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1998 NATOA Summary
This year’s NATOA (National Association of Telecommunications Officers & Advisors) conference was attended by Indianapolis participants Carlton Curry, Peggy Piety and Rick Maultra.
The emphasis this year seemed to be in the area of rights-of-way. There were many sessions that addressed this topic and NATOA itself distributed a major white paper titled Local Government Principles: Relating to Rights-Of-Way Management and Compensation & Ownership of Telecommunications Facilities. In preparing the document, NATOA and its members worked closely with the U.S. Conference of Mayors (USCM), National League of Cities (NLC), National Association of Counties (NACO), and the International City/County Management Association (ICMA) on telecommunications.
Some of the standout points in the discussion of this document at the conference included that community investment in local rights-of-way is a significant expenditure of taxpayer funds. Local government has a duty under general legal principles governing property rights not to give away public property for private use without just compensation. Taxpayers expect their local government to abide by these principles. Compensation for rights-of-way use is not unique. The private use of rights-of-way owned by local government is comparable to private use of property owned by other governmental units, for which compensation is expected and not questioned. Local government is entrusted with a duty to protect the investment and ensure that its use for private purposes provides a fair return to the taxpayers who have invested in it. If fees from users do not recover all direct and indirect costs, then taxpayers ultimately subsidize selected users of the rights-of-way, which is contrary to the local government duty, and can result in inequitable treatment of users.
Fees for rights-of-way use are typically "passed through" to the consumers of a service in proportion to the amount of service received. Thus, fees for the commercial use of the public rights-of-way do not constitute a burdensome general tax, but instead are charges imposed on the commercial user who may pass it on to those who purchase the service. The alternative to this approach, as it relates to recovering the costs of private use of the public rights-of-way, is to charge a general tax which would then be a cost to users and non-users alike.
Federal, state, and local governments each have a role in ensuring the goals of the Telecommunications Act are attained and each must respect the authority of others. Cooperation is key. It should be the exception and not the rule for one governmental unit to limit the traditional authority of another governmental unit.
Other notes on rights-of-way from the conference discussed a Dig Alert policy whereby the city and county becomes the call center. This allows you to know who is in the right-of-way. Users of the right-of-way fund the Dig Alert Center. Reference was made at one of the sessions to the right-of-way study assessment fee study that was performed by IUPUI that was commissioned by the Indiana Association of Cities & Towns (IACT) Telecommunications Task Force. Co-trenching and its importance as a way to minimize street cuts and the costs of providers and municipalities was also stressed.
Internet taxation was a new topic at the conference. The Internet Tax Freedom Act provides a six year moratorium on state and local taxes on the Internet and on interactive computer services. The language is very broad and contains exemptions for income taxes. A revised bill takes the six year moratorium down to three years (Congress) and the revised Senate bill down to two years. This was seen as a compromise to address the concerns by state and local governments who fear the loss of state and local sales taxes on the selling of goods and services via the Internet. Those in the Internet industry seek favored status under the auspices that they are a "growing industry". The NLC finds this absurd and adds that more billionaires are being made from industry profits than are Internet customers being added. The cable industry favors the revenue from cable modem service incorporated into their gross revenues and being applied to the franchise fees.
Regarding lobbying in general; two attorneys offered their thoughts. Lobbying efforts need to be beefed up. We don’t have the money that the industries have but we do have some serious numbers that can’t be ignored and are significant at the FCC, Capitol Hill and at the state level. Attorney Nick Miller pointed out that there is a lot of room for optimism for cities and towns in the current and future telecommunications era. He sees local governments as having considerable leverage with the industries because we are the primary landlords of what they need: the use of the public rights-of-way and that we are the biggest single consumer of their services. Miller also noted that he believes that all cable rates should be controlled on the local level.
There has been growing concern about the cable industry delineating commercial rates from residential rates. Commercial rates are generally higher nationwide than our the residential consumer rates. Attorneys said that nothing in the FCC rules gives a cable company the authority to charge a separate rate for these commercial accounts. Separately, attorney Tom Creighton pointed out that cable company rate filings are a request if the rates are ok and that rates can’t be raised while rates are on appeal according to the FCC.
For those NATOA members who have TCI as their cable operator, the nation’s largest, there was much concern and discussion regarding the AT&T merger. Many are concerned about the transfer process and the review of unresolved cable compliance issues with TCI before local authority on any given transfer is approved. AT&T and TCI want the process of transfers to be routine or even non-existent.
Carlton Curry, Peggy Piety and Rick Maultra engaged in positive and frank discussions with Ameritech about the possibility of Ameritech New Media (Ameritech’s cable division) providing competition in the Indianapolis/Marion County marketplace in the foreseeable future. Much of the direction depends heavily on the approval of SBC taking over Ameritech and the direction that SBC will take if and when the takeover is approved.
As Rick Maultra of the Cable Communications Agency was elected to the NATOA Board for a two year term at this conference, much of his time was spent on NATOA organizational issues. This included networking at the conference, attending the annual business meeting as well as the first NATOA Board meeting. Rick also was responsible for setting up and moderating a session at the conference titled The Changing Face of the Local Telecommunications Market.
Submitted 9/28/98
Rick Maultra
Director
Cable Communications Agency
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