“The arbitration language was one of the most deceitful acts I’ve seen in my time as a lawmaker,” Sen. Brad Lager said. “I do not believe they’ve ever negotiated in good faith. This is a building that operates on trust.”
Lager, R-Maryville, as the chairman of the Commerce, Consumer Protection, Energy & the Environment committee worked with Missouri Municipalities to pass House Bills 345 and 331. In essence the bills kept municipalities from raising rates for cell phone towers and cable pole attachments without just cause. A concession to municipalities was binding arbitration.
“It would keep an appeal from going to court because it would cost them money,” Lager said.
After the bills were passed, seven municipalities – Butler, Cameron, Gladstone, Independence, and Lee’s Summit – sued to defeat the law on the basis of binding arbitration.
“There’s no need for me to even meet with them anymore,” Lager said.
Ewell Lawson, Manager of Government relations for the Missouri Association of Municipal Utilities, said binding arbitration was just one factor agreed upon in negotiation. The municipalities also asked for relocation fees, boxing (putting lines around a pole for stabilization), and work on the poles to be included but those concessions were nixed before the bill was passed.
Lawson added that cities disputed the bills as a whole but decided to sue on arbitration, an added cost to municipalities without compensation from the state.
“It was the least offensive,” Lawson said. “It was one of many Hancock violations.”
The case has risen to the Missouri Supreme Court because of Hammerschmidt precedent meant to break up bills bloated with unrelated measures. Chuck Simino, President of Missouri Cable and Telecommunications Association, said the case has a strong chance of prevailing in the Supreme Court.
However, Lager is circumventing a ruling. He has sponsored five bills – Senate Bills 649, 650, 651, 652, and 653 – breaking up the previous bills into each sub category. Last year, HB 345 passed 143-14 in the house of representatives.
“Every part of this bill was agreed upon overwhelmingly last year,” Rep. Holly Rehder, R-Sikeston, said, utilities committee member.
The Commerce, Consumer Protection, Energy & the Environment committee unanimously approved all five bills Wednesday. On tuesday, Representatives from AT&T, CenturyLink, Verizon, T-Mobile, and Google testified in support of each of the five bills. Representatives from Springfield, Hazelwood, St. Peters, Butler, Fulton, Kansas City, Blue Springs, and Trenton testified against bills 649, 650, and 653.
No one testified in opposition to bills 651 and 652. SB 651 states that telecommunication companies cannot be sued because they could not provide services during an emergency situation. SB 652 dealt with railroad right of ways, which are mostly controlled by land management companies.
The separation of bills did create a potential problem. If SB 649 was passed – a bill permitting companies to access inside of a public right of way – but SB 653 was not, access to the poles would be free of charge to companies. The language of 653 separates utility poles from the land.
Lager is hoping the bills will be on the Senate calendar next week.
“I’d be shocked if these bills are not on the governor’s desk before spring break,” Lager said. “To think this would not be on the expedited track, a person would not have an understating of the legislative process.”
The issue that created the original bill was that telecommunications companies felt they were being vastly overcharged both for wireless infrastructure and pole attachments.
Cable companies like Comcast or Charter pay a one-time annual rent for equipment attached to telephone poles. A city like Independence has hundreds of poles. According to Simino the average rent for a pole is $7 to $10. Independence wanted to charge Comcast $30 per pole, which would have accounted to an increase of about $300,000.
“It’s a pure money grab by the municipalities,” Simino said.
Lawson said Independence had not changed pole attachment fees since the 1960s and was updating for modern costs. He also said Independence suggested such a high rate at first as a negotiating tactic. Lager admonished both Comcast and Independence.
“I’ve never seen third-grade behavior like this,” Lager said.
Daryl Duwe, Missouri Cable and Telecommunications Association lobbyist, said Comcast and Independence have been negotiating in good faith for over a year and as recently as the week of Jan. 13. He did not buy Lawson’s claim that the high rate originally proposed by Independence was meant to bring Comcast to the negotiating table.
“That’s an irresponsible negotiating tactic if that’s true,” he said.
Dan Ross, executive director of the Missouri Municipal League, said the issue municipalities have with the legislation is that it does not allow cities to properly inspect cell phone towers for structural safety. Those inspections would cost money, more than $1,500 for a tower.
He added that there was nothing wrong with the system in place, where cities negotiate the fees for pole attachments with cable companies.
“I’m not sure what’s broke about it that needs fixing,” he said.
Lawson said the main concern he has encountered from municipalities is pole repair and replacement.
AT&T released a statement supporting bills “that would reduce barriers to broadband investment to ensure the timely delivery of technology.” Lager said AT&T is looking to invest billions of dollars into the state. AT&T representative Craig Unruh said there was a situation, when installing 4E LTE technology in partnership with CenturyLink, that the company decided to not instal infrastructure because of a right of way charge.
The common solution for a fair rate is a complex formula approved by the FCC and tested in other state courts. Lawson said there are many tiers of the FCC formula and the bills have selected the lowest tier set in the 1980s.
Were municipalities allowed to keep raising rates, Ross admits consumers would pay the price in rising cable and telephone costs.
“Instead of going for a tax increase, they raise the rate,” Simino said. “They don’t hear complaints; it’s on our bill.”
