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Telecommunications Franchise and Lease Agreements

This page contains information on how a local government in Washington State can develop franchising and lease agreements to bring telecommunication services to its communities.

For a detailed discussion on the authority of cities, towns, and counties in Washington State to regulate access to public ROW and publicly owned infrastructure for telecommunications services, visit Telecommunications Regulation. 

Overview

The manner in which a telecommunications company delivers wireless or wired services often involves access to property owned by a local government, such as telephone poles, towers, reservoirs, etc., or access to the public right-of-way (ROW). Telecommunications providers will use this access to install, construct, operate, and maintain telecommunications facilities, including underground cables, wireless antenna towers, or above-ground attachments to public infrastructure.

Local governments develop telecommunications lease and license agreements to allow the lessee (i.e., the telecommunication provider) to ‘rent’ space on locally owned land or infrastructure. Further, if the provider sites a telecommunication facility on public property that also includes access to a public ROW, the local government may also need to give the lessee easements needed for operating in the ROW.  

Small Cell Wireless Facilities

Telecommunication providers have progressively moved to developing wireless broadband networks that can transmit cellular data at faster speeds but over shorter distances. This technology requires the installation of numerous “small cell” facilities. Unlike traditional wireless communication facilities (i.e., towers, tall antennas), small cell facilities do not require construction or installation and are commonly smaller devices that attach to utility poles or other existing infrastructure.

One of the challenges of small cell technology is that it blurs the lines between zoning and ROW procedures. Traditionally, wireless communication facilities (WCF) were sited outside the public ROW and regulated under a local jurisdiction’s zoning procedures. Placement of small cell technology in the public ROW requires localities to integrate their zoning approval processes for WCF with their ROW procedures for franchises and master permits.

Regulatory Authority

Federal law allows local governments to regulate the placement, construction, and modification of personal wireless service facilities as long as the local regulations do not unreasonably discriminate among providers or act to prohibit wireless services altogether. See 47 U.S.C. §332(c)(7). Washington law also allows local authorities and providers to agree on “site specific charges” for the construction or placement of personal wireless facilities in the public ROW. See RCW 35.21.860(1)(e).

Washington has its own laws regulating small cell facility “pole attachments” in cities — RCW 35.21.860(1)(e) — and in code cities, RCW 35A.21.125(2). These state laws generally require that city rates, terms, and conditions for pole attachments be “just, reasonable, nondiscriminatory and sufficient.”  RCW 80.36.375 defines personal wireless services, or small cell facilities.

In 2018, the Federal Communications Commission (FCC) issued a declaratory ruling and order (See 33 FCC Rcd. 9088) intended to speed the deployment of small cell wireless facilities (e.g., 4G and 5G). This FCC order included provisions that:

  • Set forth limits on fees that local governments charge for wireless facility deployment. Under the order, these local fees must “reasonably approximate” local government costs, be uniform among “similarly situated” providers, and are presumed valid if below thresholds identified in the order.
  • Established “shot clock” deadlines for localities to act on wireless provider applications to deploy wireless facilities.
  • Preempted local aesthetic requirements (regulating the appearance of installed wireless facilities) that are not objectively reasonable and “no more burdensome” than similar requirements the locality imposes on other utilities.

In a local government challenge to this FCC order, the Ninth Circuit Court of Appeals upheld the order’s fee and shot clock provisions but invalidated its local aesthetic requirement preemption in City of Portland v. U.S. (2020).

Examples of Small Cell Franchise Applications and Master License Agreements

The applications below are for the location of small cell facilities within a locality’s ROW.

In 2000, at a time when there was a surge in the installation of telecommunications facilities throughout the country, the Washington State Legislature adopted provisions, codified in chapter 35.99 RCW, that limit and clarify the authority of all classes of cities when regulating telecommunications facilities in the public ROW, and that establish a framework for issuing "use permits" and "master permits" (basically, franchises) to telecommunications providers for locating their facilities in the ROW.

Below are examples of master license agreements for small cell facilities:

Examples of Small Cell Franchise Agreements

Sample agreements have been grouped and organized by telecommunications provider and may reference firms that no longer exist. 

With Crown Castle/Century Link/Qwest

With New Cingular Wireless

With RCA Telecom

With T-Mobile

  • Franklin County Kahlotus Tower Site License (2021) — 5-year non-exclusive agreement with four optional renewals of 5 years each for access to a county-owned communications tower and adjacent property; includes staff report and unsigned ordinance.

With Verizon

  • SeaTac Telecommunications Franchise (2018) — 5-year, non-exclusive franchise for small cell wireless facilities; includes staff report.
  • Tukwila Telecommunications Franchise (2018) — 10-year non-exclusive agreement to establish small cell telecommunications network with optional 1-year renewal; addresses construction standards, restoration of public/private property, undergrounding, and other topics; includes staff report.

Wireless Communications Facilities

Traditional wireless communication facilities (WCF) usually consisting of an antenna display, connection cables, and a tower structure or other structure used to achieve the necessary elevation. Unlike small cell facilities, they have a coverage area that spans several miles.

Cities, towns, and counties should ensure their regulations regarding wireless antenna facility siting are consistent with section 6409(a) of the Middle Class Tax Relief and Job Creation Act of 2012, as set forth in the FCC’s October 2014 Acceleration of Broadband Deployment Order (FCC-14-153).

Washington also has categorical State Environmental Policy Act (SEPA) exemption for certain antenna installations (RCW 43.21C), which can be found in Chapter 197-11 WAC.

For examples of local ordinances and codes related to communication facilities, including small cell, WCF, and cable, visit Telecommunications Regulation.

National Environmental Policy Act (NEPA) Compliance 

Building new towers or collocating antennas on existing structures requires compliance with the FCC’s rules for environmental review under the National Environmental Policy Act (NEPA). If a licensee's proposed action falls within one of the eight categories listed in federal regulation 47 C.F.R. § 1.1307, then 47 C.F.R. § 1.1308(a) requires the licensee to consider the potential environmental effects from its construction of antenna facilities or structures and disclose those effects in an environmental assessment.  Local governments should be on the lookout for the following environmental impacts: on endangered species; archaeological, cultural, or historical properties; tribal lands; and floodplains.

Examples of Wireless Communication Facilities Application Forms and Checklists

The sample forms cover such information as applicable state statutes, SEPA restrictions, and local permitting requirements and siting regulations.

Examples of Wireless Communication Facilities Franchise and Lease Agreements

Sample agreements have been grouped and organized by telecommunications provider.

With Verizon

  • Shoreline Telecommunications Fiber Optic System Franchise (2018) — 15-year non-exclusive franchise agreement for entire city except Aurora Avenue ROW; requires most facilities to be underground; addresses permits, construction standards, emergency actions, utility taxes, and other topics; includes staff report.

With Vertical Bridge

Cable (Broadband and Cable TV)

Federal, state, and local laws all regulate cable franchises to a degree. This authority scheme allows the federal government to regulate the interstate commerce aspect of cable TV, while local governments can regulate the impact (such as use of the public ROWs within a specific locality) of franchise activity on local communities.

Federal cable TV franchise laws apply to all “franchising authorities,” which 47 U.S.C. §522(10) defines as “any governmental authority” that can grant a franchise. This definition includes cities and towns (by virtue of RCW 35.99) and counties (by virtue of RCW 36.55).

Federal law prohibits restrictions that impair the installation, maintenance, or use of antennas used to receive video programming (47 C.F.R. § 1.4000) in private residential homes, rental property where the renter has an exclusive use area, and customer-end antennas that receive and transmit fixed wireless signals. The rule applies to video antennas (including home satellite dishes that are less than one meter in diameter), TV antennas, and wireless cable antennas. The rule prohibits most restrictions that:

  • unreasonably delay or prevent installation, maintenance, or use;
  • unreasonably increase the cost of installation, maintenance, or use; or
  • preclude reception of an acceptable quality signal.

Cities, towns, and counties also cannot regulate the rates that cable companies charge their customers for services, except as permitted by the FCC in compliance with 47 U.S.C. §543.

For cable franchises, franchise fees are allowed under federal law (currently 5% of gross revenues from the franchise area). In addition to franchise fees, local governments may also impose a utility tax on cable services so long as the rate is not discriminatory compared with the rate charged to other utilities – see 47 USC 542(g)(2)(A).

State law also regulates cable TV franchises. Generally speaking, cities, towns, and counties can issue ROW permits and regulate facility placement, but they cannot prohibit cable TV providers from operating in their locality or enact regulations conflicting with federal law. Below is a list of some applicable state statutes that set forth allowed local cable TV regulations:

  • RCW 35.21.860(1)(d) – Allows cable TV franchise fees consistent with federal law.
  • RCW 35.99.040 – Allows cities/towns to enact regulations, provided that they do not conflict with federal laws.
  • RCW 35.99.020 – Allows cities/towns to issue permits for telecom franchise ROW use.

County franchises are general (they cover any type of franchise, not telecommunications franchises specifically) and are regulated by RCW 36.55.

Cable Franchise Agreements: Agreement Components and Samples

Cable franchise agreements (new or renewal) often touch on the following:

  • General categories of programming to be made available (but not individual channels). 
  • The capacity of the cable system to carry video programming and requirements to demonstrate compliance with federal technical system standards.
  • The amount of the franchise fee paid.
  • Process for the lessee to gain access to and work in the public ROW. 
  • Customer service standards related to the provision of services.
  • Provisions to address potential damages caused by the lessee’s operations.
  • Provisions to address Public, Educational, and Governmental Access (PEG) channels, along with capital support for those channels.
  • Requirements for extension of the cable system to newly developed areas within the lessor’s geographic area.
  • Provisions related to franchise violations and franchise transfers.
  • Provisions related to temporary relocation rights.
  • The authority of the lessor to access coverage maps and other data produced by lessee related to the service area.

Sample agreements have been grouped and organized by telecommunications provider and may reference firms that no longer exist.

With Comcast

With Falcon Video/Charter Communications

With Internet Xpress/Desert Winds Wireless

With LocalTel/Computer 5

With LS Network

  • Benton City Franchise Agreement (2023) — 10-year non-exclusive franchise agreement; addresses permits, indemnification, assumption of risk, insurance requirements, taxes and fees, vacation of ROW, record-keeping, notification, eminent domain and more; includes enacting ordinance.

With Ptera

With Wave Division/Northland Cable

With Wholesail Networks

With Zayo Group/AboveNet Communications

With Ziply Fiber

  • Enumclaw Cable Franchise Agreement (2024) —10-year non-exclusive fiber optic franchise (mostly aerial), with optional 5-year renewal period; addresses construction/maintenance, emergency repairs, damages to city and third-party property, location preferences, and other topics; includes staff report.
  • Pasco Fiber Optic Cable Franchise (2023) — 10-year non-exclusive fiber optic franchise that continues on month-to-month basis if not renewed; addresses permits, coordination with city, property restoration, and other topics; includes staff report.

Cable Franchise Renewal

The cable franchise renewal process is spelled out in federal law in Section 626 of the Cable Communications Policy Act of 1984, 47 U.S.C. § 546. It is designed to protect the rights of the incumbent telecommunications provider while also ensuring that a community's current and future needs and interests are satisfied, taking cost into consideration.

Formal franchise renewal begins with the telecommunications provider notifying the franchising authority of its desire to renew its franchise agreement. The franchising authority then begins by evaluating the provider's performance under the existing franchise and conducting a community needs assessment to ascertain the telecommunications needs of the community. This typically involves hiring experienced engineering, legal, financial and ascertainment consultants and can take 6 to 12 months (or more) to complete. The franchising authority then may request that the telecommunications provider submit a proposal showing how it will meet the needs identified in the ascertainment. The formal process also requires public input on the provider's past performance and on the needs ascertainment.

While federal law also permits the use of informal franchise renewal negotiations with the telecommunications provider at any time (including simultaneously with the formal process), a franchising authority must be prepared to follow the requirements of the formal process because either side may choose to return to that process at any time during the renewal proceedings.

Recommended Resources


Last Modified: November 06, 2024