Restoring Local Authority to Receive Fair and Reasonable Compensation for Use of Public Rights-of-Way by Cable Operators and Other Communications Service Providers
Adopted at the 92nd Annual Meeting in 2024
WHEREAS, mayors and other local government officials have long advocated for universal access to reliable and affordable high-speed broadband service as crucial for education, employment, economic development, and the provision of a variety of services necessary for success and progress in the 21st Century; and
WHEREAS, mayors and other local government officials believe that the timely deployment of broadband networks will promote U.S. innovation, including in transportation, agriculture, healthcare, education, public safety, manufacturing, commerce, and the continued development of smart communities; and
WHEREAS, municipalities must balance competing interests for the use of the public rights-of-way, taking into account considerations for: public safety; public utility services such as water, sewer, and electricity; the traveling public; environmental concerns; economic development; maintenance costs; and adequate taxpayer compensation for private commercial use of public property; and
WHEREAS, municipal government oversight of broadband deployment is critical to ensure it is safe, equitable, and fiscally prudent, and local government officials have the most direct understanding of the needs of their communities and understand how best to implement policies that affect their citizens; and
WHEREAS, some members of the Federal Communications Commission (FCC), Congress, and state legislatures have wrongly characterized this balancing act among competing interests for the public rights-of-way and maintenance of local authority as a barrier to broadband deployment, putting the interests of national corporations ahead of the needs of communities by effectively granting those corporations subsidized access to local public rights-of-way that do not belong to the federal or state government; and
WHEREAS, this has led to FCC and court actions aimed at restricting local authority over the local public rights-of-way, limiting the rents and fees municipalities can charge private companies for access to those rights-of-way and public infrastructure, without any assurances that the subsidy given to those companies will be used to deploy broadband infrastructure where it is most needed, thus potentially harming consumers and municipalities alike; and
WHEREAS, in 2019 the FCC adopted a Third Report and Order in its Implementation of Section 621(a)(1) of the Cable Communications Policy Act of 1984 as Amended by the Cable Television Consumer Protection and Competition Act of 1992 proceeding (2019 Order), which adopted a new reading of the federal Cable Act that would, among other things, cost local governments millions of dollars in reduced franchise and other right-of-way fees and threaten the future of cable franchise access channel and institutional network requirements; and
WHEREAS, the FCC's 2019 Order was appealed by numerous local governments, with those appeals being transferred to and consolidated in the U.S. Court of Appeals for the Sixth Circuit; and
WHEREAS, on May 26, 2021, the Sixth Circuit reversed the FCC's 2019 Order in part, ruling that a cable operator's marginal cost of complying with most non-monetary franchise obligations, not the market value of such services, is a "franchise fee" that counts against the Cable Act's 5% cap on franchise fees; and
WHEREAS, Sixth Circuit also found that the wording of the FCC's “Mixed Use” rule incorrectly states that local governments could look only to the Cable Act for jurisdiction over cable operators in the rights of way; and
WHEREAS, despite the Sixth Circuit's order, the FCC has yet to amend its rules on the marginal cost offset for non-monetary obligations and to correct its “Mixed Use” rule
WHEREAS, mayors and local governments have had to incur, and are continuing to incur, extraordinary legal costs contesting the FCC's intrusion on municipalities' ability to manage and receive fair compensation for private commercial use of public property; and
WHEREAS, the FCC's imposition of new restrictions on local governments' ability to obtain fair and reasonable compensation for use of local public rights-of-way threatens cities' continued fiscal and staffing ability to provide essential public health and safety services; and
WHEREAS, the FCC's sweeping actions prevent local governments from being good stewards of public property, safety, and welfare; and
WHEREAS, Representative Anna Eshoo (D-CA) introduced legislation in the House (H.R.907 ), the Protecting Community Television Act, which has 36 cosponsors, and Senators Edward Markey (D-MA) introduced companion legislation in the Senate (S. 340), which has 19 cosponsors; and
WHEREAS, H.R. 907 and S. 340 would overturn the part of the FCC's 2019 Order that ruled that non-monetary franchise obligations could be considered franchise fees under the Cable Act; and
WHEREAS, cable operators' broadband revenues have been increasing while their cable service revenues will be falling, with operators' broadband revenues now exceeding their cable service revenues by a significant amount, meaning that, under the FCC's 2019 Order as upheld by the Sixth Circuit, local governments' cable franchise fee receipts will decline in the years ahead, even as cable operators' use of local rights-of-way will generate increasing revenue for them free of any right-of-way fee; and
WHEREAS, unless overturned by legislation, the part of the FCC's 2019 Order upheld by the Sixth Circuit that exempts cable operators from generally applicable right-of-way fees on their broadband and other non-cable services, will deprive local governments of fair and reasonable compensation for cable operators' use of local rights-of-way and give cable operators an unjustified and discriminatory competitive advantage over their non-cable operator competitors that provide broadband and other non-cable services through facilities in the rights-of-way; and
WHEREAS, both the FCC and the Sixth Circuit ignored language in the Telecommunications Act of 1996 making clear that Congress intended to prevent the result reached by the FCC and the Sixth Circuit,
NOW, THEREFORE, BE IT RESOLVED, that The United States Conference of Mayors respectfully requests President Biden, the U.S. Congress, the Federal Communications Commission, and state governments to protect municipal authority to retain control over their local rights-of-way and to receive fair-market compensation for access to all public assets; and
BE IT FURTHER RESOLVED, that The United States Conference of Mayors calls on Congress to pass legislation that would amend 47 U.S.C. Section 542, the franchise fee provision of the Cable Act, to correct the FCC's and the Sixth Circuit's misreading of the Act and make clear that no other provision of the Cable Act limits or preempts state or local fees or taxes on cable operators or on the non-cable services they provide; and
BE IT FURTHER RESOLVED, that The United States Conference of Mayors calls on Congress to pass the Protecting Community Television Act, H.R. 907 and S. 340, which would amend the franchise fee provision of the Cable Act to make clear that the cost of non-monetary franchise obligations do not constitute a "franchise fee" under the Cable Act; and
BE IT FURTHER RESOLVED, that The United States Conference of Mayors calls on the Federal Communications Commission to act promptly on the remand Order of the Sixth Circuit which has been sitting at the Commission for well over two years.