By Lucio S.B. No. 653
76R6365 CBH-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the provision of local exchange telephone service in a
1-3 municipality and the management by the municipality of public
1-4 rights-of-way used by providers of that service.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Subtitle A, Title 9, Local Government Code, is
1-7 amended by adding Chapter 283 to read as follows:
1-8 CHAPTER 283. MANAGEMENT OF PUBLIC RIGHTS-OF-WAY USED BY
1-9 CERTIFICATED TELECOMMUNICATIONS PROVIDER IN A MUNICIPALITY
1-10 Sec. 283.001. STATE POLICY; PURPOSE. (a) It is the policy
1-11 of this state to:
1-12 (1) encourage competition in the provision of
1-13 telecommunications services;
1-14 (2) reduce the barriers to entry for providers of
1-15 telecommunications services so that the number and types of
1-16 services offered by providers continue to increase through
1-17 competition; and
1-18 (3) ensure that providers of telecommunications
1-19 services do not obtain a competitive advantage or disadvantage in
1-20 their ability to obtain a franchise for use of a public
1-21 right-of-way from a municipality.
1-22 (b) It is also the policy of this state that municipalities:
1-23 (1) retain the authority to manage the public
1-24 rights-of-way of the municipality and to ensure the health, safety,
2-1 and welfare of the public; and
2-2 (2) continue to receive from certificated
2-3 telecommunications providers reasonable and stable revenue for the
2-4 private use of the public rights-of-way within the municipality.
2-5 (c) The purpose of this chapter is to establish a uniform
2-6 method administered at the local level for compensating
2-7 municipalities for the use of their public rights-of-way by
2-8 certificated telecommunications providers that:
2-9 (1) is administratively simple for municipalities and
2-10 certificated telecommunications providers;
2-11 (2) benefits consumers by keeping the cost of services
2-12 low;
2-13 (3) is consistent with state and federal law;
2-14 (4) is competitively neutral;
2-15 (5) is nondiscriminatory;
2-16 (6) is consistent with the burdens on municipalities
2-17 created by and directly related to the incursion of certificated
2-18 telecommunications providers into public rights-of-way; and
2-19 (7) is revenue neutral.
2-20 Sec. 283.002. DEFINITIONS. In this chapter:
2-21 (1) "Access line" means a unit of measurement, other
2-22 than an interoffice transport or other transmission media that do
2-23 not terminate at an end-use customer's network interface device,
2-24 representing:
2-25 (A) each switched transmission path of the
2-26 transmission media that is physically within the public
2-27 right-of-way extended to the end-use customer's premises network
3-1 interface within the municipality that allows delivery of services
3-2 within the municipality;
3-3 (B) each termination point or points of a
3-4 nonswitched telephone or other circuit consisting of transmission
3-5 media connecting specific locations identified by, and provided to,
3-6 the end-user for delivery of nonswitched services within the
3-7 municipality; or
3-8 (C) each loop provided to any person used for
3-9 the provision of telecommunications services.
3-10 (2) "Certificated telecommunications provider" means a
3-11 telecommunications provider that has a certificate of convenience
3-12 and necessity, certificate of operating authority, or service
3-13 provider certificate of operating authority to provide local
3-14 exchange telephone service.
3-15 (3) "Commission" means the Public Utility Commission
3-16 of Texas.
3-17 (4) "Local exchange telephone service" has the meaning
3-18 assigned by Section 51.002, Utilities Code.
3-19 (5) "Public right-of-way" means the area on, below, or
3-20 above a public roadway, highway, street, bridge, cartway, bicycle
3-21 lane, or public sidewalk in which the municipality has an interest,
3-22 including other dedicated rights-of-way for travel purposes and
3-23 utility easements. The term does not include the airwaves above a
3-24 right-of-way with regard to nonwire telecommunications.
3-25 Sec. 283.003. CERTAIN RIGHTS NOT AFFECTED. This chapter
3-26 does not affect the right of a:
3-27 (1) telecommunications provider to use a public
4-1 right-of-way to provide service and to install facilities as
4-2 necessary to provide that service; or
4-3 (2) municipality to regulate the placement of those
4-4 facilities or otherwise manage those facilities in a manner that is
4-5 reasonable, consistent, nondiscriminatory, and competitively
4-6 neutral.
4-7 Sec. 283.004. FRANCHISE REQUIREMENT PROHIBITED IF
4-8 RIGHT-OF-WAY NOT USED. Notwithstanding any other law, a
4-9 municipality may not require a telecommunications provider that
4-10 does not use a public right-of-way within the municipality to
4-11 obtain a franchise or any other license or permit or to pay any fee
4-12 or other compensation to provide local exchange telephone service
4-13 in the municipality.
4-14 Sec. 283.005. FRANCHISE REQUIREMENT; EFFECT OF UNIFORM
4-15 GENERAL USE ORDINANCE REQUIREMENT. (a) Regardless of whether a
4-16 municipality adopts the uniform general use ordinance prescribed by
4-17 this chapter, a municipality may require a certificated
4-18 telecommunications provider to obtain a franchise to use a public
4-19 right-of-way within the municipality as necessary to manage the
4-20 right-of-way. For purposes of this section, reselling services,
4-21 leasing the facilities of another provider, or interconnecting or
4-22 transmitting a signal from a wireless carrier to the network of a
4-23 wireline carrier does not constitute use of a public right-of-way.
4-24 (b) A certificated telecommunications provider may erect
4-25 poles or construct conduit, cable, switches, or related
4-26 appurtenances and facilities in a public right-of-way within the
4-27 municipality and excavate within the right-of-way to provide local
5-1 exchange telephone service on execution of a franchise.
5-2 (c) Notwithstanding Subsection (a), a municipality may not
5-3 require a certificated telecommunications utility that has obtained
5-4 a franchise from the municipality to pay a franchise fee under
5-5 Section 283.008 unless the municipality adopts the uniform general
5-6 use ordinance adopted by the commission in accordance with this
5-7 chapter and the franchise between the municipality and certificated
5-8 telecommunications utility complies with the ordinance.
5-9 Sec. 283.006. PROHIBITION ON OTHER FEES AND CHARGES.
5-10 Regardless of whether a municipality adopts the uniform general
5-11 use ordinance and imposes a fee under Section 283.008, a
5-12 municipality may not require a certificated telecommunications
5-13 provider to:
5-14 (1) pay any fee other than the fee authorized by
5-15 Section 283.008, including an application, permit, excavation, or
5-16 inspection fee, for the right to use a public right-of-way or to
5-17 provide local exchange telephone service in the municipality; or
5-18 (2) provide any in-kind services without compensation
5-19 or below market rates for the right to use a public right-of-way or
5-20 to provide local exchange telephone service in the municipality.
5-21 Sec. 283.007. UNIFORM GENERAL USE ORDINANCE. (a) The
5-22 commission shall adopt a uniform general use ordinance governing
5-23 the conditions and limitations a municipality may impose for use of
5-24 a public right-of-way by a certificated telecommunications provider
5-25 and the compensation a municipality may impose for that use.
5-26 (b) The uniform general use ordinance must provide that any
5-27 municipal regulations conditioning or limiting the use of a public
6-1 right-of-way by a certificated telecommunications provider:
6-2 (1) must be based on a lawful exercise of the police
6-3 power of the municipality;
6-4 (2) must be exercised in a competitively neutral
6-5 manner;
6-6 (3) may not unduly impair competition;
6-7 (4) may not be unreasonably restrictive; and
6-8 (5) must comply with state and federal law.
6-9 (c) In addition to the provisions prescribed by Subsection
6-10 (b), the uniform general use ordinance must:
6-11 (1) provide that a municipality may receive
6-12 compensation from a certificated telecommunications provider only
6-13 for the municipality's costs of managing the public right-of-way
6-14 and only in accordance with Section 283.008; and
6-15 (2) recognize that essential differences exist between
6-16 areas of this state that may dictate individual municipal
6-17 requirements relating to regulation of the use of a public
6-18 right-of-way by a certificated telecommunications provider and
6-19 compensation for that use.
6-20 Sec. 283.008. FRANCHISE FEE. (a) A municipality that has
6-21 adopted the uniform general use ordinance may impose a fee on a
6-22 certificated telecommunications provider that has executed a
6-23 franchise agreement with the municipality for the use by the
6-24 provider of a public right-of-way within the municipality as
6-25 necessary to reimburse the municipality for the costs relating to
6-26 managing the right-of-way. Costs of managing the right-of-way
6-27 include the costs of:
7-1 (1) regulating the time or location of excavation to
7-2 preserve effective traffic flow;
7-3 (2) requiring a provider to place its facilities
7-4 underground, rather than overhead, consistent with the requirements
7-5 imposed on other utility companies;
7-6 (3) recovering an appropriate share of the increased
7-7 street repair and paving costs that result from repeated
7-8 excavation;
7-9 (4) enforcing local zoning regulations; and
7-10 (5) indemnifying the municipality against any claims
7-11 of injury resulting from the provider's excavation.
7-12 (b) The municipality shall allocate costs among certificated
7-13 telecommunications providers that have executed franchise
7-14 agreements with the municipality on the basis of the number of
7-15 access lines served by those providers.
7-16 (c) The municipality shall recover the costs through the
7-17 imposition on each certificated telecommunications provider that
7-18 executes a franchise agreement of a fee on each access line within
7-19 the municipality that physically uses the public right-of-way to
7-20 connect an end-user. A fee imposed under this section:
7-21 (1) must be competitively neutral; and
7-22 (2) may not be based on the revenues received by a
7-23 certificated telecommunications provider.
7-24 (d) In setting the amount of the fee, the municipality shall
7-25 ensure that the total amount the municipality receives in the first
7-26 year of the agreement from all certificated telecommunications
7-27 providers that have executed franchise agreements with the
8-1 municipality does not exceed the amount the municipality received
8-2 in franchise, permit, license, or other fees in 1998 from
8-3 certificated telecommunications providers. The municipality may not
8-4 increase the amount of the fee, but the total amount the
8-5 municipality receives will increase if there is an increase in the
8-6 number of access lines within the municipality that physically use
8-7 the public right-of-way to connect an end-user.
8-8 (e) The municipality shall set the annual amount a
8-9 certificated telecommunications provider must pay under this
8-10 section according to the number of access lines served by the
8-11 provider within the municipal boundaries during that year.
8-12 (f) The commission shall annually determine the total number
8-13 of access lines within each municipality and shall determine the
8-14 lines among certificated telecommunications providers that have
8-15 executed franchise agreements with the municipality. The commission
8-16 may perform audits relating to the appropriate allocation of access
8-17 lines. This subsection does not affect the authority of a
8-18 municipality to perform audits relating to the allocation of access
8-19 lines and the payment of fees under this section, but the
8-20 commission has final audit authority.
8-21 (g) If a municipality that did not impose on a certificated
8-22 telecommunications provider a fee or other charge for use of the
8-23 public right-of-way before January 1, 2000, decides to impose a fee
8-24 under this section, the municipality must adopt the uniform general
8-25 use ordinance. The municipality shall impose and set the amount of
8-26 the fee in a manner similar to the manner in which a municipality
8-27 with approximately the same population and geography imposes and
9-1 sets the amount of the fee. In addition, in setting the amount of
9-2 the fee, the municipality shall ensure that the total amount the
9-3 municipality receives in the first year of the agreement from all
9-4 certificated telecommunications providers that have executed
9-5 franchise agreements with the municipality does not exceed the
9-6 amount described by Subsection (d) and received by the similarly
9-7 situated municipality.
9-8 Sec. 283.009. PREVENTION OF DOUBLE PAYMENT. (a) If a
9-9 certificated telecommunications provider that resells local
9-10 exchange telecommunications services or facilities chooses to
9-11 execute a franchise agreement with a municipality, the reseller
9-12 shall provide a copy of the agreement to the provider from whom it
9-13 purchases services or facilities.
9-14 (b) At the beginning of the next billing period after the
9-15 franchise agreement takes effect, the provider from whom the
9-16 reseller purchases the services or facilities shall cease applying
9-17 the access line fee to the services and facilities provided to the
9-18 reseller, and the reseller shall pay that fee directly to the
9-19 municipality.
9-20 SECTION 2. (a) A work group is created to draft a proposed
9-21 uniform general use ordinance to submit to the Public Utility
9-22 Commission of Texas for adoption in accordance with Section
9-23 283.007, Local Government Code, as added by this Act. The work
9-24 group is composed of one representative of each of the following
9-25 entities, appointed by the Public Utility Commission of Texas:
9-26 (1) certificated telecommunications providers that
9-27 hold a certificate of operating authority and intend to provide
10-1 local exchange telephone service by reselling services;
10-2 (2) certificated telecommunications providers that
10-3 hold a certificate of operating authority and intend to provide
10-4 local exchange telephone service but whose primary service
10-5 offerings are interexchange service;
10-6 (3) certificated telecommunications providers that
10-7 hold a certificate of operating authority and provide local
10-8 exchange telephone service through their own facilities;
10-9 (4) certificated telecommunications providers that
10-10 hold a certificate of convenience and necessity and have fewer than
10-11 one million access lines in this state;
10-12 (5) certificated telecommunications providers that
10-13 hold a certificate of convenience and necessity and have one
10-14 million access lines or more in this state;
10-15 (6) municipalities with a population of less than
10-16 5,000;
10-17 (7) municipalities with a population of at least
10-18 5,000, but less than 100,000;
10-19 (8) municipalities with a population of at least
10-20 100,000, but less than 500,000;
10-21 (9) municipalities with a population of at least
10-22 500,000, but less than one million; and
10-23 (10) municipalities with a population of at least one
10-24 million.
10-25 (b) Not later than November 1, 1999, the work group shall
10-26 submit a proposed uniform general use ordinance to the Public
10-27 Utility Commission of Texas. The proposed ordinance must comply
11-1 with Chapter 283, Local Government Code, as added by this Act. If
11-2 the work group does not submit a proposed ordinance to the
11-3 commission by November 1, 1999, the work group is dissolved and the
11-4 commission shall develop the ordinance.
11-5 (c) The Public Utility Commission of Texas shall review a
11-6 proposed ordinance submitted under this section to determine if the
11-7 ordinance complies with Chapter 283, Local Government Code, as
11-8 added by this Act. The commission may review the proposed ordinance
11-9 in an informal proceeding.
11-10 (d) After review, the Public Utility Commission of Texas
11-11 shall approve and adopt the ordinance, approve and adopt the
11-12 ordinance as modified by the commission with the agreement of the
11-13 work group, or remand the ordinance back to the work group for
11-14 additional work.
11-15 (e) The Public Utility Commission of Texas shall adopt the
11-16 initial ordinance under this section not later than December 15,
11-17 1999.
11-18 (f) This section expires February 1, 2000.
11-19 SECTION 3. (a) This Act does not affect the validity of a
11-20 franchise agreement with a certificated telecommunications provider
11-21 executed before January 12, 1999, and a municipality may continue
11-22 to enforce that agreement and to collect franchise fees and other
11-23 charges under that franchise agreement until the date on which the
11-24 agreement expires by its own terms.
11-25 (b) During the period in which a franchise agreement
11-26 described by Subsection (a) of this section is in effect in a
11-27 municipality, a municipality may require a person who wants to
12-1 offer local exchange telephone service in the municipality to
12-2 comply with any applicable terms of the agreement as a condition of
12-3 providing services in the municipality. However, the municipality
12-4 may not require the new entrant to provide any in-kind services
12-5 without compensation or below market rates for the right to use a
12-6 public right-of-way or to provide service in the municipality. The
12-7 authority of the municipality to require compliance under this
12-8 subsection expires on the date on which the franchise agreement
12-9 described by Subsection (a) of this section expires by its own
12-10 terms.
12-11 SECTION 4. (a) Section 1 of this Act takes effect September
12-12 1, 1999. The other sections of this Act take effect on the first
12-13 date on which they may take effect under Section 39, Article III,
12-14 Texas Constitution.
12-15 (b) Except as provided by Section 3 of this Act, on and
12-16 after January 1, 2000, a municipality may not require a
12-17 certificated telecommunications provider to pay a franchise fee or
12-18 other charge for using a public right-of-way within the
12-19 municipality unless the municipality has adopted the uniform
12-20 general use ordinance required by Chapter 283, Local Government
12-21 Code, as added by this Act, and has executed a franchise agreement
12-22 with the provider in accordance with that ordinance.
12-23 SECTION 5. The importance of this legislation and the
12-24 crowded condition of the calendars in both houses create an
12-25 emergency and an imperative public necessity that the
12-26 constitutional rule requiring bills to be read on three several
12-27 days in each house be suspended, and this rule is hereby suspended,
13-1 and that this Act take effect and be in force according to its
13-2 terms, and it is so enacted.