'Absurd Result' in ExteNet Case May Warrant Rulemaking on Aging Texas Law, PUC Says

Texas right-of-way rules should be updated to reflect communications technology changes, Public Utility Commission members said Thursday. At their meeting, all three commissioners said they leaned toward adopting a proposed decision by administrative law judges, siding with ExteNet in the distributed antenna systems (DAS) provider’s compensation dispute with Houston (see 1703200049). But commissioners postponed a vote until the PUC’s April 28 meeting, saying they need more time to study the ALJ proposal. Meanwhile, legislation meant to relax local rules for wireless siting moved forward this week in Hawaii, Indiana and Missouri.

Though existing state rules may be out of date, they seem to support ExteNet’s case that it need not pay Houston for building wireless equipment in the right of way, commissioners said. Chapter 283, a Texas local government code for franchise fees, sets rates based on a company’s number of access lines, but as a DAS provider, ExteNet has no access lines. However, ExteNet should pay the city as a matter of policy, said the commissioners, supporting a rulemaking to redefine “access lines” under the chapter. The current definition was adopted when landlines were prevalent, but they soon will be a “quaint memory,” said Commissioner Kenneth Anderson. The dispute is a “perfect example” of how to trigger a section of the statute permitting the PUC to update rules to reflect new technology, said Commissioner Brandy Marquez. Chairman Donna Nelson agreed, saying “technology now is so different.” Alternatively, legislators could update the law, Nelson said.

The statute gave the PUC broad authority to update the right-of-way rules as technology advances, Anderson said. ExteNet, Houston and PUC staff agreed the agency may open a rulemaking. “The statute is very clear that when changes in technology warrant it, the commission can redefine 'access line,' and they can bring ExteNet’s facilities within the definition of access line and require some compensation,” said Legal Division Staff Attorney AJ Smullen. Staff doesn’t support the ALJ proposal because it “leads to an absurd result” where the city isn’t compensated, he said.

ExteNet opened the case not because it wanted free access, but because it didn’t want to negotiate individually with every city, said ExteNet attorney Susan Gentz. The commission should approve the ALJ proposed decision to let ExteNet move forward with its business, then open a rulemaking to explore compensation issues, Gentz said. Houston attorney Alfred Herrera supported a rulemaking but still urged the commission to reverse the ALJ decision because the city considers ExteNet a wireless provider, not backhaul, that must pay fees now. “The right of way is not to be used for free,” he said.

The Wireless Infrastructure Association looks forward to Texas commissioners' decision, WIA President Jonathan Adelstein said in a statement: “WIA supports all regulatory actions that aim to promote fair and equitable access to public rights-of-way for telecommunications providers."

Many states are moving industry-backed wireless siting legislation meant to ease the local process for approving industry small-cells applications (see map). The Hawaii Senate voted 25-0 Tuesday to pass its small-cells bill, HB-625, with amendments. The House passed the bill earlier, but must concur with the Senate revisions. Monday in Indiana, the Senate disagreed to House amendments to SB-213, and the chambers this week appointed members to a conference committee to work out differences. In Missouri, the House amended and passed HB-656 Tuesday, but it still needs a Senate vote.

The California Senate Governance and Finance Committee scheduled a hearing April 26 on that state’s small-cells bill (SB-649). Another California Senate panel cleared that bill at a contentious hearing last week (see 1704040060). At the federal level, FCC members are to vote April 20 on an NPRM and notice of inquiry on wireless siting issues proposed by Chairman Ajit Pai (see 1704100056).