Before the National Telecommunications and Information Administration,
U.S. Department of Commerce
Washington, D.C. 20230
Notice, Request for Comments on )
Deployment of Broadband Networks ) Docket No. 011109273-1273-01
and Advanced Telecommunications )
Velocita Corporation (“Velocita”), respectfully submits these comments in response to the National Telecommunications and Information Administration’s (“NTIA”) above-captioned notice (“Notice”), for the purpose of urging the NTIA and the Administration to address a serious issue impeding deployment of broadband and advanced telecommunications services -- i.e., barriers imposed by federal, state, county, and municipal governments that impede competitive telecommunications providers’ (“Providers”) access to the public rights-of-way (“ROW”) for the purpose of constructing their advanced telecommunications networks.
Because state, county, and municipal overregulation of ROW access is one of the most significant barriers to the deployment of infrastructure critical to provide advanced broadband telecommunications services, Velocita hereby requests that the NTIA support decisive action to address the pervasive and crippling barriers to competitive market entry posed by unreasonable and unlawful state, county, and municipal ROW management practices and policies. Because federal agencies also have improperly overreached in regulation of Providers’ access to public ROW on federal lands, Velocita also urges the NTIA to develop similar policies that would apply to federal agencies. Specifically, Velocita urges the NTIA to do the following:
(1) In the report issued by the NTIA in this proceeding, support the Federal Communications Commission’s (“FCC”) adoption of rules, pursuant to Section 253 of the Telecommunications Act of 1934, as amended (the “Act”), that would (a) limit states, counties, and municipalities to charging fees for public ROW access that reflect only the actual and direct costs incurred in managing the public ROW and the amount of public ROW actually used by the Provider; (b) require that state, county, and local governments act on a request for public ROW access within a reasonable and fixed period of time from the date that the request for such access is submitted -- i.e., 60 days -- or such request should be deemed approved; (c) not place undue restrictions on the types of Providers and types of telecommunications facilities allowed to use the public ROW; and (d) prohibit states, counties, and municipalities from requiring competitive Providers to waive their legal rights under federal and state law in order to obtain access to public ROW.
(2) Urge the Administration to adopt similar principles for the federal government so that competitive Providers do not face similar barriers when accessing federal public ROW to provide telecommunications services; and
(3) If necessary to achieve the principles in (1) and (2) above -- e.g., should the courts determine Section 253 provides an inadequate statutory basis for such rules -- support legislation codifying these principles.
Velocita is a broadband network provider and is in the process of deploying a 19,000-mile nationwide state-of-the art telecommunications network. Based upon its experience across the country, Velocita considers the difficulty in obtaining access to public ROW to be one of the most significant barriers to entry for competitive network Providers. Velocita’s network will traverse over 28 states providing access to more than 50 major metropolitan areas, including the five largest telecommunications markets in the United States, as well as important Tier 2 and 3 cities and many local jurisdictions.
Like numerous other competitive Providers, Velocita, too, has experienced chronic, widespread, and extremely costly intransigence on the part of ROW management authorities that impose protracted, arbitrary, and overreaching procedures for gaining permission to access public ROW. Furthermore, Velocita frequently has experienced demands for unreasonable and unlawful compensation, waivers of its legal rights, restrictions on use of its facilities, and other concessions as a condition of gaining access to the public ROW that are critical for the installation and deployment of its nationwide telecommunications network.
The rapid deployment of new facilities for broadband advanced telecommunications services depends, in large part, on competitive Providers gaining access to the public ROW. For that reason, and so that the mandates of the Telecommunications Act of 1996, Pub. L. 104-104, 110 Stat. 56 (1996) (“1996 Act”), may be fulfilled, Velocita respectfully requests that the NTIA take the actions described herein.
Too often, state, county, and municipal ROW management authorities exercise their discretion to delay an application for ROW access as a means of pressuring the Provider to acquiesce to unreasonable demands for monetary and in-kind compensation. Many localities continue to view ROW access as a revenue-generating opportunity, notwithstanding state and federal law to the contrary. Velocita, along with numerous other competitive Providers, has repeatedly experienced unreasonable compensation demands from jurisdictions that know too well that ROW is a one-of-a-kind commodity, over which the jurisdiction has monopoly control. Although, in the past, Velocita has sometimes acceded to unreasonable demands in an effort to maintain speed to market, under current market conditions it is no longer viable to accept unlawful compensation terms in consideration of prompt access, with the consequence that Velocita has reached impasse in some jurisdictions where it has refused to accept extortionate compensation terms. The fact that federal agencies, including NOAA, also demand non-cost based fees, demonstrates the need for rules to explicitly limit the fees that may be required.
Velocita, like numerous other competitive Providers, frequently faces lengthy delays to obtain a jurisdiction’s permission to access the ROW. In fact, Velocita presently is in negotiation with a City whose negotiations began over a year ago, and the company still does not have a required agreement to access the public ROW. These delays occur despite strong court precedent concluding that Section 253 of the 1996 Act does not allow localities to condition ROW access upon review of financial, technical, and legal qualifications already regulated at the state and federal level. In fact, many localities still require that Velocita persuade them of the company’s financial and technical wherewithal, before they will even process the company’s application to enter the public ROW, notwithstanding that Velocita typically has already been certificated by the state public utilities commission. Moreover, application requirements are inconsistent from one jurisdiction to the next, and, in jurisdictions without any established application procedure, the process is wholly within the discretion of local decision makers, who may delay for months or even years while ostensibly deciding how to proceed.
C. Undue restrictions on the type of providers and types of facilities allowed to use the public ROW.
A problem that Velocita believes is growing, as localities become increasingly sophisticated in their efforts to sidestep the state and federal limitations imposed upon the scope of their regulatory authority, has been the application of narrow and unnecessarily exclusionary definitions of the categories of telecommunications providers: (1) that may obtain access to public ROW on non-discriminatory and competitively neutral terms, and (2) to whom facilities in the ROW may be made available. An example of this phenomenon is the case of Berkeley, California. After a federal court enjoined enforcement of the city’s most onerous franchise requirements, the city’s response was to amend its ROW ordinance to continue to capture all but “common carriers,” which was the one category of provider that the federal court definitively said could not be subjected to the ordinance. Similarly, the California State Lands Commission similarly has attempted to limit the rights afforded under its standard ROW-access agreement to the narrowest arguably required under the state law, which references only “telephone corporations” and, because of its vintage, does not address existing and future competitive service offerings beyond traditional “telephone” services.
Velocita frequently encounters ROW authorities who believe that, because the facilities to be constructed are for pass-through purposes and Velocita will not be providing local dialtone service, they are entitled to treat Velocita completely differently (and less favorably) than they do the incumbent local exchange provider. Moreover, although Velocita is a major provider of wholesale infrastructure to other certificated telecommunications providers, including AT&T, localities often condition their grant of ROW access on the proviso that any transfer or disposition of Velocita’s conduit and fiber -- even to another telecommunications provider -- is subject to the jurisdiction’s wholly discretionary review and approval. Such actions create an untenable barrier to timely and cost-competitive market entry both for Velocita and for its carrier customers.
It is obvious and yet so important as to merit reiteration: access to public ROW is essential to the deployment of the infrastructure required to deliver advanced telecommunications services. As Congress clearly recognized in Section 253 the 1996 Act, without access to public ROW on non-discriminatory and competitively neutral terms, subject only to “fair and reasonable” compensation and the need of state and local authorities to impose regulations necessary for management of those ROW, the promise of telecommunications competition cannot be realized. Indeed, the current market downturn brutally illustrates what Congress already knew -- absent meaningful, cost-effective opportunities to rapidly deploy the infrastructure needed to provide services that will generate a return on investment, the capital required to create a robust national competitive telecommunications market will evaporate. The spate of recent bankruptcies of competitive Providers and, perhaps even more importantly, the dramatic slowdown in the breadth and pace of new infrastructure deployment despite continuing strong demand for advanced services, only serves to illustrate the point.
Velocita believes that Section 253 of the Act provides the FCC with sufficient authority to promulgate rules that would address these abuses by state, county, and local governments. The FCC has power under its statutory authority to issue such rules, and the time is now ripe for such action. Simply filing individual preemption requests under Section 253 is inadequate to address this problem, because such requests only affect one jurisdiction at a time. Moreover, because of the time and expense required for a competitive Provider to file such a preemption request individually, most carriers cannot obtain any meaningful scope of relief in that way.
Another reason nationwide rules are required is because a number of jurisdictions have treated most issues under Section 253 as “unsettled” unless the FCC or a court in their own jurisdiction has ruled definitively on the specific term or condition at issue. By having clear, national standards there would be no doubt that all state and local governments are subject to the same requirements.
Therefore, Velocita requests the NTIA and the Administration to urge the FCC, both in the report issued in this proceeding and via other means, to promptly adopt national ROW rules that would remove the state, county, and local ROW-related barriers to market entry that are deterring investment in new infrastructure and hampering the deployment of advanced services in a reasonable and timely fashion. There are several venues by which the FCC can take such action -- i.e., by issuing a notice of proposed rulemaking (“NPRM”) in a 1999 Notice of Inquiry (“NOI”) in which the FCC already sought input on entry barriers to ROW access or issuing a NPRM using the current Section 706 proceeding as a starting point.
As discussed in Part III above, Velocita’s network deployment plan has required and continues to require nationwide construction across many rural and urban jurisdictions. In deploying its network, Velocita has experienced numerous impediments to access to public ROW by state, county, and local governments. To address these problems Velocita has encountered, Velocita urges the NTIA to support the FCC’s adoption of ROW access rules that would do the following:
1. Limit federal agencies, states, counties, and municipal governments to charging fees for public ROW access that reflect only the actual and direct costs incurred in managing the public ROW and the amount of public ROW actually used by the carrier.
To prevent unreasonable and excessive demands for compensation that delay or prevent deployment and cripple competitive providers, the NTIA should urge the FCC’s adoption of a rule that would only permit federal agencies and state, county and municipal governments to charge fees for public ROW access that reflect the actual and direct costs incurred in managing the public ROW and the amount of public ROW actually used by the Provider.
2. Require federal agencies, state, county, and municipal governments to act on a request for public ROW access within a reasonable and fixed period of time from the date that the request for such access is submitted -- i.e., 60 days -- or such request should be deemed approved.
Velocita recommends that the NTIA support an approach taken by several states, including Michigan, Ohio, and Washington, that have adopted strict timelines within which a local government must grant a Provider access to the public ROW. These timelines are an effective means of ensuring that Providers can rapidly access the public ROW. The NTIA should advocate the FCC’s adoption of a rule requiring state and local governments to act on a Provider’s request for public rights-of-way access within a reasonable and fixed period of time from the date that the request for such access is submitted -- i.e., 60 days -- or such request should be deemed approved. Furthermore, the Administration should adopt a similar policy that would serve as a time limit on federal agencies.
3. Permit all entities providing telecommunications services, including those entities deploying facilities to be used directly or indirectly in the provision of such services, to access the public ROW.
To address the pervasive problem of local ordinances and policies that unduly restrict the types of Providers that may access the public ROW, the NTIA should urge the FCC to adopt a rule that ensures access to public ROW for all entities providing intrastate, interstate or international telecommunications or telecommunications services, including those entities deploying facilities to be used directly or indirectly in the provision of such services, whether for themselves or for other Providers, and stipulating that facilities should be freely transferable subject only to reasonable ROW management requirements.
4. Prohibit states, counties, and municipalities from requiring competitive providers to waive their legal rights under federal and state law in order to obtain access to public ROW.
Perhaps because public ROW management authorities recognize that the policies and practices cited above exceed their authority under state and federal law, it has become commonplace for jurisdictions to condition ROW access on the unconscionable demand that Providers, including Velocita, agree to waive their rights under state and federal law. Therefore, the NTIA should urge the FCC’s adoption of a rule that classifies such waiver of rights clauses “per se” invalid and that no state, county, or local government may condition a Provider’s access to such public ROW on its waiver of its rights under federal and state law.
In addition, the NTIA should urge the FCC to adopt a rule that requires a state or a political subdivision to amend their existing ROW access agreements, permits, rules, ordinances, or other requirements with competitive Providers that are inconsistent with changes in federal or state law, court decisions, or regulatory agency decisions (including any FCC rules) on ROW issues. These changes also should be made within a reasonable time -- i.e., within 90 days of a Provider's request. Through the adoption of such a rule, Providers can be assured that they will receive the benefit from such changes in law or court or agency decisions.
5. Explicit standards should be adopted for ROW access.
The unfettered discretion that plagues the application process often carries over to the manner in which local authorities decide whether or not to grant ROW access to a Provider. Therefore, the NTIA should urge the FCC to adopt a rule clarifying that state, county, and local jurisdictions must adopt clear, explicit written standards for access to the public ROW and that these standards should be limited to ROW management issues -- e.g., review of drawings, permitting issues, and inspection of a Provider’s work in the public ROW.
6. Lack of coordination among adjacent ROW authorities.
Another problem that all competitive infrastructure Providers face is that of having to negotiate separate agreements with multiple and sometimes overlapping ROW authorities. Velocita has been delayed and incurred additional expense as a consequence of having to deal with multiple layers of ROW authorities to accomplish a single build. A single network can pass through numerous jurisdictions, and delay or obstruction by one jurisdiction can delay deployment for the entire region. For example, Velocita currently is having difficulty obtaining authority to construct in a major East Coast city because it has been unable to reach agreement with a State highway department on reasonable compensation for its preferred route into the City. Greater coordination among jurisdictions, and expedited dispute resolution mechanisms and sanctions for undue delay, would greatly reduce this barrier to facilities construction.
B. Proceedings In Which the FCC Can Act to Adopt Such Rules.
The NTIA should issue a report supporting the FCC’s reactivation of the ROW NOI initiated in 1999 and the FCC’s development of rules, in response to the comments filed in that proceeding and in the Section 706 docket, that define the limits of state and local right-of-way management authority and provide meaningful enforcement mechanisms. Velocita believes the FCC has existing authority to exercise its preemptive powers and adopt rules under 253(d) to prohibit state and local ROW management practices that are at odds with Section 253(a) and (c). While Congressional amendment of Section 253 to clarify and expand its scope may be desirable, the FCC clearly has current authority under Sections 253 and 706 to promulgate rules now.
C. The administration should adopt similar policiies to the proposed FCC rules discussed above that would apply to federal agencies.
Federal agencies have also attempted to impose unreasonable restrictions on competitive Providers requesting access to federal lands and ROW under federal control to install telecommunications facilities. Therefore, the Administration should also adopt policies, consistent with the principles above, that would prohibit similar actions by federal agencies so that competitive Providers do not face similar barriers when accessing federal public ROW to provide telecommunications services.
D. If necessary, the NTIA should support new federal legislation to codify the rules proposed in iv.(a) above should the courts determine Section 253 provides an inadequate statutory basis for such rules.
As discussed above, Velocita believes that the FCC, under Section 253 of the Act, has the requisite statutory authority to promulgate rules limiting federal, state, and local regulation of the public ROW. Nevertheless, if the NTIA concludes that additional legislation is necessary to support the FCC’s adoption of such rules, Velocita urges the NTIA to advocate this need to Congress in any report it issues in this proceeding.
The time for the NTIA to act on the ROW access issue is now. Velocita urges the NTIA and the Administration to support the adoption of national ROW access rules by the FCC that would place reasonable limits on regulation of ROW access by state, county, and local governments, consistent with existing law. In addition, similar ROW access policies should be advocated by NTIA that would place comparable limits on federal agencies. These rules are a critically needed first step to help promote the deployment of the infrastructure necessary to provide advanced telecommunications services.
Kevin D. Minsky
Counsel for Velocita Corporation
Dated: December 19, 2001
I hereby certify that Comments of Velocita Corporation were served by e-mail and by hand on this 19th day of December 19, 2001, as indicated below.
Josephine Scarlett, Office of the Chief Counsel
Room 4713 HCHB
1401 Constitution Avenue, NW
Washington, DC 20230
(Original + five copies + diskette (MS Word 97))
Kevin D. Minsky
Adelphia Business Solutions T. Scott Thompson, Cole, Raywid & Braverman
City Signal Communications Jeffrey Karp, Chuck Rohe, Swidler Berlin (outside counsel)
Global Crossing Ltd. Paul Kouroupas, Sr. Counsel, World Wide Regulatory
Martin L. Stern, Preston Gates (outside counsel)
Global Photon T. Scott Thompson, Cole Raywid (outside counsel)
Velocita Dorota A. Smith, Sr. Regulatory Manager
Kevin Minsky, Swidler Berlin (outside counsel)
WorldCom Kevin P. Gallagher, Senior General Counsel
· Access to public rights-of-way should be extended to all entities providing intrastate, interstate or international telecommunications or telecommunications services or deploying facilities to be used directly or indirectly in the provision of such services (“Providers”).
· Government entities should act on a request for public rights-of-way access within a reasonable and fixed period of time from the date that the request for such access is submitted, or such request should be deemed approved.
· Fees charged for public rights-of-way access should reflect only the actual and direct costs incurred in managing the public rights-of-way and the amount of public rights-of-way actually used by the Provider. In-kind contributions for access to public rights-of-way should not be allowed.
· Consistent with the measures described herein and competitive neutrality, all Providers should be treated uniformly with respect to terms and conditions of access to public rights-of-way, including with respect to the application of cost-based fees.
· Entities that do not have physical facilities in, require access to, or actually use the public rights-of-way, such as resellers and lessees of network elements from facilities-based Providers, should not be subject to public rights-of-way management practices or fees.
· Rights-of-way authorizations containing terms, qualification procedures, or other requirements unrelated to the actual management of the public rights-of-way are inappropriate.
· Industry-based criteria should be used to guide the development of any engineering standards involving the placement of Provider facilities and equipment.
· Waivers of the right to challenge the lawfulness of particular governmental requirements as a condition of receiving public rights-of-way access should be invalid. Providers should have the right to bring existing agreements, franchises, and permits into compliance with the law.
· Providers should have a private right of action to challenge public rights-of-way management practices and fees, even to the extent such practices and fees do not rise to the level of prohibiting the Provider from providing service.
· The Commission should vigorously enforce existing law and use expedited procedures for resolving preemption petitions involving access to public rights-of-way.
 When completed, it is anticipated that Velocita’s nationwide network will serve 175 metropolitan areas.
 47 U.S.C. § 253.
 For example, in one recent instance, at a Council meeting on the required proposed ordinance granting Velocita access to local public ROW, a Council member who was disgruntled with previous providers’ trenching of local streets suggested that perhaps, if the Council delayed long enough and made the process difficult enough, Velocita would choose not to go through the city.
 Section 253(c) of the 1996 Act, 47 U.S.C. § 253(c).
 Section 253 states:
(a) IN GENERAL. -- No State or local statute or regulation, or other State or local requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service.
(b) STATE REGULATORY AUTHORITY.-- Nothing in this section shall affect the ability of a State to impose, on a competitively neutral basis and consistent with section 254, requirements necessary to preserve and advance universal service, protect the public safety and welfare, ensure the continued quality of telecommunications services, and safeguard the rights of consumers.
(c) STATE AND LOCAL GOVERNMENT AUTHORITY. -- Nothing in this section affects the authority of a State or local government to manage the public rights-of-way or to require fair and reasonable compensation from telecommunications providers, on a competitively neutral and non-discriminatory basis, for the use of public rights-of-way on a nondiscriminatory basis, if the compensation required is publicly disclosed by such government.
(d) PREEMPTION. -- If, after notice and public comment, the Commission determines that a State or local government has permitted or imposed any statute, regulation, or legal requirement that violates section (a) or (b), the Commission shall preempt the enforcement of such statute, regulation, or legal requirement to the extent necessary to correct such violation or inconsistency.
47 U.S.C. § 253 (emphasis added).
 Section 4(i) of the Act grants the FCC the authority to “perform any and all acts, make such rules and regulations, and issue such orders, not inconsistent with this Act, as may be necessary in the execution of its functions,” one of which is to preempt under Section 253(d) local requirements that impose a barrier to market entry in violation of Section 253(a). 47 U.S.C. § 4(i).
 See Notice of Inquiry on Access to Public ROW and Franchise Fees, FCC 99-141 (rel. July 7, 1999), issued in In the Matter of Promotion of Competitive Networks in Local Telecommunications Markets, Notice of Proposed Rulemaking and Notice of Inquiry in WT Docket No. 99-217, and Third Further Notice of Proposed Rulemaking in CC Docket No. 96-98, 14 FCC Rcd. 12,712-19 ¶¶ 70-85 (1999) (hereinafter “FCC ROW NOI”).
 Inquiry Concerning the Deployment of Advanced Telecommunications Capability to All Americans in a Reasonable and Timely Fashion, and Possible Steps to Accelerate Such Deployment Pursuant to Section 706 of the Telecommunications Act of 1996, Third Notice of Inquiry, CC Docket No. 98-146 (rel. August 9, 2001) (hereinafter the “Advanced Services Proceeding”).
 Please note that these ROW access principles are substantially identical to those developed by CompTel, a trade association of competitive Providers. Also, on December 13, 2001, a group of approximately 15 providers, that included ILECs (Verizon, Qwest, and SBC) and CLECs (AT&T, MCIWorldCom, Global Crossing, and Velocita, among others) met with Dorothy Atwood of the FCC to request the FCC to take action in adopting national ROW access rules. The principles supported by the ILECs and CLECs at this meeting are consistent with the principles supported by Velocita in this proceeding. A copy of the recommended ROW measures supported by this group is attached hereto as Exhibit 1 along with the list of attendees.
 For example, the Ohio statute provides a carrier access within 30 days of the request, the Michigan statute within 90 days, and the Washington statute within 120 days (although a “use permit” granting access to the public ROW must be issued within 30 days). See Ohio Rev. Code Ann. § 4909.02(F) (Callaghan 1999); Mich. Comp. Laws § 484.2251(3); Washington Rev. Code § 35.99.030 (2001).
 FCC ROW NOI at ¶¶ 70-85.