By Ron Thaniel
April 25, 2011

The Federal Communications Commission (FCC) adopted a Notice of Inquiry (NOI) on April 7 that seeks to obtain comments on local rights-of-way management (ROW) and compensation practices. The NOI continues a pattern of this Commission of questioning long established local ROW management and compensation for use of streets, sidewalks, public lands, and public buildings by communications companies.

The communications industry is lobbying the FCC to limit local ROW management and compensation. This industry continues to argue, with supposed examples, that local ROW management and compensation practices are delaying broadband deployment.

The comments are due 60 days after published in the Federal Register, to be determined as U.S.MAYOR heads to press, and reply comments are due 105 days after publication in the Federal Register.

The United States Conference of Mayors has and will continue to argue that Congress made it as clear as possible in Section 253 (c) of the Telecommunications Act of 1996, by an overwhelming and bipartisan vote, that the FCC was not to set rates for use of rights of way, and was to leave the determination of rates and management of public property to the states and localities. Congress made it equally clear that district courts are the arbiters of conflicts between local governments and providers on what constituted fair and reasonable compensation.

The Conference of Mayors policy states that the FCC should not establish, or recommend establishing, a recommendation that prevents cities from obtaining fair market value for use of rights of way by communications companies, should not make unlawful the current gross revenue-based, per-line or per foot-based, or other market-based rights-of-way fees that many cities charge, and should not require local rights of way fees to be cost-based or subject to any FCC-imposed cost model.

Gerry Lederer, Counsel with Miller & Van Eaton, highlighted the NOI threats to local ROW management and compensation practices on an April 13 Conference of Mayors conference call for the Washington (DC) representatives of mayors.

Lederer said a multi-pronged approach is needed to the FCC's NOI. "I fear if we only file comments and reply comments at the FCC on this matter, we will lose," said Lederer. "We need to bring congressional, White House and Press attention to the issue. We need mayors, CFOs, public works, public safety, and the city attorney." He said the NOI could have a "chilling effect on public works management."

"This inquiry is a necessary step towards determining whether there is a need for coordinated national action to improve rights of way and wireless facilities siting policies, and if so, what role the Commission should play in conjunction with other stakeholders," the Commission said.

Regarding local ROW management and compensation policies and practices, the Commission states that the NOI will explore specific steps that could be taken to identify and reduce unnecessary obstacles to obtaining access to ROW and siting wireless facilities. Regarding compensation for use of streets, sidewalks, public lands, and public buildings by communications companies, the NOI seeks to what extent and in what circumstances are ROW or wireless facilities siting charges reasonable? Are there instances and circumstances in which ROW or facilities siting charges are unreasonable? What are appropriate criteria for determining the reasonableness of such charges? For example, are permitting or application fees unreasonable to the extent they exceed amounts that would recover administrative and other specifically identifiable costs? Are "market based" rates for use of public ROW or publicly-owned wireless facilities sites reasonable? In particular, how are market-based rates or other non-cost based rates for public ROW determined when, in many situations, there does not appear to be a competitive market for public ROW? Are market-based rates substantially higher than cost-based rates?"

The Conference of Mayors will be putting together comments that will address the legal authority of the FCC to take the action that could undermine local ROW authority and budgets. The Conference of Mayors will also put together a template and filing instructions.