Right-of-way talks continue

by Karen E. Culp

SBJ Staff

After a series of changes and discussions spanning more than two years, city officials are continuing to work out the details of a proposed ordinance that would govern the use of the city's right of way by telecommunications providers.

Assistant City Attorney Nancy Yendes has held a series of closed meetings with telecommunications providers and has changed portions of the ordinance, including the portion that deals with how the city will be compensated for allowing access to its right of way.

A percentage of gross revenue is still to be collected for use of the right of way by the telecommunications companies, but instead of 2 percent of gross revenue, this ordinance proposes 1 percent be collected. In previous drafts, the number had been as high as 5 percent, Yendes said.

Though she said she has considered other proposals by the companies for compensation for use of the right of way, Yendes said the percentage of gross revenue seems to be the most equitable form of compensating the city.

"This way, who pays for use shifts according to who has customers," Yendes said.

The 1 percent of gross revenue charge will be applied to those companies leasing excess capacity to another service provider and on other services or goods, but for those providing Internet services, the fee will be one-fourth of 1 percent, the ordinance now reads.

The ordinance also provides that if the city's gross receipts tax is disallowed for any reason, a fee of at least 5 percent of gross revenues will be applied "to those revenues to which the gross receipts tax would have applied under Missouri law."

Council will have the authority, under the proposed ordinance, to increase the compensation collection (the 1 percent of gross revenue) by 1 percent every four years. Yendes said the city was still discussing whether to place a cap on that increase.

"If you look at it, at that rate it will take 20 years for the percentage to reach 5, so there may not be a reason for a cap, but we're still looking at that," Yendes said.

The ordinance is expected to appear before council soon, Yendes said, but she is not certain of when.

She said the meetings with telecommunications companies have concluded, although more meetings will be called if necessary.

Several companies are preparing written responses to and suggestions for the ordinance. Ross Summers, general manager of TCI of Springfield, said his company will submit a written response to the city about the ordinance.

"We're still a ways apart in terms of what we want the ordinance to do and what it will do as it is now written," Summers said.

Summers said TCI officials thought there should be some compensation to the city for companies' using the right of way, but that the percentage of gross revenue compensation might not be the best method for such compensation.

"We're not totally against compensating, but we don't want to make this a revenue stream for the city. We're glad to see their willingness to negotiate, and to make changes in their draft. We feel the city has negotiated in good faith," Summers said.

Summers said the cost of using the right of way should be limited to what a company uses.

TCI is taking a "sideline stance" of sorts now, Summers said, because the company does not have immediate concerns over right-of-way use.

Right now, the cable company's use of city infrastructure is provided for in its franchise agreement with the city. However, when the merger between TCI and AT&T is complete, the company will begin to have concerns over right of way because it will be getting involved in phone service and Internet service, Summers said.

"We will be affected eventually, so we need to keep a watchful eye on what is happening," Summers said.

In order to do business over the city's right of way now, the telecommunications providers have signed temporary license agreements with the city, and Yendes said the ordinance should be in place before those temporary agreements run out again. The temporary agreements are in place for 90 days at a time.

Southwestern Bell recently signed such a temporary agreement under protest.[[In-content Ad]]