2016 Arizona Revised Statutes
Title 9 - Cities and Towns
§ 9-506 Authority to issue license; limitations; permits for Wi-Fi radio equipment; definitions

9-506. Authority to issue license; limitations; permits for Wi-Fi radio equipment; definitions

A. For the purpose of authorizing and regulating the construction, operation and maintenance of cable television systems, the licensing authority of a city, including a charter city, or town for an incorporated area, or the licensing authority of the county for unincorporated areas, either individually or jointly by intergovernmental contract, may issue a license to any person to use public streets, roads and alleys and shall impose conditions, restrictions and limitations on the use of public streets, roads and alleys and on the construction, operation and maintenance of cable television systems.

B. Subject to the limitations of this section, a licensing authority may adopt resolutions or ordinances implementing and controlling the license or joint license, issue a license containing other terms and conditions and impose a license fee on gross revenues. In addition to the limitations of this section, the license is subject to the limits established by the communications act of 1934, as amended (47 United States Code sections 151 through 615b) and the federal communications commission.

C. Other than the license fee on gross revenues authorized by this article and transaction privilege taxes as provided in this subsection, a licensing authority may not levy a tax, rent, fee or charge, however denominated, on a cable operator for the use of the public streets, roads or alleys to provide cable service or levy a tax, fee or charge on the privilege of engaging in the business of providing cable service in the area of jurisdiction. Taxes, rents, fees and charges include all:

1. Access channel support except for in-kind services or payments as provided in subsection D of this section.

2. Rental, application, construction, permit, inspection, inconvenience and other fees and charges related to a cable operator's use of the public streets, roads and alleys, including the use authorized by subsection I of this section. This subsection does not prohibit a licensing authority from levying fees and charges for microcell equipment on a cable operator pursuant to section 9-584 without an offset for license fees. In addition, the following apply:

(a) Any transaction privilege taxes otherwise authorized by law to be levied on the business of providing cable service or in relation to use of the public streets, roads or alleys to provide cable service may be levied on a cable operator if the taxes are levied only on gross revenues and the rate of the taxes is subject to paragraph 3 of this subsection. This subsection does not authorize the imposition of transaction privilege taxes on interstate telecommunications services.

(b) The license fee and any transaction privilege taxes levied on gross revenues constitute a franchise fee within the meaning of 47 United States Code section 542(g)(1).

(c) Under no circumstances may the total of the rates of the license fee and of any transaction privilege taxes on gross revenues levied or assessed by a licensing authority for the privilege of providing cable service and related use of the public streets, roads or alleys to provide cable service exceed a rate of five percent, except during the transition period for certain licenses as provided in subsection H of this section.

(d) A cable operator shall pass on to subscribers any reduction in the amount of fees, taxes or other charges paid by a cable operator and itemized to subscribers that results from the implementation of the amendment to this section effective on September 21, 2006.

D. A licensing authority may not require a cable operator to provide in-kind services, make in-kind payments or pay a fee in addition to the monetary license fee levied or assessed as provided in this section as part of or as a condition of issuing a license to provide cable service, except that:

1. A licensing authority may require a cable operator to provide channel capacity to transmit programming over which the cable operator exercises no editorial control except as authorized by 47 United States Code section 531(e). The channel capacity shall be limited to not more than two channels of public, educational or governmental access programming in the basic service tier of the cable television system and not more than two channels of noncommercial governmental programming, at least one of which may be programmed by the federal government, in the digital programming tier of the cable television system. If channel capacity is required, the programming shall be specified in the license and the cable operator may require that the channels regularly display an unobtrusive logo or other suitable identifier of the cable operator as set forth in the license.

2. A licensing authority may require a cable operator to incur costs and expenses to provide, maintain and operate facilities and equipment of the cable television system, including facilities and equipment for signal carriage, processing, reformatting and interconnection:

(a) To connect the cable television system, as it may be relocated from time to time, to transmit programming to and from existing locations of public, educational or governmental access facilities and to allow monitoring of access programming at the facilities.

(b) To transmit public, educational and governmental access channels to subscribers with the same prevailing quality, functionality and identification as other channels.

3. A licensing authority may require a cable operator to provide the basic service tier of cable service at no monthly service charge to offices and facilities of the licensing authority.

4. The value of any channel capacity provided pursuant to paragraph 1 of this subsection, the costs and expenses incurred pursuant to paragraph 2 of this subsection and the value of basic service provided pursuant to paragraph 3 of this subsection may not be offset against the license fee levied or assessed under this section.

E. This section does not prohibit a cable operator from agreeing to provide in-kind services or make in-kind payments in the area of jurisdiction that are prohibited by subsection D of this section if the agreement with the licensing authority is not part of, or entered into as a condition of being issued, a new, renewed or amended license to provide cable service. An agreement that requires in-kind cable service or payments shall set forth the total annual fair market value of the in-kind cable service and payments, which shall be less than or equal to and offset against the license fee levied or assessed annually pursuant to this section. The license shall authorize the cable operator to retain license fees and taxes collected from its subscribers in the amount of this offset. In-kind cable services and payments include any channel capacity and all capital costs and charges for or in support of the use of any channel capacity that the cable operator agrees to provide under this subsection.

F. Notwithstanding subsection C of this section, a licensing authority may require that a cable operator:

1. Bear reasonable costs that are associated with damage caused to public streets, roads and alleys by construction, maintenance and operation of its facilities in the public streets, roads and alleys and that are imposed on a competitively neutral and nondiscriminatory basis in relation to costs borne by telecommunications corporations under section 9-582, subsection C.

2. Pay fines, fees, charges or damages for breach of the terms and conditions of the license.

G. This section does not affect the authority of a licensing authority to manage the public streets, roads and alleys within its boundaries or to exercise its police powers.

H. A license that is in effect on September 21, 2006, including one that is later renewed or extended for a term that begins before July 1, 2007, is enforceable in accordance with its terms and conditions as of July 1, 2007 and is not subject to the provisions of the amendment to this section effective on September 21, 2006. If a license that is in effect on September 21, 2006 is later extended or renewed for a term that begins after June 30, 2007, the extended or renewed license is subject to the provisions of the amendment to this section effective on September 21, 2006 and the amendment to this section, effective on September 19, 2007, effective on the first day of the renewal or extension term, unless the term begins before January 1, 2008, in which case the limitation in subsection C, paragraph 3 of this section on the rates of the license fee and of any transaction privilege taxes on gross revenues is:

1. Five percent, if the gross effective rate is five percent or less.

2. If the gross effective rate is more than five percent, five percent plus the following percentage:

(a) In the first year of the extension or renewal term, the gross effective rate minus five percent, multiplied by two-thirds.

(b) In the second year of the term, the gross effective rate minus five percent, multiplied by one-third.

(c) In the third year of the term, and thereafter, zero percent.

I. On application a licensing authority shall issue to a cable operator a permit to attach allowed Wi-Fi radio equipment to the cable television system in public streets, roads and alleys in the area of jurisdiction. The permits shall allow installation, operation and maintenance of the allowed Wi-Fi radio equipment. A licensing authority may require that all of the allowed Wi-Fi radio equipment at a single location fit within a fifteen-inch cube and be contained entirely within a ground-mounted pedestal otherwise allowed by the license or be connected directly to and mounted at the same height as one of the cable operator's aerial horizontal conductors otherwise allowed by the license.

J. Subsection I of this section does not:

1. Affect any authority of a political subdivision, including an agricultural improvement district or any other special taxing district, the licensing authority or any other person controlling utility poles in the public streets, roads and alleys to deny, limit, restrict or determine the terms and conditions for the use of or attachment to the utility poles or attachments to other poles of the political subdivision, licensing authority or other person by a cable operator.

2. Prohibit a licensing authority from imposing competitively neutral and nondiscriminatory requirements for a cable operator to underground aerial facilities to which allowed Wi-Fi equipment is attached.

3. Prohibit the imposition of a tax, rent, fee or charge on revenue from services provided through allowed Wi-Fi radio equipment.

4. Affect the authority of a licensing authority to manage the public streets, roads and alley within its boundaries or to exercise its police powers including review and approval of an application before issuing a permit.

K. For the purposes of this section:

1. " Allowed Wi-Fi radio equipment" means radio equipment that uses only unlicensed radio spectrum and that enables wireless communication with a communications network for unlicensed services such as Wi-Fi service.

2. " Gross effective rate" means one hundred percent multiplied by the fraction in which the numerator is the sum of all taxes, fees and charges of the licensing authority that the cable operator itemized to subscribers and paid to the licensing authority under the license for the twelve calendar months immediately preceding September 21, 2006 and the denominator is the cable operator's gross revenues for that period in the area of jurisdiction.