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The Portland City Council has sought for more than a year to standardize franchise and right-of-way fees for utility and cable companies that set up infrastructure under, beside and alongside city property.
That plan—which critics allege would raise fees—has received strong pushback from companies such as Verizon and AT&T. The city watered down its original plan after aggressive lobbying by those companies for the past two years. The newest iteration of the policy is set for a first hearing at a June 7 City Council meeting.
Last summer, the Portland Business Alliance called the city’s proposal a “massive hidden tax and fee increase that appears to violate federal law and legal precedent.”
The city’s chamber of commerce is not much happier with it now.
In a three-page letter sent June 1 to City Commissioner Carmen Rubio and Mayor Ted Wheeler, PBA president Andrew Hoan urged the council to rework the ordinance and lower costs. Hoan’s argument: Portland’s right-of-way fees are already sky high compared to those in other West Coast cities, and the city’s latest proposal would deter cable and wireless companies from doing business in Portland and potentially increase the fees even more.
“We view these exorbitant fees, and the lengths the city appears to be taking to try and keep them in place, as another example of the factors that have made living, working, and doing business in Portland increasingly so expensive,” the letter reads. “With the wireless industry rapidly deploying 5G technology across the globe, it makes no economic sense to assess fees that are approximately 400% above the cities we compete with for investments in technology and infrastructure.”
In a statement, Rubio said her office has always said the ordinance was not a ploy to raise fees but instead to come into line with best practices in other major cities.
“For nearly two years, the city has engaged internal and external stakeholders to design a better and more cost-efficient way to manage access to Portland’s right of way, and we stand by the policy development process,” Rubio said. “Many cities have moved away from individually negotiated franchise agreements to a shared city code, which will save time and money for both the city and the users of the right of way. My office promised at the front end that this was not an exercise to increase city revenues—and we have maintained that commitment.”
The city’s Office of Community Technology levies the fees on companies such as AT&T, Verizon, Comcast, Portland General Electric, and NW Natural so they can access the right of way. The fees brought in just under $88 million in 2021—the city’s third-largest source of revenue.
Lobbying records show that between June and September of last year, three utility companies—Crown Castle, the Western States Petroleum Association, and Verizon Wireless—spent $48,000 lobbying city officials on the right-of-way ordinance.
In its Thursday letter, the PBA also argues the city should allocate at least one-quarter of the right-of-way funds collected annually to the Portland Bureau of Transportation to help fill its budget deficit, which is expected to reach $29 million within the next five years. “This would also prevent any further discussion about another tax on families and businesses,” Hoan wrote—referring to a “street tax” that Transportation Commissioner Mingus Mapps briefly proposed in May that would close PBOT’s budget gap.
Hoan also made a legal argument for dedicating a portion of the right-of-way dollars to PBOT: “Federal law generally prohibits cities from generating a profit from access to the right of way in this context,” he wrote.
Rubio says the city will address “the revenue issues mentioned in this letter,” or how the right-of-way funds are allocated, in the next phase of the project.