Assigned to NREW AS
PASSED BY CONFERENCE COMMITTEE
Now COMPS-related
Assigned to NREW AS
PASSED BY CONFERENCE COMMITTEE
Now COMPS-related
ARIZONA STATE SENATE
Fifty-Third Legislature, Second Regular Session
AMENDED
state land department; continuation.
(NOW: video service; certificates of authority)
Purpose
Requires local governments to issue uniform video service licenses beginning January 1, 2020, and prohibits regulation beyond enumerated powers.
Background
The legislative body of any municipality may adopt zoning regulations in order to conserve public health, safety and general welfare. Under current law, a municipality may regulate: 1) signs and billboards; 2) the use of buildings, structures and land; and 3) the size and location of buildings and structures (A.R.S. § 9-462.01). A municipality may also require, as a condition of rezoning, public dedication of rights-of-way as streets, alleys, public ways, drainage and public utilities. Municipalities are required to hold a public hearing on any zoning ordinance (A.R.S. § 9-462.04).
The Administrative Procedures Act establishes procedures for adjudicating appeals of agency decisions. In contested agency actions, the agency may conduct a preliminary hearing informally without observing the rules of evidence required in judicial proceedings (A.R.S. § 41‑1062). Unresolved cases may be appealed to the Office of Administrative Hearings (OAH) to be adjudicated before an administrative law judge (ALJ). All parties have the opportunity to respond, present evidence and deliver arguments on relevant issues discussed in the hearings (A.R.S. § 41-1092.07). The ALJ must issue a written decision within 20 days after the hearing is concluded (A.R.S. § 41-1092.08).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
Local Government Preemption
1. Asserts statewide preemption of video service provider (VSP) licensing and prohibits a city, town or county (local government) from regulating VSPs beyond enumerated powers.
2. Preempts, beginning January 1, 2020, unless explicitly authorized, any local government agreement that:
a) regulates VSPs as a public utility;
b) requires a VSP to hold a license, permit or similar authorization;
c) regulates the provision of video service or construction of a video service network;
d) imposes any requirement related to infrastructure, facilities or deployment of equipment; or
e) charges a fee to install on poles, conduits or ducts.
Uniform Local Licenses
3. Requires, beginning July 1, 2019, local governments to adopt a standard uniform video service license (uniform license) that is limited to specified provisions.
4. Effectuates, 30 days after application, a uniform license that allows a VSP to:
a) provide video service;
b) construct and operate a video service network on highways; and
c) operate and maintain facilities installed on highways.
5. Requires, if a uniform license is denied, a local government to provide written notice within 15 days that explains application incompleteness or deficiency and information required for approval.
6. Prohibits a local government from:
a) charging a filing fee or other assessment that is not explicitly authorized;
b) voting or taking any other official action on the application; or
c) imposing any office location, build-out, line extension, investment, infrastructure, facility or deployment requirements.
7. Allows a VSP with a uniform license to add service areas by amendment or fully transfer the uniform license through a merger, sale, restructuring or other type of transaction.
8. Requires a VSP to begin offering video service within 24 months of uniform license issuance.
9. Requires a VSP to submit a semiannual, confidential report that identifies locations of operation.
10. Requires a VSP to offer service in a nondiscriminatory manner and comply with the National Electrical Safety Code, Federal Communications Commission (FCC) Code and applicable federal law and technical standards.
11. Prescribes uniform license application, issuance, transfer, amendment, extension, revocation, termination and local notification procedures, requirements and applicable time frames.
Highway Management
12. Allows a local government, in managing a highway, to:
a) nondiscriminatively manage the use and occupancy of users consistent with generally applicable local laws;
b) impose reasonable repair and restoration charges on VSPs in a competitively neutral and nondiscriminatory basis;
c) require a VSP to obtain a construction, encroachment or occupancy permit for work in, on, under or over a highway;
d) inspect work performed on facilities; and
e) limit the installation of new aerial facilities.
13. Allows a VSP to provide emergency response work or repair without local government approval.
14. Prohibits a local government from levying a fee on a VSP for the use of highways, except for gross revenue licensing fees and applicable transaction privilege tax (TPT).
15. Caps licensing fees and TPT at five percent of gross revenue and prohibits TPT assessment on interstate telecommunications services.
16. Allows a VSP to pass uniform license costs through to subscribers, provided the fee is noted as a separate line item on the subscriber's bill.
17. Allows a local government to require that a VSP provide channel capacity for public, educational or governmental access programming.
18. Prohibits a local government from imposing any VSP obligation that is more burdensome than the least burdensome local license requirement in effect on February 1, 2019.
19. Allows a local government to specify limited installation requirements, including that wi-fi radio equipment must fit within a 15-inch cube.
20. Prohibits a local government from acquiring ownership in a video service network, unless acquired at fair market value.
21. Allows a local government to solicit a VSP audit once every three years.
22. Requires a local government to apply bundling discounts when calculating gross revenues.
Enforcement
23. Allows video services subscribers to submit VSP complaints to the local government, Attorney General or FCC.
24. Designates OAH as the adjudicative body for complaints and specifies proceeding time frames.
25. Deems the OAH order as the final decision with respect to the complaint, subject to superior court appeal.
26. Implements a two-year statute of limitations for complaints, beginning from the date the complainant knows or reasonably should have known the source of damages.
27. Prohibits the awarding of attorney's fees or costs to a prevailing party.
Incumbent Cable Operator
28. Allows an incumbent cable operator, beginning January 1, 2020, to continue operating under an existing agreement or terminate the agreement and obtain a uniform license.
29. Maintains, if a VSP does not terminate a local license, the validity of the license for the stated duration, but the license is not eligible for renewal.
30. Requires a holdover cable operator to obtain a uniform license upon expiration of a local license.
Miscellaneous
31. Specifies that the Act does not:
a) limit a telecommunications provider's authority as a public utility;
b) affect the authority of a political subdivision to regulate utility poles; or
c) vest any authority or jurisdiction over VSPs to the Arizona Corporation Commission
32. Defines affiliate, allowed wi-fi radio equipment, boundaries, cable operator, cable service, cable system, commercial mobile service provider, day, electric or communications facilities, gross revenue, highway, holder, holdover cable operator, incumbent cable operator, information service, interactive computer service, license, license fee, local government, local law, local license, multichannel video programming distributor, service area, subscriber, telecommunications, telecommunications provider, telecommunications service, video service, video service network and video service provider.
33. Makes technical and conforming changes.
34. Becomes effective on the general effective date, with a delayed effective date as noted.
Amendments Adopted in the House of Representatives
ˇ Adopted the strike-everything amendment relating to video service certificates of authority.
Amendments Adopted by Conference Committee
ˇ Specifies that state preemption of video service regulation does not impact a local governments' authority to manage highway use and occupancy of users in a nondiscriminatory manner.
House Action
APPROP 3/28/18 DPA/SE 9-4-0-0
3rd Read 4/11/18 31-27-2
Prepared by Senate Research
April 20, 2018
GH/lb