Assigned to COMPS & GOV FOR
COMMITTEE
Assigned to COMPS & GOV FOR
COMMITTEE
ARIZONA STATE SENATE
Fifty-Third Legislature, Second Regular Session
video service; certificates of authority
Purpose
Designates authority to the Arizona Secretary of State (SOS) for video service provider (VSP) certification. Preempts local government VSP regulation and assigns financial responsibility of specified construction costs.
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. 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 and limits further VSP regulation by a city, town or county.
2. Prohibits a local government from:
a) requiring a license, permit or similar authorization to provide video service;
b) regulating the provision or construction of a video service network; or
c) imposing any office location, build-out, line extension, investment, infrastructure, facility or deployment requirements.
3. Allows a local government, in managing a highway, to require a VSP to obtain a construction, encroachment or occupancy permit for the work and consent to a related inspection.
4. Allows a VSP to provide emergency response work or repair without local government approval.
5. Prohibits a local government from levying a tax, rent, fee or charge on a VSP for the use of highways.
6. Limits local transaction privilege taxes to levies assessed on gross revenue, not on interstate telecommunications services.
7. Allows a local government to assess a quarterly highway access license fee that a VSP may pass through to subscribers, provided the fee is noted as a separate line item on the subscriber's bill.
8. Allows a local government to require that a VSP provide channel capacity for public, educational or governmental access programming.
9. 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.
10. Allows a local government to specify limited installation requirements, including that wi-fi radio equipment must fit within a 15-inch cube.
11. Prohibits a local government from acquiring ownership in a video service network, unless acquired at fair market value.
12. Allows a local government to solicit a VSP audit once every three years.
Construction Costs
13. Requires a city or town to bear any public highway repair or restoration costs that exceed the amount necessary to restore the highway to its condition before telecommunications company construction, maintenance or operation.
14. Requires a local government to reimburse VSPs for the cost of placing facilities underground when placement is required by the local government.
15. Requires a city or town to reimburse a telecommunications company for excess costs within two months of invoice receipt.
16. Applies public highway repair and restoration cost protections to all telecommunication company franchises, licenses and permits to the fullest extent allowable, regardless of the date of city or town issuance.
Secretary of State Exclusive Authority
17. Delegates exclusive jurisdiction of VSP certificate of authority (COA) issuance to the SOS.
18. Requires a VSP to obtain a COA to operate a video service network in a defined service area and allows the addition of service areas by COA amendment.
19. Designates a COA as a nonexclusive, state-issue license authorizing the holder, within the prescribed service area, to do all of the following:
a) provide video service;
b) construct and operate a video service network on highways; and
c) operate and maintain facilities installed on highways
20. Allows a COA to be fully transferred through merger, sale, restructuring or other type of transaction.
21. Prohibits the SOS from:
a) regulating VSPs beyond explicitly enumerated powers;
b) limiting a telecommunications provider's authority as a public utility;
c) authorizing a political subdivision to restrict VSP public highway or utility pole access;
d) transferring any authority or jurisdiction over VSPs to the Arizona Corporation Commission; or
e) conditioning COA approval on an infrastructure requirement or payment of an unauthorized fee.
22. Requires the SOS to establish and collect VSP fees, subject to JLBC approval, necessary for SOS administration and OAH oversight.
23. Prohibits a VSP from passing SOS fee costs to subscribers.
24. Requires a VSP to offer service in a nondiscriminatory manner and comply with the National Electrical Safety Code, Federal Communications Commission Code and applicable federal law and technical standards.
25. Prescribes COA application, issuance, transfer, amendment, extension, revocation, termination and local notification procedures, requirements and applicable time frames.
Enforcement
26. Requires local government complaints to be filed with the SOS.
27. Designates OAH as the adjudicative body for complaints and specifies proceeding time frames.
28. Deems the OAH order as the final decision with respect to the complaint, subject to Superior Court appeal.
29. 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.
30. Prohibits the awarding of attorneys fee or costs to a prevailing party.
Incumbent Cable Operator
31. Allows an incumbent cable operator to terminate a local license or continue operating within the licensed service area.
32. Requires, beginning July 1, 2020, an incumbent cable operator that has obtained a COA from the SOS to notify the local government within five days of COA issuance.
33. 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.
34. Requires a holdover cable operator to obtain a COA upon expiration of a local license.
Miscellaneous
35. Defines affiliate, allowed wi-fi radio equipment, boundaries, cable operator, cable service, cable system, certificate of authority, 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.
36. Makes technical and conforming changes.
37. Becomes effective on January 1, 2020.
House Action
COM 2/13/18 DP 7-2-0-0
3rd Read 2/22/18 37-18-5
Prepared by Senate Research
GH/lat