Franchise Management

Franchising

A franchise is a privilege granted by a local government to a specific business that allows them to have their facilities on public property. These businesses must have a contract or "franchise agreement," to operate within the City limits. The agreement outlines the conditions of service and terms of compensation for the use of the public right-of-way. Each time the company enters into the public right-of-way to conduct business, the community faces increased direct costs for right-of-way maintenance, improvements, and administration; and indirect costs for increased travel time, loss of access and trade to local business, increased noise pollution, and visual intrusion. As the custodian of these public-rights-of-ways, local government receives compensation for the "intrusion into and use of the limited resources of the public domain."

Over a century ago the United States Supreme Court held that cities could charge franchise fees based on the value of the public property used. The Court stated such fees were not a "tax," but rental for the use of the public property. The City of Corvallis’ first franchise fee was collected from Southern Pacific Railroad Company in the early 1900s. Today, the fee, determined by state and federal law, is calculated as a percentage of gross revenues derived from operations within the boundaries of the local government. Natural gas pipeline, electric utility, solid waste disposal and cable television companies pay an amount not to exceed 5% of gross revenues. Following federal deregulation of telecommunications, these providers are required to pay up to 7% of gross revenues.

The City holds public property in trust for the citizens of the community, and collectively, the franchise fees represent a fair and reasonable compensation to the citizens of Corvallis for private industry use of public rights-of-ways.

Franchised Utilities:

Questions concerning utilities located within the city limits should be directed to the Franchise Utility Specialist in the Public Works Department (541-766-6916).

Other Service Providers

The city is also served by several wireless telecommunications companies. Presently, wireless providers do not occupy any public rights-of-way within the city but have facilities located on City-owned property. The Public Works Department negotiates lease agreements with these providers to determine adequate compensation as well as conditions of occupancy.

Long haul telecommunication carriers which do not provide services to local residents but do occupy the public right-of-way may be required to enter into a franchise agreement or apply for an occupancy permit. Compensation for this type of "wireline" carrier is based on a per linear foot formula. The City has a master telecommunications ordinance that sets standards for a wide variety of service providers.

Following is a list of service providers with lease agreements for facilities on City-owned property:

Complaints or Comments

To submit a complaint or comment, please call the utility company first (see the contact numbers above). If the response from the utility company is not satisfactory, please contact the City's Franchise Utility Specialist at 541-766-6916 or by email to the Public Works Department.

You may also submit a comment or register a complaint directly with the government agency that has regulatory authority over the utility companies. For electricity, natural gas, and telecommunications, contact the Oregon Public Utility Commission at 1-800-522-2404. For cable, contact the Federal Communications Commission at 1-888-225-5322.