BACKGROUND

State departments of transportation (DOTs) have traditionally permitted utility occupations in state highway right-of-way (ROW) at no cost to the utility.

Federal regulations have historically protected limited access facilities from utility occupations. In 1988, these regulations were amended to permit state DOTs to allow utility occupations as a means of protecting the environment.  Such regulations, however, give the states broad discretion in determining whether or which utilities can occupy their limited access facilities. Moreover, these federal regulations require states to recover fair market value for such use, or some smaller amount based upon the state DOT’s public interest determination under its own state law. Additionally, many states are prohibited from providing uncompensated private access to public property.

Utility companies are increasingly seeking to locate fiber optic cable, telecommunications facilities and underground utilities in non-limited access state ROW. Some companies are currently spearheading the deployment of thousands of microcell and evolving cell tower technology and other evolving technology infrastructure for telecommunications providers. These entities may be seeking to submit permit applications to state DOTs using the traditional state permitting process, which generally may not adequately compensate states for the utilization of the ROW. Given the fast pace of the technology, states may want to get out in front of this potential revenue-generating opportunity.

OBJECTIVE

This objective of this research is to produce a report that addresses the issues related to a DOT’s legal obligation to provide similar free access to state ROW for private, non-traditional utilities such as broadband telecommunications.

This study should analyze the law of all 50 states to determine each state’s statutory and regulatory authority with respect to these issues. In addition, the study should determine state and federal laws impacting both safety and compensation and how the nature of the ROW (limited access, acquired via condemnation, federally funded or supported) impacts the DOT’s ability to assess reasonable rates for such use. A survey should be conducted to determine how state DOTs are approaching such requests and specifically whether and how the states are assessing fair market value or some lesser amount based upon public interest determinations.

The study should also analyze how fair market value can include a premium for the contiguous value of the longitudinal structure of this ROW for utility occupations, including but not limited to a recommendation for capturing utility profits. The research should include the potential legal obstacles to such assessments, including but not limited to any distinctions based upon the regulatory status of the utility as a public utility with condemnation authority, as well as any potential impact of the equal access provisions of the Telecommunications Act of 1996.

Status: Completed.Published as NCHRP LRD 81.