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 90th Annual Meeting in 2022
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, mayors and local government officials are facing dwindling revenue sources and increasing demand for municipal services as a result of the COVID-19 pandemic and other causes; 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 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 largely upheld the FCC's 2019 Order, in particular the parts of that order ruling that (1) the Cable Act exempts cable operators from generally applicable right-of-way fees on their broadband services, and (2) a cable operator's cost of complying with most non-monetary franchise obligations is a "franchise fee" that counts against the Cable Act's 5% cap on franchise fees; and
WHEREAS, on February 22, 2022, the United States Supreme Court denied the petition of several local governments to review the Sixth Circuit's decision; and
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, in December 2021, Representatives Anna Eshoo (D-CA) and Peter DeFazio (D-OR) introduced legislation in the House (H.R. 6219), the Protecting Community Television Act, which has 37 cosponsors, and Senators Edward Markey (D-MA) and Tammy Baldwin (D-WI) introduced companion legislation in the Senate (S. 3361), which has 18 cosponsors; and
WHEREAS, H.R. 6219 and S. 3361 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 a 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 U.S. Congress should recognize that universal access to affordable broadband cannot be achieved through deregulation and preemption of local authority and fees, but will require partnerships and robust and dedicated federal funding to accelerate universal broadband deployment; and
BE IT FURTHER RESOLVED, that the U.S. Congress should recognize that the FCC's preemptive actions threaten the continued ability of the nation's local governments to provide essential public safety and health services; and
BE IT FURTHER RESOLVED, that the U.S. Congress should preserve the respect for municipal authority protected in the Cable Act and in Telecommunications Act of 1996; and
BE IT FURTHER RESOLVED, that The United States Conference of Mayors calls on Congress to pass legislation that would amend 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. 6219 and S. 3361, 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 thanks Representative Eshoo, Representative DeFazio, Senator Markey, Senator Baldwin, and all of the cosponsors of H.R. 6219 and S. 3361 for introducing and supporting those bills; and
BE IT FURTHER RESOLVED, that The United States Conference of Mayors should oppose any new regulation or legislation that would limit, in any way, local government oversight and authority regarding the deployment of broadband in communities and the fees that local governments may impose on private businesses for installing and operating permanent commercial facilities on local public property.