.~. .
.. ."" ~
.,: c.'-) \..-'~ S"hi~C',= Qnlv 'i;<t'n ~h"----~~tlon~ q-t e....:~. ...
A..t"ticle. I oJ~ this rcr..ac,="'~---- ~"erv" oo.e.t-a-tor ....~ 1
~-elecof1'CT1ttn-i-ea-tiei-is fanll';y/mlJllt"ea'/ I:QmD@nS~~;~ :::e :.-::
~al to ten oerd!At -I-rQ\1 of Qr03S t e.ell~;; ;:/:1; .,;~:'.-:... ~.
ne'-lvl..i~f,.ed ill a (..~.j1~,:hiJ(; tlQt"eem<ltt>/~_:. . .
./ -------- '{Hi,
l-;'~ ~.
A
?~ge 30 of H
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<19
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. ._. ".. .. ~"n _.__"_'_
,".
r-'doPted 5/20/97
.
. "'" ~;':"'., -:;~:, -- --:>. , '
~.. \ . .... ~.'" ., ._,., '-'""~r1 ~r
"n"-c 'i..'!l.,':';, ~~ ~~'9: '.':;:':;'?i:;'1~~::: ~ -I;, ~
~!:~lf!d~~ ':!;:A~ ~--- s.. th ~~Dl1cams t~"'L uu~l~ 5;
aWf-:.oDUd-t-9-r "~thou!; ,~~r:e~~; )~,,~~~hd '411 VULJvH\Uh:e. J . , ak i
!l~Dnl ;..rI lJltR1R t~ Y / 'iw, :'i.;" ".J, ",
,.!n ccrutvaleuL ill-kt~I.~,UaY"'~llt"'-, .' '~t . ''':~. ...,. ':,
t . -- \'. "" . " av 'eema~RBatleR te tA8 <;:lt~
leI ,~FesellElr 81:1a11 B t.e V. a;o otller'lo.~~
"--- / (19\) of ~5 L<:Y<:U__", __ _"'..;' . .
;~~; i~~"rl9:"., D:5h-3~ki:JC ,~Q:c~mcn-t, '.<i;~ i'~ u . ~
\ ~~= ~~(~'fJ:~ ~:~i~; .~t~;~34~;~
~,~. ~." .-.;;-T..--'iR.ir...".. ... ,.<,. ~..~.~
~~*r~:if&i.'Wi:;~j~*~~~ ~~
;:- --- ..' LeA at teleeaIMH1".__,:-._ , , .._
"I.I! llE'S.18~__,. '.' '_..' , '
-.,r::;'"
<-
t~'Ci t.~ 'f~.r t:~e ,,~el l'wQLlt::
Ra.~~:'b-I i ~ t ~e
f~e. ii!:.~we.
/
~-...... . I!I
l.eloolV..tlrl
" ,
/.,
iJ,..
,
'"
~"-.
.'-
,-;-
'~'.~ --
,.'
'Af odd bv each orovider shall be ,
eEl The comoensation ____
l' 1 dhcloaed bv the Clt~.' ./.,
olJb lC V~,~: , _/_ ! ~;'lIcirl; t lQR 1:0
R 'l-""~II r-ncs. _n l=l 11
e&) .\cW1tion.l, {rUl<: 1 · .~ I. ever'1 fraAchise s ,4
,s...h!"iACI't.h. r~\:J\Hre~~~..... r~(7lJire II frlll"..hlse:. ~~
""ueaHu "rellr..e t_I,E'-l.<il ., It:. \.h4L ,,,.tv be re:n...~.
&HO-u.., t- ilitie. ar.-eo make Cayl."". h City may l&wf~._t
eeA.Il-W~_.(;___ . ___,. ,. al SCl:"<lCe olan t .e "', tr,s'~:'c
tQ eSN1" ....itA 11'1" J'Al e,rsR rw-+a.,..f-tfl. re......h"''''''"~'' t~.. j '.
d 'I:: (llId tEl sQmolv 'ht_ II. . nl ut""icel, safc;"'IJ~t _H~
a ,,;d, d ,- lit-- of telecv".'11UnlCa~" t\:he 0 bl1c ,afet., a..
e-<)l't111""_ 1.11... - I Q~th-e-rvt"~re--oTotec_ "
-d:<-l!t\.-vf cOM-IJme-r '"_
~H-aTe7"
?dge 31 at H
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Adopted 5/20/97
Sec.. 20-22.--20-30. Re..rved.
Sect ion 4.
Chapter 20. Article III. of the Code c~
Ordinances of the City of Coral Springs. entitled 'Private
Communications Facilities'. is hereby created to read ..s
follows:
ARTICLE III - PRIVATa CO~CATIONS FACILITIgS
-.
Sec. 20-31.
ADellc.tioD for licen...
^ Derson wishinq to construct. emolace. ooerate. reolace.
reconstruct. or maintain a Drivate communications System must
obtain a license therefo~. The li~e~se sha~l only aUtho~lze
olacement of the system 1n a soec1fic Dortion of the ou lic
riqht-of-way for a li~ited and soecific Duroose .in conn;~i~~
with the oerson's bUSiness but not encomcasSlnq in whole
oart the carriaqe of telecommunications for hire in the Oubl~~
riqht-of-way.- and for a limited Deriod of time. Su h
aoolicQtiQn mU3t be in th~ form orovided for by regulation and
must be accomDanied by a filina fee. th~ amount of Whi~h mu~t
be fixed desiqnated bv reaulation. oromulqated from t me-t _
time bv the City.
Sec. 20-32.
Conditions of lic@nse.
Any license shall be subiect to such conditions as :~e
City may from time to time establish. shall be exoressly
subordinate to the use of the riqhts.of,way by ocera~ors of
communications facilities~ and shall otherwise con!or~ to ~~e
feauirements of this ordinance. Subiect to the foreqoinq. ~he
orovisions of Article Y. sections 20-4(1) -(6) shall aooly ~~ a
orivate communications system as if it were a communicat1ons
facility.
Sec. 20-]J.
C~.I:IS.tiOD.
The owner of a orivate communications facility shall oa'{,
in addition to the annual occuoancy fee, a fee established _.
the City from tlme to tl~e to reflec~ the falr market val~e ~:
the orooerty used.
? dg~ 3 2 0 f ,~
,
." ,
,
,
Adopted 5/20/97
(
1 S~c.. ~O-34.--20.50 R~..rvod.
2
3 "Section S. Conflicting Ordinances
4 All prior ordinances or resolutions or parts thereof i.n
5 conflict herewith are hereby repealed to the extent of such
6 confl ict.
7
Section 6. Severability.
8 If any section, sentence, clause, or p~rase of this Ordinance
9 is held to be invalid or unconstitutional by any COurt of
10 competent jurisdiction, then said holding shall in no way
11 affect the validity of the remaining porti.ons of this
12 Ordinance.
13
Section 7. Inclusion in Code.
,
14 It is the intention of the City COrmlission of the City of Coral
15 Spring., Florida, that the provisions of this Ordinance shall
16 become and be made a part of the City of Coral Springs Code of
17 Ordinances; and that the sections of this ordinance may be
18 renumbered or relettered and the word "ordinance" rr.ay be
:9 changed to "section," "ar::icle." or such other appropr:a::e ....orj
2C or phrase in order to ac=omplish suc~ in::entior.s.
21
Section I. Effective Date.
22 This Ordinance shall become effective thirty (30) calendar days
23
Fage ]] of H
.'J:I44 ;1~:-'tU("Clrol:"'.1:4 :Cl
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after adoptlon by the Clty Commission.
PASSEO.FrRST READING THE
PUBLISHED THE
DAY OF
PASSED SECOND READING THE
ATTEST:
DA Y OF
'- Adopted 5/20/97
DA Y OF
1997.
1997.
, 1997.
JOHN SOMMERER, MAYOR
Unanimous
CHARLES J. SCHWABE, ACTING CITY CLERK
Motion/2nd
. I;'
Mayor Sommerer
Vice Mayor Calhoun
Commissioner Berk
Commissioner Stradling
Commissioner Polin
Yes No
Page 34 of H
~
'\
SUMMARY OF RELEVANT CASES
AT&T Communications of the South West Inc.. v. Citv of Austin (W.O. Texas. Julv 1997)
1. A provider that does not install or own facilities in the City's rights-of-way is not "using"
the rights-of-way.
AT&T Communications of the South West. Inc.. v. City of Dallas. !N.D. Texas. Mav 1999)
I. A City can require that AT&T obtain a franchise and pay a reasonable franchise fee based
on the use of the City's rights-of-way for companies' planned use of its existing fiber
optic facilities to provide a new service.
2. Section 253 of the Telecommunications Act does not require City to impose same fee on
all providers.
3. City does not have power to require comprehensive franchise application; to consider
factors such as technical and organizational qualifications; or place conditions on
franchise unrelated to use of City's rights-of-way.
4. Local governments have authority to require franchises from telecommunications service
providers and exercise authority pursuant to 253(b).
TCG Detroit v. City of Dearborn IE.D. Michigan. August. 1998)
I. City has right to charge "rent" for rights-of-way.
2. City does not violate Section 253 by imposing comparable but not identical agreements.
BellSouth Telecommunications Inc.. v. City of Coral Springs (S.D. Florida. Januarv 1999)
I. Indemnification, insurance, bonding and security funds all fall within the FCC's
interpretation of "managing the rights-of-way."
2. A franchise must only be conditioned on a telecommunications company's agreement to
comply with the City's reasonable regulations of its rights-of-way and the fees for use of
those rights-of-way.
3. Enforcement remedies provide the mechanism for the City to enforce an Ordinance and
are valid.
4. City may take possession of some or all franchisee's facility in the public rights-of-way
upon termination or forfeiture of the franchise.
Bell Atlantic-Maryland v. Prince George's County. Maryland (District of Maryland. Mav 1999)
I. "Any process for entry that imposes burdensome requirements on telecommunications
companies and vests significant discretion in local governmental decision-makers to grant
or deny permission to use the public rights-of-way 'may... have the effect of prohibiting'
the provision of telecommunications services in violation of the [Telecommunications
Act]."
2. Courts will look at the totality of the Ordinance to determine whether it creates a
"substantial and unlawful barrier" to entry into a given market.
3. Appropriate benchmark is not the value ofa Franchisee'~ privilege to use the rights-of-
way, but rather the cost of maintaining and improving the rights-of-way which a
franchisee actually occupies.
BellSouth Telecommunications Inc.. v. Town of Palm Beach (S.D. Florida. September 1999)
I. Requirement of a franchise must only be for facilities in the right-of-way.
2. Indemnification, bonding and security funds fall within the FCC's interpretation of
"managing the rights-of-way."
3. Enforcement remedies, including revocation, are valid. However, revocation cannot under
federal law be used to prohibit or have the effect of prohibiting the ability of any entity to
provide telecommunications service to the public.
4. Requirements concerning information on the construction offacilities (i.e, location, size,
route, construction techniques, etc.) are reasonable regulation of the right-of-way.
5. In an application process, requiring modifications offacilities to be placed in the right-of-
way reasonably necessary regulate the use of the right-of-way are valid.
Omnipoint Communications. Inc. v. Port Authority of New York and New Jersev (S.D. New
Yark. October 1999)
I. "Compensation" has long been understood to allow local governments to charge rental
fees for public property appropriated to private commercial use.
2. Factors to be considered in determining fair and reasonable compensation include I) the
extent of use of the right-of-way; (2) whether other carriers have agreed to comparable
compensation for comparable uses; (3) the course of dealings among the parties; and (4)
whether the compensation sought is "so excessive that it is likely to render doing business
unprofitable."
In Re TCI Cablevision of Oakland County. Inc. (FCC. September 1997)
1. FCC may preempt the enforcement of legal requirements to the extent necessary to
correct violations or inconsistencies with Section 253 of the Telecommunications Act.
2. A plaintiff seeking preemption must supply credible and probative evidence that the
challenged provision prohibits or has the effect of prohibiting a potential provider's
ability to provide telecommunications service.
3. Creation of a "redundant third tier" of regulation extends beyond the statutorily protected
interests in managing the public rights-of-way.
4. Local governments must be allowed to perform the range of vital tasks necessary to
preserve the physical integrity of streets and highways. This includes coordination of
construction schedules, determination of insurance, bonding and indemnity requirements,
and keeping track of the various systems using the rights-of-way.
Santa Rosa County v. Gulf Power Companv, (First DCA, Mav 1994)
I. Statutes giving Public Service Commission jurisdiction to grant certificates to
telecommunications companies preempts local government from requiring franchise
agreements from telephone utilities, under Sections 364.32-.37, F.S.
Florida Power Corooration v. Seminole County (FL Supreme Court, Mav 1991)
I. PSC jurisdiction over rates and services of public utilities preempts authority of cities and
counties to require undergrounding of utilities.
2. Ruling does not limit ability oflocal government to require developers of new
subdivisions to place utility facilities underground.
~
42 F.Supp.2d 1304
(Cite as: 42 F.Supp.2d 1304)
BELLSOUTH TELECOMMVNICA TlONS,
INC., Plaintiff,
v.
CITY OF CORAL SPRINGS, FLORIDA,
Defendant.
No. 97-70IO-CIV.
United States District Court,
S.D. Florida.
Jan. 25, 1999.
Telecommunications company sued a city for
declaratory and injunctive relief, alleging that a
recently adopted telecommunications ordinance was
preempted by state and federal law and was
unconstitutional. City counterclaimed for failure to
perform under the ordinance and for breach of
contract under the forced buyout provision of an
older ordinance. On motions for summary judgment,
the District Court, Dimitrouleas, 1., held that: (I)
those parts of the recently adopted ordinance that did
not deal directly with managing public rights-of-way
were preempted; (2) the forced buyout provision of
the older ordinance was not a contract protected by
the Contracts Clause, and it too was preempted; and
(3) injunctive relief was not warranted.
Motions granted in part and denied in part.
[1] MUNICIPAL CORPORATlONS€= 53
268k53
Provision of a city ordinance requiring
telecommunications companies to obtain a franchise
avoided preemption by state and federal
telecommunications statutes only insofar as the grant
of a franchise was conditioned on the company's
agreement to comply with the city's reasonable
regulations of its rights-of-way and the fees for use
of those rights-of-way. Federal Telecommunications
Act of 1996, 47 U.S.C.A. S 253; West's F.S.A. SS
337.401,364.01.
[1] MUNICIPAL CORPORATlONS€= 592(1)
268k592( I)
Provision of a city ordinance requiring
telecommunications companies to obtain a franchise
avoided preemption by state and federal
telecommunications statutes only insofar as the grant
of a franchise was conditioned on the company's
agreement to comply with the city's reasonable
regulations of its rights-of-way and the fees for use
Page 10
of those rights-of-way. Federal Telecommunications
Act of 1996. 47 U.S.C.A. S 253; West's F.S.A. SS
337.401,364.01.
[1] TELECOMMVNICATlONS€= 78
372k78
Provision of a city ordinance requiring
telecommunications companies to obtain a franchise
avoided preemption by state and federal
telecommunications statutes only insofar as the grant
of a franchise was conditioned on the company's
agreement to comply with the city's reasonable
regulations of its rights-of-way and the fees for use
of those rights-of-way. Federal Telecommunications
Act of 1996, 47 U.S.C.A. S 253; West's F.S.A. SS
337.401, 364.01.
[2] MUNICIPAL CORPORATIONS€= 592(1)
268k592( I)
Compensation provision of a city ordinance
governing the use of public rights- of-way by
telecommunications companies was preempted by
state law to the extent that the required fee exceeded
one percent of the gross receipts on recurring local
service revenue for services provided within the
city's corporate limits, but it was not preempted to
the extent that it dealt with applications for different
types of services and general procedural rules for
payment of the fee. West's F.S.A. S 337.401(3, 5).
[2] TELECOMMVNICATlONS€= 77.1
372k77.l
Compensation provision of a city ordinance
governing the use of public rights- of-way by
telecommunications companies was preempted by
state law to the extent that the required fee exceeded
one percent of the gross receipts on recurring local
service revenue for services provided within the
city's corporate limits, but it was not preempted to
the extent that it dealt with applications for different
types of services and general procedural rules for
payment of the fee. West's F.S.A. S 337.401(3, 5).
[3] MUNICIPAL CORPORATlONS€= 53
268k53
Provision of a city ordinance imposing general
conditions on the use of public rights-of-way by
telecommunications companies was not preempted
by state and federal telecommunications statutes to
the extent that it reasonably regulated what happened
on the ground within the rights-of-way, such as
construction procedures, relocation of facility
procedures, and the like. Federal
Copr. ((;J West 2000 No Claim to Orig. U.S. GOVL Works
42 F.Supp.2d 1304
(Cite as: 42 F.Supp.2d 1304)
Telecommunications Act of 1996. 47 U.S.C.A. S
253; West's F.S.A. SS 337.401, 364.01.
[3] MUNICIPAL CORPORATIONS~ 592(1)
2681092( I)
Provision of a city ordinance imposing general
conditions on the use of public rights-of-way by
telecommunications companies was not preempted
by state and federal telecommunications statutes to
the extent that it reasonably regulated what happened
on the ground within the rights-of-way, such as
construction procedures, relocation of facility
procedures, and the like. Federal
Telecommunications Act of 1996, 47 U.S.CA. S
253; West's F.S.A. SS 337.401, 364.01.
[3] TELECOMMUNlCATIONS~ 77.1
372k77.1
Provision of a city ordinance imposing general
conditions on the use of public rights-of-way by
telecommunications companies was not preempted
by state and federal telecommunications statutes to
the extent that it reasonably regulated what happened
on the ground within the rights-of-way, such as
construction procedures, relocation of facility
procedures, and the like. Federal
Telecommunications Act of 1996, 47 U.S.CA. S
253; West's F.S.A. SS 337.401, 364.01.
[4] MUNICIPAL CORPORATIONS~ 53
268103
Provision of a city ordinance imposing general
conditions on the use of public rights-of-way by
telecommunications companies was preempted by
state and federal telecommunications statutes to the
extent that it empowered the city to request
information regarding systems, plans, or purposes of
telecommunications facilities. Federal
Telecommunications Act of 1996, 47 U.S.CA. S
253; West's F.S.A. SS 337.401, 337.401(6),
364.01.
[4] MUNICIPAL CORPORATIONS~ 592(1)
2681092(1 )
Provision of a city ordinance imposing general
conditions on the use of public rights-of-way by
telecommunications companies was preempted by
state and federal telecommunications statutes to the
extent that it empowered the city to request
information regarding systems, plans, or purposes of
telecommunications facilities. Federal
Telecommunications Act of 1996, 47 U.S.CA. S
253; West's F.S.A. SS 337.401, 337.401(6),
Page II
364.01.
[4] TELECOMMUNlCATIONS~ 77.1
372k77. I
Provision of a city ordinance imposing general
conditions on the use of public rights-of-way by
telecommunications companies was preempted by
state and federal telecommunications statutes to the
extent that it empowered the city to request
information regarding systems, plans, or purposes of
telecommunications facilities. Federal
Telecommunications Act of 1996, 47 U.S.C.A. S
253; West's F.S.A. SS 337.401, 337.401(6),
364.01.
[5] MUNICIPAL CORPORATIONS~ 53
268k53
Provision of a city ordinance imposing
indemnification, insurance, bonding, and security
requirement on telecommunications companies
wishing to use public rights-of-way was not
preempted by state and federal telecommunications
statutes. Federal Telecommunications Act of 1996,
47 U.S.CA. S 253; West's F.S.A. SS 337.401,
364.01.
[5] MUNICIPAL CORPORATIONS~ 592(1)
268k592( 1)
Provision of a city ordinance imposing
indemnification, insurance, bonding, and security
requirement on telecommunications companies
wishing to use public rights-of-way was not
preempted by state and federal telecommunications
statutes. Federal Telecommunications Act of 1996,
47 U.S.CA. S 253; West's F.S.A. SS 337.401,
364.01.
[5] TELECOMMUNlCA TIONS~ 79
372k79
Provision of a city ordinance imposing
indemnification, insurance, bonding, and security
requirement on telecommunications companies
wishing to use public rights-of-way was not
preempted by state and federal telecommunications
statutes. Federal Telecommunications Act of 1996,
47 U.S.CA. S 253; West's F.S.A. SS 337.401,
364.01.
[6] MUNICIPAL CORPORATIONS~ 53
268k53
Enforcement and remedies provision of a city
ordinance governing the use of public rights-of-way
by telecommunications companies was not itself
Copr. <!J West 2000 No Claim to Orig. U.S. Govt. Works
42 F.Supp.2d 1304
(Cite as: 42 F.Supp.2d 1304)
preempted by state and federal telecommunications
statutes. though the city could not use it to enforce
other provisions of the ordinance that were
preempted. Federal Telecommunications Act of
1996. 47 U.S.C.A. S 253; West's F.S.A. SS
337.401, 364.01.
[6] MUNICIPAL CORPORATIONS<e;= 592(1)
268k592(1 )
Enforcement and remedies provision of a city
ordinance governing the use of public rights-of-way
by teleconununications companies was not itself
preempted by state and federal telecommunications
statutes, though the city could not use it to enforce
other provisions of the ordinance that were
preempted. Federal Telecommunications Act of
1996, 47 U.S.C.A. S 253; West's F.S.A. SS
337.401,364.01.
[6] TELECOMMUNlCATIONS<e;= 77.1
372k77.1
Enforcement and remedies provision of a city
ordinance governing the use of public rights-of-way
by telecommunications companies was not itself
preempted by state and federal telecommunications
statutes, though the city could not use it to enforce
other provisions of the ordinance that were
preempted. Federal Telecommunications Act of
1996, 47 U.S.C.A. S 253; West's F.S.A. SS
337.401,364.01.
[7] MUNICIPAL CORPORATIONS<e;= 53
268k53
Transitional provisions of a city ordinance governing
the use of public rights- of-way by
teleconununications companies were not preempted
by state and federal telecommunications statutes,
except to the extent that they conflicted with the state
statute regarding providers lawfully occupying
rights-of-way. Federal Telecommunications Act of
1996, 47 U.S.C.A. S 253; West's F.S.A. SS
337.401,337.401(7),364.01.
[7] MUNICIPAL CORPORATIONS<e;= 592(1)
268k592( I)
Transitional provisions of a city ordinance governing
the use of public rights- of-way by
telecommunications companies were not preempted
by state and federal telecommunications statutes,
except to the extent that they conflicted with the state
statute regarding providers lawfully occupying
rights-of-way. Federal Telecommunications Act of
1996, 47 U.S.C.A. S 253; West's F.S.A. SS
Page 12
337.401,337.401(7),364.01.
[7] TELECOMMUNlCATIONS<e;= 77.1
372k77.1
Transitional provisions of a city ordinance governing
the use of public rights- of-way by
telecommunications companies were not preempted
by state and federal telecommunications statutes,
except to the extent that they conflicted with the state
statute regarding providers lawfully occupying
rights-of-way. Federal Telecommunications Act of
1996, 47 U.S.C.A. S 253; West's F.S.A. SS
337.401,337.401(7),364.01.
[8] MUNICIPAL CORPORATlONS<e;= 592(1)
268k592(1 )
Provision of a city ordinance governing franchise
applications by telecommunications companies was
preempted by state law and exceeded the scope of
municipal authority to the extent that it commanded
the applicant to submit proof of its financial,
technical, and legal qualifications. West's F.S.A. S
337.401(7).
[8] TELECOMMUNlCATIONS<e;= 79
372k79
Provision of a city ordinance governing franchise
applications by telecommunications companies was
preempted by state law and exceeded the scope of
municipal authority to the extent that it commanded
the applicant to submit proof of its linancial,
technical, and legal qualifications. West's F.S.A. S
337.401(7).
[9] MUNICIPAL CORPORATIONS<e;= 53
268k53
Provision of a city ordinance governing franchise
applications by telecommunications companies was
not preempted by state and federal law to the extent
that it directly related to the construction of a
telecommunications facility and sought descriptions
of how the new facility would fit into the affected
public rights-of-way. Federal Telecommunications
Act of 1996, 47 U.S.C.A. S 253; West's F.S.A. SS
337.401,337401(7),364.01.
[9] MUNICIPAL CORPORATIONS<e;= 592(1)
268k592(1 )
Provision of a city ordinance governing franchise
applications by telecommunications companies was
not preempted by state and federal law to the extent
that it directly related to the construction of a
telecommunications facility and sought descriptions
Copr. ~ West 2000 No Claim to Orig. U.S. Govt. Works
42 F.Supp.2d 1304
(Cite as: 42 F.Supp.2d 1304)
of how the new facility would fit into the affected
public rights-of-way. Federal Telecommunications
Act of 1996, 47 U.S.C.A. ~ 253; West's F.S.A. ~~
337.401,337.401(7),364.01.
[9] TELECOMMUNlCA TIONS~ 79
372k79
Provision of a city ordinance governing franchise
applications by teleconununications companies was
not preempted by state and federal law to the extent
that it directly related to the construction of a
telecommunications facility and sought descriptions
of how the new facility would fit into the affected
public rights-of-way. Federal Telecommunications
Act of 1996, 47 U.S.C.A. ~ 253; West's F.S.A. ss
337.401, 337.401(7), 364.01.
[10] MUNICIPAL CORPORATIONS~ 592(1)
268k592( I)
Provision of a city ordinance governing franchise
applications by telecommunications companies was
preempted by state law to the extent that it allowed
the city to review an applicant's qualifications.
West's F.S.A. ~ 337.401(7).
[10] TELECOMMUNICA TIONS~ 79
372k79
Provision of a city ordinance governing franchise
applications by telecommunications companies was
preempted by state law to the extent that it allowed
the city to review an applicant's qualifications.
West's F.S.A. S 337.401(7).
[H] MUNICIPAL CORPORATIONS~ 53
268k53
Compensation subsection of a provision of a city
ordinance governing franchise applications by
telecommunications companies was preempted by
state and federal law. except to the extent that it
mandated that the compensation paid be publicly
disclosed by the city. Federal Telecommunications
Act of 1996, 47 U.S.C.A. SS 253, 253(c); West's
F.S.A. SS 337.401, 337.401(3, 4), 364.01.
[H] MUNICIPAL CORPORATIONS~ 592(1)
268k592( I)
Compensation subsection of a provision of a city
ordinance governing franchise applications by
telecommunications companies was preempted by
state and federal law, except to the extent that it
mandated that the compensation paid be publicly
disclosed by the city. Federal Telecommunications
Act of 1996, 47 U.S.C.A. SS 253, 253(c); West's
Page 13
F.S.A. SS 337.401, 337.401(3, 4), 364.01.
[H] TELECOMMUNlCATIONS~ 79
372k79
Compensation subsection of a provision of a city
ordinance governing franchise applications by
telecommunications companies was preempted by
state and federal law. except to the extent that it
mandated that the compensation paid be publicly
disclosed by the city. Federal Telecommunications
Act of 1996, 47 U.S.C.A. ~S 253, 253(c); West's
F.S.A. SS 337.401, 337.401(3, 4), 364.01.
[12] MUNICIPAL CORPORATIONS~ 53
268k53
Provision of a city ordinance governing franchise
applications by telecommunications companies was
not preempted by state and federal law to the extent
that it required a franchisee to comply with any
universal service plan the city may adopt. Federal
Telecommunications Act of 1996, 47 U.S.C.A. ~~
253, 253(b); West's F.S.A. SS 337401,
337.401(6),364.01.
[12] MUNICIPAL CORPORATIONS~ 592(1)
268k592( I)
Provision of a city ordinance governing franchise
applications by telecommunications companies was
not preempted by state and federal law to the extent
that it required a franchisee to comply with any
universal service plan the city may adopt. Federal
Telecommunications Act of 1996, 47 U.S.C.A. SS
253, 253(b); West's F.S.A. ~~ 337.401,
337.401(6), 364.01.
[12] TELECOMMUNlCATIONS~ 79
372k79
Provision of a city ordinance governing franchise
applications by telecommunications companies was
not preempted by state and federal law to the extent
that it required a franchisee to comply with any
universal service plan the city may adopt. Federal
Telecommunications Act of 1996, 47 U.S.C.A. SS
253, 253(b); West's F.S.A. ~~ 337.401,
337.401(6),364.01.
[13] CONSTITUTIONAL LAW~ 120
92kl20
Forced buyout provision of a city ordinance
governing telecommunications companies, under
which the city sought to acquire a
telecommunications company's facilities in the city's
rights-of-way, was not a contract protected by the
Copr. ~ West 2000 No Claim to Orig. U.S. Govt. Works
42 F.Supp.2d 1304
(Cite as: 42 F.Supp.2d 1304)
Contracts Clause; thus, subsequent changes in state
and federal law could, and did, operate to invalidate
the provision by preemption. U.S.C.A. Canst. An.
I, S 10, cl. I; Federal Telecommunications Act of
1996, 47 U.S.C.A. S 253; West's F.S.A. SS
337.401, 364.01.
[13] MUNICIPAL CORPORATlONS<O:= 53
268k53
Forced buyout provision of a city ordinance
governing telecommunications companies, under
which the city sought to acquire a
telecOmn1unications company's facilities in the city's
rights-of-way, was not a contract protected by the
Contracts Clause; thus, subsequent changes in state
and federal law could, and did, operate to invalidate
the provision by preemption. U.S.C.A. Canst. An.
I, S 10, cl. I; Federal Telecommunications Act of
1996, 47 U.S.C.A. S 253; West's F.S.A. SS
337.401,364.01.
[13] MUNICIPAL CORPORATlONS<O:= 592(1)
268k592(l )
Forced buyout provision of a city ordinance
governing telecommunications companies, under
which the city sought to acquire a
telecommunications company's facilities in the city's
rights-of-way, was not a contract protected by the
Contracts Clause; thus, subsequent changes in state
and federal law could, and did, operate to invalidate
the provision by preemption. U.S.C.A. Canst. Art.
I, S 10, cl. I; Federal Telecommunications Act of
1996, 47 U.S.C.A. S 253; West's F.S.A. SS
337.401, 364.01.
[13] TELECOMMUNlCATlONS<O:= 79
372k79
Forced buyout provision of a city ordinance
governing telecommunications companies, under
which the city sought to acquire a
telecommunications company's facilities in the city's
rights-of-way. was not a contract protected by the
Contracts Clause; thus, subsequent changes in state
and federal law could, and did, operate to invalidate
the provision by preemption. U.S.C.A. Canst. An.
1, S 10, cl. I; Federal Telecommunications Act of
1996, 47 U.S.C.A. S 253; West's F.S.A. SS
337.401,364.01.
[14] INJUNCTlON<O:= 22
212k22
There was no need to enjoin a city from enforcing
the preempted provisions of a telecommunications
Page 14
ordinance once a declaratory judgment had been
issued that left intact only those provisions of the
ordinance which were not preempted.
'1306 Thomas A. Dye, Miami, FL, for plaintiff.
John R. Hargrove, Thomas A. Dye, Heinrich
Gordon Hargrove Weibe & James, Fan Lauderdale,
FL, Kerry Lee Ezral, Josias Goren Cherof Doody &
Ezrol PA, Fan Lauderdale, FL, Valerie J. Manin,
Office of the Atty. Gen., Fan Lauderdale, FL,
Dorian Sue Denburg, Fred Ashmore Walters,
BellSouth Telecommunications Legal Dept., Atlanta,
GA, Frederick E. Dooley, William L. Lowery,
Miller & Van Eaton, Washington, DC, for
defendant.
OMNIBUS ORDER ON SUMMARY JUDGMENT
DIMITROULEAS, District Judge.
THIS CAUSE is before the Coun upon various
motions filed by the panies, including Bellsouth's
Motion for Summary Judgment [DE 42], City of
Coral Springs' s Cross- Motion for Summary
Judgment [DE 51], Bellsouth's Motion for Stay [DE
64], Bellsouth's Motion to Strike [DE 65], City of
Coral Springs's Motion for Leave to File
Supplemental Motion [DE 81], both parties'
discovery- related motions, and Bellsouth's Motion
to Continue [DE 108]. The Court has carefully
considered the motions and the entire file herein, and
is otherwise fully advised in the premises.
I. BACKGROUND
Bellsouth.s Complaint in this action seeks a
declaratory judgment and injunctive relief striking
down Ordinance 97-114 of the defendant City of
Coral Springs ("City"). Bellsouth argues that the
Ordinance is preempted by federal and state law, as
well as unconstitutional under the Florida and United
States Constitutions as an impairment of contract,
violation of equal protection and violation of due
process. '1307 The City assens that Ordinance
97-114 is valid and asserts counterclaims alleging
Bellsouth's failure to perform under Ordinance
97-114 and alleges breach of contract under a 1965
contract (Ordinance 106) between Bellsouth's
predecessor-in-interest and the City regarding
Bellsouth's use of the City's rights-of-way and the
City's option to purchase Bellsouth's facilities in the
rights-of-way after thirty years. In particular, the
City alleges Bellsouth has breached the 1965
contract/ordinance by frustrating the City's option to
Copr. i1;J West 2000 No Claim to Orig. U.S. Govt. Works
42 F.Supp.2d 1304
(Clle as: 42 F.Supp.2d 1304, "1307)
purchase the telephone-related property used in
connection with the City's grant to Bellsouth of the
right to use the City's right-of-way. The City
alleges that Bellsouth has refused to cooperate to
evaluate the property in the right-of-way necessary
to effectuate the City's purchase under the 1965
contract/ordinance. Both sides have filed motions
for summary judgment on the issues presented by the
complaint.
11. DISCUSSION
This case concerns the interaction between federal
and state preemption of the regulation of the
telecommunications field and the historical power of
local governments to control what happens within
local rights-of-way. Within the last few years, both
the United States Congress and the Florida
Legislature governments have enacted sweeping
telecommunications reform legislation. These
statutes, while preempting local control over
telecommunications in general, explicitly excluded
from preemption local control over rights-of-way.
A. Federal Law
In 1996, Congress enacted the Federal
Telecommunications Act of 1996 ("FTA"). The
relevant section of the FT A for this case is 47
U.S.C. ~ 253 (1999), [FNI] which provides:
FN 1. All statutory cites are to 1999.
(a) In general
No State or local statute or regulation, or other
State or local legal requirement, may prohibit or
have the effect of prohibiting the ability of any
entity to provide any interstate or intrastate
telecommunications service.
(b) State regulatory authority
Nothing in this section shall affect the ability of a
State to impose, on a competitively neutral basis
and consistent with section 254 of this section,
requirements necessary to preserve and advance
universal service, protect the public safety and
welfare, ensure the continued quality of
telecommunications services, and safeguard the
rights of consumers.
(c) State and local government authority
Nothing in this section affects the authority of a
State or local government to manage the public
rights-of-way or to require fair and reasonable
compensation from telecommunications providers,
Page 15
on a competitively neutral and nondiscriminatory
basis, for use of public rights-of-way on a
nondiscriminatory basis, if the compensation
required is publicly disclosed by such government.
In Section 253, Congress made a distinction
between the authority of states in subsection (b) and
local governments in subsection (c). While states
may regulate universal service. protect consumers,
ensure quality and protect the public safety and
welfare, local governments can only manage the
public rights- of-way, unless of course a state
specifically delegated the state authority to its local
governments,- AT & T Communications v. City of
Dallas, 8 F.Supp.2d 582, 591 (N.D. Texas 1998).
[FN2]
FN2. In applying this law to this case, the Court
will follow the well- reasoned opinion of the
Honorable Jerry Buchmeyer, Chief Judge of the
Northern District of Texas, in AT & T
Communications v. City of Dallas.
The City of Dallas opinion in turn relies upon the
analysis in AT & Tv. City of Austin, 975
F.Supp. 928 (W.D.Tex.t997). While the
defendant City herein correctly distinguishes the
facts of City of Austin, the opinion in City of
Dallas is relevant to this case. In City of Austin,
the telecommunications provider that sought entry
was "non-facility based." 975 F.Supp. at 934.
That is, it was not going to even use the rights-of-
way. However, in City of Dallas, the plaintiff
telecommunications provider sought to provide
local phone service by using the City's rights-of-
way, a similar situation as in this case. 8 F.Supp.
at 587. ([he fact that the case at bar involves the
incumbent Local Exchange Carrier ("LEC"),
while City of Dallas concerned a competitor to the
incumbent LEe, is irrelevant, as Congress
specifically stated in subsection 253(c) that local
government rights-of-way regulation must be non-
discriminatory. )
"1308 In determining what "manage the public
rights-of-way" in federal law means as applied to
Ordinance 97-114, this Court will look to the
opinion of the agency charged with interpreting and
enforcing the FT A. the Federal Communications
Commission ("FCC"). The FCC has stated:
We recognize that section 253(c) preserves the
authority of state and local governments to manage
public rights-of-way. Local governments must be
allowed to perform the range of vital tasks
necessary to preserve the physical integrity of
streets and highways, to control the orderly flow
Copr. <Q West 2000 No Claim to Orig. U.S. Govt. Works
42 F.Supp.2d 1304
(Cite as: 42 F.Supp.2d 1304, *1308)
of vehicles and pedestrians, to manage gas, water,
cable (both electric and cable television), and
telephone facililies that crisscross the streets and
public rights-of-way. We have previously
described the types of activities that fall within the
sphere of appropriate rights-of-way management
in both the Classic Telephone Decision and the
OVS Orders, and that analysis of what constitutes
appropriate rights-of-way management continues
to set the parameters of local authority. These
matters include coordination of construction
schedules, determination of insurance, bonding
and indemnity requirements, establishment and
enforcement of building codes, and keeping track
of the various systems using the rights-of- way to
prevent interference between them.
In re TCI Cablevision of Oakland County, [nc., 12
F.C.C.R. 21396, 1997 WL 580831 (F.C.C.1997),
at ~ 103. [FN3] (Cited with approval in City of
Dallas, 8 F.Supp.2d at 591-92.)
FN3. See also the Classic Telephone decision, in
which the FCC stated that a city may only justify a
local statute, regulation, or other legal requirement
if it can show that the requirement is "an exercise
of public rights-of-way management authority or
the imposition of compensation requirements for
the use of such rights of way." II F.C.C.R.
13082, at ~ 40.
B. State Law
The State of Florida has generally delegated power
over telecommunication companies to the Public
Service Commission ("PSC"), a statewide
administrative agency. Fla. Stat. S 364.01. This
exclusive jurisdiction of the PSC preempts local
control over telecommunication companies, except
for the regulation of use of rights-of-way and
collection of a reasonable fee for the use thereof.
Fla. Stat. S 364.01(2); Fla. Stat. S 337.401. [FN4]
However, state law further restricts municipal
regulation of telecommunication companies by
limiting the fee allowed to be collected by
municipalities from telecoITUllunications companies
for the granting of permission to occupy municipal
rights-of-way to one percent of the gross receipts on
recurring local service revenue for services provided
within the corporate limits of the municipality. Fla.
Stat. S 337.401(3) and (5). In addition, in 1998, the
Florida legislature amended this section to explicitly
forbid local governments from "asserting or
exercising regulatory control" over
telecollUllunications companies regarding operations,
systems, qualifications. services, service quality,
Page 16
service territory, and pricing. Fla. Stat. 9
337.401(6). Finally, this t998 amendment also
made clear that any telecommunications company
that has obtained permission to occupy or is
otherwise lawfully occupying the roads or rights-of-
way of a city on May 22, 1998, "shall not be
required to obtain additional consent to continue
such lawful occupation of those roads or rights- of-
way," except that a city may impose a fee or
reasonably regulate *1309 the use of the rights-of-
way. Fla Stat. Ii 337.401(7).
FN4. Local governments also have the power to
tax the use of telecommunication services. Fla.
Stat. ~ 166.231(9). That provision is not relevant
to this discussion.
The Supreme Court of Florida has recognized that
telephone companies have the right to use the public
roads and highways of Florida. Southern Bell Tel.
& Tel. Co. v. Ervin, 75 So.2d 796, 798 (Fla. 1954).
This right is conditioned on the responsibility not to
obstruct or interfere with the use of the rights-of-
way. [d. at 799. As it turns out, this 1954 holding
is consistent with the recent federal and state
legislation limiting regulation of telecommunications
by local governments to reasonable regulation of the
rights- of-way.
C. Ordinance 97-114
As outlined above, while federal and state law
preempt local control over telecommunication
companies, both Congress and the Florida legislature
specifically excluded from preemption municipal
control over rights-of-way. [n addition, both state
and federal law allow municipalities to collect a 1 %
gross receipts fee from teleconununication
companies that use rights-of-way in that locality.
Thus, both Bellsouth and the Citys' arguments
regarding Ordinance 97-114 prove too much.
Following the plain language of both the state and
federal statutes, and Chief Judge Buchmeyer's
opinion in City of Dallas, this Court holds that the
City of Coral Springs can only regulate the use of its
rights-of-way, and cannot collect more than one
percent of the gross receipts on recurring local
service revenue for services provided within the city
limits. Thus, those parts of Ordinance 97-114 that
do not deal directly with managing the rights-of-way
must be struck down on grounds of preemption.
[FN5]
Copr.1iJ West 2000 No Claim to Orig. U.S. Govt. Works
42 F.Supp.2d 1304
(Cite as: 42 F.Supp.2d 1304, .1309)
FN5. Thus, in keeping wilh traditional notions of
avoiding constitutional determinations when
possible. this Court's opinion rests upon statutory
preemption. rather than the alternative
constitutional grounds asserted by Bellsouth.
[I] Section 20-2. Franchise Required: [FN6] This
section is valid, but limited, as the grant of a
franchise must only be conditioned on a
telecommunications company's agreement to comply
with the City's reasonable regulations of its rights-
of-way and the fees for use of those rights-of-way.
City of Dallas, 8 F.Supp.2d 582, 592-93.
FN6. Exhibit A to Bellsouth's Motion for
Summary Judgment contains the ordinance at
issue. This was the only copy of the ordinance the
Court could find in the record. While this is not a
certified copy of the ordinance, the Court
researched the text of ordinance and found it the
same as the version maintained by the Municipal
Code Corporation (www.municode.com >).
[2] Section 20-3. Compensation Required: This
section clearly goes beyond state law which limits
the allowable fee to one percent of the gross receipts
on recurring local service revenue for services
provided within the corporate limits of the
municipality. Fla. Stat. !i 337.401(3) and (5).
Thus, the only valid sections of Section 20-3 are
subsection (4) and subsection (5), except for
subsection (5)(D). Subsection (4) concerns
applications for different types of services,
potentially both telecommunications and non-
telecommunications. Subsection (5) concerns
general procedural rules for payment of the fee, with
the exception of subsection (5)(D), which deals with
the amount of the fee, which this Court holds is
limited by state law as described above.
[3][4] Section 20-4. General Conditions Upon Use
of Rights-of-Way: This section is valid with the
exception of the second sentence of subsection (4).
Section 20-4 as a whole is the reasonable regulation
of what happens on the ground within the rights-of-
way, such as construction procedures, relocation of
facility procedures, etc. This regulation is excluded
from preemption by both federal and state law. The
only exception within Section 20-4 is the second
sentence of subsection 20-4(4). While the City may
inspect facilities within the rights-of-way, the City
does not have the authority to request information
regarding systems, plans, or purposes of the
telecommunications facilities. See Fla. Stat. 9
Page 17
337.401(6). Such investigation into future plans of a
telecommunications .1310 provider go beyond the
allowable reasonable regulation of the management
of the rights-of-way.
[5] Section 20-5. Protection of the City and
residents: This section is valid in its entirety. This
section concerns indemnification, insurance, bonding
and security funds that fall within the FCC's
interpretation of "managing the rights-of-way." In
re TCl Cablevision of Oakland County, Inc., 12
F.C.C.R. 21396, at ~ 103 (F.C.C.1997) (citing In re
Classic Telephone, Inc., II F.C.C.R. 13082, at ~ 39
(F.C.C.1996)). These requirements clearly are part
of modem construction practices, and should be
considered as part of managing rights-of-way.
[6] Section 20-6. Enforcement and Remedies: This
section is also valid in its entirety. This section
provides the mechanism for the City to enforce this
Ordinance. However, the City cannot use these
provisions to enforce any part of the Ordinance
deemed preempted by this opinion.
[7] Section 20-7. Transitional Provisions: This
Section is also valid in its entirety. Of course, to the
extent that these transitional provisions conflict with
Florida Statutes Section 337.401(7) regarding
providers lawfully occupying the rights-of-way in
Coral Springs, the state law will prevail. However,
the Court notes that even this subsection of the state
law specifically states that "nothing in this subsection
shall be interpreted to limit the power of a
municipality to impose a fee or adopt or enforce
reasonable rules or regulations as provided in this
section. "
[8][9] Section 20-21. Special Rules Applicable to
Telecommunications Facilities and
Telecommunications Service Providers: [FN7] This
Section has several provisions which are preempted
by federal and state law. Subsection (I) concerns
the contents of an application for a franchise.
Subsections (I)(C), (D) and (E) impose a
requirement that the applicant submit proof of its
financial, technical, and legal qualifications. This
type of requirement is preempted by Florida Statutes
Section 337.401(7) which reserves to the Public
Service Commission the regulation of
"qualifications." In addition, the City of Dallas
opinion specifically holds that such requirements are
unrelated to the use of the rights-of-way, and thus
beyond the scope of municipal authority. 8
Copr. rg West 2000 No Claim to Orig. U.S. Govt. Works
42 F.Supp.2d 1304
(Cite as: 42 F.Supp.2d 1304, .1310)
F.Supp.2d at 593. On the other hand, subsection
(1 )(B) relates directly to the construction of a
telecommunications facility, and seeks descriptions
of how the new facility fits into the affected rights-
of-way, a reasonable regulation of the use of rights-
of-way.
FN7. Section 20-8. Special Rules for Government
Entities is not applicable to this lawsuit.
[1OJ Subsection (4)(A) also offends state law as it
allows the City to review an applicant's
qualifications when reviewing a franchise
application. As stated above, the City's grant of a
franchise must only be conditioned on a
telecommunications company's agreement to comply
with the City's reasonable regulations of its rights-
of-way and the fees for use of those rights-of-way.
[11] Subsection (5) concerns compensation, and
thus all of subsection 20- 21(5) must fail as state law
limits such compensation, with the exception of
subsection 20-2l(5)(E) mandating that the
compensation paid must be publicly disclosed by the
City. As discussed above, the only fees that may be
required are the one percent fee in Section
337.401(3) and the construction fee allowed by
Section 337.401(4). Federal law, on the other hand,
mandates that the fees paid be publicly disclosed by
the City. 47 U.s.C. ~ 253(c).
[12] Subsection (6), entitled "Additional franchise
requirements," must fail as well. Universal service
is specifically reserved to the state government by
the FfA in 47 U.S.C. ~ 253(b). While states could
delegate such authority to local governments, Florida
has not done so. City of Dallas, 8 F.Supp.2d at 591.
Rather, Florida law gives the exclusive authority
over "services" to the Public Service Commission.
.1311 Fla. Stat. Section 337.401(6). Thus, Coral
Springs cannot include within a franchise the
reservation to comply with any universal service
plan the City may adopt.
Therefore, a declaratory judgment shall issue
precluding enforcement of the parts of Ordinance
97-114 that are preempted by federal or state law.
The Court's separately entered declaratory judgment
shall be based upon this above analysis regarding
Ordinance 97-114.
D. Counterclaims
Page 18
[13] The Court notes that the preemption analysis in
this opinion applies to the 1965 contract/ordinance.
The Court also notes that Bellsouth' s motion for
swnmary judgment in footnote 1 seeks a ruling as a
matter of law on Counts I and 11 of the
counterclaims. [FN8] While the Court disagrees
with the reason stated in Bellsouth's footnote, the
Court will grant summary judgment to Bellsouth on
the City's counterclaims as well. [FN9]
FN8. Thus. Bellsouth's Motion to Stay the
Counterclaims is hereby denied. The Court notes
that Count III of the Counterclaim merely asserts
the City's rights under Ordinance 97-114. Thus,
summary judgment on Count III is appropriate
given the cross-motions for summary judgment on
Bellsouth's claims against Ordinance 97-114. For
the reasons stated above, the Court will grant in
part summary judgment for Bellsouth on Count III
of the City's counterclaim.
FN9. Bellsouth argues that the agreement has
expired. However, the City did seek the valuation
information under the contract prior to its
expiration.
Counts I and 2 of the City's counterclaims seek
damages and specific performance based upon
Ordinance 106, the 1965 "contract" between the City
and Bellsouth. The City seeks to enforce the
valuation and buy-out provision to acquire
Bellsouth's facilities in the rights-of-way of Coral
Springs. Obviously, this government takeover of a
telecommunications facilities is way beyond the
contemplation of current federal and state law.
While the City may argue that Bellsouth freely
contracted in 1965 to give the City this buyout
option, Ordinance 106 is not a contract between two
private parties. The "contract" in this case is a
municipal ordinance, subject to later preemption by
changes in state and federal law, and not protected
by the Contracts Clause of the Constitution. Thus,
as discussed above, Ordinance 106 can only stand if
it regulates the use of the rights-of-way and is not a
barrier to the provision of telecommunications
service. Clearly, the buy-out provision of Ordinance
106 will prohibit Bellsouth from providing such
service in the City, and is not a reasonable
regulation to manage the rights-of~way.
Therefore, the forced buy-out provIsIOn of
Ordinance 106 cannot be enforced by the City, as
federal and state law now preempt such authority by
Copr. <0 West 2000 No Claim to Orig. U.S. Govt. Works
42 F.Supp.2d 1304
(Cite as: 42 F.Supp.2d 1304, *1311)
a local government. Therefore, the City's
counterclaims fail as a matter of law, and the Court
hereby grants summary judgment on the City's
counterclaims to Bellsouth.
E. Discovery Motions
As the Court has now resolved the merits of all
claims and counterclaims in this case, the Court will
deny all pending discovery motions as moot. [FNIO]
The Court notes that Bellsouth' s discovery related to
the motivations behind the City's enactment of
Ordinance 97-114 are irrelevant, since the
Ordinance stands or falls upon its plain language and
whether or not it conflicts with the plain language of
federal and state law. Similarly, the City's motions
to compel motions are also moot, as the Court's
declaratory judgment resolves all issues relating to
the various provisions of Ordinance 97-114.
FN 10. The Court notes that earliest pending
motion to compel [DE 63, filed by the Cityl was
filed after briefing on the summary judgment
motions was complete.
F. Relief
[14] The only remammg question is what relief
should be granted to Bellsouth. Bellsouth seeks both
a declaratory judgment and injunctive relief. The
City argues *1312 that it has not enforced the new
ordinance, and thus injunctive relief is not proper.
The Court will issue a declaratory judgment, which
it believes moots the issue of injunctive relief.
Page 19
Because the declaratory judgment leaves intact only
the reasonable regulation of the rights-of-way
provisions of Ordinance 97-114, there is no need to
enjoin actions not taken by the City. and no need to
enjoin actions this Court has deemed beyond the
scope of the City's enforcement authority in the area
of telecommunications regulation. The City cannot
enforce provisions in an ordinance that have been
deemed preempted by federal or state law.
III. CONCLUSION
Accordingly, for the reasons expressed above. it is
ORDERED AND ADJUDGED as follows:
1. Bellsouth's Motion for Sununary Judgment [DE
42] is hereby GRANTED in part and DENIED in
part;
2. The City's Cross-Motion for Summary
Judgment [DE 51] is hereby DENIED in part and
GRANTED in part;
3. Bellsouth's Motion for Stay [DE 64] is hereby
DENIED;
4. Bellsouth's Motion to Strike [DE 65] is hereby
DENIED;
5. The City's Motion for Leave to File
Supplemental Motion [DE 81] is hereby DENIED.
The Court's opinion rests on statutory preemption
grounds, not the constitutional grounds which the
City's supplemental memo addressed;
6. The remaining discovery motions [DE 63, 83-1,
83-2, 87-1, 87-2, 90, and 91] are hereby DENIED
as moot.
END OF DOCUMENT
Copr. Ii;) West 2000 No Claim to Orig. U.S. Gov!. Works
01/13/00 12: 02
'0'
\. '09 ~,:; 99 10: 43
"04 6589Q;22
NO.976 P002/017
NO.88l'! P~ll'!.'I!l2S
"'...- .......- ...-......
11'.11'" 1l,1"~ III1l1-.,'N'''. foIl.D """0" ",. l'.I
114.110.1'"
,.... "1'" ,.",
UNlTW Sf A ns P/STJUCT eOUllT
SOUTHERN DISTfUCT OF FLOIUDA
CAS!; l'lO, tI.I2U<:JY-I)IMIT1lD~aAS
utLSOUTH nL.!COMMllNTCATIONS. tNe.,
'11.10
o,c.
I'lainlil'l'l
afP 2 . ""
"t.
TOWN OF PALM BEACH. fLOIUDA.
"i'.:'3~. .1'."-....
. .'
. '.
Dcfcraclllll,
I
O~~RG1:~~~~':.~~l'lp~~~~lf~~~~ ':c~~::'':. ~ I=~~~ ~~J..NJr
THIS CAUSE "/II.blfar. lIIe Colin lIpon Plaintirra MOUoII far SurMIItY Jlldpntlll
(DE 16], Defendanl's Morio" for SlImnIII'Y JWlplent [DE 18), Dermdlllr'a MODon 10 Conrinlll
Trill OIIC lD~ 561111d Plainlirr. MCllion 10 Canlinu' Tri,1 Call1DE 58), The CalU1 hu
cvcrully C:C1nsidcred 1M mOliona and IIle nllR file "min. 11I4 il olhawiae ~Ily Idviaed in Il1c
premiscl.
.
.
J. BACKGROUND
Belllo\llll'a Camplailll in WI "lion "ok. I dOGllnlary jllllprllllll UI4 iIljlltICcve relief
slrikinl 40wn OrcSinlllCC 16.07 ("Ordinanu") C1f1l11 dclcndUll TaWIl ofPalJD Be"" ("Town").
Bclllolllh VIIIII 11111 IlIc OnIiTllll" ill pn:clllptod by fcd~ Uld IlIIC I,w, u WCIIM belnl
. "
lIn~onilinllion.lllI\clc.lhc Flori4a Uld Uailccl $1&\0, Cc",lilllrioM .. III 'l'IIJIairm.nl or CClllInC'.
..iollliOll If e4lllal PlOlClClion, \/iCllalion of duc pnlCen. 'lialalign or c1clCllltcl powel'l. vialllion Dr
Co\1Wlcn:c CIIIII., and . pull ofllnllwfUl purple_.. TIIc Tc"", _RIIIlII rtlc Ordil\llW:c,
'onccmin8 iii. r'I\Il&licn of IlIe IIIC of rilllll.of-way bt1cleo:gnllll\llliClliol\li Ilmee, optn vi4eo
S)lslclN. and n~lc 1.I.viliCln IYllcml, is ..&lid IIId _"II cOllnllrclaim allcPI 8.111011111'1
'.
4~ 6589022
NO.975 P003/017
NO.8B0 P011'B25
01/13/00 12:02
'0~ ~J99 1~:43
.,_ .,Ie:.." .11_0.
"
lIP-/l-1I Dl:IgP~ "O~MlIUIC~ 'OlllOll ~,'''OVI II," ..111
'"-'IHUI
T-." '01'" '-Ill
f.illllc IQ aomply willllllc Ordin_c. Bolli .Ideo MV' f1I..s moao.. ror IIImIftIlY jlld.....'
II. DISCUSSION
nul cu. con.._ Ihe Inll,..Iion bft'O'''''' r..nand llal' lI_pdo" of"" ..pJlliAt"
oC !he lelconvnuniclliol'll I\cllllll4 W hillorie pow" or 1-.lIOYlrM\llIIq 10 COIInl .bat
happenl wit/lill Ioc:al rilhll.of''''IY. Wil!UJlII1.lul flW ,lVI, "III II\; Ullilc4 StaICI enp.
U1d lIIe flondl Le8l.I.run hlv, ",..I.d cwnpinl Itlecollllllw"liana Nr.". ....llalion.
th.1I 'laIIIlCI, _hile prMmplinl local 1:101Ill'01 over 1.I_rMluN~DlII ia pIIII'II. uplici\ly
lllelu4ad fIvm lIrmnption local colla'ol ov'" rip....r...,I)'. nul Court Ilu pNVio..ly ..... -1
Ihew illun in Balhouth v. Cil"tl o{Cal1l] Sprinp. 42 F.Supp. 1304 (S.D.FII. 1999). and ill 11\
order on motiOl\J to .m.nd or a1ler ill !hI CorwJ S"..n.. cue. Th, CoW' oattl that tile iBMut
Ort\inUlce illlllll\Ulullly .lmil.,IO 111. Coral SO';II.. ordinlllc..
4. 'ederlll...
In 1996. Conps INcted tbe Fc4cn1 Tcl"onun1lllic.rionl ~I 01 \ 996 ("n A"). TIll
rclevUlllCCrion orthe PT A ror this cue ii" U.S.C. fZn (\999),1ll1hida provida:
.
(.)lIllrunJ
No SIlIe Of local .IOIIIIC or rll'llalion. or otllcl SlIle or locaIllpI nquirllllall.
IDA)' prohibit or haY, lbe .rr~l or prubibirill. rho ability of lilY anlily 10 pl'Dridl
uy int4ll'll1" or iDlrUI&lr lelcallUlluNclriOlll ..rvil:e.
.
(b) Slife "pillory wlhority
NothiBl iIIl1\il _lion lhall ""act Ib,ltlility or I SI"C IQ illlpolI. 0111
, .... pmnolllly Ilu.rI in ill Order orFIbNUY 4. 19911. m. C0\ll1IlO~11Ida thaI..,..,e
no di'p"IoG IIIIt.crial is_ or Cael ~II\ rcprd 10 lI\e ~halllllle to the ~e II iUlle. n.
OrdillU\C' ",UtI flUid or CIlI blled upon ill plain IMPlc. n,r.rore, rnaMioll or tile dilplllad
le,11 ill"" in lhiI cu, il Ippropri.~ II tile '\IlNlI11)' jlldpnllll '&.Ie wirbDlIl the Deed for
clilcovll\'Y.
'.
I All 'lINlOfY ,iwa are to 11199.
a
4(J.l 65851022
NO.:l76 P004/017
HO.B80 P012/025
01/13/00 12:02
o~:o ~51:l 10: 43
':f':)4 o;,,J4 ~4lIc:U
11'_/1_11 01:001'1I ,.a~1II1.IitM ~IDaw Ii.IlCnil iIlllI JAIl'
11..IU'..ll
r.UI , 'u. r J-'"
oompfrid".ly nevna bu...... CONi,..I,.;1b IOnIDII a'4 0111II..-.1-.
flllllIir."U I\,",~ to p''''''''' ul4 Idvuc.lIlllwlftalIC'VlA. pnn51 1M
pllbli. "'01)1 ud Vi.IIV" 11\IIII' Ill, conMUod ~\lIolil) of ,,1_1IlIIIIIIIiellloN
..""_. IIId u'cpard IIlI ri,lll. of con'll/II'rI.
(c) S.... on4locelIOW..,..unI.llll1oril]/
"'DlIIial in !hil _lion af(ecu 11I0 'lId1ority 0" SIIIO Of local IDVcrM\CIII Ul
m~'I.III' pull lie riFSI-O"W'1 Of Ul r.qul" fair ud rIIIIIllIbl. GOInpl1lIMion
6'0.. "lIcollllftIlftiC.u\ll\ll ptoVldare. 00 . .",Jlt'ili".ly ..1I1n1 ud
non.di.crimillllON bui.. lor lIIe of public ri.hIl4"Way 011 , ~ry
blli.. ihhe compDNIliOIl ,..uired i. plllllie\)' di-,10111d Ity roach pWlMlIIII.
111 S.,QOII 253. eon.- IIIIIIc . dil\illauolIllOlW"" $I lI&*rity 01.... in .._tion
(bllJllllocallOVeftIJIICllta in sublOClion (c), Whilc '\.Itcl m.y rcplatc Illliv.nal'GYtcl. p!'\llen
eo""~. I,,"un qu.lil)llll' prol..,1 Ill. \llIblic ..f~ III' ..,olr".. local 10",",,""'11 elll only
mllll..lbc pllbli~ nlhUl-o'-W'Y, \11\1"1 of cOlll'lC II .lIlOlpCifie.n" d,'olll'OlI \he 11I\1
.lIlhorilY 10 ita IllCl! 10v"""",,II. A 161:T Communication, v CilV "fDlllaI. I F,SUPP.2d 512.
591 (N.D. Tn" 199'),1 In Iddirion. ,inec SeWon 25l(C) \IIIIIIIOI,""llIIO "0'.' ~al
,Oym\ITICnl. .\&let IDIIY premtp, locallov_OIII lulhorit)'. c"CII OVrl' ItI, mlll'arm",1 or
'Publi~ nihll-of.""I",
.
.
I 1Il applyiDI W' 11'11I IIIllIu CU', 0\8 Colin will rollo...lllc WCU.fllllD"" opinion of tIIO
KOllO,ple lOfTY Budlrne)'lI'I. elli.f 11I41c oflhe Nonhem Oil"," \IrTe.u. in 61&I
~o"""u.uealiIlN" Cirv orDlllu... w.lI.. ill ollift opinion If. Relhouth v, CilV ofCflml
'il'rifllll, 4'Z F .511\I.' UCW (S.O,FII. \999).
Tlto C.N o(Oalloo opillioll ill NfJl ,.lin .111110 lIIIIIysi. in ,. TtT y ~iN of .......irI..
975 f.Supp. 9111 (W,p. Tes:. \99'),.~'" dillillpitMblt 011 i\S ,"\I hrn Ibe~'" bu. III
'iN..r .......1iD.1Ile lelCCDIMlllllin1iollll provide'!' thallOUJIII CII'" wu '''Mp-r"ilil)l bUIll." 175
F,SlIPP, II 93'. Tllal ii, il WU IIDI loinalo IIIe ripu-ol.....". 110"".",', in t'ilV or 0011.. \hi
plllinlilflllocoftUnlWelll1l1\l provider IOlIlhllll proYldc local pMallerYi'c byllllJlI die Cil)l"
rilbll-of.""II)', .,imil".iNlrion IS ill lhil elK. I F.Sllpp,,\ ,n. (The fICllllII Ill. CUI lib"
InvolvlI the ill'lIItlllcnl ~ I!lellillllc Curier ("L.Ee'" ..,1Ii11 eil) ofDllIas GOnccmed.
coropclilOr UI \h. w\IlIIlIcnl LEe. is irr'IEVU\, U CQlllf'CN tpmA,all)' .- ilIlQlncCliol\
H3(~) dlIIl local ID"1fM\ClfI1 ri.lllI--of-w.}' ~1II1'lioll mlllt lie TlOn-4iICrilaiUIAIY.)
3
.
131/13/1313 12: 132
NO.975 P13135/1317
4134 60;"9<122
NQ.Bll0 P"13/~'
'3'>4 S~4 '3481
IIH.... lI,mw lIa..-iIIl.,I(W ;01011I oUmaw IIlil 1'111
Og :0,'99 10: 44
,u.u.....'
T-U' , 11I11 HIO
In d'l8mIillin, ...1111 ''mIrIe" rIll publiC rithu..r.WI~' in fill_ Ilw ~ u IIIpll.
10 rh. Ordil\lllCC. dill Co~ wi II look'" III' opinion ar 11I8 apncy cllarl. willi inlaIJITlll\II, IIId
Cl\rorcinl rh. FT A.. 111. feder.1 Cclrrvnunic'lion, Co_illtn" ("'FCC"). n. FCC bu 1II1.!:
We rwopil.1hII loctian JUte) prollllY.. W ."lIIoril)l ot..... - local
IO"lnlIIlollllllO 1I\IlIIC' ,lIblle "pu.or-w.)'. Loc.1 pY.",n""'\lI "'- ..
allo....d '" plTfoftft die filii' of vilal lAIU lIlCnauy co p~",' sh8 plt,aieal
illl.pil)l or .Il"" and hithw')'I. \0 CllIIl\'Qllhe Imlerl)' na. .rwlllel..
pad"';_. 10 11I11III1' IU. ""'lIer. cable t'lolll olll:lrie tnd eabl. 111-'1101). and
IIllJIlIon. c.lIl1icalllll crilICTOil UI. 1""11 _ publie rip....,....)'. W.III'"
pr,Yiolllly dnCribld dlc rypa or ICtivilin IMI fall widlilllllJ tpII.. 0'
IppYOpriU ri"'\I~'-w,y llIIIII,anml in bol/l \hi CI...ie T.\IpbvD. Dal:iliClll
IIICI dI. OVS QrdIn. 1/1II11II111III)'';1 o'wh~ COftIriM.lJIPI'lIPrill'
ripl_f...y mlllllacmllll eonlinu,IIO IfI dI. pll'll\lllCl'l o'locallllllulrilY.
n- "'..I.... i.elude caardin.d... oreonllNCliQII--ul.. ~..lill'n of
illllWllCl, t1Dndill' U1d 11ld.lMilY rtquir_nu. ....b\illvn.... IlId cnt~1IMIl1
orbuildinl elllles. tnd kecpin,l*k Or die Vl!'iO\lll1Yl!CtN UliII._
ri,llll..f.",)' 10 pr.vent jnllrflflnC' ","""11 ItlDIII.
II' r. Tel ("'.bl.vi.lan afO.IlIIlld. CDunlV Inc.. 12 ,.e.c.1l. 21396, 199'7 WL 580131
(f.C.C.I~7),Il' 101." (CilCd willi IPPfD".lln CilV DrOpu.... F.SlIpp.2d II 591.92.)
B. !hat. Law
The S1611 of Flari4. Ilu 'lllcrallY cklell\lCI power over ICIlccolllnllWGl!iOll compp.IO
Ibe Public SCT'ticc ColNIIiuion ("PSe'1. . 1l11.lIIi4. .iImiIli'lI"lli~' .,-y. FlI. S161. t 364.01.
This exc""iv. jllrillli'lion ofdle PSC preetrlpu local co1l1ro1 over lolccanvnuniellicm
eompUlies. escepl for \lW rel'll.tiDn of IoIse of ri&JIlI.of.way UIII collecrion of. foPlllllII1. rn for
lIIe IIse IIIcrcor. FI.. Sill. t J6~.DI(2); Fl.. Sill. t 337.401.' Hl.llll"'., .IItC law l\InI:ler rna'ietl
. Sit 1110 Ihc Cl...i.c Teleahan. _i.ion. in ,"""cllllle FCC I..IIIS 1Ila1' cil)lllllY anly
julllif'y a loe&I.16NIC. rcpalllloll, or other ICI.l rtqll&rlNllcnl ifi' can sllDw 1I\II1hc lToIIllirC'lfltnl is
"Ill Ilerciae of public rilllll-o""'I)' mIIl1IC11l0ll1 'llthority or lI\t impo.ilioll of C41\lpens.tion
rtqllirmsenu for III""M of SllCIl ri&JIII-Or.W'Y," \I F.e,C.II.. 13082. u' 40.
. l.MIIIDvemm.au .110 IIIve 1M power la _111. 1111 Dn.llCo_lIIIiClIia.. ..,.,ica.
Fl.. 51.1. i 166.231(9). ThaI p'a~iaioo ilMl rclcVmllo lhil d1l1ClMllion.
4
.
"0" ~S8"'\J22
NO.976 P006/017
NO.see P014,eZS
01/13/00 12:03
O'? :.J 9'3 10: d4
~':I" ~4'. .,..t:l~
11'-11-11 limy "OlI-NII"lt~ GOIOOI ~molli .I!II JAilS
114-'''-11I1
T-'" . all" '-TII
mllAic:ipll rqullriOD or lCl_llniC:lliOIl compeni. by llmilinl die rllD all_ad \Q be collier.
by rnW\icipllilin tvm IclCCOllllTl\llliClliON cornpuUd ror 1M ~Iill' orplflnillion 10 C1Cc\lll)'
"'\IIlicip.I""\1Hlt-wl)' 10 011I ptII'C:In' orlM 1"1" recapll on rllCllfTinll_1 urwin r_II'
rllr aa'ficCl P"'\lidld wil/lilllll, llVrparll,limiu orlllll'llllNcipllilY' fl,. 5"1. 1 33UO\(3) Ill'
(').' III llIItilion. ill I ill, die Florida IClaiIIAII~ unCl\dc.d \llil "lion 10 npliei,l)' fOlllid IlICI'
10v'",",CIlIl tom "uecninl or nNcilinl rel'llllOI)' connl" OYIIr lCl_\IllIC6lionl
cllIIIp&/li. rcaantinl OperaliOlli, IYSICllll, qualiftC6Ullnl, "IViGtl, leMet ~1IIIl1)'. IItVicc
lCI'rillll)'.ll'1cl pric:inl' Fla. 511l. 1 331.401(6). FiII&lIY,WIIlJ9I.mmdnllllllllO 11IIII0 cl_lIlal
11>)' 1.IKOmlllIlNClrions compUl)' tllalllll obllialll ~illioa 10 oceupy or i. OIhmwiK
'l""flAlI, OCC\IlIyinllho roeAl or "IIIII-oI.1IIIY or I mlll'icipllil')' on MlY 2', 1991, ",hili 101 tic
rlllluired 10 oblli/llll4ilillnll COIllCllI 10 CODlill\le IlIch IlwfuI occupllion 01 1II0se rvw or nplI'
or-WIY." cltcep' IllIl I m\lllicipllit)' mlY hnpll~ ,fee or rcuon"'ly repiNe the lIIe 0111\1 ripn-
"
or.",.y. FI,SII1. t 311..01(1).
llI' SII\lrwm. Collll offlori4l1lllloallClCOplizld d1a1 1.I.,hollt cOlllpUlics Ilave dlo
.
n&l\110 "" 1111 pllblic lolldl aad biih....yl of Florida. S"LlI~"'" Rl!lI Tel....hone v. !Mn, '.5 ,
So.2d 196, "/98 (F\a. 1954). Thil ril/ll is col\llilionc4 on Lhc r.\lOlIIltIililY IlOilO O\llrllCl or
interfere wi\ll \II. \IIC ofl\le n&llls-af'WIY. ~ '1 19!1, "'1 il 1\IlIl1 0111, WI 1 !IS. hol4iJ11 il
colllidCIII willa die ~ rc40nlllld late loplllion limilial r."",lion oflCllICo\MIunicalionl
II)' lac:11 IOlltmmtlllllo r.asonlbl. "'Illation ollbe na!lullf.wa)'.
. MunicipIUrltI 11\0I)' 1111I inIpoac I Ice fill COlli direclly r.lllld 10 Ill. "impljrmnl
iolel)' nlllCd by Ill. '111Illb~c ollhc IIIl&l1icipal rill"l or.I,," "lhI mlonlbl. con orlb.
"pillOry "livilY of lilt rnuniciplliry," IN! ''lII' propllnioJIIIC eIwc 01 call of '11'4 ror filch.
plllllic "'IY anribllllblo 10 lllili~on of IhI ripl-ol-ll/IY b)' I IcIIlCQIMlIlllic.ariON 111m"
provieW." 5. Fla. Sl&~ , 337.401(4).
s
.
, -
01/13/00 12: 03
NO.976 P007/017
4134 6589022
~. S80 P015/112'5
'Jt::I4 ':144 ...,.cII1d\
II HI-II 11001,.. IIa..-II..NN ;01* MiU.owllIIllI JAIlS
0':l ~I) 99 10:44
11"'11'1611
T-UI , 07/11 '.IID
C. Or'....ce I""
tv. DII,linld lben, while foderl' Uld ...Ie I.. prwmplllKoll COlllrDI Dver
lelccgnvnuNc&lign cgmp...;"I. "III ColIJUU and 1M Floriu leplllNIT apclfielll, ..clwad
from preempllgn mw,ipI. cIMIni DV" rilhll-Df"")', Il\ IlIditign. hDlJI IW. and fod...II...,
IUOW mWllciplhtic:l 10 col\=t I I ~ 1l0iJ ""iJlII fez &om ltllCOlI'\IDllllicllion ;amplNellb&l
II" "11115-0('.1, in wlloc.li'y. U ....on u tho reeov., of c:CNIII CON iIIc\IrrIlI ~Y the
m\lllic.p.hlY u. raull ofW 'pDl:iflc IIH oflhl ri",t-of..IY.
P.IIlOulh'. U'1'lftI1II1I Ilotl OVM tNslJlccillc ncllllioll hili prllCmpdOll for
m\llliciPllitica in both federllll. UlclslIle II"", While 8'"lDulJl "Ii. upon \he olll_i_
cululive jlllildicrion Jlrovidcd 10 Ih. Flori4a Pvbl~ Service Coqvnitlion. Ch.,.., 364
IJIccillnll)' "lIeS lllal "Ihe 1IIIIIoriIY Uld powen pled in Sccriona166.Z31 (9) IlId 337."01 "
U'Il nolaCflltled by Ibis ChlPIC!. Florid. SIIt\lleS t 364.02(2). Al \h. l1/li0 IUn'.1M TO\llll
",
j\llcmplSIO ,iltilllllilh Ihe inJlUlI ordinance Itom lilt one 1111111. in III' Carat lip""" nil! '0)'
nali.la; thaI thc r.Ola bt impolecl i. pOllpf'ciftloll in 1/1, ToWll" ordil\lllCe. '[lID f~llhal 1/1, fee
.
.
il nOI speci fi~ dDa 1101 e1IUl,e llIe fael thaI tho colllPcmalion provi.ioD U to
lelecornmlllliClliona lavicc COmpl/llll \I "ecmpled b)' 1111111011.'
Follo...in, Ihe plain lll\'ua.. /If be\ll the IlIle U1cI fcdarallltNln. WI Co~ holel. Ihl!
Ihe Town of Palm BelCh clll only ~1\l11..lI\c lue of ill RI"ItoQC..IY, and CInllOI coUec:1 mon
lh.ll\ ont JlCI'Ccnl of the 11'011 reuipll /Ill reclllrinllOCllI .eMu rCV.IIIl' for I_ice, Jl1"lIvidcd
",iWlIltlc lDlIIlicipalisy limill, in IIIIdill/ln 10 Ihe COlli IlIowed tl)' Florida SlIl\llCI Seetioa
)]7.401(4). 'T1I1I"lhose pana Or 1M OrdinlnCc 1111140 \101 dtl14irnl\Y wilh mlll.cinlllhc
. llIa faellhal the fee i. nol .pccillcd arlJlll:ll)' mliln IN Q~O void fllf "'~'I.
6
. -
1211/13/121121 12:1213
NO.976 PI2I12I8/12117
40~ 6589022
"lO.Boo P01&''02';l
~4 ')24 9481
11'-11-11 II.I/N 'IOlIo~II"ltM GOIDON NIIOIOWI II'NI jAilS
. 09 ~J. 99 10:4<1
nHu.'.11
T-tU , 1111I ,.m
,,"'IIo<I(,"'IY...O IID-'brcllbl'"" Bell.llth on I"OYlIdlofpr_,lio".'
The COWl nllw 1UrII'loll 1II111.IYD. 0(1/1, 'KlloDl ofdle orlli.ullGc ;lIAIlcnpll h_ln:
5stion 2, F....elli.. .~\llr.:' Thi. .0000on i. v.lid. wilh IllI ""'lion of .U",illlion
on IlIllHGlillll 2.2. .... IolllelCArn/Illlllitl&iON IKilil)l OPll'ltGn. "'. ~1Ii,...enlor. a-!\iN
m",' 01'11" fir flCililil. !MIlA wilbin . p\lltlic ""'1-0""'1)'. l'IM, ir'I,I~mJnWCl,ion'
cornplllY eUl pnVI'.III.COIIIIlIIllliCllionlllMcc. withOllt ~n.lIl' ""'tI-of'.'Y,'
mllJliclplliry IIu no jllrill4iclinnlllldcr flldmllaw II rlll\lift. 6'IIIchi... ATAT v. Ci... Dr
t\!YIiD. 975 F.511pp. iU (W.p. TCIl. 1997). In IlIdition, II to dlc 111I IWIIIIII" ohllll_IIII/I2.2,
,ven if tile "p....f.w.y ar' III'" lb. IrlllI or. fruchi.e "'., ollly tie eoMitill/lc. DII I
tel~ommIllliCldo". ~mpUlY's .....emelllIO comply llIlth "'C Town'l r_nalllt rcpl.lion. of
'II ri,hll~r-III'y and Ih. rOIl lOr IIle or ,hOle ri",,,-of-wIY. OIl/9fCerwl ~ri"", 42 f.Sllpp.ld
'11309; eily orD.n... . f.Sllpp.2d If 592-93.
"
~~'ion 1. CClI'lJC"..,;on Jleq,.ircd: Sub,clion. 3.1, 3.3.3.4. 3.S ID' 3.6 IrI valid in
ttl'llIIC)' concern 11I& plIIpOle. procedllrtl for. IIId &IUl"'PlioDl frOm "'e impalltion of UI a1lewed
.
fee ror \lie Or the ri"'ll-or."'.y. Howev.r, Scelion 3.2 "r",,,, 1I"'l'lIror ",...r p4OI:' w/lil.
.
'..
dillinp;llIlbl. from ,he Cirv of Cllpl Spril\p ,*c in INI nlllplClftc 'IC i. ~poac4. il
YlI.nlo~e.ble U 10 \elecollVlllUlicllillnl COllLpWII becallle 1111\1 la1ll liIIlil.\he I1lawlbl.
compcftlltiOll ror lilt Orril)III-or.,...)' 10 one perCCII' orlll. Po" r1Clli'lIlN1l'1C\11rin.l~
-'.
scrvice revenll. for ICfYlcn provided wilhin !hc corporalc linllu: ofthe m\lll~ipalil)l. phil certain
· Thua. ill uepin. willi lI'IdilioMI IIOnonl aC Ivoldini cOftlUNDOnal4llrrmillalionl
wll.1I pOSlibl., lhis ColII'I'l opillion rnls ~pon IW\Ilory pn.lllplion. rattl.r Iblll rh. Illemllive
coftlllllltsonll "o\llld. uacnod b)' 8.lIlOlIlh Howlver. "'II Court Will bri.ny adWIIlIe
cOllllillllillne11lJ1l11111111 r'lardinl thalli prOviliOnl of the: or.inlllC' lhelll"C upllcl4.
I A ClIl1iftlld copy or 1111: Ordinance mil)' be rollll4 II dDckel Ql\'Y U
7
.
..~.
01/13/00 12:04
NO.976 P009/017
40~ 6';89022
ND.880 P017,0ZS
(l~ _~O '3'3 10: 45
95A :lZ. 948 I
"'-11-11 !1'Dl'M ,ta.lliN,ICW 'OIDGN Nlmorl 11111 I'"
II'-UI-''''
,_,.. , allll '.111
co... of4i_'io" 8IlCl OVWlill'll. f1a, 51&1. . ll1.40I(]). (I) .114 (5).
~lEdClIl.. ~Mt...J CnftftiPiAnllJpa'" u.. al'll~p.m4f.....~: niI.-t'OD i. .....Ur
'.
v.lid .. III. 1_,,1111. ,.1.,io" of-hal llappaw can lIIe ...""11 ,..iltlillltl. nall".r-,.,." .u.cll
U cOlII!nICliOIl prwadlll'rI. "IOAIion or rKilil)' plllCldurCl. Ill. nu. "pl.lion i. ..~\KIod
1I'0m plW,",ption by tIOl)I flldll'aIlnll "... ,....., willi c~" ""pliou...4 .irNtalionl- For
UllTlple, Sublcc.ioll ..:U, _lIich "f.rlIO "aI' reqllirat pmnlt 1M ...11l1li r.... i. Iimillld by
Flllrida SIAN'" ..ction 331..0110 die ane pclCml fee wi Ill. _1110.11>>" tI)' t 337.101(1).
, .".
U ClIplainld abol/l. SlIb.ccrial' U i. lirnilCld III die TO'llll'1 illll*DDII oflVllilin will\iJl \tI.
righlll.r-wIY. 'The Town _I nol hive Ihc '1IIhoril)' 10 rlqllCII inronnaliCll\ "prdilll.,lIeml,
1'111\1, or p\llllOlCI oew ICIICOtM\lIIIicalioll' flCllili... Ja'~ Slit' J37.40l(6). SIl')l
IlIvnlisation inlll f1111ln plln' of .Ielecomrnll/liurionl provider 10 bcYDlld Ihe .\lo.abl.
rUlonable rClII,..ioll oCtile m""IClllCIII arllle ript..r.,.,.y. In IlI4ilio", 1.IClioll I.' .IID
impcmainibl)' ann" die To'llll tile ri,hllO lIolic. of IDd prtMlIc, 111/1)' I81rinl- Thil IIlIlicc
Impoles III opmnonll raqllircm"'l rortlldden by stllC I."" IsIi Fla. 9111. . 33'.101(6). T1111..
.
,!'Ie IKOnd IDeS \Ilild IIntanen OflllDUClion 4.4 Il'C Uftftlrorc.DI, 'llIinat Bclllollth u ·
"
.
1.1Cl:Ol'IIIIIwUcatiolll compll'lY. FinallY, IUDIKUOD 1.2.6. wlUclI reqlli", lIolllOlItIt .llU ToWII's
roqllalto ;nlllll collduil il\ elc", or illl 0"," rClIlliramenll for 1M purpolC of accoIfto4lrilli odaII'
&ifIcNlell ror I ,lIII'le, i. _ _nforcullle, u il llso ilrIpO~ ID oparaDoJlll laqllil'llllllll dial
.tallla'" rorllllS.. 14.
Sarti61'1 ~ PrDlerUA'''\ ~rdle TDUIR ...d [,lIl.,l!M'lrc' nul lecnop it valid", h. ..lir~.
Thi,.aClio" conc_ \IId.tMitlellioll, il\l\lrWlce, llondinl...d ocurity flut41 Utll rail w1d1in IlK
fee'. illterpretation Or ''ntlnl.inl the riihls-or-lIf'Y,~ 'III", Tq Cabl.viliop Or 0.11:111111
Call1llV. Inc , 1:! F.e.C.R. 113t6, II. 103 (F.e.c- 1991Heitinllll r. C'...1c: T..I.~ona. IlIc.. \I
.
. ..
131/13/1313 12:134
NO.97;; P13113/1317
404 6589<122
ND.BB0 P~18/025
139 ,:J 99 W:4'5
9'54 '5:14 94SI
m.Il-11 05,01'" 1~1C1..1t1 ~llalIIUICJe'll1ll11l JAIII
1..-111-...1
T.ln , lall1 '-111
F.C.C .R. 1l0.2, II' 39 CF .C.C. 1996)). Th... NqulI'emCIIII cl'II'I)'1II'I pU' ol..od_
con.wucliDII pRCUen, IIId IlIoulll be ~nlidmd U pU1 of -pt. rilllllo4lf."")',
ICUOII pJovidClIll. lIIIIChllJlllm fllr 111. ToWft 100 ",forc. IIIiI Or4iJ\Ulcl. HDW""" "" COIII\
SK"Dft 6. ~"rll'lte."'M'l1 ud R.me~il:.: ni, I.Uon I. .. vali. in lu .,irel)'. nul
nOI'IIII'llultsGo'ion 6.5. ......din. ravoc.,ion proc_W". ellllllll undtr ,..,"" llw "" \IIOd 10
prohibil ot II...,. \II' .Ilacl or prolllbiunllhr abllilY of M)' Clltil)' 10 prvvid. III_lrIIIIlIIIicarionl
..",ice 10 1111 pllllUe..1 U.S.C. .253(a). \II Iddition,lII' To- CINIOt \II' lilY or1llc
enforumml provilionl'o IIlrorCe In)' part ofltll OrdlDanc. dltIII.lill/lC1llCllAlllll llainI!
8el1l11lll11 b)' WI opinioP.
'irel;..n 20.7 T'I'"it;""al p,..vili"".: Thil Seelion illlao v.lid i" ill ",drtl)'. 01
coutse, to "" nllllllhll these trIlIlillona' provilionl conni.1 ...ilh Floridl SlIllllCl SlC'Iioll
337.401(7) "aU'din. providers \....1\111)' 1X.llp)'in.llle riallll-ol.way In the TOW'll. die RlI. Ie....
..,iIl prev1ill. HoweYlf, 1M Coun lIOIe. l"al eVln thillllblccnon of III' "1,,11'" IpCGiGealb
llIlca tllal "nown. in wllllbseclion lhall be inlllpraled III liaIill\ll power of IIIIUDiciplli\1l III
.
impOl' a fee Of adopt 0' .nforce JlIIO~blc rulcs or "'lilanoM u provided ill WI ItlCtiOn. ft .
Titl. U..tp-=ial R.ul.. ~ppJic:.hla,o Tal.ee'PfllftUftiea'illl'Ll Fuillti.. ..4
y..Ie<:O!InIJ1:I,>n.iu'i""1 S.....e. PrevidUl.1. 11Iis seetion I\U IIvml pJ1l-;liolll whicb l1l'i
preernplod by fc:derallJl4ll11e law. SlIbltIClionl 1.1.3, 1.1.4. and 1.1.5 impoM raquilflftlllll "III
Ill. applicUlllllbmil proof ofillllnll\eil', Iac:Nlicu, and 1',IlllllllifiUliolll. TlIiI type of
reqyirerncnl ia preempled by FIDricla SllI\lln SlClion 337.40\(6) and (1). wllich rwurve 10 tile
,. Seelion SnSpecial Rill., (or Oov,rN'/ICrn [nlili_, Thlo Of-Spacial Rill" AppllCllllle
10 Open VicllO SYllems, Tille IV-Spacialll.ulll Applicable 10 Cabl. T.llVllion S)WIOIIII. IIId
Tille V-pnVIII COl\\llllllliclliol\$ Fllol:ililiCl arc nOI applicabl. 10 IlIisleWl\Ilt.
9
.
01/13/00 12: 04
ND.976 P011/017
NO.Baa paI9.e~
4114 658~0<,2
0" ;.099 l{l: 45
':1':1" =4" -,...,l
11""-11 OI'D1~ no"-IIINllt\I 'OIDON MlIUO~1 lilli/illS
IIC-Ill"411
T-U' , 11/11 '.11t
P~blic S.",ic:. ClIm&niNioo 1tI. rep..lion of "qualificaIlOlU." In IIIIdlrin. die Cirw ..rDallu
opinion .,.iftcllly holdllllal ~II rlll~ifl",.nll .,.lIIInltlld IlJ ItII u.. orltl. ri",,,-or.w'y,
and 111111 b.~n41l1. KlIp.llrllllllllcip,1 '~ltIoriry. I F.5~pp. 3d. II 591. On 1tI~ oIlier 1wl4.
,ub~liOnl 1.1.1 an' 1.1.2 r~JIl' direClly \0 \!Ie conawc:uon of 11I1~1IIl1C:1I101II ~i1i1Y,
lAd .nk ._ri,llolII or dIt IlKllion, Ii", roUII, pow. SOIllC.., Mi... an4 colll,"",li""
IlChNllllet ofllle IICW r"iIIty in \II, Im,cllII ",'''loCl('III.Y. .1WIIIlIIU1. rcpJIlion ofdlt \IIlIO'
"p"-of-WIY.
SlIblllCllon \ ...1 o(li\lc n also ofl"tIIcb 1111. Ialll .. illllowI 1M TOllll\ \0 review III
.ppliC:lII\'S q~lil\;lIiOIl' wllm 'cvi....,iftl. fr1r1cllilC Ip1Ilication. .... 11I104lDova,lIIc Tolllft'l
pi sf I hnchitl 1111111 only be ;ondniolled on 'lel~OII\Il\WI~II\O'" eomplllY'1 .permtnl \0
eomply",;th the TOII/II'I reueullll r.pla&iolll ofill riplI-of'..,IY ....dle (on for IIN oCtho.
n&l\lloCl(.WI)'. ThIlS. lubNelioll '.4 illeU is vl\ili, llllllimilo4 \0 IIKIditlclliou of*ililift
wilhi" Ihe "IIIII-of-wIY DC;ClIIIY \0 reuolllbly RaWII' Ill. Uti oflll& rip&oCl('''''Y'
SlIlI.acliol'l 1.5 COIICmII compelllllion, and 111111 .11 of 1II1IIICIion 1.5 \IIU11 fail U 11111
,
Ilwlimill Iu;II l;ompcllllrion, wjlh the ellccpUOll o(lIlb_liDD 1.505 1II11li111illlIMIl/lI .
COatpensA1ion paiel mlllt be pllltlicly elilcloud by \Il8 Town. AI .iK.... .bov.. lbc onlY f_
!hit mall be nq\lirccl U'C tile one per",,1 fn in SaclioD 337..01 (J) IlId IJ\c eOIll~lion fOil
IlIo...c4 by Seelio" 337.401(4). Federalllw, Oil die olller hua4. 1IIII\dII... dlal the (n' paid be
p~bl;l;ly d;KlolCd IIy \he Town. 47 U.9.C. , 253(e).
SllblecuOD \.6. ",tilled "Add/llOllol frGllchu. 'lfIIi",U"II. " 111l1li (ail.. well.
Uni"e"" ~CI ilcpocltlc:llly reltroled 10 sIl.IISI' ,ovcmmcnllty 1M ITA iJI47 U.S.C.
025J(b). WIllie stllCI could dele,llc sll~1l l",lhorilY 10 loullovemmoIIt5. F10ricll hu 001 done
SO. CoN "CDallu.1 P.S~pp.2d II 591. R&lh.r. FI"ridl'I" lliv. 1M .ullllivc all\horilY "v.r
10
. --
.-..
01/13/00 12: 05
NO.976 P012/017
q0q 6':i891!122
NO. 8Bil P020-1l4S
~':I4 ~4 9481
11'-/1-11 aUI'" ".WI ill"- GOIGOIl Il1mOVI .1 WI lA1I1
09 :0.99 113:46
-.
"'.'U-IIII
Nil , 11/11 '.111
....lVicllft 10'" Pvblic S_lc. ComnlIllion. P1~ Sat. Seaton 3l'.~1(61. 'TttYl, dlc To_
'l/1li01 inclllde willlin . bndIlIC 1111 rnc",llion \.0 complY witll any llllivcrull'!rlric. plan "'.
To_ mlY adOpl.
D. ........IIIU'"
aclllOlllh IIIUU ill j" lIIotiOnlllallftl\l CDl'llJllII..uGIIllQfriCIN arOrdilllncc; 16.'7.,.
.rrickIrI. tit. IItI ",tin Qrdi"lIICc IIIU,I rlil. TIle Cllun rej,clI tJlillfJllllllllt.
f"1ISIn1 ~ur1Ilaak 10 IWC I..., 10 dllcrnUn. iUlla or "",,-IUIY 0' IaCIIlII'cIiNncn.
\orvin" ,.... L.. 511 U.S_ 137, 139, 116 S.t'! 1061.1069 (\ M6) ("Sev..biliry iutGlllll'ln
IIlIner of lall II....). \II Floricl.. lIle rolCVIIII 1111 is:
Wbrtl . pUt of I slaNte is dlClucd UIIcollltiMional the remliltd. 0' 1tI. leI will
be ,annilld 10 11_ praviclllll: (1) IlIe uncollftiNliaNl pravlcicma can b.
IIPUI"d tOl'll111C rllllailtilrl valid pro"i.ill"s, (2) the lelill.\Iv. purpo.
,.".... in tIIC valid fll'llvi.iolll CIII be IecompUltlNl i~t1Y oCtltll.c
which.... "Did. (3) Ute IIlOd 11114111' bid f.uuras Ire "0110 iuIparIbl. in
11I1l.\UlCI dill il CUI b. lli4lbltlhc Lcai.11I1II't _14 III'" p." till aile
wilMlIllIII oilier Ultl. (') 111111 cOlllpll" ill i",lfmnalN aft., lb. iIlv.lid
JI'Ovi.ioIu1 u. 'Incklt!. W11dIIlP. 561 So.ld ,,693 ('111m.., CDma. 137 So.2c1 ..
nO\. .cc~lIrd IKaIII. 556 $o.~d II 4.9.
.-,
.
S~M\ill" Slare DfFlDrill. 590 So.2d 404. 414- IS (FII. 1991). TNUllrrlll' on 1II01llrr Flor"
"". 111M scv_biliry 40cIIIDI alwlY' dcpllld on Ute inclusion of. 1ft..llililY el.lI.. io I
1'lIslllive e~\IllCnl. Sijeh I cl~1 only b\ltl'l'cslc' Ute cue fiu anenlliliry. 590 50.111 al4U.
Applyil\11Ilc allo". lelllO the mnllll CUI. III. ColIft ~lmnilll.lIIIllO\'crabiliry i.
apprOprilte:. Th. OrdinlJlle ~nllinl s",enl Cllpr". pur,tOlO'. inclu4iol obllini"l
compeNalion for ~ of riplt-OC-WIY. bill Ibo III properly mlna,. 11/1111 \1451"" willlilllllosc
rilhl.of-WlY. Wbilo lIIi. Order limilll!lc IIrIOlllll of COlllpllllarlon IIIc City ell! olltailr from
Plllintift'. 1M Icllllllive purpllSCI Cllprcm4 by I/lc CilY. iIIcllldilll rcecipl DC COII\pClllAliOll, CUI
'lill be "complialt.d. SiIv:. I IIvin,. c1ll11C i. roWlcl wil!lin l1li OrdillUlll. in Tille Vl,lIC'lioll J
\I
. .
404 6589022
NO.976 P013/017
NO. BB0 pa21'~"5
01/13/00 12: 05
09 ,0.99 10:46
11'="" .,~. ';tWCI.l
11'-11-11 al:Q'''' Il$-lIlwm. GIlI* MiI;IIVllIE11Il jllll
1"-116-1'11
T-"I , IJIIT '-'ID
"
...n pa.' 59 aUO roe; 4l], il_1 lie Hid Ih..lh~ Ta_ Ca_1I wallld 1101 MV' puaed m.
remainin, p.... or!be Ordil\lllce followin. tII. Jlldplllllllllmd ill WI ceK. Fillllly, \II' CoWl
callclll4" I.... . l.,arl'O leI camplcw ill illclf ~al'" aftor caYlAin pomalll v. _5"111 ar
II_Ill lIIIlIIlb,"",lc ..IIiUl IIeUlOulh.
or COlll'lC. il il lIP 10 tile To_ 10 lIel,nnllll whM" II wilh~ 10 lUIqI tlll ..,,~
provisian. u wrinllll IX urIIlld lhl OrdIIlIllU CO".i.,~1 wilh WI Colin', 0rlIm. lbe To"
Co~il. .. \lie elecla4lcJi.II~ mllllllllCi4e for i",lfw\II'lIwr _l1li" praYillol\llWt or
will bl dimclIlllO m!orcl .. wri",,,, or wbtdltr l&NIIIlznonlllR nodllUY-
,....
~. .ollooutll" COIII"",do"o' ......_a
Since Ihe CoWl i. ,ojlllin. IOme ar SllllOlllh'. "IMOl)' 1Ir1Ul"1TI11. 1M Colll"l will
brieny c1i.Cllil 8elllolll/l" eO",lirvliollllu.wnenll 1,linl' validIty tiC 1M i/IIlIIIl OnIinuce.
Finl, 1110 ilnplirmcnl of conlrKl. !he OtdiJlll/1Ce uelllol prl\1lI1 or invllidall lilY cOI!IVII.
AI cIIlCllllc4l1bove. rodlnlll" prohibi'l mllllicipaliD'1 from prohibililll UlY
lelccanvnlllliCl,ian. service. _ -"I municipllil;" may monilOf UId pII'1IllI eanlrruclioa '" lacll
. .
11I'llCllIIId IIC.ive minill\ll COIIIptlllllion for lII&l clilr\lplion claelllOC ilnpo. UI impairment or
COtl~llhal violll" lhl IlIle ar fl1lml COlISrilliliant.
SICOnd. !he OrdiNll'1 clOIS not "iolarion me ..ua1 pl1llCC'lion cllll" "lhil COIll'lI\ll
IlI'UC~ IlIe "llIIIJCcilllclw rlcs provilion Bellloutb IllI\IlIlS UI eqUII prol~doD violalan. TtlirII.
IS 10 I violl,ion of clve procn. II Il.kin, of. prapInY ri&lll, the pro...lt) riJlll Bellloll.
in"okn WIIIl'U11Gll punlllln la Itl&C I..... 5\&111.... iuel! 1110111 mllllicipaliliClIO IScrtlle dlclr
llilloric jllrislliclion OVCl' '01111.1 hlppelll withio local ri,!Il...f.....y. Thill. tile II&IC ilICU is
(;Onclilionil\' lhc ''''''leel proJ*IY rialll" 8,111011111 cllimllO 1111. law a1lowin; CIlllnicipal
I\IlhllrilY av. ri"'"-4I!-W'Y'
IZ
. ..
~04 6589022
NO.976 P014/017
Ml.88121 PEl22.'12I25
01/13/00 12: 05
0" -,1199 10:46
:.~ .:1-.... ~...lIl
'.
"'o/l.U U:U'M '_illllIt. ~'Olll Mm'O~llIIlllI 1'11I1
.....1'.,'11
T-UI , IlllT '-"1
PiMll,. BIIl_llI,.lIIOliaa...",..1hIl,1II OrdiIlllllCI V\OI_ltIc -..""...... COllllllerc:c
CI.llIc, wherR)' IlMIl/ld IOCI110YfIl\ll\l"u 1ft pl'C1lll\l.Od frvtn CflII;liAllllilllrioll lIIbich
IIIIdllly llu:r*n. in,mllll' ,ommer,', Thl "donnlft'" Commerce ell_, !low",", 40.. 11I3'
1p,Iy whlll Con.,.' IJII'iflul\)' InOWI .,111 or local r.",llIion in a pam",l., a.ld. em. \II
tllis U", 47 \,l.5.C. t 2.51(') ..itlnlly ell."" 111'1 or Iocll 10","""CI" lQ m""I' \III ,ublic
ril"ll-of."'IY end reqllirc rlllOl\l_l. eompc"'I,ion from 111ICommllllicaQau ""vid.."
,. COOIII'''''.
no TOllm 111114 ,co\llllmlainl in IlIis cu, ,nIlinl \0 obllili COIIlpcuaGOII IIlIclcr IIle
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Slip Copy
(Cite as: 1999 WL 494120 (S.D.N.Y.))
OMNIPOlNT COMMUNICATIONS, INC.,
Plaintiff,
v.
THE PORT AUTHORITY OF NEW YORK AND
NEW JERSEY, Defendant.
No. 99 Civ. 0060(BJS).
United States District Court, S.D. New York.
July 13, 1999.
OPINION & ORDER
JONES, I.
.
"I Omnipoint Communications, Inc. ("Omnipoint")
brings this action alleging that the Port Authority of
New York and New Jersey (the "Port Authority")
has violated Sections 101 and 704 of the
Telecommunications Act of 1996 (the" 1996 Act"),
codified at 47 U.S.C. ~~ 253 & 332(c) respectively.
Omnipoint seeks a preliminary injunction directing
the Port Authority to allow immediate construction
of facilities for Omnipoint to provide wireless
telephone services to customers who are traveling
through the Lincoln and Holland Tunnels, or who
are inside Terminal Four at JFK Airport, which
services international flights. Because the Court
concludes that the plaintiff has not met its burden to
justify this extraordinary preliminary relief,
plaintiff's motion for a preliminary injunction is
denied.
I. BACKGROUND
The Port Authority is a governmental agency,
formed pursuant to a Compact between the states of
New York and New Jersey. See N.J.S .A. g~ 32:
I-I to 32: 1-24 (West 1990); N.Y. Unconsol. Laws
~~ 6401-23 (McKinney 1979). The Port Authority
owns, controls, operates, and maintains a number of
facilities, including the Holland Tunnel, the Lincoln
Tunnel, Newark Airport. LaGuardia Airport, JFK
Airport, the Port Authority Bus Terminal, the Port
Authority Trans-Hudson Rapid Transit System (the
"PATH"), and the World Trade Center
(DiGeronimo Dep. at 31-32).
Omnipoint is a telecommunications carrier
providing Personal Communications Services
("PCS"), which includes wireless telephone services.
Omnipoint began providing wireless telephone
Page 92
service within the states of New Yark and New
Jersey in November of 1996. (Compl.~ 13.)
Five companies currently provide wireless
telephone services in the New York- New Jersey
metropolitan area: AT & T Wireless ("AT & T"),
Bell-Atlantic Mobile ("BAM"), NexTel, Sprint PCS,
and Omnipoint (March 30, 1999 Affidavit of Francis
A. Mahoney ("Mahoney Aff.") at ~ 2.). The five
companies utilize two different types of technologies
to provide wireless telephone services. AT & T,
BAM, and NexTel are "cellular" telephone
companies, while Sprint PCS and Omnipoint are
"PCS" telephone companies. For present purposes,
the technological difference between cellular and
PCS telephone services maUer only insofar as they
require installation of different equipment in the
Holland and Lincoln Tunnels to support service by
each type of carrier.
Two of the five wireless telephone companies--both
cellular telephone companies--operating in the New
York-New Jersey metropolitan area currently
provide telephone service to customers traveling
through the Holland and Lincoln Tunnels by virtue
of having negotiated, in 1994, agreements to lease
Port Authority rights-of-way in the two tunnels
(collectively, "the 1994 Agreements"). In June of
1994, the Port Authority entered into an agreement
with AT & T's predecessor company, Cellular
Telephone Company d/b/a Cellular One ("Cellular
One"), that allowed Cellular One to provide wireless
telephone services to customers traveling through the
Lincoln Tunnel (See February IS, 1999 Declaration
of Daniel Goldfisher ("Feb. IS Goldfisher Decl. "),
Ex. I). In September 1994, the Port Authority
entered into a similar agreement with SAM's
predecessor company, New York Cellular
Geographic Service Area, Inc. ("New York
Cellular") (see id., Ex. 3). In December of 1994,
the Port Authority entered into agreements with both
Cellular One and New York Cellular that allowed
those companies to provide wireless telephone
services to their customers traveling through the
Holland Tunnel (see id. Exs. 2, 4). At some point,
AT & T Wireless Telecommunications ("AT & T")
purchased Cellular One and Bell Atlantic Mobile
("BAM") purchased New York Cellular; AT & T
and SAM inherited their predecessors agreements
with the Port Authority.
*2 Pursuant to these agreements, the Port Authority
installed a single cable in each tube of the two
Copr. ~ West 2000 No Claim to Orig. U.S. Gov!. Works
Slip Copy
(Cite as: 1999 WL 494120, *2 (S.D.N.Y.))
tWUlels that supports cellular telephone calls.
Cellular One paid the Port Authority $478,850.00
for installation of cable in the Lincoln Tunnel (id.
Ex. I, ~ 5(a)). and $200,000.00 for installation of
cable in the Holland Tunnel (id. Ex. 2, ~ 5(a)); New
York Cellular paid the Port Authority $600,000.00
for installation of cable in the Lincoln Tunnel (id.
Ex. 3, ~ 5(a)). and $600,000.00 for installation of
cable in the Holland Tunnel (id. Ex. 4, ~ 5(a)). The
foregoing payments constituted advance payment for
twenty-year leases in the cabling (id. Exs. 1-4 at ~~
5, 10). In addition to these prepaid leases. AT & T
and BAM pay additional rental fees for use of the
rights-of-way in the form of advance monthly
installments toward a $100.000.00 annual rent and
percentages, on a tiered-scale, of their annual profits
above $625.000.00. (Feb. 15 Goldfisher Decl. Exs.
1-4 at ~ 4.)
The existing cable in the tunnels will not. without
modification, support PCS calls. [FN1] (See June 3,
1999 Tr. at 12-13.)
FNI. PCS service was not available in New York
and New Jersey when the Pon Authority
negotiated the agreements with Cellular One and
New York Cellular, but only became available in
November of 1996. (Davis Dep. at 33- 36.)
The Port Authority retains the rigbt to terminate
both sets of agreements with AT & T and BAM,
provided it pays to AT & T and BAM a prorated
portion of the advance lease fees for the cabling
(Feb. 15 Goldfisher Dec!. Exs. 1-4 at ~ 38).
The current situation at JFK Airport differs.
According to plaintiff, AT & T currently operates a
base station at the airport without having to pay any
rental fee. BAM rents space for its equipment from
Japan Air Lines at the rate of $10,000.00 per year.
(See April 9, 1999 Declaration of Edward F. Maluf
("Maluf Dec!. "). Ex. 7.)
Following passage of the Telecommunications Act
of 1996 (the "1996 Act"), the Port Authority
perceived that the anticipated increase in competition
among telecommunications providers would enable
the Port Authority to maximize revenues from
leasing its rights-of-way (see Mahoney Dep. at 20).
In "the second quarter of 1997," the Port Authority
issued a Request for Proposals (an "RFP") for
developing a wireless telecommunications network at
Port Authority locations. (Mahoney Dep. at 16-17.)
Page 93
As a result of this RFP process, the Port Authority
subcontracted responsibility to NYTP, Inc.
("NYTP") to "plan, design, construct, market,
finance. manage, and operate" a telecommunications
network to be established througbout Port Authority
facilities. (Id. at 28-29.)
Omnipoint began to provide wireless telephone
services in New Yark and New Jersey in November
of 1996. (Comp!. ~ 13; Davis Dep. at 33-36.) In
January of 1997, Omnipoint made its first, and to
this point only, written request to make use of the
Port Authority rights of way. By letter dated January
29. 1997, Omnipoint's Director of Sales, Adam
Sewall, wrote to Henry Henderson, one of the Port
Authority Commissioners, concerning its interest in
providing wireless telephone services in the Holland
and Lincoln Tunnels and within Terminal Four at
JFK Airport. (See Maluf Decl. Ex. 8.)
*3 Omnipoint has not explained why it directed the
January 29, 1997 letter to an individual
Commissioner rather than to Port Authority
personnel with responsibility for managing Port
Authority rights-of-way. Nevertheless, Francis
Mahoney, a project manager in the information
services department of the Port Authority (Mahoney
Dep. at 6), became aware in September 1997 that
Omnipoint had requested interim use of certain
rights-of-way while the RFP process progressed.
(Id. at 78.) Mahoney testified that "we then took a
meeting with Omnipoint in December of 1997 where
Omnipoint talked about their need to access the
tunnels, and on a less priority basis Kennedy
Airport...... (Id. at 79.) Mahoney continued: "We
were still in the throes of evaluating the [RFP]
proposals ..., but we said to Omnipoint since we had
not concluded that process, to submit to us what
your technical plan was for the tunnels." (Id.) When,
approximately six months later, Omnipoint submitted
its technical proposal, the Port Authority "had
already reached agreement in concept with NYTP."
(ld. at 80.) The Port Authority "advised Omnipoint
both in April and July of 1998 to deal directly with
NYTP. Both in discussions on an interim and on a
permanent arrangement." (Id.)
Omnipoint's technical proposal called for attaching
antennae and repeaters to the coaxial cable serving
cellular telephone companies in the tunnels. (See
Davis Dep. at 39.) The Port Authority objected to
placement of antennae because they would interfere
with the use of large "sweepers" used to clean the
Copr. (() West 2000 No Claim to Orig. U.S. Gov!. Works
Slip Copy
(Cite as: 1999 WL 494120, .3 (S.D.N.Y.))
tunnels. (See id.) Faced with the Port Authority's
objections to the placement of antennae. Omnipoint
"started to look into the possibility of putting in a
cable system." (Id. at 39-40.) Omnipoint never
developed a technical plan or specifications for a
cable system. and never presented a proposal for a
cable system to the Port Authority. (See id. at
39-40.)
In August of 1998, NYTP circulated a draft of its
proposed carrier agreement to AT & T. BAM.
NexTel. Sprint PCS, and Omnipoint. (DiGeronimo
Dep. at 71-72.) The proposed carrier agreement
called for. among other things. the installation of
cable to support PCS service and for each of the
providers to pay the construction costs to build the
entire network. (See id. at 71-73.) The Port
Authority intends that the ultimate agreement will be
signed by each of the wireless carriers, including AT
& T and Bell who now hold contracts for use of
tunnel rights-of-way. (March 30, 1999 Affidavit of
Francis F. Mahoney ("March 30 Mahoney Aff. "), at
~~ 4, 10.) Accordingly, the Port Authority will have
to invoke its right to terminate the current contracts
with AT & T and BAM in order to enter into new
agreements with those carriers. (ld.) Because the
Port Authority will be required, upon termination of
the 1994 Agreements, to refund to AT & T and
BAM the prepaid cable lease fees for the unexpired
part of the twenty year lease, it intends to give AT &
T and BAM notice of termination only once the
proposed agreement is nearly finalized. (ld.)
.4 Omnipoint did not respond to the proposed
agreement. (Mahoney Dep. at 80-81.) In November
1998, NYTP met with Omnipoint, at which point
Omnipoint presented its views on the technical
aspects of the proposed carrier agreement. (lct. at
82-83.) Omnipoint did not discuss any of the
financial terms of the proposed agreement (id.).
NYTP continued to meet with the other four
wireless telecommunications providers. Some of the
carriers objected to a nwnber of the financial terms
of the proposed carrier agreement, including
requirements that providers pay for rights-o!Cway at
all Port Authority locations even if they had no plans
to provide service at such facilities (DiGeronimo
Dep. at 73-84).
Omnipoint filed the instant suit on January 6, 1999,
alleging violation of the 1996 Act. (See April 9,
1999 Declaration of Edward F. Maluf
Page 94
On March 17, 1999, NYTP circulated a revised
version of the proposed carrier agreement, dated
February 17, 1999 (the "February 1999" proposal or
agreement, which altered a number of the fmancial
terms contained in the August 1998 version of the
agreement. ("April 9 Maluf Dee!. "), Exs. 4, 5.) The
February 1999 agreement proposes that carriers pay
the following fees: (1) a $500,000.00 "entrance" fee
that covers all Port Authority locations; (2) an
"access fee" for each Port Authority location which
would pay for an annual allotment of minutes of use
for that location; and (3) an additional "usage fee"
per minute used, at a particular location, beyond the
allocated minutes covered by the "access fee." (See
March 30 Mahoney Aff., Ex. C. ~~ 3.1(a)-(c).) The
February 1999 proposal specified the following
annual access fees: $200,000.00 per tmmel, with an
annual 3% increase; $75,000.00 for outside access at
JFK, with an annual 3% increase; and $75,000.00
for inside access at JFK, with an annual 3 %
increase. (See id., Ex. C, Schedules 2.7(a)-(c).) The
access fees for the tunnels has since been modified.
By memorandum dated May 5, 1999, Francis
Mahoney informed Omnipoint that the Port
Authority now proposes phased-in access fees for the
tunnels. starting at $150,000.00 in year one and
increasing to $175.000.00 and $200,000.00.00 for
years two and three respectively, with an annual 3 %
increases thereafter.
The February 1999 agreement sets an aggregate
initial allocation of covered minutes of use; that is, a
total allocation for each facility is provided to the
group of carriers, rather than a separate allocation
being given to each carrier. (See id., Ex. C, ~
3.1(a).) However, counsel for the Port Authority
informed the Court at oral argument on June 3,
1999, that this provision has been modified through
subsequent negotiations with the other four carriers.
The current proposal is for each carrier to receive its
own allocation of minutes per facility. (See June 3,
1999 Tr. at 16-17.) After the carrier uses its
allocation of minutes covered by its access fee, it
would then pay a per minute fee for each additional
minute used. (See id.) The per minute fee for
additional minutes will be the same for each carrier,
and will be based upon the percentage of the average
fees charged by all carriers using the particular
facility. (See March 30 Mahoney Aff., Ex. C, ~
3.I(c).)
.S On April 9, 1999, Omnipoint filed the present
Copr. I!;l West 2000 No Claim to Orig. U.S. Govt. Works
Slip Copy
(Cite as: 1999 WL 494120, .5 (S.D.N.Y.))
motion for a preliminary injunction. [FN2] The
Court heard oral argument on the motion on June 3,
1999.
FN2. Omnipoint moved for an expedited hearing,
provided for by 47 U.S.c. i 332(c)(7)(v). at the
same time it filed the Complaint. The Port
Authority opposed this motion, arguing that the
provision allowing for an expedited hearing
applied only to actions arising from zoning
decisions. Rather than wait for the Court to decide
whether Omnipoint was entitled to an expedited
hearing in these circumstances. the plaintiff agreed
at a pretrial conference on March I, 1999 to file a
motion for a preliminary injunction.
II. SHOWING REQUIRED
PRELIMINARY INJUNCTION
FOR
A
A pany seeking to obtain a preliminary injunction
ordinarily must establish that absent award of the
injunction it will suffer irreparable harm and must
demonstrate either (I) "a likelihood of success on the
merits" or (2) "sufficiently serious questions going to
the merits to make them a fair ground for litigation
and a balance of the hardships tipping decidedly" in
the movant's favor. Waldman Publishing Corp. v.
Landol!. Inc., 43 F.3d 775,779- 80 (2d Cir.1994)
(quotation marks omitted); Coca-Cola Co. v.
Tropicana Prods., Inc., 690 F.2d 312, 314-15 (2d
Cir.1982).
Drrmipoint must meet an even more rigorous
standard here. A "clear" or "substantial" showing of
a likelihood of success is required where the
injunction sought. "will alter, rather than maintain,
the status quo"--that is, where the injunction is
properly characterized as "mandatory" rather than
"prohibitory." See Jolly v. Coughlin, 76 F.3d 468,
473-74 (2d Cir.1996) (citing Tom Doherty Assocs.,
Inc. v. Saban Entertainment, Inc., 60 F.3d 27,
33-34 (2d Cir.1995)).
Plaintiff seeks an Order mandating that the Port
Authority allow installation of Ominipoint equipment
at JFK Airport and in the Lincoln and Holland
Tunnels. Despite Onmipoint's arguments to the
contrary, the injunction it seeks is mandatory rather
than prohibitory. Although it is not always clear
which of the two types of injunction is at issue, see
id., here there is no question that the injunction
would alter, and not preserve, the status quo. [FN3]
FN3. Omnipoint characterizes the order it seeks as
Page 95
one to prohibit the Port Authority from continuing
to refuse to grant an application to Omnipoint.
This characterization amounts to mere word play.
Whether the injunction is couched to prohibit a
refusal to act or to require undertaking to act, the
injunction is clearly mandatory in character.
Requests for mandatory injunctions are subjected to
a stricter standard than are requests for prohibitory
injunctions. The moving pany must show "clearly
that he or she is entitled to relief or that extreme or
very serious damage will result from a denial of the
injunction." Phillip v. Fairlield Univ., 188 F.3d
131, 133 (2d Cir.1997). Put another way, the
movant must make a clear or substantial showing of
a likelihood of success on the merits. J oll y v.
Coughlin, 76 F.3d 468,473 (2d Cir.I996).
To justify an award of preliminary relief,
Omnipoim must both make a clear or substantial
showing that it is likely to succeed in proving a
violation of the the 1996 Acl and demonstrate
irreparable harm from the lack of interim relief.
III. ENTITLEMENT TO THE RELIEF SOUGHT
UNDER THE TELECOMMUNICATIONS ACT
OF 1996
Plaintiff alleges violation of Sections 253 and 332 of
the Act. The Court considers each alleged violation
in turn.
A. Section 253.
The 1996 Acl was enacted to promote competition
among telecommunications providers. Toward that
end, the 1996 Act provides for federal preemption of
state and local regulations that prohibit, or have the
effect of prohibiting, the "ability of any entity to
provide any interstate or intrastate
telecommunications services." See 47 V.S.C. ~
253(a) & (d). The 1996 Act preserves the authority
of slate and local governments to (I) "manage the
public rights of way;" and (2) require "fair and
reasonable compensation from telecommunications
providers, on a competitively neutral and non-
discriminatory basis, for use of public rights-of-way
on a non-discriminatory basis." 47 U.S.c. S 253(c).
*6 The parties focus entirely upon the propriety of
the compensation sought, to the exclusion of
discussing the Port Authority's right to "manage the
public rights of way." The Court therefore begins by
Copr. i!d Wesl 2000 No Claim to Orig. U.S. Govt. Works
Slip Copy
(Cite as: 1999 WL 494120, *6 (S,D,N.Y.))
examining the propriety of the compensation sought.
1. Compensation for Use of Public Rights-of-Way
Section 253(c) imposes two substantive
requirements on local governments who seek
compensation for use of their public rights-of-way:
the terms of compensation must be "fair and
reasonable," and they must be imposed on a "neutral
and non-discriminatory basis." [FN4] 47 U.S.c. S
253(c). Plaintiff alleges that the terms of
compensation sought by the Port Authority meet
neither of these two requirements. [FN5]
FN4. Section 253( c) also imposes a procedural
requirement that the local government publicly
disclose the required compensation. The panies do
nOl dispute that the compensation sought by the
Pon Authority has been publicly disclosed.
FN5. It is not clear that Section 253(c) provides
plaintiff with a private cause of action. No private
cause of action is expressly provided, and courts
have split over whether one is implied. Compare
GST Tucson Lightwave, Inc. v. City of Tucson,
950 F.Supp. 968 (D.Ariz.1996) (finding no
private right-of-action); with TCG Detroit v. City
of Dearborn, 977 F.Supp. 836 (E.D.Mich.1997)
(finding private right-of-action). The Second
Circuit has not yet considered this issue. Because
the Court concludes that plaintiff has not met its
burden to show it likely would prove violation of
Section 253(c), the Court need not and does not
consider whether a private right of action exists.
a. Fair and Reasonable Compensation.
Omnipoint asks this Court to fmd that the financial
terms proposed by NYTP (on behalf of the Port
Authority) are not fair and reasonable. The 1996 Act
does not defme the phrase "fair and reasonable
compensation, " and there is little case law
interpreting the phrase. Courts have taken one of
two approaches. First, some courts have emphasized
that in order to be fair and reasonable, the
compensation must be tied to the carrier's use of the
rights- of-way. See Bell Atlantic-Maryland, Inc. v.
Prince George's County, Civ. No. CCB-98-4l87,
1999 WL 343646 (D. Md. May 24, 1999). For
example, fees based not on actual usage of rights-of-
way but on overall profits have been found not to be
"fair and reasonable," see id. at *12, as have
requirements that the carrier provide service
elsewhere in the jurisdiction as a condition of
Page 96
gaining use of public rights-of-way, see AT & T
Communications of the Southwest, Inc. v. City of
Dallas, 8 F.Supp.2d 582, 593 (N .D. Tex. 1998).
Here, however, there is no allegation that the fees
sought are based upon general profits rather than on
usage, [FN6] and there is no requirement that
Omnipoint provide service at any location other than
those it chooses. Emphasizing that any compensation
must be tied to use of the rights-of-way, the Bell
Atlantic- Maryland court reasoned that "local
governments may not set their franchise fees above a
level that is reasonably calculated to compensate
them for the costs of maintaining and improving
their public 'rights-of-way." [FN7] Bell Atlantic-
Maryland, 1999 WL 343646, at *10. On this reading
of "fair and reasonable compensation," the Port
Authority would be limited to recovery of its
reasonable costs and it would not be entitled to
generate any sort of profit from use of its rights of
way.
FN6. In fact, Omnipoint criticizes the proposed
carrier agreement because, unlike the 1994
Agreements, the fees charged are based on
minutes of usage, rather than being based on a
percentage of profits earned. (See PI. Reply Mem.
at 6-7.)
FN7. This approach does little to elaborate the
words "fair and reasonable," and appears more
closely tethered to the concept of "compensation. "
In short, if the fees charged do not derive from
use of the rights-of.way, they cannot fairly be
considered "compensation" for such use.
This reading of "fair and reasonable compensation"
may too severely limit the term. As the court in
TGC Detroit v. City of Dearborn noted, such a
reading treats the 1996 Act as if it allowed
recoupment of "costs" rather than gaining of
"compensation." 16 F.Supp.2d 785, 789
(E.D.Mich.1998). Moreover, the term
"compensation" has long been understood to allow
local governments to charge rental fees for public
property appropriated to private commercial uses.
See City of St. Louis v. Western Union Tel. Co.,
148 U.S. 92, 99 (1893). It is thus doubtful that
Congress, by use of the words "fair and reasonable
compensation, " limited local governments to
recovering their reasonable costs.
*7 The Court need not, however, decide whether
fair and reasonable "compensation" is equivalent to
fair and reasonable "costs" because the parties have
Copr. rg West 2000 No Claim to Orig. U.S. Gov!. Works
Slip Copy
(Cite as: 1999 WL 494120, *7 (S.D.N.Y.))
not presented any evidence that the fees sought by
the Port Authority exceed its reasonable costs to
construct, maintain and administer the planned
teleconununications network.
The TGC court propounded an alternative test to
determine whether compensation was "fair and
reasonable" within the meaning of Section 253. See
TGC Detroit v. City of Dearborn, 16 F.Supp.2d
785, 789 (E.D.Mich.I998). Holding that what is fair
and reasonable should be determined in light of the
totality of the circumstances, the court identified
several non-exclusive factors that inform the
determination: (I) the extent of use of the public
rights-of-way; (2) whether other carriers have
agreed to comparable compensation (for comparable
uses of public rights of way); (3) the course of
dealings among the parties; and (4) whether the
compensation sought is "so excessive that it is likely
to render doing business unprofitable." 1d. at
790-91.
Taking these factors into consideration, the Court
concludes that plaintiff has not sustained its burden
to show a clear or substantial likelihood that it will
succeed in proving violation of the 1996 Act.
Omnipoint's arguments do not implicate the first
three of these factors in any serious way. First, the
contemplated usage of the public rights-of-way,
especially in the two tunnels, is extensive. Second,
the Court cannot, at this point, determine whether
the compensation sought is comparable to what other
carriers would accept because negotiations have not
yet concluded. [FN8] It is thus difficult for the Court
to know what terms, if any, the other carriers will
find acceptable. Moreover. Omnipoint has not
successfully negotiated the use of rights-of-way in
any tunnels, so its own experience with other tmlllels
provides no basis for comparison. (See Goldfisher
Dep. at 17-23.)
FN8. Plaintiff argues that the absence of an
agreement with any of the carriers demonstrates
that the proposal is unfair and unreasonable. The
Court disagrees. The first version of the proposed
agreement was circulated in August of 1998, with
revisions in December of 1998 and February of
1999. As of the beginning of June 1999, NYTP
was continuing to negotiate terms with the other
carriers. This time-frame is not so extended as to
warrant inferring that the carriers have rejected the
proposed terms which are, in any event, being
negotiated. The proposed agreements would be
long-term contracts, and would serve as a model
Page 97
for future carrier access agreements with
additional market entrants. It does not appear
unreasonable that the terms of such agreements
would be carefully negotiated. The Court does
not, however, discount the possibilities that either
the final terms may be unfair and unreasonable or
that a significantly protracted period during which
the carriers refuse to accept proposed terms may
evidence that the terms are unreasonable. On the
present record, however, Omnipoint fails to show
a "clear" or "substantial" likelihood of proving
that the final terms will be unfair or unreasonable.
Third, the course of the parties' dealings similarly
provides no insight into the fairness or
reasonableness of proposed terms of compensation.
As noted, Omnipoint has steadfastly refrained from
negotiating with NYTP, rendering it difficult to
assess what terms, other than those applicable under
the 1994 Agreements with AT & T and BAM, would
be acceptable to Omnipoint.
Moreover, it is virtually impossible for the Court to
determine whether the proposed terms are fair and
reasonable because these terms have yet to be
finalized, and are the subject of ongoing negotiation
with carriers other than Omnipoint. The Court does
note that the latest proposal from NYTP, of
February 1999, eliminates almost all of the terms to
which Omnipoint objects in its Complaint and
motion papers. For example, Omnipoint's principal
illustration of an unfair term is the alleged
requirement that a carrier pay to use all Port
Authority locations, regardless of which locations it
actually uses. [FN9] The February 1999 draft of the
agreement sets separate fees for each location,
eliminating the "tying" aspects that were the focus of
plaintiff's submissions.
FN9. Defendant denies that it ever proposed
charging fees for locations not used. Whether or
not such charges were ever contemplated, it is
undisputed that the February 1999 proposal does
not impose fees for unused Port Authority
locations.
*8 Plaintiff advances but one argument as to why
the current proposal exacts unfair compensation--that
the proposed access fees are so onerous as to make
unprofitable Omnipoint's provision of telephone
service in the tunnels. This argument implicates the
fourth factor identified by the TGC court: whether
the compensation is "so excessive that it is likely to
render doing business unprofitable." TGC Detroit,
Copr. ~ West 2000 No Claim to Orig. U.S. Gov!. Works
Slip Copy
(Cite as: 1999 WL 494120, "S (S.D.N.Y.))
16 F.Supp.2d at 790-91. Toward this end,
Omnipoint argues that the annual fees and
surcharges for uSe of the tunnels would exceed
Omnipoint's revenues on calls made in the tunnels.
There are, however, several flaws with Omnipoint's
assertion that the proposed fees would force it to
operate at a loss. First. the projected loss is based on
Omnipoint offering all customers service in the
tunnels while maintaining its current pricing
schedule. It is certainly within Omnipoint's range of
options to either increase its rates or offer a pricing
package that includes tunnel service at a higher rate
for that service. [FNIO] Second, Omnipoint at most
demonstrates that it will lose money on calls made in
the tunnels. Omnipoint does not account for any
additional revenue it could expect to generate for
service provided outside of the tunnels to customers
attracted to Omnipoint because of its new "tunnels
service." Counsel for Omnipoint conceded at oral
argument that it has not considered the affect of
these potential revenues on its overall profitability.
(See June 3, 1999 Tr. at 28-29.) Given Omnipoint's
insistence that a carrier's ability to provide service in
the tunnels significantly influences consumer choice
of carriers, a modest loss on calls placed in the
tunnels may be offset by a significant increase in its
customer base and overall profits. These
considerations are necessarily speculative, however,
because Omnipoint has not presented the Court with
any support for its assertion that it will be forced. by
the currently proposed fee schedule, to operate at a
loss. Given plaintiff's burden to justify the injunction
it seeks, the Court rejects as unsupported plaintiff's
conclusion that the proposed fees are unreasonable
and unfair. [FNll]
FNIO. Compensation is not rendered unfair or
unreasonable simply because it does not fit
Omnipoint's current business plan and pricing
schedule. Omnipoint concedes that it has not
prepared a "total cost business case" to determine
what level of fees it would find tinancially viable
to pay for use of Port Authority rights of way.
(See Davis Dep. at 53-56.)
FN 11. Omnipoim also argues that it would be
"obligated to provide service in multiple Port
Authority properties" even though it "can provide
service using far less elaborate and expensive
equipment than the Port Authority demands." (PI.
Mem. at 14-15.) This argument is also foreclosed
by the revisions to the proposed agreement, which
allow each carrier to choose the facilities in which
it will operate. It will be Omnipoim's choice
Page 98
whether to offer the services it curremly provides
at, for example, JFK Airport, or to lease rights-of-
way that enable it to offer more expanded
services. (March 30 Mahoney Afl. ~ 5.)
It is possible that Omnipoint could, armed with
sufficient market analysis, demonstrate that the
proposed fees are too onerous for relatively new
market entrants to bear. Upon such a showing,
Omnipoint's claim for violation of Section 253
would be strengthened significantly.
b. Terms Imposed on a Neutral and Non-
Discriminatory Basis
Omnipoint does not dispute that the proposed carrier
agreement contemplates treating all carriers exactly
the same. [FNI2] Toward that end, the Port
Authority intends to terminate the 1994 lease
agreements it negotiated with AT & T and BAM,
necessitating that AT & T and BAM sign versions of
the proposed agreements. (March 30 Mahoney Aff.
~~ 4-10.) Nevertheless, Omnipoint argues that the
agreement is not "competitively neutral."
FNI2. At the June 3, 1999 hearing, the Court
engaged in the following colloquiy with
Omnipoint's counsel: THE COURT: But I gather
you are saying the current offer would be the same
offer for each carrier, and once they signed on,
obviously, with respect to the teons, there would
be no discrimination among the carriers.
MR. FIERST: The teons ultimately would be the
same for everybody. That doesn't get to the
question whether the terms are fair and
reasonable, which is a separate section of the
statute, separate allegation we make. Just looking
at the discrimination issue, then you are right..
(June 3. 1999 Tr. at 15.)
Omnipoint's principal argument, although variously
fashioned. is that because the Port Authority
negotiated certain terms with cellular carriers AT &
T and BAM in 1994, the 1996 Act requires the Port
Authority to offer those same terms to Omnipoint
now, even though AT & T and BAM will not enjoy
the 1994 terms in the future. For example,
Omnipoint argues that forcing it to share the cost of
building network components useful only to cellular
companies is discriminatory because the 1994
Agreements did not require AT & T and BAM to
pay for construction of a cellular infrastructure.
Plaintiff's argument fails to demonstrate a likelihood
of proving discriminatory terms for two reasons.
Copr. <D West 2000 No Claim to Orig. U.S. Govt. Works
Slip Copy
(Cite as: 1999 WL 494120, *S (S.D.N.Y.))
*9 First. the February 1999 proposal requires only
that the carriers pay the costs of constructing
network components that they will use in Pon
Authority facilities that they will use. [FN13] (See
DiGeronimo Dep. at 104.) Moreover, even if the
PCS and cellular carriers were to have shared the
costs for building infrastructures for both cellular
and PCS. that arrangement would appear to be more
advantageous to the pes carriers than one in which
each carrier contributed only to the infrastructure for
its type of service. A significant ponion of the
network useful to cellular providers has already been
built. Dividing all future construction costs among
cellular and PCS providers alike would have,
therefore. subsidized rather than penalized PCS
providers. [FN 14]
FNI3. (See March 30 Mahoney Aff., Ex. e. ~
2.7(a).) If such network components have been
constructed before an individual carrier signs a
carrier agreement, the carrier is required to pay its
pro-rata share of construction costs to any carrier
that has previously paid construction costs. (See
id.)
FN 14. Sharing construction costs for both pes
and cellular components of the network would
benefit PCS carriers for another reason: at
present, there are only two peS carriers in New
York and New Jersey (Sprint pes and
Omnipoint), while there are three cellular carriers
(AT & T, BAM and NexTel). At first blush, it
would seem more beneficial to Omnipoint to pay
one.fifth of the cellular and PCS construction costs
rather than paying one-half of the PeS costs.
Indeed, BAM objected to the August 1998 version
of the proposed carrier agreement on precisely this
groung. (See DiGeronimo Dep. at 80-81.) Here
again, however, plaintiff does not offer any
estimates of comparative costs to build out a PCS
network and a cellular network, rendering it
impossible for the Court to determine whether the
proposed division of costs was beneficial or costly
to Omnipoim.
Second. the allegation of discrimination is based not
on differences in how the carriers are to be treated
under the new agreements, but on differences
between how AT & T and BAM were treated under
the 1994 Agreements and how all wireless carriersm
including AT & T and BAM--will be treated under
the new agreements. This cannot constitute
discrimination against Omnipoint. Indeed,
Orrmipoint concedes that the proposed carrier
agreements would not treat carriers differently,
Page 99
arguing it should be given "something akin to
affirmative action"--that is, the more favorable terms
AT & T and BAM enjoyed under the 1994
Agreements--so that it can "catch up with the
incumbents." [FNI5] (See June 3, 1999 Tr. at
14-15.)
FN 15. Omnipoim cites no authority for the
proposition that the 1996 Act, in requiring
"neutral and non-discriminatory" terms of
compensation, allows (let alone requires)
"affirmative action." Moreover, even if it made
sense to compare past treaunem of AT & T and
BAM ~ith present treatmem of all the carriers, in
1994 AT & T and BAM were not similarly
situated to plaintiffs. AT & T and BAM bore the
up-front cost of constructing a cellular network in
the tunnels, while none of the carriers will bear
that cost for the new construction. Moreover, AT
& T and BAM did not have to pay to construct a
PCS network in 1994 because PCS was not even
available until November of 1996.
Omnipoint also characterizes as discriminatory a
now-abandoned proposal that each carrier pay a
surcharge on calls placed or minutes used once an
aggregated number of calls or minutes have been
used by all carriers. Omnipoint correctly notes that
the surcharge, because it was to be triggered by
aggregate usage rather than tailored to each carrier's
usage, would have penalized smaller carriers who
presumably would use a smaller amount of the pre-
surcharge minutes. According to Port Authority
counsel, the current proposal is for a surcharge
triggered by each carrier's usage of its own
allotment of minutes. (See June 3, 1999 Tr. at
16-17.) Accordingly, Omnipoint's argument on this
point is now moot.
Omnipoint nevertheless objects that any fees based
on minutes used, rather than on percentage of
profits, is discriminatory because AT & T and BAM
paid a percentage of profits under the 1994
Agreements. This argument again confuses matters
by comparing the new agreement's uniform
treatment of all carriers with the treatment of AT &
T and BAM under the 1994 Agreements. Omnipoint
nevertheless argues that a fee based on minutes used,
even if applied to each carrier on identical terms, is
not competitively neutral because Orrmipoint is a
smaller company with more limited service areas
than its competitors. Omnipoint argues that its
relative size and service area make it more difficult
for Orrmipoint than for its competitors to spread its
Copr. <!d West 2000 No Claim to Orig. U.S. Govt. Works
Slip Copy
(Cite as: 1999 WL 494120, *9 (S.D.N.Y.))
costs. Omnipoint provides no legal support for its
claim that imposition of an identical fee structure is
not competitively neutral. Nor does Omnipoint
provide any factual support--by way of market
analysis or even an Omnipoint "business case"
assessmentuto indicate that Omnipoint cannot afford
the fees proposed.
*10 Omnipoint also characterizes as discriminatory
the Port Authority's alleged plan to begin further
network construction only after all five of the area's
carriers sign the proposed agreement. According to
Omnipoint. this approach advantages AT & T and
HAM who can, by virtue of refusing to sign the
agreement. delay interminably construction of the
network for pes carriers. The Port Authority has
made clear, however, that it does not intend to wait
to begin construction until all of the carriers sign
agreements. (See DiGeronimo Dep. at 97-99.)
Instead, the Port Authority plans to begin
construction as soon as one of the pes carriers signs
the agreement. (See id.) Furthermore, NYTP
estimates that it could install cabling for PCS within
120 days of such an agreement. (See DiGeronimo
Dep. at 98.)
Finally. plaintiff argues the Port Authority
discriminates by allowing AT & T and HAM to
negotiate terms of a new carrier agreement while
continuing to provide service in the tunnels, but not
allowing plaintiff into the tunnels while it negotiates
such terms. The Court is unpersuaded. AT & T and
HAM paid significant consideration for the 1994
contracts, and thus are not similarly situated to
plaintiff who has never entered into an agreement
with the Port Authority. Moreover, the Port
Authority has articulated a reasonable basis for
rejecting plaintiff's interim technical solution for the
tunnels. Plaintiff proposes to attach antennae and
repeaters to the existing (cellular) cable in the
tunnels to enable that cable to process PCS signals.
The Port Authority objects that placement of
antennae and repeaters will interfere with use of the
large "sweepers" used to clean the tunnels. [FNI6]
FN16. Plaintiff asserts that the antennae are no
larger than cameras already placed in the mnnels,
and consequently that Port Authority personnel
operating the sweepers will have a no more
difficult task to avoid the antennae than they do
avoiding the cameras. This answer is not
persuasive. The antennae do nOl replace the
cameras, but are additional obstacles. Moreover,
to the extent that they are smaller than the
Page 100
cameras, they would be more difficult to detect
and avoid. Finally, plaintiff does not propose any
limitations on liability for damage to the antennae
or consequent disruption of service. Moreover,
because Omnipoint proposes to attach antennae to
the existing cellular cable, liability for disruption
to AT & T and RAM service, as well as to
Omnipoint service, are issues that would need to
be addressed.
In sum. plaintiff's allegations of discriminatory
treattnent are deeply flawed. All of these allegations
suffer from one of two fatal defects: they either
relate to provisions no longer proposed or they
compare the proposed agreement's terms to the 1994
Agreements, rather than demonstrating
discrimination among carriers under the proposed
agreements.
2. Management of Public Rights-of-Way
The Port Authority's objections to installing
antennae in the tunnels also implicates the Port
Authority's right to "manage" the public rights-of-
way, another prerogative preserved to local
governments in Section 253(c). For guidance about
the meaning of the phrase "to manage the public
rights of way," the Court looks to the FCC. the
agency charged with implementing the 1996 Act.
The FCC, drawing on the legislative history of
Section 253(c), has found that "management
functions" include the ability to:
(1) "regulate the time or location of excavation to
preserve effective traffic flow, prevent hazardous
road conditions, or minimize notice impacts;" (2)
"require a company to place its facilities
underground, rather than overhead, consistent with
the requirements imposed on other utility
companies;" (3) "require a company to pay fees to
recover an appropriate share of the increased
street repair and paving costs that result from
repeated excavation;" (4) "enforce local zoning
regulations;" and (5) "require a company to
indemnify the City against any claims of injury
arising from the company's excavation."
*11 See Classic Tel.. Inc.. II F.C.C.R. 13082, al~
39 (1996) (quoting testimony of Sen. Feinstein).
The Port Authority has raised the same sort of
"management" concerns in objecting to installation
of antennae in the tunnels. [FNI7] The additional
diftlculty antennae would pose for cleaning the
tunnels is clearly a "management" concern. Indeed,
the Port Authority's solution of cable without
Copr. <1;J West 2000 No Claim to Orig. U.S. Govt. Works
Slip Copy
(Cite as: 1999 WL 494120, "11 (S.D.N.Y.))
antennae is equivalent to requiring that a company
place its facilities underground rather than overhead,
a management function identified in Section 253's
legislative history. Furthermore. the Port Authority
is entirely within its rights to resist installing any
Omnipoint equipment unless and until the parties can
agree to terms governing liability arising from
placement of such antennae.
FN17. No such objections have been raised with
respect to the placement of outside antennae at
JFK Airport. Because the plaintiff has not
specified the relief it wants the Court to order at
JFK Airport, however. the Court is unable to
detennine whether a more limited injunction,
specific to JFK Airport, would be warranted. Nor
does it suffice for plaintiff to assert that it should
be treated the way AT & T and BAM are treated
under the 1994 Agreements. These agreements
govern use of lhe tunnel rights of way, not the
uses of any rights of way at JFK Airport. Indeed,
AT & T's arrangements at JFK differ from
BAM's arrangements, involving different
equipment, different placement of such equipment,
and different contracting parties (HAM has
contracted with Japan Airlines; AT & T has made
arrangements directly with the Port Authority).
B. Section 332.
The 1996 Act contains the following special
provisions for regulation of mobile services:
(B)(i) The regulation of the placement,
construction, and modification of personal wireless
service facilities by any State or local government
or instrumentality thereof--
(I) shall not unreasonably discriminate among
providers of functionally equivalent services; and
(11) shall not prohibit or have the effect of
prohibiting the provision of personal wireless
services.
(ii) A State of local government or instrumentality
thereof shall act on any request for authorization
to place, construct, or modify personal wireless
service facilities within a reasonable period of time
alier the request is duly filed with such
government or instrumentality, taking into account
the nature and scope of such request.
(iii) Any decision by a State or local government
or instrumentality therof to deny a request to
place, construct, or modify personal wireless
service facilities shall be in writing and supported
by substantial evidence contained in a written
record.
Page 101
See 47 USe. S 332(c). In contrast to Section
253(c), a private cause of action is expressly
provided for "[aJny person adversely affected by any
final action or failure to act that is inconsistent"
with the foregoing provisions. See 47 U.S.e. S
332(c)(7)(B)(v).
Omnipoint alleges that the Port Authority has
violated all four of the quoted provisions. Here
again. plaintiff has failed to demonstrate it is likely
to succeed in proving the Port Authority has violated
any of them.
To begin. the parties dispute. albeit somewhat
obliquely, whether there has been a "final action or
failure to act." Omnipoint characterizes the process
undertaken by the Port Authority as a refusal to
allow Omnipoint timely access. while the Port
Authority characterizes the process as ongoing
negotiations over terms for use of its rights-of-way.
There is some merit to the Port Authority's position.
Although plaintiff wrote to Commissioner
Henderson in January of 1997, the real trigger for
the lawsuit appears to have been the August 1998
version of the proposed carrier agreement. Plaintiff
filed the instant suit less than five months after that
version was drafted. Since August 1998, NYTP has
circulated at least three different draft proposed
agreements. Other carriers have negotiated certain
of the fmancial terms. and NYTP continues to revise
the proposed agreement. Instead of involving itself
in these ongoing negotiations. Omnipoint has
steadfastly refused to discuss any financial terms
with NYTP. There was, therefore, no opportunity
for NYTP or the Port Authority to reject any
position taken by OI1U1ipoint as to those terms.
Nevertheless, because some dispute exists as to the
finality of the Port Authority's failure to approve
interim use of its rights-of-way, the Court considers
whether plaintiff has shown it will likely succeed in
proving a violation of Section 253(c). Plaintiff has
failed to make the necessary showing.
"12 First, the Port Authority approach does not
"unreasonably discriminate among providers of
functionally equivalent services." [FNI8] Not all
"discrimination" violates the Act. Rather, only
"unreasonable" discrimination is forbidden. See
Sprint Spectrum, L.P. v. Willoth, 176 F.3d 630,
Civ. No. 98-7442, 1999 WL 326062. at "5 (2d Cir.
May 24. 1999). The only way in which the Port
Authority is alleged to discriminate is by allowing
AT & T and SAM to continue providing service,
Copr. Q West 2000 No Claim to Orig. U.S. Govt. Works
Slip Copy
(Cite as: 1999 WL 494120, "12 (S.D.N.Y.))
pursuant to the 1994 Agreements, while requiring
that Omnipoint negotiate an agreement before
gaining use of Port Authority rights-of-way.
Assuming that this differential treatment can be
characterized fairly as discriminatory, it is not
unreasonably so. The Port Authority has provided
two sound reasons for the difference. First, as
discussed above, the Port Authority objects to
plaintiff's interim technical solution which would
complicate maintenance of the tunnels and
potentially create significant liability for damage to
the antennae and disruption of service. AT & T and
HAM do not utilize antennae. so their continued
operations in the tunnels pose no such problems.
Second, the Port Authority is required to refund to
AT & T and HAM a significant portion of the pre-
paid lease of tunnel cables. This expense can be
mitigated by terminating the 1994 Agreements only
once signing of the new agreements is close at hand.
FN18. The parties agree, and the Court finds, that
PCS carriers and cellular carriers are "providers
of functionally equivalent services," at least
insofar as wireless telephone services are
concerned. See (case re: paging. etc.)
Omnipoint has also failed to show it is likely to
prove the Port Authority has "prohibit[ed] or [had]
the effect of prohibiting the provision of personal
wireless services." Omnipoint notes that it cannot
provide "seamless" coverage throughout the New
York-New Jersey metropolitan area unless it can
provide service in the tunnels. Omnipoint argues that
whenever a goverumental decision produces "gaps"
in an individual carrier's coverage, the governmental
entity functionally prohibits "the provision of
wireless services." For this proposition, Omnipoint
relies upon the Second Circuit opinion in Sprint
Spectrum. L.P. v. WilIoth. See 1999 WL 326062, at
*10 (2d Cir. May 24, 1999).
Plaintiff misreads and misapplies Sprint Spectrum.
That case distinguished regulations that produce gaps
in an individual provider's service area from those
that result in an absence of coverage by any
provider, finding that the latter and not the former
prohibit the "provision of wireless services." Indeed,
Sprint Spectrum makes clear that once any wireless
carrier provides service to a given area--as AT & T
and SAM currently do in the tunnels--there is no
prohibition on the provision of wireless services.
Instead, the state or local goverument is limited in its
ability to regulate only to the extent that it cannot
Page 102
wrreasonably discriminate among providers. As
Omnipoint itself argues, AT & T and HAM already
provide service in the tunnels. establishing that the
Port Authority has not prohibited the provision of
wireless services in these areas. [FNI9]
FN 19. Nor does the Pon Authority t s alleged
rejection of plaintiff's technical proposal--to install
an antenna system in the tunnels~-constitute a
prohibition of even Omnipoint's provision of
services. The First Circuit recently found that
rejection of a proposal to build particular facilities
did not constitute a ban on provision of wireless
services. See Town of Amherst v. Omnipoint
Communications Enterprises, 173 F.3d 9 (1st
Cir.1999); accord Sprint Spectrum, 1999 WL
326062, at *7 (stating "mandating approval of all
wireless facilities would act as a disincentive for
wireless technology that will provide better
transmission and reception with less intrusive
towers, effectively undermining the [1996 Act's 1
goal of increased innovation. It) Unless Omnipoinl
could show that its proposal was the only
technologically or economically feasible one,
rejection of its proposal would not constitute an
outright ban so as to violate the 1996 Act.
"13 Ornnipoint next argues that the Port Authority
did not meet its obligation to "act on [Omnipoint's]
request for authorization to place, construct, or
modify personal wireless service facilities within a
reasonable period of time after the request [was]
duly filed with such goverument or instrumentality,
taking into account the nature and scope of such
request. " There are several problems with
Omnipoint's reliance on this provision. First,
Omnipoint never "duly filed" any such request. The
January 29. 1997 letter, its sole written request, was
neither addressed nor sent to the relevant Port
Authority personnel; it came to their attention nine
months later. Instead of contacting the proper
personnel, Omnipoint wrote to one of the Port
Authority Commissioners (and even addressed the
letter to Conunissioner Henderson at his place of
work, not at the Port Authority). To date, the only
other "request" from Omnipoint is the injunction it
proposes in this action. Second, it is unclear what
constitutes a "reasonable period of time" within
which to negotiate contractual tenns for the use of
Port Authority rights-of-way. Moreover, it appears
that Omnipoint bears at least as much responsibility
for any delay as does the Port Authority or NYTP
because Omnipoint: (1) took more than 5 months to
make its technical proposal following its December
1997 meeting with Port Authority personnel; (2)
Copr. I() West 2000 No Claim to Orig. U.S. Govt. Works
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(Cite as: 1999 WL 494120, '13 (S.D.N.Y.))
once Omnipoint knew the Port Authority had
rejected the proposal to place antennae in the
tunnels, Ornnipoint considered but failed to develop
or propose an alternative to antennae; and (3)
Ornnipoint never attempted to negotiate fmancial
tenns for either long-term or interim access with
NYTP. [FN20]
FN20. Omnipoint attempts to substantiate an
unreasonable delay. and to excuse its failure to
negotiate agreed upon terms for use of Pon
Authority rights of way. by noting that NYTP has
not signed a formal contract with the Port
Authority to act as its agent in developing and
managing the proposed telecommunications
network. This argument is unavailing. NYTP has
been given authority to negotiate terms with all of
the carriers. subject to approval by the Port
Authority. (See Mahoney Oep. at 81-82.)
Finally, the 1996 Act does not require that the Port
Authority "approve" any request within a reasonable
period of time, only that it timely "act" upon such a
request. The Port Authority did so here by promptly
rejecting Omnipoint' s proposal once plaintiff
submitted its technical plan, and by directing
plaintiff to negotiate with NYTP. Plaintiff did not do
so, and indeed refused to discuss any terms other
than those it had originally proposed. Thus. as of the
middle of 1998, plaintiff had a definitive answer to
the only request it ever made. Given these
circwnstances, the Court cannot conclude that
Omnipoint is likely to prevail on its claim that the
Port Authority delayed action for an unreasonable
period of time. [FN21]
FN21. The Port Authority contends that Section
332(b)(ii), which requires action within a
"reasonable period of time," applies only to
"zoning" decisions. and not to negotiation over the
use of public rights- of. way . This argument has
some persuasive force. Section 332(c)(7), in
which the provision appears, is entitled
"Preservation of local zoning authority. "
Moreover, the requirements that a request be
"duly filed" and that decision be rendered within
"a reasonable period of time" suggest that the
provision refers to established procedures such as
zoning, rather than to the much less fonnal
process of contract negotiation. However, the
Court need not decide whether Section 332(c)(7)
applies to the contractual negotiations at issue in
the instant case. Even if the so-called "zoning"
provisions apply, those provisions clearly allow
the Coun to consider "the nature and scope" of
Omnipoim's requestnuse of public rights-of-way
Page 103
for which the Port Authority may seek
compensation--in deciding what constitutes a
reasonable period of time within which the Port
Authority must act. Given the complex legal and
technical issues involved, and the long-term
contracts envisioned, plaintiff has not made a
sufficiem showing that any delays in reaching
agreement have been unreasonable.
Omnipoint also contends that the Port Authority
violated Section 332(c)(7)(B)(iii), which provides
that:
(iii) Any decision by a State or local government
or instrumentality therof to deny a request to
place, construct, or modify personal wireless
service facilities shall be in writing and supported
by substantial evidence contained in a written
record.
There is no evidence that the Port Authority ever
issued a written denial of plaintiff's "request."
Plaintiff must, however, overcome two significant
hurdles before calling into play the requirement of a
denial in writing. First, plaintiff must show that this
provision applies to the process of setting
compensation for use of public rights-of-way. As
noted in footnote 22, this proposition is contestable.
Second, plaintiff must show that it "duly filed" its
request, which Omnipoint plainly failed to do. Had
plaintiff satisfied these two conditions, the Court
would likely find that defendant violated the 1996
Act by failing to issue a written denial. Even that
hypothetical violation would not, however, justify
imposition of the mandatory injunction plaintiff
seeks. Instead, the proper course of action would be
to remand plaintiff's request to the Port Authority
with instructions to issue a written denial and to
place its reasons for such denial on the record.
Then, plaintiff could return to the Court with a
record for the Court to review.
IV. CONCLUSION
'14 Plaintiff has not shown a likelihood of its
success on the merits, let alone made the "clear" or
"substantial" showing required to warrant issuance
of the mandatory injunction it seeks. In reaching this
conclusion, the Court finds significant that
negotiations to establish final terms for access are
ongoing and that Orrmipoint has, for reasons not
fully apparent, refrained from participating in those
negotiations. Moreover, the Court's conclusion is
limited both to the context of a preliminary
injunction proceeding and to the current record. The
Court does not exclude the possibility that the terms
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Slip Copy
(Cite as: 1999 WL 494120. .14 (S.D.N. Y.))
of a fmal agreement could be deemed unfair or
unreasonable. or that a significantly prolonged delay
in reaching a fmal agreement could support a finding
that the Port Authority discriminates by allowing AT
& T and BAM to continue providing service under
the 1994 Agreements. Nor does the Court discount
the possibility that Omnipoint could, armed with
sufficient market research and analysis, demonstrate
that the fees proposed by NYTP and the Port
Authority are not competitively neutral because they
too severely handicap new market entrants. On the
present record. however. the Court cannot conclude
that plaintiff has made the "clear" or "substantial"
Page 104
showing that it must make to justify the mandatory
injunction it seeks. Accordingly. plaintiff's motion
for a preliminary injunction is denied.
The parties are directed to appear before the Court
on July 19, 1999 at 10:30 a.m. in Courtroom 905,
United States Courthouse. 40 Foley Square. New
York. New York 10007 to schedule the further
conduct of this action.
SO ORDERED:
END OF DOCUMENT
Copr. <!d West 2000 No Claim to Orig. U.S. Govt. Works
{\
49 F.Supp.2d 805
(Cite as: 49 F ,Supp,2d 805)
BELL ATLANTIC-MARYLAND, INC.
v,
PRINCE GEORGE'S COUNTY, MARYLAND,
No, Civ, CCB-98-4187,
United States District Court,
D. Maryland.
May 24, 1999.
Teleconununications service provider brought action
challenging validity of county's telecommunications
franchise ordinance. On cross motions for summary
judgment, the District Court, Blake, 1., held that
ordinance exceeded permissible scope of rights-of-
way regulation. and thus violated Federal
Telecommunications Act of 1996.
Plaintiff's motion granted.
[1] CONSTITUTIONAL LAW~ 46(1)
92k46(1)
Court has duty to avoid deciding constitutional
questions presented unless essential to proper
disposition of case.
[2] ST A TES~ 18,5
360k18.5
Under Supremacy Clause, local law is nullified to
extent that it actually conflicts with federal law by
standing as obstacle to accomplishment and
execution of full purposes and objectives of
Congress. U.S.C.A. Const. Art. 6, 9 2.
[3] TELECOMMUNlCA TIONS~ 1
372k1
Section of Federal Telecommunications Act of 1996
(FTA) pennitting states to adopt "competitively
neutral" regulations does not apply to local
government entities unless state specifically
delegates such authority to its local governments.
Telecommunications Act of 1996, 47 U.S.C.A. 9
253(b).
[4] TELECOMMUNICATIONS~ 78
372k78
County's telecommunications franchise ordinance
had effect of prohibiting provision of
telecommunications services, within meaning of
Federal Telecommunications Act of 1996 (FTA) , by
imposing burdensome requirements on
telecommunications companies and vesting
Page 20
significant discretion in local goverrnnental
decisionmakers to grant or deny pennission to use
public rights- of-way. Telecommunications Act of
1996,47 U.S.C.A. 9253(b).
[5] TELECOMMUNlCA TIONS~ 78
372k78
Under Federal Telecommunications Act of 1996
(FTA), local governmental entity's decision to grant
or deny telecommunications franchise may not be
left to entity's ultimate discretion, but rather may
only be conditioned on telecommunications
company's agreement to comply with entity's
reasonable regulations for managing use of its rights-
of-way. Telecommunications Act of 1996, 47
U.S.C.A. 9 253(a, c).
[6] TELECOMMUNlCATIONS~ 78
372k78
County's telecommunications franchise ordinance
attempted to regulate telecommunications companies
in ways that exceeded county's allowable authority,
under Federal Telecommunications Act of 1996
(FTA), to manage public rights-of-way; ordinance
required companies to supply information not
directly related to county's management of its rights-
of-way and vested county with complete discretion to
grant or deny franchise application based on such
factors as applicant's "managerial, technical,
financial, and legal qualifications to construct and
operate a telecommunications system on County
property" and "[w]hether the proposal will serve and
protect the public interest." Telecommunications
Act of 1996, 47 U.S.C.A. 9253(c).
[7] TELECOMMUNlCA TIONS~ 87
372k87
Any franchise fees that local governments impose on
telecommunications companies must be directly
related to companies' use of local rights-of-way;
otherwise fees constitute unlawful economic barrier
to entry under Federal Telecommunications Act of
1996 (FTA). Telecommunications Act of 1996, 47
U.S.C.A. 9 253(a, c).
[8] TELECOMMUNlCATIONS~ 89
372k89
Local goverrnnents may not set telecommunications
franchise fees above level that is reasonably
calculated to compensate them for costs of
administering their franchise programs and of
maintaining and improving their public rights- of-
way. Telecommunications Act of 1996, 47
Copr. <1:J West 2000 No Claim to Orig. U.S. Govt. Works
49 F.Supp.2d 805
(Cite as: 49 F.Supp.2d 80S)
U.S.CA. S 253(a, c).
[9] TELECOMMUNICATIONS~ 89
372k89
County's telecommunications franchise fee of 3% of
franchisee's annual gross revenues, was not fair and
reasonable, and thus violated Federal
Telecommunications Act of 1996 (FTA); fee did not
represent cost to county of maintaining and
improving public rights-of-way that franchisee
actually used, and was not based on franchisee's
degree of use. Telecommunications Act of 1996, 47
U.S.CA. S 253(a, c).
[10] TELECOMMUNICA TIONS~ 78
372k78
"Use" of public rights-of-way, which local
govenunenta! entity may regulate under Federal
Telecommunications Act of 1996 (FT A), does not
include provision of teleconununications services
through lines and facilities owned, installed, and
maintained by others. Telecommunications Act of
1996,47 U.S. CA. !i 253(c).
See publication Words and Phrases for other judicial
constructions and defmitions.
[11] FEDERAL COURTS~ 386
170Bk386
State law governs determination of severability of
state's statute after federal district court invalidates
portion of statute.
[12] MUNICIPAL CORPORATIONS~ 111(4)
268klll(4)
Under Maryland law, while entire act need not
always be struck down because one or more of its
provisions is void, entire act must fall when
provisions are so connected that it cannot be
presumed that legislative body would have passed
one without the other; test is whether legislative
body would have enacted statute or ordinance if it
knew that part of enactment was invalid.
[12] ST A TUTES~ 64(1)
361k64(l)
Under Maryland law, while entire act need not
always be struck down because one or more of its
provisions is void. entire act must fall when
provisions are so connected that it cannot be
presumed that legislative body would have passed
one without the other; test is whether legislative
body would have enacted statute or ordinance if it
knew that part of enactment was invalid.
Page 21
[13] COUNTIES~ 55
l04k55
Under Maryland law, county's entire
telecommunications franchise ordinance would be
invalidated, despite severability provision, upon
detertnination that substantial portion were
preempted by Federal Telecommunications Act of
1996 (FTA). Telecommunications Act of 1996, 47
U.S.C.A. !i 253.
[14] CIVIL RIGHTS~ 110.1
78kllO.1
Federal preemption of local ordinances pursuant to
Supremacy Clause is not actionable under Section
1983, and thus there can be no award of attorney's
fees under Section 1988. U.S.CA. Cons!. Art. 6, !i
2; 42 U.S.C.A. !is 1983, 1988.
[14] CIVIL RIGHTS~ 293
78k293
Federal preemption of local ordinances pursuant to
Supremacy Clause is not actionable under Section
1983, and thus there can be no award of attorney's
fees under Section 1988. U.S.C.A. Cons!. Art. 6, ~
2; 42 U.S.C.A. !i!i 1983, 1988.
*807 James P. Garland, Matthew Sturtz, Miles &
Stockbrige, Baltimore, MD, for plaintiff.
Sean Wallace, Upper Marlboro, MD, Nicholas P.
Miller, William Malone, Miller & Van Eaton,
PLLC, Washington, DC, for defendant.
MEMORANDUM
BLAKE, District Judge.
Now pending before the court is the motion to
dismiss filed by the defendant, Prince George's
County, Maryland ("the County"). In the complaint,
the plaintiff, Bell Atlantic-Maryland, Inc. ("Bell
Atlantic"), challenges the legality of Prince George's
County ordinance CB-98-1998, known as the
"Telecommunications Franchise Law" ("the
ordinance"). The ordinance establishes a
comprehensive "franchise" scheme regulating the
use of the County's public rights-of-way by
telecommunications companies seeking to do
business in Prince George's County. Bell Atlantic
attacks the ordinance on a variety of federal and
state statutory and constitutional grounds. Since the
parties have agreed that this matter is to be decided
in its entirety on the present motion, Bell Atlantic's
Copr. @ West 2000 No Claim to Orig. U.S. Govt. Works
49 F.Supp.2d 805
(Cite as: 49 F.Supp.2d 805, "807)
opposition to the County's motion will be treated as
a counter-motion for judgment on the pleadings. See
Fed.R.Civ.P. 12(c).
For the reasons that follow, the court will grant Bell
Atlantic's motion and issue an injunction
permanently enjoining the County from enforcing
the ordinance. Bell Atlantic's request for damages,
attorneys' fees, and costs will be denied.
BACKGROUND
Bell Atlantic is a Maryland corporation that
provides telephone services to individuals,
businesses, and governments in Prince George's
County and throughout Maryland. As the incumbent
local exchange carrier for Prince George's County,
Bell Atlantic has constructed and continues to
construct a network of telephone lines and related
facilities needed to provide telephone services in the
county. These lines and facilities use the County's
public rights-of-way. See Compl. ~~ 2, 5. 18.
Prince George's County is a Maryland home-rule
county. having adopted a charter form of
government in 1970. Compl. ~ 3. As a home-rule
county, Prince George's County has been authorized
by the state legislature to exercise all of the powers
set forth in Article 25A, section 5. of the Annotated
Code of Maryland of 1957.
1. The Ordinance [FN 1 ]
FNl. Since this case involves a challenge to
Prince George's County's telecommunications
franchise law, the relevant provisions of the law
will be described in detail. For the complete text
afthe law, see CampI., Ex. 6.
In the fall of 1998, the county council passed and
the county executive signed "808 into law Prince
George's County ordinance CB-98-1998, entitled
"An Act concerning Teleconununications Franchises
for the Use of Public Property and Public Rights-of-
way in the County." The ordinance declares that no
person shall
construct, operate, replace, reconstruct or
maintain a telecormnunications system on, over, or
under any public rights-of-way in ... the County
without a franchise granted by the County to
provide teleconununications services within the
County .
Sec. 5A-151(a).
requirement applies
The County's "franchise"
equally to telephone services
Page 22
providers, like Bell Atlantic, which own and operate
their own telephone lines and facilities, [FN2] as
well as to telecommunications companies which
provide services through lines and facilities owned
and maintained by others. [FN3] Furthermore, the
franchise requirement covers both existing lines and
facilities and future lines and facilities. [FN4]
Failure to obtain a franchise before using the
County's public rights-of-way may subject a
telecommunications company to "the immediate
revocation of any existing permits, licenses or
franchises issued by the County...." Sec. 5A-
159(c). In addition, the County "may order prompt
removal" of. the company's existing lines and
facilities "at the [company's] expense." ld.
FN2. See Sec. 5A-151(b) ("A person shall obtain
a franchise, subject to the provisions of this
Division[,] for any telecommunications system
that occupies one or more ponions of public
propeny and/or the public rights- of-way").
FN3. See Sec. 5A-151(e) ("No person shall
provide a telecommunications service through
facilities owned, maintained or operated by any
parry upon, across, beneath, or over any public
right-of-way in the County without obtaining a
franchise therefor pursuant to the provisions of
this Division").
FN4. See Sec. 5A-159(a) ("The provisions of this
Division shall apply to all telecommunications
transmission systems either installed or under
construction within the County as of the effective
date of this Division or thereafter installed or
constructed").
In order to obtain a franchise from the County, the
ordinance requires a teleconununications company to
complete an application form providing the
following information:
(1) The name, address. telephone and facsimile
number of the applicant;
(2) The name, address and telephone number of a
responsible person whom the County may notify
or contact at any time concerning the applicant's
teleconununications system;
(3) An engineering site plan showing the proposed
location of the telecommunications system,
including any manholes or overhead poles, the
size, type and proposed depth of any conduit or
other enclosures, the relationship of the system to
all existing poles, utilities, sidewalks and other
improvements within the public rights-olCway, and
Copr. Q West 2000 No Claim to Orig. U.S. Govt. Works
49 F.Supp.2d S05
(Cite as: 49 F .Supp.2d S05, *S08)
the facility or public property address;
(4) The technical standards that the applicant
proposes to follow in conslruction and operation of
the teleconununications system;
(5) A description of the telecommunications
services to be provided;
(6) The period of time the applicant intends to use
the public property or rights-of-way;
(7) Financial infortnation;
(8) A list of other jurisdictions in which the
applicant operates or has operated a
telecommunications system; and
(9) Any additional infortnation the County's
application form may require.
Sec. SA-IS2(a)(I)-(9). There also is a $S.OOO
application fee. Sec. SA- IS2(b).
Completed applications that "meet[ ] all the
requirements of the Division" then undergo a public
hearing. Sec. SA-IS2(d). At the hearing. oral and
written testimony and "any other relevant material"
may be *809 presented for and against the
application. Id. The ordinance provides that, in
evaluating a franchise application, "the County may
consider" the following factors:
(I) The applicant's managerial, technical, fmancial
and legal qualifications to construct and operate a
telecommunications system on County property;
(2) The nature of the proposed facilities,
equipment. and services;
(3) The applicant's recent performance record of
using public rights-of-way in providing
telecommunications services in other communities,
if any;
(4) Whether the proposal will serve and protect the
public interest;
(S) The effects of a grant of a franchise on the use
of the public rights-of- way, including
consideration of the effect on current authorized
users of the rights-of-way; and
(6) Such other factors as the County may deem
relevant.
Sec. SA-IS2(e)(I)-(6). Based on these factors, the
County recorrunends either that a franchise be
granted or that the application be denied. Sec. SA-
IS2(t). [FNS] Even if the County recommends that
a franchise be granted, however, this is not the end
of the process. The next step is for the applicant and
the county executive to negotiate a "franchise
agreement." Sec. SA-152(g).
FN5. The ordinance does not specify which
County decisionmaker will preside over the
Page 23
hearing or make this initial recommendation.
Instead, the ordinance delegates to lhe county
executive the authority "to adopt regulations that
are consistent with this Division to administer and
implement this Division." Sec. 5A~166(b).
A franchise agreement sets forth the terms and
conditions of a telecommunications company's
authorization (Le., its "franchise") to use the
County's public rights-of-way. [FN6] It is not
meant to replace any existing rules and regulations
governing the use of the County's roads and
property, which remain in effect. [FN7] A franchise
agreement must be agreed upon by the parties
"within ninety (90) days from the notice of the
proposed grant," otherwise "the notice of proposed
grant shall become void" and the process starts over.
Sec. SA-152(g). [FN8] Once agreed upon by the
county executive, however, a franchise agreement
remains subject to the fmal approval of the county
council. Sec. SA-IS2(h). [FN9] Until a franchise
agreement between the County and the applicant has
been executed and approved, any franchise granted
by the County to a telecommunications company
"shall not become effective." Sec. SA-IS3(a).
[FN 10] The maximum term of a franchise
agreement is 15 years, subject to renewal by the
County "in its sole discretion." Sec. SA-153(a), (t).
Telecommunications companies whose franchises are
not renewed by the County may be required by the
County to remove their existing lines and facilities at
their own expense. See Sec. SA-158(e).
FN6. See Sec. 5A-153(b) ("A franchise authorizes
use of the public rights~ of.way and those portions
of public property specifically designated in the
franchise agreement... ").
FN7. See Sec. 5A-153(g) ("The provisions
governing any and all other pennits that may be
required by the County shall still apply and all
other applicable fees are still due").
FN8. This period may be extended by the county
executive for an additional 90 days "for good
cause." Sec.5A-152(g).
FN9. The ordinance requires that the county
council register its approval of a franchise
agreement "by resolution." Sec.5A-152(i).
FNlO. In addition, the ordinance requires the
applicant to pay a "franchise acceptance fee in an
amount not to exceed the County's costs in
Copr. i:J West 2000 No Claim to Orig. U.S. Govt. Works
49 F.Supp.2d 805
(Cite as: 49 F,Supp,2d 805, *809)
considering the application, less the amount of the
filing fee," within 30 days of the date the grant of
the franchise is approved by the county council,
otherwise "the grant shall become void." Sec.
5A-t52(j).
Each execUled and approved franchise agreement
must include the following terms and conditions:
(I) Insurance, bond and indemnification
requirements;
*S10 (2) Requirements and conditions for
construction in and use of the rights-of-way;
(3) A description of the type and location of the
system facilities to be placed on public properly or
within the public rights-of-way;
(4) Reporling and record-keeping requirements,
including fmandal audits and reconciliation of
right-of-way charge payments; [and]
(5) Any other provision or requirement deemed
necessary by the County.
Sec. 5A-I53(d). In addition, the County expressly
reserves the right, "to the extent permitted by law,
to require a franchisee, as pari of a franchise
agreement, to provide telecommunications services,
facilities, equipment andlor capacity for use to the
County, at no charge to the County." Sec.
5A-154(d). Moreover, where the County deems it
necessary, "for public purposes, to utilize the public
properly andlor rights-of-way that are occupied by a
franchisee," the ordinance authorizes the County to
require the franchisee, at its expense, to "remove
any facilities and equipment within sixty (60) days
and restore the public properly or rights-of-way
to its original condition or to such comparable
condition as may be requested by the County." Sec.
5A-153(c).
Along with regulating which telecommunications
companies may use the County's public rights-of-
way and on what terms, the County's
telecommunications franchise law also imposes a 3 %
"right-of-way charge" on all franchisees "for the
privilege of using the public properly andlor public
rights-of-way." Sec.5A-154(a). This 3% charge is
levied on each franchisee's annual gross revenues.
The ordinance defines "gross revenues," in pertinent
part, as
all revenues derived directly or indirectly by the
franchisee, its amliates, subsidiaries, parent
companies and any person in or with whom the
franchisee has a financial interest, or revenues
received by the franchisee from a person with
whom the franchisee has a revenue-producing
Page 24
agreement. from the operation of the
Telecommunications System in the designated
franchise area....
Sec. 5A-150(a)(9). [FNll] More specifically, the
ordinance explains that gross revenues "shall
include, but not be limited to:"
FN 11, Gross revenues received from a
franchisee's provision of universal telephone
services in the county. pursuant to 47 U.S.c. 9
254(c)(l), are exempt from this charge. Sec.
5A-154(c).
(A) All_ gross revenues from local
telecommunications services billed to a County
address or account number or originating within
the unincorporated area of the County;
(B) All gross revenues from long distance
telecommunications services billed to a County
address or account number or originating within
the unincorporated area of the County;
(C) All gross revenues from telecommunications
services levied on a usage or usage sensitive,
mileage or flat rate basis;
(D) All gross revenues collected from connection
or disconnection fees;
(E) All gross revenues from penalties or charges
to customers for checks returned from banks, net
of bank costs paid; all gross revenues from
recoveries of bad debts previously written off, and
revenues from sales of assignments of bad debts.
Unrecovered bad debts charged off after diligent,
unsuccessful efforlS to collect may be excluded
from gross revenue computations;
(F) All gross revenues from the rental, lease or
sublease of any conduit space, or any porlion of
the franchisee's telecommunications system, or
any capacity to other persons, whether or not
owned in whole or pari by the franchisee, for the
provision of telecommunications services,
including, but not limited to, all gross revenue
from local access fee charges;
*Sl1 (G) All other gross revenues from the
provision of telecommunications services provided
by the franchisee within the County;
(J) All gross revenues collected as a line item or
otherwise passed through to the consumer,
including, but not limited to, right-of-way charges.
Sec. 5A-150(a)(9)(A)-(G).
Under the ordinance, franchisees are required to
pay their right-of-way fees on a quarterly basis, and
Copr. i1:J West 2000 No Claim to Orig. U.S. Govt. Works
49 F.Supp.2d 805
(Cite as: 49 F,Supp,2d 80S, *811)
must accompany their payments with a financial
statement "showing the franchisee's gross revenues
for the quarter in question." Sec.5A-154(e). They
are also required to file with the County annual
tinancial statements that have been audited by a
certitied public accountant. Sec. 5A-154(g). The
County expressly reserves the right "to audit and to
recompute any amounts determined to be payable
under this Division." Sec. 5A-154(h). Furthermore,
the ordinance prohibits franchisees from "separately
identify[ing] the right-of-way charge on customer
invoices or charg ling] a surcharge to customers
within the County unless similar charges for all other
facilities rented by the person to provide
telecommunications services are similarly identified
or charged." Sec. 5A-154(k).
A franchisee's failure to comply with any of the
provisions of the ordinance or any of the tenus or
conditions of its franchise agreement may lead to the
revocation of its franchise by the County. Sec.
5A-158(a). If the County revokes a franchise, "the
County may request the franchisee at the
franchisee's or surety I s expense to remove its
facilities and equipment within sixty (60) days of the
request and restore the public property and rights-of-
way to the County's specifications." Sec.
5A-158(e).
Finally, the ordinance prohibits the "transfer of a
franchise, or a transfer of an interest in or control of
a franchisee or a franchise without prior
application to and approval by the County." Sec.
5A-156(a). [FNI2] The ordinance defines the
"transfer of a franchise" as "any transaction in
which:"
FN12. This prohibition does not apply to "a
transfer of an interest to a person who already
holds an ownership interest of 25 percent or more
... if transfer of a franchise does not occur." Sec.
5A-156(a).
(A) An ownership or other interest in or control of
a franchisee or its telecommunications system is
transferred, directly or indirectly, from one person
or group of persons to another person or group of
persons so that actual working control of the
franchisee's teleconununications system is
transferred; or
(B) The rights held by the franchisee under a
franchise agreement are transferred or assigned to
another person or group of persons.
Page 25
Sec. 5A-150(a)(19)(A)-(B). The ordinance defines
the "transfer of an interest in a franchisee" as
the sale or transfer, directly or indirectly, of an
existing or newly created equity interest in the
franchisee that mayor may not result in a transfer
of control of the franchisee.
Sec. 5A-150(a)(20). Thus, the ordinance imposes
restrictions not only on the transferability of
franchises granted by the County, but also on the
transferability of shares of stock in franchisees doing
business in Prince George's County. [FN13}
FN13. See Sec. 5A-156(d) ("Before approving a
transfer of an interest in a franchisee, the County
may consider without limitation whether the
transferee's interest will have any effect on the
franchisee's operation of the system, the
franchisee's qualifications. or the public interest").
The effective date of the ordinance, which includes
a severability clause, was January 4, 1999. Compl.
, 17
11. Bell Atlantic's Lawsuit
Bell Atlantic instituted the present lawsuit on
December 23, 1998. In its complaint, Bell Atlantic
asserts that the County's telecommunications
franchise *812 law violates numerous provisions of
federal and state law, including the Contracts,
Commerce, and Due Process Clauses of the United
States Constitution; [FNI4] 42 U.S.c. S 1983;
[FN 15} the Federal Telecommunications Act of
1996; [FNI6] the Maryland Declaration of Rights;
[FNI7] the Maryland Public Utility Companies
Article; [FNI8] and Maryland common law (breach
of contract). [FNI9] Bell Atlantic seeks declaratory
and injunctive relief, as well as damages, costs, and
attorneys' fees pursuant to 42 U.S.c. S 1988(b).
FN14. U.S. Const. an. I, ~ 10; U.S. Const art.
I, S 8: U.S. Const. amend. XIV, S I,
respectively; see Compl. ~~ 23, 28, 35.
FN15. See CompI. S 53.
FN16. 47 U.S.c. S 25t et seq.; see CompI. ~ 62.
Bell Atlantic also assens that the law violates the
Federal Communications Act of 1934, 47 U.S.c.
S 151 et seq. See id.
FN17. See CompI. ~~ 75, 80.
FNI8. See CompI. ~ 89.
Copr. ~ West 2000 No Claim to Orig. U.S. Govt. Works
49 F.Supp.2d 805
(Cite as: 49 F.Supp.2d 805, *812)
FN19. See Compl. ~ 67.
On the same day that it filed its complaint, Bell
Atlantic also filed a motion for a preliminary
injunction. This motion was rendered moot
following a hearing held before Chief Judge 1.
Frederick Motz on January 6, 1999. [FN20] At the
hearing, the parties agreed to maintain the status quo
ante pending the outcome of this case.
Subsequently, the County filed its present motion to
dismiss, and Bell Atlantic filed its response. Amicus
briefs were filed in support of Bell Atlantic's
position by Sprint Communications Company, L.P.,
and AT & T Communications of Maryland, Inc.,
both of which have filed their own lawsuits against
the County seeking to overturn the
telecommunications franchise law. [FN21] A
hearing on the present motion was held before. this
court on April 16, 1999. Counsel for all parties,
including Sprint and AT & T, were present and
addressed the court on the matters now pending.
FN20. This case was reassigned to Judge
Catherine C. Blake on February 26, 1999.
FN21. See Sprint Conununications Co. v. Prince
George's County, CCB-99-288, filed February 3,
1999; AT & T Communications, Inc. v. Prince
George's County, CCB-99-465, filed February 18,
1999. These cases have also been assigned to
Judge Blake.
STANDARD OF REVIEW
The standard for dismissing a complaint for failure
to state a claim upon which relief can be granted is a
high one. "A motion to dismiss under Rule 12(b)( 6)
tests the sufficiency of a complaint; importantly, it
does not resolve contests surrounding the facts, the
merits of a claim, or the applicability of defenses."
Republican Party of N.C. v. Martin, 980 F.2d 943,
952 (4th Cir.I992). Consequently, the County's
motion to dismiss under Rule 12(b)(6) may not be
granted unless, viewing the complaint in the light
most favorable to Bell Atlantic and accepting Bell
Atlantic's factual allegations, as well as all
reasonable inferences therefrom, as true, "it appears
beyond doubt that [Bell Atlantic] can prove no set of
facts in support of [its] claim which would entitle [it]
to relief." Id.
The standard for granting judgment on the pleadings
under Rule 12(c) is similar to the standard for
Page 26
granting summary judgment under Rule 56(c):
whether, "when viewed in the light most favorable
to the party against whom the motion is made [here,
the County], no genuine issues of material fact
remain and the case can be decided as a matter of
law." King v. Gemini Food Servs., Inc., 438
F.Supp. 964, 966 (E.D.Va.1976), aff'd, 562 F.2d
297 (4th Cir.1977); see also Jablonski v. Pan Am.
World Airways, Inc., 863 F.2d 289, 290-91 (3d
Cir.1988) ("Under Rule 12(c), judgment will not be
granted unless the movant clearly establishes that no
material issue of fact remains to be resolved and that
he is entitled to judgment as a matter of law")
(internal quotation marks and citation omitted).
Because the parties do not *813 disagree about any
material facts involved in this case and the outcome
depends upon pure questions of law, judgment on the
pleadings is appropriate.
ANALYSIS
[1][2] In keeping with the court's "duty to avoid
deciding constitutional questions presented unless
essential to a proper disposition of a case." Hannon
v. Brucker, 355 U.S. 579, 581, 78 S.C!. 433, 2
L.Ed.2d 503 (1958), the court turns first to Bell
Atlantic's claim that the County's
telecommunications franchise law violates the
Federal Telecommunications Act of 1996 ("FTA").
See Compl. ~~ 54-62 (Count V). It is a "familiar
and well- established principle" that the Supremacy
Clause, U.S. Const. art. VI, cl. 2, invalidates all
state and local laws that "interfere with, or are
contrary to," federal law. Hillsborough County v.
Automated Med. Labs., Inc., 471 U.S. 707, 712,
105 S.C!. 2371, 85 L.Ed.2d 714 (1985) (citation
omitted). Local laws may be invalidated under the
Supremacy Clause in several different ways. Id. at
713, 105 S.C!. 2371. Relevant for purposes of this
case, a local law "is nullified to the extent that it
actually conflicts with federal law" by "stand[ing] as
an obstacle to the accomplishment and execution of
the full purposes and objectives of Congress." Id.
(citations omitted). After much careful
consideration, the court finds that Prince George's
County ordinance CB-98-1998 fatally conflicts with
the terms and goals of the FT A.
L The Federal Telecommunications Act of 1996
Congress passed the FTA in 1996 in order "to end
the monopolies in local telephone services and to
benefit consumers by fostering competition between
Copr. (Q West 2000 No Claim to Orig. U.S. Govt. Works
49 F.Supp.2d 805
(Cite as: 49 F.Supp.2d 805, *813)
telephone companies in cities throughout the United
States." AT&T Communications, Inc. v. City of
Dallas, 8 F.Supp.2d 582, 585 (N.D.Tex.I998). It
was Congress I s intention that market competition,
rather than state or local regulations, would
primarily determine which companies would provide
the telecommunications services demanded by
consumers. See In re Classic Tel., Inc.. 11
F.C.C.R. 13082, ~ 25 (F.C.C.1996). To carry out
this goal, Congress adopted sweeping restrictions on
the authority of state and local governments to limit
the ability of telecommunications companies to do
business in local markets. See AT & T Corp. v.
Iowa Utils. Bd., 525 U.S. 366, nn, 119 S.Ct. 721,
726, 142 L.Ed.2d 835 (1999) ("States may no longer
enforce laws that impede competition"); City of
Dallas, 8 F.Supp.2d at 591 ("Congress's intent was
to remove all barriers to entry in the provision of
telecommunications services by preempting all state
and local legal requirements that directly or
indirectly prohibit market entry").
The provision of the FTA at issue here, 47 U.S.c.
9 253, entitled "Removal of barriers to entry,"
provides, in relevant part:
(a) In general
No State or local statute or regulation, or other
State or local legal requirement, may prohibit or
have the effect of prohibiting the ability of any
entity to provide any interstate or intrastate
telecommunications service.
(b) State regulatory authority
Nothing in this section shall affect the ability of a
State to impose, on a competitively neutral basis
and consistent with section 254 of this section,
requirements necessary to preserve and advance
universal service, protect the public safety and
welfare, ensure the continued quality of
teleconununications services, and safeguard the
rights of consumers.
(c) State and local government authority
Nothing in this section affects the authority of a
State or local government to manage the public
rights-of-way or to require fair and reasonable
compensation from telecommunications providers,
on a competitively neutral and nondiscriminatory
basis, for use of public rights-of-way on a
nondiscriminatory basis, *814 if the compensation
required is publicly disclosed by such government.
47 U.S.c. 9253(a)-(c).
[3J Section 253 preempts all state and local
regulations that "prohibit or have the effect of
Page 27
prohibiting" any company's ability to provide
telecommunications services, see id. S 253(a), unless
such regulations fall within either of the statute's two
"safe harbor" provisions, see id. 9 253(b), (c).
Section 253(b) permits states to adopt "competitively
neutral" regulations "necessary to preserve and
advance universal service, protect the public safety
and welfare, ensure the continued quality of
telecommunications services, and safeguard the
rights of consumers." This provision only applies to
states, however, "unless of course a state specifically
delegated the state authority to its local
governments." BellSouth Telecomrns., Inc. v. City
of Coral Springs, 42 F.Supp.2d 1304, 1305
(S.D.Fla.1999); see also In re Classic Tel., 11
F.C.C.R. 13082, ~ 34. In the absence of such a
delegation, local governments are prohibited by the
FT A from exercising any regulatory powers over
telecommunications companies beyond those listed in
section 253(c): "manag[ing] the public rights-of-
way" and "requir[ing] fair and reasonable
compensation" for the "use" thereof.
"Municipalities therefore have a very limited and
proscribed role in the regulation of
telecommunications." City of Dallas, 8 F.Supp.2d
at 59!.
II. Does the ordinance violate the FT A?
[4] In assessing whether the County's
telecommunications franchise law violates the FTA,
the first question the court must address is: Does the
ordinance "prohibit or have the effect of prohibiting"
Bell Atlantic and other telecommunications
companies from doing business in Prince George's
County? See 47 U.S.c. 9 253(a). The County's
position is that the ordinance "is not a prohibition
against entry," but rather "merely implements an
optional process for entry." Def. 's Motion, p. 8.
What the County appears to overlook is that the FT A
preempts local regulations that not only "prohibit"
outright the ability of any entity to provide
telecommunications services, but also those that
"may... have the effect of prohibiting" the provision
of such services. The court believes that any
"process for entry" that imposes burdensome
requirements on telecommunications companies and
vests significant discretion in local governmental
decisionmakers to grant or deny pennission to use
the public rights-of-way "may ... have the effect of
prohibiting" the provision of telecommunications
services in violation of the FT A.
Copr. rQ West 2000 No Claim to Orig. U.S. Govt. Works
49 F.Supp.2d 805
(Cite as: 49 F.Supp.2d 805, *814)
After reviewing the various provisions of the
ordinance being challenged in this case, the court
finds that the County's telecommunications franchise
law unquestionably has the effect of prohibiting the
provision of telecommunications services by Bell
Atlantic and other telecorrununications companies
seeking to do business in Prince George's County.
First, the ordinance prohibits any company from
using the County's public rights-of-way to provide
telecommunications services without first obtaining a
"franchise" from the County. See Sec. SA-IS!. In
order to obtain a franchise, telecommunications
companies must submit a lengthy and detailed
application form, along with a $5.000 application
fee. See Sec. 5A-152. Completed applications are
then subjected to a complex approval process, at
each step in which the County exercises complete
discretion over whether to grant or deny permission
to use the County's public rights-of-way. See id.
Once a franchise has been granted, the franchisee is
required, inter alia, to file regular financial reports
and to pay a "right-of-way charge" of 3% of its
annual gross revenues. See Sec. 5A-154. Finally.
the ordinance prohibits the sale of shares of stock in
a franchisee without the County's prior approval.
See Sec. 5A-156. [FN22] While each of *815 these
requirements, individually. may or may not "have
the effect of prohibiting" Bell Atlantic and other
companies from providing telecommunications
services in Prince George's County, the court
believes that, in combination, they create a
substantial and unlawful barrier to entry into the
Prince George's County telecommunications market.
FN22. The foregoing description is not intended
by the court to be an exhaustive list of the
ordinance's provisions that "may have the
effect of prohibiting" the provision of
telecommunications services in Prince George's
County.
Having determined that the County's
telecommunications franchise law violates section
253(a) of the FT A, the next question is whether it
nonetheless falls within the "safe harbor" provision
of section 253(c). [FN23] The County contends
that, under 47 U.S.c. S 253(c), the ordinance "is an
expressly permitted vehicle for the County's
management of. and receipt of compensation forL]
multiple telecommunications providers' uses of the
County's rights-of- way." Def. 's Motion, p. 3; see
also id., pp. 4. 7. 9. Bell Atlantic. on the other
hand, contends that the ordinance "attempts to
Page 28
regulate far beyond the narrow scope of rights-of-
way management." PI.' s Opposition, p. 9; see also
id., pp. 5, 6, 8. More specifically, Bell Atlantic
argues that the ordinance's various requirements,
including the detailed application, the periodic
fmanciaI reports, and the right-of-way charge, "bear
no relationship" to the County's authority under
section 253(c) to "manage the public rights- of-
ways" and to "require fair and reasonable
compensation" for the "use" thereof. See generally
PI. 's Opposition, pp. 25-32. Resolving this dispute
requires the court to examine the meaning of section
253(c) in greater depth.
FN23. Significantly, the County does not contend
that the ordinance is justified as an exercise of the
broad regulatory powers reserved to the states, but
delegable to local governments, under section
253(b).
Three questions must be addressed in connection
with this issue: First. what does it mean "to manage
the public rights-of-way"? Second, what is the
meaning of "fair and reasonable compensation"?
And third, what does it mean to "use" the public
rights-of-way?
(i) managing the public rights-of-way
With regards to the first question, this court joins
the other district courts which have looked for
guidance to the interpretation offered by the Federal
Communications Commission ("FCC"). the agency
charged with implementing the FTA. See. e.g., City
of Coral Springs. 42 F.Supp.2d at 1305; City of
Dallas, 8 F.Supp.2d at 591-92. [FN24] In In re TCI
Cablevision of Oakland County, Inc., 12 F.C.C.R.
21396 (F.C.C.1997). the FCC explained the
meaning of section 253(c) as follows:
FN24. The County erroneously asserts that the
FCC "lacks jurisdiction to construe subsection
(e)." Def. 's Reply. p. 10. Pursuant to 47 U .s.c.
~ 253(d), the FCC is expressly authorized, "after
notice and an opportunity for public comment," to
preempt any local "legal requirement" that it
determines violates section 253(a). Since local
governments may be expected to defend their
regulations on the grounds that they fall within the
"safe harbor" provision of section 253(c), the
FCC must have the authority to construe section
253(c) in order to determine whether local
regulations violate section 253(a). In any event,
while the FCC's interpretation of section 253(c) is
informative, the court is not suggesting that it is
Copr. <1:J West 2000 No Claim to Orig. U.S. Gov!. Works
49 F.Supp.2d 805
(Cite as: 49 F,Supp,2d 805, '815)
controlling.
[SJection 253(c) preserves the authority of state
and local governments to manage public rights-of-
way. Local governments must be allowed to
perform the range of vital tasks necessary to
preserve the physical integrity of streets and
highways. to control the orderly flow of vehicles
and pedestrians, to manage gas, water, cable (both
electric and cable television), and telephone
facilities that crisscross the streets and public
rights-of-way.... [T)he types of activities that fait
within the sphere of appropriate rights-of-way
management include coordination of
construction schedules, determination of
insurance, bonding and indemnity requirements.
establishment and enforcement of building *816
codes, and keeping track of the various systems
using the rights-of-way to prevent interference
between them.
Id. ~ 103. These activities were spelled out in
somewhat greater detail in In re Classic Telephone,
Inc., II F.C.C.R. 13082 (F.C.C.1996), in which
the FCC quoted from the congressional testimony of
Senator Diane Feinstein, who "offered examples of
the types of restrictions that Congress intended to
permit under section 253(c)." These examples
included
-- "regulat[ing] the time or location of excavation
to preserve effective traffic flow, prevent
hazardous road conditions. or minimize notice
impacts"
--"requir[ing] a company to place its facilities
underground, rather than overhead, consistent with
the requirements imposed on other utility
companies"
--"requir[ing] a company to pay fees to recover an
appropriate share of the increased street repair and
paving costs that result from repeated excavations"
--"enforc[ing] local zoning regulations" [and]
--"requir[ing) a company to indemnify the City
against any claims of injury arising from the
company's excavation"
See id. ~ 39 (citation omitted).
[5] The County certainly is permitted under the
FT A to require teleconununications companies
interested in using the County's public rights-of- way
to obtain a County-issued franchise. See City of
Coral Springs, at 1306; City of Dallas, 8 F.Supp.2d
at 592; see also Classic Tel., II F.C.C.R. 13082, ~
28 ("We do not believe that Congress intended to
remove franchising authority from State and local
Page 29
governments"). The court believes, however, that
the terms of any such franchise must be limited to
the types of activities described by the FCC in TCI
Cablevision and Classic Telephone, supra. [FN25]
Any attempt to regulate telecommunications
companies beyond this fairly narrow scope exceeds
the County's authority under federal law.
Furthermore, the court agrees with the district courts
in BellSouth Telecommunications, Inc. v. City of
Coral Springs and AT & T Communications of the
Southwest, Inc. v. City of Dallas, supra, that the
County's decision to grant or deny a franchise may
not be left to the County's ultimate discretion, but
rather may only be conditioned on a
telecommunications company's agreement to comply
with the County's reasonable regulations for
managing the use of its rights-of-way. See City of
Coral Springs, at 1306; City of Dallas, 8 F.Supp.2d
at 592-93. These various limitations on the County's
authority are necessary to give effect to Congress's
goal of promoting maximum competition among
local telecommunications providers.
FN25. Bell Atlantic points out that many of these
activities already are provided for under the
County's "Roads and Sidewalks" ordinance. PI. 's
Opposition, pp. 29-30. Even so, the County is not
thereby precluded from imposing an additional
"franchise" requirement on telecommunications
providers. See Md.Ann.Code. of 1957, Art.
25A, 9 5(B) (authorizing charter counties "to grant
any right or franchise in relation to any
highway, street, road, lanes, alley or bridge").
The terms and conditions of any additional
franchise requirement, of course, must be
consistent with the provisions of the Ff A.
[6] The court agrees with Bell Atlantic that the
County's telecommunications franchise law, when
viewed in the light of the above standard, attempts to
regulate telecommunications companies in ways that
exceed the County's allowable authority "to manage
the public rights-of-way" under section 253(c).
First, the ordinance requires telecommunications
companies to supply information to the County that
is not directly related to the County's management of
its rights-of-way. For example, the application form
requires telecommunications companies to provide
undelined "financial information" as well as
information about "other jurisdictions" in which the
companies operate. Sec. 5A-152(a)(7)-(8). The
application form also requires telecommunications
companies to provide information about the
"technical standards" that the companies '817 intend
Copr. i!') West 2000 No Claim to Orig. U.S. Gov!. Works
49 F.Supp.2d 805
(Cite as: 49 F.Supp.2d 805, *817)
to follow in operating their teleconununications
systems and "[aJny additional information" that the
County may request. Sec. 5A-152(a)(4). (9).
Most objectionable is the fact that the ordinance
vests the County with complete discretion to grant or
deny a franchise application based on a wide-
ranging set of factors that include the applicant's
"managerial. technical. financial, and legal
qualifications to construct and operate a
telecommunications system on County property" and
"[wJhether the proposal will serve and protect the
public interest." Sec. 5A-152(e)(l), (4). These
factors relate to regulatory issues that go well
beyond the bounds of legitimate local governmental
regulation discussed in TCI Cablevision and Classic
Telephone, supra. In addition, the ordinance
provides no criteria to guide the county executive in
carrying out his or her responsibility to negotiate
franchise agreements, see Sec. 5A-152(g), and
permits the County to refuse to renew franchises "in
its sole discretion." Sec. 5A-153(t). Based on these
and other similar provisions. the court agrees with
Bell Atlantic that the ordinance "regulates providers
of telecommunications services in the most
comprehensive and utterly discretionary fashion,"
PI. 's Opposition, p. 7, and that this far exceeds the
County's authority "to manage the public rights-of-
way" under section 253(c).
(ii) fair and reasonable compensation
[7][8] The next issue to be addressed under section
253(c) involves the meaning of "fair and reasonable
compensation." These terms are not defmed by the
FfA. Yet one thing is clear: the County is expressly
authorized under section 253(c) to demand some
type of "compensation" from telecommunications
providers "for use of public rights-of-way." 47
U.s.e. ~ 253(c); see also TCG Detroit v. City of
Dearborn. 16 F.Supp.2d 785, 789 (E.D.Mich.1998)
(explaining that there is "nothing inappropriate"
under Ff A about local governments charging
compensation or "rent" for use of public property by
telecommunications companies). The crucial point,
however. is that any franchise fees that local
governments impose on telecommunications
companies must be directly related to the companies'
use of the local rights- of-way, otherwise the fees
constitute an unlawful economic barrier to entry
under section 253(a). See City of Dallas. 8
F.Supp.2d at 593. For the same reason, the court
also believes that local governments may not set
Page 30
their franchise fees above a level that is reasonably
calculated to compensate them for the costs of
administering their franchise programs and of
maintaining and improving their public rights-of-
way. Franchise fees thus may not serve as general
revenue-raising measures.
These limitations on the authority of local
governments to impose franchise fees on
telecommunications companies are necessary to
promote the full purposes and objectives of Congress
in adopting the Ff A. If local governments were
permitted under section 253(c) to charge franchise
fees that., were unrelated either to a
telecommunications company's use of the public
rights-of-ways or to a local government's costs of
maintaining and improving its rights-of-way. then
local governments could effectively thwart the
Ff A' s pro-competition mandate and make a nullity
out of section 253(a). Congress could not have
intended such a result. The legislative history
further supports the conclusion that the purpose of
section 253(c) is to enable local governments to
recoup their investments in public rights-of-way by
imposing .. fair and reasonable" user fees on
telecommunications companies, apportioned
according to the companies' actual physical use of
the rights-of- ways. See 141 Cong.Rec. H8460
(daily ed. Aug. 4, 1995) (statement of Rep.
Stupak). [FN26J
FN26. Representative Bart Stupak, along with
Representative Joe Barton, sponsored the
amendment which ultimately became section
253(c). In offering the amendment. Rep. Stupak
cited statistics showing that cities in the United
States spent approximately $100 billion each year
on public rights-of-way, but received only about
$3 billion in return in user fees. See 141
Cong.Rec. H8460. H8460 (daily ed. Aug. 4.
1995). In the congressman's opinion, "it simply is
not fair to ask the taxpayers to continue to
subsidize telecommunications companies." Id.
The telecommunications bill as originally proposed
permitted local governments to charge
telecommunications companies for use of the
public rights-of- way; however, the bill would
have required cities to impose the same fees on all
telecommunications providers, "regardless of how
much or how little they use the right-of-way or rip
up our streets." Id. Rep. Stupak opposed this
"parity" provision, arguing that, in setting user fee
levels, cities "must be able to distinguish between
different telecommunications providers" based on
the extent and intensity of their right-of-way use.
Copr. lid West 2000 No Claim to Orig. U.S. Govt. Works
49 F.Supp.2d 805
(Cite as: 49 F.Supp.2d 805, .817)
As the congressman explained. "if a company
plans to run 100 miles of trenching in our streets
and wires to all parts of the cities, it imposes a
different burden on the right-of-way than a
company that just wants to string a wire across
two streets to a couple of buildings." Id. In
adopting the Banoo-Stupak amendment, Congress
expressly rejected the original bill's "parity"
approach to telecommunications user fees. See
City of Dallas, 8 F.Supp.2d at 594.
.818 [9] In this case. the County's
telecommunications franchise law imposes a 3 %
"right-of-way charge" on each franchisee's annual
gross revenues. Sec. 5A-154(a). The ordinance
defines gross revenues very broadly. See Sec.
5A-I50(a)(9). The County contends that this charge
represents a fair and reasonable measure of the
"value" of Bell Atlantic's "privilege" of using the
County's public rights-of-way. Def.'s Reply, p. 21;
see Sec. 5A-154(a). Bell Atlantic takes the position
that the charge is not "fairly and reasonably relate[d]
to use of the rights-of-way." PI. 's Opposition. p.
25. In particular. Bell Atlantic argues that four of
the components of gross revenue as defmed by the
ordinance are unrelated to Bell Atlantic's use of the
County's public rights-of way: "gross revenues
from long distance telecommunications services
billed to a County address," Sec. 5A- 150(a)(9)(B);
"gross revenues from telecommunications services
levied on a usage or usage sensitive" basis, Sec.
5A-150(a)(9)(C); "gross revenues collected from
connection or disconnection fees, II Sec.
5A-150(a)(9)(D); and "gross revenues from
penalties or charges to customers for checks returned
from banks from recoveries of bad debts
previously written off ... [and] from sales of
assigmnents of bad debts." Sec. 5A-150(a)(9)(E).
See PI. 's Opposition, pp. 26-27.
The court agrees that these four components of
gross revenue do not appear to be directly related to
Bell Atlantic's actual physical use of the County's
public rights-of-way; consequently, they violate the
FT A. There is a more fundamental error, however,
in the manner in which the County has calculated its
franchise fee. The appropriate benchmark is not the
"value" of Bell Atlantic's "privilege" of using the
County's public rights-otCway to provide
telecommunications services in Prince George's
County. Rather, the proper benchmark is the cost to
the County of maintaining and improving the public
rights-of-way that Bell Atlantic actually uses.
Furthermore, to be "fair and reasonable." these costs
Page 31
must be apportioned to Bell Atlantic based on its
degree of use. not its overall level of profitability.
See City of Dallas, 8 F.Supp.2d at 593 (holding that
city's requirement that telecommunications company
pay franchise fee of 4 % of its local gross revenues
"contradicts the requirements of the FT A"). [FN27]
Since nothing *819 in the ordinance indicates that
the County set the level of its "right-of-way charge"
based on these two factors. the court fmds that the
"right-of-way charge" violates the FTA.
FN27, The court respectfully disagrees with the
position taken by the district court in TCG Detroit
Y. City of Dearborn, 16 F.Supp.2d 785
(E.D.Mich.1998), which upheld a city-imposed
telecommunications franchise fee of 4 % of the
plaintiff's gross revenues, in addition to a one~
time payment of $50,000. Id. at 790-91. The
court in City of Dearborn construed section 253(c)
of the FT A as not "limit[ing} municipalities to
strictly their costs related to telecommunications
providers[.} use of their right-of-ways [sic}." Id.
at 789. The plaintiff in that case had argued that
the phrase "fair and reasonable compensation"
found in section 253( c) of the Ff A should be
given the same meaning as the phrase "just and
reasonable [rate]" found in section 224 of the Pole
Attachment Act, which under the latter statute
limits recovery "to the costs of the utility." Id. In
rejecting the plaintiff's interpretation of section
253(c), the district court carefully distinguished
the two statutes, id.. but it did not address the
various reasons intrinsic to the FT A that this court
finds persuasive for limiting the franchise fees
imposed by local governments to the costs of
maintaining and improving the local public rights-
of-way.
(iii) using the public rights-of-way
[10] A final, related question has to do with what it
means under section 253(c) to "use" the public
rights-of-way. Specifically, the issue is whether the
County may impose franchise fees on
telecommunications companies, like Sprint, that
provide telecommunications services through lines
and facilities owned, installed, and maintained by
others, such as Bell Atlantic. See Sec. 5A-151(e).
Bell Atlantic argues that this provision of the
ordinance "goes beyond the protection of the
County's rights-of-way" permitted under the FTA.
PI. 's Opposition, p. 5. The court agrees. lFN28]
FN28. The County suggests that Bell Atlantic
lacks standing to challenge this particular aspect of
Copr. cg West 2000 No Claim to Orig. U.S. GOY!. Works
49 F.Supp.2d 805
(Cite as: 49 F.Supp.2d 805, *819)
the telecommunications franchise law. See Def. 's
Reply, p. 4 n. 4. The court disagrees. First, the
County's decision to extend its franchise
requirement to companies. like Sprint. which offer
telecommunications services using lines and
facilities leased from Bell Atlantic threatens to
injure Bell Atlantic's commercial prospects of
receiving rental income from such companies
because it makes doing business in Prince
George's County for such companies more costly.
Overturning the franchise requirement will redress
this injury. Thus, the "irreducible constitutional
minimum of standing" is satisfied. See Burke v.
City of Charleston. 139 F.3d 401. 405 (4th
eif.1998) (citing Lujan v. Defenders of Wildlife,
504 U.S. 555, 560-61. 112 S.Ct. 2130, 119
L.Ed.2d 351 (1992)). Second, the FTA not only
anticipates, but mandates that incumbent local
exchange carriers, like Bell Atlantic. lease their
lines, facilities, and services to newcomers to local
telecommunications markets. See 47 U. S. c. 9
251(c); AT & T Corp. v. Iowa Utils. Bd.. 525
U.S. 366, m_ - ----, 119 S.C!. 721, 726-27. 142
L.Ed.2d 835 (1999). At the same time. section
253(a) of the FT A expressly prohibits local
governments from interfering with "the ability of
any entity 10 provide any interstate or intrastate
telecommunications service." Since the County's
decision to apply the franchise requirement to
companies like Sprint will necessarily affect Bell
Atlantic's ability to conduct its own
telecommunications business, the court believes
that Bell Atlantic's complaint on this issue "fall[5]
within the zone of interests the statute ... protects
or regulates." Burke, 139 F.3d at 405 (citing
Valley Forge Christian College v. Americans
United for Separation of Church and State, Inc.,
454 U.S. 464, 475, 102 S.Ct. 752, 70 L.Ed.2d
700 (1982)). Thus, the prudential limitation on
standing is also satisfied.
As discussed previously, the FT A restricts the
regulatory authority of local governments to the
types of activities described by the FCC in TCI
Cablevision and Classic Telephone, supra. These
are activities that relate to the physical alteration,
occupation, and restoration of the public rights- of-
ways. The FT A further prohibits local governments
from imposing franchise fees that are unrelated to
telecorrununications companies' "use of public
rights- of-way" or that are designed to compensate
local governments in excess of the cost of
maintaining and improving the rights-of-way. It is
evident, then, that local governments may not
regulate or demand compensation from
telecommunications companies based solely on those
companies' provision of telecommunications
Page 32
services. The regulation of telecommunications
services is the province of the federal and slale
governments only. ConsequenIly, the coun believes
that unless a telecommunications company doing
business in Prince George's County physically
impaCIS the pubItc rights-of-way by installing,
modifying, or removing telecommunications lines
and facilities, it is not "using" the rights-of-way
within the meaning of section 253(c), and the County
may not charge it a franchise fee.
The same issue was discussed by the district court
in AT & T Communications of the Southwest, Inc.
v. City of' Auslin, *820 975 F.Supp. 928
(W.D.Tex.I997). In City of Austin, AT & T sought
to enter the local telephone services market by
reselling services purchased from the incumbent
local exchange carrier, Southwestern Bell Telephone
Company, and by providing its own services through
Southwestern Bell's existing lines and facHilies. Id.
at 934. Although AT & T did not own or maintain
any lines or facilities of its own, the city
nevertheless required it to comply with the
provisions of the city's "extremely comprehensive"
telecommunications ordinance. Id. aI934-35. This
ordinance required telecorrununications companies
seeking to do business in Austin, inter alia, to
provide detailed tinancial, organizational, and legal
information; to pay quanerly franchise fees; and to
obtain municipal consent before being permitted to
operate in the city. Id.
In its lawsuit, AT & T challenged the Austin
ordinance on nwnerous federal and stale statutory
and constitutional grounds, including preemption
under the FT A. In granting AT & T's motion for a
preliminary injunction, the coun found that there
was a substantial likelihood that AT & T would
prevail on the merits of its Ff A claim. Id. at
939-41. The court also found that a "non-facilities-
based provider," like AT & T, could not be charged
for "using" the local public rights-of-way. As the
court explained:
The City's interest in regulating local telephone
service providers is limited by federal and state
law to managing and demanding compensation for
the use of the City's public rights-of-way. The
City's unsupponed assenion that a non-facilities-
based provider is "using" the City's public rights-
of-way is wholly unpersuasive. In fact, it is a
metaphysical interpretation of the term "use" that
defies logic and common sense.
Id. at 942-43.
Copr. <l') West 2000 No Claim to Orig. U.S. Govt. Works
49 F. Supp. 2d 805
(Cite as: 49 F.Supp.2d 805, .820)
Prior to final judgment in the case, the city renewed
its argument that AT & T was using the city's rights-
of-way and therefore was subject to the ordinance's
requirements. See AT&T Conununications, Inc. v.
City of Austin, 40 F.Supp.2d 852, 853
(W.D.Tex.1998). The city argued that AT & T was
physically occupying the public rights-of-way
because the signals AT & T transmitted using
Southwestern Bell's facilities consisted of electrons
and lightwaves that traveled through lines, cables,
and switches located in the city's rights-of- way. Id.
at 853. The court rejected this argument as
"border[ing] on the absurd" and reiterated its earlier
finding that AT & T was not "using" the public
rights-of-way within the meaning of section 253(c).
Id. In the court's view, the "essential point" was that
AT & T "will not erect telephone poles or dig holes
in the City's streets in order to install, maintain,
operate, or repair [Southwestern Bell's] network."
Id.
This court similarly concludes that, consistent with
section 253(c), the County may not require
telecommunications companies which provide
teleconununications services through lines and
facilities owned by others to obtain a franchise or
pay any franchise fees before offering such services
in Prince George's County. Section 5A-151(e) of
the County's telecommunications franchise law is
therefore preempted by the FTA. In addition, any
other provision of the ordinance that is not directly
related to telecommunications companies I "use of
public rights-of-way," as that phrase is herein
defmed, violates the FTA.
Ill. Severability
[11][12] The County's telecommunications
franchise law contains an express severability clause.
"State law--herein, the law of Maryland--govems
determination of severability of a state statute."
Muller v. Curran, 889 F.2d 54, 57 (4th Cir.1989).
Under Maryland law, "[w]hile an entire act need not
always be struck down because one or more of its
provisions is void, the entire act must fall when the
provisions are so connected that it cannot be
presumed that the Legislature would have passed one
without the other." Park v. Board of Liquor License
Comm'rs, 338 .821 Md. 366, 382, 658 A.2d 687,
695 (1995) (internal quotation marks and citation
omitted). The test is whether "the legislative body
[would] have enacted the statute or ordinance if it
knew that part of the enactment was invalid." Id.
Page 33
(internal quotation marks and citation omitted).
[13][14] In this case, given the number and variety
of provisions of the County's telecommunications
franchise law that are preempted by the FT A, the
court does not believe that attempting to sever the
invalid from the valid provisions would be
appropriate. At a minimum, the FTA preempts
substantial portions of the ordinance dealing with the
franchise application and approval process, the
calculation and apportioning of rights-of-way
charges, and the extension of the franchise
requirement to telecommunications companies and
services that do not use the County's rights-of-way.
Under these circwnstances, the court cannot find that
the County would have enacted the remaining
portions of the ordinance separately. The County
itself took the position at oral argument that these
provisions of the ordinance essentially were not
severable. See Hearing Trans. pp. 39-43. Thus, the
entire ordinance must be struck down on federal
preemption grounds. [FN29]
FN29. Since the court finds that the County's
telecommunications franchise law fatally conflicts
with the terms and goals of the Ff A, the court
declines to address Bell Atlantic's alternative
federal constitutional and 42 U.S.c. ~ 1983
claims. See Compl. ~~ 19-53 (Counts I-IV). To
do otherwise is both unnecessary and improper.
Moreover, the court will deny Bell Atlantic's
request for damages, costs, and attorneys' fees
under 42 USe. * 1988(b). See Maryland Pest
Control Ass'n v. Montgomery County, 884 F.ld
160, 163 (4th Cir.1989) (per curiam) (holding that
"federal preemption of local ordinances pursuant
to the Supremacy Clause is not actionable under
Section 1983. Therefore, there can be no award
of attorney's fees under Section 1988 ").
IV. Bell Atlantic's State Law Claims
In addition to its federal statutory and constitutional
claims, Bell Atlantic argues that the County's
telecommunications franchise law must be struck
down on numerous state law grounds. See Compl. ,-r
~ 63-93 (Counts VI- IX). These arguments merit a
brief discussion, but need not be resolved by this
court.
First, Bell Atlantic argues that the authority to
decide which telecommunications companies are
qualified to do business in Prince George's County,
or anywhere else in the state for that matter, has
Copr. <!;J West 2000 No Claim to Orig. U.S. Govt. Works
49 F.Supp.2d 805
(Cite as: 49 F.Supp.2d 805, *821)
been delegated by the state legislature exclusively to
the Maryland Public Service Commission. Bell
Atlantic claims that the County is therefore
preempted under state law from enacting any local
regulations that purport to evaluate the technical,
fInancial, or organizational qualifIcations of
telecommunications companies seeking to do
business in the county or that otherwise permit the
County to deny telecommunications companies
access to the County's public rights-of-way. See
PI. 's Opposition, pp. 14-19.
Second, Bell Atlantic argues that the County in its
charter has not been authorized by the state
legislature to impose any fees on telecommunications
companies for the companies' use of the County's
public rights-of-way. See id., pp. 20-24.
Third, Bell Atlantic argues that the ordinance
violates the terms of the company's perpetual,
statewide franchise that it claims to have received
from the Maryland legislature in 1884. According
to Bell Atlantic. the tenns of this franchise permit
Bell Atlantic to use the public rights-of-way
throughout the state free of any right-of-way charges
or other burdensome local regulations. See id., pp.
32-43.
And fourth, Bell Atlantic argues that the ordinance
violates the terms of a perpetual local telephone
services contract allegedly entered into by Bell
Atlantic and Prince George's County in 1904. See
id., p. 49. [FN30]
FN30. Bell Atlantic also raises state constitutional
claims under the Maryland Declaration of Rights
which closely parallel its federal constitutional
claims.
*822 Although the parties have briefed each of
these four issues extensively, the court does not
believe it is necessary to resolve these complex and
Page 34
important state law questions in order to decide this
case. For even accepting the County's position that
the County possessed the authority under state law to
adopt its telecommunications franchise law, the
ordinance still must be struck down on the grounds
that it fatally conflicts with the terms and goals of
the FrA.
A separate Order follows.
ORDER
For the reasons stated in the accompanying
Memorandun1, it is hereby ORDERED that:
1. Prince George's County's motion to dismiss is
denied;
2. Bell Atlantic's opposition to the County's motion
to dismiss, treated as a motion for judgment on the
pleadings, is granted;
3. Prince George's County ordinance CB-98-1998 is
declared preempted under the Federal
Telecommunications Act of 1996, 47 U.S.c. S 251
et seq.
4. Prince George's County is permanently enjoined
from enforcing Prince George's County ordinance
CB-98-1998;
5. Bell Atlantic's motion for preliminary injunction
is denied as moot;
6. Bell Atlantic's request for attorneys' fees,
damages, and costs is denied; and
7. Copies of this Order and the accompanying
Memorandum shall be mailed to counsel of record.
END OF DOCUMENT
Copr. <Q West 2000 No Claim to Orig. U.S. Gov!. Works
,\
\
52 F.Supp.2d 763
(Cite as: 52 F.Supp.2d 763)
AT & T COMMUNICATIONS OF THE
SOUTHWEST, INC., et aI., Plaintiffs,
v.
CITY OF DALLAS, TEXAS, Defendant.
No. CIV.A.3:9S-CY-0003-R.
United States District Court,
N.D. Texas.
Dallas Division.
May 17, 1999.
Telephone service providers sued city, alleging that
franchise requirements imposed violated Federal
Teleconununications Act of 1996 (FfA) and Texas
Public Utilities Regulatory Act (PURA). On
plaintiffs' motions for sununary judgment. the
District Court. Buchmeyer, Chief Judge, held that
both Ff A and PURA prohibited city from placing
conditions on franchise for telecommunications
services that were not related to use of city's rights-
of-way.
Motions granted.
[1] FEDERAL CIVIL PROCEDURE~ 2553
170Ak2553
City was not entitled to additional discovery prior to
entry of sununary judgment on long distance
telephone company's claim that city franchise
requirements improperly limited its ability to offer
local service. in violation of state and federal law;
request for additional discovery was dilatory. and
factual record was already adequate on dispositive
issues. Fed.Rules Civ.Proc.Rule 56(1).28 U.S.C.A.
[2] ST A TES~ IS.3
360kI8.3
State law is displaced by federal law where (1)
Congress expressly preempts state law; (2)
congressional intent to preempt is inferred from
existence of pervasive regulatory scheme; or (3)
state law conflicts with federal law or interferes with
achievement of federal objectives. U.S.C.A. Const.
Art. 6, cl. 2.
[3] TELECOMMUNICA TIONS~ 79
372k79
Federal Teleconununications Act of 1996 (Ff A)
prohibited city from placing conditions on franchise
for telecommunications services that were not
related to use of city's rights-of-way.
Page 35
Teleconununications Act of 1996. 47 U.S.C.A. S
253(a, c).
[4] MUNICIPAL CORPORATIONS~ 53
268k53
Requirements for obtaining franchise for providing
telecommunications services which were unrelated to
use of city's rights-of-way had prohibitory effect on
service provider. and thus were preempted by
Federal Teleconununications Act of 1996 (FfA);
provider was subject to criminal prosecution if it
attempted to evade requirements and offer service in
city without franchise. Teleconununications Act of
1996.47 U.S:CA. S 253(a. c).
[4] TELECOMMUNICATIONS~ 79
372k79
Requirements for obtaining franchise for providing
teleconununications services which were unrelated to
use of city's rights-of-way had prohibitory effect on
service provider. and thus were preempted by
Federal Teleconununications Act of 1996 (FfA);
provider was subject to criminal prosecution if it
attempted to evade requirements and offer service in
city without franchise. Telecommunications Act of
1996,47 U.S.C.A. S 253(a. c).
[5] TELECOMMUNICATIONS~ 77.1
372k77.1
Competitive local exchange carrier's (CLEC)
purchase of access to incumbent local exchange
carrier's (ILEC) unbundled network elements
located in municipality's rights-of-way did not
constitute "use" of rights-of-way. and thus was not
subject to municipal regulation; CLEC did not own
or occupy any facilities in right-of-way.
Teleconununications Act of 1996, 47 U.S.C.A. S
253(c).
[6] TELECOMMUNICATlONS~ 77.1
372k77. 1
Telecommunications provider's "use of public
rights-of-way," subject to municipal regulation under
Federal Teleconununications Act of 1996 (FfA),
means physical occupation of public rights-of-way.
Teleconununications Act of 1996, 47 U.S.C.A. S
253(c).
See publication Words and Phrases for other judicial
constructions and definitions.
[7] MUNICIPAL CORPORATIONS~ 53
268k53
City's refusal to enter into 911 emergency services
Copr. cQ West 2000 No Claim to Orig. U.S. Govt. Works
52 F.Supp.2d 763
(Cite as: 52 F .Supp.2d 763)
agreement with telecommunications provider if
provider didn't comply with franchise requirements
that exceeded city's regulatory authority under
Federal Telecommunications Act of 1996 (FT A)
rendered requirements sufficiently prohibitive to be
preempted by FTA; without 911 services, provider
would be precluded from entering local market
under tcnns of certificate of operating authority
issued buy Public Utility Commission.
Telecommunications Act of 1996, 47 U.S.C.A. ~
253(c).
[7] TELECOMMUNlCA TIONS~ 79
372k79
City's refusal to enter into 911 emergency services
agreement with telecommunications provider if
provider didn't comply with franchise requirements
that exceeded city's regulatory authority under
Federal Telecommunications Act of 1996 (FT A)
rendered requirements sufficiently prohibitive to be
preempted by FTA; without 911 services, provider
would be precluded from entering local market
under terms of certificate of operating authority
issued buy Public Utility Commission.
Telecommunications Act of 1996, 47 U.S.C.A. 9
253(c).
[8] MUNICIPAL CORPORATIONS~ 65
268k65
Under Texas law, powers of home rule cities are
subject to and may be limited only by their charters
or by Constitution or by general law. Vernon's
Ann. Texas Const. Art. II, ~ 5.
[9] MUNICIPAL CORPORATIONS~ 65
268k65
Constitutional or general law limitation on powers of
home rule cities will not be implied unless provisions
of general law or of charter are clear and compelling
to that end. Vernon's Ann. Texas Const. Art. 11, 9
5.
[10] TELECOMMUNlCATIONS~ 31.1
372k31.1
Texas cities have no general police power over
telephone utilities. V.T.C.A., Utilities Code 9~
14.008, 54.205.
[11] MUNICIPAL CORPORATIONS~ 592(1)
268k592( I)
Texas home rule city lacked authority to impose
franchise requirements on telecommunications
providers unrelated to control or use of its rights-of-
Page 36
way; any requirements related to providers'
qualifications to provide service were preempted by
state law locating that authority in Texas Public
Utilities Commission (PUC). V.T.C.A., Utilities
Code 99 14.008,52.002, 54.205.
[11] TELECOMMUNlCATIONS~ 79
372k79
Texas home rule city lacked authority to impose
franchise requirements on telecommunications
providers unrelated to control or llse of its rights-of-
way; any requirements related to providers'
qualifications to provide service were preempted by
state law locating that authority in Texas Public
Utilities Commission (PUC). V.T.C.A., Utilities
Code 99 14.008, 52.002, 54.205.
*765 George Harmon Tarpley, Sheinfeld Maley &
Kay, Dallas, TX, Andrew William Austin, Sheinfeld
Maley & Kay, Austin, TX, for AT&T
Communications of Southwest, Inc.
Richard L. Crozier, Davidson & Troilo, Austin,
TX, for Taylor Communications, Inc., USLD
Communications, Inc., Caprock Communications
Corp., Golden Harbor of Texas, Inc., Westel Inc.
Michael Anthony Shaunessy, Bickerstaff Heath
Smiley Pollan Kever & McDaniel, Austin, TX,
Diane M. Barlow, Casey Gentz & Sifuentes, Austin,
TX, for Teligent, Inc.
E. Russell Nunnally, Sally Christine Helppie,
Tanuny Sue Wood, Bell Nunnally & Martin Dallas,
TX, Anthony V. James, Irving, TX, Steven Gill
Bradbury, Theodore W. Ullyot, John P. Frantz,
Kirkland & Ellis, Washington, DC, for GTE
Southwest Inc.
Weston C. Loegering, Robert Edwin Davis, Hughes
& Luce, Dallas, TX, David Randall Johnson,
Dallas, TX, for Southwestern Bell Telephone Co.
Lionel M. Schooler, Gilpin Paxson & Bersch,
Houston, TX, for Sprint Communications Co., L.P.
Ronald D. Stutes, Dallas City Attorney's Office,
Dallas, TX, Richard Thomas Urbis, Michael
Charles Fayz, Carl Hermann von Ende, Thomas G.
Parachini, Miller Canfield Paddock & Stone,
Detroit, MI, for City of Dallas.
Emily Williams, Washington, DC, for Association
of Local Telecommunications Services.
Copr. rg West 2000 No Claim to Orig. U.S. Govt. Works
52 F,Supp,2d 763
(Cite as: 52 F.Supp.2d 763, .765)
MEMORANDUM OPINION AND ORDER
BUCHMEYER, Chief Judge,
Before this Court are Motions for Swnmary
Judgment filed by consolidated Plaintiffs AT & T
Communications of the Southwest. Inc. (" AT & T").
and Teligent, Inc. ("Teligent"), seeking final
declaratory and pennanent injunctive relief against
Defendant City of Dallas ("City"). [FN1] For the
reasons stated below, both motions are GRANTED.
Thus, the City's Amended Counterclaim against AT
& T is DISMISSED, and AT & 1's Motion to Strike
or Dismiss Amended Counterclaim of the City of
Dal1as is DENIED AS MOOT. In addition,
Teligent's equal protection, due process, ultra vires,
and other claims raised in Counts Four, Six, Seven,
Eight, and Nine of its Complaint for Declaratory
Relief are DISMISSED AS MOOT.
FNl. AT & T and the City filed a Joint
Submission of AT & 1's Motion for Summary
Judgment on August 14, 1998 consisting of AT &
1's motion, the City's response, consolidated
plaintiff Southwestern Bell Telephone Company's
("SWBT") response, GTE Southwest Inc. 's
response, AT & T's reply to the City's response,
AT & 1's reply to SWB1's and GTE's responses.
reply of consolidated plaintiffs Caprock
Communications Corp. ("Caprack"), Golden
Harbor of Texas, Inc., and Westel to SWBT's and
GTE's responses, and a Joint Appendix. With
leave of Court, SWBT filed a surreply to AT &
1's reply on September 2t, 1998, and AT & T
filed a reply to SWBT's surreply on October 14,
1998.
Teligent and the City filed a Joint Submission of
Teligent's Motion for Summary Judgment on
October 28. 1998, consisting of Teligent's motion,
the City's response, Teligent's reply, and a Joint
Appendix.
I. BACKGROUND
On April 9, 1998 and July 7, 1998, this Court
issued preliminary injunctions sought by AT & T
and Teligent, respectively, against the City. See AT
& T Communications of the Southwest, Inc. v. City
of Dallas, 8 F.Supp.2d 582 (N.D.Tex.1998) ("City
of Dallas I "); AT & T Communications of the
Southwest. Inc, v. City of Dallas, 52 F.Supp.2d 756
(N.D.Tex.1998) ("City of Dallas II") These
injunctions enjoined the City from requiring AT & T
and Teligent to obtain a franchise from the City to
provide telecommunications services *766 in Dallas.
Page 37
The injunctions were granted because the federal
Telecommunications Act of 1996 ("FTA") S IOI(a),
47 U,S,C.A. S 253(a) (West Supp.1998), and the
Texas Public Utilities Regulatory Act ("PURA"),
TEX. UTIL. CODE ANN, S~ 52.002, 14.008 (West
1998), largely preempted the City's authority to
regulate telecommunications providers except for the
City's authority to manage or control its public
rights-of-way and to require fair and reasonable
compensation from telecommunications providers
for use of the City's public rights-of-way.
The injunction granted for AT & T enjoined the
City from interfering with AT & 1's plan to offer its
AT & T Digital Link (" ADL") service in a City
right-of- way. AT & T already has a franchise
under City Ordinance 186t3, which permits AT & T
to use the City's rights-of-way to offer long-distance
telephone service. When AT & T approached the
City and requested permission to use a specific right-
of-way already covered by Ordinance 18613 to offer
ADL, a local service, the City refused and informed
AT & T that it may offer ADL in the right-of-way
only if AT & T agreed to a new franchise agreement
to replace the one granted by Ordinance 18613. AT
& T brought this case because offering ADL in the
right-of-way without a franchise would have
subjected AT & T to criminal prosecution for
offering telecommunications services without a
franchise under Dallas City Code S 43- I17. Because
this Court agreed with AT & T that the City's
refusal to grant AT & T permission to use the right-
of-way for ADL without a new franchise, and that
the City's proposed franchise requirements both
violated the FT A and PURA, the City was enjoined
from requiring AT & T to agree to a new franchise
before offering ADL and from criminally
prosecuting AT & T for offering ADL without
agreeing to a new franchise. See City of Dallas I, 8
F.Supp,2d at 595. In offering ADL, AT & Twas
limited to the specific right-of-way governed by
Ordinance 18613, and was ordered to comply with
its conditions.
Similarly, the injunction granted for Teligent
enjoined the City from requiring Teligent to obtain a
franchise before offering local service in Dallas.
While both AT & T and Teligent offer local service
to Dallas customers, Teligent is different from AT &
T because Teligent provides its service using
wireless technology involving microwave
transmission and base stations placed on private
property. While Teligent may lease from a carrier
Copr. cg West 2000 No Claim to Orig. U.S. Gov!. Works
52 F.Supp.2d 763
(Cite as: 52 F .Supp.2d 763, .766)
certain facilities located in the City's rights-of-way,
Teligent does not, and has no plans to, own or
occupy any City right-of-way. Despite this
distinction, the City refused to permit Teligent from
offering its services and refused to enter into a 9-1-1
agreement with Teligent without Teligent first
obtaining a franchise. Without a franchise from the
City, Teligent is precluded from obtaining a 9-1-1
agreement, which is required under the terms of the
certificate of operating authority issued to Teligent
by PUe. See City of Dallas II at m_. 1998 WL
386168, .2. Per City Resolution 961121, the City
has refused to enter into a 9-1-1 agreement with non-
franchised service providers. Because of these
circumstances, Teligent reluctantly agreed to the
franchise, which was granted per Ordinance 23325,
and then brought this action against the City. In
granting the injunction, this Court held that Teligent
did not "use" the City's rights-of-way, and that the
City's franchise requirements violated federal and
state law. See City of Dallas II at m_, 1998 WL
386168. .4-5. The City was enjoined from
requiring Teligent to apply for and obtain a franchise
before offering telecommunications services in
Dallas. requiring Teligent to obtain a franchise
before entering into a 9-1-1 agreement with the City,
and enforcing Ordinance 23325, by which the City
had granted Te1igent a franchise to provide
telecommunications services in the City.
AT & T and Teligent now seek final declaratory
and permanent injunctive relief against the City
based on the preliminary injunctions. AT & T seeks
to .767 prevent the City from requiring a new
franchise agreement covering ADL or any other
service it may offer in the right-of-way. Teligent
seeks to invalidate Ordinance 23325 and enjoin the
City from requiring Teligent to agree to any
franchise agreement at all. Because the factual
records of both cases have not changed since the
injunctions were granted, the Court will not revisit
the facts and will address the arguments raised by
the parties in relation to the motions for summary
judgment.
II. ANALYSIS
A. Summary Judgment Standard
Under Rule 56(c) of the Federal Rules of Civil
Procedure, summary judgment "shall be rendered
forthwith if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with
the affidavits, if any, show that there is no genuine
Page 38
issue as to any material fact and that the moving
party is entitled to judgment as a matter of law."
Rule 56(c) "mandates the entry of summary
judgment, after adequate time for discovery and
upon motion, against a party who fails to make a
showing sufficient to establish the existence of an
element essential to that party's case, and on which
that party will bear the burden of proof at trial."
Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106
S.C!. 2548, 2553. 91 L.Ed.2d 265 (1986). The
moving party bears the initial burden of identifying
those portions of the record that may demonstrate
the absence of a genuine issue of material fact. See
id. at 323. 106 S.C!. 2548. Once this burden is met,
the party opposing summary judgment "may not rest
upon the mere allegations or denials of his pleading,
but ... must set forth specific facts showing that
there is a genuine issue for trial." Anderson v.
Liberty Lobby, 477 U.S. 242. 248, 106 S.C!. 2505,
2510.91 L.Ed.2d 202 (1986) (quoting First National
Bank of Arizona v. Cities Service Co., 391 U.S.
253, 88 S.C!. 1575, 1583, 20 L.Ed.2d 569 (1968))
(internal quotation marks omitted) (alteration in
original). In considering a motion for summary
judgment, a court must view the facts and draw all
reasonable inferences in favor of the party opposing
the motion. See Walker v. Sears Roebuck. 853 F.2d
355, 358-59 (5th Cir.1988). However. "the mere
existence of some alleged factual dispute between the
parties will not defeat an otherwise properly
supported motion for summary judgment; the
requirement is that there be no genuine issue of
material fact." Liberty Lobby, 477 U. S. at 247, 106
S.C!. at 2510, 91 L.Ed.2d 202 (emphases in
original).
[1] The City initially argues in its response to AT &
T's motion that AT & T's motion should be denied
or held in abeyance until the City's requested
discovery is completed. [FN2] See City's Resp. at
2. The City claims under Fed.R.Civ.P. 56(!) [FN3]
that the factual record is incomplete on several
essential issues relating to AT & T's claims and the
City's defenses, and that discovery will test the
accuracy of AT & T's representations and
arguments. Specifically, the City argues that AT &
T has failed to provide a "precise or complete
description of AT & T's use of the right-of-way,"
City's Resp. at 4, and that "the factual record is
plainly inadequate on the issues which divide the
parties concerning the scope of the City's authority
and the standards set out in both the subject federal
and state statutes at issue," id. at 5-- e.g.. whether
Copr. ~ West 2000 No Claim to Orig. U.S. Govt. Works
52 F.Supp.2d 763
(Cite as: 52 F.Supp.2d 763, *767)
or not some or all of the franchise requirements
*768 prohibit or have the effect of prohibiting AT &
T from providing the services it has offered or
intends to offer in Dallas. The City seeks discovery
on AT & T's fmancial information, arguing that the
determination of whether or not the franchise
requirements prohibit or have the effect of
prohibiting AT & T from providing
telecommunications services depends on such
discovery.
FN2. The City made the same argument in its
response to Teligent's motion. However, after
Teligent's motion was filed. Teligent and the City
stipulated to strike this argument. See Stipulation
~ 4 at 1-2. Thus, the Court will not consider this
argument in relation to Teligent's motion.
FN3. Rule 56(1) provides that:
(t) When affidavits are Unavailable. Should it
appear from the affidavits of a party opposing the
motion that the party cannot for reasons stated
present by affidavit facts essential to justify the
party's opposition, the court may refuse the
application for judgment or may order a
continuance to pennit affidavits to be obtained or
depositions to be taken or discovery to be had or
may make such other order as is just.
The City's arguments are unpersuasive because the
factual record is more than adequate and summary
judgment is appropriate in this case. First, the
City's Rule 56(1) request for denying or suspending
AT & T's motion in order to conduct discovery
lacks merit because the City has had more than
sufficient time and opportunity to conduct discovery.
See Paul Kadair, Inc. v. Sony Corp. of Am., 694
F.2d 1017.1031 (5th Cir.1983) (holding that a Rule
56(1) request for discovery can be denied if
discovery is dilatorily sought). AT & T filed its
complaint on January 5, 1998. and this Court issued
a preliminary injunction against the City on April 9,
t998. On April 20, 1998, this Court issued an
accelerated scheduling order establishing July 20,
1998 as the deadline for all discovery. Although that
deadline was extended to August 28. 1998. the City
served no discovery requests until luly 30, 1998.
when it served its first set of interrogatories and
request for document production on AT & T. These
facts reveal that the City's Rule 56(1) request is
dilatory. and its request to deny or to hold 10
abeyance AT & T's Motion is without merit.
Second. even if the City had served timely
Page 39
discovery requests on AT & T, the City cannot show
that evidence obtained from such discovery will
enable it to withstand summary judgment. The
City's argument that discovery is necessary because
AT & T has failed to provide a complete or precise
description of the right-of-way at issue is
disingenuous because the right-of-way at issue has
been clearly identified since the beginning of this
case. See AT & T's CampI. ~ 17 at 6-7; AT & T's
First Am. CompI. ~ 17 at 6-7; AT & T's Mot. for
Prelim. Inj. Ex. 4, ~ 3 at I (Aff. of Ray Pottorl) ("a
three toot-wide strip of Dallas right-of-way
approximately 5.6 miles in length, running along
portions of Bryan, Live Oak, Hubert, Dram,
Delmar, and Coit Roads in Dallas. "). In its first set
of interrogatories and request for production of
documents served on AT & T, the City seeks
documents relating to the use of any and all rights-
of-way in which AT & T offers or plans to offer
services. See AT & T's l.A. Ex. 1, Ex. A. Such
information is irrelevant to AT & T's use of the
specific right-of-way at issue in this case, and is
immaterial to the disposition of AT & T's Motion.
See Paul Kadair, Inc., 694 F.2d at 1030 (stating that
discovery is unnecessary if the discovery sought is
unlikely to produce facts necessary to withstand
summary judgment).
Finally, the factual record is more than adequate on
the issues of the City's authority and the federal and
state law limiting such authority. AT & T's
requested declarations are based on the City's
proposed franchise requirements, which impose
numerous conditions on AT & T unrelated to AT &
T's use of the City's right-of-way. This Court has
already ruled that the City's authority to regulate AT
& T is limited by the FT A and PURA to regulating
the use of the City's rights-of-way. See City of
Dallas I, 8 F.Supp.2d at 591- 92. This Court also
found that the City's proposed franchise
requirements prohibit or have the effect of
prohibiting AT & T from offering ADL. See id. at
594-95. The factual record has not changed since
that decision, and the City has failed to present any
relevant facts that would create a genuine issue of
material fact as to the prohibitory effect of the
franchise requirements. The City's argument for
additional discovery is just a futile attempt to expand
the issues in this case to avoid summary judgment.
Because of these reasons, the City's Rule 56(1)
request to deny or to hold in abeyance AT & T's
Motion is denied.
Copr. <D West 2000 No Claim to Orig. U.S. Govt. Works
52 F.Supp.2d 763
(Cite as: 52 F.Supp.2d 763, *769)
*769 B. Preemption of the City's Authority
1. Preemption Under FfA S 253(a)
[2] The Supremacy Clause of the United States
Constitution provides that the "Constitution. and the
Laws of the United States which shall be made in
Pursuance thereof ". or which shall be made under
the Authority of the United States, shall be the
supreme Law of the Land." U.S. Canst. art. VI, cl.
2. Thus, state law that conflicts with federal law is "
'without effect.' "Cipollone v. Liggett Group, Inc.,
505 U.S. 504, 515, 112 S.Ct. 2608, 2617, 120
L.Ed.2d 407 (1992) (quoting Maryland v. Louisiana,
451 U.S. 725, 746, 101 S.Ct. 2114, 2128, 68
L.Ed.2d 576 (1981)). "State law is displaced by
federal law where (1) Congress expressly preempts
state law; (2) congressional intent to preempt is
inferred from the existence of a pervasive regulatory
scheme; or (3) state law conflicts with federal law
or interferes with the achievement of federal
objectives." Hodges v. Delta Airlines, Inc., 44 F.3d
334, 335-36 n. 1 (5th Cir.1995) (en bane). Only
express preemption is involved in this case.
Section 253 of the Ff A provides in relevant part:
S 253. Removal of barriers to entry
(a) In general
No State or local statute or regulation, or other
State or local legal requirement, may prohibit or
have the effect of prohibiting the ability of any
entity to provide interstate or intrastate
telecommunications service.
(c) State and local govertUllent authority
Nothing in this section affects the authority of a
State or local govertUllent to manage the public
rights-of-way or to require fair and reasonable
compensation from telecommunications providers,
on a competitively neutral and nondiscriminatory
basis, for use of public rights-of-way on a
nondiscriminatory basis, if the compensation
required is publicly disclosed by such govertUllent.
These sections have been construed to broadly
preempt state or local regulation of
telecommunications providers. See City of Dallas I,
8 F.Supp.2d at 591; AT & T Communications of
the Southwest, Inc. v. City of Austin, 975 F.Supp.
928, 939 (W.D.Tex.1997) (Sparks, 1.) ("City of
Austin I "). However, S 253(c) of the FfA is a
savings clause that does not preempt state and local
governments' authority to manage their rights-of-
way and to require fair and reasonable compensation
Page 40
from telecommunications providers for use of the
rights-of-way. See City of Dallas I, 8 F.Supp.2d at
592.
a. Preemption of the City's Franchise Requirement
as Applied to AT & T
Under the above interpretation of SS 253(a) and (c),
the City cannot impose its form franchise
requirement on AT & T. Although the City does
have authority under the Ff A to impose a franchise
requirement on telecommunications providers, the
City does not "have the authority to grant or deny
that franchisC"based on its own discretion[;] granting
a franchise may only be conditioned on a
[provider]'s agreement to comply with the [Clity's
reasonable regulations of its rights-of-way and the
fees for use of those rights-of- way." Id. at 592-93.
The City's form franchise requirement seeks to
impose on AT & T conditions that are unrelated to
the use of the City's right-of-way for ADL--e.g.,
disclosure of detailed fmancial and operational
information, dedication of fiberoptic strands and
conduits to the City for the City's free and exclusive
use, submission to detailed City audits, notification
to the City of all communications with the FCC,
SEC, and PUC related to services provided in
Dallas, and payment of four percent of all AT & T
revenue, of whatever source, arising out of AT &
T's operations in Dallas. See Mot. for Prelim. Inj.,
Aff. of Russell Morgan ("Morgan Aff.") at mJ 9-11;
id. Ex. 1, S~ 8, 9, II. To repeat this Court's
earlier holding, these conditions are unrelated to the
City's management, or fair and reasonable
compensation for the *770 use, of the City's rights-
of-way, and are beyond the scope of the City's
authority under S 253(c). See City of Dallas I, 8
F.Supp.2d at 593.
The City argues that AT & T is not entitled to
summary judgment on its S 253(a) preemption claim
for two reasons. First. the City argues that the plain
language of S 253 creates a "safe harbor" for state
and local requirements satisfying S 253(c), and
preempts only those state and local requirements that
both fall outside S 253(c) and are shown to have the
prohibitory effect proscribed by S 253(a). Under
this construction of S 253, the City argues that "as
long as a local right-of-way management or
compensation requirement satisfies S 253(c), it is
immune from attack under S 253, even if the
requirement otherwise 'prohibit[s] or hats] the effect
of prohibiting' service within the meaning of S
Copr. CQ West 2000 No Claim to Orig. U.S. Govt. Works
52 F.Supp.2d 763
(Cite as: S2 F.Supp.2d 763, .770)
253(a)." City's Resp. at 8. Because the propesed
requirement falls within this safe harbor. the City
adds, it is immune from attack under S 253(a) and is
not preempted.
Second, the City argues that, if the Court holds that
the franchise requirement is not within the safe
harbor of S 253(c), summary judgment should
nevertheless be denied because AT & T has not
presented facts that suggest that compliance with the
franchise requirement would "prohibit or have the
effect of prohibiting" AT & T from providing
service within the meaning of S 253(a). The City
argues further that while the key issue in this case is
whether or not the franchise requirement prohibits or
has the effect of prohibiting AT & T from providing
ADL, AT & T has failed to present any evidence
that would suggest that it is unable to meet the
requirement. The City asserts that simply because
the franchise requirement is burdensome or costly
does not mean that it is prohibitive within the
meaning of S 253(a).
[3] These arguments are unpersuasive. The plain
language of S 253(a) broadly preempts state or local
regulations that prohibit or have a prohibitory effect
on telecommunications providers. See id. at 591.
Whether or not S 253(c) is a "safe harbor" that
allows any municipal regulation satisfying S 253(c)
to be immune from a preemption attack under S
253(a) if the regulation also prohibits or has the
effect of prohibiting service is irrelevant because the
City has not shown, and cannot show, that its
franchise requirement satisfies S 253(c). The City
has presented no evidence that connects its franchise
requirement with the management of and
compensation for the use of its rights-of-way.
Absent such evidence, there is no genuine issue of
material fact as to the preemption of the City's
franchise requirement imposed on AT & T.
[4J The City's backup argument to its dubious
construction of S 253--that summary judgment
should be denied because AT & T has failed to
present evidence of the franchise requirement's
prohibitive effect--is disingenuous because the
record contains sufficient evidence of such
prohibitive effect. The undisputed evidence shows
that the City has represented to AT & T that without
a new franchise governing ADL, AT & T may not
offer ADL in the right-of-way at issue. See Morgan
Atf. Ex. 1. AT & T will be subject to criminal
prosecution if it decides to evade the City's
Page 41
requirements and offer ADL without a franchise.
See City of Dallas I, 8 F.Supp.2d at 594-95; City
Code SS 43- 117, 43-118. Such evidence is
sufficient proof of the requisite prohibitive effect that
triggers the preemptive force of S 253(a). See City
of Austin I, 975 F.Supp. at 939. Because the City
has failed to rebut AT & T's arguments and
evidence, the City has not created a genuine issue of
material fact on AT & T's S 253(a) preemption
claim.
b. SWBT's and GTE's Objections to Declarations
Sought by AT & T
Consolidated Plaintiff Southwestern Bell Telephone
Company ("SWBT") has filed a respense to AT &
T's Motion objecting to two declarations sought by
AT & T. Consolidated Plaintiff GTE Southwest,
Inc. .771 ("GTE") has joined in and adopted
SWBT's response. SWBT and GTE, as incumbent
local exchange carriers ("ILECs"), object to the
following declarations sought by AT & T:
e. franchise provisions managing use of City
rights-of-way must be related to the physical use
of the rights-of-way by a local service provider
with facilities occupying such rights-of-way, [and]
f. Any fee the City charges AT & T that is not
based on AT & T's physical occupation of the
City's rights-of-way is an economic barrier to
entry and violates S 253(a) of the FfA.
AT & T's Mot. at 2-3.
[5] SWBT objects to these declarations because
SWBT believes that, if granted, they will prevent the
City from regulating AT & T for AT & T's use of
an ILEC's unbundled network elements ("UNEs")
that occupy the City's rights-of- way. Relying on
FCC decisions construing sections of the Ff A
relating to universal service and eligibility of Bell
operating companies to enter the inter LATA long
distance market, see In re Federal-State Joint Board
on Universal Service, 12 F.C.C.R. 8776, 1997 WL
236383 (F.e.e. May 8, 1997) ("Universal
Service"); In re Application of Ameritech Michigan
Pursuant to Section 71 of the Communications Act
of 1934, As Amended, to Provide In-Region,
InterLATA Services in Michigan, 12 F.C.C.R.
20543, 1997 WL 522784 (F.e.e. Aug. 19, 1997)
(" Ameritech"), SWBT argues that when a
competitive local exchange carrier ("CLEC") like
AT & T offers teleconununications service by
purchasing access to an ILEC's UNEs located in
public rights-of-way, the CLEC is making "use" of
Copr. I() West 2000 No Claim to Orig. U.S. Gov!. Works
52 F,Supp,2d 763
(Cite as: 52 F,Supp,2d 763, *771)
such public rights-of-way, subjecting the CLEC to
municipal right-of- way regulation consistent with
Ff A ~ 253(c), Granting the above declarations,
SWBT argues, would result in "a ruling that as a
matter of law the City of Dallas has no authority to
subject AT & T to reasonable rights-of- way use
regulations and fees based on its purchase of
UNEs," SWBT's Surreply at 6-7, In addition,
SWBT argues that granting the declarations at issue
would result in unpredictable revenue for
municipalities, and would conflict with ~ 253(c)'s
competitive neutrality requirement by placing ILECs
at a competitive disadvantage against CLECs
because of the manner in which municipal fee
payments are collected from customers pursuant to
Texas law. Despite the fact that City of Austin I
already rejected this argument, SWBT argues that
City of Austin I incorrectly decided this issue by
misinterpreting the FCC opinion upon which its
holding was based. See City of Austin I, 975
F.Supp. at 934 & n. 2. For these reasons, SWBT
and GTE argue that AT & T's requested declarations
should be denied and that this Court should hold that
AT & T's purchase of access to SWBT's UNEs is
"use" of the City's rights-of-way.
As noted above, SWBT's argument was already
rejected by City of Austin I, which held that a
CLEC's purchase of access to an ILEC's UNEs
located in a municipality's rights-of-way did not
constitute "use" of the rights-of-way under ~ 253(c)
because the CLEC did not own or occupy any
facilities in the right-of-way, See id.; AT & T
Communications of the Southwest, Inc. v. City of
Austin, 40 F.Supp.2d 852,855-56 (W.D.Tex,1998)
(Sparks, 1.) ("City of Austin II "), City of Austin I
is equally applicable here, but even if it did not
specifically reject SWBT's argument already,
SWBT's argument fails as speculative and
unfounded. First, SWBT's reliance on Universal
Service and Ameritech, which held that a UNE
obtained from an ILEC is the CLEC's "own facility"
in other contexts, is misplaced. Universal Service
held that under 47 U.S,e.A. ~ 214(e)(l)(A), which
requires teleconununications carriers eligible to
receive universal service support to provide services
"either using its own facilities or a combination of its
own facilities and resale of another carrier's
services." "when a requesting carrier obtains an
unbundled element, such element is the
requesting carrier's 'own facility' for purposes of
Section 214(e)(l)(A) because the requesting carrier
has the 'exclusive use of that facility *772 for a
Page 42
period of time.'" Universal Service at ~ 158.
Similarly, in Ameritech, the FCC held that under
FfA ~ 271(c)(I)(A), which sets forth the standards
that must be met by a Bell operating company
("BOC") before it may receive authorization from
the FCC to enter the interLA T A long distance
service market, a UNE obtained by a CLEC from a
BOC is the CLEC's "own telephone exchange
service facility" for purposes of Ff A ~
271(c)(I)(A). The issue in Universal Service and
Ameritech was whether a CLEC's operation of a
UNE purchased from an ILEC or BOC constituted
either the CLEC's own facility or a resale of another
carrier's facility per FfA ~~ 214(e)(I)(A) and
271(c)(l)(A). These sections, and Universal Service
and Ameritech, do not relate to state or municipal
regulations authorized by Ff A ~ 253(c) based on a
teleconununications provider's use--physical
occupancy--of public rights-of- way, and are
inapposite. The more pertinent authority is In re
Entertainment Connections, Inc., 13 F.e.e.R.
14277, 1998 WL 344168 (F.e.e. June 3D, 1998)
("ECl"), in which the FCC held that under the Cable
Act, 47 U.S,e.A. ~ 522, which contains language
similar to FfA ~ 253(c), [FN4] a cable company did
not make "use of a public right-of-way" when it
provided its signals over an ILEC's lines, which did
use public rights-of-way. ECI ~ 62. The FCC,
citing City of Austin I in support, concluded that
ECI, a CLEC, was not using public rights-of-way
when its signals were transmitted by Ameritech, an
ILEC, to ECI's subscribers using Ameritech's
facilities that were in public rights- of-way. See id.
As correctly noted by AT & T, ECI lends further
support to the conclusion that a CLEC's purchase of
access to an ILEC's UNEs located in public rights-
of-way does not constitute "use" of public rights-of-
way.
FN4. Section 522 provides that a "cable system"
does not include "a facility that serves subscribers
without using any public right-of-way." *
522(7)(B).
Moreover, SWBT's assertion that a CLEC "uses" a
right-of-way by purchasing access to a UNE located
in a right-of-way is unconvincing. Although a
CLEC's purchase of access to a UNE from an ILEC
gives the CLEC exclusive control over the
functionality over the UNE, the ILEC still retains
ownership of the UNE and will continue to repair,
maintain, and operate it even when the CLEC
purchases exclusive access. See SWBT's Resp. at 7;
Copr. (() West 2000 No Claim to Orig. U.S, Gov!. Works
52 F.Supp.2d 763
(Cite as: 52 F.Supp,2d 763, *772)
AT & T's Reply at 4 & n.3 and sources cited.
SWBT does not explain why, on one hand, a
CLEC's purchase of access to an ILEC's UNEs to
rebundle services is use of the right- of-way, but on
the other hand, a CLEC's purchase and resale of an
ILEC's retail services is not such use. As AT & T
correctly argues, "the fact that AT & T controls its
own service offering when it rebundles SWBT's
UNEs is of absolutely no consequence to the issue of
whether AT & T's purchase of UNEs from SWBT is
a physical 'use' of the [rights-of-way] for purposes
of ~ 253." AT & T's Reply to SWBT's Surreply at
5.
Finally, SWBT's remaining arguments are
unfounded. Contrary to SWBT's unsupported
assertions, granting the declarations at issue will not
result in a ruling that as a mailer of law the City has
no authority to subject AT & T to rights-of-way
regulation hased on its purchase of UNEs. AT & T
is not seeking a declaration that the City completely
lacks authority to regulate AT & T's purchase of
access to UNEs. See AT & T's Reply to Surreply at
7-8. Should AT & T in the future interconnect a
SWBT-owned UNE with an AT & T facility that
uses the City's rights-of-way, the declarations at
issue will not prevent the City from regulating AT &
T. Moreover, SWBT's fear of problems relating to
municipal revenue and/or competitive neutrality is
beyond the scope of this case and the issues raised in
AT & T's motion. Variations in municipal revenue
depend on the municipality's fee scheme and how
CLECs and ILECs agree to pay such fees. Such
variables are beyond the scope of whether or not the
City's franchise requirement is preempted by ~ 253.
.773 Finally, because AT & T does not "use" the
City's rights-of-way when offering ADL through
UNEs, ~ 253(c)' s "competitive neutrality"
requirement is irrelevant. See City of Dallas II at
762.
Because SWBT's arguments and evidence do not
create a genuine issue of material fact as to the
declarations sought by AT & T, SWBT's and GTE's
objections to the declarations are overruled, and AT
& T is entitled to summary judgment on its ~ 253(a)
preemption claim.
c. Preemption of the City's Franchise Requirement
as Applied to Teligent
Like AT & T's case, the City's franchise
requirement imposed on Teligent is also preempted
Page 43
by ~ 253. As noted earlier, Teligent's case is
different from AT & T's because Teligent does not
own or occupy any City rights-of-way. See City of
Dallas II at 761. In granting Teligent a preliminary
injunction against the City enjoining the City from
imposing its franchise requirement through City
Ordinance 23325, this Court held that Teligent's
services do not constitute "use" of the City's rights-
of-way. See id. at 762. Because the factual record
has not changed since that ruling, and because ~
253(a) preempts the City's authority to subject
Teligent to such franchise requirement, Teligent is
entitled to summary judgment on its ~ 253
preemption claim.
The City argues that Teligent is not entitled to
summary judgment on its ~ 253(a) claim because
Teligent has failed to prove any violation of ~
253(a). First, the City argues that Teligent's lease
of facilities physically occupying City rights-of-way
constitutes "use" of the City's rights- of-way within
the meaning of ~ 253(c). Second, the City argues
that even assuming that Teligent does not "use" the
City's rights-of-way, the City's franchise
requirement is not preempted because the plain
language of ~ 253 preempts only those state and
local requirements that both fall outside ~ 253(c) and
are shown to have the prohibitory effect proscribed
by ~ 253(a)--the same "safe harbor" argument the
City raised against AT & T's motion. Third, the
City argues that Teligent has presented no evidence
that the franchise requirements at issue prohibit or
have the effect of prohibiting Teligent from
providing telecommunications service in Dallas.
[6][7J These arguments are, again, unpersuasive.
First, this Court has already rejected the City's
"use" argument and held that under ~ 253(c), "use of
public rights-of-way" means physical occupation of
the public rights- of-way. See id. at 760. To clarify,
because Teligent does not physically occupy any
City rights-of-way, it is not subject to the City's
franchise requirement. Second, as discussed above,
the City's "safe harbor" argument is irrelevant
because Teligent does not "use" the City's rights-of-
way. Finally, Teligent has presented sufficient
evidence that the franchise requirements at issue
prohibit or have the effect of prohibiting Teligent
from providing telecommunications service in
Dallas. The undisputed facts reveal that the City,
per Resolution 961121, refused to enter into a 9-1-1
emergency services agreement with Teligent unless
Teligent accepted a franchise. See Agreed Facts ~~
Copr. <<,) West 2000 No Claim to Orig. U.S. Govt. Works
52 F.Supp.2d 763
(Cite as: 52 F.Supp.2d 763, .773)
14, 15. Without 9-1-1 services, Teligent would be
precluded from entering the Dallas market under the
COA issued by the PUe. See id. at ~ 19. Because
such requirements are sufficiently prohibitive, see
City of Austin I, 975 F.Supp. at 939, there is no
genuine issue of material fact, and Teligent is
entitled to summary judgment on its ~ 253(a)
preemption claim.
2. Preemption Under Texas Law [FN5]
FN5. This Court has supplemental jurisdiction
over the Plaintiffs' state law claims per 28
U.S.CA. * 1367 (Wesll998).
[8][9] The Texas Constitution provides that:
.774 [N]o [city] charter or any ordinance passed
under said charter shall contain any provision
inconsistent with the Constitution of the State, or
of the general laws enacted by the Legislature of
the State.
Tex. Const. art. XI, ~ 5. Thus, "[t]he powers of
home rule cities [like Dallas] are subject to and may
be limited only by their charters or by the
Constitution or by general law." Lower Colorado
River Auth. v. City of San Marcos, 523 S.W.2d
641, 644 (Tex. 1975). A constitutional or general
law limitation may be express or implied. (d. at
645. However, "[s]uch a limitation will not be
implied ... unless the provisions of the general law
or of the charter are clear and compelling to that
end." Id. (quoting Glass v. Sntlth, 150 Tex. 632,
244 S.W.2d 645,649 (1951)).
[10] The Public Utilities Regulatory Act ("PURA")
is a clear and compelling limitation of the City's
authority to regulate telecommunications providers.
Under PURA, the Public Utility Comntlssion
(" PUC") has exclusive jurisdiction to regulate
telephone companies. See TEX. UTIL. CODE
ANN. ~ 52.002 (West 1998). PURA lintlts the
authority of Texas municipalities to regulate utilities
as follows:
(a) This title does not restrict the rights and
powers of a municipality to grant or refuse a
franchise to use the streets and alleys in the
municipality or to make a statutory charge for that
use.
(b) A franchise agreement may not limit or
interfere with a power conferred on the
comntlssion by this title.
Id. ~ 14.008. Like the FTA, PURA also has a
savings provision that permits a municipality to
Page 44
regulate its rights-of-way:
This title does not restrict a municipality's
historical right to control and receive reasonable
compensation for access to the municipality's
public streets, alleys, or rights-of-way and charge
a fee for that use.
Id. ~ 54.205; see also id. ~ 52.oo2(a). Texas cities
therefore have no general police power over
telephone utilities. See General Tel. Co. v. City of
Perry ton, 552 S.W.2d 888, 891-92 (Tex.Civ.App.--
Amarillo 1977, writ ref'd n.r.e.). In granting
preliminary injunctive relief to AT & T and
Teligent, this Court held that PURA "lintlts Texas
cities to the authority to manage their rights-of-way
and to receive compensation for their use." City of
Dallas I, 8 F.Supp.2d at 592. The Court further
held that "[t]he lintlted exceptions to the exclusive
jurisdiction of the State PUC thus parallel the local
authority granted by the FTA: municipalities may
only regulate the use of their rights- of-way and
charge a fee for that use." Id. at 592. While the
City may require a telecommunications provider
making use of its rights-of-way to obtain a franchise
before offering services, the City may not grant the
franchise based on its own discretion, and the only
condition the City may impose is compliance with
the City's reasonable regulations of its rights-of-way
and fees for their use. See id. at 592-93.
Moreover, under PURA, the City may not require a
comprehensive application and may not consider the
telecommunications provider's technical and
organizational qualifications to offer
telecommunications services. See id. at 593. PURA
vests "that deterntlnation to the State PUC, and it
may not be second-guessed by the City." (d.; TEX
UTlL. CODE ANN. ~~ 54.103, 14.008.
AT & T and Teligent argue that the City's franchise
requirements exceed the City's lintlted authority
under PURA. Both AT & T and Teligent concede
that under PURA, the City may require
telecommunications providers making use of the
City's rights-of-way to agree to a franchise.
However, AT & T argues that the conditions and
fees imposed on AT & T by the City's form
franchise go far beyond the lintlted authority granted
to the City by PURA for control, and compensation
for the use, of the City's rights-of-way. In addition,
Teligent argues that the City cannot impose its form
franchise requirement on Teligent at all because
Teligent does not use--physically occupy--the City's
rights-of- way. Because these conditions exceed the
City's authority and because.775 they also lintlt or
Copr. rO West 2000 No Claim to Orig. U.S. Govt. Works
52 F.Supp.2d 763
(Cite as: 52 F.Supp.2d 763, *775)
interfere with a power conferred on the PUC by
PURA, AT & T and Teligent argue that they are
entitled to summary judgment on their PURA
claims .
In response, the City argues that while PURA limits
its authority in certain respects, e.g., regulating a
telecommunications provider's rates and services, it
does not limit its authority as much as AT & T and
Teligent contend. Specifically, the City asserts that
AT & T has neither explained nor offered any
evidence as to why the form franchise requirement
limits or interferes with PUC authority. With
respect to the franchise requirement imposed upon
AT & T, the City argues without evidence that it is
designed not to determine AT & T's qualifications to
provide service, but to protect the City's interest, as
landlord of the right-of-way, in assuring that its
right- of-way tenants have the experience and
fmancial wherewithal to protect the right-of-way and
to be financially responsible to cover the costs of any
and all damages to the right-of-way that might
occur. With respect to the franchise requirement
imposed upon Teligent, the City argues without
evidence that, except for the ubiquitous service and
the prior notice conditions, the franchise requirement
does not limit or interfere with PUC authority.
[II] The City's arguments are again unpersuasive.
The City's response evades the critical issue raised
by AT & T and Teligent under PURA: whether or
not the City's franchise requirements are related to
the control or use of its rights-of-way. The City's
unsupported argument that the franchise requirement
imposed on AT & T does not limit or interfere with
PUC authority is unconvincing in light of this
Court's prior decisions, which held that the City
lacks authority to impose a comprehensive and
burdensome franchise requirement as beyond its
authority. See City of Dallas I, 8 F.Supp.2d at 593.
Moreover, the City has not offered any evidence that
Page 45
would support its assertion that the franchise
requirement imposed on AT & T is related to the
City's control or use of rights-of-way at issue. [FN6]
Additionally, the franchise requirement imposed on
Teligent is preempted entirely by PURA because
Teligent does not use any City rights-of-way.
Because the City has failed to present any new
arguments or evidence raising a genuine issue of
material fact, AT & T and Teligent are entitled to
summary judgment on their PURA claims.
FN6. The City's argument that it laCKS such
evidence because it has not had sufficient time or
opportunity for adequate discovery IS
unpersuasive. As noted earlier, the City has had
plenty of time to conduct whatever discovery it
needed, but failed to seek discovery from AT & T
until one month before the discovery deadline.
Moreover, the type of evidence that might have
created a genuine issue of material fact on AT &
T's PURA claim would have been evidence from
the City itself that would justify any of its
franchise requirements as related to the control or
use of its rights-of- way. In this context, the City
has presented no evidence.
Ill. Conclusion
For the reasons stated above, AT & T's and
Teligent's Motions for Summary Judgment are
GRANTED, and the City's Amended Counterclaim
against AT & T is DISMISSED WITH
PREJUDICE. AT & T's Motion to Strike the City's
Amended Counterclaim is DENIED AS MOOT. In
addition, Teligent's equal protection, due process,
ultra vires, and other claims raised in Counts Four,
Six, Seven, Eight, and Nine of its Complaint for
Declaratory Relief are DISMISSED AS MOOT. A
judgment awarding AT & T and Teligent finaldeclaratory and permanent injunctive relief against
the City shall be entered.
END OF DOCUMENT
Copr. I() West 2000 No Claim to Orig. U.S. Govt. Works
t-.
(Cite as: 1998 WL 493128 (E.D.Mich.))
TCG DETROIT, Plaintiff,
v.
CITY OF DEARBORN, Defendant and Third-Party Plaintiff,
v.
Ameritech MICHIGAN, Third-Party Defendant.
No. 96-CV-74338-DT.
United States District COfirt,
E.D. Michigan.
Southern Division.
Aug. 14, 1998.
Richard C. Marsh, Esq., Clark Hill, Detroit, for TCG Detroit, a
New York general partnership, Plaintiff & Counter-Defendant.
John W. Tanner, III, Esq., Debra C. Walling, Esq., Dearborn City
Lesal Dcpa~tnlent, Dearborn, WLiliam Malone, Esq., Miller,
Canfield, Washington, DC, for Dearborn, City of, Defendant,
Counter-Claimant & 3d Party Plaintiff.
William D. Parsley, Esq., Gary L. Field, Esq., Loomis, Ewert,
Lansing, for Telephone Association of Michigan, Movant.
Joseph A. Fink, Esq. ,Peter H. Ellsworth, Esq., Dickinson,
Wright, Lansing, Bruce R. Byrd, Esq., Dickinson, Wright, Detroit,
for Ameritech Michigan, a suc~essor of Michigan Bell Telephone,
for Third-Party Defendant.
MEMORANDUM OPINION AND ORDER
ZATKOFF, District J.
I. INTRODUCTION
*1 This matter is before the Court on cross-motions for summary
judgment, filed by all of the parties, pursuant to Fed.R.Civ.p.
56. Responses and replies have been filed. The Court finds that
the facts and legal arguments are adequately presented in the
parties' briefs and the decisional process would not be
significantly aided by oral argument. Therefore, pursuant to E.D.
Mich. Local R. 7.1(e) (2), it is hereby ORDERED that the motions
( ( be resolved on the briefs submitted. For the reasons set forth
below, Plaintiff's motion is denied and Defendant's motion is
granted. Additionally, the Third-party Plaintiff's motion is
denied and the Third-party Defendant's motion is granted.
II. BACKGROUND
Plaintiff, TCG Detroit (hereinafter "TCG") , is a
telecommunications provider licensed by the Michigan Public
Service Commission to provide basic local telecommunications
service in certain areas of Southeastern Michigan, including
within the city limits of the Defendant, City of Dearborn
(hereinafter "City" or "Dearborn"). TCG competes with Ameritech,
the incumbent local exchange carrier.
TCG, although presenting owning no facilities in Dearborn's
public right-of- ways, planned to construct, install and maintain
facilities within the city limits of Dearborn. These facilities
were to be constructed in electrical conduLc in Detroit Edison's
right-of-way. Pursuant to a contract entered into on February 17,
1994, between Detroit Edison and TCG, TCG agreed to irrstall for
Edison, fiber optic cable in Edison's inner duct, which resides
withing existing electrical conduit, in Dearborn's right-of-way.
Pursuant to the contract "tlre"f'iber':optic . cable iasinstll.lled/Jby
TCG would be ciwnedby Edison but some of the fiber. opticca,ble
would be leased back to TCG for it to provide telecorrununications.
services.
According to TCG, when Detroit Edison informed the City of
Dearb9~n of this plan on February 24, 1994, Dearborn objected. It
was, and is, Dearborn's position that TCG needed to enter into a
franchise agreement before entering into the City's right-of-ways
to install facilities providing telecommunications services.
Thereafter, in the first quarter of 1995, Detroit Edison stopped
the installation of cable by TCG within its conduit until the
issue between the City of Dearborn and TCG was resolved.
According to the TCG, at the time installation was stopped,
approximately 7 -8 miles of cables had been installed out of a
planned 27 miles.
Dearborn and TCG had been negotiating to settle their dispute
since mid-1994. At that time, Dearborn did not have an ordinance
with respect to telecommunications. However, on August 16, 1994,
while settlement negotiations were progressing, Dearborn did
enact such an ordinance requiring telecommunications providers
who wished to utilize the City's right-of-ways, to enter into a
franchise agreement with the City (Plaintiff's Ex. I).
Thereafter, the negotiations between the City and TCG culminated
in a negotiated franchise agreement proposal offered by the City,
to TCG, in June 29, 1995.
*2 This proposed agreement required TCG to pay Dearborn a
franchise fee of 4% of TCG's gross revenues, a $50,000 one time
payment (in lieu of providing the City with four fiber optic
strands), and up to $2500 of the costs incurred by the City of.
Dearborn in connection with granting the franchise. In addition,
the proposal called fo.r TCG, if it should ever install its own
conduit within the City, to install an inner conduit for use by
the City (City'S Ex. 8). TCG's regional counsel responded by
letter dated September 22, 1995, wherein he agreed with the
substance of the proposal, while noting some minor changes
(City's Ex. 10).
While these talks between the City and TCG were being conducted,
Congress enacted the Federal Telecommunications Act (FTA) , 47
V.S.C. ~ 253, effective Pebl:uary 6, 1998, which made significant
changes to the telecommunications laws. Thus, Plaintiff, TCG,
felt that this Act conflicted with the authority of the City to
require the franchise agreement it sought to have TCG enter into.
Accordingly, TCG rejected the franchise proposal which it had
preliminarily negotiated with the City. After continuing talks
were unsuccessful, TCG filed the present suit alleging that the
City of Dearborn ordinance requiring telecommunications providers
to enter into a franchise agreement is in violation of the Act.
In addition, the Plaintiff claimed that the City's actions
violated the Michigan Telecommunications Act, M.C.L. ~ 484.2251,
as well. The Court struck the state claim, thus the only claims
pending before the Court concerns the federal claims relating to
the Federal Telecommunications Act.
Additionally, Plaintiff alleges that prior to the institution of
this suit, the City of Dearborn was discriminating in favor of
the incumbent local carrier, Ameri tech, by not requiring it to
enter into a franchise agreement. However, once TCG filed suit,
Dearborn approached Ameritech about entering into a franchise
ag"eement. Ameritech rejected that request and Dearborn filed a
third-party action against Ameritech for refusing to enter into
such an agreement. That claim is the subject of currently pending
motions which will be addressed separately in this opinion infra.
Nonetheless, this forms the basis of TCG's claim against the City
u
of Dearborn that the
requiring Ameritech,
franchise agreement.
City was discriminating
at least initially,
agains't) it by not
to enter into a
In addition, the Court notes
impression. The Sixth Circuit
address the issues before
Telecommunications Act of 1996
that this is
has not had
this Court,
in general.
a case of first
an opportunity to
or the Federal
III. Standard of Review
Summary judgment is appropriate only where no genuine issue Of
material fact remains to be decided and the moving party is
entitled to judgment as a matter of law. Fed.R.Civ.p. 56(c). A
genuine issue of material fact exists when "there is sufficient
evidence favoring the non-moving party for a jury to return a
verdict for that party." Anderson v. Liberty" 'Lobby, Inc., 477
U.S. 242, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986) (citations
omitted). In applying this standard, the Court must view all
materials offered in support of a motion for summary judgment, as
well as all pleadings, depositions, answers to interrogatories,
and admissions properly on file in the light most favOrable to
the non-moving party." Id. 106 S.Ct. at 2510. Where '''the moving
party has carried its burden under 56(c), its opponent must do
more than simply show that there is some metaphysical doubt as to
the material facts." Matsushita Electric Industrial Co. v. Zenith
Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538
(1986) (footnote omitted); Celotex Corp. v. Catrett, 477 U.S.
317, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986).
;I,'
IV.. OPINION
A. TCG v. City of Dearborn
*3 Plaintiff, TCG, alleges that Dearborn's regulatory ordinance,
and the way it is being applied to them, is in violation of the
Federal Telecommunications Act of 1996. Specifically, TCG's suit
alleges that the City of Dearborn's requirements are in violation
of 47 U.S.C. ~ 253(a) (Count I) and 253(c) (Count II). In
addition, Plaintiff brings a ~ 1983 claim as well (Count III). TCG
requests, inter alia, that the Court declare the City of
Dearborn's ordinance invalid, enjoin Dearborn from enforcing its
ordinance, direct Dearborn to issue it a license, and award it
damages, costs and attorney fees.
In Counts I and II of its complaint, TCG alleges that the City
of Dearborn's ordinance, and the way it's applied, violates 47
V.S.C. ~ 253 on the grounds that: (1) the compensation is not
fair and reasonable under the Act, (2) the City is not requiring
compensation in a competitively neutral and nondiscriminatory
manner, and (3) the City's ordinance is in violation of the Act
because it has the effect of prohibiting Plaintiff's entry into
the market. The statute at issue provides as follows:
( a) IN GENERAL
No State or local statute or regulation, or other State or local
legal requirement, may prohibit, or 'have the effect or
prqhibiting the ability of any entity to provide any interstate
or intrastate telecommunications service.
(b) STATE REGULATORY AUTHORITY
Nothing in this section shall affect the ability of a State to
impose, on a competitively' neutral basis and consistent with
section 254 of this section, requirements necessary to preserve
and advance universal service, protect the public safety and
welfare, ensure the continued quality of telecommunications
services, and safeguard the rights of consumers.
(c) STATE AND LOCAL GOVERNMENT AUTHORITY
Nothing in this section affects the authority of a state or
local government to manage the public rights-of-way or to
require fair and reasonable compensation from telecommunications
providers, on a competitively neutral and nondiscriminatory
basis, for use of the public rights-of-way on a
nondiscriminatory basis, if the compensation required is
publicly disclosed by such government.
47 V.S.C. ~ 253
(1). FAIR AND REASONABLE
Subsection (c) provides that local governments retain the
authority "to require fair and reasonable compensation" from
providers "for use of the public rights-of-way." Plaintiff argues
that the compensation the City seeks to obtain from it is not
l'fair and reasonable."
Although "fair and reasonable compensation" is not defined by
the Telecommunications Act, TCG contends that it should be given
the same meaning as the term "just and reasonable" as used in the
Pole Attachment Act, 47 V.S.C. ~ 224. Section 224 of the Pole
Attachment Act, uses the specific language "just and reasonable"
(( and defines that as: 1 )
[A] rate is just and reasonable if it assures a utility the
recovery of not less than the additional costs of providing pole
attachments, nor more than an amount determined by multiplying
the percentage of the total usable space, or the percentage of
the total duct or conduit capacity, which is occupied by the
pole attachment by the sum of the operating expenses and actual
capital costs of the utility attributable to the entire pole,
duct, conduit, or right-of-way.
*4 Although the above definition is sOl!lewhat convoluted, it
appears to limit "just and reasonable" under the Pole Attachment
Act to the costs of the utility. Thus, TCG argues, because the
term "j ust and reasonable" is comparable to the term "fair and
reasonable compensation", the City of Dearborn should only be
allowed to recover its reasonable costs relating to the
installation of TCG's facilities. The Court disagrees.
First, the Pole Attachment Act relates to "attachment [s] by a
cable television system", not to telecommunications providers.
Bt.:t rr.c.re impo:.:tantly 1 there is no apparent 1 imitation of the kind
, , the Pole Attachment Act uses in connection with "juEjt and
reasonable" and that used in the term "fair and reasonable
compensation" as found in the Telecommunications Act, 47 U.S.C. !l
253 (c). And, as the Plaintiff recognizes, "it is generally
presumed that Congress acts intentionally and purposely when it
includes particular language in one section of its statutes, but
omits it in another." BFP v. Resolution Trust Corporation, 511
U.S. 531, 537,--S.Ct.----, 128 L.Ed.2d 556(1994).
Thus, Congress, if it had so' chosen, could have defined "fair
and reasonable compensation" the.' same as "j ust and reasonable"
however, it did not do so. Accordingly, any comparison of the two
terms is inapposite. The two terms are facially inapposite, one
refers to costs and the other refers to compensation for use of
right -of -ways. Moreover, 'the fact that Congress used the word"
"compensation" in lieu of the word "costs" in the
Telecommunications Act is strong evidence against construing the'
term to limit municipalities to strictly their costs: related to
telecommunications providers use of their right-of-ways.
The term "fair and reasonable compensation", although not
explicitly defined by Congress, clearly enables a municipality to
charge compensation for the use of its right-of-ways as the words
II fair and reasonable II are commonly understood. Any determination
of whether compensation is "fair ancl reasonable" is not amenable
to a strict test. Rather, fair and reasonable is determined by
examining the totality of the facts and circumstances. In this
case, an examination of the relevant facts and circumstances
indicates that the fees sought to be imposed by the City of
Dearborn are fair and reasonable compensation under the
circumstances.
First, there is nothing inappropriate with the city charging
compensation, or "rent", for the City owned property that the
Plaintiff seeks to appropriate for its private use. The statute
specifically allows it. See 47 U.S.C. Ii 253 (c) (this section does
not affect the authority of the city to "require fair and
reasonable compensation from telecommunications providers ... for
use of the public rights-of -way. . . . ,,). Moreover, the Supreme
Court, in an opinion dealing with the placement of telegraph
poles over a hundred years ago, recognized the general right of a
city to seek compensation from a user of the city's land/right-
of-way. As the Court stated:
*5 [W]hen there is a permanent and exclusive appropriation of a
part of t.he highway, is there in the nature of things anythlDg
to inhibit the public from exacting rental for the space thus
occupied? Obviously not. Suppose a municipality permits one to
occupy space in a public park, for the erection of a booth in
which to sell fruit and other articles; who would question the
right of the city to charge for the use of the ground thus
occupied, or call such a charge a tax, or anything else except
rental? So, in like manner, while permission to a telegraph
company to occupy the streets is not technically a lease, and
doesl not in terms create the relation of landlord and tenant,
yet it is the giving of the exclusive use of real estate, for
which the giver has a right to exact compensation, which is in
the nature of rental.
City of St. Louis v. Western Union Tel. Co., 148 U.S. 92,99, 13
S.Ct. 485, 488, 37 L.Ed. 380 (1893).
The Court went on to discuss whether the charge at issue was
reasonable:
Another matter is discussed by counsel which calls for
attention, and that is the proposition that the ordinance
charging five dollars a pole per annum is unreasonable, unjust,
and excessive.... Prima facie, an ordinance like that is
reasonable. The Court cannot assume that such a charge is
excessive, and so excessive as to make the ordinance
unreasonable and void. . . .
((
Ie.. at 104.
'i
Accordingly, when considering the amount of intended use in this
case--TCG seeks to run approximately 27 miles of cable within the
right-of-ways of the City of Dearborn--the compensation sought by
the City is neither unfair nor unreasonable. [FN1]
Another relevant factor in determining whether the compensation
is fair and reasonable is what other telecommunications providers
would be willing to pay. In this case, three other
telecommunications providers negotiated, an~ agreed to, franchise
agreements substantially similar to that proposed to TCG. They
include a franchise to Metropolitan Fiber Systems, Inc.,
requiring a 3% fee on gross revenue, costs of up to $2,500, the
provision of four optic fibers for the use of the City, and
conduit space for the City if the provider installed any
conduit (Ex. 2). A franchise to Metrocom, Inc., called for a 3%
franchise fee on gross revenues, costs up to $2,500, and conduit
if the provider chose to install it for itself. (Ex. 15). A
franchise to MCI Metro Access Transmission Service, Inc.,
includl?d a 5% fee on gross reven'...18 or a per feat line charge,
costs up to $2,700, and conduit space for the CiJ::y if the
provider choose to install any conduit (Ex. 14). These agreements
with other providers were entered into on August 16, 1994,
September 5, 1995, and October 17, 1995, respectively. In
addition, each of the agreements contained other conditions
related to insurance, liability, and the like.
Clearly, this is evidence in support of a finding that the
compe~sation sought by the City is fair and reasonable.
Certainly, the agreements that other providers are willing to
enter into in order to util'iz~.the City's right-of- ways are.
relevant in a determination of what is fair and reasonable. The
evidence shows that at least three other providers agreed to
franchises that involved a substantially the same terms and
conditions as the City seeks to impose on TCG, including, a
percentage fee on gross revenue, costs, and conduit space. This
indicates that such conditions are neither unfair nor
unreasonable.
*6 Also relevant to a determination of whether or not the fees
sought by the City are fair and reasonable are the dealings
between the parties. Prior to the passage of the Federal
Telecommunications Act, TCG and the City of Dearborn were in long
term negotiations regarding the terms of a franchise agreement.
The agreements of the other providers were before TCe and the
City of Dearborn when they were negotiating an agreement in 1995.
The last draft of that agreement, which the Plaintiff
participated in negotiating, called for almost the exact same
terms that TCG is objecting to now.
The proposed franchise agreement between TCG and Dearborn called
for a franchise fee of 4% of TCG's gross revenue, a one time
franchise fee of $50,000, and the requirement that if the
Plaintiff installed conduit within the right of way, that they do
so for City as well (City's Ex 8). This- proposal was reached
after extensive negotiations between the parties (Ex. 6-12). In
fact, TCG negotiated for a one time $50,000 up front payment in
lieu of providing fiber optic strands to the City (Ex. 6). In
addition, from the extensive correspondence between the parties,
it appears that TCG agreed to most, if not all of the terms (Ex.
11). Only after the passage of the Federal Telecommunication Act
did the Plaintiff think it was no longer "fair and reasonable" to
enter into such an agreement.
Thus, the evidence indicat2s that far Leom originally obj ecting
to such a franchise agreement, TCG was actively negotiating the
terms of the agreement which it now objects to. Therefore, to the
extent that the Plaintiff now contends that the terms of its
previously negotiated agreement are not "fair and reasonable
compensation" for use of the right-of-ways, such a claim is
belied by its apparent previous willingness to negotiate, and
enter into, the agreement at issue. In fact, such evidence
indicates quite the opposite, that the proposed agreement was
reaso,nable, fair, and consistent.
Lastly, the Court is not convinced by Plaintiff's contention
that the fees in the agreement that the City wishes to impose are
so excessive that it is likely to render doing business
unprofitable. TCG did not think such a franchise was unreasonable
during negotiations, and neither did the other providers that
actually entered into agreements. Although its clear that the
Plaintiff would like to have access to the City's property
without having to pay the City compensation, it is also clear
that the simple fact that TCG does not want to pay the amount set
by the City does not render that amount unreasonable or unfair
under the Federal Telecommunications Act. After examining all of
the circumstances listed above, the Court finds no genuine issue
of material fact presented that the compensation sought by the
City is either unfair, or unreasonable, as applied to this
,{
Plaintiff. Thus,
the requirement
discussed above,
the Court finds that the City' s ordir~ance and
that TCG enter into a franchise agreement as
is not a violation of 47 U.S.C. fi 253.
2. COMPETITIVELY NEUTRAL AND NON-DISCRIMINATORY
*7 Plaintiff's next argument is that the City is not demanding
compensation on a competitively neutral and nondiscriminatory
basis. Section 253 (c) requires that any compensation sought by
the City be imposed in "competitively neutral and
nondiscriminatory" manner. Plaintiff clain:s that the City of
Dearborn is violating this provision by treating TCG differently
from Ameritech. .
Plaintiff argues that Ameritech enjoys free use of Dearborn's
right-of-ways and that "prior to TCG bringing this lawsuit, no
demand was made by Dearborn upon Ameritech that it enter into a
franchise agreement '" for its use of Dearborn's right-of-ways."
However, since the lawsuit was filed, Dearborn has demanded that
Ameritech enter into such an agreement. When Ameritech refused,
the Cit::y af De2..rbcrn filed a third-party complaint against
Ameritech seeking to have Ameritech enter into afrknchise
agreement. Ameritech' s position is that it has been granted a
state-wide franchise to operate due to its incorporation under
Act 129 of 1883. There are currently pending motions for summary
judgment on those issues before the Court which will be addressed
infra. However, regardless of the merits of Ameritech's position
vis a vis the City of Dearborn, the fact remains that Dearborn is
now seeking to require Ameritech to enter into an agreement.
Therefore, to the extent TCG claims it is being discriminated
against because the City has .n?t sought to impose a franchise
agreement on Ameritech, that claim is without merit as the City
of Dearborn is suing Ameritech for that now.
TCG also claims as discriminatory Dearborn's apparent intention
not to impose on Ameritech 'exactly the same agreement it wants
TCG to enter into. In support of this proposition, TCG cites this
portion of an interrogatory served on the City of Dearborn:
Q. Do you assert that Michigan Bell [Ameritech], and all other
telecommunications service providers operating in Dearborn, are
required to enter into a franchise agreement with the City of
Dearborn containing similar terms and conditions as the
franchise agreement tendered by the Ci ty of Dearborn to TCG
Detroit?
A. Yes; however, the City does not expect that each franchise
ay::-eement will be identical. Each agre",ment, at the time of
execution, should reflect public needs and the providers'
capabilities at the time, and the then-current market value,
and/or maintenance costs for access to, and use of, the public
right-of- way. Within the forgoing criteria, the aggregate
comparative burdens on various competing providers need only be
comparable, not equal.
(TCG Ex. V).
Based on that interrogatory
position is contrary to the
requires fair and reasonable
basis. Al though of dubious
address the TCG's argument.
answer, TCG argues that Dearborn's
clear language
compensable on
ripeness, the
of !l 253 (c) ~lhich
a nondiscriminatory
Court will briefly
TCG goes too far by equating; the City'S answer that the
requirements will not be identical with the contention that it is
unequal or discriminatory. TCG presents no evidence to the Court
that the City must impose exactly the same agreement on each
telecommunications provider without consideration of each
providers size, contemplo.ted use of the right-of-way, space
available and the like. Moreover, the explicit language of the
statute does not require such strict equality. All that is
required is that the compensation sought be non- discriminatory
and competitively neutral. 47 U.S.C. !l 253 (c). In fact, the
position that TCG is advocating--exact parity--was specifically
considered, and rejected, by Congress in drafting the Act.
*8 During the drafting of the Act, Representative Dan Schaefer
attempted to include a 'parity provision' in the Act. This parity
provision would have required that any fees or charges imposed by
a city, upon a telecommunications provider for use of the local
right-of-ways, would have to have been exactly equal, regardless
of the extent to which one provider needed to impose on the
right-of-ways compared to another. 141 CONGo REC. H 8427 (August
4, 1995). This provision was flatly rejected by the Stupak-Barton
amendment. In offering his amendment to replace the manager's
amendment, which included the parity provision, Representative
Stupak stated:
[L]ocal Governments must be able to distinguish between
different telecommunications providers. The way the manager's
amendment is right now, they cannot make that distinction.
For example, if a company plans to run 100 miles of trenching in
our streets and wires to all parts of the cities, it imposes a
different burden on the right-of-way than a company that just
(( wants to string a wire across two str<=ets to)a couple of
buildings.
The manager's amendment says that local governments would have
to charge the same fee to every company regardless of how much
or how little they use the right-of-way or rip up our
streets.... [rather] the companies should have to pay a fair and
reasonable rate to use the public property.
Id. at H 8460. The Stupak-Barton amendment was adopted in place
of the parity provision. As can be clearly seen from
Representative Stupak's comments, the parity provision was
defeated because it did not allow a ,local government to
distinguish between providers based on their varying use of the
right-of- ways. Nothing in the debate of the Stupak-Barton
amendment, which became section 253 (c), indicates that it was
intended to force local authorities to charge exactly the same
fees and rates, and, in fact, it explicitly rejects that
proposition.
Thus, the legislative history underlying section ~ 253(c) does
not support TCG's argument that the City of Dearborn is (or more
properly willI violate ~ 253(c) by imposing co~parable, but not
identical agreements, on different providers. The' legislative
history clearly allows the City to account for the differences
between providers and it is enough that the City imposes (or
plans to impose) comparable burdens. Accordingly, the Court finds
no support for TCG's claim that the City, by imposing comparable
but not identical agreements, is, or will be, discriminating
against it in violation of ~ 253(c).
3. P~HIBITING ENTRY
Plaintiff's last argument under ~ 253 is that the City of
Dearborn, by attempting to impose the agreement at issue is
prohibiting its entry into the market in violation of ~ 253(a).
However, as addressed above, because the Court finds the City's
regulation neither discriminatory nor unreasonable, it follows
that the regulation does not prohibit its entry into the market.
The City is not prohibiting the TCG from entry, rather, TCG has
chosen not to pay for its access. Thus, the Court finds no
violation of ~ 253(a).
4. 42 V.S.C. ~ 1983
*9 Lastly, Count III of TCG's complaint alleges a claim under 5
1983. In order to bring a ~ 1983 action, TCG must establish that
(1) the conduct complait"ied of was cOltlmitted by a person acting
under color of state law; and (2) that this conduct derived a
person of rights, privileges or immunities under the Constitution
or laws of the United States. Brock v. McWherter, 94 F. 3d 242,
244 (6th Cir.1996). A municipal corporation is a person within
the meaning of 42 U.S.C. !l 1983. Monell v. New York Dep't of
Social Servs., 436 U.S. 658, 690-01 (1978).
The basis of TCG's !l 1983 cause of action is premised upon the
alleged violations of 47 U.S.C. !l 253 (a)and(c) (See TCG's summary
judgment brief pgs. 18-19, and reply brief pg. 5). Because the
Court has held that 47 U.S.C. !l 253 is not violated ~y the City's
action, it follows that "there is no violation under !l 1983, and
the claim will be dismissed.
5. CONCLUSION
In sum, based on the foregoing analysis, the Court finds no
genuine issue of material fact upon which a reasonable jury could
find that the City's ordinance, and the franchise agreement it
seeks TCG to ente!" into ,- is (3. vicla.tioIl of 47 u. s. c. 5 253.
Therefore, l'CG' s motion for summary judgment is denied and the
City of Dearborn's motion is granted.
B. CITY OF DEARBORN V. AMERITECH
As discussed above, the original Plaintiff, TCG, brought suit
against the City of Dearborn alleging that Dearborn's ordinance
requiring it to enter into a franchise agreement was
discriminatory under 47 U.S.C. !l 253. Prior to the institution of
TCG's lawsuit, the City of Dearborn had not sought to impose a
franchise agreement upon the incumbent local carrier, Ameritech
Michigan (hereinafter "Ameritech"), which was already using the
City's right-of-ways. Subsequent to TCG's lawsuit, the City of
Dearborn sought to have Ameritech enter into a franchise
agreement. Ameritech refused on the grounds that it was granted a
state wide franchise to operate by virtue of its incorporation,
in 1904, pursuant to Public Act 129 of 1883. [FN2] Thereafter,
the City of Dearborn filed a third-party complaint against
Ameritech, the third-party defendant-. Because the Federal
Telecommunications Act allows the City to charge fair and
reasonable compensation for use of its right-of-ways, the City
alleges that Ameri tech, already occupying the Ci ty' S right -of-
ways, must enter into a franchise agreement with the City
pursuant to its ordinance.
i. ( Both A[lleritech and the City of Dearborn have filed md~ions for
summary judgment pursuant to Fed.R.Civ.p. 56. Each have responded
and replied. For the reasons that follow, third-party
Plaintiff's, City of Dearborn, motion is denied and third-party
Defendant's, Ameritech, motion is granted.
Ameritech contends that Dearborn's ordinance requiring a
franchise is not applicable to it because Ameritech has a
statewide, legislatively granted franchise to operate throughout
Michigan. Ameritech contends, and the Court agrees, that it
derives its authority to operate throughout Michigan from the
statute under which it is organized. Sp~cifically, Section 4 of
Public Act 129, enacted in 1883 for the organization of telephone
and messenger service companies, reads in part:
*10 Every such corporation shall have power to construct and
maintain lines of wires or other material, for use in the
transmission of telephonic messages along, over, across, or
under any public places, streets, and highways, and across or
under any of the waters in this State, with all necessary
erections and fixtures therefor: Provided, That the same shall
'lct injuriously interfere ,lith other publ~c uses of the said
places, streets, and highways, and the navigation qf said
waters; to construct, provide, and furnish instruments, devices,
and facilitates for use in the transmission of such messages,
and to construct, maintain, and operate telephone exchanges and
stations, and generally to conduct and carry on the business of
providing and supervising communication by telephone, and also
the business of furnishing messenger service in cities and
towns.
Public Act 129, 1883.
Thus, pursuant to Act 129, a corporation organized under the Act
was given the right to conduct and carryon telecommunications
business and to construct and maintain lines "along, over,
across, or under any public places streets, and highways" in the
State. rd. There was no limitation placed on a company,
incorporated under Act 129, subjecting it to local municipality
franchise authority. The only limitation was that a municipality
could regulate to protect the general welfare.
This interpretation of the Act was explicitly brought forward in
Michigan Telephone Co. v. City of Benton, 121 Mich. 512, 80 N.W.
386 (1899). In that case, the Michigan Telephone Company brought
suit when the City of Benton Harbor attempted to limit its
ability to establish a telephone system in the City. The Michigan
Supreme Court stated:
It will be obserJed that the act under which complainant is
organized [Act 129] does not require the consent of the
municipality to the construction of its lines.
* * *
Evidently it was not the intention of the legislature to permit
municipalities to prevent telegraph and telephone companies from
extending their business along the public highways and streets
of the state.... Under this statute the sole authority of the
municipality is the proper exercise of the police power,
inherent in it, to prote~t the public from unnecessary
oDstructions, inconvenience, and dangers, and to determine where
and in what manner complainant may erect its poles and stretch
its wires so as to accomplish this result. It has no authority
to impose other conditions. That authority rests in the
legislature,--the charter--making power.
Id. at 516-17, 80 N.W. 386 (emphasis added)
Thus, as can be clearly seen from the statute and the above
citect case { J\.meri t.ech was granted a s::atE:w.id~ franchise to
operate its telecommunications system. Under the act which
Ameritech is organized, Act 129, the City of Dearborn may manage
its public rights-of-way, but, as it relates to Ameritech, only
to protect the health, welfare, and safety of the public. Id. But
it may not seek to impose franchise fees.
*11 Therefore, Michigan's Act 129 conferred upon those providers
that incorporated thereunder the right to operate in
municipalities regardless of their consent, subject only to
regulation regarding the health, safety, welfare of the public.
Id. The City of Dearborn argues, however, that when Michigan
revised its Constitution in 1908, which became effective in 1909,
and expanded municipality control over streets and highways, this
revoked the previous unqualified right of corporations organized
under Act 129 to freely operate within the municipalities.
Article VIII, 5 28 of the Michigan Constitution of 1908,
provided as follows:
No person, partnership, association or corporation operating a
public utility shall have the right to Use of the highways,
streets, alleys or other public places of any city, village or
township for wires, poles, pipes, tracks or condui ts, wi thout
the consent of the duly constituted authorities of such city,
village or township; nor to transact a local business therein
it
without first obtaining a franchise therefor frob such city,
village or township. The right of all cities, villages and
townships to the reasonable control of their streets, alleys and
public places is hereby reserved to such cities, villages and
townships.
The Constitution of 1963, Art. VII, ~ 29, retained the foregoing
provision in all pertinent respects. Thus, the State of Michigan,
in the 1908 revised Constitution, required those businesses
seeking to use a municipalities right- of-ways to first obtain
the consent of the municipalities. Thus, according to the City,
the 1908 Constitution revoked the previous' unlimited grant that
Ameritech enjoyed for being organized under Act 129 and it is
therefore now subject to the City's franchise requirement.
Ameritech contends that the Constitution of 1908, while allowing
municipalities greater control over access to their streets and
highways, only applied so long as the business did not already
enjoy state-wide franchise rights pursuant to a statute enacted
prior to the new Constitution. Thus, according to Ameritech,
because it was organized J.n 1904 under Act 129, the Constitution
of 1908 did not alter its existing franchise rights! The Court
agrees with Ameritech.
The question of whether or not the 1908 Constitution affected
previously organized companies under Act 129 has not been
directly, reached by the courts of Michigan. However, the Michigan
Supremetourt has addressed the same issue in regards to utility
companies organized under a statute analogous to Act 129,
speci):,ically Act 264 of 1905. The Court believes that Michigan
Supreme Court's treatment of Act 264 is a persuasive indicator of
how it would address the issue presented concerning Act 129.
Act 264 of 1905 provided for the organization of utility
companies. Act 264 is substantially similar to Act 129 which
applied to telephone companies. Act 264 provided in part:
Any person, firm, or corporation authorized by the laws of this
state to conduct the business of producing and supplying
electricity for purposes of lighting, heating and power, and
which shall be engaged or which shall hereafter desire to engage
in the business of the transmission of such electricity, shall
have the right to construct and maintain lines of poles and
wires for use in the transmission and distribution of
electricity on, along or across any public streets, alleys and
highways and over, under or across any of the waters of this
state, and to construct and maintain in any such public streets,
alleys or highways all such erections and appliances as shall be
necessary to transform, convert and apply such electricity to
the purposes of lighting, heating and power, and to distribute
and deliver the same to the persons, firms and public or private
corporations using the same.
*12 Public Act 264 of 1905.
In the case of City of Lansing v. Michigan Power Co., 183 Mich.
400, 150 N.W. 250 (1914), the City of Lansing sued the Michigan
Power Company, which had incorporated pursuant to Act 264, and
prior to the revised Constitution of 1908. The City of Lansing
argued that Michigan Power's right to operate within its borders
without regulation by the City was revoked by the 1908
Constitution. The Michigan Supreme Court disagreed and stated:
The act [264] of 1905 tendered a franchise to defendant; such
franchise was accepted by defendant by way of installing its
service equipment in the public streets and providing a service
of a public utility; and this tender and acceptance constitute a
contract between the state and defendant beyond the power of the
Legislature, the Constitution, or of this court to impair by
destroying the contract right to remain in the streets.
Id. at 410-411, 150 N.W. 250.
Therefore, according to the Michigan Supreme Court:
The Constitution of 1909 did not revoke and terminate existing
use of the streets under Act 264 of 1905. The Constitution did
abrogate the law of 1905, out it did not and could not revoke
existing contracts under that act arising out of beneficial user
of hhe streets for public utility purposes. Constitutional
provisions, as well as legislati ve enactments, must be held
prospective in operation only, unless they carry upon their face
an intention to be retrospective.
Id. at 409, 150 N.W. 250.
In 1941, the Michigan Supreme Court reaffirmed the holding from
Michigan Power in Village of Constantine v. Michigan Gas &
Electric Co., 296 Mich. 719, 296 N.W. 847 (1941). In Constantine,
the Court again stated that the 1908 Constitution did not affect
the statewide franchise rights granted to corporations organized
under Act ~64. rd. at 732, 296 N.W. 847. Moreover, the Court held
that the term of the franchise was measured by the life of the
corporation. rd.
Further, in Traverse City v. Consumers Power Co., 340 Mich. 85,
U 64 N.W.2d 894 (1954), the Michigan Supreme Court lleld) that the
geographical limits of a corporation organized under Act 264 were
not limited solely to the area serviced by the corporation as of
January 1, 1909, the effective date of the 1908 Constitution. The
Court stated:
The effect of such a holding, freezing the rights acquired under
the State franchise to the existing user as of 1909, the
effective date of the constitutional provision which abrogated
the act of 1905 [264], is incongruous and detrimental to the
public interest.... To hold now that they are restricted from
rendering electrical service to an area .not previously served
within the corporate limits of a growing municipality would
"thwart the very nature and object of a public utility.
rd. at 97, 64 N.W.2d 894.
While Ameritech was formed under Act 129, not Act 264, the
statutes are the same in all substanti ve respects. Each was
enacted prior to the adoption of the 1908 Constitution and each
statute granted certain corporations the right to use of city
streets and rights-of-ways for the operation of their businesses,
subject only to regulation by local authGrity fer thE: health and
safety of the public. The Court finds Michigan Supreme )Court I s
analysis of Act 264 persuasive and sufficiently analogous to the
issues presented in this case concerning a telephone corporation,
such as Ameritech, organized under Act 129.
*13 There is additional support for extending the reasoning
applied by the Michigan Supreme Court relating to Act 264 cases
to the present situation under Act 129. In 1957, Michigan's
Attorney General issued an opinion concerning the Village of
Roseville's right to impose fees on certain public utilities,
namely Consumers Power, Detroit Edison, and Ameritech (Michigan
Bell Telephone Company), based on use of the public places and
rights-of-way. The Attorney General found that Roseville could
not impose such fees on Ameritech because the fees amounted to a
franchise requirement when Ameritech Michigan already had a state
franchise:
Concerning the Michigan Bell Telephone Company, we find that it
has never obtained a franchise from the Village of Roseville but
relies upon the provisions of P.A. 1883, No. 129, ~ 4, for its
authority to operate in the village. Under this act, statewide
franchise rights were granted to telephone companies. The
similarity between this statute (P.A. 1883, No. 129) and
P.A.1905, No. 264, makes it probable that the decisions of our
Court with reference to the 1905 Act would be applicable to
rights achieved ..mder the Ae;t of 1883, regardless of latter
requirements of the Constitution of 1908. We therefore are of
the opinion that the Michigan Bell Telephone Company presently
has a valid franchise in the village of Roseville, and its
facilities therein may not be subjected to the proposed levy.
Report of the Attorney General, No. 2739 (March 13, 1957).
Therefore, applying the above line of cases by the Michigan
Supreme Court interpreting Act 264 to the issue in this case, the
Court concludes Ameritech, organized under Act 129, was granted a
state-wide franchise to operate. That fraochise is not limited
solely to those geographical areas serviced by it in 1908.
. Moreover, the subsequent adoption of the 1908 Constitution did
not affect Ameritech's rights or revoke the franchise gained by
incorporating under Act 129. City of Lansing v. Michigan Power
Co., 183 Mich. 400, 150 N.W. 250 (1914); Village of Constantine
v. Michigan Gas & Electric Co., 296 Mich. 719, 296 N.W. 847
(1941); Traverse City v. Consumers Power Co., 340 Mich. 85, 64
N.W.2d 894 (1954). Therefore, the City of Dearborn cannot require
Ameritech to enter into a franchise agreement and its ordinance
is inapplicable to it.
In sum, the Court finds as a matter of law that Ameritech has
vested state franchise rights which were not abrogated by the
revised 1908 Constitution. Accordingly, no genuine issue of
material fact remains upon which a reasonable jury could find
Ameritech is required to enter into a franchise agreement with
the City of Dearborn pursuant to its regulatory ordinance.
Therefore, summary judgment in favor of Ameritech, the third-
party.?efendant is proper.
V. CONCLUSION
For the reasons stated above, IT IS HEREBY ORDERED that
Plaintiff's, TCG Detroit, motion for summary judgment is DENIED,
Defendant's, City of Dearborn, motion for summary judgment is
GRANTED. IT IS FURTHER ORDERED that Third-party Plaintiff's, City
of Dearborn, motion for summary judgment is DENIED. Third- party
Defendant's, Ameritech, motion for summary jUdgment is GRANTED.
The case 1S DISMISSED. The Clerk of the Court shall close the
case.
*14 IT IS SO ORDERED.
JUDGMENT
.
( IT IS ORDERED AND ADJUDGED that pursuant to this cdurt's Order
dated August 14, 1998, Plaintiff, TCG Detroit's, and Third Party
Plaintiff, City of Dearborn's, case is DISMISSED.
FN1. Plaintiff argues that the City of Dearborn cannot
impose a "rental" fee because it is limited as to what it
may charge pursuant to Michigan law. However, this case
involves only the Federal Telecommunications Act, 47 V.S.C.
II 253. The Court previously dismissed, without prejudice,
the state law claim. Thus, to the extent that Plaintiff
contends the City of Dearborn is excee9ing its authority to
impose fees and require compensation on state law grounds,
such a claim is not before this Court and is more properly
brought in state court.
FN2. In January, 1904, Ameritech Michigan, originally named
the Michigan State Telephone Company, and later named the
Michigan Bell Telephone Company, incorporated under Michigan
Public Act 129 of 1883 (Third-party Defendant's Ex. 8).
END OF DOCD~1ENT
)
"I,
~
Federal Communications Commission
FCC 97-331
Before the
FEDERAL COMMUNICA nONS COMMISSION
Washington, D.C. 20554
In the Matter of:
)
)
)
)
)
)
CSR-4790
TCI CABLE VISION OF OAKLAND
COUNTY, INC.
Petition for Declaratory Ruling, )
Preemption and Other Relief )
Pursuant to 47 U.S.C. 99 541, 544(e), )
and 253 )
MEMORANDUM OPINION AND ORDER
Adopted: September 18, 1997
Released: September 19, 1997
By the Commission:
Table Of Contents
Page No.
I. INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2
II. EXECUTIVE SUMMARY ..................................................... 2
III. BACKGROUND............................................................. 5
IV. TITLE VI ISSUES ........................................................... 17
A. Overview ............................................................ 17
B. Section 621 .......................................................... 18
I. Positions of the Parties ........................................ 18
2. Discussion .................................................. 27
a. Section 62 I (b)(3)(A) .................................... 29
b. Section 62 I (b)(3)(B) . . ... " . . . ..... . . . .. . ... . ..... ...... 30
c. Section 62 I (b)(3)(D) .................................... 34
C. Section 624( e) ........................................................ 35
I. Positions of the Parties ........................................ 35
2. Discussion .................................................. 36
V. TITLE II ISSUES ............................................................ 38
A. Overview of Title II Legal Allegations ..................................... 38
B. Ripeness, Standing, and Advisory Opinions. . . . . . . . . . . . . . . . . . . . . . . . 41
I. Positions of the Parties ........................................ 41
2. Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 43
Federal Communications Commission
FCC 97-331
I'
VI. MOTIONS TO DlSMlSS OR DENY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 49
VII. ORDERING CLAUSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 49
APPENDIX A: LIST OF COMMENTERS ............................................. A-I
APPENDIX B: TEXT OF TROY TELECOMMUNICATIONS ORDINANCE... . . ... . . ....... B-1
APPENDIX C: COMMENT SUMMARIES ............................................ C-I
I. INTRODUCTION
1. On July 10, 1996, TCI Cablevision of Oakland County, Inc. ("TCI") filed a petition
("Petition") seeking preemption, a declaratory ruling and other relief against the City of Troy, Michigan
("City"), pursuant to sections 621, 624( e), and 253 of the Communications Act of 1934, as amended
("Communications Act").' We placed the petition on public notice and established a pleading cycle on July
26, 1996.' In addition, the Commission held a public forum on December 16, 1996 where the parties to this
proceeding, as well as a number of other persons, submitted oral and written presentations concerning many
of the issues presented in this case.'
II. EXECUTIVE SUMMARY
)
2. In this matter, we are asked to examine certain aspects of the City's regulation of both cable
and telecommunications services. By virtue of a cable franchise it holds from the City, TCI lIjlaintains cable
facilities under and along pllbli~ rights-af-way th~OUg.I]()ut the City and cffer, cable service to its residents.
From time to time, the maintenance and upgrade of these cable facilities requires TCI to engage in
construction activities within the public rights-of-way. City regulations establish a permitting process by
which TCI obtains specific authority to disrupt the rights-of-way each time such activity is planned. This
matter arises out of the City's treatment of two construction permit applications submitted by TCI.
3_ By its first permit application (the "Royal Oak" permit application), filed in October, 1995,
TCI sought to install fiber optic facilities in an area of the City in which it did not currently provide cable
service. While the stated purpose of the installation was to interconnect three cable headends, the proposed
route was not the most direct route between the headends. The City apparently suspected that TCI intended
to use the fiber optic facilities to offer telecommunications services in the City. While TCI is franchised to
offer cable service, it does not hold a franchise or other authorization for the provision of telecommunications
]47 U.S.c. SS 541, 544(e), and 253. The specific provisions relied upon by TCI, sections 62 I (b)(3)(A), (b)(3)(B),
(b)(3)(D), 624(e) and 253 were added to the Communications Act by the Telecommunications Act of 1996, Pub. L. No.
104-104,110 Stat. 56, codiftedat 47 U.S.c. SS 151 et seg. (the 1996 Act). All citations herein to the 1996 Act will be
to the 1996 Act as codified in Title 47 of the United States Code.
'See TCI Cablevision of Oakland County, Inc., Petition for Declaratory Ruling, Preemption and Other Relief
Pursuant to 47 U.S.c. SS 541, 544(e), and 253, CSR-4790, Public Notice, Report No. 1086 (reI. July 26, 1996). A list
of commenters is set forth in Appendix A and includes the acronyms and abbreviations by which the commenters are
referred in this item
3 See Cable Services, Common Carrier and Wireless Telecommunications Bureaus and the Office of General Counsel
to Hold Public Forum on December 16th to Discuss Use and Management of Public Rights-of-Way in the Provision
of Telecommunications Services, Public Notice (reI. Nov. 26,1996).
- 2-
Federal Communications Commission
FCC 97-331
services. Although TCI maintained that it did not intend to provide telecommunications services in Troy,
TCI agreed in writing that any construction permits issued by the City would be for the provision of cable
service only, and would not authorize the provision of telecommunications services until TCI had obtained
all lawful requisite authorizations pursuant to federal, state and local requirements. The City instructed its
City Engineer that all permits that appeared to be usable for services other than cable should be endorsed
with "not for telecommunications purposes" language, consistent with the terms of its agreement with TCI.
4. Thereafter, in December, 1995, the City enacted an ordinance ("Telecommunications
Ordinance") consisting of a broad array of regulations governing the provision of telecommunications
service. TCI submitted the second construction permit application (the "Livernois Road" permit application)
to install aerial cable along two other rights of way in February, 1996, for the purpose of upgrading an
institutional network (I-NET) and improving cable service to a local school. The City eventually granted the
Livernois Road application, subject to the condition that the facilities installed pursuant to the pemrit not be
used for other telecommunications purposes. The City then asked TCI to amend the Royal Oak permit
application to correct what the City claimed were some technical problems in the application, including the
indirect route between headends, and the need for TCI, as a potential telecommunications provider, to obtain
a telecommunications franchise pursuant to the City's Telecommunications Ordinance. TCI re-submitted that
application in May, 1996, with information that TCI claims meets the City's stated concerns about the
installation route, but without agreeing to the inclusion of the endorsement language sought by the City. The
City has yet to act upon TCl's Royal Oak permit application, contending that not all of its concerns have been
addressed. The City has offered to grant the permit application ifTCI agrees to route the upgraded facilities
along the most direct route between the headends that TCI seeks to interconnect, and agrees to the inclusion
of the "not f:}r telecommunication'::. pilqJose:;fl endorsernefJt.
5. TCl's Petition raises a series of related claims regarding the permissible scope of local
franchising authority over cable operators and their provision of telecommunications services under both
Titles VI and II of the Communications Act' First, the Petition alleges that by conditioning or refusing to
grant the two construction permits, the City has interfered with TCl's operation of its cable system in a
manner that violates several sections of Title VI. The cited sections place limits on the power of a local
franchising authority to impose telecommunications-related requirements on a cable operator under Title VI,
or to dictate the type of transmission technology used by the cable operator to deliver its cable signal.
Second, the Petition alleges that the Telecommunications Ordinance violates section 253 of the
Communications Act.' Section 253(a) restricts the authority of state and local governments to impose
regulations that prohibit, or that have the effect of prohibiting, the ability of any entity to provide any
interstate or intrastate telecommunications service. TCI also alleges that the City lacks authority under state
law to enact or enforce the Telecommunications Ordinance. The City contends that its actions comply fully
with federal and state law. Further, the City maintains that the Commission lacks jurisdiction to determine
the validity of its Telecommunications Ordinance under section 253.
6. The Title VI provisions relied upon by TCI, sections 621 (b)(3)(A), (b)(3)(B), (b)(3)(D) and
624(e), generally limit the power of a local franchising authority, under Title VI, to condition the provision
of telecommunications services by a cable operator; to impose telecommunications-related requirements on
cable operators, or to dictate the type of transmission technology used by the cable operator to deliver its
'See47 U.S.C. SS 253, 621, 624.
'47 U.S.c. S 253.
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cable signal. In this decision, we find that the City has violated section 621(b)(3)(B) by placing a
telecommunications condition on its grant of cable permits. By inclusion of these provisions in Title VI,
Congress clearly intended to separate the functions of cable franchising from the regulation of
telecommunications services. The City's insistence on inclusion of its telecommunications condition in a
cable permit impermissibly mixes these separate spheres. In contrast, we do not agree with TCI's claim that
the City's actions violate section 621(b)(3)(A) of the Communications Act. That provision applies by its
terms only "[i]f a cable operator or affiliate thereof is engaged in the provision of telecommunications
services." By its own admission, TCI is not so engaged in the City of Troy. We further find that the City
has not violated section 624( e), as claimed by TCI' That section eliminates the authority of franchising
authorities to interfere with a cable operator's choice of the subscriber equipment and transmission
technology to be used in its cable system. We find that the City has not sought to restrict the discretion
granted to TCI in this regard by its actions with respect to TCl's cable permit applications.
)
7. Congress enacted section 253 to ensure that no state or local authority could erect legal
barriers to entry to telecommunications markets that would frustrate the 1996 Act's explicit goal of opening
local markets to competition. Section 253( d) directs this Commission to preempt the enforcement of such
legal barriers, upon a proper finding.7 Our treatment of the claims arising under Title VI resolves the
controversy between TCI and the City. While TCI advances the additional claim that we should preempt the
Telecommunications Ordinance as a barrier to entry under section 253, TCI states that it has no present
intention of offering telecommunications services in the City. Any resolution of the claims made by TCI
under section 253 would have no impact on TCl's interests given its current intent not to offer
telecommunications services. Under the circumstances, there is no concrete dispute between TCI and the City
for the Commission to resolve under section 253. We decline to issue a declaratory or advisory ruling as to
whether the Troy Te!ecomm:mirations Ordinance should be preempted, in whole Oi' in part, under section
253( d).
8. Nonetheless, we are troubled by several aspects of the Troy Telecommunications Ordinance
in the context of the effort to open local telecommunications markets to competition. While Congress
mandated a role for the Commission and the states in the regulation of telecommunications carriers and
services, we are concerned that Troy and other local governments may be creating an unnecessary "third tier"
of telecommunications regulation that extends far beyond the statutorily protected municipal interests in
managing the public rights-of-way and protecting public safety and welfare.' We take this opportunity to
address several issues related to section 253 that have come to our attention in the course of this proceeding.
In particular, we articulate our concern regarding how redundant and potentially inconsistent levels of
regulation of telecommunications services and service providers may deter or discourage competition.
m. BACKGROUND
9. Local Cable and Utility Placement Ordinances. In accordance with Chapter 63 of the Troy
City Code ("Cable Ordinance"), a party seeking to provide cable television service in the City must obtain
a license before constructing, maintaining or operating a cable system in the City, and must obtain a franchise
6Section 624(e) provides in pertinent part: "No State or franchising authority may prohibit, condition, or restrict a
cable system's use ofany type of subscriber equipment or any transmission technology." 47 U .S.c. ~ 544( e).
'47 U.S.c. ~ 253(d).
'See 47 U.S.c. ~ 253(b) & (c).
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before transacting business by way of a cable system in the City. While a license or a franchise under
Chapter 63 constitutes a general grant of authority to operate a cable television system in the City, the
physical construction and installation of cable and other utility facilities in the public right-of-way is
governed by Chapter 33 ("Public Right-of-Way"). Chapter 33 establishes a permitting process by which a
franchisee, licensee, or other party may seek authority to conduct construction, repair or maintenance
operations in the public rights-of-way. No person, public utility company, franchisee or licensee may
conduct any construction, repair or maintenance operations in the rights-of-way without first obtaining a
written permit or annual permit from the City Engineer. Chapter 33 also prescribes various engineering, fee
and other requirements that permittees must follow when doing work in a right-of-way.'
10. TCI offers cable television service in Troy, Michigan pursuant to a franchise issued in 1982
by the City.1O TCI acquired the cable system in 1993 from the original grantee of the franchise." In addition
to providing cable television service, TCI is authorized and required by the franchise to provide the City and
its residents interactive data and telecommunications services by means of an institutional network ("1-
NET")." TCI claims that, despite the explicit terms of TCl's franchise, since approximately 1994, the City
has engaged in a pattern of conduct designed to preclude TCI from upgrading its cable system or from ever
offering telecommunications services in the City."
)
I I. Since at least early 1994, TCI and the City have engaged in a steady dialogue regarding a
series of construction permit applications submitted by TCI for the stated purpose of upgrading its cable
system with fiber optic cables. TCI states that such upgrades are routinely undertaken by cable operators
in order to expand channel capacity, to improve signal quality to digital standards, and to increase the
reliability of cable systems. In 1994, the City surmised that TCI was interested in expanding its offerings
beyond cable service by branching into the telecommunications field. I' TC! indicates t'oat in July, 1994, tho
City had informed TCI that its permit applications would not be granted unless TCI provided signed
assurances that its system would not be used to provide telephone service. I , TCI denies that it had intended
at that time to offer telecommunications services in Troy, and in its pleadings states that it still "has no
'See Petition, Exh. 33.
IOPetition at 4.
"/d.; City Comments at 2.
"Petition at 4, citing Franchise ~ 23; Amendment 1) 7.
I3Petition at 5.
"City Comments at 8. Through late 1995, the City continued to believe that TCI was either currently offering or
planning to offer telecommunications services in Troy. See Petition, Exh. 6, October 31,1995 Letter from Peter
Letzmann. City Attorney to Mr. James Alexander ("I understand you or your subsidiary corporations are operating
without franchise or other permits in neighboring cities, therefore, I have continuing concern that Tel is operating
telecommunications in the City afTray.")
'SPetition at 5, citing Exh. 3, Letter from Michael Cleland, General Manager TCI Cablevision of Oakland County,
to Troy Mayor Jeanne M. Stine (Jan. 17, 1995). See also City Comments at 6-18.
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present intention to provide such services in the City. . . ."16 As of 1994, the City had not adopted any
regulations governing telecommunications, but nevertheless wanted to "insure that TCl would not enter into
telecommunications service in Troy without first obtaining the requisite authority to do so. . . ."17 According
to the City, under state law that authority includes a license from the Michigan Public Service Commission
and a telecommunications franchise from the City. IS TCl disputes the City's authority under state law to
require a telecommunications franchise. I'
12. Januarv 1995 Letter Al!feement. Although TCl believed that the City lacked jurisdiction to
impose such regulatory conditions, it entered into negotiations with the City, regarding the conditions under
which TCl could provide telecommunications services over its cable network in the City.'. Ultimately, TCl
and the City entered into a letter agreement dated January 23, 1995 ("January 1995 Letter Agreement"). That
agreement provides that all permits for the upgrade of TCI's cable system will include the following
endorsement:
The authorized officer of TCI agrees in writing that the permits (i) are
granted solely for the purpose of enhancement and up-grade of the cable
system and not to be used for, or enable any other person or entity to
provide, any kind of telephone service and (ii) if and when TCl shall have
obtained all lawful requisite authorizations and consents pursuant to
federal, state and local requirements, such system may be used for the
provision of other lawful telecommunications services, including telephone
service.21
)
13. The Jannary 1995 Letter Agreement further prc,,;des that, with rcspcct tc the ~onstructioi1
permits which result from the agreement, both Troy and TCl agree to the following:
a. Neither Troy nor TCl intends or understands that the
construction permits will alter either party's rights under
the existing franchise agreement.
I'TCI Reply at II. See TCI Reply at 4 ("TCI . . . has never evidenced any intent to provide anything other than cable
television service in Troy"); TCI Reply at 6; Petition at 8; Declaration of TCI General Manager Michael Cleland
(Petition, Exh. 8) at para. 5.
"City Comments at 8.
"City Comments at 8, n. 7.
"TCI Reply at 21-22.
)
20Petition at 5.
"Petition, Exh. 5; City Comments Exh. I, attachment J ("January 1995 Letter Agreement").
i '~
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b. Neither Troy nor TCI intends or understands that the
construction permits will alter either party's rights under
applicable law."
The City Attorney, Peter Letzmann, explained that the purpose of this letter agreement was to allow TCI to
make its improvements to the cable system and to acknowledge that TCI would obtain all requisite consents
prior to entering into the telecommunications business. Further, Mr. Letzmann declared: "I advised the City
Engineer that all permits that appeared to be usable for services other than cable should be endorsed with 'not
for telecommunications purposes' language consistent with the terms of the Agreement with TCI. ,,2)
14. TCI explains that it accepted the condition because it needed to upgrade its cable facilities,
to keep pace with cable technology and to be able to offer its subsc.ribers state-of-the-art cable services in
an increasingly competitive video marketplace. TCI notes that fiber upgrades also offer a platform which
can support the later offering of telecommunications services. TCI explains that it "understood, that the
[January 1995 Letter] agreement would allow TCI to enter the telecommunications market in Troy once it
'obtained all lawful requisite authorizations and consent pursuant to federal, state and local requirements,'
as stated in the condition. "Z< TCI further claims that under federal and state law, TCI is not required to obtain
any form of certification or authorization before providing private line telecommunications services.
"Moreover, since Troy's "Telecommunications Ordinance" is unlawful, TCI may presently provide certain
telecommunications services using its system. ,," TCI maintains that, contrary its understanding regarding
the January 1995 Letter Agreement, the City subsequently asserted in a letter that the condition was intended
to preclude TCI from providing telecommunications services in Troy."
15. The Troy Telecommunication, Ordinance. The City Council .doptcd its
Telecommunications Ordinance, codified at Chapter 62 of the City Code, in December, 1995-" Like the
provisions of Chapter 63 governing cable service, Chapter 62 requires a party to obtain a license before
constructing, maintaining or operating a telecommunications system in the City, and to obtain a franchise
before transacting business by way of a telecommunications system in the City. Chapter 62 also contains
UId.
"City Comments, Exh. I, Declaration of Peter A. Letzmann, dated September 4, 1996 at p.6.
24Petition at 6-7.
HPetition at 7 n.9.
"Petition at 7, citing Exh. 6, October 31, 1995 Letter from Peter Letzmann, City Attorney to Mr. James Alexander
(stating: "the Agreement does not say, nor was it ever intended to say, that you would be pennitted to construct
telecommunications facilities in the City of Troy rights-of-way"). TCI further argues that the Troy Telecommunications
Ordinance is unlawful, an~ therefore does not control TCl's ability to provide telecommunications services in the City.
Petition at 7 n.9,
27City Comments arll.
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a number of more substantive regulations governing the provision of telecommunications service and the
payment of franchise fees."
16. The telecommunications service requirements include Section 12(4), which requires that
interconnection between telecommunications providers, where feasible, for the purpose of promoting
universal service. This section also prohibits a telecommunications provider from charging punitive or
discriminatory fees for interconnection. Section 12( I) states that if a franchisee provides a "new service,
facility, equipment, fee or grant to any other community. . . within the State of Michigan, the same shall be
provided in or to the City." This requirement is subject to waiver if compliance is "undesirable, impractical,
infeasible or uneconomical. . .." Section 27(2) requires that telecommunication services to the City be
provided at the lowest rate given to any other subscriber. Section 8 provides that the City shall regulate rates
for telecommunications services "to the full extent authorized by federal or state law." Section 15(3) requires
the provider to maintain an "accurate and comprehensive file" of all subscriber and user complaints, and to
establish a procedure "to quickly and reasonably remedy complaints to the satisfaction of the City."
17. Franchise fee provisions include Section 3(6), which defines gross revenues to include "all
receipts collected. . . for all telecommunications and related operations and services within the corporate
limits of the City as well as any other revenue arising from operation or possession of [the] Franchise
regardless of where billed." This definition is relevant for purposes of Section 9(2), under which a provider
may be required to pay an annual franchise fee of up to 5% of gross revenues. Alternatively, the franchise
fee may be based on a linear foot charge of $0.40 per foot for underground facilities and $0.25 for aerial
facilities. Section 27(1) requires the provider to pay a franchise fee based on the formula used in any of
certain other Michigan communities, if that formula produces a higher fee than would be due under Section
9(2) of the City's Telecommunications Ordinance.
18. Chapter 62 also includes a severability clause, Section 23, and an "Equal Application"
clause, Section 25, which states that the provisions of the ordinance "shall be imposed upon and enforced
against all Telecommunications System in the City requiring a License or Franchise under state law from the
City." Pursuant to Section I 0, ''New Developments," Grantees ilgree to "have no recourse whatsoever against
the City for any loss, cost, expense or damage arising out of the failure of the City to have the authority to
grant all or any part of a License or Franchise. A Grantee expressly acknowledges that on accepting a
License or Franchise it did so relying on its own investigation and understanding of the power and authority
of the City."
19. Construction Permits in Dispute. TCI had originally applied on October 27, 1995 for a
permit (the "Royal Oak" application) to install conduit along several public rights-of-way for the purpose of
interconnecting three separate cable headends and upgrading its cable facilities.29 The City rejected this
application because it "did not meet the most rudimentary engineering standards."'. On or about January 14,
1996, TCI re-filed the application. In a letter to TCI dated February 14, 1996, the City's Civil Engineer raised
"The full text oflbe Troy Telecommunications Ordinance is summarized in Appendix B. Certain aspects of the
Ordinance will be discussed below as they pertain to the arguments raised by Tel's Petition, and the record formed in
response.
"Petition at 8 & Exh. 7; City Comments-at 13.
"City Comments at 13, Exh. 2 at p.3.
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three concerns with respect to the Royal Oak Application.31 First, the City's letter stated that the route
proposed by TCI to interconnect its headends "deviates from the most direct route." The letter asked TCI
to explain why it had selected an indirect route. Second, the letter indicated that one portion of the route
proposed by TCI interfered with an easement that TCI had no right to occupy, thus requiring TCI to re-route
that portion of its installation or to obtain permission to occupy the easement. Third, the City's letter referred
to a City Council meeting that had been held on December 18, 1995. According to the letter: "At this
meeting a resolution was approved which requires any prospective telecommunications companies to apply
for and obtain a franchise. This you must do." The letter then stated: "Until the above items have been
completed a permit for your cable/conduit installation cannot be issued."
20. TCI re-submitted the Royal Oak Application again in early May, 1996 and that application
remains pending." TCI claims that the re-submitted application re~ponds "only to the City's assertion. . .
that the original application did not propose the most direct route for the facilities. ,," With respect to the
City's other concern, TCI states that it "has not, and will not[,] obtain a telecommunications franchise as the
City insists. . . ."" The City responds in its comments that the re-submitted Royal Oak Application "did not
resolve the [qity's concerns."" Subsequent correspondence demonstrates that the City has continued to
question the route proposed by TCI, because it includes areas not served by TCI and is not the most direct
route between the headends TCI seeks to interconnect, and continues to insist upon inclusion of its "not for
telecommunications purposes" condition in the permit.'. In May, 1997, the City again reiterated that it will
grant the Royal Oak Application if TCI submits a new plan showing a route running directly between the
headends to be interconnected, and accepts the "not for telecommunications purposes" condition." TCI has
responded that it will agree to the direct route suggested by the City, but continues to object to the inclusion
of the "not for telecommunications purposes" condition. TCI also stated that it, "nonetheless wishes to
provide video scrvic~s to the area that would be passed \Indcr the route plan origij~ally submitted with tho
'IPetition at 8 & Exh. 10; City Comments, Exh. 2, p. 3 & Exh. 6.
"Petition at 9, n. 9; City Comments at 15.
33Petition at 9, n. 16.
"Id.
"City Comments at 15.
'.Written Ex Parle Presentation, File No. CSR-4790, TCI Cablevision of Oakland County, Inc., to Mr. William F.
Caton, Acting Secretary, FCC, filed by Mark Van Bergh, City of Troy, March 12, 1997, p. 2 (March 12 Van Bergh
Leiter), attaching Letter from Peter A. Letzrnann, Troy City Attorney, to Michael Cleland, TCI General Manager (March
II, 1997) (March /1 Letzmann Leiter).
}
"Written Ex Parle Presentation, File No. CSR-4790, TCI Cablevision of Oakland County, Inc., to Mr. William F.
Caton, Acting Secretary, FCC, filed by Mark Van Bergh, City-ofTroy, May 14, 1997, pps.1-2 (May 14 Van Bergh
Leiter), attaching Letter from Peter A. Letzmann, Troy City Attorney, to Mr. Russ Anthony, TCI North Central Region
(May 9, 1997) (May 9 Lelzmann Leiter). .
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Royal Oak permit request," and that it will be submitting a request for a new permit to bring hybrid fiber-
coaxial plant to that area."
21. In addition to the Royal Oak Application, TCI submitted another permit application to the
City ("Livernois Road Application") on February 23, 1996 by which TCI sought authority to install aerial
cable along two other rights-of-way." The application described the work to be performed as follows: "Place
new aerial cable (coax & fiber) on existing poles for telecommunications."" In a letter dated February 29,
1996, the City responded: "The City of Troy cannot process the above permit application until TCI
Cablevision of Oakland County obtains a telecommunications franchise from the City of Troy."" TCI
thereafter advised the City that the purpose of the Livernois Road Application was to upgrade an institutional
network and improve the cable service being provided to a local school." Both the institutional network and
the cable service were authorized under the terms Of TCl's cable franchise." After being advised of the
purpose of the Livernois Road Application, the City approved it by letter dated May 13, 1996." The letter
stated that the City had issued the permit subject to the following endorsement:
This permit is granted for the installation or upgrading of cable service as
described in Troy City Code Chapter 63 only. This permit specifically
prohibits and excludes installation, upgrading or operations for all other
telecommunication service."
22. Subsequent correspondence indicates that on October 9, 1996, TCI informed the I-NET
authorities that TCI had accepted the right-of-way permit for its Livernois Road construction to meet its I-
) NET extension obligations, but reserved its objection that the conditions in the permit violate sections 253,
621 and 624 of the Cemn:urlications Act. TCI stated that it had pctitiOiled the Commissioil UilCie,' those
statutory provisions to preempt enforcement of those conditions, and would commence construction of the
I-NET facilities, "but without agreeing to the conditions placed on the Livernois Road permit by the City.
TCl's construction of these facilities is subject to the express reservation of TCl's rights under state and
"Written Ex Parte Letter, File No. CSR-4790, TCI Cablevision of Oakland County, Inc., to Ms. Meredith Jones,
Chief, Cable Services Bureau, FCC, filed by Howard J. Symons, representing TCI, April 4, 1997 (April 4 Symons
Leiter), attaching Letter from Russell Anthony, TCI North Central Region, to Peter A. Letzmann, Esq., City Attorney,
City of Troy, April 2, 1997 (April 2 Anthony Leiter) at 1.
"Petition at 8; City Comments at 16.
40Petition, Exh. 9.
"Petition, ex. 11; City Comments at 16.
"City Comments at 16.
"TCI Reply at 4-5 & n. 7.
....Petition, Exh. 12; City Comments at 16-17.
"Petition, Exh. 12; City Comments at 17, n. 22.
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federal law, and before the FCC"" In October, 1996, the City responded to TCI's assertions by stating that
the Livernois Road permit was issued pursuant to TCl's cable television franchise for the City of Troy, the
agreement between the City and TCI to upgrade the cable system in Troy, "and the endorsement on the above
mentioned (building) permit." The City also stated:
[E]ven though the City disagrees, it does recognize TCl's opinion regarding
the preemption. And though TCI may disagree with the conditions
endorsed on that (building) permit, TCI has agreed and the City expects
TCI to honor those conditions. If those conditions are set aside by some
competent authority or TCI obtains a franchise to expand its services
beyond the current franchise, the matter can again be reviewed.
The City does not interpret your actions' to comply with the franchise
agreement as a waiver of any right or objection that TCI may have.47
23. In the comments the City filed before this Commission on September 4,1996, responding
to the TCI Petition, the City stated that the terms of the Livernois Road permit endorsement "were narrower
than intended. . . . ,," According to the City, "the actual language of the condition should have conformed
to the terms of the January I 995 Agreement between Troy and TCl. ,," The City averred in its comments that
it:
will not enforce the condition beyond the provisions of the January 1995
Agreement with TCI, i.e., TCI may not use the facilities authorized in the
pern"!it for telecommunications services until it has vbtaincd the requisite
consents to provide such service."
The City avers that it does not expect a breach of the 1995 Letter Agreement or permit endorsements to
occur, but if such a circumstance arises with respect to TCI, "the City would pursue remedie.s ordinarily
available. ,,51 In addition, the City states:
[h ]owever, it is not the City's expectation that the City would consider such
an event to constitute a breach of the TCI cable franchise. Moreover, it
"Written Ex Parte Presentation, dated July 1, 1997, Petition ofTCI Cablevision of Oakland County, Inc., CSR-
4790, to Ms. Suzanne Toller, Legal Advisor to Hon. Rachelle Chong, FCC, filed by Howard J. Symons, representing
TCI ("July I Symons Letter"), attaching Letter dated October 9, 1995 from Michael Cleland, General Manager, TCI
Cablevision of Oakland County, Inc. to Donald H. Gillis, Attorney for the Intergovernmental Cable Communications
Authority ("ICCC").
"July I Symons Letter, attaching Letter dated October 18, 1996, from Peter A. Letzmann, City Attorney, City of Troy
to Mr. Michael Cleland, General Manager, TCI Cablevision of Oakland County, Inc.
"City Comments at 17, n. 22.
491d.
SOld.
51March 1/ Letzmann Letter.
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would not require TCI to terminate any operation of its cable television
service using the facilities in question."
24. The City has granted at least 30 construction permits to TCI since 1993, including permits
for the installation of fiber optic cable." However, the City did not seek to impose the "no
telecommunications services until requisite consents granted" provision on any of the six coaxial cable
construction permits granted TCI during 1995. The first time Troy sought to impose the condition was in
connection with the Royal Oak and Livernois Road permits for hybrid fiber-coaxial construction in October
1995 and February 1996, respectively. TCI did not apply for any cable construction permits during 1996.
TCI records indicate that only one coaxial cable construction permit with any condition purporting to limit
future use of the facility to provide telecommunications services was granted in January 1997. TCI claims
that this permit has since been used for the construction of hybridfIber-coaxial plant, and that it did not
object to the inclusion of the condition on the January 1997 permit, in light of the City' awareness of its
objections to such conditions."
25. For the most part, TCl's Petition characterizes the City's actions with respect to both the
Royal Oak and Livernois Road construction permits as "denials" of these applications." For example, the
Petition states: "The City has denied permits to install fiber or conditioned them on a surrender of the right
to deliver telecommunications services."" Similarly, the Petition states, "[t]he City has denied the permits
solely because of its fear that fiber optic facilities could be used in the future to deliver telecommunications
services over which the City seeks regulatory control. ,," Other portions of the text characterize the City's
action with respect to the Livernois Road application as either one in which the City is "purporting to
) approve the Livernois Road Application," while insisting on the inclusion of the "not for telecommunications
purposes" endorsement, or one in which the Ijyernois Road Applications "was also d~nicd in part because
of the use of fiber. ,,"
26. The City specifically objected, in its comments, to TCl's characterization of its permitting
actions as "denials." The City explained that, notwithstanding TCI's arguments to the contrary, Troy has
never denied TCI any building permits for its cable system nOr has Troy conditioned the permits granted to
TCI in a manner that prohibits TCI from providing telecommunications services." Rather, according to the
City, the condition Troy has placed on TCI building permits, which is consistent with the January 1995 Letter
Agreement between the City and TCI, "simply requires TCI to obtain all requisite federal state, and local
authority before providing telecommunications service using the facilities authorized in the permits. This
"Id. at2.
"City Comments at 2.
"July 1 Symons Letter at 1-2.
"See. e.g., Petition at 2, 3, 8, 9,10,13,16 and 17.
S6Petition at 8.
S7Petition at 16.
) "Id. at 9, 13.
"City Comments at 3-4, t2-17.
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condition does not prohibit TCI from providing telecommunications service, but rather is intended to make
certain that before TCI provides any such service, it has obtained the requisite authority, including the right
to Use Troy's rights-of-way to provide telecommunications service as required in the Michigan Constitution
and the Ordinance. "60 The City notes that TCI has neVer sought authority to provide telecommunications
service in Troy. To the contrary, the City states that TCI has told Troy officials that TCI was not asking for
and has never asked for permission to provide such service."
27. In its reply comments, TCI argues that Troy's refusal to grant TCI's construction permit
applications "is the equivalent of a denial." TCI explains that it has demonstrated, and the City has admitted,
that the City has adopted a steadfast position that TCI will not be permitted to install hybrid fiber-coaxial
facilities as pall of its cable television system upgrade unless TCI agrees that telecommunications services
over the upgraded facilities are prohibited or unless TCI obtains a telecommunications franchise" TCI notes
that the City maintains that its actions are not denials, but merely requirements that TCI obtain other
authorizations, or accept a conditional permit, in order to receive authority to begin construction" ,TCI avers
as follows:
Regardless of the semantic distinctions involved, the simple fact remains
that the City of Troy refuses to grant TCI a construction permit without
restricting or conditioning the permit on matters wholly unrelated to its
regulation of TCI's cable service. In practice and in effect, the City's
refusal amounts to nothing less than a denial ofTCl's permit applications
on grounds forbidden under the 1996 Act.64
28. TCI also complains that the City', trcatment of Ameritech, the incumbent local cxci;a.lge
carrier, and its efforts to enter the cable market by over-building TCI's system, has been the opposite of the
City's treatment ofTCI. TCI states that Ameritech maintains a substantial corporate presence in Troy, and
that the
City appears to be more than willing to protect its corporate 'favorite son.'
For example, the City allowed Ameritech to construct a fiber optic
backbone for its cable system prior to obtaining a cable franchise, and then
granted it a cable franchise on substantially less burdensome and more
favorable terms than TCl's franchise"
Wid. at 17-18.
"Id. at 18.
"TCI Reply at 7, citing Petition at 8-9; City Comments at 5-13.
(,J Id. citing City Comments at 14-18.
"TCI Reply at 8.
65Petition at 3.
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Further, TCI alleges, "the City has refused to apply the Telecommunications Ordinance's franchise
requirements to Ameritech."66 Moreover, TCI states that the City has not sought to include in any of
Ameritech New Media (the Ameritech cable subsidiary) permits for hybrid fiber-coaxial construction the
condition that Troy seeks to impose on TCL" TCI objects that Ameritech has been permitted to install fiber
optics without limitation, while TCI "has been arrested in its ability to upgrade its system to keep current
with cable technology or to respond to competition.""
29. In its comments, the City defends its actions with respect to Ameritech New Media's
construction in the City. It stated that as early as 1993, the City had advised Ameritech New Media that if
it were to construct a system to provide cable service in Troy it would need to obtain a cable franchise. The
City eXplained that the headend and conduit construction it later authorized did not require a cable franchise
because the facilities were not being built to provide cable service:within Troy, and that Ameritech New
Media did not construct or begin constructing its cable' system in the City of Troy until after it received its
cable franchise in April, 1996.69 In a subsequent ex parte presentation, the City challenges TCl's claim that
the City is applying the Telecommunications Ordinance in a discriminatory manner.70 The City asserts that
its Telecommunications Ordinance applies equally to all providers of telecommunications services within
Troy, including Ameritech, drawing no distinction between competition local exchange carriers and
incumbent local exchange carriers. In addition, the City represented that, on December 16, 1996, it had
notified Ameritech that the carrier was in non-compliance with the Ordinance, and had requested that
Ameritech complete and submit a franchise application."
30. The City maintains generally that neither Troy's Ordinance, nor the City's handling of TCl's
building pennit app!icati0ns violate a"y provision of the 1996 Act. The City claims that i: hits afforded
similar treatment to all entrants and potential entrants desiring to provide telecommunications service in the
City. It has issued a telecommunications franchise pursuant to the City's Telecommunications Ordinance
following enactment of the 1996 Act to one potential provider of competitive telecommunications services
Metropolitan Fiber Systems ("MFS"), and has engaged in on-going discussions with another potential
provider, MCI Telecommunications Corporation ("MCI")." The City maintains that if it were to allow TCI
to provide telecommunications service in Troy using its cable plant without first obtaining a
"Petition at 3, 20-21 (City granted Ameritech a special land use pennit in July 1995, nearly one year before
Ameritech obtained cable franchise from the City, to construct a cable headend Troy from which it could send signal
via fiber optic cable to other cities where Ameritech already had cable franchises; City officials observed that fiber
optics were the "wave of the future").
"July I Symons Letter at 2.
68Petition at 21.
"City Comments, Exh. I at 8-9 (declaration of Peter A. Letzmann, City Attorney, City of Troy).
"Written Ex Parte Presentation, File No. CSR-4790, TCI Cablevision of Oakland County, Inc., to Mr. William F.
Caton, Acting Secretary, FCC, filed by Mark Van Bergh, City of Troy, January 30, 1997, attaching Written Presentation
by the City of Troy, Michigan ("January 30 Troy Presentation").
) 71January 30 Troy Presentation at I.
"City Comments at 3-4; 37 and Exh. I at 8.
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telecommunications franchise under the Telecommunications Ordinance, it would create a situation in which
TCl's potential competitors, such as MFS and MCI, could claim that the City was giving TCI a preference
and acting in a discriminatory manner relative to other service providers that seek and obtain a franchise
under the Telecommunications Ordinance."
31. Other Providers' Exoeriences with Telecommunications Franchising in Trov. In its
comments responding to the TCI Petition, MCI stated that its affiliate, MC! Metro, had intended to construct
a network in Troy to fulfill a contract made with a customer located in another city, but decided to reroute
its network around Troy rather than subject itself to the provisions of the Telecommunications Ordinance7'
MCI also asserted that, "using its newly enacted [Telecommunications Ordinance], and asserting the power
to exercise franchising authority thereunder, Troy has. . . precluded MC!'s local telecommunications
affiliate, MCI Metro, from entering the City's local telecommunications exchange market. ,,"
32. The City initially responded to MCrs statement in its reply comments. According to the
City, Troy was discussing with MCI Metro its interest in providing service in Troy throughout the first half
of 1996, including an exchange of draft telecommunications franchise documents. The last exchange
occurred on July 26, 1996, when the City forwarded a revised draft to MC!. This was approximately two
weeks after TC! filed the instant Petition with the Commission. The City explains that it heard nothing
further from MCI until it received a copy of MCrs comments in this proceeding, when, for the first time,
Troy learned that MC! had apparently decided not to obtain a franchise. The City claims that although MCI
now describes the requirements of the Troy Ordinance as burdensome, they are the same conditions that
applied when MFS obtained its franchise and that existed during the course of discussions with MC! through
the first half of 1996.76
33. Later, in an April I, 1997 written ex parte presentation, the City responded to a TC! notice
of ex parte presentation made on March 12, 1997, in which a representation was made by TC! that MC! had
reiterated, "the point, reflected in its filing in this docket, that Troy's ordinance had deterred it from offering
competitive local service." The City's April I response to this assertion takes the position that it was not
Troy's Ordinance that deterred MC! from providing a competitive local service, and that in any event, MCrs
comments in the proceeding do not support the allegation. The City quotes from page 3 ofMCrs comments
that, "MC! Metro had planned to build a network in Troy in connection with a contract made with a customer
located in another city, but it opted instead to reroute around the City." The City avers that this is MC!'s only
description of the service it "was deterred from offering," and the statement is a reflection of the fact that
MC! neither planned to offer a "competitive local service" in Troy, nor was subject to the franchising
requirement of Troy's Ordinance. Instead, the City states, MC! would only have been subject to the licensing
"City Comments at 37 n.34.
"/d. at3
75MCI Comments at 2.
"City Reply at 7-8, Exh. I at 2 (declardtion ofpeter A. Letzmann, City Attorney, City of Troy; expressing belief that
when the City sent MC! draft franchise documents on July 26, ]996, Troy believed that it was close to concluding these
discussion with MCI and that the result would be MCI obtaining a telecommunications franchise and entering the Troy
market).
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requirement before building in the City's rights-of-way to connect service locations outside of Troy, and that
the provisions of the Ordinance applicable to franchisees would therefore not have applied to MC!."
34. In a responsive May 13, 1997 written ex parte presentation, MC! takes issue with the City's
description of its intentions as "wholly inaccurate," and with the City's claim that MC! would not have
needed a telecommunications franchise in Troy. MC! explains that originally, MC! had intended to offer
local telecommunications services to the City. MC! notes that in March, 1995, MC! was authorized to
provide basic local service by the Michigan Public Service Commission, and that it subsequently initiated
franchise negotiations with the City in order to use the public rights-of-way to construct a fiber optic system
to access and serve Troy customers. Following enactment of what MC! describes as the "burdensome" Troy
Telecommunications Ordinance in December, 1995, MCI opted instead to reroute its system around the
City." MCI further claims that, "at no time during the negotiations with the City was MCI advised that, as
a licensee, it would only be subject to certain provisions of the Ordinance and not others. Nor did Troy raise
this argument in any of its comments in this proceeding." MC! urges that the Commission "not allow any
state or local government to undertake such 'bait and switch' tactics. ,,79
35. MFS did not file comments or reply comments in response to TCl's Petition. However, on
April 30, !997, LDDS Worldcom ("Worldcom"), the parent corporation of Metropolitan Fiber Systems of
Detroit, Inc. ("MFS-D") filed a letter explaining the circumstances ofMFS-D's entry into the Troy market'.
Worldcom explains that MFS-D initiated discussions regarding the installation of fiber optic
telecommunications facilities in the public rights-of-way in early 1994. Negotiations over the tenns and
conditions under which MFS-D would be allowed to install its facilities continued over a two year period,
during which time the City was attempting to develop its telecommunications policy. The negotiations
ultimately culmin~ted in the execution of a Telecommunications Fnmchis.e agreement ill !~arch, 1996.
"During the course of its negotiations with Troy, MFS-D consistently expressed concern over many aspects
of the city's demands, but, despite those concerns, felt compelled to enter into the agreement because of a
pressing need to begin providing service to several significant customers located in Troy."'1
36. According to Worldcom, MFS-D objected thro.ughout the two years of negotiations, to, inter
alia, the City's compensation requirements for use ofthe public rights-of-way, the requirement that MFS-D
provide the City with free or discounted service, any attempts by the City to regulate its provision of
telecommunications services, and to the City's discriminatory treatment of MFS-D vis-a-vis its treatment of
Ameritech. Worldcom explains that, over two years of arduous negotiation, MFS-D was,
"Written Ex Parte Presentation to Mr. William F. Caton, File No. CSR-4790, TCI Cablevision of Oakland County,
Inc., dated April I, 1997 from Mark Van Bergh, Roberts & Eckard, on behalf of the City of Troy at 1-2.
"Written Ex Parte Presentation dated May 13, 1997, File No. CSR-4790, TCI Cablevision of Oakland County, Inc.
to William Caton, Acting Secretary, FCC from Lisa B. Smith, Senior Policy Counsel, MCI ("MC! Letter").
"[d. at2.
"Letter dated April 30, 1997, from LDDS Wor/dcom, Richard L. Fruchterman, Ill. Director of Government Affairs,
to the Honorable Reed Hundt, Chairman, FCC ("MFS Letter").
"MFS Letter at 1-2.
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at risk of losing customers and the ability to enter into the Troy marketplace
if an agreement could not be reached. This was an extremely difficult
decision for MFS-D in light of the Michigan Telecommunications Act and
the Telecommunications Act of 1996 which was signed by President
Clinton on February 8, 1996 - just 4 days before MFS-D's franchise was
to be voted by the Troy City Council. MFS-D knew that the City would not
permit further negotiations of the agreement and was forced to accept its
terms on a 'take-it-or-leave-it' basis.82
IV. TITLE VI ISSUES
A. Overview
37. As a general matter, TCI claims that the City has impermissibly sought to assert regulatory
authority over telecommunications services, and to limit the construction of cable plant solely because of its
potential use in the provision of telecommunications services. TCI claims that it is directly through the City's
cable franchising power that the City is attempting to limit, restrict and condition TCI's deployment of
advanced telecommunications-capable technology." TCl argues that Congress did not intend municipalities
to use their pre-existing regulatory relationships with cable operators to impose franchise-like obligations
on providers of telecommunications services under any circumstances. Although TCI concedes the City has
certain regulatory powers over use of the public rights-of-way, TCI maintains that the scope of the City's
authority to manage the use of its rights-of-way is limited, and must be exercised in a nondiscriminatory and
competitively neutral manner.84
38. Under Title VI, TCl's Petition alleges that by conditioning or refusing to grant the two
construction permits, the City has interfered with TCl's operation of its cable system in a manner that violates
sections 621(b)(3)(A), (b)(3)(B), (b)(3)(D) and 624(e). These provisions generally limit the power ofa local
franchising authority, under Title VI, to condition the provision of telecommunications services by a cable
operator; to impose telecommunications-related requirements on cable operators; and to dictate the type of
transmission technology used by the cable operator to deliver its cable signal. With respect to the question
of the franchising authority's ability, under Title VI, to regulate telecommunications services of cable
operators, TCI and other cable commenters maintain that section 621(b)(3) precludes the imposition of
franchise obligations upon the provision of telecommunications services by cable operators, even if that
franchising authority is claimed to arise under a grant of authority other than Title VI" TCI objects to Troy's
attempts to require it to obtain a second franchise to provide telecommunications services over a cable system
that is already subject to a cable franchise between TCI and the City. TCI also claims that the City's failure
"MFS Letter at 3.
"TCI Reply at 10-11.
\
"'Petition at 14; TCl Reply at 12-16.
"TCI Reply at 14; Adelphia Comments at 12; Corneas! Reply Comments at II.
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to grant TCI's permits has interfered with TCI's discretion under section 624( e) to use fiber optic transmission
technology in its cable system."
39. In response to TCI's Title VI claims, the City defends its actions with respect to the two cable
permits as appropriate exercises of its traditional authority to manage the public rights-of-way and to see that
street cuts and trenching are done in the least disruptive manner. 87 Troy states that it has not sought to use,
nor has it used, TCl's cable franchise in a manner that restricts TCl's ability either to upgrade its cable system
or provide telecommunications service. The City and its supporters argue that the language in section
621(b)(3), "under this title" means that telecommunications regulation exercised under some other authority
is not subject to the section 621 (b )(3) limitation.88 The City claims that its regulation of telecommunications
providers stems from its responsibility under the Michigan Constitution, Article VII, Section 29, and is
beyond the scope of the limitations on cable franchise requirements contained in Section 621 (b )(3) of the
Communications Act. Therefore Tel's reliance on section 621 is misplaced.'9 The City argues that, with
respecl to Tel's section 624( e) claim, its concern was not with the transmission technology selected by the
operator, but rather, was with the circuitous route chosen."
B. Section 621
J. Positions of the Parties
40. TCI specifically alleges that the City has violated the following subsections of section 621,
as amended by the 1996 Act:
(b)(3)(A) If a cable operator or affiliate thereof is engaged in the provision
of telecommunications services __
(i) such cable operator or affiliate shall not be required to
obtain a franchise under this title for the provision of
telecommunications services. . . . 91
. . .
(b)(3)(B) A franchising authority may not impose any requirement under
this title that has the purpose or effect of prohibiting, limiting, restricting,
"Petition at 13-17.
"City Comments at 2-12.
"City Comments at 31-35.
"City Comments at 35.
"City Comments at 13-14,35-36.
9147 U.SL 9541(b)(3)(A).
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or conditioning the provision of a telecommunications service by a cable
operator or an affiliate thereof."
. . .
(b)(3)(D) Except as otherwise permitted by sections 611 and 612, a
franchising authority may not require a cable operator to provide any
telecommunications service or facilities, . . . as a condition of the initial
grant of a franchise, a franchise renewal, or a transfer of a franchise."
41. As described above, TCI asserts that the City has denied TCI's applications for permits to
install fiber optics and has done so "solely because of [the City's] fe"!; that fiber optic facilities could be used
in the future to deliver telecommunications service over which the City seeks regulatory control." According
to TCI, the City is attempting to allay this concern by requiring TCI to obtain a telecommunications. franchise
as a condition to receiving the cable construction permits.'" TCI acknowledges the City's legitimate interest
in managing and maintaining its rights-of-way and does not contest the City's authority to coordinate
construction schedules, establish building codes, impose indemnity and insurance requirements, and
otherwise oversee the placement of facilities in rights-of-way. TCI asserts, however, that these matters are
addressed in the Public Right-of-Way Ordinance set forth in Chapter 33 of the City Code:' TCI alleges that
it has complied with the permit application process prescribed by Chapter 33 and that its cable franchise
allows itto install fiber optic facilities." Thus claiming to have all of the authority it needs to proceed with
its fiber installation, TCI argues that the City may not require TCI to obtain a telecommunications franchise
as a condition of receiving a permit for that installation."
42. In amending the subsections of section 621 quoted above, Congress has "broken the link
between cable franchising and the delivery of telecommunications," according to TCI, by "prohibit[ing]
franchising authorities from imposing telecommunications requirements or conditions in cable franchises
or through the cable franchising process."" TCI contends that "[i]n direct contravention of this policy, the
City has sought to use its cable construction permit process to establish domain over telecommunications
facilities and services and to limit the construction of cable plant merely because of its potential use as a
carrier of such services. ".. TCI asserts that it has not sought to provide telecommunications service, and has
9247 V.S.c.!i 541(b)(3)(B).
"47 V.S.C. !i 541(b)(3)(D).
"'Petition at 16.
"Petition at 13-16.
96/d.; TCI Reply at 6.
97Petition at 15-16.
98Petition at 13.
"/d.
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no present intention to provide such service. 100 According to TCI, the City may not use its cable franchising
authority "to hold a cable upgrade hostage until the cable operator obtains a 'franchise' for the delivery of
telecommunications services that might later be delivered over those upgraded facilities."'o,
43. TCI contends that the City's actions would violate section 621 even ifTCI intended to offer
telecommunications service in Troy. According to TCI, "a state or local government that directs a cable
operator to obtain a Title VI franchise or to comply with franchise-like requirements in order to provide
telecommunications services, as Troy has done here, directly conflicts with section 621 and must be
preempted."102 Acknowledging certain legislative history that indicates Congress intended local governments
to retain some oversight of a cable operator's provision of telecommunications, TCI states: "Congress
specifically limited cities to the 'management' of their rights-of-way and thus precluded the kind of elaborate
regulatory regime that Troy seeks to impose. . . ." 103
44. By way of analogy, TCI notes that in establishing a regulatory regime for open vide<> systems
in the 1996 Act, Congress provided that operators of open video systems are not subject to the Title VI cable
franchise requirement.104 TCI quotes the portion of the Commission's order implementing this provision
stating that "a state or local government requirement that directs an open video system operator to obtain a
Title VI franchise to operate an open video system directly conflicts with section 653 of the Communications
Act and is, therefore, preempted."lo, TCI asserts that the Commission must apply section 621(b)(3)(A)(i)
in a similar fashion and preempt any state or local requirement that a cable operator obtain a Title VI
franchise or comply with franchise-like obligations in order to provide telecommunications service.106 TCI
acknowledges that, with respect to open video systems, the Commission determined that local governments
retain authority to oversee the installation of facilities in public rights-of-way, if done in a non-discriminatory
and competitively neutral manner.107 This authority, however, does not permit the impu$j~ion of Title VI-ty'}Jc
franchise requirements, either in the case of an open video system or in the case of the provision of
HI"TCI Reply at 11.
IOIId. at 16-17.
''''TCI Reply at 14.
''''TCI Reply Comments at 12-13.
'''TCI Reply at 13, ciling Implementation of Section 302 of the Telecommunications Act of 1996; Open Video
Systems, CS Docket No. 96-46, FCC 96-312, Second Report and Order and First Order on Reconsideration, II FCC
Rcd 18223 (1996) (OVS Second Reporl) at para. 208; Third Report and Order and Second Order on Reconsideration
(OVS Third Report and Reconsideralion), CS Docket 96-46, FCC 96-334 (released Aug. 8, 1997), (referred to
collectively as "OVS Orders"), appeal pending, sub nom. City of Dallas, Texas, el 01., v. FCC, United States Court of
Appeals for the Fifth Circuit, Nos. 96-60502 (and consolidated cases); Fourth Report and Order, CS Docket No. 96-46,
FCC 97-130 (released April 15, I 997)(modifying certain procedural rules relating to the filing and disposition ofOYS
certification applications, FCC Form 1275), reconsideration pending.
""TCI Reply at 13, quoting Second OVS Order at para. 212.
) '~CI Reply at 14.
''''TCI Reply at 13 & n. 32.
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telecommunications service by a cable operator, according to TCI. 108 "The limited range of permissible
management functions. . . appropriate to municipal right-of-way authority stands in marked contrast to the
sweeping power that Troy and others would have the Commission believe is their right," TCI argues. '09
45. A number of cable operators and other parties have filed comments in support of TCI's
position. According to MCT A, "Section 621 . . . prohibits a municipality from attempting to regulate a cable
operator's provision of telecommunications service over its cable system.""0 On this basis, MCTA asserts
that Troy cannot require "that a cable operator obtain an additional franchise before providing
telecommunications service over its cable system,"'" or in any way "regulate a cable operator's provision
of telecommunications over its cable system."'12 Adelphia asserts that the provision of telecommunications
service over existing cable facilities "entails no physical effect on the rights-of-way" and therefore should
not require separate franchising.'13
46. In joint comments filed with other cable operators, Comcast asserts that by amending
sections 621 and 624, Congress sought "to clear the way for cable operators to upgrade and improve their
networks to eventually provide telecommunications services without municipal interference."I" Comcast
agrees with TCl's analogy to open video systems, arguing that when a cable operator provides
telecommunications service, local jurisdiction over rights-of-way extends to "construction issues and
protection of the streets from disruption and damage," but does not permit substantive regulation of the
telecommunications service itself. II> Comcast asserts that the City's Public Right-of-Way Ordinance is
protected under section 621 while the Telecommunications Ordinance "is nearly identical to a traditional
Title VI, cable television franchise" and therefore violates section 62 I .116
47. Likewise, Cox argues that the amendm~nts to section 621 prohibit a local govelllillent froUl
invoking Title VI to impose any franchising or regulatory requirements on a cable operator's provision of
telecommunications service. Cox states that "any residual, non-Title VI authority that local governments
lO'Id. at 13-14.
IO'TCI Reply at 18.
1lOMCTA Comments at 3.
"'MCTA COllUDents at 4.
IIZ/d. at 3.
113Adelphia Comments at 12. See Hyperion Comments at 2 (characterizing the City's actions as imposing a
"duplicative franchise requirement on TCI's fiber-optic upgrade" in violation of section 621).
tl4Comcast Comments at II. See NCTA Conunents at 3 (Congress amended section 621 "to end the growing practice
of State and municipal governments using their cable franchising authority to dictate whether, how, or by whom
telecommunications technologies are deployed").
115Comcast Reply at 9.
"Old. at II.
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might retain with respect to the regulation of telecommunications service was to be restricted' to managing
the rights-of-way.'17 According to Cox:
Managing public rights-of-way does not mean imposing requirements and
obligations in retumforthe use of public rights-of-way. Nor does it mean
regulating the type of service that is provided over such rights-of-way.
What it means. . . is managing the physical manner in which rights-of-way
are encumbered by the construction, maintenance and continuing use of
facilities that provide telecommunications services.'1B
48. Cox argues that no franchising is required when an incumbent cable operator seeks to
provide telecommunications service because, according to Cox, (i) the local government already regulates
the cable operator's use of public rights-of-way through the cable franchise, and (ii) apart from overseeing
the physical use of the rights-of-way, local governments have no authority to regulate telecommunications
service. As Cox states:
If a city has authorized, or is willing to authorize, the use of public right[ s J-
of-way for deployment of facilities for the provision of cable service
pursuant to Title VI, there is no legitimate reason for it to require additional
permission for the provision of telecommunications service over those
facilities unless the provision of such service somehow raises new
problems of safety, interference, disruption or aesthetics relating to rights-
of-way management that are not dealt with by the cable franchise.'19
49. NCTA contends that Congress has separated regulation of cable service from regulation of
telecommunications service. "The City of Troy, by contrast, has confused these distinct spheres of regulation
by impermissibly using telecommunications considerations to decide a cable franchising matter," NCT A
concludes.".
50. The City generally agrees that Title VI divides cable regulation and telecommunications
regulation into separate spheres. Distinctions between cable service and telecommunications service justifY
separate regulatory structures at the local level, according to the City. The City notes, for example, that cable
distribution plant is installed largely in residential areas since cable television is primarily a residential
service, while "business users are primary consumers of telecommunications service and the type of
consumers that new telecommunications service providers seek to attract."'2I When a cable operator decides
to expand into the telecommunications area, it will not simply piggyback its existing distribution plant, but
instead will have to install new plant where it does not currently have facilities, according to the City. The
City asserts:
"'Cox Reply at 6.
] "[d. at 7.
] "Cox Reply at 8-10.
] "NCT A Comments at 3.
I2]See City Reply at 15-16.
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This will require access and cause disruption to different rights-of-way than
are occupied for traditional cable service. It is, therefore, appropriate to
require a cable operator desiring to provide telecommunications service to
obtain a telecommunications franchise or other local authorization for the
use of a city's rights-of-way before it may provide such service.'"
The City's Telecommunications Ordinance "is just such a requirement," and has no impact on the City's
regulation ofTCI as a cable operator, according to the City. 123
51. The City argues that the subsections of section 621 cited by TCI do not forbid local
franchising or regulation of telecommunications providers, even when the provider is a cable operator.]24
The City notes that by their express terms, the cited subsection~ of section 621 merely restrict local
regulation of telecommunications "under this title," i.e., Title VI. These provisions, according to the City,
allow for local franchising and regulation of telecommunications provided by a cable operator to the extent
permitted by any non-Title VI grant of authority. "Thus, when Section 62 I (b)(3 )(A)(i) provides that a 'cable
operator or affiliate shall not be required to obtain a franchise under this title for the provision of
telecommunications services,' . . . the section applies solely to a franchise for cable television service,"
according to the City. '"
52. The City further contends that another subsection of section 62 I makes clear that Congress
did not foreclose local franchising and regulation of a cable operator providing telecommunications services.
The City cites section 62 I (d)(2) which states: ''Nothing in this title shall be construed to affect the authority
of any State to regulate any cable operator to the extent that such operator provides any communication
service otlJ.er than cable service, whether offered on a c.cmmon carrier or priv~tc contract ba.s!B."]26 l..!though
section 62I(d)(2) expressly allows only a state to regulate a cable operator that provides other
communications services, a state may delegate that authority to a local government, according to the City. 127
In this case, the City claims that the Michigan Constitution grants it the authority to franchise and license
telecommunications providers, as well as any other person making use of its public rights-of-way. I" While
agreeing that the provisions of section 62 I cited by TCI restrict its authority to use Title VI as a means of
regulating TCl's provision of telecommunications service, the City denies having attempted to use Title VI
in this fashion.'" Neither the City's Cable Ordinance nor the TCI cable franchise "prohibit(s] TCI from
]22/d. at 16 (footnote omitted).
mId.
"'City Reply at 32.
"'City Comments at 32-33.
"'City Reply at 13, quoting 47 U.S.C. S 541 (d)(2).
127City Conunents at 8.
"'City Comments at 10; City Replj Comments at 16-17. TCI and others dispute the scope of the City's authority
under state law. TCI Reply at 21-22; MCTA Reply at 1-2. See infra at Section VII.
129City Comments at 35.
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providing telecommunications service over its cable system," according to the City.'JO Claiming that its
regulation of telecommunications providers stems from its authority under state law, not from Title VI, the
City contends that TCl's reliance on section 621 is misplaced.'3I
53. The City disputes TCI's characterization of the Commission's rules with respect to open
video systems, where we implemented the statutory requirement that operators of such systems be exempt
from the cable franchise requiremenl.132 The City quotes the Commission's determination that:
[i]f, for example, a state or local government characterizes permission to
use the public rights-of-way as a "franchise," such franchises are not
preempted so long as they are issued in a non-discriminatory and
competitively neutral manner. 133
.
,
54. A number of local governments have filed comments agreeing with the City's construction
of the relevant Title VI provisions. In a joint motion to dismiss or deny the Petition, several local
governments and PROTEC, which itself is a coalition of local governments from Michigan, argue that the
City has authority under state law to impose reasonable requirements on telecommunications providers
occupying public rights-of-way. 134 The City's exercise of that authority is valid under section 621, PROTEC
asserts, because that section does not affect "any non-Title VI authority a state or local government may have
under state law to regulate or franchise the provision of telecommunications services by cable opemtors."13S
According to PROTEC, the City "has never conditioned TCl's provision of telecommunications as a Title
VI cable opemtor, but has only exercised the authority it possesses under state law, including authority that
was specifically preserved to it under Section 62 I (b)(3) and 62 I (d)(2), to manage and receive compensation
for telecommunkatioDs providers' use of i~s rights-of-way. II 136
55. PROTEC thus argues that the City acted reasonably in restricting the use of any facilities
installed by TCI to cable service. This restriction merely recognizes that TCl's authority to install and use
facilities in the rights-of-way derives solely from its cable franchise and the City's Cable Ordinance, which
authorize only cable service, according to PROTEC.137 PRQTEC disputes what it characterizes as TCl's
argument that section 621 (b )(3) "magically transforms a Title VI cable franchise into a free pass to use local
'''TCl Reply Comments at 17.
'JlCity Comments at 13, 15-17; City Reply at 17.
132City Reply at 14.
IJ) Id. quoting Implemen/a/ion of Section 302 of the Telecommunica/ions Ac/ of 1996: Open Video Systems, Third
Report and Order and Second Order on Reconsideration ("Third OVS Order"), CS Docket No. 96-46, FCC 96-334,
para. 198 (reI. Aug. 8, 1996).
'J4PROTEC Motion at 16.
llSId. at 16. See City and County of Denver Comments at 4; Reply and Motion To Dismiss of Minnesota Authorities
at2.
'36PROTEC Motion at 20.
Il7PROTEC Motion at 20.
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streets for non-cable purposes... ."'38 According to PROTEC: "Just as TCI would not be permitted to use
its cable franchise authorization to obtain permits to install gas lines, so too TCI is not permitted under
applicable law to use its cable franchise to obtain permits for any other non-cable purposes for which it has
not received a franchise."'" PROTEC further cites section 62 I (d)(2), which provides that nothing in Title
VI prohibits a state from regulating a cable operator that provides any communication other than cable
service.140
56. The TMIC Communities agree that Congress merely intended "to separate cable franchising
under Title VI from telecommunications franchising."'" They argue that the phrase "under this title" was
added as an amendment to the subsections restricting local franchising of telecommunications providers, thus
signalling Congress's intent to permit non-Title VI regulation of telecommunications.''' The TMIC
Communities argue that Troy derives its franchising. authority over telecommunications providers from the
Michigan Constitution, not Title VI, and thus may exercise such authority without violating section
62I(b)(3)(B). "Congress did not intend that a cable operator can build or operate a telecommunications
system without a telecommunications franchise or that the cable franchise sufficiently covers
telecommunications services," according to the TMIC Communities. 143
57. Franchising telecommunications service separately from cable service makes practical sense
as well, according to municipal commenters, even when one entity is providing both services. ," Separate
franchises will ensure that the provider's cable and telecommunications obligations are not mixed and will
make clear the source and extent of the local government's authority over each service, PROTEC states. ,"
The TMIC Communities assert that the cable operator will have to use more streets and rights-of-way to
provide telecommunications service than it uses to provide cable service. "These practical considerations
alone suggest that a cabl~ frar.chisc does nDt suffj;;e tc p:otect public iigh~s-0f-way in cOl1Iltction with
telecommunications systems," according to the TMIC Communities. 146
58. According to some commenters, the Conference Report makes clear Congress' intent to
preserve a municipality's non-Title VI authority to franchise and regulate the provision of
telecommunications services by a cable operator:
IJ'PROTEC Reply Comments at 7.
139/d.
I<OpROTEC Motion at 17.
141TMIC Communities Comments at 5.
'''/d. See PROTEC Reply at 6.
'''TMIC Communities Comments at 4, 19. Giving cable operators unrestricted access to public rights-of-way would
be a taking of property under the Fifth Amendment to the u.s. Constitution, requiring the payment of just compensation
to municipal governments, according to the TMIC Communities. Id. at 11-14.
'''PROTEC Motion at 8-9: TMIC Communities Reply at 7; North Suburban Reply at 3.
'<SpROTEC Motion at 8.
'''TMIC Communities Reply at 7; see North Suburban Reply at 3.
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The conferees intend that, to the extent permissible under State or local
law, telecommunications services, including those provided by a cable
company, shall be subject to the authority of a local government to, in a
non-discriminatory and competitively neutral way, manage its public rights-
of-way and charge fair and reasonable fees.'"
59. Injoint comments filed with other municipalities and organizations, Richmond argues that
the foregoing quotation from the Conference Report proves that Congress intended separate, local franchising
of cable operators to the extent they seek to provide telecommunications service, particularly when read in
conjunction with an amendment to section 622(b) governing the cable franchise fee.'" Section 622(b) allows
a local franchising authority to impose a franchise fee of up to 5% of the cable operator's gross revenues.
In the 1996 Act, Congress amended section 622(b) to clarity that the 5% fee Can be imposed only on
revenues derived from the provision of cable service. Ricbrnond thus contends that contrary to the intent of
Congress, franchising authorities would receive no compensation for a cable operator's use of the rights-of-
way to provide telecommunications service, absent a separate telecommunications franchise requirement.'"
60. More generally, Ricbrnond argues that the legislative history cited above demonstrates that
Congress authorized local governments to regulate telecommunications separately from cable, even when
a single entity is providing both services. Accordingly, Ricbrnond contends it is lawful for the City to issue
a construction permit for cable service with the condition that the permit does not authorize
telecommunications service, and that such service cannot be provided until all federal, state and local
requirements are satisfied. ".
61. A number of commenters argue that exempting TCI from the requirement of obtaining a
telecommunications franchise, based solely on its status as a cable operator, would give TCI an unfair
advantage over other potential telecommunications providers, when the intent of Congress was to provide
for nondiscriminatory, competitively neutral regulation. ", The TMIC Communities assert that "the city of
Troy would be discriminating in favor of TCI were it not to require a telecommunications franchise before
TCI builds a telecommunications network and offers telecommunications services," since all non-cable
telecommunications providers will be required to obtain a telecommunications franchise before offering
service. '" Noting that under a cable franchise a franchising authority may impose a franchise fee only on
revenues derived from cable service, PROTEC asserts that eliminating a separate franchise requirement for
cable operators providing telecommunications service would allow cable operators to evade fees on
'<7S. Rep. 230, 104th Congo 2d Sess. ("Conference Report") at 180 (Feb. I, 1996). See PROTEC Comments at 17.
'''47 D.S.C. ~ 542(b).
149Richrnond Comments at 10, n. II.
150Richmond Comments at 16-17.
15'TMIC Communities at 9; MAS Comments at 2; Richmond Reply at 10-11; Anaheim Reply at 7-8.
152TMIC Communities at 10.
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telecommunications revenues, even though other telecommunications providers would be subject to such
fees. m
2. Discussion
62. Title VI establishes "a national policy concerning cable communications,"'" including
"guidelines for the exercise of . . . State and local authority with respect to the regulation of cable
systems. . . ."'" A fundamental aspect of the regulatory scheme erected by Title VI is the requirement that
a cable operator obtain a franchise before providing cable service.'" A franchise is "an initial authorization,
or renewal thereof. . ., issued by a franchising authority. . . which authorizes the construction or operation
ofa cable system... ."'57 In most cases, the franchising authority with jurisdiction to grant a cable franchise
is a body of state or local government.'" In general; Title VI govems cable service only.'" The scope of
a local govemment's franchising authority under Title VI dOes not extend to communications services other
than cable service. ,6<>
63. The plain language of the three provisions of section 62 I (b)(3) cited by TCI, as amended
by the 1996 Act, make clear that a local govemment may not invoke its franchising authority under Title VI
as grounds for franchising or regulating the provision of telecommunications service by a cable operator.
Section 62 I (bX3XA) states that a cable operator or affiliate "engaged in the provision of telecommunications
services - (i) . . . shall not be required to obtain a franchise under this title for the provision of
telecommunications services. . . ."'61 Similarly, section 621(b)(3)(B) states:
A franchising authority may not impose any requirement under this title
that has the purpose or effect of prohibitir.g, limiting, re,tricting, or
"'PROTEC Reply Conunents at 7, n. 5.
"'47 V.S.C. ~ 521(1).
'''47 V.S.C. ~ 521(2).
"'47 V.S.C. ~ 541(b)(1). This requirement does not apply to local or municipal authorities engaged in the
distribution of multichannel video programming, id., or to any person lawfully providing cable service without a
franchise on July I, 1984 unless the franchising authority requires such a franchise. 47 U.S.C. ~ 54 I (b)(2).
"747 V.S.C. ~ 522(9).
'58See47 V.S.C. ~ 522(10).
159'J'itle VI reaches non-cable communications services indirectly, such as by restricting the ability of a cable operator
to own other communications media in the cable franchise area. See 47 U.S.C. 9533.
''''See 47 U.S.c. 54 I (d)(2) ("nothing in this title shall be construed to affect the authority of any State to regulate any
cable operator to the extent that such operator provides any communication service other than cable service, whether
offered on a common carrier or private contract basis").
'6147 V.S.c. ~ 541 (b)(3)(A) (emphasis added).
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conditioning the provision of a telecommunications service by a cable
operator or an affiliate thereof. '62
The third provision cited by TCI, section 621(b)(3)(D), states:
Except as otherwise permitted by sections 611 and 612, a franchising
authority may not require a cable operator to provide any
telecommunications service or facilities, other than institutional networks,
as a condition of the initial grant of a franchise, a franchise renewal, or a
transfer of a franchise."]
64. The enactment of these provisions 'as part of the 1996 Act is related to the simultaneous
repeal of the cross-ownership restriction of former section 613(b) of the Communications Act.'64 Subject
to certain exceptions, former section 613(b) prohibited a Title IT common carrier from offering cable service
or other video programming directly to subscribers within its telephone service area. With the repeal of this
cross-ownership restriction and adoption of other pro-competitive provisions, Congress anticipated that a
variety of regulatory issues would arise as locally-franchised cable operators sought to begin providing
telecommunications services in addition to cable service. I., In light of this, it was logical for Congress to
confmn, with the addition of section 621 (b )(3), that local governments may not use their cable regulatory
authority under Title VI as a basis to franchise, regulate or condition a cable operator's provision of
telecommunications services.
)
65. TCI and the City seem to agree on this point. TCI asserts that Congress "has broken the link
between cable franchising and the delivery oftelecommun:catiom;... .,"166 and th~ City 3~ates Hlat Congress
intended "to separate cable franchising from rights-of-way management for. . . telecommunications services
. . . ."'67 Ironically, both TCI and the City claim support for their respective interpretations of section
62 I (b)(3) from the relevant section of the Conference Report, which states:
The conferees intend that, to the extent permissible under State and local
law, telecommunications services, including those provided by a cable
company, shall be subject to the authority of a local government to, in a
16247 U.S.c. S 541 (b)(3)(B) (emphasis added).
'''47 U.S.c. S 541 (b)(3)(D).
]641996 Act, S 302(b)(I).
]"Indeed, the National Cable Television Association reports that there had been a "growing practice" of local
municipal governments using their cable franchising authority to regulate telecommunications services. NeT A
Comments at 3. A group of franchising authorities concedes that such practices would "undercut the 1996 Act. . . ,"
TMIC Communities Reply at 7.
166Petition at l3.
) 167City Reply at t5. See NCT A Comments at 3 (amendments to Section 621 create "distinct spheres of regulation");
TMIC Communities Comments at 5 (Congress intended "to separate cable franchising under Title VI from
telecommunications franchising").
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non-discriminatory and competitively neutral way, manage its public rights-
of-way and charge fair and reasonable fees.'"
The foregoing statement from the Conference Report reflects an intent to preserve the powers of local
governments to manage lbe use of the public rights-of-way and to receive compensation for the use of those
rights-of-way, consistent with the stated standards that such actions be nondiscriminatory, competitively
neutral and lbat rees be fair and reasonable.
66. While essentially agreeing wilb the City on lbe effect of section 62](b)(3) to this extent, TC]
and olber cable interests contend that section 621 (b )(3) imposes a further restriction on local regulation of
telecommunications service and telecommunications providers. TC] contends that "section 62](b)(3)
precludes lbe imposition of franchise obligations upOn the provision of telecommunications services by cable
television operators," even iflbe franchising aulbority purPorts to be acting under a grant of authority other
lban Title VI. 169 As noted above, however, two oflbe lbree subsections, section 62 I (b)(3)(A) and section
621(b)(3)(B), prohibit loca] franchising and regulation lbat is imposed "under lbis title," i.e., Title VI.'''
a. Section 621(b)(3)(A)
67. We first conclude lbat TCI has failed to establish that lbe City has violated section
62 I (b)(3)(A) wilb respect to lbe City's actions on TCI's construction permit applications. That provision
states:
If a cable operator or affiliate thereof is engaged in the provision of
telcccmrr:.unicat:ons services --
(i) such cable operator or affiliate shall not be required to obtain a
franchise under lbis title for the provision of telecommunications services
171
This provision is inapp]icable here because TCI states, and lbe City acknowledges, that TCI is not now
engaged in lbe provision of telecommunications services, and has no present intention to provide such
services in the City of Troy. In this case, lbe cable operator is not "engaged in lbe provision of
telecommunications services," but ralber, is engaged solely in the provision of cable services under its Title
VI cable franchise. Because lbe prohibition in lbis subsection does not apply by its terms to TCI's business
in the City of Troy, we find no violation of section 621(b)(3)(A).
b. Section 621(b)(3)(B)
I6'Conr Rep. at 180. Petition at 13-14; City Comments at 33-34. TCI, however, claims that the City's actions with
respect to its cable pennits, and it Telecommunications Ordinance, exceed the scope of the City's pennissible rights-of-
way management authority, where as the City maintains its actions fall well within its traditional authority, wholly apart
from Title VI. Petition at 16-17; City Comments at 35.
'''TCI Reply at 12.
17047 V.S.C. S 541(b)(3)(A); 47 V.S.c. S 541(b)(3)(B).
"'47 V.S.c. S 541(b)(3)(A).
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68. The second provision cited by TCI, section 621(b)(3)(B), states that a franchising authority
"may not impose any requirement under this title that has the purpose or effect of prohibiting, limiting,
restricting, or conditioning the provision of a telecommunications service by a cable operator or an affiliate
thereof."'" The City's actions complained of by TCI include: the January 23, 1995 Agreement (prohibiting
TCI from using for telecommunications purposes any facilities installed pursuant to cable construction
permits, until TCI has obtained all lawful federal, state and local authority to provide telecommunications
service); the corresponding endorsement on the Livernois Road Application; the City's failure to grant the
Royal Oak Application without inclusion of a like endorsement; and the City's enactment of the
Telecommunications Ordinance. With respect to its enactment of the Telecommunication Ordinance, the
City claims authority under the Michigan Constitution, not Title VI.
69. We find on the record before us that the City has violated section 62 I (b)(3)(B). Clearly, as
Troy itself recognizes, the City entered into the 1995 Agreement with TCI, imposed the endorsement on the
Livernois Road Application, and seeks to condition the Royal Oak permit on the basis of TCl's status as a
cable operator.17J The City's franchising authority over cable operators such as Tel derives from Title VI
of the Communications Act. Accordingly, the City clearly was acting under Title VI when it endeavored to
condition the grant of the building permits at issue, and the subject matter of the condition was not related
to the cable service TCI provides. Rather, it expressly concerns the provision oftelecommunications service
in Troy, a service TCI neither currently provides, nor plans to provide in that locality.
70. The literal terms of the Livernois Road permit endorsement state that the "permit specifically
prohibits and excludes installation, upgrading or operations for all other telecommunications service." This
language would force TCI to forego the right to provide telecommunications service as a condition of
upgrading its cable system, and would violate section 62 I (b)(3)(B), ifi! were to be enforced as o.igiilally
written. Even if, as the City has represented to this Commission, the City does not intend to enforce the
terms of the Livernois Road Application permit beyond the terms of the 1995 Agreement, the language of
the condition as written and as later interpreted by the City plainly violates the express terms of the statute.
Section 62 I (b)(3)(B) states that a "franchising authority may not impose any requirement under this title that
has the purpose or effect of prohibiting, limiting, restricting, or conditioning the provision of a
telecommunications service by a cable operator or an affiliate thereof."'" In this case, the condition or
endorsement is being imposed "under this title," and by its own terms its purpose is to condition the provision
of a telecommunications by a cable operator. Both the cable interests and the cities agree that Congress
intended by this provision to separate the realms of cable franchising from telecommunications service
regulation. The City's required endorsement therefore violates the plain language of the statute and it
impermissibly mixes the two distinct regulatory spheres in direct contravention of Congress' intent in
amending section 621.
71. The still pending Royal Oak Application presents no different circumstance. The stated
purpose of the Royal Oak Application is "to upgrade CATV service quality and interconnect [three] . . .
17247 V.S.C. ~ 54 I (b)(3)(B).
173See City Comments at 8 ("when Tel submits a building permit application to Troy to upgrade its cable system,
it does so-under the authority granted in its cable franchise to use the city's rights-of-way for its cable service").
17447 V.S.C. 9 54 I (b)(3)(B) (emphasis added).
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Headends."'" In its letter to TCI dated February 14, 1996, the City raised three concerns with respect to the
Royal Oak Application. Two of the concerns dealt with the route of the proposed installation. First,
according to the City, the installation proposed by TCI deviated from the most direct route between the
headends.'" Second, TCI's plans called for a portion of its facilities to be installed in an easement to which
TCI has no right of access. The third concern related to the Telecommunications Ordinance which,
according to the letter, "requires any prospective telecommunications companies to apply for and obtain a
franchise." The letter adds: "This you must do."177 The City eXplained that its concern that TCl intended
to provide telecommunications using the facilities proposed in the permit application arose principally from
the fact that TCI's building plans indicated planned installation of conduit and cable through a complex of
office buildings, where TCI had no existing cable plant and provided no cable service.178
72. In its Petition, TCl acknowledges its refusal to obtai)! a telecommunications franchise, but
claims to have re-submitted the Royal Oak Application in a manner that resolves the City's other concerns. 179
In the re-submitted application, TCl responded to the City's concerns with the proposed route by stating that
the plans submitted by TCl with its Royal Oak permit application reveal only prudent management by TCI
in planning its proposed upgrade. TCI notes that it has become standard practice in the industry to begin
cable system build-outs prior to any specific demand for service in the franchise area, and that franchising
authorities routinely urge cable operators to route their facilities through business districts. TCl, in its
Petition, urges that the "only conclusion warranted by a review of the building plans submitted with TCl's
Royal Oak permit application is that TCl planned to build-out its cable plant for the eventual provision of
cable service to business areas in which it previously had no facilities."o
73. The City maintains that its concerns were not resolved when TCl re-submitted its Royal Oak
permit application in May] 996.181 In its !v12fcb 11 Letter to TCl, the City Attorney reFoscots that the City
will grant the Royal Oak Application if TCl will submit a new and direct route plan.1S2 According to the
City, the most direct route between the headends that TCl wishes to interconnect is along a public street
known as Crooks Road."] The "zigzagging, circuitous" route proposed by TCI deviates from Crooks Road,
17SPetition, Exh. 7.
!"Petition, Exh. 10.
mId.
"'City Comments at 14. See also March 12 Van Bergh Letter at I (the proposed deviation went through a
business/research park where TCl has no existing cable television service and did not propose to provide cable service).
179Petition at 9 n.16.
'''TCI Reply at 5-6.
18ICity Comments at 15.
18'March II Letzmann Letter al2.
ISJMarch ] 1 Letzmann Letter at I.
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according to the City, passing several office buildings and a cemetery before returning to Crooks Road. 184
The City notes that the portion of the proposed route that deviates from Crooks Road passes no residential
customers. I" The City states: "The more direct route [along Crooks Road] would create less disruption to
Troy's rights-of-way and is the route TCI would normally have been expected to use simply to connect its
headends." 186 The City has advised TCI that it will grant the Royal Oak application if TCI corrects this
routing problem: "After further discussion with the City engineers, we have come to the conclusion that if
you submit the route plan showing a route running due north and south in the Crooks Road right-of-way and
otherwise meet appropriate ordinances and design standards, the City will issue the permit."I" In addition,
the City reiterated its insistence that TCl's permit contain the "not for telecommunications purposes"
endorsement "reflecting the January 23, 1995 agreement between the City and TCL"I88
74. In its responsive ex parle submission, TCI: (I) states that it agrees to a route that runs due
north and south in the Crooks Road right-of-way; (2) clarifies that it wishes to provide video services in the
area that would have been passed in its original Roya] Oak application route plan, and (3) states that it will
shortly submit a new, separate permit application to bring hybrid fiber-coaxial cable plant to that area.I'9 TCI
also states that it cannot accede to the City's insistence on including the endorsement restricting use ofthe
facilities to cable services "unless and until" TCI shall have obtained all lawful requisite authorizations and
consents for the provision of telecommunications services. TCI explains that, in its view, the City is without
authority to impose limitations on TCl's construction of cable facilities in this manner.l90 The City
responded by stating that it does not expect a breach of the 1995 Letter Agreement or permit endorsements
to occur, but if such a circumstance arises with respect to TCI, "the City would pursue remedies ordinarily
available," and that "it is not the City's expectation that the City would consider such an event to constitute
a breach of the TCI cable franchise.""1
75. Again, the City's actions have impermissibly blurred the distinction, mandated by section
621(b)(3)(B), between regulation of telecommunications services and regulation of cable services. The
literal terms of the condition the City originally sought to impose on the Royal Oak permit in February, 1996
required TCI to obtain a telecommunications franchise before TCI would be permitted to upgrade its cable
facilities.l92 Even as revised, the City's condition required TCI to agree that it would not use the upgraded
184City Comments at 14; March II Letzmann Letter at I.
I"City Comments at 14.
186/d.
187March II Letzmann Letter at 2.
IUld.
189 April 2 Anthony Letter at I.
190 April 2 Anthony Letter at I.
19lMarch 11 Letzmann Letter at 2.
1925ee City Comments, Exh. 6, Letter from David B. Lindquist, Civil Engineer, City of Troy, to Chris D. Martinez,
Field Engineer, TCI Cablevision of Oakland County,lnc., dated February 14, 1996 ("[tlhe 'December City meeting' to
. (continued...)
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Federal Communications Commission
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cable facilities for telecommunications purposes unless and until TCI obtained all lawful authorizations,
which the City maintains includes a telecommunications franchise from the City of Troy pursuant to its
Telecommunications Ordinance.'" A requirement that a cable provider must agree to obtain a
telecommunications franchise in the future before it could receive a permit to upgrade its cable system for
the purpose of providing cable service is just the sort of action that section 621(b)(3)(B) was intended to
prohibit. The City's further attempt in March, 1997 to limit the scope of its condition by stating that "it is
not the City's expectation that the City would consider such an event to constitute a breach of the TCI cable
franchise,"'" is too little, too late. The further limitation comes more than one year after the first revised
Royal Oak permit application was filed, and it is not even a definitive statement that the City would not treat
a violation as a breach of the cable franchise. The City, to the contrary, has clearly indicated that, in its view,
the condition is a legally operative mechanism under which the City may take action against TCI in the
future.'" It is accordingly a significant condition,related solely to the provision of telecommunications
service over cable facilities, imposed upon TCI in this case pursuant to the City's Title VI franchising
authority. For these reasons, imposition of the condition on TCl's cable permits violates. section
62 I (b)(3)(B).
76. We are also concerned that the Royal Oak Application essentially lay dormant with the City
for ten months. An unexplained failure to respond to a permit application by the incumbent cable operator
within a reasonable time would lead to the assumption that local franchising authority under Title VI is being
used for some other purpose, thereby violating section 62 I. It appears that the City's March I I, 1997,
response is written more in the context of the issues in this proceeding, than as part of it responsibilities in
administering the public rights-of-way. The fact that TCI has accepted the City's objection to the proposed
installation route for the fiber optic facilities, as reflected in the parties exchange of letters in March and
April, 1997,196 rdlects that some elements oflhis dispute could have b~el1, ifnat resulved, then at ieast
adequately clarified by the parties at a much earlier time. Although we acknowledge the difficulties parties
face when one pursues resolution of their dispute in another forum, we note that, in this case, the City's
administrative process relating to the permits was not stayed during the pendency of TCI's Petition here.
"'(o..continued)
which you refer is the City Council meeting of December I 8, I 995. At this meeting a resolution was approved which
requires any prospective teleconununications companies to apply for and obtain a franchise. This you must do. Until
the above items have been completed a permit for your cable/conduit installation cannot be issued. ").
"'See May 14 Van Bergh Letter, attaching May 9 Letzmann Letter ("IfTCI is found to need further authorizations
or consents to operate a telecommunications system in Troy, including authority under the Michigan
Telecommunications Act and Chapter 62 of the Troy Municipal Code (as Troy believes it does), then this condition
confIrms that Tel will obtain such authority before providing telecommunications service. ").
"'March I I Letzmann Letter at 2.
'''See May 14 Van Bergh Letter at 3 ("If, as TCI says, it intends to comply with all applicable laws, then the
condition will have no bearing on TCl's conduct. On the other hand, ifTe! has other intentions, because the condition
is an independent requirement that pertains to the use of TCl's facilities for services other than cable, it provides a
mechanism for Troy to enforce its management authority over the public rights-of-way in the event of an unauthorized
use of the rights-of-way, without adversely affecting TCl's cable television service or fInding that Tel is in violation
of its cable franchise. ")
J96As proposed in the City's March II Letzmann Letter, TCI has agreed to connect the Headends directly. See April
2 Anthony Letter. .
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Unexplained administrative failure to provide permit applicants with responses within a reasonable time may
lead the Commission to construe the circumstances most favorable to the party aggrieved by the delay."7
77. The Commission's filing procedures are intended to afford parties flexibility to convey the
circumstances of their position. We generally do not impose rigid rules, normally associated with civil
litigation, that confine a party's ability to supplement the record. Many of our proceedings have broad
impact, and our rules seek to include commentary from a range of interested parties. Yet, as this proceeding
illustrates, our procedures must not become part of the permit process for franchised cable operators to obtain
access to the public rights-of-way to upgrade their cable facilities. It is unfortunate that it took a Petition
from TCI for the City to clarity its intentions. In addition, the year-long process of supplementing the record
has had a detrimental impact on our ability to render a timely decision on a set of facts that accurately
represents the situation faced by TCI and other potential providers in1he Troy communications market. We
strongly urge future claimants and responding entities under sections 62 I (b)(3), 624(e) and 253 to submit
complete and accurate accounts of the facts in their initial pleadings. 198
78. We also note that the administration of the public rights-of-way should not be used to
undermine the efforts of either cable or telecommunications providers to either upgrade or build new
facilities to provide a broad array of new communications services. The City itself appears to have
recognized that fiber optic facilities are important to the future of communications networks, but its actions
with respect to the attempts of certain providers to install these facilities in the public rights-of-way have
been less than welcoming.'99 Upgrades of existing copper and coaxial cable plant are necessary today for
the delivery of high quality cable services, are required for the provision of tomorrow's competitive local
) telephone service, and are essential for the future provision of switched, integrated broadband voice, video
and data services. All levels of government can best 5er:e th~ public interest by joining together to speed
the accomplishment of the sorts of cable upgrades TCI seeks to make in Troy by streamlining and hastening
administrative processes.
c. Section 62J(b)(3)(D)
79. The third and final subsection of section 621(b) invoked by TCI, section 62I(b)(3)(D),
generally prohibits a franchising authority from requiring a cable operator "to provide any
telecommunications service or facilities, other than institutional networks, as a condition of the initial grant
of a franchise, a franchise renewal, or a transfer of a franchise. ,,200 It is not clear from TCI's pleadings exactly
how the actions ofthe City violate section 62 I (bX3)(D). The only evidence that could even remotely be read
to suggest that the City has sought to require TCI to provide telecommunications service is the February 14,
]"See Public Notice, "Supplemental Pleading Cycle Established for Comments on Petition for Declaratory Ruling
of the Cellular Telecommunications Industry Association, FCC 97-264, released July 28, 1997 (Commission believes
it has jurisdiction to preclude siting moratoria of unlimited or unspecified duration under section 253(d), and, to the
extent such moratoria may constitute prohibited commercial mobile radio service (CMRS) entry regulation, as
constituting barriers to CMRS entry under section 332(c)(3)).
"'We also urge that factual assertions be supported by credible evidence, including affidavits, to avoid the problems
inherent with unsworn ex parle submissions on key factual points in contention.
]99Petition at 4-9; MCI Comments at 3; MCI Letter at 1-2; MFS Letter at 2-3.
20047 U.S.c. S 54 I (b)(3)(D).
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1996 letter from the City's Civil Engineer stating that the City will not grant the Royal Oak Application unti I
TCI obtains a telecommunications franchise.'ol In its Petition, TCI claims the City has imposed this
condition to regulate "telecommunications services that might later be delivered" by TCI.202
80. TCI's invocation of section 621(b)(3)(D) fails properly to invoke the protections of that
provision, because it does not allege that the City has even attempted to require TCI to provide
telecommunications service or facilities, other than institutional networks, as a condition of its franchise.
Nor would the record in this case support such a claim. We conclude that the decision of when or whether
to provide telecommunications service has been left to TCI, and cannot be attributed in any manner to the
City. Therefore, we find no violation of section 621(b)(3)(D).'OJ
B. Section 624(e)
1. Positions of the Parties
81. TCI asserts that the City's actions violate section 624( e) which, as amended, provides in
pertinent part: ''No state or franchising authority may prohibit, condition, or restrict a cable system's use of
any type of subscriber equipment or any transmission technology. ,,204 TCI claims that Congress sought "to
leave the design of transportation architecture to market players."'" Quoting legislative history, TCI argues
that Congress found that "'the patchwork of regulations that would result from a locality-by-Iocality approach
is particularly inappropriate in today's intensely dynamic technological environment."'''. The City has
violated section 624(e), according to TCI, by prohibiting it from installing fiber and thus effectively requiring
TCI to use only coaxial cable for the transmission of its cable signals.'07 MCT A likewise asserts that the City
has denied Tel's constnlction permit app!ica!ions and therefore has "prohibited Tel's UGe of fibei optic
technology in the cable system" in violation of section 624(e).'08
82. The City claims it could not have violated section 624( e) because it has not denied either of
the two applications under which TCI has sought the authority to upgrade its cable system with fiber
"'See Petition at 8 & Exh. 10; City Comments, Exh. 2 at p.3 & Exh. 6.
202Petition at J 7.
20347 U.S.C. ~ 54 I (b)(3)(D).
20447 U.S.C. ~ 544(e).
"'Id.atI7.
""TCI Reply at 9, quoting H. Rep. No. 204, 104th Cong., 1st Sess. 110 (1995).
"'Petition at 17; TCI Reply Comments at 9-10.
208MCT A Comments at 3.
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optics.'" The City granted the Livernois Road Application on February 23, 1996,"0 and the Royal Oak
Application is still pending.'11 Further, the City states: "To the extent Troy has conditioned TCI's permits
on using facilities for cable purposes only[,] until such time as TCI has obtained the requisite consents to
provide telecommunications service, such conditions present no impediment to the technology TCI may
deploy for its cable system."212 PROTEC agrees: "Troy could not have violated Section 624(e), since Troy
never in fact denied or rejected TCl's permit applications to the extent such permits applied to the installation
of fiber optic cable for the sole purpose of providing a cable system upgrade. ,,'" Richmond adds that the
City's concern was that TCI intended to provide telecommunications service without the requisite authority,
and that "[sJuch a concern is unrelated to the transmission technology employed by TCI."'" Richmond
cautions that local governments are not suggesting, by their arguments here, that section 624( e) prohibits
local governments from determining whether a cable operator may install a fiber optic system as opposed
to some other technology.'"
83. TCI responds that, regardless of whether Troy has simply refused to grant a construction
penn it, or whether it has denied Tel a construction penn it, Troy has taken or withheld action on Tel's
pennits based upon the type and potential uses of a particular technology. TCI claims that by blocking its
permit applications or placing restrictions upon their grant, Troy has violated section 624( e)'s prohibitions
against prohibiting, conditioning, or restricting the transmission technology that TCI intends to deploy for
the provision of cable service. TCI argues further that Troy's actions fall squarely within the proscribed
conduct under section 624{ e) by restricting TCl's use of its preferred cable communications technology in
direct violation of Congress' intention that franchising authorities play no part in such decisions.'"
)
2.
Discussion
84. Section 624( e) provides in pertinent part: "No State or franchising authority may prohibit,
condition, or restrict a cable system's use of any type of subscriber equipment or any transmission
technology." The Conference Report indicates that the purpose of the cited provision of section 624(e) is
to prohibit cable franchising authorities "from regulating in the areas of technical standards, customer
equipment, and transmission technologies."217 In the case of the Livernois Road Application, we find that
the City has granted the application and has not prohibited, conditioned or restricted TCl's use of fiber optics
"'City Connnents at 36.
2I'City Connnents at 16.
2IIId. at 13.
mId. at 36.
213PROTEC Connnents at 24-25.
214Richmond Comments at 18.
WRather, they are suggesting only that TCI's Petition does not provide the appropriate forum for determining the
scope ofseclion 624(e). Richmond Comments at 18 n.8.
) 2I'TCI Reply at 10.
"'Conference Report at 168.
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as part of its cable system. The City subsequently explained in this record that it would only enforce the
endorsement in accordance with the terms of the 1995 Letter Agreement, so that the prohibition would be
limited to TCl's provision of telecommunications services without first having received requisite lawful
authorizations.218 We reject TCl's contention that the endorsement on the Livernois Road permit, standing
alone and as limited by the 1995 Agreement, violates section 624( e). As drafted, the Livernois Road permit
endorsement limits the use of the facilities installed to cable television service, and prohibits TCI from using
its cable facilities for the provision of telecommunications services.'19 We do not believe that the City's
conditioning the grant of a cable construction permit in this manner can fairly be considered to constitute a
prohibition, condition, or restriction on the use of any subscriber equipment or particular transmission
technologies within the terms of section 624(e). The condition simply does not relate to TCl's choice and
use within its cable system of either subscriber equipment or transmission technology. Rather, the
endorsement is directed at the types of services which may be provid~d, and the regulatory requirements with
which the operator must comply before providing telecommunications services over the subject facilities.
Therefore, the endorsement on the Livernois Road Application, both as originally written and as later limited
to the scope of the 1995 Letter Agreement, does not violate section 624( e).
85. TCI also argues that the City's failure to grant the Royal Oak Application without the same
endorsement has interfered with TCl's discretion under section 624( e) to use fiber optic transmission
technology in its cable system. The City's actions with respect to the Royal Oak application were primarily
focussed on the question of whether the route chosen by TCI was the least disruptive to the public rights-of-
way, given the stated purpose of the work, and with TCI's potential use of the facilities to provide
telecommunications services. Section 624( e) does not restrict the City's authority in either regard.220 Here,
the City has issued numerous permits for the installation of both fiber optic and coaxial cable since 1993,
and has sought to impose the "n0t for tclec0ffimur.ications ~Ulposes" lan5'Uug~ upon unly three peffllits; ilJe
two permits for fiber optics that are the subject of this proceeding, and one permit for coaxial cable.221 The
condition regarding telecommunications services therefore does not appear to be directed to either the
specific transmission technology chosen or the question of whether this technology will achieve the
performance required ofTCI under its cable television franchise. Thus, the record as a whole supports the
City's claim that the terms of the condition were unrelated tothe transmission technology chosen by TCI.
In light of these circumstances, the prohibition contained in section 624(e) on a cable franchising authority's
regulation of technical standards, customer equipment, and transmission technologies is neither implicated
nor violated.
"'City Comments at 17,0.22 & Exh. 1 at p.7.
219See Petition, Exh. 12.
220ln contrast, we have previously concluded that section 62 1 (b)(3)(B) does restrict the City's ability to condition
cable construction permits where the facilities may also be used to provide non~Tit1e VI telecommunications services.
22lSee City Comments at 2; July I Symons Letter at 1-2.
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V. TITLE It ISSUES
A. Overview of Title II Legal Allegations
86. The 1996 Act amended Title II of the Communications Act in a number of ways aimed at
ending the old regulatory regime of government-protected monopolies.222 10 furtherance of this goal, Section
253, in pertinent part, states:
(a) IN GENERAL.--No State or local statute or regulation, or other State or local
legal requirement, may prohibit or have the effect of prohibiting the ability of any entity to
provide any interstate or intrastate telecommunications service.
(b) STATE REGULATORY AUTHORITY.--Nothing in this section shall affect
the ability of a State to impose, on a competitively neutral basis and consistent with section
254, requirements necessary to preserve and advance universal service, protect the public.
safety and welfare, ensure the continued quality of telecommunications services, and
safeguard the rights of consumers.
(c) ST ATE AND LOCAL GOVERNMENT AUTHORITY.--Nothing in this section
affects the authority of a State or local government to manage the public rights-of-way or
to require fair and reasonable compensation from telecommunications providers, on a
competitively neutral and nondiscriminatory basis, for use of public rights-of-way on a
nondiscriminatory basis, if the compensation required is publicly disclosed by such govern-
ment.
(d) PREEMPTION.--If, after notice and an opportunity for public comment, the
Commission determines that a State or local government has permitted cr imposed any
statute, regulation, or legal requirement that violates subsection (a) or (b), the Commission
shall preempt the enforcement of such statute, regulation, or legal requirement to the extent
necessary to correct such violation or inconsistency.223
Under Title II, the Petition challenges the Telecommunications Ordinance as a barrier to entry in violation
of section 253 generally, and seeks preemption under section 253(d).22'
87. TCI's specific legal challenges under section 253 can be broken down into four principal
arguments. First, TCI argues that the Telecommunications Ordinance as a whole prohibits, or has the effect
of prohibiting, TCI from providing telecommunications service, in violation of section 253(a)'" Second,
according to TCI, the City has failed to apply the Telecommunications Ordinance to Ameritech and therefore
has violated the requirement of nondiscrimination and competitive neutrality that TCI claims applies "[uJnder
"'See Implementalion oflhe Local Competition Provisions in the Telecommunicolions ACI of 1996, CC Docket No.
96-98, First Report and Order, ] I FCC Rcd 15499 (1996) ("Local Compelition Order"), Order on Reconsideration, CC
Docket No. 96-98, I] FCC Rcd 13042 (I 996)(Local Compelilion Reconsideralion Order), vacaled in pari on olher
grounds, Iowa Utililies Board el. al v. FCC, No. 96-3321 and consolidated cases, 1997 WL 40340] (8th Cir. July 18,
1997).
22347 U.S.c. Ii 253(a)-(d).
) "'Petition at 18, TCI Reply at 15.
"'Petition at 17-20; TCI Reply at 20-21.
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any interpretation of Section 253."216 Third, TCI asserts that section 253(c) permits municipalities' oversight
over only the physical use of the rights-of-way, as opposed to substantive regulation of the service
provided.227 Various provisions of the Telecommunications Ordinance, including those governing rate
regulation, interconnection, and service quality, "far exceed[ ] the City's power to manage the rights-of-way"
under section 253(c), according to TCL'" Fourth, TCI contends that the franchise fee based upon a
percentage of the operator's gross revenues exceeds the "fair and reasonable compensation" to which the City
is entitled under section 253(c). TCI argues that both federal and state law require cost-based fees for use
of the public rights-of-way'29
88. TCI further alleges that the City lacks authority under state law to enact or enforce the
Telecommunications Ordinance.'JO TCI claims that the Troy Telecommunications Ordinance exceeds the
City's limited authority under the Michigan TelecomIilUnications ActJo manage the public rights-of-way and
to charge franchise fees for use of the rights-of-way.'3I TCI"states that "[t]he Michigan Constitution provides
only that "reasonable control" of streets and public places is reserved to local governments, and that.a "public
utility" must obtain a franchise before transacting business in a municipality. Under section 102 of the
Michigan [Telecommunications] Act, however, telecommunications service is not a 'public utility service'
,,232
89. TCI requests that the Commission adopt an order:
· declaring that the City's conditioning of TCI's cable system
construction violates Sections 621, 624 and 253 of the Communications
Act;
· declaring that the City of Troy's denial of TCI's Royal Oak and
Livernois Permit Applications violates the Communications Act, and is
preempted by federal law.
226Petition at 21.
"'Petition at 17-20; TCI Reply at 15; TCI November 26, 1996 ex parte comments.
228Petition at 18.
"'Petition at 19; TCI Reply at 21-22.
"OPetition at 5; TCI Reply at 21-22.
"'TCI Reply at 21-22.
"'Letter to Barbara Esbin, Associate Chief, Cable Services Bureau, FCC dated November 27, 1996, Re: Ex Parte
Presentation, Petition ofTCI Cablevision of Oakland County, Inc., CSR-4790 from Howard Symons on behalf ofTCI
at p. 2, citing Mich. Const., art. 7, 9 29, and Mich. Compo Laws 9484.2102(dd).
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· declaring that the Troy Telecommunications Ordinance and the
City's denial of TCl's permit applications exceed the City's authority as
provided in Section 253(a) of the 1996 Act and have the effect of
prohibiting TCl's entry into interstate and intrastate telecommunications
markets in violation of Section 253(a) of the 1996 Act; and
· declaring that the City's Telecommunications Ordinance and the
City's denial of TCl's permit applications are preempted by Section 253(d)
of the 1996 Act.23J
90. The City both denies TCl's assertions on the merits, and argues that the Commission has no
jurisdiction to adjudicate TCI's claims under section 253(d). The City-contends that the Telecommunications
Ordinance is primarily an exercise of the City's authoritY under section 253( c) to manage its public rights-of-
way and receive fair and reasonable compensation for the use of those rights-of-way, and that section 253( d)
withholds from the Commission any authority to preempt such local regulation of telecommunications
service. According to the City, any dispute as to the validity of the Telecommunications Ordinance under
section 253( c) must be resolved by a court of competent jurisdiction, according to the City. The City argues,
that, at most, even if limited jurisdiction exists, the scope of the Commission's preemption authority under
section 253 is narrow, and is not appropriately exercised in response to TCI's Petition.'" The City also
argues that to the extent the specific provisions challenged by TCI relate to a matter identified in section
253(b), they are within the City's franchise authority as delegated under the Michigan Constitution, and the
minimal requirements that are imposed are done so in competitively neutral manner. The City generally
defends its Telecommunications Ordinance as an appropriate exercise of the City's authority to manage its
public rights-of-way under both fodeml ~ncl state law.'" The City asserts that "[t]he Michigan Cons,itution
delegates franchising authority to cities for any telecommunications service provider (i.e., public utility)
transacting business in the city. ,,'36 Most municipal and other local government parties also support the view
of limited FCC preemption jurisdiction advanced by Troy, and, accordingly, several Motions to Dismiss the
TCI Petition were filed in the proceeding.'"
B. Ripeness, Standing and Advisory Opinions'"
mpetition at 22.
23'City Conunents at 20-31.
"'City Conunents at 19-31.
23'Letter to Mr. William F. Caton, Acting Secretary, FCC dated February 25, 1997, Re: Ex Parte Presentation, File
No. CSR-4790, TCI Cablevision of Oakland County, Inc., from Mark Van Bergh, Roberts & Eckard, P.C. on behalf
of the City of Troy, attaching Memorandum of Oral Ex Parte Presentation February 24, 1997.
237See. e.g. PROTEC Motion at 2; TMIC Conunents at 14-17.
231Summaries of the positions of the parties on the remaining issues arising under Title B are contained in Appendix
C. These issues are organized as follows: (I) Section 253; Prohibition on Barriers to Entry; (2) Scope of Local
(continued... )
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I. Positions of the Parties
91. Several parties contend that the Commission should not reach the merits of TCl's claims
under section 253. According to PROTEC and Richmond, since TCI has not applied for a franchise, it
cannot claim to have been harmed by the Telecommunications Ordinance.'" Invoking the judicial concept
of standing, PROTEC asks us to dismiss TCl's Petition because there is no injury for the Commission to
redress.'40 Anaheim claims that the Telecommunications Ordinance poses no barrier "to an activity that TCI
is undertaking (or even proposing to undertake)," in light of TCl's assertion that it does not intend to provide
telecommunications service.'" Anaheim urges the Commission not to render an "advisory opinion" as to
the validity of a local regulation "that, at present, does not apply to [TCl's] operations in Troy."'"
92. In its reply, TCI responds that this matter is ripe for l\djudication because "the adoption and
enforcement of Troy's Telecommunications Ordinance violates the Communications Act and causes TCI
harm by impairing and impeding its ability to proceed with vital system upgrades."'43 TCI further notes that
the Commission is not subject to the "case or controversy" requirement that restricts the jurisdiction of
federal courts under Article III of the Constitution. '44 TCI also argues that this means that the Commission
does not need to wait until the Ordinance is enforced to preempt any of its offending provisions; rather, it
may act here to "issue a declaratory order to terminate a controversy or remove uncertainty."'"
93. CPI acknowledges the concerns raised with respect to the fact that TCI, the filing party, has
indicated that it does not seek to provide telecommunications service in Troy. CPI maintains that although
this situation would be dispositive in a formal complaint proceeding under section 208 of the Act, section
253 does not by its terms limit relief to the party filing a petition for preemption. CPI maintains that an
action under section 251 can be initiated by any entity, "r even by t'Je Commi'3ion itsdf. CPI fears that if
the Commission were to determine that preemption can only occur where the entity initiating the proceeding
"'(...continued)
Government Authority Under Sections 253(b) and (c); (3) Competitive Neutrality and NondiscriminatIOn; (4) Scope
of Municipal Authority Under Michigan State Law; (5) Fair and Reasonable Compensation; and (6) Commission
Jurisdiction to Preempt Under Section 253(d).
"'PROTEC Motion at 26-27; Richmond Comments at 7.
240Id.
"'Anaheim Reply at 5.
'''ld. at 3.
"'TCI Reply at 8, n. 15.
244Id.
'''March 28 TCI Letter, attaching Ex Parte Presentation, "The FCC's Authority to Preempt the City of Troy's
Ordinance is Not Limited by Traditional Judicial Concerns About 'Ripeness,''' citing 5 U.S.c. S 554(e); 47 C.F.R. S 1.2;
American Postal Workers Union v. u.s. Postal Service, 891 F.2d 304, 314 (D.C. Cir. 1989) (agencies are entitled to
make predictive judgments of future public interest; complete factual support not required where such judgments are
based on agency's expert knowledge), rev'd on other grounds, 498 U.S. 517 (! 991).
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is directly harmed, such a determination would effectively preclude any non-profit organization (such as
itsel!) or trade association from filing petitions under section 2532..
94. CPI argues that the facts introduced in the record in this case provide a sufficient basis on
which the Commission can, and should, preempt the Troy ordinance as a barrier to entry under section
253(a). CPI states:
MCl's comments in this record clearly indicate that MCI would have
constructed telecommunications facilities in Troy if not for the excessive
regulation that the Troy ordinance imposes on telecommunications
providers. The city cannot take advantage of the "savings clause" in
subsection (c) because the city's actions -- " such as regulating
interconnection and imposition of a "most favored nation" provision __ are
not related to the management of its rights-of-way. This evidence requires
the FCC to preempt the Troy ordinance, even though MCI was not the party
who filed the initial petition in this proceeding.247
)
95. In the alternative, CPI contends that the Commission should clarifY the meaning of section
253 as soon as possible, whether it preempts the Troy Ordinance or not. CPI notes that this proceeding has
become "a high-profile case, involving substantial efforts from the industry and the representatives of the
cities. . .. Should the FCC remain silent on the section 253 issues, or worse, deny the petition to preempt
under section 253, cities may be emboldened to impose a third layer of regulation on telecommunications
carriers. This result could deny consumers the benefits of local telephone competition that the 1996
Telecommunications Act was intended to provide. "". CPI recognizes that the Commission C311lWt decide
specific preemption issues prior to reviewing the facts of a case, but urges the Commission to announce
standards it will use in reviewing future preemption proceedings. CPI suggests that the Commission express
the following policy statements or standards in its decision on the Troy ordinance that will provide guidance
to cities and the industry:
(I) Section 253(a) is a broad provision that allows the FCC to preempt any
statute that "may" have the effect of prohibiting "any" entity from providing
"any" service.
(2) Section 253(c) is a limited "savings clause" that allows a State or city
to impose rights-of-way regulations only if it meets all three conditions:
(a) The city's regulation must be directlv and soecificallv
"related to management of the rights-of-way."
(b) The "fair and reasonable" compensation standard does not
allow the city to charge monopoly rents for use of its rights-of-way.
24.CPI Memo at I n.2.
247CPLMemo at I.
24'CPI Memo at 2.
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(c) Cities must treat new entrants and incumbents in the
same manner at the same time.'49
96. LSGAC urges that the Commission "not be tempted to act precipitously to preempt state and
local governments necessarily. States and local governments should recognize the urgency of
telecommunications deregulation and work under appropriate deadlines to make their decisions. ,,250 LSGAC
submits that "[r]egulation, preemption, and formal legal action against another level of government should
be the last, not the first, recourse to resolve conflicting claims. It advocates that rights-of-way disputes
between telecommunications companies and local governments be resolved in local jurisdictions, and offers
to explore with an appropriate delegation of industry representatives "areas of agreement on rights-of-way
issues pertaining to state and local governments. ,,251
2. Discussion
97. We previously have found that certain governmental actions flatly precluded an entity or
class of entities from providing a particular service in violation of section 253(a).'" We also found that the
governmental actions in those cases did not fall within the powers reserved to states and localities under
sections 253(b) and/or 253(c).'" In the Classic Telephone Decision, we held that, under explicit delegated
authority from the state, two cities' denials of a franchise to a prospective provider of local exchange service
prohibited the ability of that entity, Classic Telephone Co., to provide local exchange service in those cities.
Absent a franchise from the cities, Classic Telephone Co. lacked the requisite authority to enter the market
and thus was legally barred from providing service.'" Similarly, in the New Englond Decision, we
preempted a state regulation that permitted only ILECs and certified LECs to provide payphone services in
"'CPl Memo at 2-4 (emphasis original). CPI elaborates on each standard further in its Memo, and also cautions
that its list is not meant to be exhaustive.
2SOLSGAC Advisory Recommendation No. I at 2.
"'Id. at 2-3.
"'See Classic Telephone, Inc. Petition for Preemption, Declaratory Ruling and Injunctive Relief, Memorandum
Opinion and Order, File No. CCBPol 96-10, II FCC Rcd 13082 (I996) (Classic Telephone Decision), petition for
emergency relief, sanctions, and investigation pending (filed Dec. 6, 1996), petition for review held in abeyance, City
of Bogue, Kansas and City of Hill City, Kansas v. FCC, No. 96-1432 (D.C. Cir. Jan. 14, 1997)(denying petitioner's
motion for writ of prohibition and sua sponte holding petition in abeyance); New England Public Communications
Council Petition for Preemption Pursuant to Section 253, Memorandum Opinion and Order, FCC 96-470, File No.
CCBPoI96-1 I (reI. Dec. 10, 1996) (New England Decision), recon. denied, Memorandum Opinion and Order, FCC
97-143 (reI. April 18, 1997) ("New England Reconsideration'}
25JSee New England Decision at paras. 19-25; Classic Telephone Decision at paras. 29-42. In the case of Classic
Telephone, however, we did not reach the cities' substantive claims that their actions fell within the reservation of
authority under section 253(c) on the ground that, on the record before us, the cities had not established an adequate
premise to invoke the provisions of section 253( c). Rather, the cities had merely claimed that section 253( c) pennitted
their franchise decisions, without providing any support for this contention. Id. at para. 40.
254Classic Telephone DeciSion at paras. 17-28.
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the state of Connecticut. The regulation legally barred a class of entities __ non-LECs __ from providing
payphone services in the state.'''
98. In addition to outright prohibitions of entry, Section 253(a) also forbids state and local
governments from enforcing any statute, regulation, or other legal requirement that has the effect of
prohibiting any entity's ability to provide any interstate or intrastate telecommunications service. In
evaluating whether a state or local provision has the impermissible effect of prohibiting an entity's ability
to provide any telecommunications service, we consider whether it "materially inhibits or limits the ability
of any competitor or potential competitor to compete in a fair and balanced legal and regulatory
environment. 11256
99. This case does not involve the denial of a franchise application or some other express
prohibition on the provision of telecommunication service. Rather, TCI challenges the validity of the
Telecommunications Ordinance both on its face and as applied by the City to new entrants. Yet, Tel asserts
that it "has no present intention" to provide telecommunications services in the City.'" TCI does not even
explicitly contend that it ever contemplated providing any telecommunications service in Troy. On the basis
of TCI's representations, the record does not demonstrate that the Troy Telecommunications Ordinance has
had the impermissible effect of prohibiting TCI's ability to provide telecommunications service in the City
of Troy. Given the facts of this case we will not issue what would be a purely advisory opinion.'" We
therefore decline, in our discretion, to decide on the validity of specific sections of the Troy
Telecommunications Ordinance under section 253.259
) 100. We do not agree with those commenters arguing that it is strictly necessary for a party
ch"lIenging the validity of a Telecommunications Ordinance such as Troy'; tv fir;t bave applied for, and have
been denied, a franchise before filing a petition with this Commission. Such a party would clearly have a
timely claim under section 253, as may other potential claimants regarding the validity under section 253 of
the Troy Telecommunications Ordinance.'60 We do not issue a declaratory ruling or advisory opinion
resolving Tel's challenges to the particular provisions of the Troy Ordinance because our resolution ofTCI's
claims under section 621 (b)(3)(B) resolves the actual controversy between the parties. Under Our decision,
the City may not place a condition related to the cable operator's provision of telecommunications services
"'New England Decision at paras. ]7-18.
'''California Payphone Association Petition for Preemption of Ordinance No. 576 NS of the City of Huntington Park,
California Pursuant to Section 253(d) of the Communications Act of 1934, CCBPol 96-26, Memorandum Opinion and
Order, FCC 97-251 (released July 17, 1997) at para. 31 ("Huntington Park Decision").
"'See TCI Reply at II.
"'See Anaheim Reply at 5.
B'ln addition, we do not address the validity of the provisions of the Ordinance because an open question exists
under Michigan law regarding whether there has been a delegation of authority to Troy sufficient to support its adoption
of the Ordinance. Cj Classic Telephone Decision, II FCC Rcd at 13084, para. 4 (noting that the delegation issue had
been affmned d under Kansas law by the Kansas Supreme Court in United Tel. of Kansas v. City of Hill City, 258 Kan.
20E, 899 P.2d 489 (Kan. 1995)).
''"Thus, in response to the concerns raised by CPI, we make clear that non-profit entities or trade associations are
not precluded from asserting a properly supported claim under section 253(a).
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Federal Communications Commission
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in a cable pennit issued pursuant to Title VI cable franchising authority. In light of this detennination, and
because TCI has stated that it has no present intention of entering the telecommunications markets in the City
of Troy, the Troy Telecommunications Ordinance no longer directly affects the operations ofTCI within the
City. Our decision under Title VI severs any link between TCl's operations in the City and the impact of the
Telecommunications Ordinance.
101. Nor do the comments and infonnal filings seeking preemption of the Troy
Telecommunications Ordinance by MCI, on behalf of MCI Metro, and World com, on behalf of MFS-D,
provide an adequate factual basis as currently in the record for us to preempt the Troy Telecommunications
Ordinance under section 253(d). Section 253(d) gives the Commission an important and powerful tool to
promote competition in telecommunications markets -- it pennits us to preempt the enforcement of legal
requirements to the extent necessary to correct violations or inconsistencies with section 253. With respect
to a particular ordinance or other legal requirement, it is up to those seeking preemption to demonstrate to
the Commission that the challenged ordinance or legal requirement prohibits or has the effect of prohibiting
potential providers ability to provide an interstate or intrastate telecommunications service under section
253(a). Parties seeking preemption of a local legal requirement such as the Troy Telecommunications
Ordinance must supply us with credible and probative evidence that the challenged requirement falls within
the proscription of section 253(a) without meeting the requirements of section 253(b) and/or (c). We will
exercise our authority only upon such fully developed factual records. This case does not contain such a
record, and we exercise our discretion not to address any of the challenges to the validity under section 253
of the Troy Telecommunications Ordinance in this proceeding.
102. We caution that our resolution of the issues under Title VI should not be construed in any
manner gS prejudging how the Camillisdon \-vauld ru!c en a we:l.foundcd section 253 chCilltilge to (he Troy
Telecommunications Ordinance itself, or to any similar ordinance. Although we decline, in our discretion,
to issue a declaratory ruling on the validity of the contested provisions of the Troy Telecommunications
Ordinance, we take this opportunity to address generally some issues related to section 253. Section 253 is
a critical component of Congress' pro-competitive deregulatory national policy framework that it put into
place by enacting the 1996 Act.261 As we have noted, "Congress intended primarily for competitive markets
to detennine which entrants shall provide telecommunications services demanded by consumers, and by
preempting under section 253 sought to ensure that State and local governments implement the 1996 Act in
a manner consistent with these goals."26' We are troubled by several aspects of the Troy Ordinance in the
context of the effort to open local telecommunications markets to competition. While Congress mandated
a role for the Commission and the states in the regulation of telecommunications carriers, we are concerned
that Troy and other local governments may be creating an unnecessary "third tier" of regulation that extends
far beyond the statutorily protected interests in managing the public rights-of-way.'6l
103. We recognize that section 253(c) preserves the authority of state and local governments to
manage public rights-of-way. Local governments must be allowed to perfonn the range of vital tasks
necessary to preserve the physical integrity of streets and highways, to control the orderly flow of vehicles
and pedestrians, to manage gas, water, cable (both electric and cable television), and telephone facilities that
crisscross the streets and public rights-of-way. We have previously described the types of activities that fall
261See Conference Report at I.
"'Classic Telephone Decision, II FCC Rcd at 13095. -
"'See 47 U.S.C. S 253(c).
- 45-
Federal Communications Commission
FCC 97-331
within the sphere of appropriate rights-of-way management in both the Classic Telephone Decision and the
OVS Orders,'" and that analysis of what constitutes appropriate rights-of-way management continues to set
the parameters of local authority. These matters include coordination of construction schedules,
determination of insurance, bonding and indemnity requirements, establishment and enforcement of building
codes, and keeping track of the various systems using the rights-of-way to prevent interference between them.
104. Of similar importance is the authority reserved to the states under section 253(b) to preserve
and advance universal service, protect the public safety and ensure the continued quality of
telecommunications services, and safeguard the rights of consumers, provided such requirements are
necessary, competitively neutral, and consistent with the Communications Act's universal service
requirements. As we noted in the Huntington Park Decision, section 253(b) ensures that States continue to
have authority to require telecommunications service providers to make emergency services available to the
public and comply with local consumer protection laws.""
105. Our concern is that some localities appear to be reaching beyond traditional rights-of-way
matters and seeking to impose a redundant "third tier" of telecommunications regulation which aspires to
govern the relationships among telecommunications providers, or the rates, terms and conditions under which
telecommunication service is offered to the public. For example, the Troy Telecommunications Ordinance
contains provisions that, among other things, require franchisees to interconnect with other
telecommunications systems in the City for the purpose of facilitating universal service, provide for
regulation of the fees charged for interconnection, and mandate "most favored nation" treatment for the City
under which a franchisee providing a "new service, facility, equipment, fee or grant to any other community
) .. . within the State of Michigan" shall provide the same to the City of Troy.''' Such Ordinance provisions
will !)e difficult to justify under <;ection ?53(c) on the grounds that th~}' art; within the scope ofpermissibJe
local rights-of-way management authority or other traditional municipal concerns such as police, fire,
building code enforcement or other public safety concerns. In addition, several of these provisions seem
redundant of comprehensive federal and state regulatory programs governing inter-carrier interconnection
and universal service obligations and support. Given the likelihood of such local requirements impeding
competition and imposing unnecessary delays on new entrants, attempts to impose a redundant "third tier"
of regulation at the local level will be met with close scrutiny by the Commission.
106. Each local government may believe it is simply protecting the interests of its constituents.
The telecommunications interests of constituents, however, are not only local. They are statewide, national
and international as well. We believe that Congress' recognition of this fact was the genesis of its grant of
'''See Classic Telephone Decision, II FCC Rcd at 13103, citing 141 Congo Rec. S8172 (daily ed. June 12, 1995)
(statement of Sen. Feinstein, quoting letter from the Office of the City Attorney, City and County of San Francisco);
Implementation of Section 302 of the Telecommunications Act of 1996; Open Video Systems, CS Docket No. 96-46,
FCC 96-312, Second Report and Order and First Order on Reconsideration, II FCC Rcd 18223, 18330 (1996)(OVS
Second Report); Third Report and Order and Second Order on Reconsideration (OVS Third Report and
Reconsideration), CS Docket 96-46, FCC 96-334 (released Aug. 8, 1997), (referred to collectively as "OVS Orders"),
appeal pending, sub nom. City of Dallas, Texas, et ai, v. FCC, United States Court of Appeals for the Fifth Circuit,
Nos. 96-60502 (and consolidated cases); Fourth Report and Order, CS Docket No. 96-46, FCC 97-130 (released April
15, I 997)(modifying certain procedural rules relating to the filing and disposition of OVS certification applications,
FCC Form 1275), reconsideration pending.
26SHuntington Park Decision, FCC 97-251, at para 35.
266See Appendix S, Chapter 62 - Telecommunications Ordinance, Section 12{l).
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Federal Communications Commission
FCC 97-331
preemption authority to this Commission. In addition, section 253(b)'s reservation to the States of authority
over issues such as universal service, safety, and consumer protection appears to reflect Congress' view that
an array of local telecommunications regulations that vary from community to community is likely to
discourage or delay the development of telecommunications competition. As a result, where relations among
telecommunications providers would be affected, or where the rates, terms, and conditions under which
telecommunications service is offered to the public are dictated by an local ordinance, is of considerable
concern to this Commission. This concern is exacerbated by the potential for multiple, inconsistent
obligations imposed on a community-by-community basis. Such a patchwork quilt of differing local
regulations may well discourage regional or national strategies by telecommunications providers, and thus
adversely affect the economics of their competitive strategies.
107. An especially troubling issue alluded to in the recorckoncems the discriminatory application
of telecommunications regulation, whether at the state or localleve!. Arguments are advanced by localities
that the incumbent providers occupy a favored position vis-a-vis the state and local governments because of
the way the provision of telephone service and its regulation have evolved over the last century. While this
Commission cannot speak to the intricacies of state law on these matters, Congress sought to strike a balance
in the 1996 Act. Obligations were imposed on incumbent carriers to create conditions essential to the
development of competition.'67 At the same time, Congress recognized the need for State and local
governments to continue respond to truly local issues. Section 253 plays an important role in this regime.
108. One clear message from section 253 is that when a local government chooses to exercise its
authority to manage the public rights-of-way or to require fair and reasonable compensation from
telecommunications providers, it must do so on a competitively neutral and nondiscriminatory basis.268 Local
requirements imp0s~d or:!y 0.n the 0pcration3 of ne\v entrants and not on existing operations of incumbents
are quite likely to be neither competitively neutral nor nondiscriminatory. ~ W ~/I
109. Section 253(b) acknowledges the authority of states to prescribe competitively neutral
regulations of statewide applicability necessary to preserve and to advance universal service, protect the
public safety and welfare, ensure the continued quality of telecommunications services, and safeguard the
rights of consumers. Competition is best served where states wield their powers carefully, avoiding, to the
greatest extent possible, an intricate intrastate patchwork of telecommunications regulation at the local level
that will frustrate the prospects for full and effective competition. States, in deciding which
telecommunications regulatory powers to delegate to their political subdivisions and which regulatory powers
to retain, should strive to avoid redundant layers of regulation, in keeping with the pro-competitive,
deregulatory intent of Congress in enacting the 1996 Act. Similarly, governments that have historically
26'See. e.g, 47 U.S.c. 9251(b) & (c). Section 251(b) imposes certain interconnection obligations on all local
exchange carriers, while section 251(c) imposes additional interconnection obligations upon incumbent local exchange
carriers.
"'See 47 U.S.c. 9253(c). We are cognizant of the arguments of the City and the other municipal commenters that
the Commission lacks jurisdiction under section 253(d) to preempt actions taken by the City pursuant to section 253(c).
See. e.g, City Comments aI20-28; PROTEC Comments at 7; TMIC Communities Comments at 15. Our observations
here do not address the merits of that jurisdictional argument; rather they are confined to our view of the message
Congress intended to send through the express tenns of section 253( c). No one disputes the possibility that a municipal
ordinance would be subject to preemption if it were found to violate the proscription contained in section 253(a), and
not fall within Ihe express terms of the reservation of authority in section 253(c). The dispute disclosed in this record
is Over the question of who is authorized to make this determination -- this Commission or the local federal district_
courts. See text, supra at section V.A.6. By our decision here, we leave that important issue for another day.
- 47-
Federal Communications Commission
FCC 97-331
refrained from engaging in substantive telecommunications regulation should not view new entrants as being
more susceptible to regulation than the incumbents. These efforts would go a long way in hastening the
arrival of local telephone competition of many varieties, and in particular, of facilities-based local
competition.
110. Finally, we note that interpreting the 1996 Act is not an easy task. It requires the combined
efforts of state and local governments, along with those of the Commission. It is a duty that is shared by all
levels of government, shaped by the dictates of section 253. In applying this statutory provision, we must
remain mindful of the fundamental purpose of the Act: to promote competition and reduce regulation in
order to secure lower prices and higher quality services for American telecommunications consumers and
encourage the rapid deployment of new telecommunications technologies.
- 48-
Federal Communications Commission
FCC 97-331
VI. MOTIONS TO DISMISS OR DENY
Ill. Two joint commenters filed motions to dismiss or deny the Petition on the grounds that the
Commission lacks jurisdiction to determine the validity of the Telecommunications Ordinance under section
253(c).269 In view of our resolution of this matter, we dismiss the motions as moot.
VII. ORDERING CLAUSES
112. IT IS ORDERED that the Petition filed by TCI Cablevision of Oakland County, Inc., is
granted in part, and denied in part, as provided above.
113. IT IS FURTHER ORDERED that the Motions to Dismiss or Deny are dismissed as moot.
FEDERAL COMMUNICA nONS COMMISSION
William F. Caton
Acting Secretary
269See PROTEC, et aI., Joint Motion to Dismiss or Deny; Minnesota Communities Joint Reply Comments and Motion
to Dismiss or Deny.
- 49-
~
975 F.Supp. 928
(Cite as: 975 F.Supp. 928)
AT & T COMMUNICATIONS OF THE
SOUTHWEST, INC., Plaintiff,
v.
CITY OF AUSTIN. TEXAS, Defendant.
No. A 97-CA-532 SS.
United States District COUft,
W.D. Texas,
Austin Division.
Aug. 21. 1997.
Local telephone market entrant brought action
against city, challenging city ordinance requiring
municipal consent before operation of
telecommunications services in city, asserting claims
under Federal Telecommunications Act (FTA).
Texas Public Utilities Regulatory Act of 1995
(PURA). and federal and state constitutions. Entrant
moved for preliminary injunction against
enforcement of ordinance, incumbent local exchange
carrier (LEC) moved to intervene. and city moved to
dismiss or abate. The District Court. Sparks, J..
held that: (1) carrier was not entitled to intervention
of right; (2) court had federal question jurisdiction
over entrant's federal preemption claim; (3) action
was ripe for adjudication, despite fact that entrant
had not applied for municipal consent; (4) Federal
Communications Commission (FCC) did not have
exclusive jurisdiction over claims arising under FT A
provisions proscribing local requirements prohibiting
ability to provide telecommunications services and
reserving local governmental authority to manage
public rights-of-way and, thus. court was not
required to abstain from deciding entrant's
preemption claim arising under provisions; (5) court
would not defer to Commission under primary
jurisdiction doctrine; (6) FT A. in conjunction with
PURA. federally preempted ordinance. as ordinance
regulated entrant in a way unrelated to "use" of
public rights-of-way; (7) court would not abstain
under Pullman abstention doctrine from deciding
necessary issue of city's regulatory authority under
PURA in ruling on federal preemption claim, (8)
entrant met substantial threat of irreparable injury
requirement for preliminary injunction; (9) entrant
met balance of hardships requirement for
preliminary injunction; and (10) entrant sufficiently
established that granting of relief would not disserve
public interest, as required for preliminary
injunction.
Page 66
Entrant's motion granted and motions of carrier and
city denied.
[1] FEDERAL CIVIL PROCEDURE~ 331
170Ak331
Incumbent local exchange carrier (LEC) was not
entitled to intervention of right in local telephone
market entrant's action against city, challenging city
ordinance provision requiring municipal consent
before operation of telecommunications services in
city, as carrier did not have direct, substantial, and
legally protectable claim or interest in action, despite
contention that carrier had interest in legal
proceeding determining whether entrant had interest
in sums carrier paid city and whether carrier could
pass through fees to entrant as resale customer;
entrant made no claims as to any compensation or
franchise fees issues between entrant and carrier and
between carrier and city, and outcome of action
would have no effect on carrier's undisputed
obligation under ordinance to pay franchise fees.
Vernon's Ann. Texas Civ.St. art. l446c-O ~
3.2555(h); Austin. Tex., City Code !i 18-8-4;
Austin, Tex.. Ordinance !i 970213-E.
[2] FEDERAL CIVIL PROCEDURE~ 314.1
170Ak314.1
Applicant for intervention of right must establish the
following elements: application to intervene is
timely; applicant has interest relating to property
which is subject matter of action; applicant is so
situated that disposition of action may, as a practical
matter. impair or impede its ability to protect that
interest; and applicant's interest is inadequately
represented by existing parties. Fed.Rules
Civ.Proc.Rule 24(a). 28 U.S.C.A.
[3] FEDERAL COURTS~ 199
170Bk199
District court had federal question jurisdiction over
local telephone market entrant's claim in seeking
preliminary injunction and declaratory relief,
asserting that, pursuant to federal constitutional
supremacy clause, Federal Telecommunications Act
(FT A) preempted city ordinance requiring municipal
consent before operation of telecorrununications
services in city. U.S.C.A. Const. Art. 6. c1. 2; 28
U.S.C.A. !i 1331; Telecommunications Act of 1996.
47 U.S.CA. !i 253(a, c).
[4] FEDERAL COURTS~ 178
170Bk178
Plaintiff's due process and equal protection claims
Copr. ll) West 2000 No Claim to Orig. U.S. Govt. Works
975 F,Supp, 928
(Cite as: 975 F.Supp. 928)
could serve as basis for district court's subject
matter jurisdiction as long as they were not so
insubstantial, implausible, foreclosed by prior
decisions of Supreme Court, or otherwise completely
devoid of merit as not to involve federal
controversy, U,S,C,A, Const.Amend, 14; 28
U,S,C.A,9 1331.
[5] FEDERAL COURTS~ 191
l70Bk191
Plaintiff who seeks injunctive relief from state or
local regulation, on ground that such regulation is
preempted by federal statute which, by virtue of
federal constitutional supremacy clause, must
prevail, thus presents federal question which federal
courts have jurisdiction to resolve. U.S.C.A. Const.
Art, 6, cl. 2; 28 U,S,C,A, 9 1331.
[6] FEDERAL COURTS~ 191
170Bkl91
Nonexistence of implied private right of action or
viable 9 1983 claim under particular federal statute
is inapposite to whether district court may exercise
federal question jurisdiction over federal preemption
claim plaintiff asserts under federal constitutional
supremacy clause in seeking injunctive relief from
state or local regulation, U,S,C,A, Const. Art. 6,
cl. 2; 28 U,S.C,A, 9 1331; 42 U,S,C.A. 9 1983,
[7] FEDERAL COURTS~ 13
170Bk13
Local telephone market entrant's action against city,
alleging that Federal Telecommunications Act (FTA)
preempted city ordinance requiring municipal
consent before operation of telecorrununications
services in city, was ripe for adjudication. despite
fact that entrant had not applied for municipal
consent; entrant challenged city's ability to impose
ordinance on nonfacilities-based providers, not
whether city was lawfully applying specitic
ordinance provisions, detennination of entrant's
claims simply required examination of ordinance in
light of federal and state law without further factual
development, and harm to entrant was present and
real. U.S.C,A, Const, Art, 6, cl. 2;
Telecommunications Act of 1996, 47 U.S.C.A, 9
253(a, c); Vernon's Ann, Texas Civ.St. art, 14460-0,
99 1.103, 3,2555(f); Austin, Tex, , City Code 9
18-8-4,
[8] FEDERAL COURTS~ 12.1
170Bk12, I
Court should dismiss case for lack of ripeness when
Page 67
case is abstract or hypothetical; key considerations
are fitness of issues for judicial decision and
hardship to parties of withholding court
consideration.
[9] FEDERAL COURTS~ 12.1
170Bk12, I
Case is generally "ripe" if any remaining questions
are purely legal ones; conversely, case is not "ripe"
if further factual development is required.
See publication Words and Phrases for other judicial
constructions and definitions.
[10] FEDERAL COURTS~ 56
170Bk56
Federal Communications Commission (FCC) did not
have exclusive jurisdiction over preemption claims
arising under Federal Telecommunications Act
(FT A) provisions proscribing state and local
requirements having effect of prohibiting entity's
ability to provide telecommunications services and
reserving state and local authority to manage public
rights-of-way and, thus, district court was not
required to abstain from deciding local telephone
market entrant's preemption claim, arising under Act
provisions, challenging validity of city ordinance
requiring municipal consent before operation of
telecommunications services in city; nothing in plain
language of Act preemption provision purported to
confer exclusive jurisdiction with Commission over
claims of type entrant raised, and Congress made
exclusive Commission jurisdiction clear as to other
claims elsewhere in Act. U,S,C.A, Const. Art. 6,
cl. 2; Telecommunications Act of 1996, 47
U,S,C.A. 99 253(a, c, d), 255(f); Communications
Act of 1934, !i 713(h), as amended, 47 U,S,C,A, 9
613(h); Austin, Tex" City Code 9 18-8-4.
[10] TELECOMMUNICATlONS~ 78
372k78
Federal Communications Commission (FCC) did not
have exclusive jurisdiction over preemption claims
arising under Federal Telecommunications Act
(FT A) provisions proscribing state and local
requirements having effect of prohibiting entity's
ability to provide telecommunications services and
reserving state and local authority to manage public
rights-of-way and, thus, district court was not
required to abstain from deciding local telephone
market entrant's preemption claim, arising under Act
provisions, challenging validity of city ordinance
requiring municipal consent before operation of
telecommunications services in city; nothing in plain
Copr. rQ West 2000 No Claim to Orig, U,S, Govt. Works
975 F.Supp. 928
(Cite as: 975 F.Supp. 928)
language of Act preemption provision purported to
confer exclusive jurisdiction with Commission over
claims of type entrant raised. and Congress made
exclusive Commission jurisdiction clear as to other
claims elsewhere in Act. U.S.C.A. Const. Art. 6,
cl. 2; Telecommunications Act of 1996. 47
U .S.C.A. ~~ 253(a, c, d), 255(f); Communications
Act of 1934. ~ 713(h), as amended, 47 U.S.CA. ~
613(h); Austin. Tex., City Code ~ 18-8-4.
[11] ADMINISTRATIVE LAW AND
PROCEDURE<';::=> 228.1
15Ak228.1
"Primary jurisdiction doctrine" is judicially-created
doctrine that is invoked when enforcement of claim
requires resolution of issues which. under regulatory
scheme, have been placed within special competence
of administrative body.
See publication Words and Phrases for other judicial
constructions and definitions.
[12] ADMINISTRATIVE LAW AND
PROCEDURE<';::=> 228.1
15Ak228.1
Under primary jurisdiction doctrine, district court,
within its discretion, may dismiss or stay suit
pending resolution of all or some portion of action
by relevant administrative agency.
[13] ADMINISTRA TJVE LAW AND
PROCEDURE<';::=> 228.1
15Ak228.1
Under primary jurisdiction doctrine, court must
weigh parties' need to resolve action expeditiously
against benefits of obtaining federal administrative
agency's expertise on particular issue.
[14] ADMINISTRATIVE LAW AND
PROCEDURE<';::=> 228.1
15Ak228.1
Application of primary jurisdiction doctrine is
particularly appropriate where uniformity of certain
types of administrative decisions is desirable, or
where there is need for expert and specialized
knowledge of agencies.
[15] ADMINISTRATIVE LAW AND
PROCEDURE<';::=> 228.1
l5Ak228.1
Under primary jurisdiction doctrine, court can defer
to administrative agency only if benefits of agency
review exceed costs imposed on parties.
Page 68
[16] TELECOMMUNlCA TIONS~ 78
372k78
District court would not defer to Federal
Communications Commission (FCC) under primary
jurisdiction doctrine so as to abstain from ruling on
local telephone market entrant's claim against city
alleging that Federal Telecommunications Act (FT A)
preempted city ordinance requiring municipal
consent before operation of teleconmlUnications
services in city; preemption issue did not involve
issues requiring Commission's specialized
knowledge or expertise. parties deserved expeditious
review of issues. Act preemption provision did not
counsel deferral to Commission, and city's
accusation of forum-shopping was not persuasive.
U.S.C.A. Const. Art. 6. cl. 2; Telecommunications
Act of 1996, 47 U.S.C.A. ~ 253(a, c); Austin,
Tex., City Code ~ 18-8-4.
[17] TELECOMMUNICATIONS<';::=> 75.1
372k75.1
Federal Telecommunications Act (FTA) preemption
provision was simply mechanism by which Federal
Communications Commission (FCC), on its own
accord, could raise and adjudicate preemption
issues. Telecommunications Act of 1996, 47
U.S. CA. ~ 253(d).
[18] FEDERAL COURTS<';::=> 72
170Bk72
It is generally plaintiff's prerogative to choose its
forum.
[19] INJUNCTION<';::=> 132
212k132
Preliminary injunction is rare and extraordinary
remedy that should be granted only if movant has
clearly carried burden of persuasion on each of the
following elements: there is substantial likelihood of
success on the merits; there is substantial threat of
irreparable injury if injunction is not granted;
threatened injury to plaintiff outweighs threatened
harm to defendant; and granting of relief does not
disserve public interest.
[19] INJUNCTION<';::=> 147
212kl47
Preliminary injunction is rare and extraordinary
remedy that should be granted only if movant has
clearly carried burden of persuasion on each of the
following elements: there is substantial likelihood of
success on the merits; there is substantial threat of
irreparable injury if injunction is not granted;
Copr. <1) West 2000 No Claim to Orig. U.S. Govt. Works
975 F.Supp. 928
(Cite as: 97S F.Supp. 928)
threatened injury to plaintiff outweighs threatened
harm to defendant; and granting of relief does not
disserve public interest.
[20] TELECOMMUNlCA TIONS~ 78
372k78
City ordinance requiring municipal consent before
operation of teleconununications services in city did
"prohibit" or "have the effect of prohibiting"
competition within meaning of Federal
Telecommunications Act (FT A) provision
proscribing state or local requirements that may
prohibit or have effect of prohibiting any entity's
ability to provide teleconununications services;
threat of criminal sanctions and fines for failure of
entity to obtain municipal consent could only be
described as "prohibition." Telecommunications Act
of 1996, 47 U.S.CA. S 253(a); Austin, Tex., City
Code S 18-8-4.
See publication Words and Phrases for other judicial
constructions and defmitions.
[21] MUNICIPAL CORPORATIONS~ S3
268k53
Federal Telecommunications Act (FT A) provision
reserving state authority to protect public safety and
welfare with respect to telecommunications
providers did not preempt all local regulation of
providers for the public good, despite fact that
provision did not explicitly mention states' political
subdivisions. U.S.C.A. Const. Art. 6, cl. 2;
Telecommunications Act of 1996, 47 U.S.C.A. S
253(b).
[21] TELECOMMUNlCATIONS~ 77.1
372k77. 1
Federal Telecommunications Act (FT A) provision
reserving state authority to protect public safety and
welfare with respect to telecommunications
providers did not preempt all local regulation of
providers for the public good, despite fact that
provision did not explicitly mention states' political
subdivisions. U.S.CA. Const. Art. 6, cl. 2;
Telecommunications Act of 1996, 47 U.S.CA. S
253(b).
[22] MUNICIPAL CORPORATIONS~ 53
268k53
When statute authorizes state regulation but is silent
with respect to regulatory authority of local
governments, statute carmal be read to preempt all
local regulation. U.S. CA. Const. Art. 6, cl. 2.
Page 69
[23] MUNICIPAL CORPORATIONS~ 53
268k53
State's authority to regulate under federal statute
necessarily includes authority to delegate local
regulation, including regulation for public health,
safety, and welfare purposes, to local authorities.
[24] TELECOMMUNlCATIONS~ 77.1
372k77. 1
Congress enacted Federal Telecommunications Act
(FT A) provision, which reserves local authority to
manage public rights-of-way, as municipal shield to
protect authority of local governments to control
public rights-of-way and to be fairly compensated
for use of public property. Telecommunications Act
of 1996, 47 U.S. CA. S 253(c).
[25] TELECOMMUNlCAT10NS~ 77.1
372k77.l
Federal Telecommunications Act (FT A) section
governing removal of barriers to entry into
telecorrununications services market preserves rights
of municipalities to enforce zoning laws and to
regulate time, place, and manner of installation,
maintenance, operation, and repair of
telecorrununications provider's facilities.
Telecommunications Act of 1996, 47 U.S. CA. S
253.
[26] MUNICIPAL CORPORATIONS~ 53
268k53
Federal Telecommunications Act (FTA), in
conjunction with Texas Public Utility Regulatory Act
of 1995 (PURA), federally preempted city ordinance
requiring municipal consent before local telephone
market entrant, which was nonfacilities-based
service provider and reseller, could operate
telecorrununications services in city, as ordinance
regulated entrant in a way unrelated to "use" of
public rights-of-way; under federal and state law,
including Ff A provisions proscribing local
requirements prohibiting entity's ability to provide
telecorrununications services and reserving local
authority to manage public rights-of-way, city's only
legitimate interest was to regulate its public rights-
of-way, an interest that entrant's activities in city did
not implicate. U.S.C.A. Const. Art. 6, cl. 2;
Telecommunications Act of 1996, 47 U.S.C.A. S
253(a, c); Vernon's Ann. Texas Civ.St. art.
14460-0, SS 1103, 3.251, 3.2531, 3.2532,
3.2555(1); Austin, Tex., City Code S 18-8-4.
See publication Words and Phrases for other judicial
constructions and definitions.
Copr. rg West 2000 No Claim to Orig. U.S. Govt. Works
975 F.Supp. 928
(Cite as: 975 F.Supp. 928)
[26] TELECOMMUNICATIONS<%:=> 78
372k78
Federal Telecommunications Act (FT A), in
conjunction with Texas Public Utility Regulatory Act
of 1995 (PURA), federally preempted city ordinance
requiring municipal consent before local telephone
market entrant, which was nonfacilities-based
service provider and reseller, could operate
telecommunications services in city. as ordinance
regulated entrant in a way unrelated to "use" of
public rights-of-way; under federal and state law,
including FT A provisions proscribing local
requirements prohibiting entity's ability to provide
telecommunications services and reserving local
authority to manage public rights-of-way, city's only
legitimate interest was to regulate its public rights-
of-way, an interest that entrant's activities in city did
not implicate. U.S.C.A. Const. Art. 6, c1. 2;
Telecommunications Act of 1996, 47 U.S.C.A. S
253(a, c); Vernon's Ann. Texas Civ.St. art.
14460-0, SS 1.103, 3.251, 3.2531, 3.2532,
3.2555(1); Austin, Tex., City Code S 18-8-4.
See publication Words and Phrases for other judicial
constructions and defInitions.
[27] FEDERAL COURTS<%:=> 56
170Bk56
District court would not abstain under Pullman
abstention doctrine from deciding necessary issue of
city's regulatory authority under Texas Public Utility
Regulatory Act of 1995 (PURA) in ruling on local
telephone market entrant's claim that Federal
Telecommunications Act (FT A) federally preempted
city ordinance requiring municipal consent before
operation of telecommunications services in city;
federal preemption did not pose substantial federal
constitutional claim, and state law issue was neither
novel nor difficult. U.S.C.A. Const. Art. 6, c1. 2;
Telecommunications Act of 1996, 47 U.S.C.A. S
253(a, c); Vernon's Ann. Texas Civ.St. art. 14460-
0, SS 1.103, 3.251, 3.2531, 32532, 3.2555(1);
Austin, Tex., City Code S 18-8- 4.
[28] FEDERAL COURTS<%:=> 46
170Bk46
Under "Pullman abstention doctrine," federal courts
may abstain or defer from deciding federal
constitutional issues that are raised in connection
with state statutes whose interpretation is unsettled
or difficult.
See publication Words and Phrases for other judicial
constructions and definitions.
Page 70
[29] FEDERAL COURTS<%:=> 46
170Bk46
Pullman abstention is particularly appropriate in
cases presenting federal constitutional issue which
might be mooted or presented in different posture by
state court determination of pertinent state law.
[30] FEDERAL COURTS<%:=> 46
170Bk46
Federal preemption generally does not pose
substantial federal constitutional claim required for
Pullman abstention.
[31] MUNICIPAL CORPORATIONS<%:=> 53
268k53
Municipal consent ordinances that purport to exert
general police power regulations over
telecommunications providers unlawfully encroach
on matters entrusted to Texas Public Utility
Commission (PUC) in violation of section of Texas
Public Utility Regulatory Act of 1995 (PURA)
prohibiting franchise agreement provision from
limiting or interfering with power that Act confers
on Commission; only Commission is to determine
whether particular entity is fit to provide
teleconununications services in state. V emon' s
Ann. Texas Civ.St. art. 14460-0, SS 1.103, 3.251,
3.2531, 3.2532, 3.2555(1)
[31] TELECOMMUNICATIONS<%:=> 78
372k78
Municipal consent ordinances that purport to exert
general police power regulations over
telecommunications providers unlawfully encroach
on matters entrusted to Texas Public Utility
Commission (PUC) in violation of section of Texas
Public Utility Regulatory Act of 1995 (PURAl
prohibiting franchise agreement provision from
limiting or interfering with power that Act confers
on Commission; only Commission is to determine
whether particular entity is fit to provide
teleconununications services in state. Vernon's
Ann. Texas Civ.St. art. 14460-0, SS 1.103, 3251,
3.2531, 3.2532, 3.2555(1)
[32] INJUNCTION<%:=> 138.48
212k138.48
Local telephone market entrant met substantial threat
of irreparable injury requirement for preliminary
injunction against enforcement of city ordinance
requiring municipal consent before operation of
telecommunications services in city, in entrant's
action claiming that Federal Telecommunications
Copr. iD West 2000 No Claim to Orig. U.S. Govt. Works
975 F.Supp. 928
(Cite as: 975 F.Supp. 928)
Act (FrA) preempted ordinance, despite entrant's
failure to apply for municipal consent when
ordinance was enacted; monetary damages for
delayed entry into local telephone market would be
highly speculative, and penalizing entrant for
refusing to comply with ordinance that city lacked
authority to impose would be inappropriate.
U.S.C.A. Const. An. 6. cl. 2; Telecommunications
Act of 1996. 47 U.S.C.A. ~ 253(a, c); Vernon's
Ann. Texas Civ.St. an. 1446c- O. ~~ 1.103. 3.251,
3.2531,3.2532,3.2555(1); Austin, Tex., City Code
~ 18-8- 4.
[33] INJUNCTION<e;;:> 138.9
212kI38.9
Although monetary damages normally are
insufficient to establish irreparable injury for
purposes of obtaining preliminary injunction, they
may be sufficient if economic damages are especially
difficult to ascertain.
[34] INJUNCTION<e;;:> 138.48
212k138.48
Local telephone market entrant, which was
nonfacilities-based service provider and reseller, met
balance of hardships requirement for preliminary
injunction against enforcement of city ordinance
requiring municipal consent before operation of
telecommunications services in city, in entrant's
action claiming that Federal Telecommunications
Act (FfA) preempted ordinance, despite contentions
that city had interest in knowing who provided
service to protect citizens' health and welfare and in
receiving compensation for use of public rights-of-
way; injunction would result in little, if any, harm,
existing long- distance providers such as entrant
were subject to federal and state regulation, Texas
Public Utility Commission (PUC) had licensed
entrant as local service provider. entrant had no right
to access or to use city's streets or rights-of-way,
and any residual compensation issues could be
resolved later. U.S.C.A. Const. Art. 6, cl. 2;
Telecommunications Act of 1996, 47 U.S.C.A. ~
253(a, c); Vernon's Ann. Texas Civ.St. art.
1446c-0, ~~ 1.103, 3251, 3.2531, 3.2532,
3.2555(1); Austin, Tex., City Code ~ 18-8-4.
[35] INJUNCTION<e;;:> 138.48
212k138.48
Local telephone market entrant sufficiently
established that granting of relief would not disserve
public interest, as required for preliminary
injunction against enforcement of city ordinance
Page 71
requiring municipal consent before operation of
teleconununications services in city, in entrant's
action claiming that Federal Telecommunications
Act (Ff A) preempted ordinance; enforcement of
ordinance would delay entrant in moving into local
telephone service market, putting it at significant
competitive disadvantage with incumbent local
exchange carrier (LEC) and other local providers,
and enjoining enforcement of ordinance would serve
goals of both Act and public interest. U.S.C.A.
Const. An. 6, cl. 2; Telecommunications Act of
1996, 47 U.S.C.k ~ 253(a, c); Vernon's
Ann. Texas Civ.St. an. 1446c-O, ~~ 1.103, 3.251,
3.2531, 3.25J2, 3.2555(1); Austin, Tex., City Code
~ 18-8-4.
[36] MUNICIPAL CORPORATIONS<e;;:> 53
268k53
In enacting Federal Telecommunications Act (Ff A),
Congress intended primarily for competitive markets
to determine which entrants shall provide
telecommunications services demanded by
consumers, and by preempting state and local
regulation under section governing removal of
barriers to entry sought to ensure that state and local
governments implement Act in a manner consistent
with these goals. Telecommunications Act of 1996,
47 U.S.C.A. ~ 253.
[36] STATES<e;;:> 18.81
360kI8.81
In enacting Federal Telecommunications Act (Ff A),
Congress intended primarily for competitive markets
to determine which entrants shall provide
teleconununications services demanded by
consumers, and by preempting state and local
regulation under section governing removal of
barriers to entry sought to ensure that state and local
governments implement Act in a manner consistent
with these goals. Telecommunications Act of 1996,
47 U.S.C.A. ~ 253.
[36] TELECOMMUNICATIONS<e;;:> 77.1
372k77. I
In enacting Federal Telecommunications Act (Ff A),
Congress intended primarily for competitive markets
to determine which entrants shall provide
telecommunications services demanded by
consumers, and by preempting state and local
regulation under section governing removal of
barriers to entry sought to ensure that state and local
governments implement Act in a manner consistent
with these goals. Telecommunications Act of 1996,
Copr. !:l West 2000 No Claim to Orig. U.S. Govt. Works
975 F.Supp. 928
(Cite as: 975 F.Supp. 928)
47 U.S.C.A. 9 253.
*933 Paula W. Hinton. Akin, Gump, Hauer &
Feld, Houston, TX, Mary Jean K. O'Conner,
Dallas, TX, Andrew W. Austin, Thomas K. Anson,
Sheinfeld, Maley & Kay, P. C., Austin, TX, David
Graham, Sidley & Austin, Chicago, IL, for
Plaintiff.
Peter D. Kennedy, R. James George, Jr., Todd S.
George, George Donaldson & Ford, Austin, TX,
Andrew Martin, City of Austin, Edward Delabarre,
Assistant City of Austin Attorney, Austin, TX, for
Defendant.
SPARKS, District Judge.
ORDER
BE IT REMEMBERED on the 7th day of August
1997 the Coun called the above-styled cause for
hearing on the plaintiff AT & T Communications of
the Southwest, Inc.'s ("AT & T") motion for
preliminary injunction filed on July 30, 1997, to
which the defendant the City of Austin, Texas (the
"City") filed a response on August 7, 1997. The
Coun also heard oral argument on a motion filed by
Southwestern Bell Telephone Company ("SWBT") to
intervene as a matter of right pursuant to Federal
Rule of Civil Procedure 24(a) and the City's motion
to dismiss, or in the alternative, to abate. All parties
to the suit and SWBT appeared by representation of
counsel. In accordance with the Court's
announcements at the hearing, the City filed a post-
hearing brief on August 14, 1997, in which it
presented new evidence and arguments to be
considered by the Coun. On August 18, 1997, AT
& T filed its response to the City's brief. On August
14, 1997, SWBT filed an amicus curiae brief on the
issues presented at the hearing, panicularly on those
issues in which SWBT claims to have an interest.
[FNI]
FNl. The quality of the written briefs and the oral
presentations of AT & T. the City, and SWBT
was excellent. The parties succinctly identified
the issues to be determined, made compelling
arguments for their respective positions, and
exhaustively researched the peninent areas of the
law, making the writing of this opinion a
thoroughly enjoyable experience.
AT & T seeks to enjoin the enforcement of a city
ordinance purporting to regulate companies
providing local telephone service in Austin. The
Page 72
City asserts that the suit should be dismissed for lack
of subject matter jurisdiction or, in the alternative,
asks the Coun to stay the case pending the resolution
of issues within the exclusive or primary jurisdiction
of the Federal Communications Conunission
("FCC") and/or to abstain from deciding the state
law issues raised in AT & T's motion. The City
also seeks to dismiss pursuant to Federal Rule of
Civil Procedure 12(b)(6) for failure to state a claim.
SWBT filed a motion to intervene in the suit,
claiming that AT & T seeks a declaration that the
municipal fees to which AT & T mayor may not be
subject under the ordinance should be deemed paid
in whole or-.in part hy SWBT. For the reasons
discussed below, the Coun concludes that SWBT's
motion to intervene as a matter of right and the
City's motion to dismiss or abate should be denied
and that AT & T's motion for preliminary injunction
should be granted.
I. FACTUAL BACKGROUND
Congress recently enacted the Telecommunications
Act of 1996, Pub.L. No. 104- 104, 110 Stat. 56,
codified at 47 U.S.c. ~ 151 et seq. (Supp.1997),
("FTA" or the "Act"), in an effort to foster rapid
competition in the local *934 telephone service
market and to end the monopoly market of local
providers. Congress recognized that it would be
extremely difficult for potential competitors to enter
the market if they had to finance and build their own
local telephone networks. Congress therefore
devised two means by which new entrants could
obtain services from already existing facilities
belonging to the incwnbent local service provider
("incumbent LEC"). First, incumbent LECs are
required under the Act to sell their services at
essentially wholesale prices to competitors, who can
then resell the services to consumers at retail value.
See 47 U.S.c. 9 251(c)(4). Second, new entrants
can purchase access to functionalities of the
incumbent LEC's network on an "unbundled" basis,
which the new entrants can then use to create their
own services. See 47 U.S.C. 9251(c)(3). Pursuant
to the Act, AT & T attempts to enter the local
telephone service market both by reselling services it
will purchase from SWBT, the incumbent LEC in
Austin, and also by providing services through
unbundled network capabilities obtained from
SWBT. By offering local service in this manner, AT
& T will use SWBT's existing facilities and will not
install, operate, maintain, or repair any
telecommunications facilities in the City's public
Copr. I[;J West 2000 No Claim to Orig. U.S. Govt. Works
975 F.Supp. 928
(Cite as: 975 F ,Supp, 928, *934)
rights-of-way. [FN2] See In the Maller of
Defmition of a Cable Television System, 5 F.C.C.R.
7638, 1990 WL 603007, ~ 28 (1990) ( "Congress did
not intend to include within the meaning of the term
'use' of a public right-of-way the mere passing over
of such a right-of-way by electromagnetic
radiation. "). The City will continue to manage
SWBT's access to and use of its public rights-of-way
to the extent authorized by law.
FN2. SWBT expressed some concern in its amicus
brief over the use of the term "non-facilities-
based" provider to describe AT & T. SWBT
points to a recent FCC order stating that a carrier
who purchases access to an unbundled network
facility has "exclusive access" and "exclusive
control" over those network facilities. First
Report and Order, Implementation of the Local
Competition Provisions in the Telecommunications
Act of 1996, CC Docket No. 96-98 (August 8,
1996) ~~ 258, 385. That same order confirms,
however, that the competitor's use of an
incumbent LEC's unbundled network elements
"does not alter the incumbent LEC's physical
control or ability or duty to repair and maintain the
network elements. " Id. The order appears
unambiguously to foreclose the possibility that
competitors may exercise any control over an
incumbent LEC's physical facilities themselves.
Therefore, the distinction sought by SWBT
between pure reseUers under * 251(c)(4) and
purchasers of unbundled network functionalities
under * 251(c)(3) seems unwarranted. AT & T,
however, acknowledges that it intends, at some
point in the future, to own facilities placed in the
City's rights-of-ways. Therefore, for the sake of
clarity and simplicity, the tenn "non.facilities-
based provider" is defined for purposes of this
order only as a telecommunications services
provider that does not physically use or have
access to the City's public rights-of- way.
Pursuant to the Texas Public Utility Regulatory Act
of 1995, TEX.REV.CIV.STAT. art. 14460-0 S
3.2531, ("PURA 95"), AT & T applied for and
received from the Texas Public Utility Commission
("PUC") a Certificate of Operating Authority
("COA") to operate as a local exchange service
provider in Texas. On June 5, 1997, the PUC
issued the COA after an extensive review process in
which the PUC examined AT & T's financial,
technical, and other qualifications as a potential local
service provider, including consideration of the types
of services AT & T will provide. [FN3] On July 15,
1997, AT & T became fully authorized by the State
to offer, and is technologically capable of offering,
Page 73
local exchange residential service in Texas in areas
currently served by SWBT. AT & T began efforts to
market local exchange service in Texas on or about
July 15, 1997, including the implementation of an
"800" number in which potential customers can call
and place orders for local telephone service.
FN3. The PUC concluded that ., AT & T ... has
the financial and technical qualifications to provide
the proposed services and the ability to meet the
Commission's quality of service standards."
On February 13, 1997, the City of Austin, a home
rule municipality, approved Ordinance No.
970213-E, which enacted Chapter 18-8 of the City
Code (the "Ordinance"). The Ordinance, effective
February 24, 1997, requires telecommunications
service providers such as AT & T to obtain
municipal consent before operating
teleconununications services in the City. Ordinance
S 18-8-4. The Ordinance is extremely
comprehensive. Among other things, it requires: (I)
a non-refundable $850.00 application fee; (2)
quarterly *935 franchise fees to compensate the City
for use and occupancy of the public rights-of- way;
(3) disclosure of detailed fmancial and organizational
materials, including copies of the company's filings
with the Securities and Exchange Commission, its
latest annual report and prospectus, and its Articles
of Incorporation and Bylaws; (4) information
relating to state and federal certificates of authority
to operate as a teleconununications service provider,
as well as franchises held in other Texas
municipalities; (5) continuing disclosure
requirements, such as providing updated audits of its
business records and notifying the City of all
petitions, applications, and communications with the
FCC and the PUC affecting the use of public rights-
of- way; (6) information regarding any legal or
administrative proceedings in which the provider
may have been involved; and (7) information
relating to the company's Equal Employment
Opportunity program, as well as company plans to
encourage procurements from minority-and women~
owned businesses. The Ordinance also grants the
City the authority to conduct audits of the
corporation on thirty-days notice. In short, the
information sought by the City is either duplicative
of or exceeds the information sought by the PUC in
determining whether to grant a COA.
The granting, amending, denying and terminating of
a municipal consent is a legislative function within
Copr. rg West 2000 No Claim to Orig. U.S. Govt. Works
975 F.Supp. 928
(Cite as: 975 F.Supp. 928, *935)
the discretion of the Austin City Council (the "City
Council"). Ordinance ~ 18-8-8. The approval
process can take up to six months, and if the City
Council refuses to act within the time period
prescribed, the application is deemed denied. If the
municipal consent is not sought or is denied, the
provider cannot compete within Austin city limits
and is subject to criminal penalties and fines for each
day the provider operates without consent. In light
of the Ordinance, AT & T has withdrawn its
telemarketing and advertising plans and has
instructed its representatives not to solicit or accept
orders for local telephone service in Austin.
II. AT & T'S CLAIMS
AT & T brings a combination of federal claims
under the Ff A, state law claims under PURA 95,
and constitutional claims under both the United
States and Texas constitutions. By far the most
significant and compelling of AT & T's claims is its
preemption claim under the Ff A. [FN4] Section 253
of the FfA, entitled "Removal ofbaniers to entry,"
provides in relevant part:
FN4. In addition to its FT A claim. AT & T
challenges the Ordinance under ~ 3.2532 of PURA
95. which grants the authority to the pue to
detennine when, where, and under what
conditions an entity may provide
telecommunications services within the State of
Texas. This state law claim is germane to the
issue of federal preemption and will be discussed
more fully in Part V(A), infra. AT & T also
raises several due process and equal protection
claims under the United States and Texas
constitutions. Because the FTA disposes of the
issues to be resolved in AT & T's preliminary
injunction motion, the Court will not consider the
merits of these claims at this time.
No state or local statute or regulation, or other
state or local legal requirement, may prohibit or
have the effect of prohibiting the ability of any
entity to provide any interstate or intrastate
telecommunications service.
Nothing in this section affects the authority of a
State or local government to manage the public
rights-of-way or to require fair and reasonable
compensation from telecommunications providers,
on a competitively neutral and nondiscriminatory
basis, if the compensation required is publicly
disclosed by such government.
Page 74
47 U.s.e. ~ 253(a) & (c).
AT & T argues that ~ 253(c), in conjunction with
state law, reserves to municipalities only the limited
authority to regulate and make reasonable charges
for the installation, maintenance, and repair of
physical facilities placed in the public rights-of-way.
AT & T argues that the Ordinance, as applied to AT
& T, cannot be justified as an exercise of the power
reserved to municipalities under ~ 253(c) since AT
& T is not installing or maintaining any facilities in
the public rights-of-way. The Ordinance therefore
violates ~ 253(a) of the FfA by flatly prohibiting
*936 non-facilities-based providers like AT & T
from providing local service without the City's
consent. The City rejects the notion that the Ff A
preempts all municipal "gatekeeping" authority to
regulate telecommunications service providers for
the public health, safety, and welfare of its citizens.
According to the City, its duty under the Ff A is to
treat all entities that attempt to enter the local
telephone services market in a competitively neutral
and non-discriminatory way, a proposition that
directly contradicts AT & T's assertion that the Ff A
requires municipalities to distinguish among
telecommunications service providers on the basis of
facility ownership.
lll. SWBT'S MOTION TO INTERVENE AS A
MATTER OF RIGHT
[1][2] SWBT claims it has a "justifiable and
justiciable interest in any legal proceeding
determining whether AT & T has an interest in the
sums that Southwestern Bell pays to the City and
whether Southwestern Bell may pass through fees to
AT & T as a customer." [FN5] Not surprisingly,
AT & T opposes the motion to intervene despite the
fact that SWBT generally agrees with AT & T's
position that the Ordinance is inapplicable to
resellers such as AT & T. [FN6] A party seeking to
intervene pursuant to Rule 24(a) must establish each
of the following four elements: (1) the application to
intervene is timely: (2) the applicant has an interest
relating to the property which is the subject matter of
the action: (3) the applicant is so situated that the
disposition of the action may, as a practical matter,
impair or impede its ability to protect that interest;
and (4) the applicant's interest is inadequately
represented by the existing parties. Sierra Club v.
Glickman, 82 F.3d 106, 108 (5th Cir 1996). The
motion to intervene is without merit. AT & T makes
no claims or requests for relief regarding any
Copr. @ West 2000 No Claim to Orig. U.S. Govt. Works
975 F.Supp. 928
(Cite as: 975 F.Supp. 928, '936)
compensation or franchise fees issues that might
exist between AT & T and SWBT and between
SWBT and the City. Furthermore. the ultimate
outcome of this case will have absolutely no effect
on SWBT's undisputed obligation under the
Ordinance to pay franchise fees to the City as
compensation for the use and occupancy of its public
rights-of-way. SWBT. therefore, does not have a
"direct, substantial, and legally protectable claim" or
interest in this litigation. See Ozee v. Am. Council
on Gift Annuities, Inc., 110 F.3d 1082, 1096 (5th
Cir.1997) (citations omitted).
FN5. Under Texas law, local service providers
may "pass along" in toto municipal franchise fees
though a pro rata charge to its customers. See
PURA 95 ! 3.2555(h).
FN6. At the preliminary injunction hearing,
counsel for the City stated that it took no position
on the motion.
IV. THE CITY'S MOTION TO DISMISS OR
ABSTAIN
A. Subject Matter Jurisdiction
[3][4][5] AT & T concedes that the FTA does not
create an express or implied private right of action
for violations of 9 253(a) and (c). See GST Tucson
Lightwave, Inc. v. City of Tucson, 950 F.Supp.
968, 970-71 (D.Ariz.I996) (concluding that no
implied private right of action exists under 9 253).
The plaintiff instead asserts federal question
jurisdiction pursuant to 28 U.S.C. 9 1331 under two
distinct theories. First, the plaintiff asserts a cause
of action under 42 U.S.c. 9 1983. claiming that the
FTA, and specifically 99 251-253, create
enforceable rights for the benefit of new entrants like
AT & T that may be vindicated in federal court.
Whether this theory has any validity is a question
this Court thankfully need not answer at this point.
It is apparent that the Court has jurisdiction by virtue
of AT & T's Supremacy Clause claim. its second
basis for asserting jurisdiction. [FN7] "A plaintiff
who seeks injunctive relief from state [or local]
regulation, on the ground that such regulation is
preempted by a federal statute which, by virtue of
the Supremacy Clause of the '937 Constitution, must
prevail, thus presents a federal question which the
federal courts have jurisdiction under 28 U.S.c. 9
1331 to resolve." Shaw v. Delta Air Lines, Inc.,
463 U.S. 85, 96 n. 14, 103 S.C!. 2890, 2899 n. 14,
Page 75
77 L.Ed.2d 490 (1983); see Hillsborough County V.
Automated Lab., Inc., 471 U.S. 707, 713, 105 S.C!.
2371,2375,85 L.Ed.2d 714 (1985) ("[F]or purposes
of the Supremacy Clause, the constitutionality of
local ordinances is analyzed in the same way as that
of statewide laws. ").
FN7 . AT & T's due process and equal protection
claims may serve as the basis for subject matter
jurisdiction as long as they are not "so
insubstantial, implausible, foreclosed by prior
decisions of [the Supreme Court], or otherwise
completely devoid of merit as not to involve a
federal controversy." See Oneida Indian N alian
v. Coti'nty of Oneida, 414 U.S. 661, 666-67, 94
S.Ct. 772, 777, 39 L.Ed.2d 73 (1974). Because
the plaintiff's preemption claim is the obvious
basis for jurisdiction, the Court need not consider
at this time whether those claims also confer
jurisdiction.
[6] Moreover, the nonexistence of an implied
private right of action or a viable 9 1983 claim under
the particular federal statute is inapposite to whether
the Court may exercise jurisdiction. See Western
Air Lines v. Port Authority of New York and New
Jersey, 817 F.2d 222,225 (2nd Cir.1987) ("A claim
under the Supremacy Clause that a federal law
preempts a state regulation is distinct from a claim
for enforcement of that federal law . "), cert. denied,
485 U.S. 1006, 108 S.Ct. 1467, 99 L.Ed.2d 697
(1988); Rollins Envtl. Servo (FS), Inc. v. Parish of
St. James, 775 F.2d 627, 631-37 (5th Cir.1985)
(considering the effect of a preemption provision of
the Toxic Substance Control Act. 15 U.S.c. 99
2601-2629, despite the absence of a private right of
action); cr. White Mountain Apache Tribe v.
Williams. 810 F.2d 844 (9th Cir.1987)
(acknowledging that the Supremacy Clause may be
invoked to enjoin a preempted state statute but that it
does not provide a basis for a 9 1983 claim), cert.
denied sub nom. White Mountain Apache Tribe v.
Arizona State Transp. Bd., 479 U.S. 1060, 107
s.n 940. 93 L.Ed.2d 990 (1987). In its post-
hearing brief, the City appears to have abandoned its
original contention that the Court lacks subject
matter jurisdiction under 9 1331 and instead relies on
its arguments, discussed below, that the controversy
is not ripe and/or that primary jurisdiction belongs
with the FCC. Furthermore, except for its argument
that the Court should abstain from hearing AT & T's
state law claims under the Pullman abstention
doctrine (see Part V(A), infra ), the City does not
dispute that the Court may exercise supplemental
Copr. cg West 2000 No Claim to Orig. U.S. Govt. Works
975 F.Supp. 928
(Cite as: 975 F.Supp. 928, *937)
jurisdiction over AT & T's PURA 95 claims. See
28 U.s.C. ~ 1367(a). Therefore, consistent with AT
& T's immediate request for injunctive and
declaratory relief only, [FN8] the Court may
exercise jurisdiction over this case.
FN8. AT & T's complaim also assens a claim for
attorneys' fees and costs, which, of course, is not
at issue in the motion for preliminary injunction.
B. Ripeness
[7] It is undisputed that AT & T has not applied to
the City for a municipal consent, and AT & T does
not allege that the City would deny it a consent or
that it is unable to meet the requirements of the
Ordinance. The City therefore contends that the
controversy is premature and that the Court should
either dismiss or abate the action pending AT & T's
application to the City for consent. AT & T. on the
other hand, argues that it is prepared to offer local
telephone service in Austin immediately and that it is
prevented from doing so only because it has not
applied for a municipal consent that the City cannot
constitutionally require. The City acknowledges that
AT & T will be in violation of the Ordinance-and
therefore subject to criminal penalties-if AT & T
attempts to provide local telephone service without
obtaining the consent.
[8][9] The following standard is used to determine
whether a dispute, including a pre-enforcement
challenge to a government regulation, is ripe:
A court should dismiss a case for lack of
'ripeness' when the case is abstract or
hypothetical. The key considerations are the
1 fitness of the issues for judicial decision and the
hardship to the parties of withholding court
consideration.' A case is generally ripe if any
remaining questions are purely legal ones;
conversely. a case is not ripe if further factual
development is required.
Chevron U.S.A. v. Traillour Oil Co., 987 F.2d
1138, 1153 (5th Cir.1993) (quoting New Orleans
Public Service, Inc. v. Council for New Orleans,
833 F.2d 583, 586-87 (5th Cir.1987)). This case is
ripe for adjudication. AT & T challenges the ability
of the City to impose *938 the Ordinance on non-
facilities-based providers, not whether the City
Council is lawfully applying specific provisions of
the Ordinance. Under the latter circumstance, it
would be proper to require a provider to apply for a
municipal consent before bringing suit because the
Page 76
actions of the City Council would elucidate the
issues to be judicially determined. In this case,
however, it is the existence of the Ordinance itself
that gives rise to the plaintiff's claims.
Furthermore, a determination of AT & T's claims
simply requires an examination of the Ordinance in
light of federal and state law; no further factual
development is required. Finally, the harm to AT &
T in this case is present and real. It goes without
saying that delayed entry into the local telephone
service market can have profound effects on the
success of AT & T's venture, particularly against a
competitor as well-entrenched as SWBT.
Considering ~the Ordinance's threat of criminal
penalties and fines, AT & T was left with the
Hobson's choice of either applying for a municipal
consent or challenging the Ordinance in an
appropriate forum. In short, AT & T's failure to
apply for a municipal consent is irrelevant to the
merits of this case, and the plaintiff should be
delayed no more in its ability to seek relief under the
Act.
C. Preemption by the FCC
[10] The City next argues that, even if the Court
concludes that it can exercise subject matter
jurisdiction over AT & T's claims, the Court should
abstain from deciding them because the FCC, as the
federal agency charged with enforcing the FT A, has
either exclusive or primary jurisdiction. Section
253(d), entitled "Preemption," states:
If, after notice and an opportunity for public
comment, the Conunission determines that a State
or local government has permitted or imposed any
statute, regulation, or legal requirement that
violates subsection (a) or (b) of this section, the
Commission shall preempt the enforcement of
such statute, regulation or legal requirement to the
extent necessary to correct such a violation or
inconsistency.
Nothing in the plain language of ~ 253(d) purports
to confer exclusive jurisdiction with the FCC over
the types of claims raised here by AT & T. When
Congress intended to confer exclusive jurisdiction
with the FCC over claims arising under other
provisions of the FTA, it made its intentions clear in
the statute. See 47 U.S.c. ~ 255(1) & 613(h) ("The
Conunission shall have exclusive jurisdiction with
respect to any complaint under this section. ").
Without question, Congress' failure to do so here is
evident, and the only logical inference that can be
drawn is that Congress did not confer the FCC with
Copr. (Q West 2000 No Claim to Orig. U.S. Govt. Works
975 F.Supp. 928
(Cite as: 975 F .Supp. 928, *938)
exclusive jurisdiction over claims arising under S
253(a) and (c).
[11][12][13][14][15] Whether the FCC has primary
jurisdiction involves a lengthier analysis. The
primary jurisdiction doctrine is a judicially created
doctrine that is invoked "when enforcement of [a]
claim requires the resolution of issues which, under
a regulatory scheme, have been placed within the
special competence of an administrative body."
United States v. Western Pacific Railroad Co., 352
US. 59, 63-64, 77 S.Ct. 161, 165, I L.Ed.2d 126
(1956). The district court, within its discretion, may
dismiss or stay the suit pending the resolution of all
or some portion of the action by the relevant
administrative agency. See Reiter v. Cooper, 507
U.S. 258, 268-69, 113 S.Ct. 1213, 1220, 122
L.Ed.2d 604 (1993); Wagner & Brown v. ANR
Pipeline Co., 837 F.2d 199, 201 (5th CiLI988).
The Court must weigh the parties' need to resolve
the action expeditiously against the benefits of
obtaining the federal agency's expertise on a
particular issue. See Gulf States Utilities Co. v.
Alabama Power Co., 824 F.2d 1465, 1473 (5th
Cir.), opinion amended by 831 F.2d 557 (5th
Cir.1987). Significantly, application of the doctrine
is particularly appropriate where "uniformity of the
certain types of administrative decisions is desirable,
or where there is a need for the expert and
specialized knowledge of the agencies." See
Wagner, 837 F.2d at 201 (quoting Avoyelles
Sportsmen's League, Inc. v. Marsh, 715 F.2d 897,
919 (5th CiL1983) (internal quotations marks
omitted)). The Court can defer to the agency "only
if the benefits of agency review exceed the costs
imposed on the parties." Wagner, 837 F.2d at 201.
[16][17][18] Applying these guidelines to the
present case, the Court concludes that deferral *939
to the FCC is inappropriate in this case. First, the
issue raised here-whether the Ordinance is
preempted by federal and/or state law-is a matter of
straightforward statutory construction that does not
involve issues requiring the FCC's specialized
knowledge or expertise. Cf. Chevron U.S.A., Inc.
v. Narural Resources Defense Council, Inc., 467
U.S. 837, 843 n. 9, 104 S.Ct. 2778, 2781 n. 9, 81
L.Ed.2d 694 (1984) ("The judiciary is the final
authority on issues of statutory construction and must
reject administrative constructions which are
contrary to clear congressional intent. "). Second,
the City's request to abstain to the contrary, both
panies in this case deserve an expeditious review of
Page 77
the issues raised in AT & T's complaint. Deferral to
the FCC would likely result in a lengthy delay given
that the FCC is required under ~ 253(d) to provide
"notice and an opponunity for public comment"
before it may decide preemption issues. Third, AT
& T persuasively argues that ~ 253(d) is simply a
mechanism by which the FCC, on its own accord,
can raise and adjudicate preemption issues;
therefore, ~ 253(d) does not require or even counsel
deferral to the FCC under the primary jurisdiction
doctrine. Finally, the City's accusation that AT & T
is forum-shopping rings hollow. Preemption claims
are within the jurisdiction and competence of the
federal judiciary, and as the City is well aware, it is
generally the plaintiff's prerogative to choose its
forum.
V. AT & T'S MOTION FOR PRELIMINARY
INJUNCTION
[19] A preliminary injunction is a rare and
extraordinary remedy that should be granted only if
the movant has clearly carried the burden of
persuasion on each of the following four elements:
(I) there is a substantial likelihood of success on the
merits; (2) there is a substantial threat of irreparable
injury if the injunction is not granted; (3) the
threatened injury to the plaintiff outweighs the
threatened harm to the defendant; and (4) the
granting of relief does not disserve the public
interest. Sierra Club v. City of San Antonio, 112
F.3d 789,793 (5th CiLI997).
A. Suhstantial Likelihood of Success on the Merits
[20] Section 253(a) of the Ff A proscribes state or
local starutes, regulations, or legal requirements that
"may prohibit or have the effect of prohibiting the
ability of any entity to provide any interstate or
intrastate telecommunications services." Neither
party disputes that Congress intended through the
Ff A to preempt purely intrastate matters, including
local franchising authority. Furthermore, both
parties agree that under the Ff A municipalities
retain their traditional power to regulate and demand
compensation for the physical use of their public
rights-of way. As an initial matter, the City argues
that the "minimal requirements" of the Ordinance
cannot be considered on their face to "prohibit" or
"have the effect of prohibiting" competition. The
Court flatly rejects that argument. The threat of
criminal sanctions and fmes for the failure of an
entity to obtain municipal consent can indubitably
COpL !Q West 2000 No Claim to Orig. U.S. Govt. Works
975 F.Supp. 928
(Cite as: 975 F.Supp. 928, '939)
only be described as a prohibition. [FN9] The
limited issue raised in this case. therefore, is the
scope of the City's authority under federal and Texas
law to regulate a local service provider in a way that
is unrelated to the provider's use of the public rights-
of-way.
FN9. Additionally. the Court disagrees with the
City's characterization of the Ordinance as a
"small" burden. In fact, the application process
appears to be excessively cumbersome; the
amount of detail a potential provider must disclose
under the Ordinance. especially tangential
infonnation relating, for instance. to a company's
EEOC policies. is nothing short of extraordinary.
[21][22][23][24][25] Section 253(b) of the FTA
states:
Nothing in this section shall affect the ability of a
State to impose. on a competitively neutral basis
requirements necessary to preserve and
advance universal service, protect the public safety
and welfare, ensure the continued quality of
telecommunications services, and safeguard the
rights of consumers.
47 u.s.c. 9253(b). Although the plain language of
section 253(b) appears to grant regulatory authority
only to States and not to their political subdivisions,
the provision cannot '940 be so narrowly construed.
When, as in this case, a statute authorizes state
regulation but is silent with respect to the regulatory
authority of local govermnents, the statute cannot be
read to preempt all local regulation. See Wisconsin
Public Intervenor v. Mortier, 501 U.S. 597, 607,
III S.C!. 2476, 2483, 115 L.Ed.2d 532 (1991); see
also In the Matter of Classic Telephone, II
F.C.C.R. 13082, 13100-101 (1996). The Supreme
Court reasoned in Mortier that political subdivisions
II are created [by the State] as convenient agencies for
exercising such of the governmental powers of the
State as may be entrusted to them." Mortier, 501
U.S. at 607-08, III S.C!. at 2483. Therefore, a
State's authority to regulate under a federal statute
necessarily includes the authority to delegate local
regulation, including regulation for public health,
safety, and welfare purposes, to local authorities.
[FNIO] See id.
FNlO, Having said that, however, it appears that
Congress did not anticipate that local governments
would attempt to regulate telecommunications
service providers for the public good. Indeed, at
the urging of municipalities, Congress enacted ~
253(c) as a municipal shield "to prOlect the
Page 78
authority of local governments to control public
rights.of-way and to be fairly compensated for the
use of public property." GST Tucson. 950
F.Supp. at 971. Section 253 also preserves the
rights of municipalities to enforce zoning laws, to
regulate the time, place, and manner of the
installation. maintenance, operation and repair of a
provider's facilities. 141 Cong.Rec. S8172
(1995).
[26][27][28][29][30] Having determined that 9
253(b) of the FT A does not preempt all local
regulation for the public good, the issue then
becomes one of state law-how much regulatory
authority does the City have under PURA 95" The
City argues that this issue is a novel question of state
law that the Court should abstain from deciding
under the Pullman abstention doctrine. [FN II] See
Railroad Comm'n of Texas v. Pullman Co., 312
U.S. 496, 61 S.C!. 643, 85 L.Ed. 971 (1941).
Under Pullman, federal courts may abstain or defer
from deciding federal constitutional issues that are
raised in connection with state statutes whose
interpretation is unsettled or difficult. Pullman
abstention is particularly appropriate in "cases
presenting a federal constitutional issue which might
be mooted or presented in a different posture by a
state court determination of pertinent state law."
Word of Faith World Outreach Center v. Morales,
986 F.2d 962, 967 (5th CiL), cert. denied, 510 U.S.
823, 114 S.C!. 82, 126 L.Ed.2d 50 (1993). AT & T
contends that the Court should not abstain from
construing Texas law in this case because Pullman
abstentions are always improper in federal
preemption cases. Although the Fifth Circuit has yet
to speak on this issue, [FNI2] other circuit courts
have concluded that federal preemption generally
does not pose a substantial federal constitutional
claim required for Pullman abstention. See Hotel
Employees and Restaurant Employees Int'l Union v.
Nevada Gaming Comm'n, 984 F.2d 1507, 1512 (9th
CiL1993) ("Pullman abstention is not appropriate
because preemption is not a constitutional issue. ");
United Services Auto. Ass'n v. Muir, 792 F.2d 356,
363 (3rd CiL1986) ("[A] federal court should not
abstain '941 under Pullman from interpreting a slate
law that might be preempted by a federal law,
because preemption problems are resolved through a
nonconstitutional process of statutory
construction. "), cert. denied, 479 U.S. 1031, 107
S.C!. 875, 93 L.Ed.2d 830 (1987); Federal Home
Loan Bank Board v. Empie, 778 F.2d 1447, 1451 n.
4 (10th CiL1985) ("[T]he Supreme Court does not
appear to view federal preemption questions based
COpL I[;J West 2000 No Claim to Orig. U.S. Gov!. Works
975 F.Supp. 928
(Cite as: 975 F.Supp. 928, *941)
only on the Supremacy Clause as the type of
constitutional issues that the Pullman doctrine
counsels courts to avoid. "). The Court agrees. The
Supremacy Clause itself does not inform the Court's
substantive inquiry into the scope of AT & T's
federal preemption claim; it merely establishes the
primacy of federal law .
FN 11. It is undisputed that AT & T represented to
the PUC when applying for its COA that there was
no need to apply to any municipality for consent to
offer local telephone service. The City contends
that the Coun should abstain under Pullman from
deciding whether the pue has the authority to
issue permits to companies which have not sought
consent from municipalities. A recent unpublished
opinion by the Texas Third Court of Appeals
appears to foreclose this argument. See City of
Piano v. Public Utility Comm'n. 953 S.W.2d 416
(Tex.App.--Austin, 1997). That coun held that
PURA 95 does not require the holder of a Service
Provider Certificate of Operating Authority
("SPCOA") under PURA 95 ~ 3.2532 to apply for
or obtain municipal consent in order to be granted
the SPCOA. Id. at 953 S.W.2d at 418-19. The
Coun appreciates the highly ethical conduct of
counsel for SWBT for initially bringing this case
to the Coun's attemion. Of course, the parties (Q
the case immediately followed suit.
FNI2. The Fifth Circuit has held, however, that
the Burford abst.emion doctrine, Burford v. Sun
Oil Co., 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed.
1424 (1943), is inapplicable to federal preemption
claims because "the basic premise of [Burford ]
abstention-avoiding needless federal court
intervention into important matters within a State's
jurisdiction (Q regulate-obviously is lacking."
New Orleans Pub. Serv., Inc. v. City of New
Orleans, 782 F.2d 1236, 1243 (5th Cir.), opinion
withdrawn in pan, 798 F.2d 858 (5th Cir.1986),
and cen. denied. 481 U.S. 1023, 107 S.Ct. 1910.
95 L.Ed.2d 515 (1987) (citations and internal
quotation marks omitted).
Alternatively, the state law issue presented here is
neither novel nor difficult. The original PURA
became effective in 1976, at which time the Texas
Legislature removed the power to regulate
telecommunications providers from local
governments and conferred such powers on the
PUC. See General Tel. Co. of the Southwest v. City
of Perryton, 552 S.W.2d 888, 892 (Tex.App.--
Amarillo 1977, writ ref'd n.r.e.) ("[T]he
legislature's exercise of its constitutional authority to
vest exclusive original jurisdiction over all state
Page 79
telecommunications in the Public Utility Commission
of Texas tenninated the regulatory power, both
statutory and conlractual, theretofore held by
municipalities over telephone systems. ").
Moreover. PURA 95 unambiguously confers
authority on the PUC alone to grant or deny pennits
to telecommunications providers who wish to operate
in Texas. See PURA 95 ~ 3.2531 (Certificate of
Operating Authority); PURA 95 S 3.2532 (Service
Provider Certificate of Operating Authority); PURA
95 ~ 3.251 (Certificate of Convenience and
Necessity). Under PURA 95, municipalities retain
the narrow authority to regulate and demand
compensatiorr for the use of city streets and
facilities:
Nothing in this Act shall be construed as in any
way limiting the rights and powers of a
municipality to grant or refuse franchises to use
the streets and alleys within its limits and to make
the statutory charges for the use thereof, but a
provision of any franchise agreement may not limit
or interfere with any power conferred on the
commission by this Act.
Nothing in this Act shall restrict or limit a
municipality's historical right to control and
receive reasonable compensation for access to its
public streets, alleys, or rights-of-way or other
public property.
PURA 95. S 1.103,3.2555(1) (emphasis added).
[3 I] AT & T correctly argues that municipal
consent ordinances that purport to exert general
police power regulations over telecommunications
providers unlawfully encroach on matters entrusted
to the PUC in violation of ~ 1.103. Once the PUC
has made the determination that a provider satisfies
the safety, health, and welfare concerns of the State.
any municipal ordinance concerned with reviewing
that decision has the potential to overrule, or at a
minimum, undennine the PUC' s ability and
discretion to grant operating certificates. The
Ordinance, in effect, turns our federal system of
government on its head by allowing the City, rather
than the State. to be the final authority regarding
who can and cannot provide service in a particular
locality. The Court is not suggesting that the City
does not have an interest in protecting the general
health, safety, and welfare of its citizens. Of course
it does. But determining whether a particular entity
is fit to provide teleconununications services in
Texas is a decision that is to be made in the first and
orily instance by the PUC, and under Texas law, the
Copr. '" West 2000 No Claim to Orig. U.S. Govt. Works
975 F.Supp. 928
(Cite as: 975 F.Supp. 928, *941)
City may not second-guess that determination. See
Jones v. City of Houston, 907 S.W.2d 871, 876
(Tex.App.--Houston [1st Dist.] 1995, writ denied)
(stating that a home-rule municipality's powers may
be limited by the legislature if the legislature's
intention to do so appears with "unmistakable
clarity"). The City's only legitimate interest under
federal and Texas law is to regulate its public rights-
of-way. an interest that is in no way implicated by
AT & T's activities in Austin. [FNI3]
FNI3. The opinion issued by the City Attorney,
attached as Exhibit 3 to the City's post-hearing
brief, is too linle, too late. The opinion Slates that
the Ordinance only permits the City Council to
grant, deny, or revoke its consent to a company
seeking to enter the local telephone service market
based a power reserved to the City under federal
and state law. As the Court has previously
recognized, federal and state law abrogate any
municipal authority to subject a non-facilities-
based provider like AT & T to any kind of local
regulation. Therefore, it is axiomatic that the
Ordinance violates 9 253(a) of the Ff A
irrespective of how reasonably the City Council
administers the Ordinance.
*942 B. Substantial Threat of Irreparable Injury
[32J[33] Although monetary damages normally are
insufficient to establish irreparable injury, they may
be sufficient if the economic damages are especially
difficult to ascertain. See Lalcedreams v. Taylor,
932 F.2d 1103, 1109 (5th Cir.1991). In this case,
AT & T is attempting to enter the local telephone
services market after a decades-long monopoly of
local service by a single carrier. AT & T is, by no
means, a small or vulnerable corporation, but it is
entering a market in which competition among
providers is a new phenomenon. Hence, monetary
damages for delayed entry into the market would be
highly speculative, as there would be no historical
record against which to measure lost profits and/or
lost market share. The City argues that AT & T
"created its own crisis" by failing to apply for a
municipal consent when the Ordinance was enacted,
and that therefore AT & T cannot complain that the
Ordinance is the cause of any irreparable injury.
This argument has absolutely no merit. AT & T
should not be penalized for refusing to comply with
an ordinance the City had no authority in the first
instance to impose.
C. Balance of Hardship
Page 80
[34] The City identified two interests that would be
harmed by enjoining the enforcement of the
Ordinance against AT & T. First, the City claims it
has an interest in knowing who provides telephone
service in the City to protect the health and welfare
of its citizens. [FNI4] Second, the City claims it
has an interest in receiving compensation from all
telecommunications service providers for their use of
the City's public rights-of-way. The Court perceives
little, if any, harm that would result from granting
the preliminary injunction. As for the City's first
interest, telecommunications service providers, in
particular existing long-distance providers such as
AT & T, are already subject to enormous federal
and state regulation. Furthermore, the PUC has
licensed AT & T as a qualified local telephone
service provider, ensuring that the health, safety,
and welfare of the City's residents has already been
protected. The City's second interest is a red
herring. AT & T has no right to access or to use the
City's streets or public rights-of-way. Any residual
compensation issues-the increased administrative
costs the City claims it would incur for coordinating
emergency notification among the various local
service providers, for instance--may be resolved at a
later date. The inunediate issue in this case is the
authority of the City to delay AT & T's entry into
the local telephone services market.
FN14. Under Texas law, the City is certainly
entitled, and has obviously received, notice that
AT & T intends to provide local telephone service
in Austin. See City of Piano, 953 S.W.2d at
42t-22.
D. Public Interest
[35][36] There is no doubt that enforcement of the
Ordinance would delay AT & T's entry into the local
telephone service market, putting it at a significant
competitive disadvantage with SWBT and other local
providers. "Congress intended primarily for
competitive markets to determine which entrants
shall provide the telecommunications services
demanded by consumers, and by preempting [state
and local regulation] under section 253 sought to
ensure that State and local governments implement
the 1996 Act in a manner consistent with these
goals." Classic Telephone, 11 F.C.C.R. at 13096.
Enjoining enforcement of the Ordinance will serve
the goals of both the FT A and the public interest.
Copr. 19 West 2000 No Claim to Orig. U.S. Govt. Works
975 F,Supp, 928
(Cite as: 975 F.Supp. 928, *942)
E. Conclusion
AT & T has clearly carried its burden of persuasion
on all of the preliminary injunction factors, The
City's interest in regulating local telephone service
providers is limited by federal and state law to
managing and demanding compensation for the use
of the *943 City's public rights-of-way. The City's
unsupported assertion that a non-facilities-based
provider is "using" the City's public rights-of-way is
wholly unpersuasive. In fact, it is a metaphysical
interpretation of the term "use" that defies logic and
common sense. True, neither the FT A nor PURA
95 specifically categorizes or distinguishes between
facilities-based and non-facilities-based providers,
but the law does make distinctions among the various
powers that may be exerted by each successive level
of government. In enacting the Ordinance, the City
overstepped its bounds.
In accordance with the foregoing, the Court enters
the following orders:
IT IS ORDERED that the plaintiff's Motion for
Preliminary Injunction [# 10], filed August 4, 1997,
is GRANTED as follows: IT IS ORDERED,
ADJUDGED, AND DECREED that, pending final
disposition of this litigation and subject to the posting
by AT & T Communications of the Southwest, Inc.
of a bond in the amount of $850.00 (eight-hundred
Page 81
and fifty dollars), the defendant the City of Austin,
Texas is hereby enjoined from enforcing Chapter
18-8 of the Austin City Code against the plaintiff AT
& T's provision of "telecommunications services" as
defined in Chapter 18-8 of the Austin City Code
through either resale of telecommunications services
purchased from Southwestern Bell Telephone
Company or network functionalities purchased from
Southwestern Bell Telephone Company;
IT IS FURTHER ORDERED that Southwestern
Bell Telephone Company's Motion to Intervene as a
Matter of Right [# 7], filed August 4, 1997. is
OVERRULED AND DENIED, except that SWBT
may file amicus curiae briefs on any issue it deems
proper,
IT IS FURTHER ORDERED that the defendant the
City of Austin's Motion to Dismiss, or in the
alternative, to Abate [# II], filed August 5,1997, is
OVERRULED AND DENIED; and
IT IS FINALLY ORDERED that the defendant the
City of Austin's Motion to Strike AT & T's Brief in
Response to the City of Austin's Post-Hearing Brief
[# 24], filed August 18, 1997, is OVERRULED
AND DENIED,
END OF DOCUMENT
Copr. !Q West 2000 No Claim to Orig. U.S. Govt. Works
~
635 So.2d 96
151 P.U.RAth 552, Uti!. L. Rep. P 26,391, 19 Fla. L. Weekly D703
(Cite as: 635 So.2d 96)
SANTA ROSA COUNTY, Appellant/Cross
Appellee,
v,
GULF POWER COMPANY, BellSouth
Telecommunications, Inc" d/b/a Southern Bell
Telephone and Telegraph Company, and
Escambia River Electric Cooperative, Inc.,
Appellees/Cross Appellants,
and
ESCAMBIA COUNTY, Appellant/Cross
Appellee,
v,
GULF POWER COMPANY, Escambia River
Electric Cooperative, Inc., Southern Bell
Telephone and Telegrapb Company, and
SoutWand Telepbone Company,
Appellees/Cross Appellants.
Nos. 92-3658, 92-3803.
District Court of Appeal of Florida,
First District.
March 3D, 1994.
Rehearings Denied May 24, 1994.
Counties appealed from fmal declaratory judgment
of Circuit Court, Escambia County, John P. Kuder,
1., which precluded counties from imposing
franchise fees on utilities. Utilities cross-appealed
from judgment holding that counties possessed
regulatory power to impose franchise fees. The
District Court of Appeal, Ervin, 1., held that: (I)
Public Service Commission has not preempted
counties' right to convey franchises to electric.
utilities, although Commission has exclusion
jurisdiction to grant territorial certificates of
necessity as to telephone utilities; (2) county
resolutions conveying to electric company right to
occupy counties I roads were ultra vires acts and
neither defense of impairment of obligation of
contracts nor of estoppel was available to prevent
imposition of franchise fee; (3) franchise fee
constituted consideration for contractual grant of
right to use county rights- of-way and was not an
impermissible tax; and (4) utilities properly
exercised right to tenninate franchises.
Affirmed in part, reversed in part and remanded.
[IJ COUNTIES~ 107
Page I
1 O4k 107
Noncharter counties have home-rule authority to
impose franchise fees on utilities even though power
to so act is not specifically enumerated among those
delegated to counties by statute; only limitation on
county's implied power to act occurs if there is
general or special law clearly inconsistent with
powers delegated. West's F.S.A. ~ 125.01; West's
F.S.A. Const. An. 8, ~ 1(1).
[2] COUNTIES~ 24
104k24
Public Service Commission (PSC) has not preempted
counties' right to convey franchises to electric
utilities; Commission's power to regulate rates is
not affected by franchise fees that are passed on to
customer. West's F.S.A. ~ 366.13.
[2] ELECTRICITY~ 8.1(4)
l45k8.1(4)
Public Service Commission (PSC) has not preempted
counties' right to convey franchises to electric
utilities; Commission's power to regulate rates is
not affected by franchise fees that are passed on to
customer. West's F.S.A. ~ 366.13.
[3] COUNTIES~ 107
I04k107
Statute providing that rural electric cooperatives
shall have power to operate transmission lines across
all public thoroughfares did not create private
contract with cooperatives that is constitutionally
protected from impairment and did not preclude
county from imposing franchise fees upon
cooperative. West's F.S.A. ~ 425.04(11).
[4] STATUTES~ 233
361k233
In ascertaining whether statutory grant of power
gives rise to contractual obligation, one must first
examine specific language of statute, and, in absence
of adequate expression of actual intent by public
authority to bind itself thereby, court should not
lightly construe that which is undoubtedly a scheme
of public regulation to be, in addition, private
contract to which state is party.
[5] COUNTIES~ 24
104k24
Statutes giving Public Service Commission (PSC)
jurisdiction to grant certificates of necessity and
convenience to telephone service providers preempts
Copr. ~ West 2000 No Claim to Orig. U.S. Govt. Works
635 SO.2d 96
(Cite as: 635 So.2d 96)
county from requiring franchise agreements from
telephone utilities. West's F.S.A. SS 364.32-364.37.
[5] TELECOMMUNICATIONS<!::=> 75.1
372m .1
Statutes giving Public Service Commission (PSC)
jurisdiction to grant certificates of necessity and
convenience to telephone service providers preempts
county from requiring franchise agreements from
telephone utilities. West's F.S.A. SS 364.32-364.37.
[6] STATES<!::=> 18.3
360kI8.3
It Express preemption II requires that statute contain
specific language of preemption directed to
particular subject at issue.
See publication Words and Phrases for other judicial
constructions and defInitions.
[7] STATES<!::=> 18.3
360kI8.3
"Implied preemption" incurs if legislative scheme is
so pervasive that it occupies entire field. creating
danger of conflict between local and state laws.
See publication Words and Phrases for other Judicial
constructions and definitions.
[8] COUNTIES<!::=> 107
l04klO7
Resolutions adopted by counties granting electric
utility right to occupy counties' roads for purpose of
constructing and maintaining electric transmission
lines constituted ultra vires acts, as counties had no
delegated authority to convey franchise to use
counties' rights-of-way, and neither defense of
impairment of obligation of contracts nor of estoppel
was available to electric utility to prevent counties~
from imposing franchise fees upon utility for its use
of public's rights-of-way. Const. 1885, Art. 8, S 6.
[8] ESTOPPEL<!::=> 62.3
156k62.3
Resolutions adopted by counties granting electric
utility right to occupy counties' roads for purpose of
constructing and maintaining electric transmission
lines constituted ultra vires acts, as counties had no
delegated authority to convey franchise to use
counties' rights-of-way, and neither defense of
impairment of obligation of contracts nor of estoppel
was available to electric utility to prevent counties
from imposing franchise fees upon utility for its use
of public's rights-of-way. Const. 1885, Art. 8, S 6.
Page 2
[9] ESTOPPEL<!::=> 62.3
156k62.3
Counties cannot be estopped from denying validity
of acts that exceeded their delegated powers.
[10] COUNTIES<!::=> 107
l04klO7
Franchise fees imposed by counties on utilities for
use of rights-of-way constituted consideration for
contractual grant of right to use rights-of-way and
were not invalid as impermissible ntax" having no
discernible relationship to cost to counties for use of
rights-of-way.
See publication Words and Phrases for other judicial
constructions and definitions.
[11] COUNTIES<!::=> 107
l04klO7
In view of express language in county ordinances
granting franchises to utilities and imposing
franchise fee, utilities lawfully exercised rights to
terminate unilaterally by failing to participate, and
termination would not be denied on theory counties
substantially performed or made good-faith efforts to
perform but were prevented from fulfilling same hy
action of other parties.
*97 Thomas V. Dannheisser, County Atty., Milton,
for appellant/cross appellee Santa Rosa County.
Robert L. Nabors, Gregory T. Steward, and
Thomas H. Duffy of Nabors, Giblin & Nickerson,
P.A., Tallahassee for appellant/cross appellee
Escambia County.
G. Edison Holland, Jr., and Teresa E. Liles of
Beggs & Lane, Pensacola, for appellee/cross
appellant Gulf Power Co.
1. Nixon Daniel, III of Beggs & Lane, Pensacola,
for appellee/cross appellant BellSouth.
Thomas E. Wheeler, Jr. of Bell, Schuster &
Wheeler, Pensacola, for appellee/cross appellant
Escambia River Electric Co-op, Inc.
ERVIN, Judge.
In these consolidated appeals, Santa Rosa County
and Escambia County appeal certain *98 portions of
a final declaratory judgment, the net effect of which
precluded the counties from imposing franchise fees
on two telephone utilities and two electric utilities,
operating within the respective counties, for using
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635 SO.2d 96
(Cite as: 635 So.2d 96, *98)
the counties I rights-of-way to construct or maintain
the utilities' poles and lines. Certain of the utility
companies, in turn, cross appeal from portions of the
judgment holding that the counties possess the
regulatory power to impose franchise fees. We
affirm in part, reverse in part and remand with
directions .
In 1989, Escambia County adopted Ordinances
89-37 and 89-39. The former granted a non-
exclusive franchise to Gulf Power Company (Gulf
Power) and imposed a franchise fee equal to five
percent of its gross sales of electricity each month,
and the latter granted a non-exclusive franchise to
Escambia River Electric Cooperative (EREC) , a
rural electric cooperative, pursuant to the same
general terms as that conveyed to Gulf Power. [n
1991, Escambia County adopted Ordinances 91-19
and 91-22, purporting to convey non-exclusive
franchises to BellSouth Telecommunications, Inc.
(BellSouth) and Southland Telephone Company
(Southland), pennitting them to use the county's
rights-of-way and imposing a franchise fee for such
use equal to five percent of the revenues collected
from the sale of local telephone ,ervices. In 1990,
the Board of County Commissioners of Santa Rosa
County approved Ordinances 90-01 and 90-02, also
granting nOD-exclusive franchises to Gulf Power
Company and EREC, with terms similar to those
provided in the Escambia County ordinances.
Each ordinance contained a clause allowing any of
the grantees to terminate its franchise if other
utilities in the respective counties did not enter into
franchise agreements, or if franchise fees were not
imposed within two years of the effective date of the
agreements. Both BellSouth and Southland declined'
to enter into the agreements. asserting that section
362.02, Florida Statutes, prevented the counties
from requiring them to obtain a franchise. As a
result of this refusal, the electric utilities, within the
time specified in the agreements, ceased paying the
franchise fees and declined to enter into other
franchise agreements. Subsequently, the counties
brought separate suits for declaratory judgments,
later consolidated, to detennine the validity of the
various ordinances establishing the franchises in
question.
After trial, the lower court entered fmal declaratory
judgment, making the following pertinent rulings in
the alternative:
Page 3
1. Non-charter counties, such as Santa Rosa and
Escambia, do not require specific authority from the
legislature to impose franchise fees upon utilities for
the use of their rights-of-way, as such power can be
reasonably implied from the powers generally
delegated to them, unless there is some general or
special law inconsistent therewith.
2. The Public Service Commission (PSC) has not
preempted the counties' right to convey franchises to
electric utilities, because the PSC does not have
unconditional authority to issue certificates of
convenience ~d necessity to electric utilities.
3. Section 425.04(11), Florida Statutes, extended a
contractual offer to rural electric cooperatives, such
as EREC, which, once accepted, could not be
impaired; therefore, the counties were precluded by
the terms of the statute from imposing franchise fees
upon EREC.
4. The counties have no authority to require
franchise agreements from telephone utilities,
because the PSC has exclusive jurisdiction to grant
territorial certificates of necessity as to them
pursuant to applicable Florida Statutes.
5. The counties were equitably estopped from
imposing franchise fees upon Gulf Power as a result
of resolutions passed in 1926 by Escambia County
and in 1928 by Santa Rosa County, conveying to
Gulf Power the right to occupy the counties' roads
for the purpose of constructing and maintaining
electric transmission and distribution lines, and, as
such, the resolutions constituted a grant of a
franchise with no fee. Additioually, because the
resolutions gave rise to contractual obligations. the
counties could not later validly adopt ordinances
imposing fees, as such acts would violate the
obligation of contracts clauses of the federal and
state constitutions. As a consequence, Santa Rosa
County Resolution *99 92-17, repealing its 1928
resolution, was void.
6. Each franchise fee was an impermissible tax,
because the amount charged bore no discernihle
relationship to the cost to the counties for the use of
their rights-of-way in that the counties did not
provide sufficient evidence to show that the amount
charged was reasonable.
7. The ordinances were void under their own tenns
in that all utilities had not executed franchise
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635 SO.2d 96
(Cite as: 635 So.2d %, *99 )
agreements within the two years required by the
ordinances.
Both counties appeal from the portion of the fmal
declaratory judgment pertaining to rulings 3, 5, 6
and 7. Escarnbia County only appeals from ruling 4,
while all the utilities cross appeal ruling I, and Gulf
Power cross appeals ruling 2.
We affirm rulings I, 2, 4 and 7, but reverse 3, 5
and 6, and remand the case with directions that
judgment be entered in conformance with this
opinion. Each of the court's rulings is discussed in
the order as above listed.
I.
[I] In deciding that non-charter counties have home-
rule authority to impose franchise fees, the trial
court rejected the cross appellants' argument that the
power to so act is lacking, because it is not
specifically enumerated among those delegated to the
counties by section 125,01, Florida Statutes (1989).
We agree. Article VlII, section I(t) of the Florida
ConstinIlion (1968) provides:
Counties not operating under county charters shall
have such power of self- government as is
provided by general or special law. The board of
county commissioners of a county Dot operating
under a charter may enact, in a manner prescribed
by general law, county ordinances not inconsistent
with general or special law .. ..
(Emphasis added.) The statute broadly implements
the constitutional provision by authorizing the
governing body of a county, "[t]o the extent not
inconsistent with general or special law ," to exercise
the power to carry on county government which
includes, "but is not restricted to, " certain
enumerated powers. ~ 125.01(1), Fla.Stat. (1989).
Subsection (I)(w) gives counties the authority to
"[p]erform any other acts not inconsistent with law,
which acts are in the common interest of the people
in the county, and exercise all powers and privileges
not specifically prohibited by law." Finally,
subsection (3) provides:
(a) The enumeration of powers herein shall not be
deemed exclusive or restrictive, but shall be
deemed to incorporate all implied powers
necessary or incident to carrying out such powers
enumerated, including, specifically, authority to
employ personnel, expend funds, enter into
contractual obligations, and purchase or lease and
sell or exchange real or personal property.
Page 4
(b) The provisions of this section shall be liberally
construed in order to effectively carry out the
purpose of this section and to secure for the
counties the broad exercise of home rule powers
authorized by the State Constitution.
(Emphasis added.)
The Florida Supreme Court has commented on the
broad scope of home-rule authority conferred upon
non-charter counties in no less than three opinions:
Taylor v. Lee County, 498 So.2d 424 (Fla.1986);
Speer v. Olson, 367 SO.2d 207 (Fla. 1979); and
State v. Orange County, 281 So.2d 310 (Fla. 1973).
As the court recognized in Speer, 367 So. 2d at 211:
The first sentence of Section 125.01(1), Florida
Statutes, (1975), grants to the governing body of a
county the full power to carry on county
government. Unless the Legislature has pre-
empted a particular subject relating to county
government by either general or special law. the
county governing body, by reason of this sentence,
has full authority to act through the exercise of
home rule power.
Thus, the specific powers enumerated lmder section
125.01 are not all- inclusive, and a non-charter
county's authority comprises that which is
reasonably implied or incidental to carrying out its
enumerated powers. The only lintitation on a
county's implied power to act occurs if there is a
general or special law clearly inconsistent with the
powers delegated. *100 As discussed later in this
opinion, the only statutes which we fmd inconsistent
with the authority of the counties to grant franchises
and to impose fees thereon are those pertaining to
the PSC's regulation of telephone utilities, which,
we consider. have preempted the counties from so
acting. Thus. we affirm the court's first ruling.
2.
[2] Cross appellant Gulf Power argues that the
pervasiveness of PSC regulation over electric
utilities under chapter 366, Florida Statutes, is
inconsistent with and preempts imposition of a
franchise fee upon it. In this regard we agree with
the trial court's fmding that the prevailing theme of
chapter 366 involves the regulation of rates charged
by the electric utilities within the state; whereas the
franchise fees in issue have no impact upon the rates
of the respective utilities, in that the fees assessed
are passed onto the customer. pursuant to Florida
Administrative Code Rule 25-6.100(7). Additionally,
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635 SO.2d 96
(Cite as: 635 So.2d 96, "1(0)
section 366.13, Florida Statutes (1989). provides
that "[n]o provision of this chapter shall in any way
affect any municipal tax or franchise tax in any
manner whatsoever." (Emphasis added.) Such
provision clearly implies the counties' authority to
require electric utilities to pay franchise fees for
their use of the counties' rights-of-way. In any
event, we find no statute clearly inconsistent with the
counties' power to require franchise agreements
from electric utilities for such use. We therefore
affirm the court's second ruling.
3.
[3J The court nevertheless ruled that section
425.04(11), Florida Statutes, conveyed a puhlic
grant to EREC to use the rights-of-way, which, once
accepted by usage, constituted a contract which is
protected from impairment by Article I, Section 10
of the United States Constitution and Article I,
Section 10 of the Florida Constitution (1968). We
cannot agree with the court's analysis. Section
425.04(11) provides that rural electric cooperatives
shall have the power
[t]o construct, maintain, and operate electric
transmission and distribution lines along, upon,
under and across all public thoroughfares,
including without limitation, all roads, highways,
streets, alleys, bridges and causeways, and upon,
under and across all publicly owned lands, subject,
however. to the requirements in respect of the use
of such thoroughfares and lands that are imposed
by the respective authorities having jurisdiction
thereof upon corporations constructing or
operating electric transmission and distribution
lines or systems[.]
[4] In ascertaining whether a statutory grant of
power gives rise to a contractual obligation, one
must first examine the specific language of the
statute, and, in the absence of an adequate
expression of an actual intent by the public authority
to bind itself thereby, a court should "not lightly
construe that which is undoubtedly a scheme of
public regulation to be, in addition, a private
contract to which the State is a party." National
R.R. Passenger Corp. v. Atchison, Topeka & Santa
Fe Ry., 470 U.S. 451, 466-67, 105 S.C!. 1441,
1452,84 L.Ed.2d 432,446 (1985). We find nothing
in section 425.04(11) revealing any clear-cut
legislative intent to grant private contractual rights to
rural electric cooperatives. We understand the
language of the statute simply to be an expression of
Page 5
the legislature that such cooperatives shall be granted
the right to access public thoroughfares for the
purpose of operating their electric distribution lines.
Nothing, however, is contained therein suggesting
that the counties are precluded from placing
reasonable regulations on the use of the public's
rights-of-way. In fact, the counties' authority to
regulate is clearly indicated by the latter portion of
subsection (11), which subjects a utility's right to
use the public thoroughfares to the conditions the
public authority having jurisdiction may impose.
Indeed, section 425.04(9), Florida Statutes (1989),
which should be read in pari materia with the
provisions of 425.04(11), grants cooperatives the
power, among other things, "[t]o purchase or
otherwise acquire ... franchises [.]" (Emphasis
added.)
Consequently, we agree with the counties that
section 425.04(11) cannot be interpreted as an
unconditional grant of authority to rural electric
cooperatives to occupy permanently *101 all rights-
of-way conveyed to them pursuant to the terms of
the statute, because, obviously, if the legislature
intended the coopemives' right of possession to be
without restriction, it would not have been necessary
to add the statutory language empowering them to
acquire franchises. Accordingly, we conclude that
the provisions of section 425.04(11) do not create a
private contract; hence, no obligation arose
therefrom which could be subsequently impaired.
We therefore reverse the court's third ruling.
4.
[5] We affirm the trial court's conclusion that the
exercise of the counties' franchise fees against
defendants BellSouth and Southland is preempted by
operation of chapter 364. Florida Statutes. In so
ruling, the trial court concluded that sections 364.32
through 364.37, Florida Statutes (1989), gave the
PSC the exclusive jurisdiction to grant certificates of
necessity and convenience to telephone service
providers; thereby preempting the counties from
enacting the ordinances at issue in regard to
telephone service providers . We agree.
[6][7] Florida law recognizes two kinds of
preemption: express and implied. The former
requires that the statute contain specific language of
preemption directed to the particular subject at issue.
See Hillsborough County v. Florida Restaurant
Ass'n, 603 SO.2d 587, 590 (Fla. 2d DCA 1992).
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635 So.2d 96
(Cite as: 635 So.2d 96, "101)
Implied preemption occurs if a legislative scheme is
so pervasive that it occupies the entire field, creating
a danger of conflict between local and state laws.
(d. at 590-91. In our judgment, section 364.01(2).
Florida Statutes (1989). provides an express
preemption from county regulation of telephone
utilities by stating the following:
It is the legislative intent to give exclusive
jurisdiction in all matters set forth in this chapter
to the Florida Public Service Commission in
regulating telephone common carriers, and such
preemption shall supersede any local or special act
or municipal charter where any conflict of
authority may exist.
Similarly, section 364.33, Florida Statutes (1989),
requires telephone service providers to apply to the
PSC for certificates of convenience and necessity to
construct and operate and extend telephone lines,
except in territories already served by such entities.
Nothing was placed in evidence below showing that
section 364.33 does not apply to BellSouth or
Southland. Consequently, as there was no evidence
disclosing that Escarnbia County issued certificates
of convenience and necessity to BellSouth and
Southland for the purpnse of constructing and
operating telephone poles and lines, we affirm the
trial court's fourth ruling that Escarnbia County's
attempt to impose utility franchises or utilization fees
against BellSouth and Southland is preempted by
operation of chapter 364, Florida Statutes, and that
the ordinances were, as to them, inconsistent with
general law.
5.
[8] Having correctly decided that no existing'
Florida statute was in derogation of the counties'
right to impose franchise fees upon Gulf Power for
its use of the public's rights-of-way, the lower court
nonetheless alternatively ruled that the resolutions
Escarnbia County and Santa Rosa County adopted in
1926 and 1928, respectively, granted Gulf Power the
right to occupy the counties' roads for the purpose of
constructing and maintaining electric transmission
lines, without exacting a fee; thus, the counties'
later attempts to impose utility franchise fees on Gulf
Power by ordinance violated the clauses of the
United States and Florida constitutions prohibiting
impairment of the obligations of contract. In
addition, the court ruled that by virtue of enacting
such resolutions conveying the franchise without a
fee, upon which Gulf Power relied to its detriment,
Page 6
the counties were estopped from asserting the
defense of the invalidity of the resolutions,
We cannot agree with either of the court's two
grounds for invalidating the ordinances' provisions
requiring Gulf Power to pay franchise fees. In our
judgment, at the time the two resolutions were
adopted, the counties had no delegated authority to
convey a franchise to use the counties' rights-of-
way; hence, the resolutions constituted ultra vires
acts, and thus neither the defense of impainnent
"102 of obligation of contracts nor of estoppel was
available to Gulf Power,
Before the adoption of the Florida Constitution of
1968, the counties were considered to have only
such powers that the legislature expressly delegated
to them. Article VIII, Section 6 of the 1885 Florida
Constitution provided that the "powers, duties and
compensation [of county commissioners] shall be
prescribed by law," As the Florida Supreme Court
observed in Hopkins v, Special Road & Bridge Dist.
No, 4, 73 Fla, 247, 251, 74 So, 310, 311 (1917):
"County commissioners can exercise such authority
only as is 'prescribed by law'; and, where there are
doubts as to the existence of authority, it should not
be assumed," Gulf Power, however, relies upon
Martin v, Townsend, 32 Fla, 318, 13 So, 887
(1893), for the position that the counties, as of the
dates the resolutions were adopted, had the inherent
power to sell and dispose of county property. The
court's decision in Martin, however, must be
considered as being limited to the facts before it, in
that it involved the validity of a sale of lands in 1852
by a board of county commissioners; consequently,
the validity of the sale was governed by the
constitution and statutes then in effect, which
authorized the sale. As the Florida Supreme Court
later explained in Gessner v, Del-Air Corp., 154
Fla, 829, 17 SO.2d 522 (1944), the rule announced
in Martin did not continue to prevail at all times
following the sale in 1852. In Gessner, the court
observed that although boards of county
commissioners had previously been vested with
authority to sell county property, such power was
extinguished upon passage of Chapter 882, Laws of
Florida, Acts of 1872, The court concluded its
history of Florida legislation with the following
comment: "From our examination we conclude that
by the act of 1872 the power to dispose of property
was omitted, and has not been restored. Without
such legislative delegation the commissioners could
not convey," Id. 17 So.2d at 523,
Copr. i() West 2000 No Claim to Orig. U.S, Gove Works
635 So.2d 96
(Cite as: 635 8o,2d 96, *\02)
As a consequence, when the 1926 and 1928
resolutions were passed, the counties only possessed
authority to exercise, through their boards, such
power as was delegated either by the constitution or
the legislature, expressly or by necessary
implication. Colen v. Sunhaven Homes, Inc., 98
So.2d 501, 503 (Fla.1957) (involving franchise);
Crandon v. Hazleu, 157 Fla. 574, 582, 26 So.2d
638, 642 (1946); Gessner, 154 Fla. at 829, 17
So.2d at 522; Scenic Hills Util. Co. v. City of
Pensacola, 156 So.2d 874, 876 (Fla. 1st DCA 1963)
(involving franchise). As the constitution and law
then in effect precluded counties from conveying
property or franchises for the use of property, and
continued to do so until the adoption of the 1968
constitution, we conclude that the counties' grant of
the franchises to Gulf Power in 1926 and 1928 must
be considered ultra vires and of no effect. As a
result, the lower cottrt's determination that the
subsequently adopted ordinances violated the
contract clause of the federal and state constitutions
was erroneous, because, in order to invoke the
constitutional prohibition against the impairment of
obligation of contracts, it must first be shown that a
lawful contract existed which YJas subject to
impairment. Mahood v. Bessemer Properties, 154
Fla. 710, 18 8o,2d 775 (1944).
[9] Moreover, counties cannot be estopped from
denying the validity of acts that exceeded their
delegated powers. Edwards v. Town of Lantana 77
So.2d 245, 246 (Fla. 1955); State ex reI. Nuvee~ v.
Greer, 88 Fla. 249, 261, 102 So. 739, 744 (1924);
Jones v. Pinellas County, 81 Fla. 613, 619-20, 88
So. 388, 390 (1921); C.K. Cobb, Annotation,
Estoppel. of United States, State, or Political
Subdivision by Deed or Other Instrument, 23
A.L.R.2d 1419, 1429 (1952). See also Crowell v.
Monroe County, 578 SO.2d 837, 838 (Fla. 3d DCA
1991); P.C.B. Partnership v. City of Largo, 549
So.2d 738,741-42 (Fla. 2d DCA 1989). Therefore,
the trial court's determination that the later-adopted
ordinances impaired Gulf Power's contractual
obligation, and that the counties were estopped from
asserting the invalidity of the resolutions as a defense
is reversed. [FNI] For the same reason *\03 we
reverse the trial court's detennination voiding Santa
Rosa County's Resolution 92-17, which repealed its
1928 resolution.
FN 1. As a consequence of our detennination that
the resolutions were beyond the scope of the
counties' delegated authority, we see no need to
Page 7
reach the issue of whether, as the panies
extensively argued, the gram of the franchise to
Gulf Power could be validly accomplished by
resolution ralher than by ordinance, in that such
argument presupposes a proper delegation of
legislative authority to the counties to so act.
6.
[10] As an alternative ground for invalidating the
franchise fee ordinances, the trial court decided that
the fees were impermissible taxes as they were based
upon a percentage of gross receipts--an amount
which bore no relation to the cost of regulation.
Because the counties presented no evidence showing
that the fees were based upon a reasonable rental
value for the utilities' use of the counties' rights-of-
way, the court concluded that the fees, as structured,
constituted impermissible taxes. We reverse.
In the closely analogous case of City of Plant City
v. Mayo, 337 So.2d 966 (Fla.1976), the supreme
court approved a franchise fee of six percent of the
gross receipts Tampa Electric Company obtained in
return for using municipal rights-of-way, and, in
summarily rejecting the utility's argument that the
fee was in fact a tax, the cottrt replied:
[W]e have absolutely no difficulty in holding that
the franchise fees payable by Tampa Electric are
not "taxes". The cities would lack authority to
impose taxes of this type [under the Constitution]
and, unlike other governmental levies, the charges
here are bargained for in exchange for specific
property rights relinquished by the cities.
Id. at 973 (footnotes omitted). Accord City of
Hialeah Gardens v. Dade County, 348 So.2d 1174,
1180 (Fla. 3d DCA 1977) (franchise fee from
Florida Power & Light Co. to provide electricity to
Dade County was not a tax, "but rather
consideration paid by the utility for the grant of the
franchise," following City of Plant City), cert.
denied, appeal dismissed, 359 SO.2d 1212
(Fla. 1978). See also Jacksonville Port Auth. v.
Alamo Rent-A-Car, Inc., 600 So.2d 1159, 1162
(Fla. 1st DCA) (" '[n common parlance, a tax is a
forced charge or imposition, it operates whether we
like it or not, and in no sense depends on the will or
contract of the one on whom it is imposed.' ")
(quoting State ex reI. Gulfstream Park Racing Ass'n
v. Florida State Racing Comm'n, 70 So.2d 375, 379
(Fla. 1953)), review denied, 613 So.2d I (Fla. 1992).
We therefore conclude that the trial court erred in
characterizing the franchise fees at bar, which
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635 So.2d 96
(Cite as: 635 So.2d 96, *103)
constituted consideration for the contractual grant of
the right to use county rights-of-way, as taxes.
7.
[II] The court fInally ruled, assuming the validity
of the ordinances in question. that under the express
language in the ordinances, the utilities had the right
to tenninate their respective franchises by giving the
requisite notice specifIed therein, and because they
had complied with such conditions, they lawfully
exercised their rights to terminate unilaterally their
franchise agreements. We agree. The ordinances
expressly provide that before a utility's right to
terminate can be extinguished, all utilities must agree
to the terms of the franchise within two years. As
the telephone utilities failed to participate, the
condition failed, and the explicit language of the
ordinances authorized the unilateral tennination.
,
Page 8
The counties, however, assert that because they
substantially performed their agreements and/or
made good-faith efforts to perform their portion of
the contracts, but were prevented from fulfilling the
same by the action of other parties, tennination
should be denied. We fmd these arguments
unavailing in that the key provisions of the
ordinances are couched in tenns of the fairness of
spreading the fmancial burden between all of the
utilities. which purpose was defeated once the
telephone companies refused to enter into the
agreements.
AFFIRMED in part, REVERSED in part, and
REMANDED for judgment consistent with this
opinion.
BARFIELD and BENTON, 11.. concur.
END OF DOCUMENT
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~
579 So. 2d 105
Uti!. L Rep. P 26,064, 16 Fla. L Weekly 286
(Cite as: 579 So.2d 105)
FLORIDA POWER CORPORATION, Appellant,
v.
SEMINOLE COUNTY and City of Lake Mary,
Appellees,
No, 76743,
Supreme Court of Florida.
May 2, 1991.
Electric utility brought action against county and
city seeking declaratory and injunctive relief against
enforcement of ordinances which required utility to
relocate underground its overhead power lines which
were along right of way of road which was to be
widened. The Circuit Court, Seminole County,
O.H. Eaton, Jr., 1., entered judgment in favor of
city and county. The District Court of AppeaJ
certified the case and the Supreme Court, Grimes,
J., held that jurisdiction of Public Service
Conunission to regulate rates and services of public
utilities precluded authority of city and county to
require electric utility to place its lines underground.
Reversed and remanded.
McDonald, 1., dissented.
[1] ELECTRICITY<%=> 9(3)
l45k9(3)
Jurisdiction of Public Service Commission to
regulate rates and services of public utilities
preempted authority of city and county to require
electric utility to place underground its overhead
power lines located along right of road which was to
be widened and, thus, ordinances requiring same
were invalid; requiring placement of lines
underground would result in increased cost to utility
and its rates. West's F.S.A. SS 366.041(1),
366.05(1).
[2] ELECTRICITY<%=> 9(3)
l45k9(3)
Public Service Commission is vested with authority
to require conversion of distribution lines to
underground where "feasible" if Commission finds
that to be "cost-effective." West's F.S.A. S
36604(7)(a).
*105 Alan C. Sundberg, Sylvia H. Walbolt, Robert
Pass and F. Townsend Hawkes of Carlton, Fields,
Ward, Emmanuel, Smith & Cutler, P.A., Tampa,
Page 88
and Albert H. Stephens and Pamela I. Smith, Office
of the General Counsel, Florida Power Corp., St.
Petersburg, for appellant.
Robert A. McMillan, Co. Atty. and Lonnie N.
Groot, Asst. Co. Atty. for Seminole County,
Sanford, and Davisson F. Dunlap, Jr. of Pennington,
Wilkinson, Dunlap, Bateman & Camp, P.A.,
Tallahassee, and Ned N. Julian, Jr. of Stenstrom,
Mclntosh, Julian, Colbert, Whigham & Simmons,
P.A., for Lake Mary, Sanford, for appellees.
G. Edison Holland, Jr. and Teresa E. Liles of
Beggs & Lane, Pensacola, amicus curiae for Gulf
Power Co.
Ron A. Adams of Steel, Hector & Davis, and Jean
G. Howard, Florida Power & Light Co., Miami,
amicus curiae for Florida Power & Light Co.
Lee L. Willis and James D. Beasley of Ausley,
McMullen, McGehee, Carothers and Proctor,
Tallahassee, amicus curiae for Tampa Elec. Co.
Harry Morrison, Jr., Gen. Counsel and Kraig A.
Conn, Asst. Gen. Counsel, TaJlahassee, amicus
curiae for Florida League of Cities, Inc.
Susan F. Clark, Gen. Counsel and Richard Bellak,
Associate Gen. Counsel, Tallahassee, amicus curiae
for The Florida Public Service Com'n.
Robert L. Nabors and Thomas H. Duffy of Nabors,
Giblin & Nickerson, P.A., Tallahassee, amicus
curiae for Florida Ass'n of Counties. Inc.
*106 GRIMES, Justice.
This is an appeal from a final judgment of the
Eighteenth Judicial Circuit of Florida. The case was
certified by the Fifth District Court of Appeal as
involving an issue of great public importance that
will have a great effect on the proper administration
of justice throughout the state and that requires
immediate resolution by this Court. We have
jurisdiction under article V, section 3(b)(5) of the
Florida Constitution.
Lake Mary Boulevard is a two-lane county road that
is maintained by Seminole County and passes
through the City of Lake Mary. Pursuant to a
franchise agreement with the city, Florida Power
Copt. (Q West 2000 No Claim to Orig. U.S. Govt. Works
579 SO.2d 105
(Cite as: 579 So,2d 105, *106)
Corporation (FPC) maintains overhead power lines
along the right of way. Upon determining to widen
Lake Mary Boulevard, the city and the county
enacted ordinances requiring FPC to relocate its
power lines underground. The city's ordinance
stated that FPC must bear the entire cost of
undergrounding. While the county's ordinance was
silent as to who would pay the cost of placing the
power lines underground. the county unequivocally
declared that it would not do so.
FPC sued the city and the county for a declaratory
judgment and injunctive relief against the
enforcement of the ordinances. FPC admitted that it
was obligated under section 337.403(1), Florida
Statutes (1989), to relocate the lines overhead within
the new right of way at its expense. However, FPC
contended that it would cost an additional
$1,250,000 to place the lines underground. FPC
was willing to place the lines underground only if the
city and the county would bear the additional cost.
Following the trial, the circuit judge upheld the
validity of the ordinances and directed FPC to place
its power lines underground or to remove them
entirely from the right of way.
[I] On appeal, the parties, supported by their
respective amici curiae, make numerous contentions.
Most significantly, FPC asserts that the ordinance
invades the exclusive authority of the Public Service
Commission to regulate rates and service. It says
that if the ordinances are upheld, similar ordinances
would be certain to follow and that the aggregate
cost of converting all of FPC's lines to underground
lines would exceed $2.5 billion. The city relies
upon its constitutional grant of authority under
article V111, section 2(b) of the Florida Constitution,
as well as its legislative grant of authority through
the Municipal Home Rule Powers Act, chapter 166,
Florida Statutes (1989). The county, which operates
under a charter form of government, stresses its
authority under article V 111 , section l(g) of the
Florida Constitution, as well as section 125.01(3)(a)
and (b), Florida Statutes (1989). Both the city and
the county rely heavily upon section 337.403(1),
Florida Statutes (1989), which was cited by the
circuit judge as authority for his ruling. Upon
consideration, we conclude that FPC must prevail.
Section 366.04(1), Florida Statutes (1989),
expressly confers jurisdiction on the Public Service
Conunission to "regulate and supervise each public
utility with respect to its rates and service." This
Page 89
section further provides that the jurisdiction
conferred upon the commission "shall be exclusive
and superior to that of all municipalities... or
counties, and, in case of conflict therewith, all
lawful acts, orders, rules, and regulations of the
commission shall in each instance prevail." S
366.04(1), Fla.Stat. (1989).
The Public Service Conunission has broad powers
in the exercise of its "exclusive and superior"
jurisdiction, including:
[the] power to prescribe fair and reasonable rates
and charges, classifications, standards of quality
and measurements, and service rules and
regulations to be observed by each public utility;
to require repairs, improvements, additions, and
extensions to the plant and equipment of any
public utility when reasonably necessary to
promote the convenience and welfare of the public
and secure adequate service or facilities for those
reasonably entitled thereto; ... and to prescribe all
rules and regulations reasonably necessary and
appropriate for *107 the administration and
enforcement of this chapter.
9366.05(1), Fla.Stat. (1989).
Requiring FPC to place its power lines underground
clearly affects its rates if not its service. As with
any other regulated public utility, FPC is entitled to
charge rates sufficient to make a reasonable rate of
return. 9 366.041(1), Fla.Stat. (1989); see also Gulf
Power Co. v. Florida Pub. Servo Comm'n, 453
SO.2d 799 (Fla. 1984). If FPC has to expend large
swns of money in converting its overhead power
lines to underground, these expenditures will
necessarily be reflected in the rates of its customers.
We believe that the jurisdiction of the Public
Service Commission to regulate rates and services of
public utilities preempts the authority of the city and
county to require FPC to place its lines
underground. While the authority given to cities and
counties in Florida is broad, both the constitution
and statutes recognize that cities and counties have
no authority to act in areas that the legislature has
preempted. See, e.g., art. VIII, 99 I(t), l(g), 2(b),
Fla.Const.; 99 125.01, 166.021, Fla.Stat. (1989);
Tribune CO. V. Cannella, 458 So.2d 1075
(Fla. 1984), appeal dismissed sub nom. Deperte V.
Tribune Co., 471 U.S. 1096, 105 S.C!. 2315, 85
L.Ed.2d 835 (1985); Speer v. Olson, 367 SO.2d 207
(Fla. 1978) . In an analogous situation, this Court
held that the City of Miami had no authority to
Copr. <1J West 2000 No Claim to Orig. U.S. Govt. Works
579 So.2d 105
(Cite as: 579 So.2d lOS, '107)
regulate the payment of workers' compensation
benefits. Barragan v. City of Miami, 545 So.2d 252
(Fla. 1989). We explained:
Section 166.021(3)(c), Florida Statutes (1987),
which is part of the municipal home rule powers
act, limits cities from legislating on any subject
expressly preempted to state government by
general law. The preemption need not be explicit
so long as it is clear that the legislature has clearly
preempted local regulation of the subject. Tribune
Co. v. Cannella, 458 So.2d 1075 (Fla. 1984),
appeal dismissed, 471 U.S. 1096, 105 S.Ct. 2315,
85 L.Ed.2d 835 (1985). There can be no doubt
that chapter 440 has preempted local regulation on
the subject of workers' compensation.
Barragan, 545 So.2d at 254.
The highest courts of four other states have also
rejected local governments' attempts to mandate the
placing of underground facilities at a utility's
expense. In striking down an ordinance similar to
those involved in the instant case, the Missouri
Supreme Court graphically explained why statewide
regulation of the subject was necessary.
If [the City] had the right by its ordinance to
specify how [the utility] should design and install
its transmission lines or to require it to spend this
substantially greater swn in constructing said lines,
then other municipalities would have like
authority.... If 100 such municipalities each had
the right to impose its own requirements with
respect to installation of transmission facilities. a
hodgepodge of methods of construction could
result and costs and resulting capital requirements
could mushroom. As a result, the supervision and
control by the Public Service Commission with
respect to the company, its facilities, its method of
operation, its service, its indebtedness, its
investment, and its rates which the General
Assembly obviously contemplated would be
nullified.
Union Elec. Co. v. City of Crestwood, 499 S.W.2d
480,483 (Mo. 1973).
Likewise, in Vandehei Developers v. Public Service
Commission, 790 P.2d 1282 (Wyo. 1990), the county
argued that it could condition the utility's use of the
county's right of way on the requirement that the
line be placed underground. In declaring the
ordinance invalid, the Wyoming Supreme Court held
that while the legislature had provided that the
permission of the county was required to use the
right of way, the statute did not grant the county the
Page 90
authority to regulate public utilities and that such
authority rested exclusively with the Public Service
Commission. Accord Public Servo Co. v. Town of
Hampton, 120 N.H. 68, 411 A.2d 164 (1980);
Duquesne Light Co. v. Upper 5t. Clair Township,
377 Pa. 323, 105 A.2d 287 (1954).
'108 The city seeks to distinguish this case from the
cases from other jurisdictions by pointing out that
they involved the undergrounding of transmission
lines rather than distribution lines. However, this
distinction, based solely upon the amount of voltage
carried in the line, is irrelevant to the legal issue
involved in those cases. There is nothing in the
stated rationale of those decisions that suggests there
would have been a different result if the lines to be
undergrounded were distribution rather than
transmission lines.
The circuit judge's reliance on section 337.403(1),
Florida Statutes (1989), is misplaced. This statute
reads in part as follows:
(1) Any utility heretofore or hereafter placed
upon, under, over, or along any public road that is
found by the authority to be unreasonably
interfering in any way with the convenient, safe,
or continuous use, or the maintenance,
improvement, extension, or expansion, of such
public road shall, upon 30 days' written notice to
the utility or its agent by the authority, be removed
or relocated by such utility at its own expense
except as provided in paragraphs (a) and (b).
The statute does not grant localities the power to
mandate the type of system to be used by a utility or
to determine who should pay for such a system. It
merely provides for the removal or relocation of
utility facilities when necessary to accommodate
expansion or maintenance. The city and county have
done more than direct FPC to remove or relocate its
lines to accommodate the road widening. The words
" removed or relocated" do not suggest the
extraordinary requirement of conversion of an
overhead electric system to an underground system
as a condition of use of the right of way.
[2] If there was any doubt that the legislature did
not intend that cities and counties could dictate the
decision of whether public utilities should convert
their overhead systems to underground, this was laid
to rest by the enactment of section 366.04(7)(a),
Florida Statutes (1989), which provides in pertinent
part that:
By July I, 1990, the commission shall make a
Copr. r!:J West 2000 No Claim to Orig. U.S. Govt. Works
579 So. 2d 105
(Cite as: 579 So.2d 105, "108)
determination as to the cost- effectiveness of
requiring the installation of underground electric
utility distribution and transmission facilities for
all new construction, and for the conversion of
overhead distribution and transmission facilities to
underground distribution and transmission
facilities when such facilities are replaced or
relocated. . . Upon a finding by the commission
that the installation of underground distribution
and transmission facilities is cost-effective, the
commission shall require electric utilities, where
feasible, to install such facilities.
Thus, the Public Service Commission is vested with
the authority to require conversion of distribution
lines to underground where "feasible" if the
commission fmds this to be "cost-effective."
Permitting cities or counties to unilaterally mandate
the conversion of overhead lines to underground
would clearly run contrary to the legislative intent
that the Public Service Commission have regulatory
authority over this subject.
In addition, through its use of the language
"conversion of overhead distribution and
transmission facilities to underground distribution
and transmission facilities," the legislature has
further weakened two of the contentions relied upon
by the city and the county that were discussed earlier
in this opinion. First, the language indicates that the
Page 91
words "removed or relocated" as used in section
337.403(1) were not intended to encompass the
changing of overhead facilities to underground
facilities. Moreover, it suggests that the legislature
does not make the distinction between distribution
and transmission lines by which the city and county
seek to distinguish the out-of-state cases.
We hold that the ordinances requiring FPe to
convert its overhead lines along Lake Mary
Boulevard to underground lines are invalid. In view
of our disposition of the case, we do not pass upon
FPC's contention that the city's ordinance
impermissibly' impaired its franchise agreement. We
hasten to point out that our ruling does *109 not
limit the ability of cities and counties to require
developers of new subdivisions to place their electric
power supply facilities underground. We reverse the
judgment and remand for entry of a judgment in
favor of FPe.
It is so ordered.
SHAW, C.l., and OVERTON, BARKETT,
KOGAN and HARDING, Jl., concur.
McDONALD, 1., dissents.
END OF DOCUMENT
Copr. Q West 2000 No Claim to Orig. U.S. Govt. Works
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Page 1 of7
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~~~
-CITE-
47 use Sec. 224
-EXPCITE-
TITLE 47 - TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS
CHAPTER 5 - WIRE OR RADIO COMMUNICATION
SUBCHAPTER II - COMMON CARRIERS
01/26/98
Part I - Common Carrier Regulation
-HEAD-
See. 224. Pole attachments
-STATUTE-
(a) Definitions
As used in this section:
(1) The term I 'utility" means any person who is a local exchange
carrier or an electric, gas, water, steam, or other public utility,
and who owns or controls poles, ducts, conduits, or rights-af-way
used, in whole or in part, for any wire communications. Such term
does not include any railroad, any person who is cooperatively
organized, or any person owned by the Federal Government or any
State.
(2) The term' 'Federal Government" means the Government of the
United States or any agency or instrumentality thereof.
(3) The term' 'State' I means any State, territory, or possession
of the United States, the District of Columbia, or any political
subdivision, agency, or instrumentality thereof.
(4) The term 1 'pole attachment" means any attachment by a cable
television system or provider of telecommunications service to a
pole, duct, conduit, or right-of-way owned or controlled by a
utility.
(5) For purposes of this section, the term " telecommunications
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carrier" (as defined in section 153 of this title) does not
include any incumbent local exchange carrier as defined in section
251 (hi of this title.
(b) Authority of Commission to regulate rates, terms, and
conditions; enforcement powers; promulgation of regulations
(1) Subject to the provisions of subsection (el of this section,
the Commission shall regulate the rates, terms, and conditions for
pole attachments to provide that such rates, terms, and conditions
are just and reasonable, and shall adopt procedur~s necessary and
appropriate to hear and resolve complaints concerning such rates,
terms, and conditions. For purposes of enforcing any
determinations resulting from complaint procedures established
pursuant to this subsection, the Commission shall take such action
as it deems appropriate and necessary, including issuing cease and
desist orders, as authorized by section 312(b) of this title.
(2) The Commission shall prescribe by rule regulations to carry
out the provisions of this section.
(c) State regulatory authority over rates, terms, and conditions;
preemption; certification; circumstances constituting State
regulation
(1) Nothing in this section shall be construed to apply to, or to
give the Commission jurisdiction with respect to rates, terms, and
conditions, or access to poles, ducts, conduits, and rights-of-way
as provided ln subsection (f) of this section, for pole attachments
in any case where such matters are regulated by a State.
(2) Each State which regulates the rates, terms, and conditions
for pole attachments shall certify to the Commission that -
(A) it regulates such rates, terms, and conditions; and
(B) in so regulating such rates, terms, and conditions, the
State has the authority to consider and does consider the
interests of the subscribers of the services offered via such
attachments, as well as the interests of the consumers of the
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utility services.
(3) For purposes of this subsection, a State shall not be
considered to regulate the rates, terms, and conditions for pole
attachments -
(Al unless the State has issued and made effective rules and
regulations implementing the State's regulatory authority over
pole attachments; and
(B) with respect to any individual matter, unless the State
takes final action on a complaint regarding sueD matter -
(i) within 180 days after the complaint is filed with the
State, or
(ii) within the applicable period prescribed for such final
action in such rules and regulations of the State, if the
prescribed period does not extend beyond 360 days after the
filing of such complaint.
(d) Determination of just and reasonable rates; . 'usable space' I
defined
(1) For purposes of subsection (b) of this section, a rate is
just and reasonable if it assures a utility the recovery of not
less than the additional costs of providing pole attachments, nor
more than an amount determined by multiplying the percentage of the
total usable space, or the percentage of the total duct or conduit
capacity, which is occupied by the pole attachment by the sum of
the operating expenses and actual capital costs of the utility
attributable to the entire pole, duct, conduit, or right-of~way.
(2) As used in this subsection, the term' 'usable space" means
the space above the minimum grade level which can be used for the
attachment of wires, cables, and associated equipment.
(3) This subsection shall apply to the rate for any pole
attachment used by a cable television system solely to provide
cable service. Until the effective date of the regulations
required under subsection (e) of this section, this subsection
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shall also apply to the rate for any pole attachment used by a
cable system or any telecommunications carrier (to the extent such
carrier is not a party to a pole attachment agreement) to provide
any telecommunications service.
(e) Regulations governing charges; apportionment of costs of
providing space
(1) The Commission shall, no later than 2 years after February 8,
1996, prescribe regulations in accordance with this subsection to
govern the charges for pole attachments used by t~lecommunications
carriers to provide telecommunications services, when the parties
fail to resolve a dispute over such charges. Such regulations
shall ensure that a utility charges just, reasonable, and
nondiscriminatory rates for pole attachments.
(2) A utility shall apportion the cost of providing space on a
pole, duct, conduit, or right-of-way other than the usable space
among entities so that such apportionment equals two-thirds of the
costs of providing space other than the usable space that would be
allocated to such entity under an equal apportionment of such costs
among all attaching entities.
(3) A utility shall apportion the cost of providing usable space
among all entities according to the percentage of usable space
required for each entity.
(4) The regulations required under paragraph (1) shall become
effective 5 years after February 8, 1996. Any increase in the rates
for pole attachments that result from the adoption of the
regulations required by this subsection shall be phased in equal
annual increments over a period of 5 years beginning on the
effective date of such regulations.
(f) Nondiscriminatory access
(I) A utility shall provide a cable television system or any
telecommunications carrier with nondiscriminatory access to any
pole, duct, conduit, or right-of-way owned or controlled by it.
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(2) Notwithstanding paragraph (1), a utility providing electric
service may deny a cable television system or any
telecommunications carrier access to its poles, ducts, conduits, or
rights~of-waYf on a non-discriminatory (FOOTNOTE 1) basis where
there is insufficient capacity and for reasons of safety,
reliability and generally applicable engineering purposes.
(FOOTNOTE 1) So in origlnal. Probably should be
"nondiscriminatory" .
(g) Imputation to costs of pole attachment rate
A utility that engages in the provision of telecommunications
services or cable services shall impute to its costs of providing
such services (and charge any affiliate, subsidiary, or associate
company engaged in the provision of such services) an equal amount
to the pole attachment rate for which such company would be liable
under this section.
(h) Modification or alteration of pole, duct, conduit, or
right-of-way
Whenever the owner of a pole, duct, conduit, or right-of-way
intends to modify or alter such pole, duct, conduit, or
right-of-way, the owner shall provide written notification of such
action to any entity that has obtained an attachment to such
conduit or right-of-way so that such entity may have a reasonable
opportunity to add to or modify its existing attachment. Any
entity that adds to or modifies its existing attachment after
receiving such notification shall bear a proportionate share of the
costs incurred by the owner in making such pole, duct, conduit, or
right-of-way accessible.
(i) Costs of rearranging or replacing attachment
An entity that obtains an attachment to a pole, conduit, or
right-of-way shall not be required to bear any of the costs of
rearranging or replacing its attachment, if such rearrangement or
replacement lS required as a result of an additional attachment or
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the modification of an existing attachment sought by any other
entity (including the owner of such pole, duct, conduit, or
right-of-way) .
-SOURCE-
(June 19, 1934, ch. 652, title II, Sec. 224, as added Pub. L.
95-234, Sec. 6, Feb. 21, 1978, 92 Stat. 35; amended Pub. L. 97-259,
title I, Sec. 106, Sept. 13, 1982, 96 Stat. 1091; Pub. L. 98-549,
Sec. 4, Oct. 30, 1984, 98 Stat. 2801; Pub. L. 103-414, title III,
Sec. 304 (a) (7), Oct. 25, 1994, 108 Stat. 4297; Pub. L. 104-104,
title VII, Sec. 703, Feb. 8, 1996, 110 Stat. 149.)
-MISC1-
AMENDMENTS
1996 - Subsec. (a) (1). Pub. L. 104-104, Sec. 703 (1), inserted
first sentence and struck out former first sentence which read as
follows: "The term 'utility' means any person whose rates or
charges are regulated by the Federal Government or a State and who
owns or controls poles, ducts, conduits, or rights-of-way used, in
whole or in part, for wire communication."
Subsec. (a) (4). Pub. L. 104-104, Sec. 703(2), inserted "or
provider of telecommunications service I I after .' system' , .
Subsec. (a) (5). Pub. L. 104-104, Sec. 703 (3), added par. (5).
Subsec. (c)(l). Pub. L. 104-104, Sec. 703(4), inserted ", or
access to poles, ducts, conduits, and rights-of-way as provided in
subsection (f) of this section," after "conditions".
Subsec. (e) (2) (B). Pub. L. 104-104, Sec. 703 (5), substituted
. . the services offered via such attachments" for "cable
television services'!.
Subsec. (d) (3). Pub. L. 104-104, Sec. 703 (6), added par. (3).
Subsecs. (e) to (i). Pub. L. 104-104, Sec. 703(7), added subsecs.
(e) to (i).
1994 - Subsec. (b) (2). Pub. L. 103-414 substituted' 'The
Commission" for "Within 180 days from February 21, 1978, the
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Corrunission' , .
1984 - Subsec. Ie) (3). Pub. L. 98-549 added par. (3).
1982 - Subsec. Ie). Pub. L. 97-259 struck out subsec. Ie) which
provided that, upon expiration of 5-year period that began on Feb.
21, 1978, provisions of subsec. (d) of this section would cease to
have any effect.
EFFECTIVE DATE OF 1984 AMENDMENT
Amendment by Pub. L. 98-549 effective 60 days after Oct. 30,
1984, except where otherwise expressly provided, see section 9(a)
of Pub. L. 98-549, set out as a note under section 521 of this
title.
EFFECTIVE DATE
Section effective on thirtieth day after Feb. 21, 1978, see
section 7 of Pub. L. 95-234, set out as an Effective Date of 1978
Amendment note under section 152 of this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 152, 251, 271 of this
title.
[~]~ 0
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I
t}'
U.S. Code
Page 1 of3
Search lISC, About Database. Download lISC. Classification Tables, Codification
4:J~~
-CITE-
47 use See. 253
01/26/98
-EXPCITE-
TITLE 47 - TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS
CHAPTER 5 - WIRE OR RADIO COMMUNICATION
SUBCHAPTER II - COMMON CARRIERS
Part II - Development of Competitive Markets
-HEAD-
Sec. 253. Removal of barriers to entry
-STATUTE-
(a) In general
No State or local statute or regulation, or other State or local
legal requirement, may prohibit or have the effect of prohibiting
the ability of any entity to provide any interstate or intrastate
telecommunications service.
(b) State regulatory authority
Nothing in this section shall affect the ability of a State to
impose, on a competitively neutral basis and consistent with
section 254 of this title, requirements necessary to preserve and
advance universal service, protect the public safety and welfare,
ensure the continued quality of telecommunications services, and
safeguard the rights of consumers.
(c) State and local government authority
Nothing in this section affects the authority of a State or local
government to manage the public rights-of-way or to require fair
and reasonable compensation from telecommunications providers, on a
competitively neutral and nondiscriminatory basis, for use of
public rights-of-way on a nondiscriminatory basis, if the
compensation required is publicly disclosed by such government.
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(d) Preemption
If, after notice and an opportunity for public corrunent, the
Commission determines that a State or local government has
permitted or imposed any statute, regulation, or legal requirement
that violates subsection (a) or (b) of this section, the Commission
shall preempt the enforcement of such statute, regulation, or legal
requirement to the extent necessary to correct such violation or
inconsistency.
(e) Commercial mobile service providers
Nothing in this section shall affect the application of section
332(c) (3) of this title to commercial mobile service providers.
(f) Rural markets
It shall not be a violation of this section for a State to
require a telecommunications carrier that seeks to provide
telephone exchange service or exchange access in a service area
served by a rural telephone company to meet the requirements in
section 214 (e) (1) of this title for designation as an eligible
telecommunications carrier for that area before being permitted to
provide such service. This subsection shall not apply -
(1) to a service area served by a rural telephone company that
has obtained an exemption, suspension, or modification of section
25l(c) (4) of this title that effectively prevents a competitor
from meeting the requirements of section 214 (e) (1) of this title;
and
(2) to a provider of commercial mobile services.
-SOURCE-
(June 19, 1934, ch. 652, title II, Sec. 253, as added Pub. L.
104-104, title I, Sec. 101 (ai, Feb. 8, 1996, 110 Stat. 70.)
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in section 252 of this title.
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Search use, About Database, Download use, Classification Tables, Codification
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FLORIDA CONSTITUTION
Page 61 of99
~
Constitution, by Revision No.8 (1998) to take effect January 7, 2003. As amended by Revision No.8 (1998),
effective January 7, 2003, s. I(i), Art. VIII, State Constitution, will read:
(i) COUNTY ORDINANCES. Each county ordinance shall be filed with the custodian of state records and shall
become effective at such time thereafter as is provided by general law.
SECTION 2. Municipalities.--
(a) ESTABLISHMENT. Municipalities may be established or abolished and their charters
amended pursuant to general or special law. When any municipality is abolished, provision shall
be made for the protection of its creditors.
(b) POWERS. Municipalities shall have governmental, corporate and proprietary powers to
enable them to conduct municipal government, perform municipal functions and render
municipal services, and may exercise any power for municipal purpqses except as otherwise
provided by law. Each municipal legislative body shall be elective.
(c) ANNEXATION. Municipal annexation of unincorporated territory, merger of
municipalities, and exercise of extra-territorial powers by municipalities shall be as provided by
general or special law.
SECTION 3. Consolidation.-- The government of a county and the government of one or
more municipalities located therein may be consolidated into a single government which may
exercise any and all powers of the county and the several municipalities. The consolidation plan
may be proposed only by special law. which shall become effective if approved by vote of the
electors of the county, or of the county and municipalities affected, as may be provided in the
plan. Consolidation shall not extend the territorial scope of taxation for the payment of pre-
existing debt except to areas whose residents receive a benefit from the facility or service for
which the indebtedness was incurred.
SECTION 4. Transfer of powers.--By law or by resolution of the governing bodies of each
of the governments affected, any function or power of a county, municipality or special district
may be transferred to or contracted to be performed by another county, municipality or special
district, after approval by vote of the electors of the transferor and approval by vote of the
electors of the transferee, or as otherwise provided by law.
SECTION 5. Localoption.--
(a) Local option on the legality or prohibition of the sale of intoxicating liquors, wines or
beers shall be preserved to each county. The status of a county with respect thereto shall be
changed only by vote of the electors in a special election called upon the petition of twenty-five
per cent of the electors of the county, and not sooner than two years after an earlier election on
the same question. Where legal, the sale of intoxicating liquors, wines and beers shall be
regulated by law.
(b) Each county shall have the authority to require a criminal history records check and a 3 to
5-day waiting period, excluding weekends and legal holidays, in connection with the sale of any
firearm occurring within such county. For purposes of this subsection, the term "sale" means the
transfer of money or other valuable consideration for any firearm when any part of the transaction
is conducted on property to which the public has the right of access. Holders of a concealed
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Title XI Chapter 162
COUNTY ORGANIZATION AND County Or
INTERGOVERNMENTAL Municipal Code
RELATIONS Enforcement
162.09 Administrative fines; costs of repair; liens.--
View
Entire
Chapter
(1) An enforcement board, upon notification by the code
inspector that an order of the enforcement board has not been
complied with by the set time or upon finding that a repeat
violation has been committed, may order the violator to pay a
fine in an amount specified in this section for each day the
violation continues past the date set by the enforcement board
for compliance or, in the case of a repeat violation, for each day
the repeat violation continues, beginning with the date the
repeat violation is found to have occurred by the code inspector.
In addition, if the violation is a violation described in S. 162.06
(4), the enforcement board shall notify the local governing body,
which may make all reasonable repairs which are required to
bring the property into compliance and charge the violator with
the reasonable cost of the repairs along with the fine imposed
pursuant to this section. Making such repairs does not create a
continuing obligation on the part of the local governing body to
make further repairs or to maintain the property and does not
create any liability against the local governing body for any
damages to the property if such repairs were completed in good
faith. If a finding of a violation or a repeat violation has been
made as provided in this part, a hearing shall not be necessary
for issuance of the order imposing the fine. If, after due notice
and hearing, a code enforcement board finds a violation to be
irreparable or irreversible in nature, it may order the violator to
pay a fine as specified in paragraph (2)(a).
(2)(a) A fine imposed pursuant to this section shall not exceed
$250 per day for a first violation and shall not exceed $500 per
day for a repeat violation, and, in addition, may include all costs
of repairs pursuant to subsection (1). However, if a code
enforcement board finds the violation to be irreparable or
irreversible in nature, it may impose a fine not to exceed $5,000
per violation.
(b) In determining the amount of the fine, if any, the
enforcement board shall consider the following factors:
1. The gravity of the violation;
2. Any actions taken by the violator to correct the violation; and
3. Any previous violations committed by the violator.
(c) An enforcement board may reduce a fine imposed pursuant
to this section.
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(d) A county or a municipality having a population equal to or
greater than 50,000 may adopt, by a vote of at least a majority
plus one of the entire governing body of the county or
municipality, an ordinance that gives code enforcement boards
or special masters, or both, authority to impose fines in excess of
the limits set forth in paragraph (a). Such fines shall not exceed
$1,000 per day per violation for a first violation, $5,000 per day
per violation for a repeat violation, and up to $15,000 per
violation if the code enforcement board or special master finds
the violation to be irreparable or irreversible in nature. In
addition to such fines, a code enforcement board or special
master may impose additional fines to cover all costs incurred by
the local government in enforcing its codes and all costs of
repairs pursuant to subsection (1). Any ordinance imposing such
fines shall include criteria to be considered by the code
enforcement board or special master in determining the amoun~t
of the fines, including, but not limited to, those factors set forth
in paragraph (b).
(3) A certified copy of an order imposing a fine, or a fine plus
repair costs, may be recorded in the public records and
thereafter shall constitute a lien against the land on which the
violation exists and upon any other real or personal property
owned by the violator. Upon petition to the circuit court, such
order shall be enforceable in the same manner as a court
judgment by the sheriffs of this state, including execution and
levy against the personal property of the violator, but such order
shall not be deemed to be a court judgment except for
enforcement purposes. A fine imposed pursuant to this part shall
continue to accrue until the violator comes into compliance or
until judgment is rendered in a suit to foreclose on a lien filed
pursuant to this section, whichever occurs first. A lien arising
from a fine imposed pursuant to this section runs in favor of the
local governing body, and the local governing body may execute
a satisfaction or release of lien entered pursuant to this section.
After 3 months from the filing of any such lien which remains
unpaid, the enforcement board may authorize the local
governing body attorney to foreclose on the lien. No lien created
pursuant to the provisions of this part may be foreclosed on real
property which is a homestead under s. 4, Art. X of the State
Constitution.
History.us. 1, ch. 80-300; s. 5, ch. 86-201; s. 1, ch. 87-391; s. 5, ch. 89-268; s. 4,
ch. 94-291; s. 1, ch. 95-297; s. 5, ch. 99-360.
Note.--Former s. 166.059.
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Title XII
MUNICIPALITIES
166.021 Powers.--
Chapter 166
Municipalities
View Entire Chapter
(1) As provided in s. 2(b), Art. VIII of the State Constitution,
municipalities shall have the governmental, corporate, and
proprietary powers to enable them to conduct municipal
government, perform municipal functions, and render municipal
services, and may exercise any power for municipal purposes,
except when expressly prohibited by law.
(2) "Municipal purpose" means any activity or power which may
be exercised by the state or its political subdivisions.
(3) The Legislature recognizes that pursuant to the grant of
power set forth in s. 2(b), Art. VIII of the State Constitution, the
legislative body of each municipality has the power to enact
legislation concerning any subject matter upon which the state
Legislature may act, except:
(a) The subjects of annexation, merger, and exercise of
extraterritorial power, which require general or special law
pursuant to s. 2(c), Art. VIII of the State Constitution;
(b) Any subject expressly prohibited by the constitution;
(c) Any subject expressly preempted to state or county
government by the constitution or by general law; and
(d) Any subject preempted to a county pursuant to a county
charter adopted under the authority of ss. l(g), 3, and 6(e), Art.
VIII of the State Constitution.
(4) The provisions of this section shall be so construed as to
secure for municipalities the broad exercise of home rule powers
granted by the constitution. It is the further intent of the
Legislature to extend to municipalities the exercise of powers for
municipal governmentai, corporate, or proprietary purposes not
expressly prohibited by the constitution, general or special law,
or county charter and to remove any limitations, judicially
imposed or otherwise, on the exercise of home rule powers other
than those so expressly prohibited. However, nothing in this act
shall be construed to permit any changes in a special law or
municipal charter which affect the exercise of extraterritorial
powers or which affect an area which includes lands within and
without a municipality or any changes in a special law or
municipal charter which affect the creation or existence of a
municipality, the terms of elected officers and the manner of
their election except for the selection of election dates and
qualifying periods for candidates and for changes in terms of
office necessitated by such changes in election dates, the
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distribution of powers among elected officers, matters prescribed
by the charter relating to appointive boards, any change in the
form of government, or any rights of municipal employees,
without approval by referendum of the electors as provided in s.
166.03J. Any other limitation of power upon any municipality
contained in any municipal charter enacted or adopted prior to
July 1, 1973, is hereby nullified and repealed.
(5) All existing special acts pertaining exclusively to the power
or jurisdiction of a particular municipality except as otherwise
provided in subsection (4) shall become an ordinance of that
municipality on the effective date of this act, subject to
modification or repeal as other ordinances.
(6) The governing body of a municipality may require that any
person within the municipality demonstrate the existence of
some arrangement or contract by which such person will dispose
of solid waste in a manner consistent with the ordinances of the
county or municipality or state or federal law. For any person
who will produce special wastes or biomedical waste, as the
same may be defined by state or federal law or county or city
ordinance, the municipality may require satisfactory proof of a
contract or similar arrangement by which special or biomedical
wastes will be collected by a qualified and duly licensed collector
and disposed of in accordance with the laws of Florida or the
Federal Government.
(7) Notwithstanding the prohibition against extra compensation
set forth in s. 215.425, the governing body of a municipality may
provide for an extra compensation program, including a lump-
sum bonus payment program, to reward outstanding employees
whose performance exceeds standards, if the program provides
that a bonus payment may not be included in an employee's
regular base rate of pay and may not be carried forward in
subsequent years.
(8) Entities that are funded wholly or in part by the
municipality, at the discretion of the municipality, may be
required by the municipality to conduct a performance audit paid
for by the municipality. An entity shall not be considered as
funded by the municipality by virtue of the fact that such entity
utilizes the municipality to collect taxes, assessments, fees, or
other revenue. If an independent special district receives
municipal funds pursuant to a contract or interlocal agreement
for the purposes of funding, in whole or in part, a discrete
program of the district, only that program may be required by
the municipality to undergo a performance audit.
(9)(a) The Legislature finds and declares that this state faces
increasing competition from other states and other countries for
the location and retention of private enterprises within its
borders. Furthermore, the Legislature finds that there is a need
to enhance and expand economic activity in the municipalities of
this state by attracting and retaining manufacturing
development, business enterprise management, and other
activities conducive to economic promotion, in order to provide a
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stronger, more balanced, and stable economy in the state, to
enhance and preserve purchasing power and employment
opportunities for the residents of this state, and to improve the
welfare and competitive position of the state. The Legislature
declares that it is necessary and in the public interest to facilitate
the growth and creation of business enterprises in the
municipalities of the state.
(b) The governing body of a municipality may expend public
funds to attract and retain business enterprises, and the use of
public funds toward the achievement of such economic
development goals constitutes a public purpose. The provisions
of this chapter which confer powers and duties on the governing
body of a municipality, including any powers not specifically
prohibited by law which can be exercised by the governing body
of a municipality, shall be liberally construed in order to
effectively carry out the purposes of this subsection.
ec) For the purposes of this subsection, it constitutes a public
purpose to expend public funds for economic development
activities, including, but not limited to, developing or improving
local infrastructure, issuing bonds to finance or refinance the cost
of capital projects for industrial or manufacturing plants, leasing
or conveying real property, and making grants to private
enterprises for the expansion of businesses existing in the
community or the attraction of new businesses to the
community.
(d) Nothing contained in this subsection shall be construed as a
limitation on the home rule powers granted by the State
Constitution for municipalities.
History.nS. 1, ch. 73-129; s. 1, ch. 77-174; s. 2, ch. 90-332; s, 2, ch. 92-90; s. 2,
ch. 93-207; s. 2, ch. 94-332; s. 1, ch. 95-178; s. 1, ch. 98-37.
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Title XII Chapter 166
MUNICIPALITIES Municipalities
166.0415 Enforcement by code inspectors; citations.--
View Entire Chapter
(1) The governing body of each municipality may designate its
agents or employees as code inspectors whose duty it is to
assure code compliance. Any person designated as a code
inspector may issue citations for violations of municipal codes
and ordinances, respectively, or subsequent amendments
thereto, when such code inspector has actual knowledge that a
violation has been committed.
(2) Prior to issuing a citation, a code inspector shall provide
notice to the violator that the violator has committed a violation
of a code or ordinance and shall establish a reasonable time
period within which the violator must correct the violation. Such
time period shall be no more than 30 days. If, upon personal
investigation, a code inspector finds that the violator has not
corrected the violation within the time period, the code inspector
may issue a citation to the violator. A code inspector does not
have to provide the violator with a reasonable time period to
correct the violation prior to issuing a citation and may
immediately issue a citation if the code inspector has reason to
believe that the violation presents a serious threat to the public
health, safety, or welfare, or if the violation is irreparable or
irreversible.
(3) A citation issued by a code inspector shall state the date and
time of issuance; name and address of the person in violation;
date of the violation; section of the codes or ordinances, or
subsequent amendments thereto, violated; name of the code
inspector; and date and time when the violator shall appear in
county court.
(4) Nothing in this section shall be construed to authorize any
person designated as a code inspector to perform any function or
duties of a law enforcement officer other than as specified in this
section. A code inspector shall not make physical arrests or take
any person into custody and shall be exempt from requirements
relating to the Special Risk Class of the Florida Retirement
System, bonding, and the Criminal Justice Standards and
Training Commission, as defined and provided by general law.
1(5) The provisions of this section shall not apply to the
enforcement pursuant to ss. 553.79 and 553.80 of building
codes adopted pursuant to s. 553.73 as they apply to
construction, provided that a building permit is either not
required or has been issued by the municipality. For the
purposes of this subsection, "building codes" means only those
codes adopted pursuant to s. 553.73.
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(6) The provisions of this section may be used by a municipality
in lieu of the provisions of part II of chapter 162.
(7) The provisions of this section are additional or supplemental
means of enforcing municipal codes and ordinances. Except as
provided in subsection (6), nothing in this section shall prohibit a
municipality from enforcing its codes or ordinances by any other
means.
History.--s, 13, ch, 89-268; s. 5, ch. 98-287,
INote.--Section 5, ch. 98-287, amended subsection (5), effective January 1, 2001,
to read:
(5) The provisions of this section shall not apply to the enforcement pursuant to 55.
5_5J~ 79 and 553.8_Q of the Florida Building Code adopted pursuant to s. 5.5.3.,1] as
applied to construction, provided that a building permit is either not required or ha~,
been issued by the municipality.
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Chapter 337
Contracting; Acquisition,
Disposal, and Use of
Property
337.401 Use of right-of-way for utilities subject to
regulation; permit; fees.--
Title XXVI
PUBLIC
TRANSPORTATION
View Entire
Chapter
(1) The department and local governmental entities, referred to
in ss. 337.401-337.404 as the "authority," that have jurisdiction
and control of public roads or publicly owned rail corridors are
authorized to prescribe and enforce reasonable rules or
regulations with reference to the placing and maintaining along",
across, or on any road or publicly owned rail corridors under
their respective jurisdictions any electric transmission,
telephone, or telegraph lines; pole lines; poles; railways;
ditches; sewers; water, heat, or gas mains; pipelines; fences;
gasoline tanks and pumps; or other structures hereinafter
referred to as the "utility."
(2) The authority may grant to any person who is a resident of
this state, or to any corporation which is organized under the
laws of this state or licensed to do business within this state, the
use of a right-of-way for the utility in accordance with such rules
or regulations as the authority may adopt. No utility shall be
installed, located, or relocated unless authorized by a written
permit issued by the authority. The permit shall require the
permitholder to be responsible for any damage resulting from
the issuance of such permit. The authority may initiate injunctive
proceedings as provided in s. 120.69 to enforce provisions of this
subsection or any rule or order issued or entered into pursuant
thereto.
(3) If any municipality requires any telecommunications
company to pay a fee or other consideration as a condition for
granting permission to occupy municipal streets and rights-of-
way for poles, wires, and other fixtures, such fee or
consideration may not exceed 1 percent of the gross receipts on
recurring local service revenues for services provided within the
corporate limits of the municipality by such telecommunications
company. Included within such 1-percent maximum fee or
consideration are all taxes, licenses, fees, in-kind contributions
accepted pursuant to subsection (5), and other impositions
except ad valorem taxes and amounts for assessments for
special benefits, such as sidewalks, street pavings, and similar
improvements, and occupational license taxes levied or imposed
by a municipality upon the telecommunications company. This
subsection shall not impair any franchise in existence on July 1,
1985.
(4) A municipality may by ordinance enter into an agreement
with any person providing telecommunication services defined in
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s. 203.012(7) as a condition for granting permission to occupy or
use any city street, alley, viaduct, elevated roadway, bridge, or
other public way. The agreement shall permit the
telecommunication service provider to construct, operate,
maintain, repair, rebuild, or replace a telecommunications route
within a municipal right-of-way. The agreement shall provide for
a fee or other consideration payable annually based on actual
linear feet of any cable, fiber optic, or other pathway that makes
physical use of the municipal right-of-way. In no event shall the
fee or other consideration imposed pursuant to this subsection
be less than $500 per linear mile of any cable, fiber optic, or
other pathway that makes physical use of the municipal right-of-
way. Any fee or other consideration imposed by this subsection
in excess of $500 shall be applied in a nondiscriminatory manner
and shall not exceed the sum of:
(a) Costs directly related to the inconvenience or impairment
solely caused by the disturbance of the municipal right-of-way;
and
(b) The reasonable cost of the regulatory activity of the
municipality.
(c) The proportionate share of cost of land for such street, alley,
or other public way attributable to utilization of the right-of-way
by a telecommunication service provider. Furthermore, no
telecommunication service provider shall be required to pay
more than one such fee or other consideration annually for the
construction, maintenance, operation, repair, rebuilding, or
replacement of a parallel telecommunications route owned by it,
or by a subsidiary under its direct control, which makes use of
the right-of-way of any municipality enacting an ordinance
pursuant to this subsection. The fee or other consideration
imposed pursuant to this subsection shall not apply in any
manner to any telecommunication service provider who provides
telecommunication services as defined in s. 203.012(3) for any
services provided by such service provider. Any agreement
entered into pursuant to the authority of this subsection prior to
June 3, 1988, and the fees or fee schedule in effect on that date
shall remain in full force and effect until such agreement expires.
Any ordinance enacted pursuant to this subsection prior to June
3, 1988, and the fees or fee scheduie in effect on that date shall
remain in full force and effect unless the ordinance is repealed by
the municipality. Notwithstanding the language contained herein
a municipality may reenact any ordinance which has an
automatic expiration date provided the ordinance does not
increase the fees in effect in said ordinance in vioiation of this
section.
(5) Except as expressly allowed or authorized by general law
and except for the rights-of-way permit fees subject to
subsection (3), a municipality may not levy on a
telecommunications company a tax, fee, or other charge for
operating as a telecommunications company within the
jurisdiction of the municipality or which is in any way related to
using roads or rights-of-way. A municipality may not allow a
telecommunications company to pay a fee or provide
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compensation in excess of the limits prescribed in this section. A
municipality may not require or solicit in-kind compensation in
lieu of any fees imposed pursuant to this section. Nothing in this
subsection shall impair any ordinance or agreement in effect on
the effective date of this act which provides for or allows in-kind
compensation by a telecommunications company.
(6) A local governmental entity may not use its authority over
the placement of facilities in its roads and rights-of-way as a
basis for asserting or exercising regulatory control over a
telecommunications company regarding matters within the
exclusive jurisdiction of the Florida Public Service Commission or
the Federal Communications Commission, including, but not
limited to, the operations, systems, qualifications, services,
service quality, service territory, and prices of a
telecommunications company.
(7) A telecommunications company that has obtained
permission to occupy the roads and rights-of-way of an
incorporated city or town or that is otherwise lawfully occupying
the roads or rights-of-way of a municipality on the effective date
of this act shall not be required to obtain additional consent to
continue such lawful occupation of those roads or rights-of-way;
however, nothing in this subsection shall be interpreted to limit
the power of a municipality to impose a fee or adopt or enforce
reasonable rules or regulations as provided in this section.
(8) Except as expressly provided in this section, this section
does not modify the authority of local governmental entities to
levy the tax authorized in s. 166.231 or the duties of
telecommunications companies under ss. 337.402-337.404. This
section does not apply to building permits, pole attachments, or
private roads, private easements, and private rights-of-way.
Except as expressly provided in this section, this section does not
limit or expand whatever powers counties may have relating to
roads and rights-of-way. Nothing in this section shall limit or
expand whatever authority a local government may have to
impose any fee pursuant to 47 U.S.c. ss. 542 and 573.
(9) As used in this section, "telecommunications company" has
the same meaning as defined in s. 364.02.
(10) This section, except subsections (1). (2), and (6), does not
apply to the provision of pay telephone service on public or
municipal roads or rights-of-way.
History.--s. 127, ch. 29965, 1955; s. I, ch. 63~279; s. I, ch. 65-52; 55. 23, 35, ch.
69-106; s. 141, ch. 84.309; s. 8, ch. 85-174; s. 8, ch. 86-155; 55. 2, 21, ch. 88-168;
5.8, ch. 89-232; S. 41, ch. 91-221; s. 26, ch. 94-237; s. 1. ch. 98-147; s. 2, ch. 99-
354.
Note.--Former 5.338.17.
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Chapter 337
Contracting; Acquisition,
Disposal, and Use of
Property
337.402 Damage to public road caused by utility.--When
any public road or publicly owned rail corridor is damaged or
impaired in any way because of the installation, inspection, or
repair of a utility located on such road or publicly owned rail
corridor, the owner of the utility shall, at his or her own expense,
restore the road or publicly owned rail corridor to its original
condition before such damage. If the owner fails to make such
restoration, the authority is authorized to do so and charge the'
cost thereof against the owner under the provisions of s.
337.404.
Title XXVI
PUBLIC
TRANSPORTATION
View Entire
Chapter
History.--s. 128, ch. 29965, 1955; s. 142, ch. 84-309; s. 27, ch. 94-237; s. 969, ch.
95-148.
Note.--Former 5.338,18.
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Chapter 3:'U
Contracting; Acquisition,
Disposal, and Use of
Property
337.403 Relocation of utility; expenses.--
Title XXVI
PUBLIC
TRANSPORTATION
View Entire
Chapter
(1) Any utility heretofore or hereafter placed upon, under, over,
or along any public road or publicly owned rail corridor that is
found by the authority to be unreasonably interfering in any way
with the convenient, safe, or continuous use, or the
maintenance, improvement, extension, or expansion, of such
public road or publicly owned rail corridor shall, upon 30 days' .
written notice to the utility or its agent by the authority, be
removed or relocated by such utility at its own expense except
as provided in paragraphs (a), (b), and (c).
(a) If the relocation of utility facilities, as referred to in s. 111 of
the Federal-Aid Highway Act of 1956, Pub. L. No. 627 of the 84th
Congress, is necessitated by the construction of a project on the
federal-aid interstate system, including extensions thereof within
urban areas, and the cost of such project is eligible and approved
for reimbursement by the Federal Government to the extent of
gO percent or more under the Federal Aid Highway Act, or any
amendment thereof, then in that event the utility owning or
operating such facilities shall relocate such facilities upon order
of the department, and the state shall pay the entire expense
properly attributable to such relocation after deducting therefrom
any increase in the value of the new facility and any salvage
value derived from the old facility.
(b) When a joint agreement between the department and the
utility is executed for utility improvement, relocation, or removal
work to be accomplished as part of a contract for construction of
a transportation facility, the department may participate in those
utility improvement, relocation, or removal costs that exceed the
department's official estimate of the cost of such work by more
than 10 percent. The amount of such participation shall be
limited to the difference between the official estimate of all the
work in the joint agreement plus 10 percent and the amount
awarded for this work in the construction contract for such work.
The department may not participate in any utility improvement,
relocation, or removal costs that occur as a result of changes or
additions during the course of the contract.
(c) When an agreement between the department and utility is
executed for utility improvement, relocation, or removal work to
be accomplished in advance of a contract for construction of a
transportation facility, the department may participate in the
cost of clearing and grubbing necessary to perform such work.
(2) If such removal or relocation is incidental to work to be done
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on such road or publicly owned rail corridor, the notice shall be
given at the same time the contract for the work is advertised for
bids, or 30 days prior to the commencement of such work by the
authority.
(3) Whenever an order of the authority requires such removal or
change in the location of any utility from the right-of-way of a
public road or publicly owned rail corridor, and the owner thereof
fails to remove or change the same at his or her own expense to
conform to the order within the time stated in the notice, the
authority shall proceed to cause the utility to be removed. The
expense thereby incurred shall be paid out of any money
available therefor, and such expense shall, except as provided in
subsection (1), be charged against the owner and levied and
collected and paid into the fund from which the expense of such
relocation was paid.
History.--s. 129, ch. 29965, 1955; s. I, ch. 57-135; s. 1, ch. 57-1978; 55. 23, 35,
ch. 69-106; s. 143, ch. 84-309; s. 12, ch. 87-100; s. 28, ch. 94-237; s. 970, ch. 95-
148; s. 2S, ch. 99-385.
Note.--Former s. 336.19.
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Chapter 337
Contracting; Acquisition,
Disposal, and Use of
Property
337.404 Removal or relocation of utility facilities; notice
and order; court review.--
Title XXVI
PUBLIC
TRANSPORTATION
View Entire
Chapter
(1) Whenever it shall become necessary for the authority to
remove or relocate any utility as provided in the preceding
section, the owner of the utility, or the owner's chief agent, shall
be given notice of such removal or relocation and an order
requiring the payment of the cost thereof, and shall be given
reasonable time, which shall not be less than 20 nor more than
30 days, in which to appear before the authority to contest the
reasonableness of the order. Should the owner or the owner's
representative not appear, the determination of the cost to the
owner shall be final. Authorities considered agencies for the
purposes of chapter 120 shall adjudicate removal or relocation of
utilities pursuant to chapter 120.
(2) A final order of the authority shall constitute a lien on any
property of the owner and may be enforced by filing an
authenticated copy of the order in the office of the clerk of the
circuit court of the county wherein the owner's property is
located.
(3) The owner may obtain judicial review of the final order of
the authority within the time and in the manner provided by the
Florida Rules of Appellate Procedure by filing in the circuit court
of the county in which the utility was relocated a petition for a
writ of certiorari in the manner prescribed by said rules or in the
manner provided by chapter 120 when the respondent is an
agency for purposes of chapter 120.
History.--s. 130, ch, 29965, 1955; s. 16, ch. 63~512; s. 1, ch. 69-267; 55. 23, 35,
ch. 69-106; s. 56, ch. 78-95; s. 144. ch. 84-309; s. 500. ch. 95-148.
Note.--Former s. 338.20.
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Title XXVII Chapter ~62
RAILROADS AND Special Powers of
OTHER REGULATED Telegraph and Telephone
UTILITIES Companies
362.01 Powers to occupy roads.--Any telegraph or telephone
company chartered by this or another state, or any individual
operating or desiring to operate a telegraph or telephone line, or
lines, in this state, may erect posts, wires and other fixtures for
telegraph or telephone purposes on or beside any public road or
highway; provided, however, that the same shall not be set so
as to obstruct or interfere with the common uses of said roads or
highways. Permission to occupy the streets of an incorporated.
city or town must first be obtained from the city or town council.
View Entire
c:!lilpter
Historyo--s. 1, ch. 782, 1856; RS 2256; s. 1, ch. 5262, 1903; GS 2820; RGS 4373;
CGL 6337.
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Title XXVII Chapter 364
RAILROADS AND OTHER Telecommunications
REGULATED UTILITIES Companies
364.01 Powers of commission, legislative intent.--
View Entire
Chapter
(1) The Florida Public Service Commission shall exercise over
and in relation to telecommunications companies the powers
conferred by this chapter.
(2) It is the legislative intent to give exclusive jurisdiction in all
matters set forth in this chapter to the Florida Public Service
Commission in regulating telecommunications companies, and
such preemption shall supersede any local or special act or
municipal charter where any conflict of authority may exist.
However, the provisions of this chapter shall not affect the
authority and powers granted in s. 166.231(9) or s. 337.401.
(3) The Legislature finds that the competitive provision of
telecommunications services, including local exchange
telecommunications service, is in the public interest and will
provide customers with freedom of choice, encourage the
introduction of new telecommunications service, encourage
technological innovation, and encourage investment in
telecommunications infrastructure. The Legislature further finds
that the transition from the monopoly provision of local exchange
service to the competitive provision thereof will require
appropriate regulatory oversight to protect consumers and
provide for the development of fair and effective competition, but
nothing in this chapter shall limit the availability to any party of
any remedy under state or federal antitrust laws. The Legislature
further finds that changes in regulations allowing increased
competition in telecommunications services could provide the
occasion for increases in the telecommunications workforce;
therefore, it is in the public interest that competition in
telecommunications services lead to a situation that enhances
the high-technological skills and the economic status of the
telecommunications workforce.
(4) The commission shall exercise its exclusive jurisdiction in
order to:
(a) Protect the public health, safety, and welfare by ensuring
that basic local telecommunications services are available to all
consumers in the state at reasonable and affordable prices.
(b) Encourage competition through flexible regulatory treatment
among providers of telecommunications services in order to
ensure the availability of the widest possible range of consumer
choice in the provision of all telecommunications services.
(c) Protect the public health, safety, and welfare by ensuring
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that monopoly services provided by telecommunications
companies continue to be subject to effective price, rate, and
service regulation.
(d) Promote competition by encouraging new entrants into
telecommunications markets and by allowing a transitional
period in which new entrants are subject to a lesser level of
regulatory oversight than local exchange telecommunications
companies.
(e) Encourage all providers of telecommunications services to
introduce new or experimental telecommunications services free
of unnecessary regulatory restraints.
(f) Eliminate any rules and/or regulations which will delay or
impair the transition to competition.
(g) Ensure that all providers of telecommunications services are
treated fairly, by preventing anticompetitive behavior and
eliminating unnecessary regulatory restraint.
(h) Recognize the continuing emergence of a competitive
telecommunications environment through the flexible regulatory
treatment of competitive telecommunications services, where
appropriate, if doing so does not reduce the availability of
adequate basic local telecommunications service to all citizens of
the state at reasonable and affordable prices, if competitive
telecommunications services are not subsidized by monopoly
telecommunications services, and if all monopoly services are
available to all competitors on a nondiscriminatory basis.
(i) Continue its historical role as a surrogate for competition for
monopoly services provided by local exchange
telecommunications companies.
History.--ss. 1-4, ch. 6186, 1911; 55. 1.6, ch. 6187, 1911; s. 1, ch. 6525, 1913;
RGS 4393; CGL 6357; s. 1, ch. 63-279; s. 1, ch. 65-52; s. 1, ch. 67-541; s. 3, ch.
76-168; s. 1, ch. 77-457; 55. 1,32, ch. 80-36; s. 2, ch. 81-318; s. 25, ch. 83-218;
55.6,7, ch. 89-163; 55. 1,48,49, ch. 90-244; s. 4, ch. 91-429; s. 5, ch. 95-403.
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Title XXVII Chapter 364
RAILROADS AND OTHER Telecommunications
REGULATED UTILITIES Companies
364.0361 Local government authority; nondiscriminatory
exercise.--A local government shall treat each
telecommunications company in a nondiscriminatory manner
when exercising its authority to grant franchises to a
telecommunications company or to otherwise establish
conditions or compensation for the use of rights-of-way or other
public property by a telecommunications company.
View Entire
Chapter
History...s. 33, ch. 95-403.
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Title XXVII Chapter 364
RAILROADS AND OTHER Telecommunications
REGULATED UTILITIES Companies
364.16 Connection of lines and transfers; local
interconnection; telephone number portability.--
View Entire
Chapter
(1) Whenever the commission finds that connections between
any two or more local exchange telecommunications companies,
whose lines form a continuous line of communication or could be
made to do so by the construction and maintenance of suitable
connections at common points, can reasonably be made and
efficient service obtained, and that such connections are
necessary, the commission may require such connections to be
made, may require that telecommunications services be
transferred, and may prescribe through lines and joint rates and
charges to be made, used, observed, and in force in the future
and fix the rates and charges by order to be served upon the
company or companies affected.
(2) Each alternative local exchange telecommunications
company shall provide access to, and interconnection with, its
telecommunications services to any other provider of local
exchange telecommunications services requesting such access
and interconnection at nondiscriminatory prices, terms, and
conditions. If the parties are unable to negotiate mutually
acceptable prices, terms, and conditions after 60 days, either
party may petition the commission and the commission shall
have 120 days to make a determination after proceeding as
required by s. 364.162(6) pertaining to interconnection services.
(3) Each local exchange telecommunications company shall
provide access to, and interconnection with, its
telecommunications facilities to any other provider of local
exchange telecommunications services requesting such access
and interconnection at nondiscriminatory prices, rates, terms,
and conditions established by the procedures set forth in s.
364.162.
(a) No iocal exchange telecommunications company or
alternative local exchange telecommunications company shall
knowingly deliver traffic, for which terminating access service
charges would otherwise apply, through a locai interconnection
arrangement without paying the appropriate charges for such
terminating access service.
(b) Any party with a substantial interest may petition the
commission for an investigation of any suspected violation of
paragraph (a). In the event any certificated local exchange
service provider knowingly violates paragraph (a), the
commission shall have jurisdiction to arbitrate bona fide
complaints arising from the requirements of this subsection and
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shall, upon such complaint, have access to all relevant customer
records and accounts of any telecommunications company.
(4) In order to assure that consumers have access to different
local exchange service providers without being disadvantaged,
deterred, or inconvenienced by having to give up the consumer's
existing local telephone number, all providers of local exchange
services must have access to local telephone numbering
resources and assignments on equitable terms that include a
recognition of the scarcity of such resources and are in
accordance with national assignment guidelines. Each local
exchange provider, except small local exchange
telecommunications companies under rate of return regulation,
shall provide a temporary means of achieving telephone number
portability. The parties, under the direction of the commission,
shall set up a number portability standards group by no later
than September 1, 1995, for the purposes of investigation and "
development of appropriate parameters, costs, and standards for
number portability. If the parties are unable to successfully
negotiate the prices, terms, and conditions of a temporary
number portability solution, the commission shall establish a
temporary number portability solution by no later than January
1, 1996. Each local exchange service provider shall make
necessary modifications to allow permanent portability of local
telephone numbers between certificated providers of local
exchange service as soon as reasonably possible after the
development of national standards. The parties shall negotiate
the prices, terms, and conditions for permanent telephone
number portability arrangements. In the event the parties are
unable to satisfactorily negotiate the prices, terms, and
conditions, either party may petition the commission and the
commission shall, after opportunity for a hearing, set the rates,
terms, and conditions. The prices and rates shall not be below
cost. Number portability between different certificated providers
of local exchange service at the same location shall be provided
temporarily no later than January 1, 1996.
(5) When requested, each certificated telecommunications
company shall provide access to any poles, conduits, rights-of-
way, and like facilities that it owns or controls to any local
exchange telecommunications company or alternative local
exchange telecommunications company pursuant to reasonable
rates and conditions mutually agreed to which do not
discriminate between similarly situated companies.
History...s. 17, ch. 6525,1913; RGS 4409; CGL 6373; s. 3, ch. 76.168; 5.1, ch.
77-457; 55. 16, 32, ch. 80-36; s. 2, ch. 81-318; 55.6,7, ch. 89-163; 55. 20, 48, 49,
ch. 90-244; s. 4, ch. 91-429; s. 14, ch. 95-403.
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Un;f;ed Tax:
SIMPLIFYING
COMMUNICA TIONS
TAXATION IN
FLORIDA:
OVERVIEW AND ISSUES
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Florida House Of Representatives
Committee on Utilities and Communications
October, 1999
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COMMITTEE ON UTILITIES AND COMMUNICATIONS
MEMBERS
Rep. Luis E. Rojas, Chairman
Rep. Josephus Eggelletion, Vice Chairman
Rep. George Albright
Rep. Joe Arnall
Rep. Gustavo Barreiro
Rep. Gus Bilirakis
Rep. Tom Feeney
Rep. J. Dudley Goodlette
Rep. Bob Henriquez
Rep. Randy Johnson
Rep. Willie Logan
Rep. Ken Pruitt
Rep. Chris Smith
Rep. Tracy Stafford
Rep. Dwight Stansel
STAFF
Patrick L. "Booter" Imhof, Staff Director
Lynn Koon, Committee Administrative Assistant
Charles Murphy, Staff Attorney
Wendy Holt, Legislative Analyst
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Table of Contents
PAGE
Executive Summary 1
I. Introduction 3
II. Impetus for Simplified Tax 5
III. Local Government Concerns 7
IV. Negotiations Regarding a Simplified Tax 9
V. State and Local Taxes and Fees 10
A. Public Service Tax (also called the
Municipal Utility Tax or MUT) 10
B. Gross Receipts Tax 12
C. State Sales Tax 14
D. Local Option Sales Surtax 15
E. Franchise Fee 16
F. Telecommunications Access
System Act (TASA) Fee 17
G. 911/E911 Fee 17
VI. The Florida Constitution 19
A. Impairment of Contract 19
B. Taxpayer Bill of Rights 19
C. State Revenue Limitation 20
D. Mandates 20
E. Public Education Capital
Outwy (PECO) 21
Appendix A. Taxes and Fees Associated with
Telecommunications Services 22
Appendix B.
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Industry and Local Government
Positions on Issues Related to the
Simplified Tax
23
1. Problems with the way that telecommunications services are currently taxed in Florida.
2. Annual costs for the industry to comply with the requirements of the current tax system.
3. Annual cost for local governments to implement the current system.
4. Annual cost for the state to implement a unified tax system.
5. How a unified tax might improve on the current method of taxing telecommunications.
6. Obstacles to implementing a unified telecommunications tax.
7. A unified telecommunications tax system and the requirements of the Florida Constitution.
8. Florida Statutes that would need to be amended in order to implement a unified
telecommunications tax
9. Federal law and the inclusion of cable television service in the unified telecommunications
tax.
10. Federal law and the inclusion of cable franchise fees in the unified telecommunications tax.
I I. Industry segments and the desirability of a unified tax. .
12. Ratepayer frustration with the proliferation of line item charges added to telephone bills.
13. Unified tax and facus groups.
14. Whether a unified tax will represent a tax increase or a tax decrease for residential
consumers of cable television, basic local telecommunications service, vertical features,
the Internet, and long distance services.
Appendix C.
Appendix D.
Appendix E.
Appendix F.
Appendix G.
Seven Types of Local Option
Sales Surtaxes
24
Intemet Tax Freedom Act
26
F.C.C. 1998 Glossary of
Telecommunications Terms
27
State and Local Taxes
and Fees Stated as Percentage
of Bill. --BellSouth
28
Levy of Local Discretionary
Sales Surtaxes
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EXECUTIVE SUMMARY
Because of changes in the telecommunications marketplace that may make the current tax
structure increasingly unworkable. the staff of the House Committee on Utilities and
Communications was directed to monitor the possible development of a simplified
telecommunications tax proposal and to gather background information that might assist members
in evaluating the merits of such a proposal.
With the removal of regulatory restrictions. and the development of new technologiesm
computer, television, and telephone services (whether land line or wireless) will increasingly begin
to look more alike. This trend is known as convergence. Similarly;communications providers have
begun to offer packages of several types of services for a single price; this is called bundling.
Convergence and bundling will increasingly blur distinctions between categories of communications
services.
Current law provides for seven state and local taxes and fees that apply to various
communications services. These include the following:
. Public Service Tax;
. Gross Receipts Tax;
. State Sales Tax;
. Local Option Sales Surtax;
. Franchise Fee;
. Telecommunications Access System Act Fee;
. 9 lllE9 I I Fee.
These taxes and fees have varying rates and bases and apply differently to different services.
Some of the revenues from communications taxes have been bonded by local governments; others
are bonded at the state level to fund Public Education Capital Outlay (PECO).
According to industry representatives, variations in local tax and fee levies and the
requirement that taxes be filed with hundreds of local tax jurisdictions, create an expensive
administrative burden for the industry. Thus, the industry favors state administration of a simplified
communications tax.
Local governments want to ensure that any change in the tax structure is equitably collected
and distributed, and negatively impacts neither local revenues (including projected growth), nor the
ability to bond funds. Development of a collection and distribution model is complicated because
not all local governments are currently collecting communications taxes and fees at the statutorily
authorized maximum level, and because noncharter counties are not statutorily authorized to collect
all of the taxes authorized for municipalities and charter counties.
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The Legislature has the power under the Florida Constitution to implement a simplified
communications tax. However, in crafting the legislation, care must be taken to comply with
constitutional requirements involving the following:
. impairment of contract,
. the taxpayer bill of rights,
. the state revenue limitation,
. local mandates, and
. Public Education Capital Outlay (PECO).
A simplified tax must be compatible with federal law governing franchise fees applicable to
cable television service. There is also a three year federal moratorium on taxation of the Internet
which preempts Florida's authority to tax Internet access service.
Representatives of industry and local governments have been meeting to develop a workable
simplified tax. Among more specific issues, these meetings have generally focused On the following:
· establishing a revenue benchmark based on current law;
. crafting an equitable collection and distribution system;
. preserving bondable revenue streams;
. protecting current bond holders;
~ prc3erving local autonomy with respect to rights of way;
· avoiding the creation of precedents that might erode local authority to collect franchise fees
from electric and gas industries; and
. creating a competitively and technologically neutral tax.
Once a simplified tax proposal is developed, it is understood that representative consumer
bills will need to be "run" to determine taxpayer impact; at that time adjustments may need to be
made to correct any disproportionate tax burdens.
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I. INTRODUCTION
The staff of the House Committee on Utilities and Communications was directed by
the Chairman, and the Speaker of the House, to monitor the possible development of a
simplified telecommunications tax proposal and to gather background information that might
assist members in evaluating the merits of such a proposal. The proposal is being negotiated
by the Florida League of Cities, the Florida Association of Counties, the Florida
Telecommunications Industry Association ("FTIA"), 1 the Florida Cable
Telecommunications Association ("FCT A")' and others (~ollectively the "Work Group").
While the members of the Work Group are working to develop a simplified tax, the cities
and counties currently neither support nor oppose the development of a simplified tax. This
is because the specifics of any eventual proposal will matter a great deal to the local
governments and, to this point, the simplified tax negotiations have been only conceptual.
In developing this report, staff did the following:
attended many of the meetings in which a proposed simplified telecommunications
tax was discussed;
conducted research of relevant statutory and constitutional requirements;
reviewed the report by the 1996 Telecommunications Taxation Task Force and the
1996 Interim Report of the Senate Committee on Commerce and Economic
Opportunities and Ways and Means; and
lThe FTIA is comprised of the following telecommunications providers plus a number of
additional non-provider members: Alltel Communications, Inc.; AT&T; AT&T Wireless
Services; BellSouth Telecommunications, Inc.; BellSouth Mobility, Inc.; Frontier
Communications of the South, Inc.; GTE Florida Inc.; GTE Wireless; Intermedia
Communications, Inc.; Nextel Communications; Northeast Florida Telephone Company, Inc.;
Primeco Personal Communications, L.P.; Progress Telecommunications Corp.; Sprint - Florida,
Inc.; Sprint PCS; TDS Telecom/Quincy; Vista-United Telecommunications.
'The FCT A is comprised of the following cable providers plus a number of additional
members who are not cable providers: Adelphia; Advanced Cable Communications; AT&T
Broadband & Internet Services; Charter Communications; Comcast; Cox; FSN Cable; Jones
Intercable; MediaCom; MediaOne; Palm Coast Cablevision; Southeast Cable TV; Time Warner;
Watson Cable Company.
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developed a questionnaire in consultation with the Chairman which was sent to
industry and government entities participating in the development of the simplified
tax proposal.
The results of this research and review are set forth in this report.
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II. IMPETUS FOR SIMPLIFIED TAX .
There are seven distinct state-authorized taxes and fees applicable to telecommunications
service] Cable television service is subject to higher local franchise fees based on federal law 4
Internet Service is not taxed.'
Perceived difficulties with the current taxation scheme are the result of a gradual opening of
telecommunications markets and a constant evolution of technologies.6 Regulatory and
technological changes have tended to result in a blurring, or convergence,7 of telecommunications,
television and computer services. Each of these services is beginning to be offered by cable, local
telephone, long distance telephone, Internet, satellite and wirele,5s companies.
As service offerings converge and also become increasingly bundled,8 the eXIsting
distinctions between services for purposes of tax rates, bases, and exemptions will become an
increasingly difficult and artificial accounting problem for the companies. According to the filA,
'Eight if you count the disparate franchise fee treatment of local and long distance
telecommunications service. See section V. of this report for a summary of the state and local
taxes and fees. See also Appendix A. for a chart prepared by DOR comparing the applicable
taxes and Appendix F which illustrates the tax burden on local exchange service 3S reported by
BellSouth.
'See 47 U.S.C. 542(b). (Authorized fees are "not to exceed 5 percent of . . . gross
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revenues .
'The 1998 Internet Tax Freedom Act (Sec 1100-01, PL 105-277) established a three year
moratorium on taxation of Internet access and multiple or discriminatory taxes on electronic
commerce. See Appendix D. Although the Internet Tax Freedom Act "grandfathers" existing
taxation of Internet Access, the service is not taxable under Florida Law. See s. 203.012(5),
Florida Statutes (exempting Internet access service from gross receipts tax); s. 166.231(9),
Florida Statutes (cross referencing gross receipts language for purposes of the municipal utilities
tax); s. 212.05(l)(e)l, Florida Statutes (cross referencing Section 203.012, Florida Statutes, for
purposes of sales tax.
6E.g., wireless, satellite, and Internet offerings of video, voice and data.
'In its" 1998 Glossary of Telecommunications Terms" the Federal Communications
Commission (FCC) states that "convergence means that providers of communications systems
can deliver products and services that compete with products and services now delivered by other
networks. One example would be a cable company providing local phone service or a local
phone company providing video services." The F.CC Glossary is included as Appendix E.
8re., combined and sold in packages.
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statewide providers have the additional burden of being subject to hundreds of individual local tax
jurisdictions with differing tax rates and potentially differing interpretations of how thes~
complicated accounting matters should be treated. The FfIA reports that a new computer platform
capable of billing, collecting and remitting appropriate tax to Florida jurisdictions costs more than
$8 million to create.. This cost would appear to be a tremendous barrier to market entry by new
providers.
The FfIA also indicates that, even with such an expensive system, the industry must still pair
each customer with the appropriate taxing jurisdiction. This pairing process is known as "situsing."
With city annexations and multiple jurisdictions sometimes claiming the same address, situsing can
be very difficult and labor intensive. Correcting mistakes when a company fails to place a person
in the correct taxing jurisdiction is similarly labor intensive. Moreover, according to the industry,
because of disparities in taxation levels among taxation jurisdictions, inaccurate pairings of taxpayer
and taxation jurisdictions have resulted in several class action law suits by customers. 10
FfIA estimates that the combined annual costs for its 18 members to comply with the
current tax laws totals between $10 and $15 million." Asked to describe problems with the current
taxation of telecommunications, the Department of Revenue described many of the problems
discussed above and concluded that "these burdens are likely to increase with the blending of
services, some subject to tax and some not, with the rate of taxation varying with the type of service,
the type of user, and the location of the user." 12
.See FfIA response to committee questionnaire, question 2, Appendix B.
!OSee FfIA response to committee questionnaire, question I, Appendix B.
II See FfIA response to committee questionnaire, question 2, Appendix B.
I'OOR response to committee questionnaire, question I, Appendix B.
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III. LOCAL GOVERNMENT CONCERNS
Generally, local governments are concerned about giving up local autonomy with respect to
rights-of-way, and tax revenues. The League of Cities estimates that municipalities I] receive
approximately $246,747,000 annually from the cable and telecommunications companies for the
combined payment of franchise fees, municipal utilities tax, local option sales tax, and local
government half-cent sales tax program. The cities want to preserve these revenues and have them
continue to grow. Local governments also are concerned about how bonding issues will be handled;
naturally they are protective of their ability to continue to attract bond investors.
Because not all local tax jurisdictions have decided to tax 'at the maximum allowable level,
and non-charter counties are not authorized to collect all of the taxes authorized for municipalities,
there is concern at the local level over how a statewide simplified tax will treat local governments
that are not similarly situated. This concern has taken the form of numerous questions about how
taxes will be assessed and how revenues will be distributed. More specifically, local governments
primary concern is preserving revenue capacity when moving from a local option tax structure to a
simplified tax implemented statewide. This transition poses the second major concern which is how
to establish a distribution mechanism that will fairly allocate revenues among the various local
governments. Moving from a local option system to a revenue sharing system can be a complex
political and logistical transition. During the August meeting of the Work Group there was a
sentiment that nothing more remained to be discussed .mtil th~re i~ a pro?0sal on the table that Cal'
be evaluated by the participants. Even if every substanti ve issue regarding a simplified tax can be
resolved, there is still some concern on the part of local governments because one Legislature cannot
bind subsequent Legislatures. Thus, even if a perfectly equitable simplified tax can be devised, the
same cannot be guaranteed going forward.
In response to the committee questionnaire, the City of Orlando, and the League of Cities
identified several obstacles to implementing the simplified tax. 14 Among these is concern about local
governments losing direct control over audit verification. Local governments find
telecommunications taxes to be a reliable, and bondable revenue source that has a proven and
predictable growth rate. They believe that care must be taken with any system designed to distribute
a simplified tax so that municipalities that have implemented telecommunications taxes, and come
to rely on this revenue source, are ensured such revenues including projected growth.ls
13These estimates do not include revenues collected by counties from cable and
telecommunications providers.
B.
14See OrlandolLeague of Cities response to committee questionnaire, number 6, Appendix
15/d.
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Including franchise fees in the simplified tax calls into question issues associated with local
government's authority to manage rights-of-way. This authority is viewed by local governments ::s
essential to the protection of the health, safety and welfare of citizens and thus, any erosion of home
rule authority with respect to rights-of-way may cause concern to local governments.16
.,
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Local governments also are concerned that calling franchise fees a tax creates a precedent
that could jeopardize necessary revenue sources if such a precedent were applied to other utility
companies (electric and gas) that use local rights-of-way. Thus, local governments believe that care
must be taken to preserve the identity of funds in the simplified tax that are designated as franchise
fees. .7
Another concern raised by local governments is that reassignment of initial ownership of tax
funds from local governments to the state raises potential legal and fiscal problems for local
jurisdictions which have bonded revenues from telecommunications taxes. Local governments
believe that care must be taken to ensure that current and future bond ratings are not impaired.18
The City of Orlando, and the League of Cities observe that a flat-rated, simplified tax on a
broad base of all telecommunications/communications services could result in a tax increase on a
number of non-charter county taxpayers that currently are not taxed on these services. 19 How
revenues from these areas are to be treated is of considerable interest to local governments.
16!d.
17!d,
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IV. DISCUSSIONS REGARDING A SIMPLIFIED TAX
A Work Group comprised of industry and governmental stake holders has been discussing
issues associated with a simplified tax and attempting to craft a simplified tax proposal.
Participation has been wide ranging; however, a core group included representatives from BellSouth,
the Florida Telecommunications Industry Association, the Florida Cable Telecommunications
Association, the Florida League of Cities, the Association of Counties, and the Department of
Revenue. The cities of Tampa, Tallahassee, Orlando, and Jacksonville were also active participants.
The Work Group has toiled to determine what taxes and fees should be included in a simplified tax,
how such a tax and distribution system should be structured, the ClllTent and projected revenue levels
attributable to the taxes and fees that will be incorporated into the simplified tax, the basis upon
which taxes will be assessed, and the services that should be subject to the tax. While there appears
to be some consensus on some of these issues, the status of the Work Group might best be
summarized by paraphrasing a comment made at the August meeting---there is nothing more that
can be accomplished until the concept is reduced to writing in the form of proposed legislation. Only
then can stake holders realistically begin to weigh the benefits and impacts of the proposal and craft
suggested compromises.
As a simplified tax proposal becomes more concrete, it is understood by the Work Group
members that consumers / tax payers will need to he brought into the dialogue. Tax impact will
depend on each customer's usage pattern and local taxation jurisdiction. Thus, once issues are
resolved between local governments and the industry, it is anticipated that various representative
consumer bills will be "run" under the simplified tax proposal to determine tax payer impacts. At
tliat point, adjustments can be made in the proposal to correct any perceived inequities.
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V. STATE AND LOCAL TAX SUMMARY
In addition to the numerous federal taxes and fees, the following seven state and local
taxes and fees appear on customer bills in Horida.
+ Public Service Tax (also called the Municipal Utility Tax or MOT);
+ Gross Receipts Tax;
+ Sales Tax on Communications;
+ Local Option Sales Surtax;
+ Franchise Fees;
+ Telecommunications Access System Act (TASA) Fee; and
+ 911/E911 Fee.
The Work Group concluded that the fees supporting deaf relay service and 911/E911
service were not appropriate for inclusion in the simplified structure. Thus, the Work Group
has been attempting to develop a simplified tax based on the remaining four taxes plus local
franchise fees for cable and telecommunications.20
A. Public Service Tax (also called the Municipal Utility Tax or
MDT)
Municipalities and charter counties are authorized to levy a tax on the purchase of
telecommunications services.21
For this purpose, telecommunications service includes local telephone service,
telegram or telegraph service, teletypewriter service, private communication service, cellular
service, specialized mobile radio service, pagers and paging service (beepers) and any form
of mobile or portable one or two way communications."
20Because describing the taxes in a narrative is invariably cumbersome, staff has included
at Appendix A, a spread sheet prepared by the Department of Revenue which concisely
illustrates the applicability, rates and revenues of the taxes currently being considered for the
simplified tax. To staffs knowledge, such a document does not exist for franchise fees.
"s. 166.231(9), Florida Statutes. See also e.g., Volusia County v. Dickinson, 269 So.2d 9
(Fla. 1972) (reasoning that charter counties have authority comparable to municipalities). The
MUT also applies to the purchase of other utility services such as electricity, gas, and water
service. s. 166.231(l)(a), Florida Statutes.
"ss. 166.231 and 203.012(5), Florida Statutes.
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Telecommunications service does not include incidental services or related
equipment such as t.'1e provisioning and maintenance of customer premises equipment. The
term also excludes Internet access service, electronic mail service, electronic bulletin board
service, or similar on-line computer services.2]
Municipalities levying the tax have two options for collection:
Up to 10 percent of the monthly recurring customer service charges.
Excluding: public telephone charges collected on site; access
charges; customer access line ch_arges paid to a local telephone
company.24
Or
Up to 7 percent of the total amount charged for any telecommunications
service that originates and terminates within Florida that is provided within
the municipality or attributable to a communications device, service address
or billing address that is located within a municipality.25
Excluding: public telephone charges collected on site; charges for
for"iga (;xcharlge vi' pri vate line services (cxcept when these are used
as a substitute for specified local services); access charges; and any
customer access line charges paid to a local company."
The MUT is collected by the seller of the taxable telecommunications service and
remitted to the appropriate municipality.27 The seller is permitted to keep I percent of the
amount of the tax collected as compensation for this responsibility."
23fd.
"s.166.231(9)(a) I, Florida Statutes.
2'Cellular and other mobile services are taxed only on the monthly recurring charges
excluding variable usage charges. ss. 166.23 I (9)(a)2 and 203.012(5)(b), Florida Statutes.
26s.166.231 (9)(a)2, Florida Statutes.
27S. 166.231(9)(f), Florida Statutes.
"s. 166.231(9)(b), Florida Statutes.
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The League of Cites reports that in fiscal year 96-97, the 260 municipalities which
have implemented the tax collected $169,574,675 for the municipal utilities tax on
telecommunications services. Counties imposing this tax collected $51.3M. for that same
year. 2.
B. Gross Receipts Tax
Providers of utility service'o must pay a 2.5 percent tax on the total amount of gross
receipts derived from business done in Florida, between points within Florida." Although
the tax is owed by the provider, it may be separately stated on customer bills and based on
the total amount of any bilL" When separately stated, the tax must be paid by the provider's
customers (including all government units).33
The 2.5 percent tax applies to the gross receipts for the sale of the following:
. local telephone service;
. telegram or telegraph service;
. teletypewriter service;
. private communication service;
. cellular service;
. specialized mobile radio service;
. pagers and paging service (beepers); and,
. any form of mobile or portable one or two way communications. J4
For interstate calls the tax applies to the following:
charges imposed at each channel termination point within Florida;
2.See September 1998, Local Government Financial Information Handbook prepared by
the Flor:ida Legislative Committee on Intergovernmental Relations and the Department of
Revenue.
lOUtility service means "electricity for light, heat, or power; natural or manufactured gas
for light, heat, or power; or telecommunications services." s. 203.012(9), Florida Statutes.
liS. 203.01(1)(a-b), Florida Statutes. For telecommunications service, the tax is also
owed on interstate services billed or charged to a Florida telecommunications number, device, or
customer. s. 203.60(1), Florida Statutes.
"s. 203.01(5), Florida Statutes.
"[d.
34S. 203.012(5), Florida Statutes.
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charges for total channel mileage between each channel
termination point within Florida;
half of the charges imposed for total channel mileage between the
first channel termination point inside Florida and the
nearest channel termination point outside Florida.35
The tax does not apply to the following:
+ Internet access service; electronic mail service; electronic bulletin
board service, or similar on-line computer services;36
+ separately stated charges made f?r incidental services or related
equipment such as the provisioning and maintenance of customer
premises equipment;"
+ charges made to the public for commercial or cable television (an
allocation procedure is created to determine the taxable amount when
cable is used for two way telecommunications);"
+ charges made by hotels and motels for local telephone service when
such charge occurs incidental to the right of occupancy in such hotel
or motel;3"
+ charges for connection, disconnection, move, change, suspension of
service, service order, number change, restoration;40
~ charges fOf yellow pages li.stillgS.41
For fiscal year 99-2000 the gross receipts tax on communications will generate $334.4M. 42
Such revenues are deposited in the Public Education Capital Outlay and Debt Service Trust Fund
("PECO").43
35S. 203.013(2), Florida Statutes.
3~S. 203.012(5), Florida Statutes.
"/d.; ss. 203.012(2)(b)l, and 5, Florida Statutes.
"ss. 203.012(2)(b)2 and s. 203.01(9), Florida Statutes.
19s. 203.012(2)(b)3, Florida Statutes.
40S. 203.012(2)(b)4, Florida Statutes.
41S. 203.012(2)(a), Florida Statutes.
42 See OaR tax chart, Appendix A.
41 Article XII, Section 9(a)(2), Florida Constitution; S. 235.42(2)(a) I, Florida Statutes.
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c. State Sales Tax
The state sales tax on teleconununications service is 7 percent." In this context, the taxable
services include "all teleconununications services of whatever nature." 45
The following are exempted from the state sales tax:
local service provided via pay telephone;46
residential telephone service;47
yellow pages classified listing charges;48
"s. 212.05(l)(e)1, Florida Statutes. (The statute provides that a tax is due and payable as
follows: "At a rate of 6 percent on charges for: All telegraph messages and long-distance
telephone calls beginning and terminating in this state, teleconununications service as defined in
s. 203.012, and those services described in s. 203.012(2)(a), except that the tax rate for charges
for telecommunications service is 7 percent."). (Emphasis supplied.).
.'s. L12.05(l)(e)1., Florida Statutes (cross referencing definition ofteleconununication
service found at s. 203.012, Florida Statutes, and those services described in s. 203.012(2)(a),
Florida Statutes.). (By way of additional clarification, the statute specifies that the following
teleconununications services are taxable: local telephone services; toll telephone services;
telegraph services; teletypewriter services; private conununications services; cellular/wireless
telephone services; paging services; all telegraph and toll calls originating and terminating in
this state; telegraph and telephone equipment installation; access charges; rotary charges; centrex
charges; directory assistance; touch-tone charges; emergency number services; PBX message
charges; PBX trunk flat-rate charges; public announcement message charges; dial-it charges;
local area data transport charges; key line charges, directory listings (other than yellow page
classified listing charges). [d.
46S. 2l2.05(l)(e)2, Florida Statutes.
47S. 2l2.08(7)U), Florida Statutes. (The residential sales tax exemption for
teleconununications service is created under the household fuels exemption applicable to "sales
of utilities to residential households. . . in this state by utility companies who pay the gross
receipts tax imposed under s. 203.01..." That section of law provides that "every person that
receives payment for any utility service" must pay a gross receipts tax. [d. Utility service
"means electricity for light, heat, or power; natural or manufactured gas for light, heat, or power;
or telecommunications service." s. 203.012(9), Florida Statutes. (Emphasis supplied.)).
"s. 203.0l2(2)(a), Florida Statutes.
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services incidental to the provision of telecommunications service;"
equipment sales or rental for which charges are separately stated.50
The state sales tax rate on cable and television system program services and the installation
of telephone equipment is 6 percent.'!
The state sales tax is deposited into the General Revenue Fund.52 The Department of
Revenue estimates that the tax on communications will generate $644.3M. for FY 99-2000.53
A portion of state sales tax is shared with local government through the local government half cent
sales tax program which distributes net sales tax proceeds to counties and municipalities that meet
strict eligibility requirements. 54 Based on data provided by the Department of Revenue, the Florida
League of Cities estimates that lor fiscal year 98-99, municipalities received $19,227,420 from the
half cent program based on taxes imposed on communications services.
D. Local Option Sales Surtax
As the name implies, the local option sales surtax is a discretionary sales tax that is levied
at the option of local government. The surtaxes are authorized by general law with the rate and uses
of each tax specified in the enabling law. The rate in a county may vary from 0 percent to 2.5
percent depending on which surtaxes are authorized for each county and which surtaxes each county
has enacted.55 Generally, the local option sales tax is levied on the same base as the state sales tax.
However, there are a few exceptions:
4.Such as maintenance of customer premises equipment. s. 203.012(5)(b), Florida
Statutes.
SOld.
"See ss. 212.05(1)(e)lb and c, Florida Statutes.
52S. 212.20, Florida Statutes.
"See DOR chart, Appendix A.
"See s. 212.20(6)(f) and Part IV of Chapter 218, Florida Statutes.
"See ss. 212.054 and 212.055, Florida Statutes. See also, Levy of Local Discretionary
Sales Surtaxes, Appendix G.
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long distance telephone services are exempt;'6
local option sales tax applies to sales of tangible personal property up to $~ ,000; (Items
priced above $5,000 are taxed upon the first $5,000.);"
telephone and cable services are treated equally.58
Local option sales taxes are remitted to the Department of Revenue by telecommunications
providers (selling dealers) who have collected the tax from their customers.59 Telecommunications
companies receive a small fee for this collection service. The tax is distributed by the Department
of Revenue (minus administrative costs) according to the county in which it was collected.60
E. Franchise Fee
A municipality is authorized by statute to charge telecommunications providers up to I
percent of local recurring revenues for the use of the rights-of-way. 61 Long distance companies are
assessed franchise fees based on lineal distance in the rights-of-way.62
Counties and municipalities are authorized by statute to enter into franchise agreements for
the provision of cable television services.63 Federal law provides that franchise fees may not exceed
'6s.212.054(2)(b)1, Florida Statutes.
"/d.
58S. 212.054(2)(b)2, Florida Statutes.
'9S. 212.054(4), Florida Statutes. (The local option tax is not required to be stated
separately from the state sales tax.). Id.
601d. The League of Cities estimates that, in fiscal year 1998-99, municipalities received
$6,785,649 in local option sales tax on telecommunications.
6'S. 337.401(3), Florida Statutes (1998 Supplement). (Charter Counties have the same
authority granted to municipalities.). See e.g., Volusia County v. Dickinson, 269 So.2d 9 (Fla.
1972). The League of Cities estimates that, for fiscal year 1996-97, the 295 municipalities
collecting franchise fees received $15,349,606 from telecommunications providers.
62S. 337.401(4), Florida Statutes (cross referencing the definition of "toll telephone
service" at s. 203.012(7), Florida Statutes.).
63S. 166.046, Florida Statutes. The League of Cities estimates that, for fiscal year 1996-
97, the 339 municipalities collecting franchise fees received $35,748,160 from cable television
providers.
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5 percent of the cable operator's gross revenues for a 12 month period,'" and defines "franchising
authority" to include" any govemmental entity empowered by Federal, State, or local law to grant
a franchise. "65
There appear to be no restrictions on the use of franchise fees.
F. Telecommunications Access System Act (TASA) Fee
The Public Service Conunission is authorized to assess a surcharge that is not to exceed $.25
per line per month. The surcharge is collected by local exchange telecommunications companies
which are authorized to retain I percent of the total surcharge amount each month to recover the cost
of collecting the fee.66 Funds collected are remitted by the local exchange companies to the not-for-
profit administrator of the telecommunications access system.6'
The proceeds are used to fund the telecommunications access system for speech and hearing
impaired persons.68 The Public Service Conunission informs the staff that for the year ended June
30, 1998, the total surcharge revenues were $13,893.643. The current monthly charge per telephone
line is $.09.
G. 911/E911 Fee
Landline
Counties may impose a charge not to exceed $.50 per month per line (up to a maximum of
25 lines per bill) for lines used to provide local exchange telephone service.6' Pay telephones are
64 47 U.S.C. 542(b).
6547 U.S.c. 522( 10).
66See ss. 427.704(4)(a)3 and (4)(b), Florida Statutes.
6'[d. at ss.(2) and (4)(c).
681d.
69S. 365.l71(13)(a)1, Florida Statutes.
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exempt from the fee?O The fee is collected by "telephone companies;" such providers are authorized
to retain I percent of the total fee to recover the cost of collecting the fee.71
The fee is remitted to the counties and used for the provision of 9 I 1 service.72
Wireless (cellular, peS)
The state requires wireless providers to collect a monthly fee of $.50 from each service
subscriber who has a service number with a billing address in this state.73 Providers are authorized
to retain I percent of the total fees to recover the cost of collecting the fee.74 Pees are remitted to th
wireless 911 board and are used to fund development and operation of E911 for wireless
communications.7s
70Id.
71S. 365.I7I(I3)(c), Plorida Statutes.
72S. 365.I7I(l3)(a)2, Plorida Statutes.
73S. 365.l72(8),Florida Statutes, ch. 99-367 Laws of Florida.
74s.365.172(9)c, Florida Statutes, ch. 99-367, Laws of Florida.
75S. 365.172(2)(d), Florida Statutes. ch. 99-367, Laws of Florida.
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VI. THE FLORIDA CONSTITUTION
Generally, the State has authority to create a simplified tax and authority over local
governments with respect to the taxation of telecommunications service;'6 however, there are several
constitutional requirements that will govern how a statute creating a simplified tax must be drafted.
A. Impairment of Contract
Article I, Section 10 of the Florida Constitution prohibits laws impairing the obligation of
contracts. A pledge of revenue is a contract." Local governments are authorized to pledge
local and state shared revenues unless otherwise prohibited by law. 78 Moreover, the gross
receipts tax is pledged for the Public Education Capital Outlay bonds." Based on a Work
Group presentation by the Association of Counties, the simplified tax can avoid contract
impairment by replacing revenue sources for bonded money with an equally creditworthy
source.'o
B. Taxpayer Bill of Rights
Article I, Section 25 of the Florida Constitution requires the Legislature to adopt a
Taxpayers' Bill of Rights that sets forth in "clear and concise language. .. taxpayers' rights
and responsibilities and government's responsibilities to deal fairly with taxpayers under the
laws of the state." The Legislature has created the required Taxpayers' Bill of Rights'l and
any simplified tax must be consistent with these provisions.
'6See Article VII, Section I(a), Florida Constitution and Article VIII, Sections I (f-g) and
2(b), Florida Constitution.
"State v. City of Pensacola, 40 So.2d 569,574 (Fla. 1949).
78 State v. Orange County, 281 So.2d 310, 313 (Fla. 1973).
"Article XII, Section 9, Florida Constitution.
80See also Florida Association of Counties response to committee questionnaire, question
7, Appendix B. ("Care should be taken to avoid impairing the bondholders' contractual right to
revenue derived from electronic communications taxes by state and local governments, by
providing replacement revenues that are as good as or better than the existing source.").
"See s. 213.015, Florida Statutes.
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C. State Revenue Limitation
Article VII, Section lee) of the Florida Constitution limits state revenues to the level of state
revenues collected the previous year plus an adjustment for growth. "Growth" is tied to
growth in Florida personal income. Moving local fees and taxes to a state-administered
simplified tax would appear to bring those revenues within the scope of the state revenue
cap. However, indications are that Florida has substantial room under the cap to
accommodate the simplified tax'2
While the constitution requires that "[ t ]he legislature shall, by general law, prescribe
procedures necessary to administer" the revenue cap,83 no" such law has ever been enacted.
Compliance with the constitutional cap has been accomplished through informal procedures.
D. Mandates
There is a sense from the Work Group that a simplified tax can be created that will not result
in a mandate.84 Naturally, this conclusion depends on the specific provisions of an eventual
proposal. Depending on how the proposed distribution system is crafted, the two types of
mandates that may be implicated follow:
1. Article VII, Section l8(b) of the Florida Constitution provides that:
Except upon approval of each house of the legislature by
two-thirds of the membership, the legislature may not
enact, amend, or repeal any general law if the anticipated
effect of doing so would be to reduce the authority that
82 Although the Department of Revenue cannot currently estimate the precise impact of a
simplified tax, they believe that the impact will not cause the state to exceed its constitutional
revenue cap. Based on a March 1999, five year projection by Economic and Demographic
Research, the current revenue limit is $25,415.6M. with the state operating at $1,529.7M. below
this limit.
83Article VII, Section I(e), Florida Constitution.
84See e.g., FCTA response to the committee questionnaire, question number 7, Appendix
B. (Referencing the conclusions of the 1996 Tax Task Force, the FCT A states that the simplified
tax would not constitute a mandate because "the aggregate dollars available to local governments
under the proposal would actually be greater than their current revenue collections under the
various taxes and fees. "). [d.
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municipalities or counties have to raise revenues in the
aggregate, as such authority exists on February I, 1989.
2. Article VII, Section 18@ of the Florida Constitution requires a two-thirds vote of the
membership of both houses to reduce the percentage of a state tax shared with counties and
municipalities as an aggregate based on 1989 revenue levels.
E. Public Education Capital Outlay (PECO)
~
Article XII, Section 9 of the Florida Constitution provides that
all of the proceeds of the revenues derived from the gross
receipts taxes collected from every person, including
municipalities, as provided and levied pursuant to the
provisions of chapter 203, Florida Statutes, as such
chapter is amendedfrom time to time, shall, as collected,
be placed in a trust fund to be known as the "public
education capital outlay and debt service trust fund" in
the state treasury.85 (Emphasis supplied.).
PECO funds are used to pay principal and interest of bonds, for reserve funds provided for
in proceedings authorizing the issuance of bonds and for direct payment of the cost of
specified capital projects'6
85 Article XII, Section 9(a)(2), Florida Constitution.
"/d. at paragraphs (a)(2)a-c.
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Appendix A. Taxes and Fees Associated with Local
Telecommunications Service
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Appendix B. Industry and Local Government Positions on Issues
Related to the Simplified Tax
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Appendix C
Seven types of Local Option Sales Taxes
The Charter County Transit System Surtax is authorized by s.
212.055(1), Florida Statutes. Counties that adopted a charter prior to June 1,
1976, and counties whose government is consolidated with one or more
municipalities may levy a sales tax up to 1 percent upon approval by a majority
of the electorate. Proceeds must be used for development, construction,
maintenance, and operation of a fixed guide way rapid transit system or a county
wide bus system.
The Local Government Infrastructure Surtax is authorized by s.
212.055(2), Florida Statutes. Counties may levy'a sales surtax of .5 percent or
1 percent upon ordinance approval by a majority of the county governing
authority and approval by a majority vote of the electorate. This local option
sales tax when combined with other local option sales taxes authorized under
s. 212.055(3),(4),(5), & (6), Florida Statutes, cannot exceed a combined rate of
1 percent. .
For counties with populations that exceed 50,000, proceeds must be used
1) to finance, plan, and construct infrastructure, 2) to acquire land for public
recreation, conservation, or protection of natural resources, or (3) to finance the
closure of local government-owned landfills that are already closed or are
required to close by order of the Department of Environmental Protection.
Counties with populations of 50,000 or fewer as of April 1, 1992, in
addition to the generally authorized uses, may use the proceeds for any public
purpose if 1) the debt service obligations for any year are met, 2) the county's
comprehensive plan is in compliance, and 3) the county has amended its surtax
ordinance.
The Small County Surtax is authorized by s. 212.055(3). Florida
Statutes. Counties with a population of fewer than 50,000 may levy sales surtax
of .5 percent or 1 percent upon ordinance approval by a majority of the county
governing authority if the proceeds are expended for operating purposes. A
majority vote of the electorate is required if the proceeds are to be expended for
servicing bond debt. This local option sales tax when combined with other local
option sales taxes authorized under ss. 212.055(2),(4),(5), & (6), Florida
Statutes, cannot exceed a combined rate of 1 percent.
The Indigent Care Surtax is authorized by s. 212.055(4), Florida
Statutes. Counties that are not consolidated with any municipalities, having a
population of at least 800,000, and not levying a surtax authorized under s.
212.055(5) or (6), Florida Statutes, may levy sales surtax up to .5 percent
conditioned on ordinance approval by a majority of the county governing
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authority or by approval by a majority vote of the electorate. Funds from this
surtax must be expended to provide health care services to qualified indigent
residents. This local option sales tax when combined with other local option
sales taxes authorized under s. 212.055(2) & (3), Florida Statutes, cannot
exceed a combined rate of 1 percent. The authority to levy this tax expires on
October 1, 2005.
The County Public Hospital Surtax is authorized by s. 212.055(5),
Florida Statutes. Any counties as defined by s. 125.011 (1), Florida Statutes,
may levy a sales surtax at the rate of .5 percent conditioned on ordinance
approval by a majority of the county governing authority or by approval by a
majority vote of the electorate. At least 80 percent of funds from this surtax
must be expended on a county public general hospital. This local option sales
tax when combined with other local option sales taxes authorized under s. 212.
055(2) & (3), Florida Statutes, cannot exceed a combined rate of 1 percent.
The Small County Indigent Care Surtax is authorized by s. 212.055(6),
Florida Statutes. Counties with a population of fewer than 50,000 may levy
sales surtax of .5 percent upon ordinance approval by a majority of the county
governing authority. Funds from this surtax must be expended to provide health
care services to the medically poor. This local option sales tax when combined
with other local option sales taxes authorized under s. 212.055(2) & (3), Florida
Statuies, cannot exceed a combined rate of 1 percent. The authority to levy this
tax expired on October 1, 1998.
The School Capital Outlay Surtax is authorized by s. 212.055(7),
Florida Statutes. The school board in each county may levy a discretionary
sales surtax at the rate of up to .5 percent subject to a majority vote of the
electorate. Funds must be used for fixed capital expenditures or fixed capital
costs on school facilities and campuses that have a life expectancy of five or
more years.
26
Appendix D.
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Internet Tax Freedom Act
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Appendix E. F.e.e. 1998 Glossary of Telecommunications
Terms
28
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Appendix F. State and Local Taxes and Fees Stated as
Percentage of Bill. --Bel/South
29
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Appendix G. Levy of Local Discretionary Sales Surtaxes
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Miami-Dade County
Unified Tax Proposal on Communications Services Presentation
I. Unified Tax proposed bv the communications industrv
A. Industry established a joint work group comprised of industry and local governments (FLC
and F AC) in the spring to discuss the proposed tax.
B. Will replace the following state and local taxes and local franchise fees on communications
servIces.
I. State sales and use tax.
2. State gross receipts tax.
3. Local public service tax (Municipal Utility Tax).
4. Local option sales tax (local option surtax).
5. Local telephone and cable TV franchise fees.
e. Current taxes to be replaced with a single unified tax administered at the state level by the
Florida Department of Revenue.
II. Monies from the unified tax would be divided among the state General Revenue Fund, the
state Public Education Capital Outlay Trust Fund (PECO), and city and county governments with
the state taking an administrative fee for collection.
III. Industry claims that proposal will be revenue neutral and will hold local governments
harmless.
IV. Local Government Concerns
A. Tax Base
I. Proposal excludes Internet service revenues
2. Cable TV base reduced
3. Local government need to compare current revenue streams vs. proposed.
B. Hold Harmless, Distribution - Most critical to local governments.
I. F AC argues that distribution must be based on a local government's full tax capacity and
include future growth.
2. Industry has proposed a rollback to deal with areas that will see an increase in taxes.
3. Still no consensus on how to deal with local government distribution.
4. Local governments should require in legislation that any rollback be at the discretion of local
governments.
5. Require the establishment of a local oversight board to monitor DOR distribution.
6. Distribution formula must equitably deal with the local option sales tax and the y, cent sales
tax.
e. Impact on Bonding
I. Local governments pledge telecommunications tax revenues.
2. Local governments need to determine the impact on bonded monies.
D. Telephone and Cable TV Franchise Fees
I. Industry wants to include franchise fees in tax.
2. Rate not yet determined.
3. Local governments need to require that cable TV inkind services be preserved (Public,
Educational, Governmental programming (PEG), services to schools, libraries, capital
contributions, etc.).
E. Draft Legislation circulated to the work group last week
,t\
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Franchise Fees
337.4015 Communications services, -
(I) Except as provided herein. no municipalitv or countv shall require anv provider of a
communications service to pav a rental or franchise fee as a condition for granting
permission to occupy or use municipal or county streets and rights-of-way for the
provision of communications service, The authority of municipalities and counties to
require rental or franchise fees from communications services providers is specifically
preempted by the State because of unique circumstances applicable to communications
services providers when compared to other utilities using or occupying municipal or
county streets and rights-of-way, Similar communications services may be provided by
providers which require the use of municipal or county streets and rights-of-way and by
providers which do not require the use of municipal or county streets and rights-of-way,
Because similar communications services may be provided by different means. the State
desires to treat communications services providers in a similar manner and to have the
taxes and rental or franchise fees paid by communications services providers be
competitively neutral. The State recognizes that rental or franchise fees are to compensate
the municipality or county for the use or OCCUpancy of municipal or county streets and
rights-of-way, Municipalities and counties retain the authority to collect rental or
franchise fees from other users or occupants of municipal or county streets and rights-of-
way and the provisions of this section shall have no affect upon this authority or the level
of compensation paid to the municipality or county by other users or occupants of
municipal or county streets and rights-of-way, Municipalities and counties retain the
authority to negotiate franchise agreements with other users or occupants of municipal or
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county streets and rights-of-way. The proyisions of this subsection do not restrict the
authority of municipalities or counties to receiye rental or franchise fees for the use of
public property or rights-of-way for use as communications tower sites. Unless the
context demonstrates otherwise, words or phrases used in this section shall haye the same
meaning as proyided in section
(2) A municipality or county may request and negotiate for in-kind compensation and
contributions and community benefits only from proyiders of cable service pursuant to
federal law. Nothing in this section shall impair any ordinance or agreement in effect on
the effectiye date ofthis act which proyides for or allows in-kind compensation or
contributions or community benefits by a proyider of communications services. Each
municipality and county retains authority to negotiate all terms and conditions of a cable
service franchise except the franchise fee.
(3) Each municipality and county retains authority to regulate and manage municipal or
county streets and rights-of-way in the exercise of its police power. Each municipality
and county retains the authority to require and collect permit fees, inspection fees and
other administratiye and operational fees from any proyiders of communications services
that use or occupy municipal or county streets and rights-of-way. All fees required under
this subsection shall not be offset against the tax imposed under section
. All
fees required under this subsection shall be reasonable and commensurate with the cost of
the regulatory actiyity.
(4) A municipality or county may not use its authority oyer the placement of facilities in
its streets and rights-of-way as a basis for asserting or exercising regulatory control oyer a
proyider of communications service regarding matters within the exclusiye iurisdiction of
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the Florida Public Service Commission or the Federal Communications Commission,
including, but not limited to, the operations, systems, qualifications, services, service
quality, service territorv, and prices of a provider of communications service.
(5) This section, except subsection (4), does not apply to the provision of pay telephone
service on public or municipal or county streets or rights-of-way.
(6) Each municipality and county should adopt an ordinance providing general rights-of-
way regulations for communications services providers using or occupying public or
municipal or county streets or rights-of-way. Municipalities and counties that have
general rights-of-way use or occupancy ordinances are not required to readopt such an
ordinance. Municipalities and counties that begin the process to adopt a general rights-
of-way use or occupancy ordinance after the effective date of this act shall provide the
Department with a notice of the municipality's or county'S intent to adopt such an
ordinance. The Department shall make all notices received available for inspection by
communications services providers. The failure of a municipality or county to notify the
Department of its intent to adopt a general rights-of-way use or occupancy ordinance
shall have no impact on the validity of any ordinance adopted.
Subsections 125,66(7) and 166.041(9) are added to read:
When adopting general rights-of-way use or occupancy ordinances, the provisions of
subsection 337.4015(6) are to be followed.
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337.401 Use ofright-of-way for utilities subject to regulation; permit; fees.--
Note: Effective Jan. 1,2002, subsections 337.401(3), (4), (5), (6), (7), (8), (9) and (10),
Florida Statutes, are repealed.
(I) The department and local governmental entities, referred to in ss. 337.401-337.404 as
the "authority," that have jurisdiction and control of public roads or publicly owned rail
corridors are authorized to prescribe and enforce reasonable rules or regulations with
reference to the placing and maintaining along, across, or on any road or publicly owned
rail corridors under their respective jurisdictions any electric transmission, telephone, or
telegraph lines; pole lines; poles; railways; ditches; sewers; water, heat, or gas mains;
pipelines; fences; gasoline tanks and pumps; or other structures hereinafter referred to as
the "utility."
(2) The authority may grant to any person who is a resident of this state, or to any
corporation which is organized under the laws of this state or licensed to do business
within this state, the use of a right-of-way for the utility in accordance with such rules or
regulations as the authority may adopt. No utility shall be installed, located, or relocated
unless authorized by a written permit issued by the authority. The permit shall require the
permitholder to be responsible for any damage resulting from the issuance of such permit.
The authority may initiate injunctive proceedings as provided in s. 120.69 to enforce
provisions of this subsection or any rule or order issued or entered into pursuant thereto.
(3) If allY mUllicipality reqllires ally telecoffimllllicati€llls C€lmpaHY to pay a fee or other
caHsiderati€lH as a c€lHditi€l1l fm grantillg permissioll t€l €lcCllPy mllHicipal streets and
rights €lf way f-er p€lles, '.vires, and €lther fi)(tures, SIKh fee or cOHGidcrati€lH may H€lt
e)(cecd I percellt €lf tRe gross receipts €l1l reclIrrillg local service FeyellHeS for services
provided witRiH tRe c€lfjlmate limits aftRe ffillllicipality by sllcR telecoffimllllicati€lHs
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eom]3Rn)'. IRehuied witltiR slIelt I pereeRt mallimum fee or eORsideratioR are all ta.lles,
lieeRses, fees, iR kiRd eORtrilJlltioRs aceej'lted j'l\fTSliaRt to sHbseetioR (5), ami other
imj'lositioRS eJwej'lt ad valorem twees aHd anlOHRts for assessmeRts f{)r sj'leeial beRefits,
sHeh as sidewalks, street j'laViRgs, llIld similar imj'lrOVemeRts, llIld oeellj'latieRallieeRse
twees leyiedor imj'losed by a mooieij'lality lIj'leR tRe teleeommooieatieRs eomj'laRY. This
sHbseetioR shall Ret impair aH)' fTaRehise iR eldsteRee OR JaIl' 1, 1985.
(1) .^. manieij'lality may by onliRaRee eRter iRtO an agreement with any j'lersoR j'lfOyidiRg
teleeOffiTRlIRieatieR services defiRed iR s. 203.912(7) as a eORditioR for grantiRg
j'lefffiissieR to oeeHj'lY er lIse aRY eity street, alley, yiadliet, elevated roadvia)', bridge, er
other l'!Helie way. The agreemeRt shall permit the teleeemmliHieatioR service pre'lider to
eORstmet, oj'lerate, maiRtaiR, rej'lair, reBlIild, or reJllaee a teleeom!RHRicatioRs rollte 'O'itltiR
a mllRiciJlal right of way. TRe agreemeRt sRall Jlroyide for a f-ee or oIRer eeRsideratioR
j'layaele ar.Jlllally eased OR actlialliRear feet ef an)' eaBle, fieer oj'ltie, or otRer j'lathway
that makes j'lR)':Jieal lIse of the mooieij'lal right of way. IR RO eveRt shall the ree or otRer
eORsideratioR i!Rj'losed Jl\ifSliaRt to this slleseetioR Be less thllll ~599 per liRear mile of an)'
eaBle, fiBer optic, or otRer j'laHiwa)' that makes physieal Hse of tRe !RHRicij'lal rigRt of
',vay. .'\RY fee or other eeRsideratioR imJlosed BY Hiis sHeseetioR iR elwess of $599 shall Be
aJlJllied iR a TloTldiseri!RiRator)' !RaRRer and sRall Rot elweed the Slim of:
(a) Costs direetly related to the iTleOTlyeRieRCe or imj'lairmeTlt solely eaused by tRe
disturBaRce of the !RHRieiJlal right of way; aTld
(B) The reasoTlaBle eost oftlte reglllatery acti'lity of the mllTlieij'lalit)'.
(c) The Jlroj'lortioTlate share of eost of land for sHcR street, alley, or other public way
attriblltable to lItilizatioR of the right of way by a teleCOH11RlmieatioTl serviee provider.
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F'lIthemwre, Ae leleeemrnooieatieA seriiee flreviaer shall be reEjHirea te fla)' mere Ihan
eAe stleh fee or other eeAsiseratieA ar.!ltlall)' fer the eeAstruetieA, maiAteHatlee, ejleratieA,
rejlair, reBtlilsiHg, er rejllaeemeHt ef a jlarallelleleeemmooiealieAs raHte O?ffle8 BY it, or
BY a sHBsisiary Wlaer its aireet eentrol, whieh makes Hse ef the right ef way ef any
mtffiieijlality eAaetiAg an erainanee IHlIsHaat te this sHBseetieA. The fee er ether
eeAsiaeratieA imjlesea jlttr5Hant te this sliBseetieA shall Hot ajljlly ill any mar.ner te all)'
teleeemmHAieation serviee jlroviaer whe jlrovises teleeemffiWlieation serviees as SeHAes
iH s. 20HH2(3) fer any serviees jlrevises by sHeh serviee !lroviaer. IdlY agreemeHt
eftteres illte !lttrSHant te the atltherity efthis stlBseetieft jlrier to JWle 3, 19&&, ans the f-ees
er fee sehesHle in effuet eft that sate shall remaiA iA full ferce ans effeet HRtil sHeh
agreemeRl e)'!liTeS, !.AY orsiHallce eAaeteS !lttrSHaRl te this sliBseetieA !lrier te J HRe 3,
19&&, ans the fees er fue seheSHle iA effuet eft that sate shall remaiH iH full faree aHa
effeet liHless the erainance is Te!lealea by the mliHiei!lality. NetwithstanaiHg the laHgHage
eelltaillea hereiH a mooieijlality may reeftact aH)' erdiHanee wflieh has aH aHtomatie
e)'jliratieH aate !lreviaea the eraillanee aees Iwt iHerea5e the fees iH effeet iA saia
eraiHanee iH vielatien of this seetieH.
(5) 5)[eellt as m'!lresslj' allowea or aHlherizea BY geHerallaw aHa e)wejlt fer the rights
af way !lermit fees sHbjeet to sHBseetieH (3), a mlmieijlality may Ilst levy aft a
teleesHlmHHieatislls eeHlflaH)' a tw" fee, or ether eharge fer slleTatillg as a
teleesHlHlHHieatiells eeHl!laH)' withill the jtlfisaietieft efthe mtlAiei!lality sr 'Nhieh is iH
any way relatea ta Hsillg reaas or rights of way. !. mWliei!lality may Hat allow a
teleeoHlHlHHieatisHs esmflany ts jlay a fee sr !lro'iide eomjleHsatieft iH exeess sf tne
limits !lreSeriBea iH this seetieH. !. Hltlllieiflality may AOt TCEjliire sr selieit iH kiHd
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aamJ3eRsatiaR iR lieli af aay fees imJ3asea J3lHaliant ta tltis sealiaR. NathiRg iR this
5liBseatiaR shall impair aay ordinance or agreemeRt iR effect OR the effective aate of this
act whiell provides for or allo',vs in kind eOffipensation by a teleeoffiffi\;jflieations
eompaay.
(6) /\ lacal govemmeRtal eRlity may Rot lise its authsRty over the plaeemeRt of facilities
iR its raaas ana rights af ',vay as a Basis for assertiRg er eJ(ercisiRg reglilatary caRtrol over
a telecommliRications eomJlany reganliRg matters withiR tlte e),e!lisi'le jurisaiction of the
FlsRaa PliBlie Sen'ice CsmmissioR sr the Feaeral CammliRicatians CammisaiaR,
iRclliaing, Bllt Rat limitea ta, the aJ3eratians, systems, EjllalifieatioRs, services, service
Ejliality, service territory, ElRa prices of a telecommooieations esmpaay.
(7) !. teleaammllRieatians aamJ3E1fl)' that has eBtaiRea J3ermissioR to oceliJ3Y the reaas
ana rights of ',vay of an iReofJloratea city er to\'iR or that is stherwise laYlfully oeeliJlyiRg
the rsaas or rights of way of a mllRieiJ3ality aR the effeeti'ie aate sf this act shall Ret Be
refilllirea to oBtaiR aaailisRaI eORseRl Is cORlinlie suclllawful seelipatisR af thase reaas ar
rights of way; however, RSlhiRg in this sliBseetiaR shall Be iRtefJlrelea to limit the power
sf a 1R1IRieiJ3alily ts imJ30se a fee or aaoJ3t or eRforce reaooRaBle rules or reglilatioRs as
pW'iiaea iR this seetion.
(&) E),aeJ3t as el(J3ressly J3rsvidea iR this scetioR, this scetieR ascs Rot msdii)' the
alithority of Iseal g8'lemmeRlal eRtities to Ie'/)' the ta)( alithorizea iR s. 166.231 or the
dillies sfteleealRmllAieatians ealRJ3aRies liRder ss. 337.492337.404. This seclioR does
not apply to bliildiRg permits, pele attaahments, or Jlrivate waas, private eaSelReRts, aRd
pri'iate rights sf way. Elwept as eJ(pressly pwvided iR this seetieR, this seatioR floes Rot
lilRit er e)(J3and whatever powera ceooties lRay have relatiRg to roads aHd rights of way.
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Netlling in this sestien shall limit er el(Jlana '""hatever autherity a leeal gevernment may
have Ie imJlese any fee JlHr5Hant te 17 U. S. C. S5. 542 ana 573.
(9) As HDea in this seetisn, "leleeemIHlmieatisns eemflany" has the same meaning as
aeHRea in s. 364.02.
(-14) This seetisn, el(Seflt slisseetisns (I), (2), ana (6), aees net aJlJlly ts the Jlre,..i5isR sf
Jlay teleJlhene sefvise en Jltlslie Sf mlinisiJlal reaas ef rights sf way.
{
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166.236. Municipal and County Communications Services Tax. -
Definitions:
(I) The following terms and phrases, when used in this section, shall have the
meanings provided herein.
(a) "Actual cost of operating a substitute communications system" includes,
but is not limited to, depreciation, interest, maintenance, repair, and other expenses
directly attributable to the operation of such system. For putposes of this section, the
depreciation expense to be included in actual cost shall be the depreciation expense
claimed for federal income tax purposes. The total amount of any payment required by a
lease or rental contract or agreement shall be included within the actual cost of operating
the substitute communications system.
(b) "Amount paid" means the total amount received in money or otherwise by
a provider for the provision of communications services in this state. The term "amount
paid" does not include any excise tax, sales tax, or similar tax, fee or assessment levied
by the United States or any state or local government, including but not limited to
emergency telephone surcharges, upon the purchase, sale, use or consumption of any
communications service, which is permitted or required to be added to the purchase price
of such service.
(c) "Bad debt" means any debt or account receivable arising from the sale of
communications services by the provider upon which the tax imposed by this section has
been reported and paid in a prior reporting period and which has become worthless and
charged off for income tax purposes.
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(d) "Cable service" means the provision of video programming or other
programming service to purchasers, and the purchaser interaction, if any, required for the
selection or use of such video programming or other programming service, regardless of
whether the programming is transmitted over facilities owned or operated by the cable
service provider or over facilities owned or operated by one or more other
communications service providers. "Cable service" includes all charges made for such
service, including but not limited to basic, extended and premium service charges, audio
programming charges, broad band services charges, pay-per-view charges, and two-way
cable charges.
(e) "Communications service" means the provision, transmission,
conveyance, or routing of audio, data, video, or any other information or signals of the
purchaser's choosing to a point, or between or among points, specified by the purchaser,
by or through any electronic, radio or similar medium or method now in existence or
hereafter devised. The term "communications service" includes but is not limited to local
telephone services, long distance telephone services, internet telephony, telegraph
services, teletypewriter services, teleconferencing services, private line services, channel
services, data transport services, voice mail and other messaging services, mobile
communications services, cable services, satellite broadcast services, wireless cable
services, directory assistance services, and facsimile services. The term
"communications service" shall not include:
1. information services, including the storage of data or information for
subsequent retrieval, the retrieval of data or information, or the processing, or reception
and processing, of data or information intended to change its form or content, including
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but not limited to Web hosting service and amounts charged to the end user for 900
number service;
2. installation or maintenance of wiring or equipment on a customer's
premises;
3. the sale or rental of tangible personal property;
4. the sale of advertising, including but not limited to directory services;
5. bad check charges;
6. late payment charges; and
7. billing and collection services;
For purposes of determining taxable transactions, the term "communications
service" includes amounts paid for or attributable to:
1. the connection, movement, change, or termination of communications
servIce;
2. the detailed billing of communications services;
3. the sale of directory listings in connection with a communications service;
and
4. the sale or recharge of a prepaid calling arrangement.
For purposes of determining taxable transactions, the term "communications
service" does not include amounts paid for or attributable to:
1. communications services which are used as a component part of or
integrated into a communications service or which are otherwise to be resold, including
but not limited to carrier access charges, interconnection charges paid by the providers of
mobile communications services or other communications services, charges paid by cable
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service providers for the transmission of video or other programming by another
communications service provider over facilities owned or operated by such other
communications service provider, charges for the sale of unbundled network elements,
and any other inter-company charges for the use of facilities for providing
communications services;
2. communications services provided to the United States government, any
agency or instrumentality thereof, or any entity exempt from state taxes under federal
law;
3. communications services provided to any department, bureau,
commission, board, or other statutory or constitutional agency of the state and
communications services provided to counties, municipalities, or other political
subdivisions of the state. A purchaser not qualifying as a governmental agency or unit
shall not be entitled to the exemption even though the purchaser may be the recipient of
public funds or grants;
4. bad debts, provided, however, that if any portion of a debt deemed to be
bad is subsequently paid, the communications service provider shall report and pay the
tax on that portion during the reporting period in which the payment is received. If the
communications service provider has previously paid the amount of the tax, the provider
may, under rules and regulations prescribed by the Department of Revenue, take as a
deduction the amount found worthless and charged off for income tax purposes; and
5. local telephone service paid for by inserting coins in coin-operated
communications devices available to the public.
(I) "County" means a non-charter county.
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(g) "Department" means the Florida Department of Revenue.
(h) "Local telephone service" means a service providing access to a local
telephone system and the privilege of communications within a local calling area, and
any facility or service provided in connection with such service.
(i) "Long distance telephone service" means a service permitting
communications to or from an area outside of a local calling area, regardless of the
manner in which such service is priced or provided.
Gl "Mobile communications service" means anyone-way or two-way radio
communications service carried on between mobile stations or receivers and land
stations, and by mobile stations communicating among themselves, and includes but is
not limited to cellular communications services, personal communications services,
satellite communications services, paging services, specialized mobile radio services and
any other form of mobile one-way or two-way communications service.
(k) "Municipality" means a municipality or charter county.
(I) "Person" has the same meaning given to such term in s. 212.02.
(m) "Prepaid calling arrangement" means any right to exclusively purchase
communications services, which must be paid for in advance and which enables the
origination of calls using an access number and/or authorization code, whether manually
or electronically dialed.
(n) "Provider" means any person making a retail sale of a communications
servIce.
(0) "Purchaser" means the person paying for communications services.
(p) "Retail purchase" means-
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I. the purchase of a communications service for any purpose other than
for resale or to be used as a component part of or integrated into a
communications service to be resold in the ordinary course of business; or
2. the purchase, recharge or other prepayment of a prepaid calling
arrangement.
(q) "Satellite broadcast and wireless cable services" mean point-to-multi-point
distribution services which include, but are not limited to, dIrect broadcast satellite
service and multi-channel multi-point distribution services, with programming or audio,
data, video or any other information transmitted or broadcast by satellite, micro wave or
any other equipment directly to the purchaser's premise.
(r) "Satellite communications services" (Define) (State tax if locals tax
cable)
(s) "Service address" means~
(a) in the case of cable services and satellite broadcast and wireless cable
services, the location where the customer receives the services in this state; and
(b) in the case of all other communications services, the location of the
communications equipment from which communications services are originated
or at which communications services are received by the customer. In the event
that this is not a defined location, as in the case of mobile phones, paging systems,
maritime systems, third number and calling card calls and the like, "service
address" shall mean the location of the customer's primary use of the
communications equipment, as determined by telephone number, authorization
code, the customer's billing address, or other street address provided by the
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customer as the location of primary use; provided, however, that such address
must be within the licensed service area of the service provider. In the case of a
communications service paid through a credit or payment mechanism that does
not relate to a service address, such as a bank, travel, debit or credit card, the
service address is deemed to be the address of the origination of the
communications service.
(t) "Substitute communications system" means any telephone system or other
system capable of providing communications services, which a person purchases, installs,
rents or leases for his own use to provide himself with services used as a substitute for
communications services provided by a communications service provider.
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Tax Authority and Sourcing Rules:
(2)(a) A municipality or charter county may levy a tax up to _ percent (_%)
(which shall equal the authority to impose a public service tax on telecommunications
services, and the franchise fee authority for telecommunications and cable services) and a
non-charter county may levy a tax up to _ percent ( _%, which shall equal the
franchise fee authority of non-charter counties) of amounts paid for [the retail purchase of
7] communications services which either (i) originate and tehninate in this state, or (ii)
either originate or terminate in this State and are charged to a service address in this
State, regardless of where such amounts are billed or paid. Notwithstanding the
foregoing, in the case of a prepaid calling arrangement, the origination and termination of
all communications services to which the purchaser is entitled shall be deemed to take
place at the point of sale, recharge or other reauthorization of the prepaid calling
arrangement, regardless of whether some or all of such communications services are
actually used.
(b) Such tax is also imposed, at a rate set forth in paragraph (a), on the actual
cost of operating a substitute communications system. Any person who purchases,
installs, rents, or leases a substitute communications system shall register with the
Department and pay the tax imposed by this subsection on an annual basis pursuant to
rules prescribed by the Department. The provisions of this paragraph do not apply to the
use of a substitute communications system by any person engaged in the business of
providing communications services or to any radio system operated by any county or
municipality or by the state or any political subdivision thereof.
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(c) A municipality, charter county or non-charter county shall levy a tax rate
as authorized under this section pursuant to an ordinance. Any ordinance imposing or
altering the tax rate shall be effective on the following January I. An ordinance to
initially impose a tax levy as authorized in this section shall be adopted at least one
hundred and twenty (120) days prior to the effective date of the ordinance. An ordinance
to alter a tax levy as authorized in this section shall be adopted at least sixty (60) days
prior to the effective date of the ordinance.
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Tax Payment Responsibility:
(3) Except as otherwise provided in subsection (2)(b), the tax imposed by this
section shall be paid by the person paying for such communications service and shall be
collected from such person by the communications service provider, including a
communications service provider operated or owned by the state or a political subdivision
thereof or by a non-profit entity, and remitted to the Department pursuant to subsection
(7).
(4) Every person, except the state or a political subdivision thereof or a
municipality, purchasing a communications service is liable for the tax imposed by this
section. The purchaser's liability is not extinguished until the tax has been paid to this
state, except that proof of payment of the tax to a communications service provider
engaged in business in this state is sufficient to relieve the purchaser from further liability
for the tax.
(5) Every communications services provider making sales of communications
services in this state shall collect the tax levied by this section from the purchaser of such
services. The tax shall be separately stated from all other charges on the bill or invoice.
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Department of Revenue Administration:
(6)(a) The Department shall act as the agent of municipalities and counties and
administer the provisions of this section and shall have all of the powers, rights, duties,
and authority with respect to the assessment, collection, refunding, and administration of
the taxes levied by this section, which are conferred generally upon the Department by s.
(b) All procedural and administrative provisions 'bf chapters 212 and 213 shall
apply to all taxpayers liable for the communications services tax imposed under the
provisions of this section and to all providers of communications services required to
collect and remit such tax, except where there is conflict, in which case the provisions of
this section shall control. (May want to review with the Department provisions of
Chapters 212 and 213 for specific inclusion).
(c) The Department shall develop a collection and remittance process for tax
revenues authorized under this section based on a point of collection system that
recognizes municipal and county boundaries. Communications services providers shall
identify the municipality or county where each taxable transaction occurs and shall
collect and remit all tax revenues to the Department as provided herein. The Department
shall remit amounts collected on behalf of each municipality and county to the
appropriate municipality or county as provided herein.
Each municipality or county identified in the transitional schedule shall provide
the Department with customer service address lists identifying each address within the
jurisdictional limits of the municipality or county. Each municipality or county not
identified in the transitional schedule shall provide the Department with customer service
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address lists identifying each address within the jurisdictional limits of the municipality
or county prior to implementing a tax rate authorized under this section. Each
municipality and county providing customer service address lists to the Department shall
have the opportunity to review and correct the information provided to the Department
prior to the Department making the information available to communications services
providers through the electronic database as provided in this subsection.
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Company and Department Reporting Requirements:
(6)(d) Communications services providers shall provide the following
information to the Department on a monthly basis: each municipality or county the
communications service provider has had a taxable transaction in; and the amount of tax
~ted for each municipality or county. Communications services providers shall
remit all tax revenues collected as authorized by this section to the Department on a
monthly basis in conjunction with the corresponding monthry report. The Department
shall provide specified information to each municipality and county along with the
monthly remittance by the Department to each municipality and county as provided
herein.
Communications services providers shall provide the following information to the
Department on a semi-annual basis: the legal name and doing business as name of the
communications service provider; the business address of the communications service
provider; the business telephone and facsimile numbers and e-mail address of the
communications service provider; the federal tax identification number and state sales tax
identification number of the communications service provider; and the registered agent of
the communications service provider in the State of Florida. Communications service
companies shall inform the Department, on a semiannual basis, of who their resellers and
carriers are. The Department shall compare a communications services provider's
reporting of who their resellers and carriers are for compliance. (What is intended here?)
The Department shall provide the following information to each municipality and
county the Department remits tax revenues to on a monthly basis: each communications
service provider providing service in a specific municipality or county; the dollar amount
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FOR DISCUSSION PURPOSES ONLY
remitted by each communications service provider to the Department and collected on
behalf of each municipality or county; a report on the audit assessments separately stated
for each communications service provider, including the period under audit; a report of
any penalty or interest assessed and separately stated for each communications service
provider; each communications service providers' primary business coding number; each
communications service provider's Department reporting number; and year to date tax
information on each communications service provider for each municipality and county
based upon an October - September fiscal year basis. Monthly reports shall be
transmitted by the Department to each municipality and county through electronic mail, if
available in the municipality or county; and by written copy by first class postage in the
United States mail service. The monthly report shall state separately the monthly
activities for each communications service provider having taxable transactions in a
municipality or county. The monthly report provided to municipalities and counties by
the Department shall specifically identify every communications service provider
collecting and remitting tax proceeds to the Department on behalf of the municipality or
county and the specific dollar amounts of tax proceeds remitted by each communications
service provider for each municipality or county.
The Department shall be responsible for maintaining lists of communications
services providers which identify the specific municipalities and counties the
communications services providers provide service. The Department shall permit
municipalities and counties to review the Department's lists of communications services
providers providing services in a specific municipality or county. Municipalities and
counties may inform the Department of communications services providers providing
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service within a municipality or county and not identified on the Department's list. The
Department shall be responsible for ensuring that communications services providers
comply with the provisions of this section. The Department shall be responsible for all
filings for municipalities and counties related to a communications services provider
seeking bankruptcy or insolvency protection. (Locate similar language regarding
Department requirements to protect sales tax proceeds during bankruptcy proceedings).
Auditing:
(e) The Department shall be responsible for enforcing the collection of the tax
levied by this section and is hereby specifically authorized and empowered to examine at
all reasonable hours the books, records, and other documents of all communications
services providers. (See audit provisions in Chapter 212 regarding sales tax). The
Department shall have primary audit responsibility for communications services
providers regulated by the Florida Public Service Commission or the Federal
Communications Commission. Municipalities and counties shall have primary audit
responsibility for all communications services providers not regulated by the Florida
Public Service Commission or the Federal Communications Commission, which include,
but are not limited to, hotels and motels, resellers, shared tenant service providers,
facsimile service providers, and alarm service providers. The Department may delegate
its audit responsibility to qualified agents or entities, including qualified municipal or
county officials. The Department shall review all audits for compliance with Department
standards and shall approve all settlements with communications services providers.
The Department shall establish an audit training and certification program for
certified public accountants to perform audits of communications services providers.
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(Similar to sales tax audit program). Municipalities and counties retain the authority to
perform operational audits on cable services providers for regulatory compliance and also
for compliance with in-kind contributions or compensation or community benefits.
The Department shall retain _ percent of all revenues collected by the
Department through its auditing activities and remitted to municipalities or counties.
Public Records:
(f) All information retained by the Department regarding communications
services providers, including, but not limited to, reporting requirements, audit papers and
work papers may be reviewed by municipal and county officials (specifically identify
these officials). All information or data provided to the Department by communications
services providers that is of a proprietary nature shall be reviewed by Department,
municipal and county officials in a confidential manner and shall be exempt from the
public records law.
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FOR DISCUSSION PURPOSES ONLY
Electronic Database For Standard Numeric Jurisdictional Codes
Electronic Database:
(g) The Department or a designated database provider shall provide an
electronic database for use by communications service providers. The electronic
database, whether provided by the Department or a designated database provider, shall be
provided in a format approved by the American National Standards Institute's Accredited
Standards Committee X12, that, allowing for de minimis deviations, designates for each
street address in the State, including to the extent practicable, any multiple postal street
addresses applicable to one street location, the appropriate jurisdictions, and the
appropriate code for each taxing jurisdiction, for each level of taxing jurisdiction,
identified by one statewide standard numeric code. The electronic database shall also
provide the appropriate code for each street address with respect to counties and
municipalities which are not taxing jurisdictions when reasonably needed to determine
the proper taxing jurisdiction. The statewide standard numeric codes shall contain the
same number of numeric digits with each digit or combination of digits referring to the
same level of taxing jurisdiction throughout the State using a format similar to FIPS 55-3
or other appropriate standard approved by the Federation of Tax Administrators and the
Multistate Tax Commission, or their successors. Each address shall be provided in
standard postal format. The Department may contract with a designated database
provider.
Updates:
Municipalities and counties shall provide updated information for the electronic
database on a semiannual basis to the Department or designated database provider. The
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department or designated database provider shall maintain and update the electronic
database on a semi-annual basis.
Funding:
The Department shall receive an appropriation of $
to develop
the electronic database, which amount shall be reimbursed to general revenue in equal
installments over a period of
years from proceeds generated by municipalities
and counties, on a prorata basis based on revenues received, under this section. The
Department shall receive _ percent of proceeds generated by municipalities and
counties to operate and maintain the electronic database.
Use:
A communications services provider may choose not to use the electronic
database as provided for herein. The communications services provider shall be
responsible for identifying the location of taxable transactions within each municipality
and county. When compared with the information contained in the electronic database,
communications services providers shall be permitted the following error rates on
identifying the location, by specific municipality or county, of taxable transactions: 5%
error rate for the year 2002; 3% error rate for the year 2003; and I % error rate thereafter.
(Should there be a limit on the total amount of revenues these error rates can impact?)
Municipalities and counties shall have no responsibility to provide any information on
jurisdictional limits or service addresses to communications services providers.
Communications services providers shall be responsible for obtaining all information on
municipal and county jurisdictional limits and service addresses from the Department. If
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a communications services provider has an error rate higher than allowable under this
subsection, the communications services provider may be audited by municipalities and
counties where the communications services provider provides service for the time
periods of non-compliance and the municipality or county may impose penalties and
interest to the same extent as the Department, as provided in subsection~. A
communications services provider that complies with the permitted margins of error shall
be responsible for correcting identified errors in a timely maimer.
Hold Harmless:
A communications services provider using the data contained in the electronic
database described in this subsection shall be held harmless from any tax, charge, or fee
liability that otherwise would be due solely as a result of any error or omission in the
electronic database provided by the Department or designated database provider. The
communications services provider shall reflect changes made to the electronic database
during a semi-annual period no later than thirty days after the end of that semi-annual
period.
Except as provided herein, communications services providers using the data
contained in the electronic database described in this subsection shall not be subject to
municipal or county audits for the collection and remittance process of municipal or
county revenues and shall also be immune from taxpayer lawsuits based on errors due to
inaccurate customer service addresses.
Development:
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Municipalities and counties shall provide the Department or designated database
provider with customer service address lists identifYing all addresses within a particular
municipal or county jurisdiction and the tax rate for that jurisdiction to be contained in
the electronic database. If two or more municipalities or counties claim jurisdiction over
the same customer service address, the customer service address shall not be included in
the electronic database until the appropriate jurisdiction is identified.
(h) The Department shall issue an annual report on all of the administrative
activities taken or performed pursuant to this section. The report shall include, but not be
limited to, information on audit activities and the revenue collection and remittance
process. The report shall be distributed to each municipality and county that the
Department has collected and remitted tax revenues to under this section at any time
during the one year reporting period.
(i) The Secretary of the Department shall establish a technical advisory group
composed of (10 or another number) state, municipal and county officials
to advise the Department on auditing standards and other administrative activities to be
performed by the Department. The Florida League of Cities and the Florida Association
of Counties shall each appoint four members to the technical advisory group. The
Department shall consider the recommendations of the technical advisory group when
developing rules pursuant to this section. (The technical advisory committee would be
for a limited duration to oversee the development of the Department's administrative
apparatus and would continue to review and provide comment on the Department's
administrative activities for several years after the collection and remittance process
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FOR DISCUSSION PURPOSES ONLY
begins.) Members of the technical advisory group shall receive per diem expenses as
permitted under Chapter 112.
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(7)(a) The tax imposed by this section, including any penalties or interest
attributable to the nonpayment of such taxes or for noncompliance with the provisions of
this section, shall be remitted to the Department. The tax shall be credited to the
Municipal and County Communications Tax Clearing Trust Fund and shall be remitted to
municipalities and counties by the Department in accordance with the provisions of this
section.
(b) For the purpose of compensating the communications service provider for
collecting and remitting the tax imposed by this section, each communications service
provider shall be allowed _ percent of the amount of tax collected on behalf of the
municipality or county in the form of a credit when submitting its return and remittance
to the Department, provided the amount due was not delinquent at the time of payment.
(8) The provisions of this section shall have no impact on the authority of
municipalities or counties to levy ad valorem taxes, levy occupational license taxes,
impose special assessments, or require and collect permit fees, inspection fees and other
administrative or operational fees from any providers of communications services. Any
taxes, assessments or fees collected from providers of communications services shall not
be offset against the tax imposed under this section.
(9) Revenues generated under this section are fully bondable by
municipalities and counties to pay for current and future bond obligations.
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Transitional Schedule:
Each municipality and county currently receiving revenues from the public
service tax on telecommunications services, franchise fees on telecommunications
services and/or franchise fees on cable services must be identified along with the total
revenues received by each municipality or county. A tax rate must be established for
each municipality and county that will generate the projected revenues from these sources
and must be established by general law as the new tax rate. "The transitional schedule is
designed to ensure that when the new tax is imposed and the current tax and franchise fee
structure is replaced, an adequate revenue stream is provided to replace lost revenues.
The new revenue stream must be provided without a municipal or county governing body
having to pass an ordinance imposing a rate for the new tax. Any increase in tax rates
over the rate necessary to provide equivalent revenue streams would require action by the
municipal or county governing body. Tax rates established in the transitional schedule
shall be automatically adjusted if tax collection information indicates that the initial rate
set was not correct.
Effective Date:
The effective date for the Department to begin developing the electronic database
and perform other administrative activities would be immediately upon becoming law.
The effective date for the new tax and the remainder of the act would be January I, 2002.
Direct Broadcast Satellite:
(The state rate shall include a portion for taxation of direct broadcast satellite.
Revenues generated under this portion of the tax rate should be distributed to
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municipalities and counties. This is designed to keep direct broadcast satellite and cable
services on a competitively neutral basis. Also, this is designed to prevent a loophole
which could permit the delivery of Internet services through direct broadcast satellite
without the Internet services being subject to taxation, if current moratoria are removed.)
24
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Telecommunications Taxation Workgroup
Subcommittee and General Session Meetings
November 16. 1999, Orlando Airport Marriott
The purpose of this group is to draft legislation to implement the Florida
unified "flat tax" on telecommunications.
Please refer to notes from the October 20 and November 8, 1999 meetings
for background information.
Ms. Pam Cook from BeJlSouth, who represents industry, chaired the meeting.
Mr. John Wayna Smith and Mr. Kelvin Robinson represented Florida League
of Cities-the primary contributors to the session.
Ms. Sarah Blakley and Mr. Bob McKee represented Florida Association of
Counties. They actively participated in this session appearing to agree to
those issues as noted below. However, in the previous meeting they had
stated that they could not state their position until they had met with their
constituents (after 11/16/99).
Ms. Susan Langston, Florida Telecommunications Industry Association acted
as the group facilitator.
DOR was represented during part of the workshcp, but stated no opinion,
other than they 'would do what ever the legislaturl;l tasked them to do."
Much of industry's "flat tax" presentation had been tempered by an industry
developed paper, "Proposal for State and Local Taxation of the
Telecommunications Industry," dated November 15, 1999, presented to the
Advisory Commission on Electronic Commerce, U.S. Congress. We were
provided copies. The proposal outlines two formulas for state taxation (one
for states without current local taxation, one for states with local taxationl
and strr;sses the necessity to provide uniform taxing throughout the United
States. The first formula mirrors BellSouth's initial proposal. one rate, one
tax, statewide. The second provides for lodal. taxes similar the concessions
offered by industry et the meeting described below, but is more restrictive.
The most significant issue in the second formula is the requirement for
SITUS utilizing a statewide database.
The meeting started with a side by side presentation of the positions of Local
Government and Industry.
At the end of the meeting. the following tentative agreements and areas of
disagreement were identified:
A~reed to by Industry and Local Government:
C. Rilea. T. Vayda
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Telecommunications Taxation Workgroup
Subcommittee and General Session Meetings
November 16, 1999, Orlando Airport Marriott
A. SITUS
. OaR to develop and maintain database.
. Providers to SITUS trensactions utilizing either their database or OaR
database.
. Rorida and industry to work toward national modellassuming the
Congress can develop framework for same).
. Should providers choose to continue using their own database. OaR
would test the provider's database against the official database
periodically. If a specified level of confidence were achieved. the provider
would continue to pay based on their database with noted corrections
being made prospectively. This would allow .safe harbor" for Industry.
If the provider's databilse were out of tolerance, tax penillties and interest
would apply. There was some discussion of levels of confidence (i.e.
starting at 95%). but this got derailed due to GTE's late arrival, where
industry said they would have to discuss this issue further. The big issue
is that industry does not want to adopt Florida's database, and to
subsequently be required to change to a national model. Due to the
timing of this issue. industry also .aid there was tho possibility that
Florida's methodology could be used as the nationill model.
. Database to take about two years to develop-note there was no
discussion of what to do in the interim. Before industry wanted safe
harbor during the interim. However. the local government position was to
comply with existing statute.
. Updates to the datilbase to be semi-annuaL
. Taxpayer lilwsuits-As industry views lilnguage from current PST/MUT
statutes to be satisfactory (deals with class action 6uits by customers)
they wish the same protection in the new legislation.
. Public record exemptions remilin. but some 60rt of RISE agreement
between state and local governments OK.
. Providers to pay one check to OaR with associated reports for illlocation
to local governments.
. OaR to distribute funds to local governments.
. OaR only entity authorized to audit providers.
. Alllocel government payment/distribution issues to be with DoR.
B. Local Rilte
. Agreed to allow variable local rate up to stiltutory cap (%).
. Statute to establish cap for different types of local government.
C. Rilea, T. Vayda
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5
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Telecommunications Taxation Workgroup
Subcommittee and General Session Meetings
November 16, 1999, Orlando Airport Marriott
. Industry proposed three caps, one for cities, one for charter counties, and
one for non-charter counties, with the charter counties being lower than
cities.
. Florida League of Cities and Association of Counties Indicated this was
unacceptable and that there should be no differentiation between
charter counties and cities-two ceps. (This point of dlfferenc:e to be
considered by industry, end resolved before next meeting. It is based
on industry's position-primarily Bell South--thet Charter Counties do
not have the right to charge the 1 % franc:hise fee, or for that matter
levy the broad .base tax the same as a citY.1
· Proposed rates could not be discussed as DOR failed to provide current
rate/revenue data. Similarly issues regarding "hold harmless"
methodologies (for bonding, windfalls) and the .75% vendor
compensation were not discussed, as the DOR data was necessary for
meaningful discussion.
C. Franchise Fees.
. Industry indicated that franchise fees must be included in the local rate.
This was more or less agreed tc by the Florida League of Cities, but is
included below, es It was not totally resolved!
C. Tax Base.
. Basically all telecommunications except for Internet (currently prohibited
by law).
. Agreed to keep legislation silent on the Internet, but ailow for formulas
should it become taxable.
. Industry agreed to provision that if bundled with other services, Internet
would be taxable if not separately stated.
Issues to be resolved:
A. SITUS
. Standards for database accuracy (noted abovel.
. Single rate cap for cities and charter counties (noted above).
B. Local Rate.
. Rate cap-to be determined based on OOR supplied revenue data.
. Decisions of how to handle local option sales tax and transit tax (this
laHer tax apparently is an authorized tax applicable to six older charter
c. Rilea, T. Vayda
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Telecommunications Taxation Workgroup
Subcommittee end General Session Meetings
November 16, 1999, Orlando Airport Marriott
counties-not Orange County-that allows up to a 2.5% additional tax on
telecommunications).
. Industry wants permit and other fees identified in chapter 337 to be
deducted as offsets or not charged in addition to single rate tax, as single
rate tax is to cover this amount. These are primarily fees defined in
337.401 that deal with use of right of way permit fees and the 1 % gross
revenue fee used to cover right of way upkeep. Basically, industry want
to pay no fees other than single rate tax. (There was no mention of
occupational license fees, and other miscellaneous fees not under this
section, but one would assume this could be included in the final
legislation.)
o Note that there was no representative from any school board presant so it
is not clear how thair interests are being represented.
C. Franchise Fees
o Include franchise fees in tax.
o In kind benefits from cable franchise (current providers are grandfathered,
but for new providers or renewals, all provider in kind in excess of federal
reouirements to be eliminated except on reimblJrsement-thisgoes along
with elimination of local franchise fee negotiation).
C. Other
o "Hold harmless" methodologies (for bondingl.
o Windfalls,
o Vendor Compensation.
While proposed legislation is to be developed after this week's meeting of
the Florida League of Cities, industry and government proposed one final
meeting on 12/16/99 at 10:00, Rorida League of Cities Building,
Tallahassee. A briefing will also be provided to the Florida Senate
Telecommunications Working Committee during the week of December 9 reo
the proposals and significant issues (briefing is to last a meximum of 30
minutes and is to be done by one representative of industry and ana from
government--assumed to be John Wayne Smith).
Note: One issue not discussed at the meeting is DOR's collection of the tax
from hotels (es resellers of telecommunications). We have referred this to
Bob McKea, Florida Association of Counties, but doubt if anyone has
considered this-we do feel it will prove to be difficult, and this is an
important revenue source for Orange County.
C. RHea, T. Veyda
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ITIA POSITION - ~CAL OPTION
1. Situs for X years using each companies existing syslems and work toward a common
nationwide database for addresses.
2. Local government would grant immunity from liability while industry is using existing
systems as long as we were not willfully negligent and made reasonable effort to accurately
situs.
3. After the common nationwide database is available all providers must convert within a
reasonable time. Semiannual address updates only.
4. Agree to a common sourcing of transaction.
5. Local option tax is one rate and is either on or off. It will include franchise fee for local, long
distance and cable.
6. Only municipalities and chaner counties are eligible for the local option at their capacities.
Non-chaner counties are only eligible for B lower option rate which includes cable franchise
fees and existing local option sales taX.
7. The local option may be turned on or off by vote of caaunissian once per year with an
effective date of January 1. Must give same notice to providers as currently provided for in
?vlUT law.
8. Permit fees and other fees that are presently deducted as offsets to the franchise fee pursuant
to ehapter 377 arc not charged to communications providers, including long distance
providers.
9. Audits by OaR, monthly remittance to OOR with one check per provider with information
on how much OCR should send to each local government imposing the local option tax.
10. Include language from last years MDT biJI for refunds and class action law suits.
.
II. Tax base for state component and local option component will be the same to the extent
allowed by federal law. '
12. Language to specifically ensure that local government does not exceed its authority to adopt
ROW rules and regulation as necessary to manage the public ROWand protect public health,
safety and welfare.
13. Require notice of proposed ROW ordinances to the FPSC and The Florida Administrative
Weekly.
14. Specifically require that any regulations be imposed by ordinance of genera! application and
not by company specific agreement for both local and long distance companies. (Note: All
fees are to be included in the local oplion component of the unified lOX - see #8. above.)
15. In-kind contributions will also be an offset against the local option ta~ for Cable TV.
7/16
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PROPOSAL FOR STATE AND LOCAL TAXATION OF TIlE
TELECO~CATIONS~USTRY
Suhhlilted To:
The Advisory Commiuion 011 Electronic Commerce
November 15,1999
Submitted By:
..,
AirTouch Communications. IllC.
ALLTEL Corporation
AT&T Corporation
Bell Atlantic Corporation
BellSouth Corporation
CommNet Cellular, Ine.
Global Crossing
GTE Corporation
SBC Communications Inc..
Sprint Corporation
US WEST Inc.
Westelll Wi~,e\ess .CorporatioD
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11
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I. INTRODUCTION
In me Internet Tax Freedom Act (the "Act"). Congress created the Adviso!}' Commission on
Electronic Commerce (me "Commission") and directed it to conduct a comprehensive study of
me current systems of taxation as they relate to the Internet and electronic cOtrunerce, Among
the issues to be examined by the Commission arc "ways to simplify Federal and State and local
taxes imposed on the provision of telecommunications services." Act 9 I 102(g)(2)(F). The
Commission is required to submit a report to Congress reflecting the results of this study,
including legislative recommendations. At its meeting in New York on September 14- I S, 1999.
the Commission invited interested parties to submit specific proposals with respect to the areas
under study by the Commission.
This Proposal, which relates to the state and local taxation of the telecommunications
industry, is divided into two substantive parts. The fl1'St fartoffers two options for simplifying
the complex sll'Ucture of state and local transaction taxes currently applicable to
telecommunications services. The second part suggests a phasc-out of those aspects of the
current tax strueture that discriminate against the telecommunications industry, such that
telecommunications providers and telecommunications services ultimately will be subject to an
overall state and local tax burden that is no greater than other competitive industries and
services.1 The Proposal then recommends that the Commission endorse the tax reform measures
set forth in the Proposal and seeks Congressional action to encourage and facilitate
implementation of those reform measures by t.he states. Finally, section III demof'.stratcs that this
Proposal satisfies, and in some respects exc""ds, vinually aU of tile applicable criteria and
standards that were set by the Commission.
II. PROPOSAL TO REFORM TELECOMMUNICATIONS TAXES
A. SimDlifkation
The companies submitting this Proposal recognize that a single plan for simplification may
not be suitable for all states and local governments or for the conswners of teleconununications
services ill,those states and 10caJ!ties. Accordingly, this Proposal includes two simplification
options, depending in part on the existing tax sll'Ucture of each state. The first option
incorporates a single, statewide transaction tax on talecommunications, a portion of which could,
al the state' s option. be distributed to local governments. The second option allows for the
continued imposition of local taxes in those states where local taxes are currently imposed on
I For purposes of tltis Proposal, the lenn "trMsaelion Ux" means I tax imposed upon or measured by !he lIl1lO<lo15
paid For products and services. regardless of whether the legal obligalion to pay !he w: is placed on the vendOr or
the customer. This is !he same dermilion used For purposes of !h. Committee 00 Stale Taul;on 50-State Study ilnd
Repo" on TelecommlJnications Taxation ("COST Srudy"), which was presented to (he CommiiSion at its September
meeting in New York. AltI10ugh stalt and local per-line charges and nat fees are also in need of simplificalioo and
could benefit from the options o~t1incd here, the PropositI docs not cover-these: items, as they arc beyond the scope
of the Commission's char-g.:=:.
J This plupOse armis Proposal is not to document c.he complexity and disproportionate tax burden faced by the
telccommunlc.uioo5 industry in the area of slate and locallaxcs, but rather to suggest solutions to these problems.
The Commission is referred to the COST Study, which dramatically demOnStfalcs the need for comprehensive
reform or the [ax systems applicable to the telecommunications industry.
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telecommunications services, but requires certain additional provisions to insure that there is
substantial simplification in the administration of those taxes.
OPTION A
. One T,an$action Tax Per State. Telecommunications services would be subject to no
more than one Slale-level transaction tax. The same tax rate would apply regardless of
the particular local jurisdiction in which the services were provided and there would be
no need to determine the local situs of the transaction. It is contemplated that the state
would, in many instances, disrribute a portion of the revenues from such tax to local
governments in accordance with an appropriate distribution formula. It is also
contemplated that the telecommunications industry would cooperate with the state and
local goverrunents in providing infortlUltion necessary to design the distribution formula.
. One Return Per State.. Under this option, each telecommunications provider would be
required to file only one tax return per reporting period with the state tax administrative
agency. as opposed to the many separate retwns that are sometimes required to be filed
with various local jurisdictions that currently administer their own taxes.
. One Audit Administered at the State LeveL Because there would be only one tax and
one rerum, this option would also eliminate the need for multiple audits by local taxing
jurisdictions. A single audit would increase the efficiency of the audit process, thereby
reducing governmental costs.
. Nationwide Uniform Sourcinl!. All states would adopt a single. uniform method of
determining the situs of telecommunications transactions. It is anticipated that
specialized rules would be developed for particular types of transactions. This will
eliminate the possibility of more than one state asserting a claim for tax on a particular
transaction. Moreover, Uniform rules for sourcing transactions will greatly simplify the
compliance burden of telecommunications providers and, as a result, reduce the current
elCposure faced by carriers on audit.
. Nationwide Uniform Definitions. All states would adopt uniform definitions oflenns
reievantto the taxation of telecommunications services, such as local telephone service.
mobile service, etc. This will greatly simplifY the compliance burden of
telecommunications providers by making it much easier to detennine which of their
services are subjecl to tax in a particular state.
· J 20 Davs Lead Time for lmo/ementinr! Tax Ba$(: Qnd Rale Chanf7es.
T eleeommunications providers would be given a minimum of 120 days in order to
comply with any changes in the tax base or tax rate on telecommUnications services.
This will allow such companies sufficient time to make the necessary changes to their
billing and accounting systems to assure collection and remittance of the correct amount
of tax.
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OPTION B
.
One State Transaction Tax Per State. Under this option. there would be no more than
one slate transaction tax on lelccommunications services. but local governments would
continue to be authorized 10 impose local taxes under the conditions set forth below.
.
Optional Local Tax. In addition 10 the state-level taX, local jurisdictions in the state that
ate currently authorized to impose tax on telecommunications services provided within
their jurisdictions would continue 10 be authorized to do so. It is contemplated that,
subject to any limitations under state law, Cllch authorized local jurisdiction would have
the ability to choose (i) whether 10 impose a tax on telccommunications services, and (ii)
the rate at which to impose the tax. However. each stICh localjurisdiction would be
permitted to impose only one transaction tax on telecommunications services, such that
any multiple taxes currently imposocl would have to be consolidated.
.
Uniform Stale and Local Tar Base. Although each authorized local government would
determine whether and at what rate to impose a tax on telecommunications. the tax base
for all local taxes would be the same. Further, if the state also imposes a tax on
telecommunications, the base for local taxes would be the same as the base for the state-
level taX.
.
Uniform State and Local Exemotions. Exempt customers and transactions would also
be ,he sun: for L'le ,93t. e.nd all local taJ<:~s.
. Sinlde Tax Return llnd State Distribution of Revenues. Taxes would be reported
sepatately for the state and each local jurisdiction but would be combined on a single
return filed with the state tax administrative agency. Telecommunications providers
would make a single payment of all taxes to the state and tax revenues would be
distributed by the slate to the respective local taxing jurisdictions. It is contemplated thaI
local goverrunents would be afforded some form of review to verify the proper
distribution of tax revenues.
· Unified State Level Audits. The stale tax administrative agency would conduct a single
audil of the state and all local taxes. It iswntemplated that local governments would be
afforded some form of review over the selection of companies for audit and the conduct
of such audits. .
. State-Administered Uniform Address Datllbase. Selection of this option would require
the state to compile and administer a database, in a nationwide uniform format, that
would assign each street address to the appropriate local jurisdiction in a manner that
would allow telecommunications providers to determine the correct jurisdiction for which
to repot1 any tax attributable to each such address.)
J This address daL1base would be similar in mlUlY respects to Ihe: addrcu dAtabase contemplated by Section 804 of
lhc: proposed Mobile Tclecommunicllions Sourcing Act, 5.1755, as introduced by Senators Brownback lJnd Dorgan
on October 20, 1999.
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.
Statt A dministt!rt!d Jurisdictional and Rate Database. The state would also maintain a
database of the state and allloea! raxes and tax rates applicable to telecommunications
services and would be responsible for updating that database for any changes in such
rates or jurisdictions. It is con",mplated that the database would be updated on a fixed
periodic basis not to exceed four times per year and thaI telecommunications providers
would only be responsible for implementing rale ehanges 120 days after ea!:h such
periodic update.
.
Teleeol7ll7lunicQtions Pr(Jvit!ers Held Harmless. Telecommunications providers would
be entiUed to rely on the address database for sourcing telecommunications transactions
and on the rate database, and would be held harmless from claims by either customers or
the local raxing jurisdictions for situsing or tale errors attributable to the information
contained in the databases.
.
Venda,s' Comoensalion. In order to offset the additional costs incurred as a result of
administering local taxes under this option, telecommunications providers would be
allowed an adequate level of vendors' compensation that would be taken as a credit
against taxes due when filing returns.
. Notionwide Uniform Sourcinp. (Same as Option A.)
. Nationwide Uniform Definitions. (Same as Option A.)
B. Eliminstion of Discriminatory Taxation
Because of their importance to the Internet and electronic commerce, the lelecommunications
industry and telecommunications services should not continue to bear a grealer burden of state
and local taxes than other competitive industries! In addition, elimination of the disparity in
raxation between telecommunications and other competitive industries will minimize the
relevance of how ''telecommunieations'' services should be defmed. The companies submining
this Proposal recognize, however, that the current rax structure applicable to telecommunications
evolved over a long period of time during which telecommunications played an entirely different
role in the I'conomy. It is further recognized that immediate, radical change may not be practical
because of the disruption it may cause to state an!llocal government budgets that have come 10
depend on the taxes paid by telecommunications providers and their customers. Therefore, the
following points offer gradual but meaningful change that ultimately will result in
relecommunications being taXed at the same level as othct competitive businesses.
. PhlUe-Out of Induslrv-Soecific and Hi~her Transaction Taz: kates. To the extent that
telecommunications services are subject to transaction taxes not applicable to general
businesses and/or to the extent that (he rax rales applicable to telecommunications
services exceed thosc applicable to general business, these inconsistencies should be
eliminated over a reasonable period of time. Given the different fiscal situations and
budgetary concerns of both state and loea] governments, it is recognized that no single
~ Although repeal oflhe federal Clt;cise tax an communications should be a pan of any c:ffon 10 eliminate industry-
specific taxes on telecommunications services, this Proposal emphasizci SUIte: and local ~xc:s in accordance: with [he
Commission's invitalion for proposals.
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formula for achieving this objective will be suitable for every state. However. because
many state. are currently experiencing SUbstantial revenue growth and because the
telecommunications industry is expected to continue growing rapidly. a speedier
transition to a fully nondiscriminatory tax slIUcture may be possible in many instances,
. ProfJem Tax Reform. The assessment ratios and tax rates applicable to
telecommunications property should be no higher than those generally applied to
commercial and industrial property. In addition. the property of telecommunications
companies subject to tax should be consistent with that subject to tax in the hands of
commercial and industrial taxpayers. Similarly, the methodologies used to value
telecommunicatiDns property fDr tax pwposes shDuld result in valuatiDns no higher than
the methDdDlogies generally used to value commercial and industrial property.
. Equal Trea~"t fa, Busilless [lIDuts. Most states currently exempt or partially exempt
purchases of certain types of business equipment from sales and use taxes.
TelecommunicatiDns equipment purchases shDuld be afforded the SllJIle tax treatment, in
order to increase the capital avaiJllble fDr build-out of the telecommunications
infrastructure and tD aVDid the pyramiding of taxes. Any such exemption Dr Dther
provisiDn sbould be broad enough to account for the rapid changes in technolDgy
experienced with respect to telecommunications equipment.
C. Reeommended Commission Action
The companies submitting this PrDposal believe that the best way to eifecL the tax reform
measures sought by this Proposal is thrDugh cDDperatiDn amDng representatives of the industry
and state and local governments ID change the laws at the state and local level. Therefore, the
companies are nOI at this time seeking federallegislaliDn that would mandate these ehanges. S
Rather, il is hoped that the CommissiDn will (I) endDrse the specific tax refDrm measun:s set
forth in this Proposal; (2) ask Congi-ess to adDpt a resDlution which strongly encourages the
states to work with the teiecDmmunieations industl)' to implement such measures and offers the
r~sources of apprDpriate federal agencies to assist in the process; and (3) recommend that
Congress enact a law establishing a Congressional Review CommissiDn which, after a periDd Df
three years. would review the progress of the Slates in achieving the objectives Dfthis PropDsal.
Based orl its findings. the Review CommissionwDuld recommend whether Congress should take
some form of affirmative action. '
m. CRITERIA FOR EV ALVA nON
1. How does this proposal fundamentally simplify the existing system of sqles tax collecrion
(Some examples may be: common definitions. single rate per state. clarification of neXIlS
standards. and soforth)?
The proposal will greatly simplify the tax collection and reminance of state and IDcal taXes
on telecDmmunications services by substantially reducing the number of taxes. definitions
and exemptions that telecommunications providers currently must account for. For example,
I II is recognized, how~ver.lhl( cCNin elemen(s of the Proposal which call for nationwide unifOrm stand.vds, such
as uniform sourcing ilI'Id defUlifions. may require feduallegislafion in order to be implcmemed.
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even assuming all states were to adopt Option B, the number of annual rransaction laX rclUms
required to be filed by a nationwide telecornmwtications provider would be reduced from as
many as 55,000 to approximately 600, and the number of tax bases the provider Would be
responsible for maintaining would be reduced from Over 650 to a maximum of 51. The
number of Lues the customers see on their telecommunications bill also would be reduced in
most states. Obviously, the simplification would be even more dramatic depending on the
number .of Slates that adopt Option A.
2. How does this proposal define, distinguish, and propose to lar informarion, digital goods,
and services provided electronically over Ihe Internet?
Because this Proposal focuses solely on tclC(:()mmwtications, it does not propose to tax
information, digital goods and services provided electronically over the Internet.
J. How does Ihis proposalprolecl againsl onerous a1ldlor mulliple audils?
Under both Options A and B, the Proposal contemplates that'a single audit would be
conducted at the stale level.
4. Does Ihis proposal impose any raxes on Internet access or new tares on Internel sales?
No.
5. Does this proposal leave Ihe net tar bl4rden Dn CDnsumers unchat!ged? (Does if impose an
obiigation to pay lares where slJch an obligatiDn dDes not erist tOday? DDes it reduce Dr
increase stDle and local lelecommunication tares? Does il reduce or increase tares,
licensing fees, or other charges on slffl!ices designed or used for access 10 or use of the
Internet?)
By ealling for reductions in state and loeal taxes on lelecommunications 10 be phased in over
time, the Proposal ultimately will reduce the overall tax burden on consumers, which should
also reduce the overall cost of accessing the Internet.
6. Does the proposal impose any 1a;J;, licensing or reporting requirement, col/eclion obligation
or aliter ob/igQlion or fee on parties ather tha..n those with a phYSical presence in a parlicular
srare or political subdivision?
The Proposcal would not change ClllTent physica.! presence nexus standlU'ds.
7. What featUl'es of the proposal will impacr the revenue base of federal, state, and local
governments? Any estimates or opinions musl be subslantialed.
The impaet that the Proposal will have on the revenue base of state and locaJ governments
will depend on me growth of the industry during the period in which discriminatory taxes on
telecommunications are phased out. It is generally accepted that revenues from
telecommunications services will continue to increase rapidly over the neXt several years,
and such rapid growth rates would minimize the impact on Slate and local gOYerrunent
revenues.
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8. Does Ihis proposal remove Ihe financial, logislical, and administralive compliance burdens
of sales and LlIe III:{ collectioTlS from sellers? Does the proposal include any special
provisions with respect to small, medium-sized, or stan-up businesses?
By streamlining taXes. simplifYing the reponing and audit processes, and by providing for the
paymem of vendors' compensation, the Proposal significantly reduces the administrative.
compliance and financial burdens currently borne by teleconuntmications companies.
Moreover, because the ability to obtain accurate jurisdictional and rale information is one of
the grearesl challenges typically faced by newer and smaller firms, the simplification offered
by this Proposal clearly will make it easier for start-up and small businesses 10 enter and
compete in the markelS for teleconunWlicatioll5 services.
9. Does the proposal trear pW'cht2sers of Ii/re products or services in ar Ii/rea manner as
possible through the implementation of a policy or system that does not discriMinate on the
baSis of how people buy?
Yes. This Proposal does not distinguish among either consumers or providers of
teleconuntmications services based on the manner in which they are purchased.
10. Does the proposal discriminate against our-ofsrate Or remote vendors or among different
calegories of such vendors?
No.
I I. How does this proposal affeCt Us. global competitiveness and the ability of u.s. businesses
to compete in a global mad'erplace?
The proposal is neutral with respect to the ability of U.S. businesses to compete globally.
12. Can rhis proposal be scaled to the international level?
Yes.
13. How does this proposal conform to international tax systems, including those thar are based
on Source rather than destination? Is this proposal haT/nonized with the tax systems of
America's trading partners?
With respeclto telecommunications services, the value added tax systems of European Union
countries discriminate against non European Union countries and are not. source-based. The
concepts reflected in this Proposal, however, could be used as an international model 10 avoid
discriminatory and multiple taxation.
14. Is the proposal technologically fiasible utilizing widely available software to enable tox
collection' If so, whar are the initial costs and the costs for required updates. and who is (0
bear those casts?
Duo to the complexity of existing state and local taxes on telecommunications, there is no
software currently available that the industry Can use today to collect and report all of the
many differenllaxes applied to telecommunications. Option B of the Proposal would require
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if
that slales provide and maintain a database with jurisdictional data, which would enable the
industry to rely on currently available software to collect Il!ld remit state and locaJtaxes.
15. Does the proposal protect the privacy of purchasers?
Yes.
16. Does this proposal respect the sovereignry of states and Native Americans?
Yes.
17. How does this proposa/treat/ocal governments' autonomy and their ablliry to raise a
greater or lesser amount of revenues depending an the neetb and dj!Slres of their citizens?
By providing an alternative simplification option under which loeal govemmcnts would
continue to have the authority to impose loealtaxes on telecommunications, the Proposal
preserves local govemment autonomy.
18. Is the proposal consiitutional?
Yes. The Proposal is clearly constitutional. However, certain aspeci.s of the proposal that
contemplate nationwide uniform standards, such as uniform sourcing, may require federnl
legislation in order to implemented.
IV. CONCLUSION
In considering this Proposalll!ld in formulating ilS recommcndation to Congress, the
Commission should be guided by the fact that telecommunications is one of the most, ifnot the
most, critical factor in the continued growth of the Internet Il!ld electronic commerce. The
lelecommunications infrastructUrc is truly the backbone ofthc Internet. Neither the Inrernet nor
electronic commerce could exist, and access to the Internet would be Impossible, without
telecommunications. Given the impOrlance of telecommunications, it is indefensible that this
indumy should bear a greater tax and tax compliance burden than other industrics. Without
comprehensive reform of the tax structure applicable to tclecommunications, the Internet and
electronic' cOlnmerce will not develop to their full potential. Moreover, telecommunications
providers will inevitably find new ways to reduce their tax and administrative burden through
structural and other changes, which may not be.-as efficient and which would likely result in
decreased tax revenues for state and local governments over time. By beginning the process of
simplifying taxes and eliminating discrimination, however, the Commission c.m encourage the
telecommunications industry to increase and accelerate the dcploymeot of capital for the nation's
infrastructure, resulting in both continued rapid growth of thc Internet and electronic commerce,
as well as increased stability in the tax revenues received by state and local governments from
the telecommunications industry.
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CITY OF AVENTURA
COMMUNITY DEVELOPMENT DEPARTMENT
FROM:
velopment Direc~
TO:
Brenda Kelley, C
DATE:
January 14, 2000
SUBJECT:
Office Building Signs
In the City of Aventura
The City's current sign code permits the following size of wall signs:
. 1 wall sign per ground or second floor establishment which has its own
frontage and entrance facing a public street. Corner or through store
locations may have an additional wall sign. Such second sign shall be limited
to 50% of the square footage of the primary sign.
. Maximum size of 1 square foot for each 1 lineal foot of tenant frontage
(building frontage) for each sign located within 300 feet of a street on which
the building fronts; or 1.5 square foot for each 1 lineal foot of tenant frontage
for each sign located more than 300 feet of a street on which the building
fronts.
Staff has contacted unincorporated Miami-Dade County, the Cities of Miami,
North Miami Beach, North Miami, Hallandale, Coral Gables, Fort Lauderdale, and
Boca Raton to ascertain their respective office building sign codes. The results
follow.
Office Signage Allowed in Neighboring Jurisdictions
Jurisdiction Office Signage Regulations
North Miami Beach . Number: One wall sign for each building or store
front on a zoned lot. On corner lots the owner may
elect to have two wall signs provided that the total
sign area of the two wall signs shall not exceed the
total area permitted for one such sign.
. Size: The maximum area of such sign shall be in
accordance with the following table:
Square Footage of signage
For each linear ft. of bldg.
Or store frontage
1~2~~ 1
3 sto~ 1.5
4 sto~ 1.75
5 sto~ ~ more 2
. Sign shall not encompass more than 75% of the
width of st~e front or building.
. For first floor tenants with direct exteri~ access,
signage allowed for that tenant only at the first floor
doorway and within the guidelines f~ a 1st sto~
frontage.
Uninc~p~ated Miami- . Number: Type and number of point of sale signs
Dade County permitted for a single individual business on a lot
will be based on the following formula:
Lot frontage (feet) Signs allowed
0-75 2 signs but no detached
76-150 3 signs, one of which may be
detached
4 signs, one of which may be
North Miami
Location of Sign
151 +
detached
. Size: 10 percent of the wall area for a building that
does not exceed 15 feet in height; then 1.5 percent
increase for each foot of building height above the
15 feet measured to bottom of the sign.
. In addition, a corner lot with minimum dimensions of
300 feet will be allowed 4 signs, 2 of which may be
detached signs provided that the second sign is no
greater than Yz the size allowed the first sign and
provided the separation between the 2 signs is at
least equal to 50 percent of the total amount of
frontage on both streets or roadways.
. Where multiple businesses are located on a given
lot, each business use shall be permitted a wall sign
only.
. Office Park District (would apply to Aventura
Corp~ate Center property under County code):
Size: 50 square feet
Number: 1 detached or flat wall sign per principal
building
Special Conditions: the flat or detached sign may only
identify the building or occupants therein
. Number: 1 sign permitted per building, can be the
name of the building or the major tenant.
. Size: 1:1 (ex: 150' of bldg. Frontage = 150 sq. ft.
sign)
2
Boca Raton
. Not allowed above the roofline
. No signs for individual tenants permitted on wall
. Number: 1 identification sign permitted per
building.
. Size: 2 sq. ft. per 1 linear foot of building frontage;
maximum size is 100 square feet
. Individual tenants allowed sign on wall only when
they have direct access from outdoors.
. Number: single business buildings are allowed a
maximum of 4 depending on number of street
frontages - 1 of 4 signs can be freestanding
. Number: multi business buildings are allowed 1
building identification sign for each street frontage
& 1 or 2 freestanding plus 1 wall directory sign for
each building entrance
. Size: not more than 25% of wall size to maximum
of 300 square feet
For signs whose faces are perpendicular to the on
premises frontage
. Up to a maximum of 2 freestanding signs
depending on the number of street frontages.
The freestanding sign can identify the main
occupancy along with 4 tenant names per
face
or
. 1 fixed projecting sign, not extending more
than 3 feet from the wall
or
. 2 flat signs identifying a designated main
entrance to an occupancy on opposite sides
of the building
For signs whose faces are parallel to the frontage, 1 of
the following categories of signs are permitted:
. Up to a maximum of 2 freestanding signs
depending on the number of street
frontages. The freestanding sign can
identify the main occupancy along with 4
tenant names per face,
or
. 1 fixed projecting sign, not extending
more than 3 feet from the wall
or
. 1 flat sign identifying a designated main entrance to
an occupancy on opposite sides of the building
. Commercial centers are allowed 1 canopy sign per
occupancy. Each occupant also has the option of
Hallandale
Fort Lauderdale
3
Coral Gables
constructing a principal and an amplifying sign by
dividing the total permissible flat sign area between
the principal sign and the amplifying sign.
Amplifying signs are limited to the identification and
price of a particular product for sale or service
. Size: 32 sq ft per face for projecting signs up to an
aggregate of 64 sq ft, 100 sq ft for the 2 flat signs
and 160 sq ft for buildings above 100 feet in height
. Number: office district - 1 ground or monument
sign for each 100 feet of frontage
. Size: 1 wall sign limited to 1 sq ft of sign area for
each linear foot of wall fronting on a street and may
be increased 2 Y:z sq ft for each foot above the first
10 feet of building height from grade at the bottom
of the wall to the bottom of the sign
. 1 projecting sign in lieu of wall sign
. 1 address or directional sign
. no signs permitted on frontages which face
residentially zoned property within radius of 1000 ft
. Number: 3 wall signs for buildings less than 8
stories, 4 wall signs for buildings 8 stories and over
. Size: 1 % of total wall fayade plus 1 sq ft for each 1
ft vertical from grade to bottom of sign
. Can use all four facades and can be 2 different
names (ex: "Hancock Building" on east and west,
"Ameribank" on north and south elevations)
Miami
Staff recommends that signs be permitted on office buildings and that a new
section be added to the Sign Code to regulate these types of signs. Staff
suggests that the following item be included in this new section to address the
size of wall signs:
1. The maximum size of wall sign be dictated by location on the building,
that is,
i) at the first, second, third or fourth story, a maximum sign area of 1
square feet for each 1 lineal foot of frontage
ii) at the fifth, sixth or seventh story, a maximum sign area of 1.5
square feet for each 1 lineal foot of frontage
iii) at eighth and ninth story, a maximum sign area of 2 square feet for
each 1 lineal foot of frontage
iv) at ten stories and above, a maximum sign area of 2.25 square feet
for each 1 lineal foot of frontage
2. Where the building is a corner or through location and 2 wall signs are
allowed, one wall sign may be the name of the building and the other
may be the name of a major tenant of the building - with the second wall
4
sign being 50% of the square footage of the primary sign as currently
allowed.
The following table shows the existing sign size on two ten-story buildings in the
City and compares the size of wall signs permitted by the City of Aventura
existing code, proposed code and the codes of North Miami Beach, Miami, Fort
Lauderdale and Coral Gables.
Aventura
(existing
code)
One (1) wall sign
sign 160 square feet
Aventura
(proposed code)
North
Beach
Miami
Fort Lauderdale
Miami
Coral Gables
Boca Raton
Two (2) wall signs
Primary Siqn 160 square feet
Secondary Siqn 80 square
feet
One (1) wall sign
360 sq ft
Two (2) wall signs
Primary Siqn 360 sq ft,
Secondary Siqn 180 sq ft
One (1) wall sign
320 sq ft
or Two (2) wall signs not
exceeding 320 sq ft total
One (1) wall sign
320 sq ft
or Two (2) wall signs not
exceeding 320 sq ft total
One (1) wall sign
300 sq ft
Two (2) wall signs
300 sq ft
One (1) wall sign
360 sq ft
One (1) wall sign
360 sq ft
Four (4) signs
250 sq ft each
Four (4) signs
250 sq ft each
One (1) Wall Sign
(flat or projecting)
32 sq ft for 2 faces of
proiectinq siqn for total of 64
sq ft
100 SQ ft for flat siq n
One (1) Wall Sign
(flat or projecting)
32 sq ft for 2 faces of
proiectinq siqn for total of 64
SQ ft
100 SQ ft for flat siqn
5
For your information, the following table shows the name and address of each of
the office buildings in the City and the number of stories, wall signs and
monument signs at each location.
# of Existing
Building Location # of Stories # of Existing Monument
Wall Signs Signs
Mount Sinai Building 2845 Aventura Blvd 2 2 1
First Union Building 2925 Aventura Blvd 3 3 0
Police Opt Building 2956 Aventura Blvd 2 3 0
HSBC Building 2958 Aventura Blvd 3 2 2
South Trust Building 3050 Aventura Blvd 3 2 0
TotalBank Building 17701 Biscayne Blvd 3 1 0
Professional Offices 17971 Biscayne Blvd 2 1 1 (shared
A ventu ra (Point East) Aventura
Plaza Plaza)
Washington Mutual 18301 Biscayne Blvd 2 1 1
(South Building)
NationsBank Building 18305 Biscayne Blvd 4 2 0
Jaffe Office Building 18741 Biscayne Blvd 2 8 0
Coves of Biscayne 18955 Biscayne Blvd 1 0 0
(under construction)
Turnberry Place 19495 Biscayne Blvd 10 2 2
(Washington Mutual
North Building)
A ventu ra Corporate 20801 Biscayne Blvd 5 1 1 (shared
Center (south building) with north
building)
Aventura Corporate 20801 Biscayne Blvd 5 2 1 (shared
Center (north building) with south
building)
Medical Office Building 21150 Biscayne Blvd 4 1 1
Turnberry Bank 20295 NE 29 Place 3 3 1
Turnberry Office 2875 NE 191 Street 10 2 1
Concord Center II 2999 NE 191 Street 10 1 1
Dental Care Group 2797 NE 206 Street 2 5 2
Waterways Offices 3575 NE 207 Street 2 0 0
Gelbwaks Insurance 2801 NE 209 Street 2 1 0
Linda Marx Realty 20895 N E 209 Street 2 2 0
Aventura Cancer 20950 NE 209 Street 3 2 1
Center
Orthopedic Care Center 21000 NE 209 Street 2 1 0
Please feel free to contact me with any questions you may have.
6
CITY OF AVENTURA
OFFICE OF THE CITY MANAGER
MEMORANDUM
FROM: Eric M. Soroka, Cit~
TO: City Commission
DATE: December 13, 199
SUBJECT: Aventura Boulevard Entrance Feature
..."
As requested by the City Commission, attached is a cost estimate relating to the
construction of the Aventura Boulevard Entrance Feature. The cost estimate is
$484,200 for both sides of the entrance feature. The estimate was prepared by William
O'Leary.
Staff has reviewed the estimate and believes that it may be a high estimate. In any
event, the budget contains $250,000 for the south side of the entrance feature.
This matter will be placed on the next Workshop Agenda.
EMSlaca
Attachment
cc: Tony Tomei, Capital Projects Manager (wi attachment)
Robert M. Sherman, Director Community Services (wi attachment)
CC0829-99
1..1 ~ '_
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., .
ESI ,,,. ASSOCIAnS P.A.
t^I"Il:~:Q.PE...ROufECTURf LAND PLANNING
URlJi'JiIOEsICN GRAPHIC DESIGN
December 1, 1999
Mr. Tony T()mej
Capital Projects Director
2999NE 191" Street
Suite 11500
Aventura, Flonc:a 33180
.':
Re: Aventurll Boulevard Entry Feature
Aventura, Horida
Dcar Mr. Tomei:
111.r~pon..<;( 10 YQur inquiry regarding the above referenced project. pl= be advised oflhe
foilowing:
A) The Statement of Probable ConstructIOn Cost reflects a cost of$ 484,200.00
(see attached eSlImate).
B) Tbe finished materials for the walls will probably be concrete with a painted
stucco finish.
C) hi the detailed design phase we WIll altempt to include "coach lights" on Ihe
c,}lumns although we wIll consult with the electrical engincers to see if Ihe
p"oposed landscape lighting will destroy the effect of these fixtures.
Pk..se let me know if you require any additionalmfonnallon
Very truly yours.
7;rJt;:T~PA
WlLLIAM A O'LEARY, FASLA .-1.
WAO!cas ~
Enclosure
OAK PLAZA /'1.,'DFESSIUNAl CENTER B525 s.w, ')2NO STREET. SUI;E c\ 1 M:AMI. flO;;; DA 3:11 '}6 ~j()S) 5')O-(IG%
MEMBERS OF THE A.\oiERICAN 50Cl[rr OF LAS:iSCADE ARCHIHe rs
D .C- 1-99 WED 11 :41 O~LEAR'~' OESIGt~ ~SSUI_
~-' - ~'-'=.
AVENTURA BQVLEVARD ENTRANCE
P~E.lIMINARY STATEMENT OF PROBABLE CONSTRUCTION COST
11rl9l99
ITEM QTY UNIT UNIT COST TOTAL
"".
26 EA $1,600,00 $44,60000
3 EA $1,000.00 $3,000
41 EA $150.00 $6,15000
17 EA $4,90000 $83,300 00
1 LS $3,000,00 $3,00000
100 EA $70,00 $7,00000
um 600 EA $900 $5,400,00
1600 EA $2.;'5 $4,400,00
2,000 EA $1.'1'5 $3,500.00
1600 EA $6, $10.80000
1 LS $100.000,00 $100 000,00
1000 SF $275 $2,75000
1.350 SF $4, $5,40000
1 LS $50,000, $50,000,00
1 LS $30.000,00 $30,000, DO
1 LS $10,000, $10,000,00
1 LS $4.000. ' $4.00000
1 LS $15,000,00 $15000.00
1 lS $15.00000 $15000,00
$403.500,00
$80,700.00
$484.200,00
. These items I<>qure engineering input, consequently,
lhe renected'costs are allowances only.
O^K PlAZA f'Rqf-lSSlO....AL Ct:NHR 6525 S.w. 9ZND STi<EET. SUITE Cl i MIAM!, FLORID^ 3J 156 DOS) 5?6.()096
MEMBERS Of THE ^,Wf{ICAN SOCIETY OF lANDSCAPE ARCHITECTS
Existing City National Bank Sign
2875 NE 191 Street
10-SV-99
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t;~\ST)NG SIGiN COD8"
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Date: 1/18/00 Time: 2:15:40 PM
Pag<1 of 2
Land Use & Environmental Law
.__._. ....h..n.d. .1-. . Debra D. Ousley .. d....l-
Attorney & Counselor At Law
d
PO Box 1417, Wimer Park, Fla. 32790 Off: (407) 629.0617 Fax: (407) 629.0804
January 18, 2000
Mayor Arthur Snyder and City Commissioners
City of Aventura
2999 NE 191 St., Suite 500
Aveotura, Florida 33180
RE: Supplemental Guide Signs for Aventura Mall
. " . ~ ,. " , ~
Dear Mayor Snyder and City Commissioners:
I have been retained by A ventura Mall to assist in seeuring approval of supplemental guide
signs within the Florida Depl ofTransportation (FDOT) right-of-way for the Mall's
smrounding road network. Unfortunately, I will not be able to attend the planned
workshop 1.0 present this issue. George Berlin requested that ] write to you to provide
some backll1lDund infonnation regarding the approval process.
The Florida FDOT Traffic Engineering Manual is a reflection of the Federal Highway
Administration Guidelines. The purpose of signing is for the benefit of the motorist to
identifY IIIl\ior fucilities of a certain size and magnitude that have a regional draw of
motorists. This advanced signing allows for proper lane alignment and efficient access.
Most signing designations are based on either a certain size in SF or are considered in
combination with the volume of motorists attending the facility.
In the last several years, FDOr recognized that some private facilities met or exceeded
this criteria and warrant consideration for supplemental guide signs. In 1996,
. FDOT instituted provisions for regional malls to acquire supplement guide signs. The
provisions oftbe Traffic Engineering Manual, Section 1I.16, Supplemental Guide Signing
for Limited and Non-Limited Access Highways - General Criteria, Pg. II-4I, 4/19/96,
states in relevant part:
The District Traffic Operations Engineer may approve signing for regional maJJs
or shopping centers 93,000 square meter or more (1,000.000 SF) when the route
to ihrfacility is not obvious to the motorist or safety or operational problems can
be attributed to unclear directions. Safety and operational pro blerns must be
documented and effect the site destined and other traffic. Local government
concurrence of the reQJIe!rt i~ required beinre it will be C(m~idered
arbitration/mediation . administrative & governmental law . real estatelland development transactions
zoning . comprehensive pia" amendments . development agreements . permit negotiation
~ From: Debra Ouslcy, Esq, To: George B~lin
4
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Date: 1/18/00 Time: 2:15:40 PM
Page2of2
Letter to Mayor Snyder
RE: A ventura Mall Signs
Page 2
January 18, 2000
, " .. " c _ ~ .' / , ,- ' , .' -
Malls over 1,000,000 SF meet and exceed all of the criteria for signing of facilities which
have traditionally received signing in tenns of both size and volume of traffic. The
Aventura Mall is the largest mall in Florida and presently supports 2.3 million gross square
feet. In particular, these ma1Is are similar to sports arenas and auditoriums in that they
both generate large volumes of traffic at specific times during events. They both have a
regional dia.,-where motorists may not be aware of the most direct or alternative routes.
Also, Florida is unique in that we have many seasonal residents who do not frequent the
malls year round and are not as familiar as one might expect of year round residents.
4Jso, the larger malls must draw from a large region in order to exist. A majority of the
IpalI customers are not located within the local street network or within the County.
10 date, I have secured signing approval for 8 mall facilities throughout Florida. Where
SIgns have been installed prior to this last holiday season, it appears that the signs do in
fact assist the motorist. I amjust beginning to collect data on this. The Avenues Mall in
Jacksonville is a good example as the usual backup on the interstate during the peak
,_l]Qlj4a.Ys,ea~(m \\?lSpracticaJlyeIiminated because the signs directed motorists off the
:ip.tcrstate at different locations to distribute the traffic away from the most used interstate
exit ramps.
I
On behalf of the Aventura Mall Management, I appreciate your review and consideration
€!fthis matter. Of course, please feel free to caIJ me to address any questions you may
have.
I
ct)~~
Ij)ebra Ousley, Esq.
I
ce:
.
Eric Soroka
George Berlin
_ c , ~ . , . ,_ ," , "
-'-
'liimherry 5lssociates
October 26, 1999
VIA FACSIMILE
Eric Soroka, City Manager
CITY OF AVENTURA
2999 N.E. 191" Street - Suite 500
Aventura, Rorida 33180
Re: Aventura Mall - Off-Site Signage
Dear Eric:
Pursuant to our recent discussion and our upcoming meeting, I would like to provide you with same
background information.
We have been advised, by our consultant that FOOT has instituted provisions far regional malls to
acquire supplemental guide signs. The provisions of the Traffic Engineering Manual, Section 11.16,
Supplemental Guide Signing far Umited and Non-Umited Access Highways - General Criteria, P. 11-41,
4/19/96, states in relevant part:
The District Traffic Operations engineer may approve signing far regional malls or
shopping centers 93,000 square meter or mare [1,000,000 sq. ft.] when the
route to the facilitv is not obvious to the motorist or safetv or ooerational problems
can be attributed to unclear directions. Safety and operational problems must be
documented and effect the site destined and ather traffic. Local Qovernment
concurrence of the reQuest is reQuired before it will be considered.
The specific criteria is underlined.
In discussions our consultant has had with local governments, they usually insist that local
governments have no jurisdiction aver FOOT right-of-way. This case is different, as you can
see from the last sentence within FOOT criteria. Since we will be including the City of
Aventura in the sign age, we will be asking far your concurrence as well. I will provide you with
the signage detail and locations as soan as I am in receipt of same.
As always, thank you far your assistance and cooperation.
GJB/ d
19501 Biscayne Boulevard, Suite 400, Avenlura, Florida 33180 (305) 937-6200 Fax: (305) 933-5511