United States: Extenet V City Of Houston: Who Pays For Access To Texas Rights-Of-Way?

On April 13, 2017, the Texas Public Utilities Commission will hear oral arguments on the issue whether companies with certificates of public convenience and necessity from the Commission may place their facilities in local rights-of-way and provide wireline backhaul and Distributed Antenna Systems (DAS) service without additional local authority or the obligation to pay fees.   DAS providers say "yes" while local governments contend that such companies must negotiate separate license agreements and fees with individual cities to access their rights of way.  The Commission will be considering the recommendation of two Texas administrative law judges to side with the companies.

The case arises from a complaint filed by ExteNet Network Systems, Inc. in response to the City of Houston's demand for a license agreement and fees for ExteNet's deployment of backhaul lines to wireless sites in Houston.  ExteNet argued that its status as a Certified Telecommunications Provider entitled it to access the City's rights of way under Chapter 283 of the Texas Local Government Code regardless whether it also provided local voice or other services traditionally envisioned for municipal end users.  The Texas Legislature enacted Chapter 283 in 1999 to encourage the entry of competitive communications service providers and the deployment of new communications facilities in Texas.   Under Chapter 283, CTPs are not required to negotiate individual local franchises, but instead remit payment to each municipality on a quarterly basis based on the number of "access lines" the service provider has within each municipality.  Chapter 283 also prohibits municipalities from charging CTPs additional fees for the right to use the public right of way to provide their services.

ExteNet argues that it is not required to obtain local franchises to construct its system and provide its services, and also that it is not required to pay fees because it does not provide access lines.  Although ExteNet's state certificate is based on a decade-old request to provide local exchange services, it has never provided them.  Nevertheless, ExteNet argues, and the Administrative Law Judges have agreed, that  to qualify as a CTP, a service provider must only be authorized to offer local services, and need  not actually provide them, as the PUC ruled in a 2001 dispute between Metromedia Fiber Network Services, Inc. and the City of Carrollton (Docket No. 24480).  The City of Houston disagrees, arguing that ExteNet's services do not qualify for coverage under Chapter 283 because ExteNet does not provide local services and its lines cannot be characterized as "access lines."  The City's argument that not all services qualify for the benefits and protections of Chapter 283 has some precedent, as the PUC has determined, for example, that long-haul lines not terminating at an end-user premises do not qualify (Project No. 22909).

The Administrative Law Judges reviewing this matter issued a proposed decision on February 24, 2017 in favor of ExteNet, finding that Chapter 283 defines a CTP as one with operating authority to offer local telephone exchange service, and that the provisions of Chapter 283 apply regardless of what service the CTP actually provides at any given time.

Although the proposed decision favors ExteNet (and similarly situated providers), PUC staff have other ideas.  PUC staff's March 10 Exceptions argue that allowing service providers like ExteNet the protections of Chapter 283 would lead to an absurd result because such providers do not pay any fees under Chapter 283, which is intended to provide compensation to municipalities for use of the public right-of-way.  Staff warns that ExteNet and other providers like it would receive an anti-competitive subsidy under a statute that was intended to promote fair competition in the Texas telecommunications market.   Incumbent service providers offering service under other regulatory schemes in which they must negotiate franchise agreements and fees with individual cities could express the same concern.  The ALJs have indicated in response that they have no intent to modify their recommended decision.

This case represents but one move of a larger nationwide chess match between cities wanting to maximize not only their control over their rights of way and compensation for their use and new service providers wanting to minimize the financial and administrative costs of deploying services.  This proceeding is being carefully monitored by service providers across several industry sectors, each with its own set of particular concerns.

We would anticipate that the losing party will either appeal or find other avenues to address its concerns (such as resorting to legislative solutions).   Meanwhile, various states are considering legislation addressing access to municipal rights of way for wireless communications service providers, and Mobilitie has a pending petition at the Federal Communications Commission seeking federal preemption of state and local authority over rights of way for such services.  Regardless of the PUC's final decision, the ExteNet proceeding in Texas will not close the issue.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
18 Oct 2017, Seminar, San Francisco, United States

Please join us for Sheppard Mullin's Labor & Employment Law Update & Happy Hour Seminar Series. 2017 presents significant developments in California labor and employment laws that will affect the way you run your day-to-day business operations. We will provide analysis and insight on these new laws, as well as offer practical advice and helpful tools for employers to protect their organizations from liability in the workplace.

18 Oct 2017, Seminar, California, United States

Come learn the latest about Labor Law Updates, Healthcare Reform Updates, Federal and State Tax-related issues/credits, Unemployment and Disability Insurance-related issues. Meet face-to-face with Sheppard, Mullin, Richter & Hampton LLP attorneys, government representatives, and other experts in workshops that will educate you on critical and timely issues.

18 Oct 2017, Seminar, San Diego, United States

Data breaches have a devastating impact on business and personal privacy. The Equifax breach is the most recent example of hackers taking advantage of corporate vulnerability. Shows like Mr. Robot have surged in popularity as our curiosity with hacking and cybersecurity continues to grow.

 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.