Texas BPL Bill Gaining Traction

Date: Apr 28, 2005

The Texas Senate Business and Commerce Committee has approved SB 1748, the first-of-its-kind legislation designed to facilitate electric utility entry into Broadband over Power Line ("BPL").

If enacted, the bill would prohibit state and local regulation of BPL services. Local governments could not impose franchise obligations or assess franchise fees. And utilities would be entitled to choose between two rate-based incentives. The first would allow utilities to recover BPL-related costs in rate cases to the extent that BPL is used for internal purposes. In addition, the utility would be entitled to keep 60% of the revenues it receives from any BPL commercial deployment. The second option would entitle the utility to maintain rates at the level that will be in effect on July 1, 2005.

All fees collected from and received by BPL affiliates must be nondiscriminatory, and "usual and customary" pole attachment fees must be paid. Consistent with Keller and Heckman LLP's interpretation of the Pole Attachment Act, the utility cannot be required to provide access to third party BPL providers.

Despite their good intentions, two provisions of the bill are questionable from a legal standpoint. The first is the provision allowing utilities to provide BPL service without obtaining additional easement authority or paying landowners additional easement fees. This provision is seemingly at odds with the takings provisions of the Fifth and Fourteenth Amendments, and appears improperly to legislate away a landowner's judicial rights. The second is the provision allowing utilities to determine which Internet Service Providers should gain access to the BPL system's broadband capacity. If the BPL service offered by the utility is deemed to be telecommunications, FCC regulations may require the utility to provide open access to all comers.

If you have any questions about SB 1748 or any other BPL , FCC or utility telecom issues, please contact Tom Magee at 202-434-4128 or magee@khlaw.com.