By Ron Thaniel
August 5, 2002

On July 24, The U.S. Conference of Mayors, joined by the National Association of Telecommunications Officers and Advisors (NATOA), the National League of Cities (NLC), and the National Association of Counties (NACo) submitted a letter to the National Association of Regulatory Utility Commissioners (NARUC) expressing dissatisfaction in both the process and product of the of the NARUC public Rights-Of-Way Study Committee.

NARUC's members include the governmental agencies that are engaged in the regulation of utilities and carriers in the fifty States, the District of Columbia, Puerto Rico and the Virgin Islands. NARUC's member agencies regulate the activities of telecommunications, energy, and water utilities.

During NARUC's Winter meeting, the Telecommunications Committee adopted a resolution creating the Public Rights-of-Way Study Committee to develop recommendations for reducing the extent to which rights-of-way access serves as a barrier to the deployment of advanced telecommunications and broadband networks. At that time, and repeatedly since, the U.S. Conference of Mayors and the other local government national associations have objected to the content of this resolution because we believe it inaccurate with its assertion, without any factual analysis, that local governments are an impediment to broadband deployment.

The determination by the Study Committee that it is local government, not deployment or the lack of capital, that is the barrier to broadband deployment is the basis of the problem. Digging further into this issue and it is very apparent that it is the industry's sole focus to deny local governments their rights regarding the management authority and ability to receive compensation for occupation of the public rights-of-way. Agreeing with the industry, one of the four sub-committees of the Study Committee has positioned that occupation of the public rights-of-way should be for free.

Other sub-committee groups of the Study Committee have recognized and acknowledged the property interests of local government in the public rights-of-way and the right to be compensated for use of those property interests. Despite this, the model legislation offered states that "The fees assessed to a provider may not include any payment for rent or other compensation for the economic value of the property rights used within the rights-of-way." Free access was not contemplated by the Congress in passage of Section 253 of the Telecommunications Act, which provides for "fair and reasonable compensation."

The U.S. Conference of Mayors is further troubled that NARUC members would seriously consider proposing preemption of local government in light if NARUC's long'standing policy to never seek preemption of any state action by the federal government. Congress- instructions relating to Section 253 of the Telecommunications Act make it clear that the federal government has no role in the setting of rates for public rights-of-way and furthermore it would negate the Commissioners own state or local laws to request such preemption.

Based on the letter from the U.S. Conference of Mayors and other national organizations headway has been made with modifications to the NARUC resolution during a vote on July 30 by the Telecom Committee. More work on this issue of rights-of-way control will occur over the next number of months and the Conference will keep the nation's mayors current as developments occur.

During the U.S. Conference of Mayors Annual Meeting in Madison this past June, the Conference adopted a Rights-of-Ways Resolution calling on the Federal Communications Commission, the Congress, as well as the telecommunications industry to respect local government's right to manage local infrastructure and underscores that local taxpayers not be required to subsidize the telecommunications industry by being denied the ability to recover the expenses associated with access to the rights-of-ways and fair and reasonable rent.

Telecom and Cable Industry Chaos Impact Cities

The impact of telecom and cable giants filing bankruptcy will be felt in cities around country. At issue is your franchise agreement with these companies and your ability to receive or get reimbursed franchise fees if the company files bankruptcy. You will need to act quickly to protect your interest locally.

Cable Modem Law Suit Update

The FCC released its Declaratory Ruling and Notice of Proposed Rulemaking in the Cable Modem NOI on March 15, 2002. In the Declaratory Ruling, the FCC found for classification purposes that cable modem service is an 'interstate information service.' To further confuse the issue, and the public, the FCC then proceeds with an NPRM making numerous tentative conclusions, and asking questions that reflect its lack of understanding of the impact of its own decision.

It is estimated that local governments will conservatively loose upwards of $330 million dollars this decade alone in franchise fees on this service. Further, the FCC would propose that cable operators be permitted to use public rights of way without providing any form of compensation or being subject to local controls.

ALOAP has hired Tim Lay of Miller Canfield Paddock & Stone to represent the Alliance before the 9th Circuit Court of Appeals. On May 13 the Alliance filed a Petition for Review before the DC Court of Appeals and that petition has now been moved to the 9th Circuit. ALOAP has also hired the firm of Miller & Van Eaton to prepare comments and reply comments in the FCC's NPRM on the cable modem issue.

The motion for intervention before the Ninth Circuit has been granted: ALOAP 9th Circuit Briefing Schedule

On July 15, 2002 the Court stayed the proceeding until August 14, 2002. In addition, the court set the following new briefing schedule:

• Petitioners's briefs (ALOAPs) are now due SEPTEMBER 13
• Intervenors supporting petitioners: SEPTEMBER 27
• FCC's brief due: OCTOBER 28
• Intervenors supprting respondents: NOVEMBER 12
• Non-aligned intervenors: DECEMBER 3
• Petitioners- reply briefs (ALOAP) are due 21 days after service of non-aligned intervenors- brief (DECEMBER 24)
• Reply briefs of intervenors supporting petitioners: due 35 days after service of non-aligned inrevenors- brief (JANUARY 7, 2003)

If your city has not contributed to the ALOAP legal defense fund, please consider making a contribution to the cause. Please make contributions payable to: USCM — Cable Modem Project. Send to:

Woody Ward, Finance Director
U.S. Conference of Mayors
1620 Eye Street, N.W.
Washington, D. C. 20006