Leveraging the Municipal League to Protect Local Telecom Rights

The success of the telephone industry in whittling away at cities' rights to manage and regulate their local telecommunications rights-of-way has created a revenue emergency for some local governments.

In Colorado, municipalities can no longer receive right-of-way revenues from carriers above right-of-way management costs. In Texas, municipalities and municipal electric utilities are now precluded from providing lucrative telecommunications services.

The lobbying prowess of the telephone industry has been strong in these states, but municipalities elsewhere are fighting back the old-fashioned way-leveraging strength in numbers via the clout of a statewide municipal league. So far, municipal leagues in Tennessee and Utah have succeeded in heading off-or at least achieving parity with-telephone companies in the battle over the right to govern local telecommunications services.

In Tennessee, the state legislature in its last session considered a bill similar to one passed in Colorado that would have curtailed municipal authority over local rights of way. Having seen what happened in Colorado, the Tennessee Municipal League reacted quickly, sending out a bulletin to its members that urged strong action against the bill. In the ensuing lobbying campaign, the bill never got out of committee.

The Tennessee League did not stop at a legislative stalemate. It proceeded to promote municipal interests further by developing a model ordinance for its member cities and towns that supported their right to levy right-of-way fees on utilities.

As several cities now move to implement the model ordinance, Bell South, the incumbent local exchange carrier, is actively lobbying city councils against the measure and threatening suit if the ordinances are enacted.

While Tennessee municipalities have succeeded in heading off what they consider to be an unpalatable state law, Utah cities and towns so far have avoided court battles by taking concerted action a step further: They are attempting to develop model telecommunications ordinances in cooperation with the telephone industry.

The difference here is a regulatory environment that is more favorable to municipalities. In Utah, localities have the right to apply a local franchise or business tax on utilities, including providers of local telecommunications services.

In this environment, the telephone industry has perceived little chance of success in pre-empting local authority or taxation. So it has focused on one of its less contentious goals: achieving a common regulatory framework by working with localities rather than having to negotiate custom agreements city by city and town by town.

While some issues remain under discussion, the telephone industry appears to be taking the position that it will forego legislative and court battles if cities and towns adopt the model ordinance. The ordinances-which appear to be well-crafted-meet the industry's need for clear and consistent treatment while not compromising the municipal interests in revenue and right-of-way management.

But while Utah provides a strong model of successful cooperation among competing interests, the jury is still out in that case. The model ordinance has not yet been widely adopted, its effectiveness is as of yet unknown, and industry-sponsored legislation and court fights remain possibilities. All signs, however, are positive.

The examples of Tennessee and Utah show that municipalities, acting through a network of statewide municipal leagues and associations, can have a powerful impact on the fight over right-of-way management. But these cases also show it is critically important for municipalities to be prepared with a coordinated response to any legislation that threatens to pre-empt their authority.

--Miles Fidelman is president of the nonprofit Center for Civic Networking. He can be reached at mfidelman@civicnet.org or (617) 241-9205.

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