PUBLIC UTILITIES ‑- TELEPHONE COMPANIES ‑- OPERATION OF COMMUNITY ANTENNA TELEVISION SYSTEM ‑- AUTHORITY OF CITY OR COUNTY TO REQUIRE FRANCHISE ‑- ADEQUACY OF TELEPHONE MUNICIPAL FRANCHISE TO COVER COMMUNITY ANTENNA TELEVISION OPERATIONS ‑- WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION ‑- APPLICATION OF RCW 80.16.020 TO POLE CONTACTS AND CABLE LEASING BY TELEPHONE COMPANY TO AFFILIATED INTEREST FOR COMMUNITY ANTENNA TELEVISION PURPOSES.
(1) A telephone company granted a franchise under RCW 80.36.040 for telephone lines does not need a franchise from a city or county to operate a community antenna television system where such operations are to be carried out with facilities otherwise qualifying as telephone lines. Where a telephone company does not hold a franchise under RCW 80.36.040, or proposes to use facilities not otherwise qualifying as telephone lines, cities or counties have the authority to require such company to obtain a municipal franchise as a condition precedent to its use of the public rights of way.
(2) Ordinance No. 844 of the city of Snohomish allows the West Coast Telephone Company to operate a community antenna television system without further authority from said city if such operations are to be conducted over facilities otherwise qualifying as telephone lines.
(3) The leasing of space on telephone poles of the telephone company to an affiliated interest is subject to the requirements of RCW 80.16.020.
(4) The leasing of community antenna television cable by a telephone company to an affiliated interest is subject to the requirements of RCW 80.16.020.
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July 11, 1966
Honorable William A. Gissberg
Route 1, Box 41
Lake Stevens, Washington 98258
Cite as: AGO 65-66 No. 92
By letter previously acknowledged you have requested an [[Orig. Op. Page 2]] opinion of this office on the following questions:
1. When a telephone company proposes to construct a community antenna television system, does a city or county have the authority to require that said company obtain a franchise or license to construct and operate said system as a condition precedent to the use of its streets?
2. I am enclosing a copy of Ordinance No. 844 of the city of Snohomish, which grants a telephone franchise to the West Coast Telephone Company. I would like your opinion as to whether the provisions of said franchise would allow the telephone company to construct a community antenna television system without further authority from the city of Snohomish.
3. Is the leasing of space on the telephone poles of the telephone company to an "affiliated interest" subject to the requirements of RCW 80.16.020?
Questions 3 and 4 are answered in the affirmative. The answers to questions 1 and 2 are contained in the following analysis.
RCW 80.36.0401/ grants a state‑wide [[statewide]]franchise under certain conditions to telephone and telegraph companies to maintain telephone and telegraph lines along and upon any public road, street or highway. The statute contains a proviso which reads:
". . .Provided further, That where the right-of-way as herein contemplated is within the corporate limits of any incorporated city, the consent of the city council thereof shall be first obtained before such telegraph or telephone lines can be erected thereon."
[[Orig. Op. Page 3]]
The effect of this proviso was before the court for construction inSeattle v. Western Union Telegraph Co., 21 Wn.2d 838, 153 P.2d 859 (1944). The facilities involved in that case were telegraph lines maintained by a telegraph company. The statute by its express terms applies equally to telephone lines maintained by a telephone company. The city of Seattle contended that RCW 80.36.040 did not constitute the grant of a franchise where the city had not consented thereto and that the proviso applies alike to companies lawfully operating upon city streets as of the time of the passage of the act and to those which subsequently should seek to obtain permission to operate over and upon such streets. The court ruled:
"It is our opinion the language used in the proviso is plain and unambiguous. We are clearly of the opinion this proviso was intended to and does operate in the future and not in the past. In other words, it is our opinion that the proviso applies only to those telegraph or telephone companies which should for the first time, subsequent to the effective date of the act of 1890, seek permission of an incorporated city, having the power to grant the right upon condition, to operate upon and along the streets, and that it was not intended to, nor does it, apply to a telegraph company2/ which was lawfully operating upon and along the streets of such city at the time of the effective date of the act."
The court also observed from an analysis of cases from other jurisdictions:
". . . that by its acceptance of the grant the company was not limited in its use of the streets to those actually occupied at the time of such acceptance, but is entitled to operate upon such other streets as may be necessary in order to meet the demands of such city and carry out the purpose for which the company was formed."
[[Orig. Op. Page 4]]
In summary of its holding, the court stated:
"From the cases cited, which support the almost universal rule, we are of the opinion that the act of 1890 was an express grant to a telegraph company,2/ which had been lawfully operating upon the streets of Seattle prior to statehood and prior to the passage of the act, of the right to operate, construct, and maintain along and upon any public road or street in this state, without compensation being paid for such use to the state or any of its agencies, all lines of telegraph2/ necessary for the purpose for which the company was formed; that the grant thus made by the state did not require that a telegraph2/ company having the status of respondent be required to obtain the consent of any state agency to make such grant binding, all that was required being that the grant be accepted; that respondent accepted such grant by continued operation and maintenance of its lines upon the streets of Seattle after the passage of the act; that, by such acceptance, the grant became a contract between the state and respondent, which could not thereafter be impaired by the state or any of its agencies; that the grant included not only the right to operate, construct, and maintain, without compensation, its lines upon the streets of Seattle so occupied at the time of the passage of the act, but also upon such other and additional streets as might be necessary in furnishing the public the service for which respondent was formed."
Thus it is settled in this state that where a telephone company meets the requirements of the foregoing statute it has a right to "operate, construct, and maintain" along and upon any public road or street in this state telephone lines without the necessity of obtaining any further authorization for the use of such public rights of way.
RCW 80.36.040 does not define the words "telephone line." We deem it reasonable, however, to conclude that these words as used in RCW 80.36.040 are no more, nor less, inclusive in [[Orig. Op. Page 5]] their scope than the identical words in RCW 80.04.010.3/ The latter statute was first enacted in 1911, and has been amended on numerous occasions but without change in the definition of the words with which we are here concerned. The latter statute is part of the comprehensive regulatory enactments constituting the genesis of Title 80 RCW. While RCW 80.36.040 (effective in 1890) preceded these statutes it is now a part of Title 80 RCW.
In light of the foregoing the first question is whether the offering of community antenna television service (CATV) by a telephone company in a county, city or town may be performed under the terms of such a state‑wide franchise, or whether it is necessary to obtain a franchise from the municipality for the use of its public rights of way. In our opinion the state‑wide franchise is applicable where the CATV service is to be rendered over "telephone lines" of the telephone company but is not applicable where the CATV operation is to be conducted separate and apart from the "telephone lines" of the telephone company. A "telephone line" does not cease to be a "telephone line" by reason of its additional use for television transmission in a CATV operation. Similarly, a line used solely for television transmission does not by that fact alone become a "telephone line." While there are no decisions of our courts on the precise question, this view is fully supported by decisions of other jurisdictions.
Section 7901 of the Public Utility Code of the statutes of the state of California is, in all respects here material, identical in effect with the provisions of RCW 80.36.040. The California supreme court in the case of Pacific Telephone & Telegraph Co. v. City of Los Angeles, 44 Cal.2d 272, 282 P.2d 36 (1955), had before it the contention of the City of Los Angeles that the state‑wide franchise to the telephone [[Orig. Op. Page 6]] company for telephone lines could in no event entitle the company ". . . to use its lines interchangeably for transmitting telephone messages, telegraph messages, teletypewriter messages, telephotographs, program services (including radio and television broadcasts) and any other communication by means of the transmission of electrical impulses." The city contended "the state franchise does not give Pacific the right to use its telephone lines for the transmission of anything other than 'articulate speech'." The court held that the statute granting the state‑wide franchise authorizing telephone companies to construct their telephone lines along public rights of way places no restriction upon what may be transmitted by means of electrical impulses over those lines.
In the subsequent case of Telephone Transmission v. Public Util. Comm., 47 Cal.2d 82, 301 P.2d 862 (1956), the California supreme court in referring to theCity of Los Angeles case, supra, stated:
"We held that section 536 of the Civil Code (now section 7901 of the Pub. Util. Code), which authorizes telephone corporations to construct their lines along public highways, places no restrictions upon what may be transmitted by means of electrical impulses over those lines. Pacific Telephone and Telegraph Company was unquestionably a telephone corporation, and it remained a telephone corporation and its lines remained telephone lines, even though they were incidentally used to transmit other forms of communication." (Emphasis supplied.)
The court there distinguished the rendering of a CATV service by a nontelephone company from that rendered by a telephone company. That state's regulatory agency had reasoned that since the state‑wide franchise permits television broadcasts to be carried over telephone lines, any line erected to carry television broadcasts is a telephone line and anyone who operates such a line is therefore engaged in a telephone corporation. The court annulled this holding of the regulatory agency and stated:
". . . It does not follow, however, that because telephone corporations are not [[Orig. Op. Page 7]] prevented by law from using their lines, which are unquestionably telephone lines, for the transmission of television broadcasts, any corporation that uses poles, wires, et cetera, to transmit such broadcasts is a telephone corporation . . ."4/
The similarity of Public Utility Code § 7901 of California and RCW 80.36.040, as well as the similarity of the definition of "telephone line" in the California statute5/ and the equivalent statute in the state of Washington,6/ persuades us that the holding of the California supreme court properly reflects the law of this state.
Supporting the result of the California cases are decisions holding that the right of eminent domain granted telephone companies extends to procurement of rights of way which will be used for television circuits as well as for telephone circuits. Ohio Telephone and Telegraph Company v. Steen, 85 N.E. 2d 579 (1949), andBall v. American Telephone & Telegraph Co., 227 Miss. 218, 86 So.2d 42 (1956). See, also,Independent Theater Owners v. Arkansas P.S.C., 235 Ark. 668, 361 S.W. 2d 642 (1962). The rationale of these decisions is that the additional use of telephone lines for television transmission does not negate the status of such facilities as telephone lines.
In summary of this part of our answer to Question No. 1, it is our opinion that a telephone company possessing a statewide franchise under RCW 80.36.040 may use its "telephone lines" for the offering of a CATV service without the necessity for procuring a municipal franchise for the use of the municipality's public rights of way; but where such CATV [[Orig. Op. Page 8]] operation is carried out through facilities which do not otherwise qualify as "telephone lines," (such as a line, whether pole or underground conduit, constructed solely for television distribution) RCW 80.36.040 is not a bar to the requirement by the municipality of a franchise for the use of its public rights of way for that purpose.
There remains for consideration a further part of Question No. 1, namely, the authority of cities and counties to grant franchises for the use of public rights of way for the placement of CATV facilities by a telephone company where said company does not qualify for a state‑wide telephone franchise under RCW 80.36.040, or, if it does so qualify, where the lines to be constructed or used do not otherwise constitute "telephone lines."
Broad franchise authority is granted counties by the provisions of RCW 36.55.010. By the provisions of RCW 35.22.570 cities of the first class, in addition to all other powers, have the authority found in the statutory powers of cities of a lesser class. See, also,Winkenwerder v. Yakima, 52 Wn.2d 617, 328 P.2d 873 (1958). Second class cities and towns are granted broad franchise authority by the provisions of RCW 35.23.440 (40) and RCW 35.27.370 (12), respectively. Any city organized under the commission form of government has all the powers of cities of the second class by virtue of the provisions of RCW 35.17.030, to the extent consistent with statutes pertaining to "commission form" cities. The franchise authority of cities of the third class not organized under the commission form of government is contained in RCW 35.24.290 (10).
The wording of the latter provision is unrestricted in scope with regard to the authority to grant franchises for conduits for underground wires no matter what be their intended purpose. The statute further authorizes the grant of permission for the construction and maintenance of telegraph, telephone and electric lights. This statute is not as general in its express terms as the corresponding statutes for counties and cities of the first, second and fourth classes, nor does it actually use the word "franchise" in connection with telephone lines, as it does in the case of conduits for underground wires. However, it is an established principle of statutory construction that a statute should receive a sensible construction, such as will give effect to the legislative intent and avoid absurd consequences as far as possible. State ex rel. Thorp v. Devin, 26 Wn.2d 333, 173 P.2d 994 (1946).
[[Orig. Op. Page 9]]
Certainly the authority given to a city to permit the construction and maintenance of lines, in this statute, implies a corresponding authority to withhold such permission, or to grant it conditionally. Generally speaking, the authority to exercise an unlimited power includes authority to exercise a lesser power. See, 10 McQuillin, Municipal Corporations, 3rd. ed., § 28.10.
We discern no intention on the part of the legislature, in the language of RCW 35.24.290 (10),supra, to withhold from cities of the third class any of the similar authority given to counties and to cities of all other classes. While readily conceding that this is a matter to which the legislature may wish to give specific attention, we are not of the opinion that our courts would interpret this statute as demonstrating a legislative intent to grant such cities less authority than that granted all other cities in the same matter, including cities of the fourth class. This conclusion is reinforced by the legislative grant of unrestricted authority in the same statute to grant franchises for conduits for underground wires. There seems to be no logical reason for distinguishing between the authority of a city of the third class to grant franchises for such purpose and for overhead wires.
Accordingly, we conclude that where a telephone company does not qualify for a state‑wide franchise under RCW 80.36.040, or if so qualifying proposes to utilize lines not otherwise constituting telephone lines, counties and cities have the authority to require municipal franchises for such companies for CATV distribution over the municipalities' rights of way.
The ordinance referred to in your second inquiry grants the telephone company
". . . the right, privilege and authority to . . . place, erect, lay, maintain, and replace in, upon, along and under all of the streets, alleys, and other public highways of said City, poles, conduits, wires, cables and other facilities and appurtenances for the conduct and operation of a general telephone business and the transmission of electricity therefor."
Your question is whether the franchise would allow the company to use such public rights of way for a CATV system without further authority from the city.
[[Orig. Op. Page 10]]
If the company qualifies under RCW 80.36.040 for the statewide franchise granted thereby, it would have authority aside from the municipal ordinance to use the city's rights of way for telephone lines. Such lines would not cease to be telephone lines by virtue of the incidental or additional use for CATV operations. It is only if the company does not qualify under the state‑wide franchise statute, or proposes to carry on its CATV operations by the use of facilities not otherwise constituting telephone lines, that a construction of the ordinance becomes significant. Inasmuch as we have not been supplied with any factual information as to the history of the company or its predecessors in order to determine whether it is covered by RCW 80.36.040, it would be improper for us to speculate on that matter. Accordingly, what is said hereinafter in answer to Question No. 2, is pertinent only if an examination of the facts would show the telephone company to be without a franchise under RCW 80.36.040.
The key words in the franchise are those authorizing the use of public rights of way for facilities ". . . for the conduct and operation of a general telephone business and the transmission of electricity therefor." If the franchise were by its express terms a grant of authority to use public rights of way for the placement of "telephone lines," we would have no hesitancy in saying that CATV facilities could be carried thereon for the reasons hereinbefore stated in answer to your first inquiry. The language of the franchise, however, is one authorizing the use of public rights of way for placement of "facilities for the conduct and operation of a general telephone business." Does this variation in language require a different interpretation? We believe that our courts would hold that it does not. We find no evidence to indicate an intention on behalf of the city that the specific language used was for the purpose of making the grant either more or less restrictive or inclusive in its effect than the language used in RCW 80.36.040.
We therefore advise that the franchise in question authorizes CATV transmission by the telephone company on its lines which otherwise constitute telephone lines. It does not authorize CATV transmission on lines of the company which do not otherwise qualify as telephone lines.
Questions (3) and (4):
By the provisions of RCW 80.16.020 no contract or arrangement [[Orig. Op. Page 11]] for the "lease . . . of any property, right, or thing, . . . made or entered into between a public service company7/ and any affiliated interest as defined in this chapter8/ . . . shall be valid or effective unless or until such contract or arrangement shall have received the approval of the commission."
This statute contains no language which would exempt the telephone company from the requirement of approval by the Washington Utilities and Transportation Commission of a lease "of any property, right, or thing" to an affiliated interest by virtue of that affiliated interest being engaged in community antenna television operations by means of either the lease of facilities for pole contacts or the lease of cable. If the operator of the CATV is an affiliated interest of the telephone company, the telephone company is subject to the provisions of RCW 80.16.020.
We trust the foregoing will be of assistance to you.
Very truly yours,
JOHN J. O'CONNELL
FRANK P. HAYES
Assistant Attorney General
*** FOOTNOTES ***
1/Laws of Washington 1889-1890, § 5, page 292, effective March 28, 1890. This section has never been amended and is now codified as indicated.
2/As heretofore noted the statute by its express terms is equally applicable to telephone companies and telephone lines maintained by them.
3/"'Telephone line' includes conduits, ducts, poles, wires, cables, cross-arms [[crossarms]], receivers, transmitters, instruments, machines, appliances, instrumentalities and all devices, real estate, easements, apparatus, property and routes used, operated, owned or controlled by any telephone company to facilitate the business of affording telephonic communication."
4/We note this decision supports our opinion AGO 53-55 No. 346, that a company engaged in CATV operations is not by that fact a telephone company and a public service company subject to jurisdiction as to rates and services by the Washington Utilities and Transportation Commission.
5/Public Utility Code, § 233.
6/RCW 80.04.010, supra.
7/RCW 80.16.010 defines the term "public service company" in such a manner as to include a telephone company.
8/See, RCW 80.16.010.