Bulletin

Telecommunications Right-of-Way Compensation in Newly-Annexed Areas

Chapter 283 of the Texas Local Government Code, enacted in 1999, significantly altered the procedures under which cities collect compensation from certificated telecommunications providers (CTPs) that use city rights-of-way. Under Chapter 283, payments to cities are no longer based on a percentage of gross receipts. Rather, CTPs pay cities quarterly based on the number of “access lines” located in the city. The access lines are multiplied by an access line fee that is calculated under the statute.

When a city annexes territory, the newly-included area may have access lines. However, neither Chapter 283 nor the rules adopted by the Texas Public Utility Commission (PUC) directly address this situation. In order for a city to be properly compensated for the inclusion of the access lines, the city should notify any CTPs that may be providing service in the current city limits that, if the CTP also has access lines in the newly-annexed area, it must begin compensating the city accordingly. In addition, if a city is aware of other CTPs that may be operating in the area, it should notify those as well. Finally, the city should also notify the PUC so that the information can be posted on the PUC’s website.

Please contact Hayden Childs at the PUC at hayden.childs@puc.state.tx.us or 512-936-7390 or the TML Legal Department at legal@tml.org or 512-231-7400 for more information.