Chapter 18


18-1    Definitions

18-2    License or Franchise Required

18-3    License Application

18-4    Conditions of License or Franchise

18-5    Compensation

Article 18-1

In this chapter, unless the context otherwise requires:

A.    “Cable services” and “cable system” shall have the same meaning as defined in Chapter 16 of this code.

B.    “Commercial mobile radio service” means two-way voice commercial mobile radio service as defined by the Federal Communications Commission in 47 United States Code Section 157.

C.    “Facilities” means the plant, equipment, and property used in the provision of telecommunications services and not owned by the city, including but not limited to poles, wires, pipe, conduits, pedestals, antennas, and other appurtenances placed in, on, or under highways and not owned by the city and used in the provision of telecommunication services. The term does not include wireless facilities as that term is defined in Article 18A-3.

D.    “Public highway” or “highway” means all roads, streets and alleys and all other dedicated public rights-of-way and public utility easements of the city.

E.    “Telecommunications” means the transmission, between or among points specified by the user, of information of the user’s choosing, without change in the form or content of the information as sent and received. The term does not include commercial mobile radio services, pay phone services, interstate services, wireless services as that term is defined in Article 18A-3 or cable services.

F.    “Telecommunications corporation” means any public service corporation to the extent that it provides telecommunications services in this state. (Ord. 18-222 § 1; Ord. 02-80)

Article 18-2
License or Franchise Required


18-2-1    License Required

18-2-2    Exception

18-2-3    Existing Franchises and Licenses

18-2-4    Limitations

18-2-5    License or Franchise Not Exclusive

Section 18-2-1 License Required

No telecommunications corporation shall install, maintain, construct or operate telecommunications facilities in any public highway in the city unless a license to use the highways to provide telecommunications services has first been granted by the city council under this chapter or a franchise awarded by the electorate under Article XIII of the Arizona Constitution and this chapter to such telecommunications corporation; provided, however, that this chapter does not apply to the installation, maintenance, construction and operation of wireless facilities as that term is defined in Article 18A-3, which activities shall be governed by Chapter 18A. (Ord. 18-222 § 1; Ord. 99-52)

Section 18-2-2 Exception

Notwithstanding Section 18-2-1, any telecommunications corporation that was providing telecommunications service within the State of Arizona as of November 1, 1997, pursuant to a grant made to it or its lawful predecessors prior to the effective date of the Arizona constitution, may continue to provide telecommunications services pursuant to that state grant, until and unless the state grant is lawfully repealed, revoked or amended, and need not obtain any further grant from the city to provide telecommunications services; provided, however, that such entity must in all other respects comply with the requirements applicable to the telecommunications corporations as provided in Title 9, Chapter 5, Article 7 of the Arizona Revised Statutes. (Ord. 02-80)

Section 18-2-3 Existing Franchises and Licenses

Nothing in this ordinance shall be deemed to affect the terms or conditions of any franchise, license, or permit issued by the city prior to the effective date of the amendments of this ordinance or to release any party from its obligations thereunder. Those franchises, licenses or permits shall remain fully enforceable in accordance with their terms. The city manager, with the consent of the council, may enter into agreements with franchise holders, licensees or permittees to modify or terminate an existing franchise, license or agreement.

Section 18-2-4 Limitations

A franchise or license to any telecommunications corporation to use the highways to install, maintain, construct or operate telecommunications facilities shall not authorize the use of the highways to provide any other service; nor shall the issuance of the same invalidate any franchise, license or permit that authorizes the use of the highways for such other services; nor shall the fact that a telecommunications corporation holds a franchise, license or permit to make any other use of the highway or to provide any other service, authorize installation, maintenance, construction or operation of telecommunications facilities in any highway in the city, without obtaining a license or franchise hereunder. (Ord. 99-52)

Section 18-2-5 License or Franchise Not Exclusive

Any license or franchise granted shall not be exclusive.

Article 18-3
License Application

A.    Any telecommunications corporation desiring a license or franchise under this chapter to construct, install, operate and maintain telecommunications facilities in streets and other highways of the city shall file an application with the city clerk requesting at the applicant’s election either a franchise or license, in the form prescribed by the city, and shall pay an application fee of Two Thousand Five Hundred Dollars ($2,500.00) payable in cash, certified or cashier’s check, wire transfer, or in any other manner acceptable to the manager, made payable to the city. No application shall be considered without receipt of said fee. The applicant shall be responsible for reimbursing the city’s full reasonable costs in excess of the application fee in processing the application, including, in the case of an application for a franchise, costs of an election. The application fee is in addition to any permit fees established for persons doing work or locating in the public highway. (Ord. 99-52) (Ord. 02-80)

B.    Each application shall, at a minimum, (1) show where the facilities the applicant will use will be located, or contain such other information as the city may deem necessary in order to ensure that the applicant will comply with requirements for use of the highways; (2) identify the applicant, its name, address and telephone number; (3) contain a description of the services to be provided; and (4) set out a description of any agreement with any other entity that would permit such entity to use the facilities.

C.    Upon receiving an application for a license or franchise that satisfies the conditions of subsection (B), the city shall promptly proffer a telecommunications license or franchise to the applicant for its review, and may inquire into matters relevant to the issuance of the license or franchise. If the applicant agrees to the terms and conditions of the license or franchise, the request shall be submitted to the council with a recommendation for approval (in the case of a license) or a franchise election (in the case of an application for a franchise). Notwithstanding the foregoing, the city need not issue or renew a license or franchise, or schedule a franchise election, if the applicant has previously had a license or franchise revoked, or for any other reason permitted under Arizona law.

Article 18-4
Conditions of License or Franchise


18-4-1    General Conditions

18-4-2    Administration and Enforcement

18-4-3    Renewal

18-4-4    No Warranty

18-4-5    Term

Section 18-4-1 General Conditions

As a condition of issuing or renewing a license or franchise to use the public highways to provide telecommunications services, the city may require:

A.    Proof that the applicant has received a certificate of public convenience and necessity from the Arizona Corporation Commission; except that this requirement shall not apply to a telecommunications corporation that provides solely interstate telecommunication services within the state. (Ord. 02-80))

B.    The applicant to agree to comply with highway use requirements that the city may establish from time to time;

C.    The applicant to agree to provide and maintain accurate maps showing the location of all its facilities and the facilities it will use in the highways within the city, and to comply with such other mapping requirements as the city may establish from time to time; applicant shall provide the city with electronic mapping information in a format compatible with the current city electronic mapping. (Ord. 02-80)

D.    The applicant to obtain the insurance, and provide proof of insurance as required by the city; to post the performance bonds and security fund required by the city; and to agree to fully indemnify the city, its officers, agents, boards and commissions, in a form satisfactory to the city; and agree that it shall have no recourse whatsoever against the city or its officials, boards, commissions, agents or employees for any loss, costs, expense or damages arising out of any provision or requirement of the city because of the enforcement of the license or franchise or because of defects in this chapter or the license or franchise issued;

E.    The applicant to agree to comply with and be bound by the administrative and enforcement provisions as may be prescribed from time to time by the city.

Section 18-4-2 Administration and Enforcement

Every franchise or license shall be subject to the following administrative and enforcement provisions:

A.    Franchises and licenses shall be personal to the franchisee or licensee. Except as provided in the license or franchise, no transfer of a franchise, franchisee, license or licensee, or change of control over the same (including, but not limited to, transfer by forced or voluntary sale, merger, consolidation, receivership, or any other means) shall occur unless prior application is made to the city and the city’s prior written consent is obtained, which consent will not be unreasonably withheld or delayed. In making a determination as to whether to approve a transfer the city may consider the same information and qualifications required of an original application for a license or franchise; whether the licensee or franchisee is in compliance with its license or franchise and this chapter and, if not, the proposed transferee’s commitment to cure such non-compliance; whether the transfer would result in an evasion of other applicable provisions of law, or impair lawful contracts; and the effect of the transfer on the city’s interest. No application for a transfer of a license or franchise shall be granted unless the proposed transferee agrees in writing that it will abide by and accept all terms of the chapter and the license or franchise, and that it will assume all obligations, liabilities, and responsibility for all acts and omissions, known and unknown, of the previous licensee or franchisee under this chapter and the license or franchise for all purposes, including renewal. Approval by the city of a transfer of a license or franchise does not constitute a waiver or release of any of the rights of the city under this chapter or the franchise or license, whether arising before or after the date of the transfer.

B.    Every franchisee or licensee shall be subject to the city’s exercise of such police, regulatory and other powers as it now has or may later obtain, and a franchise or license may not waive the application of the same.

C.    Every franchise or license shall be subject to revocation if the franchisee or licensee fails to comply with the material terms and conditions of the license or franchise, or applicable law. Provided, however, that a franchise or license shall not be revoked unless the franchisee or licensee is given written notice of the defect in performance, and fails to cure the performance within sixty (60) days of the notice, except where the city finds that the defect in performance is due to intentional misconduct, is a violation of criminal law, or is part of a pattern of violations where the franchisee or licensee has already had notice and opportunity to cure. A hearing shall be held before a license is revoked if the licensee requests a hearing.

D.    Penalties for violation of franchise or license.

E.    Damages for violation of the franchise or license terms. Any remedies available to the city are cumulative, and are not limited by the recovery of any amounts pursuant to the insurance provisions of the license or franchise, or pursuant to any indemnity clause.

F.    A requirement that if the franchisee or licensee fails to pay amounts owed to the city by the time prescribed for payment, the franchisee or licensee shall pay interest on the amounts owed, at the rate of one percent (1%) per month.

G.    A requirement that franchisee or licensee shall produce books and records for the city’s inspection and copying, prepare reports, respond to questions and permit the city to have access to its facilities as the city may request in order to determine whether licensee or franchisee has complied with its obligations under the franchise or license, or other applicable law.

Section 18-4-3 Renewal

A licensee that receives a telecommunications service license pursuant to this chapter may apply for a renewal of its license, which renewal shall be reviewed in accordance with the requirements of state law.

Section 18-4-4 No Warranty

The issuance of a license, permit or other authorization by the city is not a representation or warranty that such license, permit, or authorization is a legally sufficient substitute for a franchise, and it not a representation or warranty that a franchise is not required.

Section 18-4-5 Term

Any license granted by the city pursuant to this chapter shall commence upon adoption of the license and acceptance of the license by the provider within thirty (30) days of the grant. The license shall be effective for a period of five (5) years, and subject to the conditions and restrictions provided in the instrument and this chapter.

Article 18-5

A.    The city shall not levy a tax, rent, fee or charge to a telecommunications corporation for the use of a public highway to provide telecommunications services, or levy a tax, fee or charge upon the privilege of engaging in the business of providing telecommunications services, except that, in connection with its provisions of telecommunications services and its use of the highways to provide the same, each telecommunications corporation shall:

1.    Pay a transaction privilege tax on the business of providing telecommunications services or applicable use tax, as may be specified from time to time in Chapter 8A of the Litchfield Park City Code.

2.    Pay public highway construction permit fees and utility poles and wires construction permit fees established from time to time by the city pursuant to Chapter 7, Article 7-9 of this code.

3.    Pay all reasonable costs associated with the construction, maintenance and operation of its facilities in the public highways used to provide telecommunications services, including reasonable costs associated with damage caused to the public highways.

4.    A telecommunications corporation that has placed facilities in public highways that carry interstate traffic between and among the telecommunication corporation’s points of presence exclusive of facilities used by the local network and the portion of the interstate network that carries intrastate calls, shall pay an annual fee based on the number of linear feet of trench in the public highways. The rate per linear foot shall be set by council resolution and shall not exceed the highest rate per linear foot a political subdivision charged a licensee or franchisee on or before December 31, 1999. The rate per linear foot shall not be increased in any year by more than the increase in the average Consumer Price Index as published by the United States Department of Labor, Bureau of Labor Statistics. (Ord. 02-80)

5.    The licensee may provide in-kind benefits such as facilities or services to the city if agreed to by the city and licensee. The calculation of the in-kind benefits shall be set forth in the license. Any in-kind facilities provided to the city under the license shall remain in possession and ownership of the city after the term of the license expires. The value of in-kind benefits shall be less than or equal to, and may be offset against, payments of interstate linear foot charges or transaction privilege tax on the business of providing telecommunications service owed to the city, but shall not be offset for any combination of intrastate and interstate charges. (Ord. 02-80)

B.    Nothing in this section is intended to limit the obligation of any person to pay amounts owed under any franchise or license. Provided that, for franchises or licenses issued after the effective date of this ordinance, payments required under such franchise or license for the provision of telecommunications services shall comply with the provisions of A.R.S. Section 9-581 (Ord. 99-48)

C.    If the provider disputes the amount of city construction permit fees or other fees payable under this chapter, the matter shall be referred to a dispute resolution board. The board shall consist of three (3) members agreed upon by both parties. Expenses for the board shall be shared equally by the city and the provider. The board will hear the dispute promptly, and render a decision within twenty (20) days after the hearing. All decisions of the board are non-binding on the city and provider; however, the findings of the board shall be admissible in any legal action. The city and the provider shall accept or reject findings of the board within thirty (30) days after receipt of the findings. If damages are assessed by the board, the provider shall pay city within thirty (30) days of receipt of an invoice. Late charges of five percent (5%) and interest charges of one and one-half percent (1.5%) per month shall be added for late payment.

D.    Existing and future fees for the use of the city’s right-of-way, whether for telecommunications services or lease of dark fiber, shall be fair and reasonable and on a competitively neutral and nondiscriminatory basis as determined by the city. Licensee and city may enter into a separate agreement for in-kind consideration in lieu of any compensation set forth in this article to the extent not otherwise prohibited by applicable law. (Ord. 19-235 § 1; Ord. 02-80)