The City of Portland, Oregon recently issued a notice regarding the city’s expanded utility licensing requirement, under which all providers of facilities-based and resold telecommunications services and interconnected VoIP service providers must register with the City before providing service within the city limits.
Under Portlands new regulations (updated in March 2009), a utility includes any entity that supplies public services through or associated with telecommunications utility, regardless of whether or not the utility owns or uses physical facilities in public streets. Therefore, all wireline telecommunications companies including interconnected VoIP providers and telecommunications companies that resell lines or services from Qwest (“resellers”) must obtain an annual license from the City of Portland.
Portlands licensing requirement is prospective. Thus, any utility who expects to provide telecommunications service in 2010 must secure a license before providing telecommunications services to residents or businesses located in Portland. Licenses are effective for one year, in this case January 1, 2010 December 31, 2010.
There is no fee to apply for or receive a license. However, the City imposes a quarterly fee on all telecommunications service providers who receive a license (which is the likely reason for the imposition of the licensing requirement on resellers and interconnected VoIP providers). The fee is currently 7% of all gross revenue from in-city services.
Client Advisory
All clients are advised that Portlands licensing requirement is one of the first instances where a local municipality has imposed a local licensing requirement on telecommunications services. Traditionally telecommunications services have been primarily regulated at the state level, in the form of licensing requirements adopted by state public utility commissions. Thus, the authority for local municipalities to regulate telecommunications service providers, in particular interconnected VoIP service providers, is troublesome and ripe for judicial review.
Nevertheless, clients providing telecommunications or interconnected VoIP services to residents and businesses located within the City of Portland should review the utility licensing requirement and register with the City if necessary. Clients who have further questions about the City of Portlands utility licensing requirement should contact Jonathan Marashlian at jsm@commlawgroup.com or 703-714-1313.
