FEDERAL COURT OF APPEALS ISSUES FAVORABLE OPINION REGARDING UTILITY RELOCATION
Texas cities have the authority to manage and regulate their public rights-of-way. One aspect of right-of-way management is the regulation of right-of-way use by utility companies. However, under Section 253 of the Federal Telecommunications Act (Act), a city cannot prohibit any company from providing telecommunications service within the city. 47 U.S.C. § 253(a). Fortunately, the federal statute also includes a “safe harbor” provision for cities. That provision states:
47 U.S.C. § 253(c).
In 2005, the City of Houston adopted an ordinance requiring owners of facilities located in public rights-of-way to bear the cost of relocating their equipment to accommodate city public works projects. The city then required AT&T to remove its facilities for a city drainage improvement project at a cost of $420,000. AT&T relocated its facilities but, believing the city’s relocation ordinance was preempted by Section 253 of the Act, sued the city to recover the cost of the relocation. AT&T also argued that the city’s relocation ordinance was preempted by state law. The city argued that its ordinance fell within the “safe harbor” provision of the Act, and that there was no private cause of action for telecommunications companies to sue under the federal law.
The case hinged on whether: (1) there is a private right of action under the Act; (2) the city’s relocation ordinance violates the Act by prohibiting telecommunications service, and therefore is preempted; (3) the “safe harbor” provision would save the city’s ordinance from preemption even if the ordinance worked as a prohibition of telecommunications service; and (4) the ordinance, if saved by the “safe harbor” provision, is also neutral and nondiscriminatory. The district court in the case concluded that the relocation ordinance fell within the “safe harbor” provision and that there is no private right of action by telecommunications companies under the Act.
The federal Fifth Circuit Court of Appeals recently concluded in Southwestern Bell Telephone, LP, doing business as AT&T Texas v. City of Houston (No. 07-20320) that telecommunications companies do not have a private right of action under the Act and that the Houston ordinance falls within the “safe harbor” provision and does not discriminate against any telecommunications provider.
The decision is a favorable one for Houston and all other cities that have projects that might require relocation of utility facilities. However, AT&T’s state law claims were not addressed by the district court or the court of appeals and thus may be refiled in state court.
TML staff will continue to monitor the case, should it be appealed or should the case be refiled in state court, and take action as necessary. If you have questions regarding utility relocation or this litigation, please contact the TML Legal Department at (512) 231-7400 or legal@tml.org