In its usual sense, a franchise to use the streets is the right to use or occupy the streets for a stated period of time, for which a valuable consideration is paid. It reflects a contract between the municipality and the individual to whom a limited property right to use the public streets is granted[i].
Many states regulate the use of public ways by statutory provisions. A city has reasonable control of its streets and licensees have no right to use the streets without the consent of the city[ii].
State statutes authorize the use of the highways of the state by motor vehicles in the transportation of persons and property for hire. Generally there are three classes of motor vehicles involved in highway transportation of property and persons for hire and these classes are placed under the jurisdiction of the railroad and public utilities commission for regulation according to duly enacted and existing statutes. These three classes are[iii]:
- common carriers;
- contract carriers; and
- for hire carriers.
Motor carriers can operate as a common carrier only after first obtaining from the commission a certificate of public convenience and necessity[iv].
A certificate of public convenience provides a common carrier or any public utility with entry to a discrete territory or marketplace. The certificate should include a description of the nature of the service and of the territory in which it may be offered, rendered, furnished, or supplied[v].
In determining public convenience and necessity, the deciding factors are[vi]:
- whether the operation will serve a useful purpose responsive to a public demand or need,
- whether this purpose can or will be served as well by existing carriers, and
- whether it can be served by the applicant in a specified manner without endangering or impairing the operations of existing carriers contrary to the public interest.
A certificate of public convenience and necessity is a license[vii]. A license is a mere personal privilege to do acts upon the land of the licensor, of a temporary character, and revocable at the will of the power authorized to issue it[viii].
The certificate of public convenience and necessity is issued for the purpose of promoting the public convenience and necessity, and not for the purpose of conferring upon the holder any proprietary interest[ix].
A certificate does not guarantee the security of the common carrier’s investment and it does not grant the common carrier a monopoly[x].
In Towns Truck Lines, Inc. v. Cotton State Express, Inc., 266 Ala. 131 (Ala. 1957), the court held that a certificate of public convenience and necessity is a kind of public franchise and are to be construed in favor of the public.
Although motor transport service is highly desirable and beneficial when carried on in the public interest, the benefits of it should be enjoyed by railroads when those benefits can be ordered without violating the law and where they are in the public interest[xi].
In order to regulate private carriers or contract carriers and to secure permits as a condition of their operation upon the public highways, a grandfather clause was enacted. The purpose of such a clause is to recognize and continue in force, service performed bona fide by private or contract motor carriers on the effective date of the statute without the necessity of establishing that the applicant for a permit is fit and able to perform such service or showing that the proposed service is in the public interest[xii].
A person may provide transportation or service subject to federal jurisdiction under the federal statutes governing motor carriers, freight forwarders, and brokers only if the person is registered to provide the transportation or service[xiii].
The Unified Carrier Registration Act establishes the unified carrier registration system plan. It governs the collection and distribution of registration and financial responsibility information provided and fees paid by motor carriers, motor private carriers, brokers, freight forwarders, and leasing companies[xiv].
[i] State ex rel. Hutton v. Baton Rouge, 217 La. 857 (La. 1950).
[ii] Kon v. Ann Arbor, 41 Mich. App. 307 (Mich. Ct. App. 1972).
[iii] Orlando Transit Co. v. Florida Railroad & Public Utilities Com., 160 Fla. 795 (Fla. 1948)
[iv] La. R.S. 45:164.
[v] Susquehanna Area Reg’l Airport Auth. v. Pa. PUC, 911 A.2d 612 (Pa. Commw. Ct. 2006).
[vi] In re Application of Kilthau, 236 Neb. 811 (Neb. 1991).
[vii] State ex rel. Hutton v. Baton Rouge, 217 La. 857 (La. 1950).
[viii] Greater Wilmington Transp. Authority v. Kline, 285 A.2d 819 (Del. Super. Ct. 1971).
[ix] State ex rel. Hutton v. Baton Rouge, 217 La. 857 (La. 1950).
[x] Susquehanna Area Reg’l Airport Auth. v. Pa. PUC, 911 A.2d 612 (Pa. Commw. Ct. 2006).
[xi] Dye Trucking Co. v. Miller, 397 S.W.2d 507 (Tex. Civ. App. Austin 1965).
[xii] Puhl v. Pennsylvania Pub. Utility Com., 139 Pa. Super. 152, 160 (Pa. Super. Ct. 1940).
[xiii] 49 USCS § 13901.
[xiv] 49 USCS § 14504a.