Texas PUC Staff Rejects ALJ Proposed Decision in ExteNet v. Houston

(see 1702280039). The distributed antenna systems (DAS) provider said it doesn’t have to pay fees to Houston because Chapter 283, a local code for franchise fees, sets rates based on a company’s number of access lines -- but as a DAS provider ExteNet has no access lines. ALJs agreed in a proposed decision last month, saying ExteNet backhaul is covered under the franchise agreements of commercial mobile radio service providers who pay the city. But in exceptions filed Friday, Texas PUC staff disagreed, saying commissioners instead should require ExteNet to negotiate franchise agreements with cities to access the right of way (ROW). “While the ALJs attempt to uphold the Legislature's intent of promoting competition under the statute, the Proposal for Decision (PFD) actually creates an anti-competitive result,” staff said. ALJs took too strict of an interpretation of Chapter 283, allowing ExteNet "to enjoy the absurd result of getting to use the City ROW for free without requiring the provider to offer a qualifying service,” it said. Staff rejected possible remedies suggested by the ALJs. Nothing in the record supports one idea to revoke “service provider certificate of operating authority” for providers without access lines, staff said. A proposed rulemaking to explicitly include ExteNet facilities within the definition of access lines could be “a complicated process with many unanswered issues to address,” it said. Houston also rejected ALJs’ proposed decision, saying the judges improperly read the law and commission rules. ALJs’ conclusion that CMRS providers already pay the city for right of way "is at best an overstatement,” the city said. “Neither Houston nor the State has any franchising authority over CMRS providers.” Houston acknowledged it has a license agreement with Verizon, and ExteNet has a contract with the CMRS provider to install wireless facilitates. "Even as to Verizon, ExteNet's proposal isn't to act as Verizon's contractor, but rather to install facilities as a host provider for Verizon's use and any other CMRS providers irrespective of whether or not those other CMRS providers have an agreement with the City for use of the ROW,” Houston said. "If an entity such as ExteNet serves as a contractor for a CMRS provider to install facilities in the City's ROW, it may do so only under the auspices of that CMRS provider's license agreement.”