[WSJ: Boston Wants Telecom Firms To Pay Rent For Wiring City Streets]
(underscoring the cost-saving and time-to-market advantages of FBBW -- mark)
BOSTON -(Dow Jones)- The city of Boston is planning to charge telecommunications firms rent for the public rights of way under city streets and sidewalks where the companies are madly competing to install state-of-the-art communications networks.
The rental fee would be assessed equally on existing telecom networks, such as Bell Atlantic Corp.'s (BEL) phone system, as well as new installations, like the fiber-optic cable through which RCN Corp. (RCNC) plans to offer voice, video and data services.
Boston officials say they are being inundated with requests from telecom companies - a "feeding frenzy," as one official put it - to dig open city streets to install new networks. City officials say the firms stand to make millions by using a public asset they are now getting free.
"The only way you're in business is by virtue of using the streets, which are owned by the city of Boston and the taxpayers," said Merita Hopkins, Boston's corporation counsel, or chief lawyer. "You should be paying us rent. It's like any other business."
Hopkins says the new fee would be assessed on telecom wires that run both underground in conduits and overhead on utility poles. The fee would also offset the city's cost of repairing streets damaged by companies constantly excavating to install more wiring.
The new charge is part of a nascent trend among municipalities across the country to capture revenue from the lucrative industry. Virginia recently authorized its cities and counties to collect a monthly 50-cent-per-phone-line fee from telecom companies for using rights of way in their jurisdictions.
Industry officials say Boston would be the first city in New England to charge a rental fee. Hopkins said the city hasn't decided on the amount of the rental fee, nor how it would levy it. Options include charging companies for every linear foot of wire they have in a public right of way, or assessing a percentage based on companies' revenue. "We're not locked into a position now other than to charge rent," she said.
Either way, given the number of competitors and miles of wiring in Boston, the added revenue for the city could be considerable. Boston has about 850 miles of public streets. Dennis DiMarzio, Boston's chief operating officer, says, "I sure hope" the income to the city would run into the millions of dollars.
The rental fee is part of a broader city effort to impose new regulations on the exploding telecom industry. Officials hope to have the package of measures finalized within weeks.
Another proposal would limit the amount of space a company would be granted for underground conduits. Officials are worried about running out of available space under Boston's notoriously narrow streets because of the sheer number of new networks proposed.
For example, at a recent hearing before a city public-works commission that issues excavation permits, RCN-Beco Com, a joint venture between Boston Edison, now known as BEC Energy, and RCN of Princeton, N.J., was seeking to install eight conduits in a single trench under a small street in the South End. Each conduit is typically a four-inch plastic pipe.
Commission officials objected to RCN's request after company officials said they wouldn't use all eight conduits to deliver service to the area, but wouldn't say why they wanted the additional capacity.
"The word 'greedy' comes to mind," complains Joseph Casazza, Boston's public-works commissioner and chairman of the permitting board. If "you put in too many conduits, I can't do my job" of managing the space under the streets.
Hopkins adds that the city doesn't want to give away all the space under small streets to the first company that applies, forcing other competitors to have to rent conduit space from that company if they also want to provide service to that particular area.
"If we give an entire street away and there's no room left," Hopkins says, "do we in essence create a new monopoly because everyone who comes in after will have to go through that company?"
Such fairness questions are at the heart of the policy Boston is developing. The federal Telecommunications Act of 1996 requires regulators to treat all competitors - new entrants and former monopolies - equally, "in a nondiscriminatory manner." That is why Boston officials say the rental fee will be assessed equally on newly installed fiber-optic networks, and on the old-fashioned copper-based telephone lines that New York-based Bell Atlantic may have installed decades ago.
As the former Baby Bell monopoly, Bell Atlantic has the largest telecom network in Boston, and therefore would probably pay the most to the city. Bell Atlantic declined to comment.
But other competitors say they wouldn't object if the fee were assessed fairly. "As long as our competitors - all our competitors - would be subject to the same terms and conditions," said Scott Burnside, RCN's senior vice president for regulatory governmental affairs, "RCN would have no problem at all. We wouldn't waste five cents contesting it."
Since they don't know yet what the actual fee will be, RCN officials can't predict its impact on consumers. But they add the additional cost would most certainly be passed along to telecom customers.
Meanwhile, at least one utility lawyer challenges the legality of the city rental fee. Last May, Robert Glass, a lawyer retained by Boston Edison, wrote to Boston officials that the city doesn't have the authority under state law to impose the rental fee. Massachusetts law, Glass wrote, only allows municipalities to charge fees to offset the inconveniences caused by construction, such as traffic and potential safety issues.
State law prohibits Boston from levying a new tax. But Hopkins says Boston can levy rental fees by city ordinance.
Boston Edison, however, has sent mixed signals to the city about the new fee. Despite its legal protestations, in another venue Boston Edison officials have offered to sign license agreements with Boston that allows the city to impose just such a charge.
At the time, Boston Edison and its partners were lobbying to get a number of permits approved that Boston officials were holding up while they investigated whether the utility's use of electrical conduits for the telecom venture with RCN was proper.
The offers to pay the rent were made in a series of letters this summer and fall to city officials, which The Wall Street Journal obtained through a Freedom of Information Act request.
Boston Edison declined to comment further. |
