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HomeMy WebLinkAbout1996 09 09 Regular Item K COMMISSION AGENDA ITEM K REGULAR X CONSENT INFORMATIONAL September 9. 1996 Meeting MGR /!. ~EPT ~ Authorization REQUEST: Land Management Division requesting Commission action on the recommendation of the Board of Adjustment as it relates to the request of 1) Florida Power Corporation and 2) the City of Winter Springs for variances to the height restrictions set forth in Section 20-164 of the Code of Ordinances and Chapter 20 of the Code of Ordinances. These variances are requested for the purpose of erecting telecommunications towers within the City of Winter Springs. Separate action is required for each request. PURPOSE: The purpose of this Board item is to approve or disapprove the recommendation of the Board of Adjustment as it relates to the request of Florida Power Corporation and the City of Winter Springs for variances to the height restriction for the purpose; of erecting telecommunications towers within the City of Winter Springs. The height of the towers would be one hundred twenty (120) feet each, One (1) tower would be erected at the Florida Power Corporation substation located east of the intersection of Shore Road and Panama Road and is zoned R-1AA (One Family Dwelling District). One (1) tower would be erected on City property within the West Reclamation Facility located at 1000 West S.R. 434 (approximately 2,000 feet north of S,R. 434, west of the Florida Power Easement, west of the Winter Springs; Golf Course and northeast of Golf Terrace Apartments) and is zoned Planned Unit Development (PUD). APPLICABLE CODE: Code Section 20-82. Duties and powers; general. The Board of Adjustment shall make recommendations to the City Commission to grant any variance or special exception as delineated in this chapter. September 9, 1996 Agenda Item K Page 2 Code Section 20-83(h) - "Any variance, special exception or conditional use which may be granted by the city council shall expire six (6) months after the effective date of such action by the city commission, unless a building permit based upon and incorporating the variance, special exception or conditional use is obtained within the aforesaid six-month period. However, the city commission may renew such variance, special exception or conditional use for one (1) additional period of six (6) months, provided good cause is shown and the application for extension shall be filed with the board at least thirty (30) days prior to the expiration of the six-month period. Any renewal may be granted without public hearing, however, a reapplication may be charged in an amount not to exceed the amount of the original application fee....." Code Section 20-164. Building height regulations. (relative to Florida Power Corporation request) "In R-lAA and R-IA One-Family Dwelling Districts, no building or structure shall exceed thirty-five (35) feet in height....." Code of Ordinances, Chapter 20 (relative to City of Winter Springs request) There is no definitive height restriction for this type use in the PUD Section of Chapter 20. But, in no zoning district throughout the City does the height restriction exceed fifty (50) feet. FINDINGS: 1) The Telecommunications Act of 1996 is designed to remove regulatory barriers and encourage competition among all types of communications companies. It allows local telephone companies into the long distance, cable television, and phone equipment manufacturing markets. It allows long distance telephone companies, cable operators, cellular providers and others into the local telephone market. The Act encourages satellite services to compete with cable. But, the Act also loosens telephone and cable rate regulation. It loosens regulations of television and radio broadcasters as well. September 9, 1996 Agenda Item K Page 3 The Act generally preserves local zoning authority over wireless telecommunications facilities (such as cellular towers) as long as zoning requirements are nondiscriminatory, do not have the effect of prohibiting service, and are not based on the health effects of radio frequency emissions. Zoning decisions must, however, be made within a reasonable time, be based on evidence, and be in writing. In order to take advantage of the Act's general principle of preserving local zoning authority, local government zoning decisions about wireless telecommunications facilities must satisfy five conditions. Those conditions are: 1. Local zoning requirements may not unreasonably discriminate among wireless telecommunications providers that compete against one another. The legislative history makes clear that local governments do not necessarily have to treat competitive providers exactly the same if their proposed facilities present different zoning concerns. Congress intended to give local governments some flexibility in this area, It recognized, for example, that a proposed 50-foot tower in a residential district presents different concerns than a a 50-foot tower in a commercial district, even if the two towers are going to offer services that compete with one another. 2. Local zoning requirements may not prohibit or have the effect of prohibiting the provision of wireless telecommunications service. This is intended to prevent local governments from imposing outright bans on wireless telecommunications facilities, It probably also prohibits moratoriums on accepting applications, at least any moratorium that is of indefinite length. At the same time, local governments should have the ability to limit the number and placement of facilities as long as those limits do no have the effect of precluding a wireless telecommunications provider's ability to offer services. September 9, 1996 Agenda Item K Page 4 3. A local government must act on a request for permission to place or construct wireless telecommunications facilities within a reasonable period of time. The time taken to act on an application will be considered reasonable as long as it is no longer than the time the local government usually takes to act on the other requests (say, for zoning variances) of comparable magnitude that have nothing to do with telecommunications facilities. And Congress emphasized that the Act does not require local governments to give preferential treatment to zoning requests involving telecommunications facilities -- such requests can wait their turn. As long as the request is not moved down the list, it does not have to be moved up the list. 4. Any city councilor zoning board decision denying a request for permission to install or construct wireless telecommunications facilities must be in writing and must be based on evidence in a written record before the council or board. This requirement may necessitate a considerable change in practice fro some city councils and zoning boards. It means that proceedings on a zoning application will need to be reduced to writings. This can be done by having the proceedings transcribed and by requiring the applicant, the city staff and any interested members of the public to reduce their comments and arguments into written submissions to the councilor board. This requirement also means that city staff will need to make sure that any facts or arguments on which the councilor board may rely on in denying a request are in fact included in the transcribed hearing or written filings submitted to the councilor board before its decision is made. That decision also must be in writing and contain reasons that are consistent with the Act's requirements. Municipalities should carefully consult with their city attorneys to implement this requirement. 5. As long as wireless telecommunications facilities meet standards to be set by the FCC, a local government may not base any decision denying a September 9, 1996 Agenda Item K Page 5 request to construct such facilities on the ground that radio frequency emissions from the facilities will be harmful to the environment or health of residents. The Act gives the FCC, not local governments, the sole authority to determine what standards wireless facilities must meet to ensure that their radio frequency emissions do not harm humans or the environment. While local governments can require the facilities to comply with FCC emission standards, local governments may not adopt their own standards. This means that, as long as the facilities meet FCC emission standards, concerns about the effects of emissions from radio towers on the health of nearby residents is not a permissible reason for making zoning decisions about the placement of wireless telecommunications facilities. NOTE: The above information is taken from the National League of Cities Guide entitled "The Telecommunications Act of 1996: What It Means to .Local Governments"'. 2) The approximate height of the major transmission towers going through the City is ninety five (95) feet. 3) The Board of Adjustment, at their meeting of November 29, 1990, granted variances to the height restrictions (twenty five (25) feet at the time) for the Florida Power Corporation substation. The Board granted nine (9) structures to be sixty (60) feet in height and one (1) structure to be eighty (80) feet in height. 4) The Board of Adjustment, at their meeting of February 7,1991, granted a variance to the height restriction of fifty (50) feet at 1200 Belle Avenue (C-2 zoning) to construct a communications tower with a height of one hundred eighty (180) feet. September 9, 1996 Agenda Item K Page 6 5) The Board of Adjustment, at their meeting of March 7, 1991, granted a variance to the height restriction offifty (50) feet at Central Winds Park (C-1 zoning) to construct ball field light poles to a maximum height of seventy five (75) feet. 6) All property owners affected by this request have been notified according to Code requirements. 7) The Board of Adjustment is to hear these requests at their meeting scheduled for September 5, 1996. Their recommendations will be provided to the Commission as supplemental information to this item on September 6, 1996 8) The two (2) requests were incorporated into one (1) agenda item because the information furnished is approximately 99% identical. CONCLUSIONS: The applicants' proposals to locate telecommunications towers in Winter Springs is consistent with the Telecommunications Act of 1996. Code Section 20-83(h) provides the Commission authority to approve Board of Adjustment recommendations allowing height variances. There is precedence in the City for approval of towers of this height. The actions of the Board of Adjustment will be provided to the Commission in a separate report. RECOMMENDA TION: The recommendation will be forthcoming on September 6, 1996, after the Board of Adjustment meets. ATTACHMENTS: National League of Cities Guide entitled "The Telecommunications Act of 1996: What It Means to Local Governments" " ,. September 9, 1996 Agenda Item K Page 7 Location Map of Florida Power Corporation Substation with approximate location of tower depicted Florida Power Corporation outlining request for special exception (variance) Location Map of West Reclamation Facility with approximate location of tower depicted Photo ofNarcoossee Substation showing a similar monopole which is being requested. 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" . ,': ~ ...~~~~: f ..~':'.'i/: ..<~.~.!:;} }) . .:'~; ..:; " ~';::} " ~..'. ....' t. ~ . .:.' ., jl . ,'i ~'. " ;i ,. 'i i 1 'il W 1: I i ; " REQUEST FOR A SPECIAL EXCEPTION PCS PrimeCo / Florida Power Corporation respectfully submits this letter in support of its application to City of Winter Springs for a permit to erect a telecommunications monopole located on an existing electrical substation (Winter Springs Substation) approximately 1.5 miles south of the intersection of CR-434 and CR-4l9, at the intersection of Panama and Shore Roads. PCS PrimeCo (Primeco) is a telecommunications company licensed by the F. C. C. which is in the process of building an Personal Communication Service ( PCS ) wireless communications network across Florida. Primeco has entered into a lease with Florida Power Corporation to install a 120' concrete monopole and three small equipment cabinets (30'x30'X60') located at the base of the monopole which will house the supporting electronic equipment, adjacent to the fenced area of the substation. The substation property is 11.75 acres and is zoned R -IAA. 1. That the establishment, maintenance or operation of the Special Exeception will not be detrimental to or endanger the public health, safety, or general welfare. Pimeco will obtain Federal Aviation Administration ('FAA') required approval for the construction and operation of the monopole at this location, in addition to an endorsement from the F.C.C. The obligations of the F.C.C. licensing are quite extensive, to ensure that Primeco's relied upon wireless communications service is provided in a safe and uniform manner throughout its network. The subject site was carefully selected in order to meet the system-wide engineering requirements at the location and in a manner which will have a minimal impact on adjacent or nearby properties. 2. That the location of the Special Exception conforms to the City of Winter Springs Comprehensive Plan and other applicable regulations. 3. That the Special Exception will be no more injurious, economically or otherwise, to adjacent property or improvements than would any use permitting in the zoning district. The entire site will be fenced and locked. This facility will not interfere with the television and radio reception in the surrounding area and will not have any impact on the provision of the city. It follows that the facility is compatible with the adjacent properties and will not have adverse effects on these properties. As a co-located facility this telecommunications site will serve the community as well as fostering increased communications and safety, thereby supporting development in the area. The communication facility will be operated continuously; however, since the facility is unmanned, whether the facility is operating or not would be imperceptible to onlookers or adjacent property owners. Thus, there is nothing to endanger the public health, safety or general welfare. 4. That the establishment of this Special Exception, with the existing design and buffering, will not impede the normal and orderly development and improvement of adjacent property for uses permitting by the Zoning District. 5. That adequate utilities, access roads, drainage, and other necessary facilities are provided. As shown on the attached site plan, acces~ will be provided by the existing substation development. Other than that, since the facility is unmanned on-site parking, loading, unloading and drainage are not applicable. Water and sewage disposal facilities will not be needed since this site will be unmanned. Electrical power will be provided by Florida Power Corporation. 6. That adequate measures are taken to provide ingress and egress designed to minimize traffic congestion on public roads. With regard to ingress and egress to the communications facility, the facility will be unmanned and will be visited on an average of once per month for routine maintenance purposes. The effect on traffic and pedestrian travel will be negligible. 7. That the Special Exception shall conform to the applicable regulations for structures, lots and setbacks in the zoning district, requirements regulations for structures, lots and setbacks in the zoning district, requirements as the Board may impose. All setback requirements have been met according to applicable regulations. The facility does not emit noise, glare or odor nor does it have signs or traffic congestion. Primeco's wireless network system will work muchlike the cellular companies. Primeco's F. C. C. license requires it to operate its system in a defmed service region using designated radio frequencies ( 1900Mhz). Each site must be precisel{located relative to other sites. Primeco's grid system must reflect the contours and topography of the area and the radius of the antenna's reliable transmission. Primeco' s network dictates that a site be at this location to avoid a gap in its service to this area of Winter Springs. In conclusion, Primeco / Florida Power Corp. respectfully, requests that permission to erect this communications pole be granted. .. ., '" ~ '- [) SEMINOLE lLJ -1>- 01- 22 -:J ~O lLJU C/) SMA NICOLE IN SiATE RO 4-34- ( I \ Lake \ ~ Irene ~ ~~ .- ~ U\ TRA;, "J" \ @\ \ 'HATER \ RECLAMATION FACiLITY \ \ \ \ \ ~ \ i 1~1\~ A0'(t01"\\1of'i \ \".oCj1' \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ o eoJID ; . ". ~\ TRACT "I" 0102 '0000 '-'-' >- z ~ TRACT "I" \ ~ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ ~ .- en Z u'l \ @1.7 ~ \ TRACT "I" 010J-0000 \ 0100'0000 1.0 A 7.0 7,A WIN ER SPG CASSELBERR '!::~'./"":/i~!/.S: ~"~:~: /:"lCi {..If: j:'.~ :;::. .~ l")" 1 J ,,*\ f l11/j , , . ... NARCOOSSEE SUBSTATION '~~ " ~ ". '\ '-0, .1:' ',,1 - .. ._~r. .....$....... ~ ...;...;..:.....i;~w............~ ':':",<_~ .1::;;;1,; :~l...._:..;~....~. _, ..:I.~:.L""~ ~:. ". 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TABLE OF CONTENTS Preface .......................................................................................................................................... i Introduction.... .............. ................ ....... ....... .......... .... .................. ..... .... ... .............. ............. ....... ..1 Chapter 1: A Brief History of Telecommunications ................................................................5 Chapter 2: Overview of the Telecommunications Act of 1996 ..............................................9 Chapter 3: Removal of Barriers to Entry to Provision of Tekcommunications Services......13 Chapter 4: Provision of Telecommunications Services by Cable Operators ........................17 Chapter 5: Provision of Cable and Video Services by Telephone Companies ....................19 Chapter 6: Changes to the Cable Act ....................................................................................23 Chapter 7: Impact of the Act on Local Zoning Power ..........................................................27 Chapter 8: Effects on Local Taxation...... ..................... ...... ............ ............ .......... ............. ......31 Conclusion................................................................................................................................3 3 Glossary ........... ........ .................................................................................................................3 5 Ir.- . ....a".....~ .. - iiiiiiiiiiiiiii . . .. Preface. Enactment of the Telecommunications Act of 1996 presents local governments with many new challenges and opportunities. To ensure that municipal officials understand the benefic.s-and the pirfalls--of this new law, the National League of Cities has published this guidebook for local government leaders. This primer provides an overview of the Telecommunications Act of 1996 and what it will mean for your community. It explains how this new legislation affects issues of hiscorical importance co local governments, such as local ability co manage and receive compensation for the use of the public rights-of-way, protection of local zoning and taxing authority, and cable rate deregulation. It also provides a short overview of how selected provisions of the Act are intended co foster competition and deregulation in the communications industry generally. This guidebook does not provide an exhaustive, detailed explanation of every provision of the new law. Instead, it focuses on key issues of importance co local governments so that local leaders can respond co the many questions they will receive from constituents and induscry representatatives. Local officials will playa key, continuing role in defining parameters and setting policies to ensure that community needs are considered and protected as the information superhighway develops. In that sense, enactment of the Telcommunications Act of 1996 is a beginning. As the Federal Communications Commission begins co promulgate rules defining how the federal legislation will be implemented, municipal leaders should be prepared to comment on rules that are likely co have the greatest impacts locally. Moreover, city officials should be prepared co contact state legislacors and governors co protect local interests and ensure a role for local governments in the development of the information superhighway. This publication was drafted by the attorneys at the law firm of Miller, Canfield, Paddock and Scone, P.L.e. Special thanks are due to the firm's arrorneys--ll11man Lay, Nicholas Miller, Joseph Van Eaton, and Matthew Ames--for the time they spent working on this publication. We would also like co gratefully acknowledge Public Technology; Inc., whose financial support was essential in order for NLC co produce this publication. NLC gratefully acknowledges the editing on this book done by NLC staff members Renee Winsky, Manager, Local Government Services, and Barrie Tab~n, Senior Legislative Counsel. Additional thanks go co NLC staff Jeff Retcher, Director, Center for Public Affairs;' Frank Shafroth, Direccor, Center for Policy and Federal Relations; Camille Kellogg, Marketing Communications Manager, and Susan Teerz, Graphic Artist. Christine Becker, Deputy Director, provided general oversight for this project. We hope this guidebook contributes co the development of more effective telecommunications policies and programs in the nation's cities and cowns. Donald J. Borut Executive Director National League of Cities ,'l(ot INTRODUCTION - .. . - - "The bill President Clinton signed today sweeps away the old regulatory boundaries between cable and telephone, between long~distance and local exchange companies. It heralds an exciting win-win era for the consumer and for the telecommunications industry as well." -Raymond W. Smith, CEO Bell Atlantic Corporation "The President's signature on this legislation unleashes a new era of competition in communications services . . .. The bipartisan and industry support for the Telecommunications Act of 1996 demonstrates what we've said for twelve years - America's future is too important to leave on hold." -John L. Clendenin, Chairman and CEO BellSouth Corporation - "Just a few years ago, the idea that consumers would have a choice in local phone service or that cable and telephone companies would soon go head~to~head to serve American consumers would have been virtually unthinkable. Now, this landmark legislation provides a blueprint for competition and choice. And the cable industry is ready to compete and provide new services, "new progTamming, and new technologies." -Decker Ansrrom. President National Cable Television Association "Mr. Speaker, earlier it was said all elements of industry liked this bilL 1 have no particular beef with the industry, but I would suggest that when all elements of industry like the bill, probably the taxpayers and the consumers have reasons to worry. " - Barney Frank. Member U.S. House of Representatives D-Mass. 1 The Telecommunications Act of 1996: What It Means to Local Governments Telecommunications: Is It Too Complicated to Comprehend? Have you heard? Congress just passed a new law entitled the Telecommunications Act of 1996. Is this a maccer better left co experts? Telecommunications technologies are complicated and high-tech. They really do require "rocket scientists" co understand! And the jargon! The language of telecommunications doesn't come close co plain English. Consider, for example, these terms: What are HDTV, CATV, MMDS, OVS, PCS, DBS, MF] or RBOCs? What are monopolies of scale, scope and density? Don't be discouraged. The new law is a huge statute and is very complex. That is because it couches every single existing federal law affecting communications, and tries co couch some state and local laws as well. But the new Act is surprisingly simple in concept and execution. Getting Ready Your community needs your leadership co get the benefits and avoid the problems. You need co lUlderstand both the good and the bad. Here are some things the new Act allows: beccer, and more cost effective local government services through creative use of public rights-of-way and procurement strategies; new potential revenue sources for your budget through fair rental payments for use of public rights-of-way; more vibrant local economy through rapid entry of new vendors applying new technologies co serve local businesses; and better education and health services through expanded and improved technologies available at reduced rates co qualified schools and public institutions. On the other hand, you may face the following new problems: your costs of street and sewer maintenance may triple or quadruple through the repeated and unsupervised construction in your rights-of-way by multiple lUlregulated telecommunications companies; your government's phone bills may double or triple through decreased regulation of local phone rates long before there is any genuine competitive alternative co your local exchange telephone company; or more social and economic isolation of the middle class and the poor may occur through the lack of uniform, reasonable prices and lUliversally available new services. The Near Future You can expect co face the following types of issues. They will arise first in urban and commercialized.~uburban areas, and then in upper income residential and smaller business centers. More rural areas will have co wait. You will face new demands on local rights-of-way. Many companies, from the dominant local telephone company to small, single-purpose companies, will want co rrench your srreets. If not handled properly, this landrush could result in your community losing potential revenue sources and mcurring new expenses, resulting in higher ta.xes. I\s laroe consumers of local telephone services, local oove~ments will have new alternatives for meeting their '" telecommunications needs. But you will need co develop strategies co avoid being trapped into monopoly prices in this new world. You will need co marshal your assets - public rights-of-way and budget dollars - co get the best deal for taxpayers. Not all telecommunications consumers will be equal in this new world. Large telecommlUlications users will enjoy wider choices at declining prices. Small businesses, residential users, and low to middle income families, on the other hand, may not have real competitive alternatives for a long time. Local zoning b~ards will face a flood of requests for siting of cellular cowers and other communications facilities. Local ta.xes or franchise fees on telephone companies will be challenged as unfair if other telecommunications service providers are not covered by the taxes or fees, or nor creared the same. You have lirde rime. But you are not alone. Every other jurisdiction in your region will face the same problems in the same timeframe. Share information. Cooperate. Participate. 2 Introduction Municipal Officials Are Up to the Task Remember, if you can build roads, plan a city, deliver services, and manage a workforce, then you can also manage telecommunications and its impact on your community. Here are a few principles to keep in mind. . Principle One: Local governments are landlords of most telecommunications companies. You own the public rights-of-way in public trust. Most telecommunications companies place wire and other facilities on, over or under those rights-of-way. Taxpayers have a right to fair return for private businesses' use of public property. Historic prices for right-of-way use are not relevant in today's market. There is no sound reason to give away valuable public property for free. - _. . -- - . Principle Two: Local governments are large users of telecommunications. Remember, everyone wants your business, but they will want to charge you above-market prices if they can. If you procure telecommunications. services carefully, you can save money and deliver new and better governmental services more efficiently. . Principle Three: Telecommunications companies live by the same universal, economic rules as everyone else. Competition is uncomfortable but healthy. It spurs investment and innovation, better services and lower prices. But, wishing for competition doesn't make it happen. Some markets, when deregulated, simply become unregulated monopolies. The company that enjoys such a monopoly in one market can compete unfairly in other markets. Remember though, businesses should pay fair market prices for the public rights-of-way they consume. Otherwise, the r~sulting local government subsidy of those businesses will distort competition. . Principle Four: Cities will need to participate actively to protect their interests and the interests of their residents. Because the Act sweeps broadly, it contains a lot of gaps and unanswered questions. These questions will be filled in by the Federal Communications Commission ("FCC"), the courtS, state legislatures and - importantly - by municipal officials like you. In addition, you c~ be sure that the various telecommunications industries will participate vigorously in each of these forums. Cities should participate actively as well, or they could lose valuable rights. 3 ~'---..~ .'~"_~~~"""""""~zr"'~:....~r.~ -- ., .. The Telecommunications Act of 1996: What It Means to Local Governments 4 . ~ ~ "", ~. - CHAPTER ONE A Brief History of Telecommunications It's difficult to understand the new Telecommunications Act unless you have some feel for the history that led up to it. Historically, the telephone, cable, and broadcast industries operated under separate - and quite different - regulatory structures. Regulation varied, but each industry was regulated in a manner that was based on the assumption that each industry was unrelated to the other, and that each had monopolistic characteristics. New technologies have raised the possibility that each of these industries can compete with one another, and that new entrants can compete as well. The new Act is based on the premise that this possibility will in fact occur - and occur soon. The Communications Act of 1934 In 1934, Congress passed the grand-daddy of all federal communications law. The 1934 Act established the Federal Communications Commission. It required the FCC to regulate interstate telephone services and left: intrastate services to state regulators. The law also established that the airwaves belong to the federal government and authorized the FCC to grant licenses for broadcast and other "wireless" services in the public interest. To handle telephone regulation, the FCC established an implicit regulatory partnership with the states to oversee the telephone industry. A fundamental premise was that telephone companies, both local and long distance, were "common carriers." In other words, telephone carriers were only in the business of transporting the messages of others - they were prohibited from controlling the content of the telephone messages they carried. In time, a uniform state and federal system of rate-of-rerurn price regulation and investment oversight over the telephone industry developed. The system included a subsidy mechanism to average long distance rates . nationwide. The AT&T Monopoly Since the rum of the century, AT&T dominated the telephone industry, enjoying a virtual monopoly over not only long distance service, but also local telephone service through the local Bell operating companies that AT&T owned. The industry invested huge amounts of money in copper wires that were expensive to build but cheap to maintain and operate. After World War II, microwave radio links began to replace cross-country copper wires for long distance circuits. Microwave was cheaper to build and more reliable over long distances. The Rural Electrification Administration extended loans to locar telephone cooperatives and tural telephone companies" to expand telephone service into small towns and farms. The Department of Justice achieved the breakup of AT&T on January 1, 1984. In a consent decree with the government known as the Modified Final Judgment ("MFJ"), AT&T agreed to relinquish all of its local telephone exchange companies in return for the right to compete openly in computer, information and long distance services. The local Bell operating companies formerly owned by AT&T were broken into seven Regional Bell Operating Companies ("RBOCs"). AT&T also agreed to divestiture terms that prohibited the new RBOCs from entering into any new businesses other than local telephone service. The federal district COurt responsible for enforcing the MF] has gradually relaxed this absolute prohibition on the RBOCs over the last twelve years. But the MFJ remained the law over the RBOCs. The rationale for the MF] agreement is important. The Department of Justice, the court and AT&T all agreed that the provision of local telephone service was a natural monopoly. In other words, most of the costs of providing local telephone 5 The Telecommunications Act of 1996: What It Means to Local Governments service were in building the network of local copper lines that run from each business or home to the local telephone company's switching offices ("exchanges"). Once built, the ongoing costs to operate the local telephone exchanges and the lines to customer locations were relatively low. The number of local calls on the wires did not increase the company's costs. Since the only way to compete would be to build a duplicate local network, it was difficult, if not impossible, for a second local company to enter the exchange area and successfully over-build the original telephone company. Long distance service, in contrast, could be much more competitive because the up-frOnt network costs were lower. Connections between switching offices and long distance lines had much smaller economies of scale. Television Enters the Picture Television displaced radio as the leading electronic mass media in the 1950s. Unlike telephone common carriers, broadcast licensees were given complete control over the content of the information they transmitted. The FCC attempted, however, to require broadcasters to abide by "public trustee" obligations. Broadcast networks dominated the broadcast industry by producing mass audience appeal programming. The network influence is a function of economics. Local broadcasters can get larger audiences for less cost by running network shows than by producing their own local programming. The networks became the major outlet for all video programming, surpassing movie theaters in annual revenues paid to studios. Network control was enhanced by an FCC post-war decision ro limit the number of television licenses in each major urban market. The FCC argued that television was an unproven technology and investors needed assurances of large audiences and limited competition. Fewer licenses meant less competition. The FCC tried to counteract this effect, at least partially, through strict limits on the number of stations anyone could own. Then Came Cable Before 1976, cable television was a small entrepreneur's business. Cable was nothing more than a means of retransmitting television broadcast signals to communities with poor off-air television reception. Cable reached barely ten percent of the nation's televisions, and mostly in rural areas. This changed in 1976 when HBO started to provide television programs by satellite. HBO was soon followed by several other satellite programming services unique to cable. Cable operators then had an unrivaled product to offer major suburban and urban area viewers. The gold-rush for major- market cable franchises was on. Within a few years. the industry went from passing 20 percent of U.S. television households to over 90 percent of television households. Today, more than 60 percent of television households in the nation subscribe to cable. And cable systems were, like the local telephone network, a natural monopoly. The costs of operating a system varied little with the number of subscribers or television channels on the system. So over-builders were rare and could not survive. Faced with de-facto monopolies, cities began to use cable franchises to regulate prices and behavior of cable companies. Cities also began to use the franchise bidding process to recapture for the public the fair value for the use of the public rights-of-way occupied by cable systems. The cable industry appealed first to the FCC and then to Congress for relief from the local cable franchise process. In 1984, Congress passed the first Cable Act. It deregulated cable rates, but endorsed the cable franchise process as a mechanism for obtaining community benefits. In response to rate deregulation, cable rates soared. In 1992, Congress responded by amending the Cable Act to allow rate regulation, subject to FCC oversight and control. Fiber Optics and Convergence In the late 1980s and early 1990s, technology convergence hit telephony, cable television, video, music programmers and the computer industry. The form: digital transmission on strands of fiber optic glass. Remember those early Sprint ads where you could hear a pin drop over a glass fiber? Fiber optics first entered telephony on high-density, long distance routes. Light on thin glass strands could carry many more messages than copper wires. And light on fiber did not dissipate over long distances. These features made fiber more attractive than copper wire. But fiber optical transmission requires digital signals. Traditional telephone and cable signals, however, were sent in an analog format. So both industries faced an expensive conversion process. The telephone industry converted to fiber in those parts of the telephone network that had heavy "trunk line" traffic that could justify the cost of conversion. Low- density routes were left to pre-existing analog copper technology. 6 - Chapter One - - -.. .. and fewer distinctions among them. ~ - ~ -' With time, fiber construction became routine in me telephone industry on high-densiry routes. And digital transmission became common in all parts of the national telephone network except the local line berween cuscomers and the first switching office. As fiber optic technology evolved in the telephone nerwork, cable television operarors discovered fiber was actually cheaper co build and operate than traditional coaxial copper cable. "Fiber rebuilds" became common in the cable industry, with fiber replacing coaxial cable in the backbone of cable nerworks, leaving only the last portion direcdy in fronr of subscriber homes as analog copper coa.'Xial cable. For the first time, cable operacors had wires (fiber optic strands) through major arteries of cities that could carry high quality, rwo-way digital signals. Today, telephone, cable television, and computer nerworks all choose a common technology ro build new systems: digital aansmission. And fiber is the aansmission medium of choice for lengthy and/or high-densiry routes. Bur me telecommunications world is far from being all fiber and digital. There are roo many miles of copper wires and too many analog telephones and televisions still in place. But the speed of evolution is accelerating. E'XpertS anticipate that in ten years, nearly all televisions could be digital format. The last analog elements will be the "last mile" of local telephone wire and local cable television wire, and perhaps me television set. At all other levels of the distribution nerworks, whether cable or telephone, the technology of choice for me future is the same-digital transmission and fiber optics. Technology Convergence Forces Legal Convergence This short hiscory reveals a pattern: each communications industry had its own unique technology-and monopoly. In response, Congress and the states enacted differenr laws and regulatiOns for telephone, for cable television, for broadcast, and for computers. Each industry started as a distinct technology with strong natural monopoly characteristics. The legislatures reacted by passing separate laws adapted co each separate technology and market. The new 1996 Telecommunications Act seeks to adapt federal law ro changing technological reality. The Act rests on the fundamenral premise that the various media industries - cable, telephone, and broadcast - are less and less technologically distinct, and thus the law should draw fewer What this technological convergence means is that, to an ever greater extenr in me future, industries that hiscorically have not competed with another -like cable, local telephone, long distance telephone and wireless radio - will begin ro do so. The premise of the new Act is mat, if the regulacory lines berween the industries are removed - and everyone is allowed to enter and compete in everyone else's market - then new competition will emerge, displacing the need for regulation to protect consumers from monopoly abuse. If all of this sounds like a grand experimenr based on faith in future developments, that's because it is. Even industry leaders frankly admit they do not know where these changes will lead. 7 . , . ...... ' : ,,', "'.",' ,: ,:... ,"", , ;"" ' ..' , The Telecommunications Act of 1996: What It Means to Local Governments 8 CHAPTER TWO Overview of The Telecommunications Act of 1996 . - The new Act is designed to remove regulatory barriers and - encourage competition among all rypes of communications companies. It allows local telephone companies into the long distance, cable television, and phone equipment manufacturing markets. It allows long distance telephone companies, cable operators, cellular providers and others into the local telephone market. And the Act encourages satellite services to compete with cable. But the Act also loosens telephone and cable rate regulation. And it loosens regulations of television and radio broadcasters as well. The Act also contains provisions intended to preserve universal service to poorer areas and to restrict children's access to violent and sexually explicit programming on cable, broadcast and the Internet. - What Is the Telecommunications Act of 19961 The new Act couches every existing electronic communications industry. The legislation expresses very broad principles but leaves lots of gaps that regulators and industries will have co fill in. Public information about the Act has been sketchy. The general media has covered the progress of the legislation, but not the content. Most commentary has been vague and only begins to describe the real workings of the statute. Most citizens have heard of the information superhighway, but know little about the details. This chapter describes the Act in broad terms. It is not a legal analysis of the details of the legislation. Think of it as an orientation tour of this important legislation. Impetus Behind the Act The impetus behind the Act was, in a word - competition. The telephone, cable television, and broadcast industries were converging toward common technologies with digital formats for content, and fiberoptics and wireless technologies for transmission. The industries are capable of competing with each other in many new ways. They also are burdened with inconsistent historical laws and regulations that hamper their abiliry to compete. So, Congress sought to eliminate regulatory requirements chat interfere with competition and to give providers authority to enter new markets. If competition does develop, service will improve and prices will fall. What the Act Does The Act encourages competition wherever possible. Specifically, the Act opens local telephone exchange service to competition; allows the seven RBOCs to enter new lines of business, long distance, equiprment manufacturing, and information services chrough seperate subsidiaries; allows cable television operators into local telephone services; allows local telephone companies to offer cable television services and deregulates cable operators; and encourages new services (such as cellular, Direct Broadcast Satellite, and wireless cable) to compete with telephone and cable television companies where possible. The Act gives broadcasters greater regulatory flexibility. For example, the Act greatly rela.xes current limits on the number of radio or television stations one company can own. One company may own up co 8 radio stations in a single major media market. One company may own an unlimited number of television stations as long as all of chose stations do not reach more chan 35 percent of the national audience. Terms of broadcast licenses are extended to 8 years, and the incumbent broadcaster is given more protection at license renewal. 9 -. The Telecommunications Act of 1996: What It Means to Local Governments The Act regulates obscene, indecent, and violent program content. For example, sending obscene or "indecent" content on the Internet is illegal. Cable television operators must scramble or block sexually explicit adult or indecent programming. Cable television operators may also refuse to transmit "indecent" public access programming. New televisions must have a V-chip installed to allow blocking of violent programming. Broadcasters and cable operators are encouraged to adopt a rating system for violent and sexually explicit programming. The Act also establishes a Telecommunications Development Fund and a National Education Technology Funding Corporation. The Development Fund is a federal loan fund to stimulate small business entry into telecommunications. The Education Technology Funding Corporation receives funds from any source to sti'mulate investment in "education technology infrastructure." Direct Effects of the Act on Your Community Local governments shape communications activities. The new Act recognizes this fact and ratifies local authority in significant respects. But the Act also limits local authority in other areas. Effects of the Act on your community include: 1. Universal Service The legislation attempts to protect against monopoly pricing of basic telephone services. It does this through creation of a class of basic service called "Universal Service." Rates for telecommunications services that the FCC or state public service commissions classify as parr of universal service must be "jUSt, reasonable and affordable." The FCC can determine what COSts of telecommunications facilities are allocable to universal service. The FCC may not, however, use the rate-of- return COSt principles it has used in the past. Universal service will be available everywhere in the country, including rural and urban areas. Universal service rates must be uniform throughout the country. A company that offers universal service at rates below its cOSts qualifies for a subsidy from a universal service fund that is paid from all telecommunications service providers. A few special classes of users will get special rates for universal service: health care providers; primary/secondary schools; and libraries. Taken together, these are new legal concepts, and it is impossible to predict how the regulators will apply these tests and what rate levels will result. There is a reasonable possibility that basic rates for basic telephone services could double or triple--or stay the same. . 2. Expansion of Competition The Act opens the legal opportunity for long distance companies to offer local telephone service, for local telephone companies to offer long distance services and cable television service, and for local cable television operators to offer all forms of telephone services. ,. Observers suggest that vigorous competition is likely to develop most rapidly in services and facilities for long distance services and for large business users of telecommunications. This may drive down the price of long-distance rates between urban areas and the overall COSt of telecommunications for larger businesses. 3. Residential and Small Business Telephone Rates Calling for competition does nor guarantee it will develop. There remains strong evidence that local telephone service to residential and small businesses still exhibits strong economies of scale. The same appears true for urban cable television service. If competition does not develop in these markets, and price regulation is not maintained, local telephone and cable rates could skyrocket. 4. Cable Television Rates The Act continues the trend started by the FCC in .. removing all teeth from cable rate regulation. Many small cable companies may see their rates deregulated immediately. Others may be deregulated whenever the local telephone company claims it offers service in some parr of the franchise territory. And all cable rates will be substantially deregulated by March 1999. In addition, specific provisions make meaningful rate regulation in the interim largely a sham. Cable operators are speaking openly of $3-$6/month rate increases in 1996. Future rate increases will be determined by whether and when telephone companies choose to overbuild cable companies. Many industry observers predict that will not occur to any significant degree until after the turn of the century, if then. 10 . ~~ i" -. - -, - .., Chapter Two . . - Some Conclusions - or Simple Guideposts Local governments comrol three important elemems in the new telecommunications mix: 1) local governments comrol the price of real estate - the public rights-of-way - that the wired companies want to.use; 2) local governments are a major customer and source of funding to the industry in that they are me largest local telephone service customer, the funder of education, health services, and libraries and a potemiallender of construction capital through public bonds; and 3) local governments retain their residual police power to regulate local business practices and to protect consumers. Technology is helping to open markets because new technology is cheaper and commonly available to all the players. In addition, telecommunications providers are converging on the same least-cost solutions for transmission. Not all markets will be competitive, regardless of what the law permits. Do not expect overbuilding of residential and small business local exchange lines. New entrants in the local telephone service market (long distance companies, cable television operators, and competitive access providers) will build only to high-density point locations. Elsewh~re, they will cominue to rely on the wires of the traditional local telephone company to reach Customers. Cable television lines are still difficult and expensive to convert to telephone service. You can expect, in areas where competition does not develop, that basic telephone prices will escalate dramatically unless there is strong regulatory action. In addition, cable rates will escalate over the next several years as the FCC continues to withdraw from effective rate regulation. 11 d __._ _ _ . . ~_ . '_04_..._ ___ _._ ._._ .. The Telecommunications Act of 1996: What It Means to Local Governments 12 I CHAPTER THREE - -.. ~ - Removal of Barriers to Entry to Provision of Telecommunications Services The Act preempts all state and local laws that prohibit - or have the effect of prohibiting - a business from providing telecommunications services. But the Act also preserves: (1) all state laws that non-discriminatorily promote universal service, public safety and consumer protection; and (2) all state and local laws that involve management of local rights-of-way or require telecommunications providers to pay compensation for use of local rights-of-way, as long as those laws are non- discriminatory. Probably the most important goal of the Telecommunications Act of 1996 is to encourage competition in the provision of all types of communications services - from traditional telephone and other voice and data services, to traditional cable and other video services. Both the telephone and cable industries argued ro Congress that state and local regulation, franchising and permitting requirements were an obstacle to competition, making it more difficult for businesses to emer and provide telecommunications services in various markets. Rightly or \\oTongly, many members of Congress were swayed by the industries' argumems. As a result, the Act comains a section entitled "Removal of Barriers to Emry'~ that is directed at state and local governments. The "Barriers to Entry" section overrides any state or iocallaw, ordinance or requiremem that prohibits any business or other person from providing any telecommunications services. This limitation also reaches any scate or local law, ordinance or requirement that, while not prohibiting the provision of telecommunications services, has the effect in practice of prohibiting a business from providing such services. ;[(!..iIE--.C '-:serVices~YoU''SFiMfffi keepritifn:ina~evi~'J~H,~. . :"'.._;;';'~:~:'::3';:-~~~;'~';';-'i;!J"'..i~~~~ZP-:':l:'l"'';:'1:!.'..t~--''~' .,ft992'GQb7t'AcffizreQH"i'contai~:"~~. .~'.= , <::",~~~~",,~?\,'<'Y$~f~';~;'i;i5t:~:~~';::#-&~~.'..'. . .. . :" '6himti'a'Tndfifai;Jf,/; . "~7;om.7'uni~ondEf':ijtf.~;,~ pr....__.. '-'~"''''-'~fY JL'''''''',",''<;i~~~"W~'~~ ...~~~~~1~i~r.~t~.._~ The statu[~ does not describe what types of state or local laws or requirements might be considered as prohibiting or having the effect of prohibiting someone from providing telecommunications services. New telecommunications providers seeking to compete with the local telephone company, however, are likely to claim that the new law nullifies virtually any kind of municipal franchise, ta.x or permitting requirement that the providers don't like. Municipalities should take such claims with a healthy grain of salt. In fact, what types of municipal laws or requirements would be considered barriers to entry will have to be answered based on the local law and facts in each individual communiry. To be prepared for competitive entry, municipalities should do rheir homework in advance and be thoroughly familiar with applicable state laws and their own historical treatment of rights-of-way users. Safe Harbors Although the Act does nor define what types of local laws or requirements will be considered to be prohibited barriers to 13 .. The Telecommunications Act of 1996: What It Means to Local Governments entry, it does define two categories of state and local laws that will not be considered barriers to entry. These permissible types of state and local law are untouched by the Act. They are "safe harbors" - as long as a local law or requirement falls within one of the safe harbors, it will not be considered a barrier to entry, regardless what effect the local law may have on the ability of telecommunications providers to enter a market. Safe Harbor for Universal Senrice, Public Safety and Consumer Protection The first "safe harbor" is for state laws that are necessary to promote universal service; protect public safety and welfare; ensure continued quality of telecommunications services; and protect the rights of consumers. To qualify for this "safe harbor," a state law falling into any of these categories also must be "competitively neutral." While undefined, that probably means the law cannot favor one class of telecommunications providers over another. Interestingly, this "safe harbor" applies to "state" laws and requirements. There is no reference to local laws or requirements. The telecommunications industry will no doubt claim chat chis "safe harbor" is restricted to state laws like consumer protection laws and state public utility commission. requirements. Since most local governments are political subdivisions of the state, however, a good argument can be made that this "safe harbor" applies to local governments as well, as long as state law gives che local government authority to act in these areas. Safe Harbor for Rights-of-Way Management and Compensation The second "safe harbor" - and one of more importance to most municipalities - relates to state and local laws concerning compensation for, and management of, local streets and rights-of-way. Local public streets and rights-of-way are property that a local government holds on behalf of the public and that is paid for by the taxpayers. All private businesses that place wires, conduits or pipes over, on or under this public property are therefore tenants of the public. And like any property owner, the public - through its local government - is entitled to compensation from those who use its property for profit and to manage the use of that property to make sure it is used efficiently and safely. In enacting the new Telecommunications Act, Congress specifically recognized and endorsed the rights of local governments to manage this valuable local public property, and to receive fair compensation for its use. The Act therefore contains an explicit "safe harbor" for all non-discriminatory local laws or requirements that either involve management of local rights-of-way, or require telecommunications providers to pay fair and reasonable compensation for their use of local rights-of-way. Local management and compensation requirements of this type will not be considered barriers to entry, regardless what effect they may have on entry, as long as those requirements are imposed in a non-discriminatory manner. At a minimum, chis means chat any non-discriminatory local franchise fee or ta.x that a municipality imposes on all telecommunications providers will be safe from attack under the new Act. The same is true of any non-discriminatory requirements relating to street use, such as street opening or right-of-way permits, bonding, insurance and indemnity requirements, and the like. One task all municipalities will want to undertake immediately is to review all of their current franchise, tax and right-of-way relationships with telecommunications providers, such as the local telephone company. Another task will be to research and analyze any state law limitations on a municipality's taxing, franchise and right-of-way authority. In some states, municipalities may want to consider asking the state legislature to modify state law to give municipalities more flexibility to deal with these issues. At a minimum, municipalities will want to be on the lookout for efforts by the telecommunications 14 .-' . II - - Chapter Three industry to modify state laws to the industry's advantage and municipalities'disadvantage. Disputes about whether a particular local right-of-way management or compensation requirement falls within the "safe harbor" will be Jecided by a local state or federal court, not by the FCC in Washington. A local court is likely to be a far more favorable (and less expensive) forum for most municipalities. Preemption by the FCC The Act also gives the FCC authority to preempt any state or local law or requirement that is a "barrier to entry." There is, however, a very important exception to this FCC authority - an exception beneficial to municipalities. The FCC's authority does not extend to determining whether a local law falls within the "safe harbor" for local right-of-way management and compensation. . . . . 15 e ..- The Telecommunications Act of 1996: What It Means to Local Governments 16 F II - - CHAPTER FOUR Provision of Telecommunications Services by Cable Operators The 1996 Act allows cable operators to provide telecommunications services over their cable systems. Cities may require a cable operator to pay compensation for tts use of rights-of-way to provide telecommunications services, but cities may not do so through the cable television franchise process. Cities must rely on their authority over telecommunications service providers instead. As discussed in the preceding chapters, a central purpose of the 1996 Act was to allow any entity to provide any telecommunications service it chooses. One of Congress' specific objectives was to encourage cable operators to provide telecommunications services in competition with traditional telephone companies. In the past, the scope of services a cable operator may provide was rypically determined chrough che local cable franchising process chat Congress approved in che 1984 Cable Act. Thus, if an opera cor wanted to provide telecommunications services in addition to cable service, it often had to ask the city to modify its cable franchise to authorize the operator to provide additional services. Conversely, a city might have granted the authority to use the cable system to provide ocher kinds of services, contingent on the cable operator's payment of franchise fees on its revenues from these other services. Cities also had the authority to collect franchise fees on all the revenues that an operator derived from operating its cable system, including telecommunications service revenues. The 1996 Act changes those options. The new Act makes the following changes: . Unlike in the past, municipalities may not require cable operatOrs to obtain cable franchises before rroviding telecommunications services. . Unlike in the past, cable operators providing telecommunications services will not be bound by the requirements of the 1984 Cable Act. Instead, they will be governed only by the rules applicable to other telecommunications providers. . Municipalities may not use their cable franchising powers to order a cable operator to stop providing a telecommunications service, nor may they use those powers to order an operator to stop operating its cable system for the purpose of providing such services. However, che Act does not prevent municipalities chat have authority under state or local law from requiring all telecommunications providers - including cable operators - to obtain franchises to provide telecommunications services or to pay compensation for use of the public rights-of-way. . Other than requiring a cable operator to provide public, educational and government ("PEG") access facilities and institutional networks, municipalities may not use the cable franchising process to require cable operators to provide any telecommunications services or facilities. Note that this does not affect a municipality's authority to require cable-related services or facilities. It also does not affect any authority a municipality may have under state law to franchise or tax telecommunications service providers, including a cable operator that happens to provide telecommunications services. 17 IIIiIll The Telecommunications Act of 1996: What It Means to Local Governments . Finally, under the Cable Act, a municipality may not collect cable franchise fees on revenues that a cable operator earns from telecommunications services. A city may, however, as provided under state and local law, collect fees or taxes on telecommunications services provided by cable operators just as the city can from other telecommunications service providers. What This Means for Cities Cities will now have to rely on state and local law, rather than the Cable Act, to regulate and obtain compensation from cable operators' provision of telecommunications services. In cities where states permit the grant of telecommunications franchises or the imposition of fees or taxes on telecommunications providers cities will probably be less affected by this change in law. Cities that do not already have telecommunications taxing or franchising ordinances in place, however. will have to implement the procedures required by their state laws if they wish to continue to be able to manage fully their cable operator's use of local rights-of-way and their ability to receive full compensation for that use. In some states, cities may have to lobby the state legislature for the needed authoriQ{. Cities that do nothing may lose revenue and might be forced to accommodate unregulated rights-of-way users. Cities that act could retain control over management of their property and receive fair compensation for its use. . 18 . . - . I - CHAPTER FIVE Provision of Cable and Video Services by Telephone Companies The new Act allows telephone companies to provide cable-like video services in their local telephone service areas. Depending on how a telephone company structures its provision of video service, the telephone company may be subject to local franchise-like obligations similar to those imposed on cable operators. Does this mean that cable companies and telephone companies will compete in the video services market? Not necessarily: the Act also allows cable companies and telephone companies to merge operations under certain circumstances. To understand the changes that the new Act makes concerning telephone company provisions of cable-like video services, you first have to understand a little bit about prior law. In the early 1970s, the FCC adopted rules largely prohibiting a local telephone company from providing cable service in its local telephone service area. This prohibition, often known as the cable-telco crossownership rule, was incorporated into the 1984 . Cable Act passed by Congress. The prohibition was originally based on the fear that local telephone companies would come to dominate what was, in the early 1970s, a fledgling cable industry. There also was a fear that a single company providing both local telephone and cable service would possess too much market power. As a result of the cable-telco crossownership ruh~, your local telephone company has long been prohibited from building a cable system or providing cable service in your city. (There were a few exceptions to this rule, but only for smallrural areas.) As the cable industry grew in the 1980s, it became apparenc that cable operators were no longer a fledgling industry in need of protection from the larger telephone industry. To the contrary, the cable industry itself became large and enjoyed a monopoly in most cities and counties. The most likely potencial competitor to a local cable operator is the local telephone company. The reasons are fairly obvious: the telephone company already has utility poles, conduits and wire facilities in place, as well as a billing system, maintenance and installation equipment and personnel. These resources place the local telephone company in a uniquely favorable position to enter and compete with the cable operator - far mqre favorable than any other entrant, who would have to acquire such resources from scratch. The 1996 Act eliminates the cable-telco crossownership p~ohibition. . It does so in a rather convoluted way, however. Rather than simply eliminating the prohibition and allowing the local telephone company to enter as a cable operator, the new Act gives the telephone company various alternative ways to enter the video market, but piaces special constraints on the telephone company as well. Options for Telephone CDmpanies The legislation allows local telephone companies that want to provide cable-like video services to select from among the following four options. 1. The "Wireless" Option A telephone company may provide cable service using so- called "wireless" cable technologies. If a telephone company opts for this approach, it need not obtain a Cable Act franchise from the local municipality, as long as the telephone company's wireless system is truly "wireless" - that is, it does not cross any public rights-of-way with wires. 19 The Telecommunications Act of 1996: What It Means to Local Governments 2. The "Common Carrier" Option ''Traditional Cable" Option v. "OVS" Option A telephone company may distribute video programming on a common carrier basis. Several local exchange carriers provided a version of this service - known as "channel service" - even before the new Act was passed. They built cable systems and the cable operator simply leased the system from the telephone company. If a telephone company Opts for the pure common carrier approach, it need not obtain a Cable Act franchise from the municipality. The Act, however, leaves open the question of whether, where state law requires telephone companies to obtain a local telephone municipal franchise, a municipality may require the telephone company to amend its franchise or get a new franchise. 3. The "Traditional Cable" Option A telephone company may opt to provide video programming in some other manner than those described above, including as a traditional cable operator. If it does, the telephone company is fully subject to aU the provisions of the Cable Act, including franchising requirements, unless it constructs an FCC-certified "open video system" ("OVS"). 4. The "OVS" Option A telephone company may elect to enter as an FCC- certified OVS provider. Unlike a traditional cable operator, an OVS operaror must allow others to purchase capacity from it at JUSt and reasonable, nondiscriminatory rates. It will also be required to satisfy some FCC-established rules that will require the OVS operator to pay a fee to local governments for use of rights-of-way, and to provide suPPOrt for PEG access channels and facilities on the OVS system - just as a cable operator must provide support for PEG access. Traditional cable systems must set aside capacity for use by others, but the amount of capacity set aside is more limited- PEG access channels plus commercial leased access channels (commercial leased access obligations top out at 15 percent for systems with 55 or more channels). An OVS provider, in contrast, must make available up to two-thirds of system capacity for use by others, in addition to PEG access obligations. Traditional cable operators have been able to effectively eliminate or reduce their leased access obligations by demanding high rates. Whether OVS operators wiU be able to limit their obligations in the same manner will depend on the outcome of an FCC rulemaking that will implement the OVS provisions of the new Act. The rule making will determine, for example, what it means to provide capacity at rates that are both "nondiscriminatory" and "just and reasonable.." The rulemaking will also determine what OVS system capacity may be used for. The statute states that an OVS provider must set aside capacity for use by others to provide "video programming," which is defined as programming comparable to programming provided by a television broadcast network. The FCC may need to decide whether pay-per-view programming, video on demand, or other advanced video services are "video programming."" OVS systems and traditional cable systems will vary in another important respect: certified OVS systems will not be subject to the Cable Act ~equirement of obtaining a local cable franchise. They may, howe:'er, be required to obtain a franchise or other authorization from local governments under other provisions of state law. Even though OVS systems are not required to obtain a Cable Act franchise, they are subject to certain cable franchise-like requirements. For example, an OVS system may be required to set aside channels and to provide suPPOrt for PEG access. They may also be required to pay a fee in lieu of a franchise fee "on the gross revenues of the operator for the provision of cable service imposed by a local franchising authority or other governmental entity." The rate at which the fees are imposed cannot exceed the rate at which franchise fees are imposed on any cable operator. The meaning of this language will be determined in regulatiOns that the FCC is required to adopt by August 1996. OVS systems may also be required to comply with privacy and Equal Employment Opportunity (EEO) regulations adopted by the FCC and by state or local governments. 20 - - ........ - - - - - ~ iiiii ~ Chapter Five Unfortun~tely, the new Act does nO( clearly state how the PEG access and franchise fee requirements on OVS operators are to be imposed or established. Again, the critical issues will be determined in an FCC rulemaking. Whether, for example, PEG access requirements imposed on OVS systems in any given municipality are identical to those the municipality imposes on its cable operacors may depend on the outcome of that rule making. That outcome will be particularly important co municipalities that have issued franchises to cable operators containing "most favored nations" clauses. OVS operators are specifically exempted from some provisions of the Cable Act, including Cable Act franchise requirements. In addition, they are not subject to the rate regulation provisions of the Cable Act (but, interestingly, OVS systems also may not be protected by Cable Act limitations on local and state rate regulation of cable systems). They are not entitled to the renewal protections of the Cable Act (because they do not have to obtain a cable franchise under the Cable Act). The consumer protection provisions of the Cable Act- including the FCC's consumer protection standards - do not apply to OVS systems. (OVS operators can be expected to argue that local authority to establish customer service standards for OVS has been preempted, but it is not at all clear that this is true.) The Role of Local Government in Regulating Telephone Companies Providing Video Services It is clear under the new Act that if a telephone company chooses the "traditional" cable system option, it will be subject to local franchising requirements and all the provisions of the Cable Act. However, that doesn't mean that a telephone company is free to provide video service under the other three options without obtaining any authorizations from the local municipality. For example, a telephone company might wish to locate the facilities required to provide wireless cable service on public property. If it does so, depending on state and local law, a franchise or right-of-way use agreement might be necessary. The same may be aue of entry under the "common carrier" or "OVS" options. The municipal role in telephone company provisions of cable-like video services is therefore likely to be defined through a combination of FCC rulemakings, the provisions of state law and municipal charter and ordinance provisions. Telephone-Cable Mergers One key question from your constituents is likely to"be: will the new Act actually result in head-co-head .video competition between the telephone company and the cable company? Unfortunately, the answer co that question is not clear. The new Act allows cable companies and telephone companies to acquire up to 10 percent interests in the operation of the other. Further, the new Act allows cable companies and telephone companies to merge or to engage in joint ventures in several circumsJances. A merger or joint venture can occur if the FCC decides that the merger is appropriate in light of the economic condition of the merging companies, or is justified in light of the "convenience and needs of the community to be served." However, the FCC can allow such a merger only if the affected local government(s) approve. In rural areas, a merger or joint venture is also permitted when the merger is between a local telephone company and cable company, where the cable system being acquired serves fewer than 35,000 inhabitants and is not in an urbanized area. A local relephone company is limited, however, to acquiring cable systems that serve fewer than 10 percent of the households in the service area of the telephone company. There is a second separate exemption from telephone-cable merger limitations for cable systems that (a) serve no more than 17,000 subcribers; (b) are not owned by one of the 50 largest cable systems operators; and (c) are located outside of the tOp 100 television markets. In competitive .cable markets, a joint venture or merger is permitted in some circumstances where there are at least twO cable systems in the market and the cable system that is being acquired by or acquiring the local telephone company is not the largest cable company in the market. In cases involving small telephone and cable systems, a merger or joint venture is permitted between a cable company and local telephone company where the telephone company has less than $100 million in annual operating revenues and the cable system serves no more than 20,000 subscribers, no more than 12,000 of whom live in an urbanized area. 21 ~.. .... .,-.... .. ." '." ..........~...."....................-...-;....:....;......W..;I..~..oI.4It_.H...I...........". ....~~~ ~ ~ .: , .. . . ..' ' . . . '" ': ' , . . . . '.' ..' .' , , The Telecommunications Act of 1996: What It Means to Local Governments . .:. ::.... . 22 r ~ . - CHAPTER SIX Changes to the Cable Act The new Act will significantly reduce and in many cases eliminate local and federal control over cable rates, especially over "expanded basic" tier rates. Subscriber notice protections are limited in some cases. Local control over technical standards is narrowed. But overall, local franchising authority over cable - including the franchise renewal process and local authority to require cable operatOrs to provide significant benefits to the community in the form of PEG access and institutional networks - has not been affected. The new Act makes several changes to the Cable Act. The changes relate to a variety of issues - the definition of "cable system," rate regulation, subscriber notice, system ownership, technical standards, and franchise transfers. The only common denominator in these various changes is that virtually all were sought by the cable industry. It is important to remember, however, that these changes do not alter a municipality's basic authority over cable system operators under the cable franchise process. Key Provisions Experience No Change Municipal authority to franchise cable systems is not changed. Among other things, operators can still be required to meet a municipality's cable-related needs and interests as a condition of obtaining a franchise. A municipality can still require a cable operator to set aside capacity for PEG use, to provide equipment and facilities for PEG use, and to build an advanced "institutional network" that links, for example, schools, government and key local institutions. (Institutional networks can be used for voice, video and data transmission under the Cable Act.) A municipality can still establish minimum facilities and equipment requirements for a cable system. The renewal provisions of the Cable Act remain unchanged. Several other provisions of the Cable Act, however, were altered. Revised Definition for "Cable System" The definition of "cable system" was revised to include only systems that cross public rights-of-way. Previously, systems that did not cross public rights-of-way, but served multiple buildings not under common ownership, control or management, were deemed "cable systems" and required a franchise. As a result of this change, systems that do not use rights-of-way will not be subject to Cable Act franchises, even if the service they provide is identical to the cable service traditionally provided by cable operators. In many municipalities, this exclusion will serve only to exempt apartment or condominium buildings linked by cable laid across private property. In some municipalities - particularly cities with large private developments whose streets are not public rights-of-way - the change may be more significant. Cable System Ownership The new Act removes the longstanding Cable Act restriction on local telephone company ownership of cable systems. (This issue is discussed separately in Chapter Five.) The new Act also allows local broadcast stations and cable systems, as well as local newspapers and cable systems, to be commonly owned in most instances. 23 The Telecommunications Act of 1996: What It Means to Local Governments Notice to Subscribers of Rate and Service Changes FCC regulations, and many local franchises, now require an operator to give advance written notice to subscribers of proposed changes in cable service packages and rates. Many local franchises, for example, provide that prior notice - usually 30 days - must be given of any proposed change in rates or services. The new Act amends the consumer protection provisions of the Cable Act to permit a cable operator to provide notice of service and rate changes to subscribers "using any reasonable written means at its sole discretion." The amendments further provide that a cable operator may not be required to provide prior notice of any rate change that is the result of a regulatory fee, franchise fee, or any other fee, tax or assessment of any kind imposed by a federal, state or local government. Cable operators are likely to argue that these provisions essentially leave the substance and timing of notices to subscribers entirely to the operator's "sole discretion." It is also arguable, however, that the law is intended, at most, to give operators latitude in deciding the best means to give \\oTitten notice (whether to use a bill stuffer or separate mailing, for example), while leaving it up to local franchising authorities or to states to define what is "reasonable" written notice. FCC rule makings are likely to resolve the answers to these questions. For now, local governments should not assume that subscriber notice requirements have been entirely preempted- particularly notice provisions that are not strictly related to changes in programming services or rates. Changes to Cable Rate Regulation It has been widely reported that the new Act eliminates cable . rate regulation. That is not true. Depending on the outcome of FCC rulemakings, however, many communities could see rates deregulated. even where subscribers have no genuine competitive alternative to the cable operator. When Can Rates Be Regulated? Under the new law, as under the old law, rates cannot be regulated in communities where the operator faces "effective competition." The new Act, however, redefines "effective competition" to include any community where a local telephone company or its affiliate, or any other multichannel video programming distributor using the local telephone company's facilities, offers video programming services "comparable" to that provided by an unaffiliated cable operator in the area. The effect of this provision depends on what is meant by "comparable" video programming "offered" in the franchise area. If, for example, the phrase "offered" in the franchise area is triggered by a telephone company's offering of service to a single apartment building anywhere in the franchise area, the sweep could be quite broad. In many large cities; local phone companies may already be offering, or soon will offer, cable service in standalone apartment buildings, and nowhere else. An FCC rulemaking will address this issue, and the outcome will decide whether the Act will deregulate rates in many communities. "Expanded Basic" Tier Rates Deregulated in 1999 Effective in March 1999, the new Act will deregulate what the Act refers to as "cable programming service" - commonly referred to by operators as the "super basic" or "expanded basic" tier. This acro~;the-board deregulation of expanded basic in 1999 will occUr regardless whether effective competition exists or not. Additional Rate Regulation Relief for "Small Cable Operators" The Act could be read to deregulate the rates of "small cable operators" immediately. This deregulation would apply in any franchise area where the operator serves fewer than 50,000 subscribers, and the operator qualifies as a "small cable operator." A "small cable operator" is defined as an operator that, individually and through its affiliates, serves fewer than 1 percent of all cable subscribers nationwide (that's about 600,000 subscribers) and whose gross annual revenues are $250,000,000 or less. Many smaller communities may see their expanded basic rates deregulated immediately by this provision. Rates in small communities that are served by large national cable operators, however, will not be deregulated under this "small cable operator" exception. 24 ~ - iiiiii .~ I' '. .. . I", l . . ," . ~ '~'I .:.~" i'~'.).~...,,,,,,, I ;..~ '~'. .+\ , ....~.., Chapter Six . New Burdens Imposed on Local Governments ~ Under existing FCC rules, any subscriber can file a complaint with the FCC regarding expanded basic tier rates. Once filed with the FCC, that complaint must be resolved by the FCC in accordance with its rules. Under the new Act, only the local government can file complaints about expanded basic rates with the FCC. Moreover, the local government can file such a complaint only if it receives complaints about those rates from local subscribers within 90 days of the date a new rate for expanded basic goes into effect. This means that local governments must devise a means of recording rate complaints they receive from subscribers. This is particularly important because the FCC can only order refunds for overcharges back to the date the local government first receives a complaint about new rates from a subscriber. a }'-" Rate Regulation of Basic Service and Equipment In municipalities where the operator is not subject to "effective competition," the operator's rates for basic service and equipment will remain subject to regulation. In most areas, this means local governments can continue to regulate rates for basic service and equipment. With respect to equipment rates, however, the Act allows operators to aggregate equipment costs for broad categories of equipment - converters, for example - and to charge the same rate for all converters no matter how shopworn or functional. This effectively allows operators to require subscribers with old, cheap converters in small markets served by old systems to subsidize the rates for more expensive, advanced converters paid by subscribers in some large markets with more modern systems. This subsidization will also make local government's job of effectively regulating basic service and equipment rates more complicated and difficult. Umits on Local Authority over Cable System Technology and Subscriber Equipment The 1984 Cable Act specifically allows municipalities to include facilities and equipment requirements in franchise proposals and renewals, and to enforce such requirements in a franchise. The new Act leaves these provisions unchanged, but adds new language stating that a municipality may not prohibit, condition or restrict a cable system's use of any type of subscriber equipment or any transmission technology. The meaning of this new language is unclear. Read in context, the language appears to be intended to prevent municipalities from requiring cable operators to use a specific kind of converter or signal security technology. The cable industry, however, will no doubt argue that the new language is broader in scope. Some operators might even go so far as to argue that it prevents municipalities from bargaining for increased system channel or fiber capacity at franchise renewaL Such a reading seems unreasonable in light of the fact that the new Act leaves unchanged municipalities' basic authority over cable system facilities and equipment. But you should expect your cable operator to claim aggressively that this change removes your authority over such matters as system capacity and installation of fiberoptic capacity. And you should be prepared to defend vigorously against the cable operator's argument. Elimination of Anti-Trafficking Umitation on Cable System Transfers The 1992 Cable Act generally prohibited cable operators from selling or transferring their systems within three years of system acquisition or construction, subject to certain exceptions. The new Act eliminates this restriction, allowing cable operators to sell or transfer their systems as often as they like. The new Act does not, however, change the requirement of the 1992 Cable Act that municipalities must act on cable franchise tranSfer requests within 120 days. Umitation of the Unifonn Rate Requirement The 1992 Cable Act generally required a cable operator to charge uniform rates throughout the geographic area served by its cable system. The new Act loosens this requirement in that the uniform rate requirement does not apply to any cable operator subject to effective competition. It also does not apply to any programming service offered on a per-channel or per- program basis. This means that an operator's rates for premium programming like HBO and for pay-per-view programming need not be uniform. In addition, bulk discounts that an operatOr provides to multiple dwelling units (such as apartment buildings and condominiums) are not subject to the uniform rate requirement. This is true even if the operator is not subject to effective competition and thus otherwise subject to rate regulation. 2S . '" . '. ,.: ...., ';.,:',~' .', '. ," '!'.- .r;, r The Telecommunications Act of 1996: What It Means to Local Governments FCC to Set New Rules for Cable Equipment Compatibility Public Access Channel Programming The new Act largely rewrites the provisions of the 1992 Cable Act concerning cable equipment compatibility. It requires the FCC to adopt rules that set only minimal standards at most. This may mean that subscribers will continue to experience difficulty in obtaining televisions and VCRs that are fully compatible with the cable system. The new Act gives a cable operacor the power to refuse to carry any programming (or part of a program) on a public access channel that contains obscenity, indecency or nudity. This restriction - particularly the undefined scope of the "nudity" prohibition - could lead to litigation. . . . 26 CHAPTER SEVEN Impact of the Act on Local Zoning Power II lII:lII - The Act generally preserves local zoning authority over wireless telecommunications facilities (such as cellular rowers) as long as zoning requirements are nondiscriminatory, do not have the effect of prohibiting service, and are not based on the health effects of radio frequency emissions. Zoning decisions must, however, be made within a reasonable time, be based on evidence, and be in writing. By August 1996, the FCC will complete a proceeding that could affect local zoning authority over rooftop television antennas and satellite dishes. Interested communities should participate in that FCC proceeding. In the past several years, a host of new wireless communications technologies have been developed. Telecommunications services include paging service, cellular telephone service, and personal communications services (UpCS"). Television service delivery includes direct broadcast satellite ("OBS"). What all of these new wireless technologies have in common is that, to varying degrees, they require either the construction of transmitting equipment (placed on towers) or receiving equipment (such as satellite dishes), or both. As a result, if left unchecked, the growth of these services could result in the sprouting of new radio towers and receivers all over a municipality's landscape - far more than exist under older technologies such as radio telephone service and television broadcast service. Most of these new facilities will be sited in developed areas - such as cities and suburbs - where the potential residential and business customers of these new services are located. Local governments have long exercised zoning authority over development. to ensure that the appearance and integrity of neighborhoods are not marred by the cluttering of unsightly facilities or the intrusion of commercial facilities into residential areas. Like warehouses and smokestacks, placement and location of antenna towers and satellite dishes present zoning issues. The Act contains language specifically protecting local zoning. authority to a significant degree. However, at the same time, the Act does place some new federal requirements on local zoning authority over wireless telecommunications facilities, and it leaves the door open for the FCC to consider adopting rules that could limit local zoning authority over DBS receiving dishes and television antennas. Local Zoning Authority over Wireless Telecommunications Facilities The Act addresses the issue of local zoning authority over wireless telecommunications facilities in three steps. It (1) establishes a general principle that local zoning authority is preserved, subject to certain conditions; (2) lists the conditions that local zoning requirements must satisfy; and (3) identifies which disputes will be handled by the courts and which will be handled by the FCC. 27 " " r!III -- - -- The Telecommunications Act of 1996: What It Means to Local Governments General Principle: Local Zoning Authority Preserved The Act makes clear that as long as local zoning requirements satisfY certain conditions, nothing in the entire Communications Act of 1934 will limit or affect zoning authority of local governments over the placement, construction, and modification of wireless telecommunications facilities. This principle is important because over the years, the FCC has attempted to exercise its general authority over wireless transmissions under the Communications Act of 1934 to limit or preempt local zoning authority. Until now, the _ 1934 Act contained no explicit limit on the FCC's authority over zoning. With this new principle, local governments for the first time will have a statutoty basis in the Act to defend themselves against unwarranted federal intrusion into local zoning. Conditions to local Zoning Requirements In order to take advantage of the Act's general principle of preserving local zoning authority, local government zoning decisions about wireless telecommunications facilities must satisfY five conditions. Those conditions are: 1. Local zoning requirements may not unreasonably discriminate among wireless telectJmmunications providers that compete against one another. The legislative history makes clear that local governments do not necessarily have to treat competitive providers exactly the same if their proposed facilities present different zoning concerns. Congress intended to give local governments some flexibility in this area. It recognized, for example, that a proposed 50-foot tower in a residential district presents different concerns than a 50-foot tower in a commercial district, even if the two towers are going to offer services that compete with one another. 2. Local zoning requirements may not prohibit or have the effect of prohibiting the provision of wireless telecommunications service. This is intended to prevent local governments from imposing outright bans on wireless telecommunications facilities. It probably also prohibits moratoriums on accepting applications, at least any moratorium that is of indefinite length. At the same time, local governments should have the ability to limit the number and placement of facilities as long as those limits do not have the effect of precluding a wireless telecommunications provider's ability to offer service. 3. A local government must act on a request for permission to place or construct wireless telecommunications facilities within a reasonable period of time. The time taken to act on an application will be considered reasonable as long as it is no longer than the time the local government usually takes to act on the other requests (say, for zoning variances) of comparable magnitude that have nothing to do with telecommunications facilities. And Congress emphasized that the Act does not require local governments to give preferential treatment to zoning requests involving telecommunications facilities - such requests can wait their turn. As long as the request is not moved down the list, it does not have to be moved up the list. 4. Any city councilor zoning board decision denying a request for permission to install or construct wireless telecommunications facilities must be in writing and must be based on evidence in a written record before the councilor board. }'his requirement may necessitate a considerable change in practice for' some city councils and zoning boards. It means that proceedings on a zoning application will need to be reduced to writing. This can be done by having the proceedings transcribed and by requiring the applicant, the city staff and any interested members of the public to reduce their comments and arguments intO written submissions to the councilor board. This requirement also means that city staff will need to make sure that any facts or arguments on which the council or board may rely on in denying a request are in fact included in the transcribed hearing or written filings submitted to the council or board before its decision is made. That decision also must be in writing and contain reasons that are consistent with the Act's requirements. Municipalities should carefully consult with their city attorneys to implement this requirement. 28 . -. I' Chapter Seven - - 5. As long as wireless telecommunications facilities meet standards to be set by the FCC, a local government may not base any decision denying a request to construct such facilities on the ground that radio frequency emissions from the facilities will be harmful to the environment or health of residents. The Act gives the FCC, not local governments, the sole authority to determine what standards wireless facilities must meet to ensure that their radio frequency emissions do not harm humans or the environment. While local 'Sovernments can require the facilities to comply with FCC emission standards, local governments may not adopt their own standards. This means that, as long as the facilities meet FCC emission standards, concerns about the effects of emissions from radio towers on the health of nearby residents is not a permissible reason for making zoning decisions about the placement of wireless telecommunications facilities. Who Resolves Disputes Between Municipalities and Wireless Telecommunications Providers? In a major victory for municipalities, the Act requires that a wireless telecommunications provider claiming that a city has violated any of four out of five conditions listed above must seek relief in a state or federal court, not at the FCC. The disappointed applicant may go to the FCC only if it claims that the municipality improperly based its decision on the harmful effects of radio frequency emissions from the proposed facilities. The FCC is also prevented from preempting local zoning requirements except for those relating to radio frequency emissions. Consistent with this restriction, the Act also requires the FCC to discontinue its pending rulemaking proceeding concerning preemption of local zoning requirements for cellular towers. Zoning Issues Relating to DBS and Television Broadcast Facilities The Act contains no comparable local zoning provisions dealing with the other type of communications facilities that might appear on your City's landscape (e.g., television broadcast antennas and satellite television dishes). This will probably seem odd to most cities, since television antennas and dishes may present precisely the same types of zoning concerns as wireless telecommunications facilities - they can affect neighborhood appearance and integrity. After all, zoning requirements tend to be directed at the physical size and appearance of facilities, not the particular services they are used to provide. The Act does, however, contain two provisions that both the television broadcast and DBS industries are likely to try to use t'o restrict municipal zoning authority over television antennas and dishes. The first provision gives the FCC exclusive jurisdiction over "direct-to-home satellite services" - in other words, DBS service. This essentially gives the FCC the same broad authority over DBS service that it has long had over television broadcast service. This may strengthen the FCC's hand in adopting rules concerning limitations on local zoning authority over satellite dishes. The second provision may be a bit more of an explicit threat to local governmenrs. This provision requires the FCC - by August 1996 - to adopt rules that prohibit "restrictions" that impair a viewer's ability to receive television programming from over-the-air local television broadcast stations, DBS services, or "multichannel multipOint distribution services" ("MMDS"). The Act does not say what types of "restrictions" the FCC is supposed to prohibit. You should assume, however, that the broadcast and DBS industries will argue to the FCC that local zoning requirements concerning rooftop antennas and backyard satellite dishes are "restrictions" that the FCC should limit or prohibit. 29 . - -/ ( II The Telecommunications Act of 1996: What It Means to Local Governments . . . . '" .' ~."'. .'-. . .....~. . ~ 30 I. .. - , ;,' I' I ,';\ . ...'r' ~. -:;'t' " ,-. ,',' - -" i!. . '..:' '..: CHAPTER EIGHT Effects on Local Taxation Cities may no longer impose any local tax or fee on the programming services of direct broadcast satel!ite providers. The state, however, may impose such a tax and remit some or all of it co municipalities. The 1996 Act and the legislative history explicitly recognize the authority of local governments to receive compensation for telecommunications providers' use of local rights-of-way. UnfortUnately, Congress was not so understanding of traditional local taxation authority unrelated to rights-of-way use. Instead, at the urging of providers of DES services, Congress preempted local taxation of DBS services. And in House debates on the floor, at [east two members of Congress threatened to extend this principle to exempt other kinds of communications services from local ta"(ation in the future. Before the 1996 Act became law, federal law did not address the local taxation of DBS services at alL The 1984 Cable Act does not reach such services because they are not delivered by means of a cable system. Consequently, although federal law did not give cities any authority to impose fees or taxes on DES providers, it also did not in any way limit a city's authority to impose such taxes under state and local law. In other words, if a city had the authOrity under state law to impose a tax on DBS service, it could. The 1996 Act, however, explicitly preempts local taxation of DES services. The Act and the Legislative History ~ntain the Following Provisions: · No local government may impose any kind of tax or fee on the provision of DES services. The preemption is so broad that it could be read to preempt all local taxes on DBS services, even generally applicable taxes such as a sales tax to the extent they apply to DES services. · Unlike local governments, the state may tax DES services. In addition, the Act specifically allows the state to collect such a tax and then distribute it to local governments. · Only ta"(es on DBS service itself are preempted. Cities ma still tax the sale of DBS equipment, and they may still collect real estate ta"(es on property owned or leased by a DBS provider. The wireless cable industry hopes to broaden the exemption beyond DBS. During the floor debate in the House, Reps. Hyde of Illinois and Buley of Virginia stated that they believed wireless cable raised the same factual situation as DES, and Hyde indicated that he will probably hold hearings on the issue. Since the Act specifically allows the state to tax DBS service and to remit it to localities, you will want to determine if DBS is currently taxed in your state, either specifically or through a more generally applicable tax. If not, municipalities in your state might want to develop a state initiative to impose such a tax. In assessing the effects of the 1996 Act on their taxing authority, cities also need to consider the consequences of other state legislation in this area as welL Many states are adopting their own telecommunications reform legislation, often altering local taxing powers in the process. For example, localities in Michigan have the authority to collect taxes from public utilities, and telecommunications providers have always been treated as public utilities under Michigan law. The 1995 Michigan Telecommunications Act, however, states that telecommunications providers are not public utilities, thus exposing Michigan cities to the risk of substantial revenue loss. 31 . ....:...~_..;; J." :..~ ..&..:~l...~ ".... ..~.. I,' .. ;....;,............... - t ~ ~.. ..::- .-.... .' .' -,. . -'. ...r The Telecommunications Act of 1996: What It Means to Local Governments What This Means for Cities Cities that currently tax DBS services under cheir own taxing powers will lose revenues. Cities will face additional revenue losses if wireless cable services are brought under the preemption. In addition, cities must be prepared to fend off long-term efforts by industry to bring caxation of all kinds of ocher telecommunications services - even wire line services - wirhin the scope of the new Act. Cicies will also need co be prepared to face a general threat that the industry will seek to limit their ability to tax telecommunications services at the srate level as welL . Do you currently tax DES services in any way? you have a meanS of replacing that revenue? . . 32 r' .' ~" ..'. .. ....... ".........;... ..................".::'.u.......u.....' .1 . CONCLUSION In the years ahead, you will encounter many new challenges and oppornmities as a result of the new Act. The meaning of many of the provisions we have discussed will be refined and clarified through FCC decisions, coUrt decisions, state legislation and - yes - through municipal ordinances as well. For cities to protect their interests, they will have to be active participants in all of these forums. To take full advantage of the opportUnities the new Act presents, as well as to resolve many of the problems it creates, you also will Want to consult with your municipal attorney and perhaps specialists in the field as wetl. As you wind your way through this legislative thicket, you will need to refocus your thinking in three critical areas: · You will need to move away from thinking of the world as being composed of a single local telephone company and a single cable operator, and towards thinking of a world composed of multiple telecommunications providers, each competing with one another, with some providing voice services, some providing data services, some providing video services, and some providing all three. · You will need to think of your local government as the landlord of the local public streets and rights-of-way, and of the various private companies that place facilities on those rights-of-way as your tenants. You are entitled to fair compensation from those private companies, but you should also strive to reorganize your ordinances and franchises to treat those rights-of-way users in a coordinated, nondiscriminatory way. · Your local government is a large user of telecommunications services. The new world will provide you with many new alternatives to the traditional procurement process CO obtain the telecommunications services your local government needs. You will want to leverage your starus as a large user and as landlo~d of the rights-of-way to ma.'Ximize the telecommunications services you receive and minimize the costs. If you proceed carefully and wisely, the opportunities presented by the new Act will outweigh the problems. The new world offers a chance for your local government to be a significant interchange on the information superhighway. To realize that opportunity, you will need to be proactive at the federal and state level to protect your interests. 33 ;':-: - .......~; .','. ; -, '-~"-":'-' - ~ .' "."~.', \' '.::,"'~':.. ...,..- .,'. ..' '. ,'. '.' .... ': ... :.:'. .. ".::'" '.f . ..'~.~ .....,... ..... ,..-..........."...;....~..'..;I;;~(4~...i. , . I. The Telecommunications Act of 1996: What It Means to Local Governments 34 I . , Iiiiii - - - ~ . - - - ... IBIiji - GLOSSARY OF TELECOMMUNICATIONS TERMS A Analog telecommunications - Moving information from place to place in the form of continuous electrical signals. Analog is the form of information that comes out of an ordinary voice telephone, or from a modem into a telephone line. B Broadcast - To transmit information over the airwaves to two or more receiving devices simultaneously. Information can be transmitted over local television or radio stations, satellite systems or wireless data communications networks. c Cable programming service - A tier of cable service containing multiple channels of programming commonly referred to by operators as the "super basic" or "expanded basic" tier. Cable system - A wired distribution system that crosses public rights-of-ways and is used to deliver multiple channels of video programming to multiple subscribers in a community. Cellular service - A telecommunications service that permits customers to use wireless, mobile telephones to connect, via low-power radio transmitter sites called cell sites, either to the public switched network or to other mobile cellular phones. Coaxial cable - A high capacity cable, typically copper, commonly used in cable television systems. It has more bandwidth than twisted pair, but less bandwidth than fiber- optic cable. (See Twisted pair, Fiber optics.) Commercial leased access - Channels set aside on a cable system for commercial use by programmers unaffiliated with the cable operator and whom the operator does not voluntarily choose to carry. Common carrier - An entity licensed by the FCC or a state agency to supply local and/or long-distance telecommunications services to the general public at established and stated prices. Competitive Access Provider (CAP) - Provides local exchange "bypass" service to businesses with large long- distance traffic. A CAP connects these businesses directly with their long distance carrier of choice, "bypassing" the need for the local telephone company to provide the connection. Customer premises equipment - The equipment employed on the premises ,of a person (other than a carrier) to originate, route, or terminate telecommunications. A telephone and a modem are examples of customer premises equipment. D Digital telecommunications - An information transmission, storage and processing method that uses electronic or optical pulses, also called bits. Digital switching technology transmits and processes calls faster and better than analog transmission, its predecessor. This improves both the capacity and the efficiency of the network. Direct Broadcast Satellite (DBS)- A radio communication service in which programming signals transmitted or retransmitted by satellites in space are intended for direct reception by the general public (both individual or community reception). 35 1 \ I ""', .;h"'''._..~....~,......... The Telecommunications Act of 1996: What It Means to Local Governments E Effective competition - Any community where either: (1) a local telephone company or its affiliate, or any other multichannel video programming distributor using the local telephone company's facilities offers video programming services "comparable" to that provided by an unaffiliated cable operacor in the area; (2) less than 30 percent of the homes subscribe to cable services; (3) multichannel video distributors, other than the largest cable opera cor, offer cable services co at leas~ 50 percent of the homes and at least 15 percent of the homes subscribe to such other, competitive multichannel video distributors; or (4) a municipally owned cable system offers cable service to at least 50 percent of the households in the area. Where "effective competition" exists, cable rates are immune from rate regulation. Exchange - The local area served by a central office or switching center. An exchange can be identified by the area code and first three digits of a phone number. Exchanges are grouped to form a Local Access and Transport Area. (See LATA.) F Federal Communications Commission (FCC) - The FCC has the power to regulate interstate and foreign communications by radio, television, wire, satellite and cable. No more than three of the five members can be from the same political party. The president nominates the commissioners, and the Senate confirms them for five-year terms. Fiber optics - A form of communications transmission by glass wire strands that uses light to send data, high-quality video and sound. Fiber optics technology has a much greater capacity co carry information, consumes less electricity and is less sensitive , to electromagnetic glitches than traditional forms of communications shipped over twisted pair or coaxial cable. (See Coaxial cable, Twisted pair.) H High-Definition Television (HDTV) - Any of a variety of video formats offering higher resolution than current television broadcast standards. Integrated Service Digital Network (ISDN) - A digital s\~itched network that provides very fast, simultaneous transmission of voice, data and images over a single telephone line. It enables the carriage of hundreds of communications at once and multipage faxes in seconds instead of minutes, as well as medium-quality video images. Institutional Network (I-Nee) - A communication network which is constructed or operated by the cable operator and which is dedicated co use exclusively by the local government, schools, or other local institutions, as opposed to residential subscribers. Interexchange Carrier (!XC) - A telephone company authorized to provide long-distance communications, but not local telephone service. Companies like AT&T, US Sprint and MCI are IXes. (See LEe.) Internet - An unregulated, global confederation of computer networks linked through regional, private business and educational networks. The Internet began in 1969 as an acrempt by the Defense Department to link universities to Pentagon researchers, while also serving the national security purpose of spreading out crucial computing tasks to a wide geographic area. The Internet provides file transfer, remote login, electron'ic mail, news and other services. L LAl'J' (Local Area Network) - A network of computers and peripheral equipment that interact mainly with one another within a relatively small area. LATA (Local Area and Transport Area) - Any of 161 local telephone serving areas in the United States created by the MF] in 1984. LATAs were established co create boundaries that distinguish between local and long-distance service. Calls' between LAT.As are carried by long-distance companies, while calls within a LATA are handled by local phone companies. LATAs are further divided into areas called exchanges. (See Exchange.) LEC (Local Exchange Carrier) - Any person that is engaged in the provision of telephone exchange service or exchange access. Such term does not include a person insofar as such person is engaged in the provision of a commercial mobile service, except to the extent that the FCC finds that such service should be included in the definition of such term. 36 ..: ' "-" Glossary of Telecommunication Terms M ;; r ,Modified Final Judgement (~fF]) - The consent decree entered into August 24,1982 by AT&T and the Justice Department that broke up the monopoly of local and long- distance telephone service and equipment manufacturing controlled by AT&T. Multichannel Multipoint Distribution Service (MMDS) - A service involving the transmission of multiple channels of television programming through earth-bound (rather than satellite) transmitters. To receive MMDS, a subscriber must have a special antenna installed. Also know as "wireless cable." N National Education Technology Funding Corporation - The Telecommunications Act of 1996 created this corporation to receive funds from any source ro stimulate investment in "education technology infrastructure." Network - A system of terminals, switches and connections (lines and radio channels) that communicates information among users. (See Public switched network.) o Open Video System (OVS) - A local exchange carrier may provide cable service to its cable service subscribers in its telephone service area through an open video system that complies wim the Act. The conditions under which a LEC may provide OVS will be determined by regulatiOns mat the FCC will prescribe consistent with the public interest, convenience, and necessity. Unlike a cable operator, the operation of an OVS must make available two-thirds of its capacity for use by others through reasonable, non- discriminarory tariffs. p Pay television - A system of distributing television programming, either over-me-air or by cable, for which the subscriber pays a fee. The signals for such programming may be scrambled to keep non-subscribers from receiving service. Also know as "premium television." Public, Educational and Government (PEG) access- Channel capacity and facilities set aside by a cable operator for public. educational or governmental use. The amount of PEG access is determined by local governments in their franchise agreements with cable operators. Personal Communications Services (PCS) -Digital wireless telephone technology such as portable phones, pagers, faxes and computers. Such mobile technology promises to allow each consumer to use the same telephone number wherever he or she goes. Also known as Personal Communications Network (PCN). Premium channels - Optional per-channel, pay-television services, usually first-run movies and special events, that are offered by a cable television system for a seperate monthly fee. Public access - A very broad and important term covering the public's right to participate in the marketplace of ideas as provided by the Constitution. Public access means providing ramps for wheel-chairs in public places. It means the Freedom of Information Act to broaden public access to government decision-making. It means public access ro cable TV. The principle of public access is important in addressing areas of public life traditionally underserved by the commercial market, such as education, health care and governance. R Regional Bell Operating Company (RBOC) - The breakup of AT&T created s~ven regional Bell holding companies, known as Baby Bells: Ameritech, Bell Atlantic, BellSouth, NYNEX, Pacific Telesis, Southwestern Bell and US West. s Small cable operator. A cable operator that, individually and through its affiliares, serves fewer than 1 percent of all cable subscribers nationwide and whose gross annual revenues are $250,000,000 or less. T Telecommunications - The transmission, between or among points specified by the user, of information of the user's choosing, wimout change in the form or content of the information as sent and received. Telecommunications Development Fund - The Telecommunications Act of 1996 established this federal fund ro stimulate small business entry into telecommunications. Telecommunications infrastructure - The cables, switches, radio rowers, and other facilities and equipment that are required to make telecommunications work. Cables and wires that connect customers to switching centers are called outside 37 :j ,....,. :~ ~.:_-~~:~..~" . :"P~"'{'.'~' i-..:.....!,.O::'-:_~.-c~::...-.".......,." .'j' .; -- _ 'p. .~. 'I',,~' _ ..' ""'-"':"~"'j The Telecommunications Act of 1996: What It Means to Local Governments plant. Equipment under a roof is inside plant. v Telecommunications service - The offering of telecommunications for a fee directly to the public, or to such classes of users as co be effectively available directly co the public, regardless of the facilities used. Tier - Different packages of multiple programming channels available through cable television systems for different prices. "Basic" service, received for a minimum fee, includes local broadcast television stations and PEG channels. "Expanded basic" service, the next level of service after basic, includes the majority of the popular satellite-delivered, advertiser-supported programming services such as CNN and ESPN. A "fat basic" tier is a basic service tier that includes channels usually found on the expanded basic tier. Trunk line - The main distribution line of a cable television system, which feeds signals from the headend co feeder lines. Subscriber drop cables are connected to feeder lines. Twisted pair cable - A wire consisting of insulated copper wire organized in distinct pairs that are twisted around each other in order to identify each separate circuit. Individual pairs of wire are the primary path between a cuscomer's premises and the telephone company's local central office. This type of cable has been standard in the telephone industry for decades. However, it is being gradually replaced by fiber optic cable, which has a vastly greater capacity to carry information. (See C03.xial cable, Fiber optics.) u Universal service - An evolving level of telecommunications services that the FCC shall establish periodically under the Act, taking into account advances in telecommunications and information technologies and services. In reviewing the definition, the FCC shall consider the extent to which such telecommunications services: A) are essential to education, public health, or public safety; B) have, through the operation of market choices by customers, been subscribed to by a substantial majority of residential customers; C) are being deployed in the public telecommunications networks by telecommunications carriers; and D) are consistent with the public interest, convenience, and necessity. V-chip - Technology built into television sets that will allow parental choice in television programming. Specifically, an apparatus designed to block display of all programs with a common rating, such as video programming containing violent or sexual content. Video programmer - Any provider of video programs, such as cable operators, television networks, local broadcasters and satellite program distributors. Telephone companies would be allowed to own and offer video programs under the new Act. w Wireless access - Anyone of a number of methods to replace all or part of the wired connections in a communities nerwork, to residential and business subscribers. Examples include DBS, MMDS, analog and digital cellular, and personal communication services. SOURCES: Federal Communications Commission, Congressional Quarterly, GTE Telephone Operations, Jones Cable Television and Information Infrastructure Dictionary, and the Telecommunications Act of 1996. 38 . I':j'. . .~ ""', .', .. ;f ,'.-..1" .'. .....;,1..., ~ ::~'_',-i'~J;!~ .-:...:...1...... .....,.... .1' '. '. I' , j..."..-....:l-....,........:.t..A............I,l,..-..._.......:.;...._...N...:.....u....~.' I' ,'" Ii About The National League of Cities The Nacional League of Cities was established in 1924 by and for reform-minded state municipal leagues. It now represents forty-nine leagues and more than 1,400 cities directly, and through the membership of the state municipal leagues, some 17,000 cities indirectly. NLC serves as an advocate for its members in Washington in the legislative, administrative, and judicial processes that affect them; develops and pursues a national municipal policy that meets the present and future needs of our nation's cities and the people who live inchem; offers training, technical assistance, and information to municipal officials to help them improve the quality of local government in our urban nation; and undertakes research and analysis on topics and issues of importance to the nation's cities and towns. ,/ ., . ,'> . COMMISSION AGENDA ITEM K SUPPLEMENT REGULAR X CONSENT INFORMATIONAL September 9. 1996 Meeting DEP~ Authonzation PURPOSE: The purpose of this Board item is to update the Commission on the recommendations of the Board of Adjustment taken at their meeting of September 5, 1996 as it relates to the requests of: 1) Florida Power Corporation, and 2) the City of Winter Springs to construct telecommunications towers in excess of established height restrictions. FINDINGS: 1) Florida Power Corporation request - Four (4) citizens spoke. a) William Fernandez represented the Ranchlands Homeowners' Association and stated that the Association is maintaining a neutral position on this Issue. b) Thorp Earley (Seville Chase Subdivision) opposed the location of the monopole because it would be directly across from the secondary entrance to the subdivision. Mr. Earley's suggestion was that it be moved, north and eastward and be located on city owned property. c) R.J. Risser wanted more information on what would be there. d) Harold Scott was seeking additional information. Primeco, the company that would actually utilize the space on the towers, visited the city owned property and have identified an alternate location on this property. This location is to the north of the power easement and east of the ponds, and is approximately two hundred fifty (250) feet northeast of the proposed Florida Power location. September 9, 1996 Agenda Item K (Supplement) Page 2 The original motion was to recommend approval as presented. Smith stated that he would feel more comfortable if the site were located on the City property to allow the City to maintain and control (of the tower) and stated that he respects Florida Power's position as they have to be somewhat generous in allowing some flexibility in that regard. Amended motion was to allow at least the two alternative sites to be considered (on Florida Power and City of Winter Springs property) to be determined and let the City Commission make the final determination based upon recommendation by City Staff All voted aye. (Note: This motion is to allow a monopole to be constructed to a height of one hundred twenty (120) feet). 2) City of Winter Springs request - Bob Reeve, General Manager for the Winter Springs Golf Club, had concern over the height of the tower, however, they would like to cooperate with the City if that is the best location. Mr. Ariele, Primeco, stated to clarify that the application at this time is to include a one hundred forty (140) foot pole in this location.....to accommodate other users. LeBlanc stated that at the present time the City is (only) considering 120', the Board could make in their recommendation that the pole be allowed to (be) no more than a maximum of 140' Motion was to recommend approval to the City Commission to the request for the monopole up to a maximum of 140'. All voted aye (Note: The City was unaware of the request for one hundred forty (140) feet in height for the monopole and this height, or the potential for a third party user was not discussed in the lease negotiations.) September 9, 1996 Agenda Item K Supplement Page 3 RECOMMENDA TION: 1) Florida Power Corporation request - The recommendation is that the Commission approve that a tower be constructed to a height of one hundred twenty (120) feet on city owned property. 2) City of Winter Springs request - The recommendation is that the Commission approve that the tower be constructed to a height of one hundred twenty (120) feet, and that the additional twenty (20) feet be authorized (only) after successful lease negotiation by the City Manager. ATTACHMENTS: Unofficial Minutes of the September 5, 1996 Board of Adjustment Meeting Location map depicting the proposed Florida Power Corporation location and the City of Winter Springs location. COMMISSION ACTION: MINUTES BOARD OF ADJUSTMENT SEPTEMBER 5, ]996 The Board of Adjustment Meeting of September 5, ] 996 was called to order by Vice-Chairman AI Becker at 7:00 p.m. ROLL CALL: Elizabeth Harrow, Vice-Chairman, present Thomas Wixted, present Al Becker, present Frank Adams, absent Greg Smith, Chairman, present CITY STAFF: D. LeBlanc, Land Management Specialist Approval of Minutes of June 6. ]996: Vice-Chairman Becker asked for a motion to approve the minutes of June 6, ] 996. Motion was made by Smith to approve the minutes of June 6, 1996. Seconded by Harrow. Vote: All aye. Election of Chairman: Becker nominated Greg Smith for Chairman. Seconded by Harrow. Motion was made by Wixted to close nominations. Seconded by Becker. Vote: All aye. New Chairman Greg Smith. Election of Vice-Chairman: Becker nominated Elizabeth Harrow for Vice-Chairman. Seconded by Smith. Motion was made by Wixted to close nominations. Seconded by Smith. Vote: All aye. New Vice-Chairman Elizabeth Harrow. Request of Mr. & Mrs. Jolm Drehofffor Variances to Sections 6-2]9(a) and 6-2]9(c) of the Code of Ordinances to allow a swimming pool (water's edge) to be closer than ten (10) feet from the rear property line, and the screen enclosure to be closer than seven (7) feet from the rear property line. The property is located in The Reserve at Tuscawilla, Phase I, Lot 23, Plat Book 48, Pages 3] thru 40 (105 Atrium Court). The subiect property is zoned Planned Unit Development (PUD): Donald LeBlanc, Land Management Specialist, gave his presentation. LeBlanc stated that there are no property owners to the rear of this property, the property to the rear is retention/detention and a conservation easement. The screen at one point will be on the lot line and the water's edge will be as close as 8 feet, 6 inches. Discussion. Smith asked ifthere is anyone present to speak for or against the request. There was no one present who spoke for or against the request. Motion was made by Becker to approve the request of Mr. & Mrs. Drehoff for val'iances to Sections 6-219 (a) and (c). Seconded by Wixted. Vote: All aye. BOARD OF ADJUSTMENT MINUTES SEPTEMBER 5. 1996 PAGE 2 Request of Florida Power Corporation for a Variance to Section 20-164 of the Code of Ordinances which will allow a concrete, telecommunication monopole to be built in excess of thirty five (35) feet. The property is a substation for Florida Power Corporation and is located to the east of the intersection of Shore and Panama Roads. The property is zoned R-lAA (One Family Dwelling District): LeBlanc gave his presentation, and stated this variance would allow a concrete telecommunication monopole to be built in excess of thirty five feet, namely approximately 120 feet. LeBlanc stated that the property owners that would be affected by this were notified of this request. Discussion. William Fernandez, 250 Panama Road East, spoke on this request. Fernandez stated that as President of the RancWands Homeowners Assoc., the Officers of the Homeowners Assoc., has discussed this request and stated that so long as it is confined within the boundary of the Florida Power substation through their easement and stated that they (Assoc.) will remain neutral on this matter. Fernandez also stated he is the fee simple owner of the 100' stretch of land underlying the Florida Power Corporation easement in Block E, which has some rather tall metal monopoles and if it is incompatible and the Board of Adjustment doesn't approve the variance, Fernandez stated that he would be happy to talk to the representatives about leasing them a pole that they can construct on the corner of Hayes and Bahama on the power easement for $1,000 a month. Thorp Earley, 4224 Enwood Landing Drive, Orlando, developer of Seville Chase subdivision, stated the subdivision is 110 lots and stated that he doesn't have a problem with the pole's height, but does have a concern about the location. Earley stated that the location in question at this point would be directly across from their secondary entrance into the 110 lot subdivision. Earley stated that he feels there is a better way to do this and after researching, has found out that the City owns property to the north of the power easement, where at this time there are effluent ponds and spray fields. If you were to go to the eastern part of the City owned property (by the ponds) you could put the pole there and minimize any impact for any homeowners in the area. Earley said it is their concern that the location even within the Florida Power substation area would have a direct impact on his subdivision and stated if the City could put it on their property, not only does the City get the lease money but the City would minimize the impact. LeBlanc showed the Board the location of the Florida Power easement and the City owned property. RJ. Risser, 217 West McCromic, Apopka, stated that he owns a strip ofland (approx. 32 acres) that is landlocked to the east of the substation and stated that he would like more information on what is going on there. LeBlanc stated that there are no plans as of yet, this is for a height variance and if it is granted then the plans would come into the City. Harold Scott, 911 Augusta National Blvd., asked how many monopoles will be located in the City. John Ariele, representative from PrimeCo (the company who would utilize the towers) stated there will be two sites in the City and no other sites at this point in time. BOARD OF ADJUSTMENT MINUTES SEPTEMBER 5. 1996 PAGE 3 Smith asked if there would be any disruptions in terms of the broadcast range. Ariele said no, because of the frequency, there is absolutely no interference with other frequencies. Smith asked about the height of the tower. Ariele said that is about the average height of a tower, 100' to 120' (or a little higher than that). Ariele stated that part of what they are looking at in Winter Springs is accommodating additional users; should additional users need to be accommodated, such as the City of Winter Springs Public Safety and so forth. They have to have enough vertical separation to allow additional antennas to be put on those facilities. Mr. Scott asked if the additional users be at the same frequencies and low power. Ariele stated no. Scott said then there would be the possibility that other frequencies could interfere with present TV or Satellite reception. Ariele said no, we are talking about the Public Safety system which is already in place and we are talking about a whole different megahertz frequency. Discussion. LeBlanc stated that the City would not need the space for Public Safety but would possibly need it for the Utility Department. Richard Noble, representative from Florida Power, stated that Florida Power made application originally for a very specific site for the pole on the substation site, it is located in the northeast portion of the substation and showed the specific site on his drawing to the Board. Noble stated that they are asking for that specific spot, they are not asking for the whole site and work out the location later, they have already performed the soil boring and know that the pole would work in that exact location. There was discussion as to where the pole would be located on the Florida Power property. There was also discussion on the location of the pole on a different site as was discussed by Earley. Noble stated that there are a number of poles on the substation site and the heights range from 50' and up to about 110', the poles on the northwest corner of the site are the taller poles. Discussion. Ariele stated that they have a situation that they have an opportunity to work with Florida Power and a potential alternate site and said they respectfully request is that they would certainly entertain an opportunity to work with the City of Winter Springs for an alternate site, they have had their construction people meet with the Director of Utilities as early as today, and they did find an alternate location that would work for their purposes and would work for the City's purposes, however, they don't have a lease agreement yet with the City of Winter Springs, and said they would like to run both of those parallel and leave it up to the City Commission to decide which way they would rather go, pending the Board of Adjustment's review of the situation. Ariele stated that yes, they do have a site located and have met with the City officials and have determined a site that would work for both parties. Wixted moved to recommend approval to the City Commission the application as presented. Seconded by Becker. Discussion. Smith said that he would feel more comfortable if the site were located on the City property to allow the City to maintain and control and stated that he respects Florida Power's position as they have be somewhat generous in allowing some flexibility in that regard and Smith stated that he would like to amend the motion to allow at least the two BOARD OF ADJUSTMENT MINUTES SEPTEMBER 5. 1996 PAGE 4 alternative sites to be considered (on Florida Power and City of Winter Springs property) to be determined and let the City Commission make the final determination based upon recommendation by City Staff. Discussion on the amendment. Wixted stated if the Board members are in accord he will entertain the amendment to change his motion. Seconded by Harrow. Vote on the amendment to the motion: All aye. Vote on the motion: All aye. Request of the City of Winter Springs for a Variance to Chapter 20 of the Code of Ordinances which will allow a concrete, telecommunication monopole to be built in excess of fifty (50) feet. This property is the West Reclamation Facility and is located about two thousand (2,000) feet north of West S.R. 434, west of the Florida Power Corporation Easement, west of the Winter Springs Golf Course and northeast of Golf Terrace Apartments (1000 West State Road 434). The property is zoned Planned Unit Development (PUD): LeBlanc gave his presentation and showed the Board the site location on the map. Bob Reeve, General Manager for the Winter Springs Golf Club, 900 West S.R. 434, spoke on the request. Reeve stated that the location of this tower (towards the 13th hole) there is no problem with the location but have concern about the height of the pole, however they would like to cooperate with the City if that is the best location. Discussion. Mr. Ariele stated to clarify that the application at this time is to include a 140' pole in this location due to the fact that the City Public Utilities and other co-location opportunities, to prevent the need for another tower in the general location, they try to make use of the height to accommodate other users. LeBlanc stated that at the present time the City is considering 120', the Board could make in their recommendation that the pole be allowed to no more than a maximum of 140'. Becker moved to recommend approval to the City Commission to the request for the monopole up to a maximum of 140'. Seconded by Wixted. Vote: All aye. The meeting adjourned at 7:50 p.m. Respectfully Submitted, Margo M. 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