Item C: Telecommunications Tax Fund

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Federal law recognizes that “cable system” operators are required to obtain local franchises in order to operate in the public rights of way. 47 USC §541(b). Under the federal law, a “cable system” is any facility consisting of: closed transmission paths and associated signal generation, reception, and control equipment that is designed to provide cable service which includes video programming and which is provided to multiple subscribers within a community. 47 USC §522(7). The definition excludes facilities that “serve only subscribers in 1 or more multiple dwelling units under common ownership, control or management, unless such facility or facilities uses any public right-of-way.” Id.. Federal courts have construed the statute as providing an exception to the 10 requirement to obtain a franchise for very limited right of way use. Federal agencies and courts have further read the statute as providing that companies leasing telecommunications lines in the right-of-way to distribute cable programming do not have to obtain cable franchises. These cases do not address state and local authority to separately require 11 franchises, such as state law providing local authority to require a telecommunications franchise. A Seventh Circuit ruling, which upheld a decision by the FCC, was that the FCC reasonably interpreted federal law. The rule is that transmission of signals over existing lines owned by a third party, leased to the transmitting entity, did not constitute “use” of the local streets. See also City of th Austin v. South Western Bell Video, 193 F.3d 309 (5 Cir. 1999), in which the Court held that because the cable service provider was a subsidiary of South Western Bell Video, SWBV was not independently subject to the federal franchise requirements. The federal law further provides that a franchise “shall be construed to authorize the construction of a cable system over public rights-of-way, and through easements, which is within the area to be served by the cable system and which have been dedicated for compatible uses.” 47 USC §541(a)(2). The common theme in the federal law and decisions interpreting it? The link to the right of way. ____________________ III. SPNM:ROR ERVICE ROVIDERS IN THE EWILLENNIUM THE ACE TO CCUPY THE IGHT OF W AY A. Telecommunications Service Providers Municipalities have enjoyed over 100 years of clear franchising authority in Oregon, based on the constitutional and state law provisions described above. The current state law, enacted in 1989, references a problematic narrow definition of telecommunications services to be 10 Guidry Cablevision v. City of Ballwin, 117 F.3d 383 (8thCir 1997). Service provider needed single wire crossing to serve two apartment complexes on opposite sides of city street. City insisted provider obtain a cable franchise. The Eighth Circuit held that the single crossing did not constitute “using” the street. 11 City of Chicago, v. FCC, 199 F.3d 424 (7th Cir. 1999) Right of Way Management and Compensation Page 5 of 15 APWA Fall Conference - 2005