Understanding Municipal Rights-of-Way: From Centerline to Edge (Part 3)
In Part 3 of my right-of-way series, I will look at utilities, franchises, small cell facilities, and right-of-way use permits. Part 1 of the series covered right-of-way fundamentals and use for travel, and Part 2 covered sidewalks, street trees, and the “fringes” of right-of-way.
Secondary Uses of Right-of-Way
The primary purpose of right-of-way is public travel. However, under Washington case law, “secondary” uses are also permitted:
There are numerous other purposes for which the public ways may be used, such as for water mains, gas pipes, telephone and telegraph lines, etc. These are termed secondary uses and are subordinate to, and permissible only when not inconsistent with, the primary object of the highways.
Franchises, Master Permits, and Statewide Grants
Franchises and master permits are general grants of authority by a city or county to a provider to use right-of-way to provide or distribute its services. Franchises are most commonly used to provide utility or telecommunications service.
Examples of statutes granting franchise authority include RCW 35A.47.040 (code cities) and chapter 36.55 RCW (counties). A “master permit” is defined in RCW 35.99.010(3) and is the equivalent of a franchise for telecommunications purposes, but cable services are excluded from the definition.
Not all telecommunications providers are required to obtain franchises or master permits. According to the definition of “master permit,” telephone and telegraph providers operating in this state when the Washington Constitution was adopted possess a “statewide grant.” Local governments may request, but not require, such entities (which are the successors to the original telephone companies) to obtain a master permit pursuant to RCW 35.99.030(1). The statewide grant is generally understood to apply to wireline telecommunication but not to cable or wireless facilities.
We frequently get questions about the circumstances under which cities and towns can charge a franchise fee. The answer depends on the type of franchise. For electricity, natural gas, and telecommunications franchises, fees are limited to actual administrative expenses, but a utility tax may be imposed by cities and towns under RCW 35.21.860 and RCW 35.21.865.
Under RCW 35.21.870, utility taxes exceeding 6% must be submitted to the taxing district’s voters for approval. In addition, taxes on internet services are prohibited under federal law, which essentially eliminates the ability of cities and towns to impose utility taxes on telecommunications providers.
For cable franchises, franchise fees are allowed under federal law (currently 5% of gross revenues from the franchise area). In addition to franchise fees, cities 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 does not contain prohibitions on cities and towns from imposing reasonable franchise fees (and utility taxes) on sewer and water providers. Similarly, there are no prohibitions on solid waste franchise fees — cities and towns may impose a franchise fee in addition to a utility tax.
Finally, county franchising is governed by chapter 36.55 RCW, which does not contain any specific restrictions on charging reasonable franchise fees.
MRSC has several webpages with helpful information for franchises and master permits
Small Cell Technology
Perhaps you’ve heard about increased demand from wireless service providers to site “small cell” facilities in rights-of-way. Such facilities are often mounted on utility poles or light standards and are intended to provide improved coverage for wireless devices.
One of the challenges of small cell technology is that it blurs the lines between zoning and right-of-way procedures. Traditionally, wireless facilities were sited outside the right-of-way and regulated under a local jurisdiction’s zoning procedures. Placement of small cell technology in the right-of-way will require cities and counties to integrate their zoning approval processes for wireless facilities with their right-of-way procedures for franchises and master permits.
Right-of-way Use Permits
Right-of-way use permits cover a host of different activities and uses. MRSC has a Right-of-way Use Permits webpage that provides information on different types of uses and numerous examples of rights-of-way permit regulations.
In general, cities and counties charge a reasonable fee for use of the right-of-way in addition to administrative costs. To do otherwise could violate the prohibition on the gift of public funds. However, RCW 35.21.860 limits city fees for use of right-of-way to actual administrative expenses for electricity, telephone, and natural gas franchises.
If you have questions about rights-of-way or other local government issues, please use our Ask MRSC form or call us at (206) 625-1300 or (800) 933-6772. If you have comments about this blog post or other similar topics you would like me to write about, please email me at firstname.lastname@example.org.
MRSC is a private nonprofit organization serving local governments in Washington State. Eligible government agencies in Washington State may use our free, one-on-one Ask MRSC service to get answers to legal, policy, or financial questions.