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COMMUNET Home

COMMUNET Home

COMMUNET  November 1994, Week 2

COMMUNET November 1994, Week 2

Subject:

Re: Condemnation of Phone/Cable Utilities

From:

Brent Wall <[log in to unmask]>

Reply-To:

Communet: Community and Civic Network Discussion List

Date:

Sun, 13 Nov 1994 11:14:06 -0500

Content-Type:

text/plain

Parts/Attachments:

Parts/Attachments

text/plain (85 lines)

On Sun, 13 Nov 1994, Kurt Bressner wrote:
 
> Dear Brent,
>
> On November 12, 1994 you wrote:
>
> A radical option, which I will propose to my Board, but which I don't
> think for a minute will be acted on is:  public ownership of the
> infrastructure.  That is, local governments could issue revenue bonds
> paying for the condmenation of the cable and phone infrastructure.  I
> think the numbers would work on such condemnations, since the costs of
> acquisition could be off-set by charges for use of the networks by phone
> and cable companies.  (This is the extreme case of charging them a
> right-of-way fee which could also underwrite the PEG functions of a
> community net.)
>
> Response:  Before you take this to your board, you should be aware that in
> some states, Illinois included, municipalities cannot charge fees for the
> use of the rights of ways any more.  Communities can charge a fee usually
> derived from the # or accounts in the phone system.  However, this has been
> sharply restricted in the last 18 months.  Cable, is currently different,
> allowing by FCC rules a cap of 5% gross receipts as a franchise fee.
>
> As for condemnation of a system by issue of revnue bonds and a lease-back
> arrangement, it might work if the political leadership is prepared to
> "sell" the concept to an increasingly skeptical and sometimes hostile
> constituency.  In Illinois, I doubt if the legal test  for condemnation of
> meeting a compelling public interest would be accepted by the courts at
> this stage of the game.  You can be assured the cable and phone interests
> would go to court over the purchase of their infrastructure by a public
> entity.
>
> I suggest the future is more in the arena of a partnership with the private
> sector.  The next two years will mean downsizing government and reduction
> of services rather than increases.  We are currently in negotiations with
> two fiber optic carriers for including the connection of a fiber optic
> backbone system for all of our public buildings (schools, city, library,
> etc.).  They are not too pleased with our request, but I think we will
> prevail.
>
> We don't have a freenet or even a local BBS system... yet.  You are farther
> ahead of us in your efforts and are to be commended for your leadership in
> this emerging arena of communications!
>
> Did not mean to "butt in" but I wanted to at least let you know of another
> perspective on this issue.
>
> Regards,
>
> Kurt Bressner
>
>
> Kurt Bressner
> Village Manager
> Village of Downers Grove, Illinois
> (708) 719-4567
> FAX (708) 719-4593
> [log in to unmask]
>
>
>
Hello, Kurt,
 
Your comments are very welcome.  I don't see at as butting in at all.
The partnership approach you mentioned is also on our options list.  Our
goal is simply to avoid folks from getting priced out of the net.  To
effect this there are a number of options.  If capital is needed, perhaps
(but probably not in all states given the diversity of state law) local
government could issue revenue bonds for infrastructure deployment, with
revenues from entertainment and commercial uses being used to underwrite
the use of the net by folks who can't pay high fees.  The advantage of
this approach to a business is that they would not have to go to capital
markets which would charge a much higher rate than a tax extempt revenue
bond.  Whether this could pass a public use test for exemption status I
don't know.
 
We are also working on other variations on the partnership theme.
 
Your comments are always welcome.
 
Regards,
 
Brent Wall
Leon County Free-Net Project

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