Opinion ID: 198617
Heading Depth: 1
Heading Rank: 4

Heading: federal telecommunications act claim

Text: 32 The central question on appeal is whether the district court erred when it concluded that Cablevision is unlikely to succeed on the merits of its § 253(c) claim. This question involves a number of subsidiary questions, most of which we merely identify and set aside in order to focus on the crux of this matter: whether, pursuant to § 253(c), the PIC has been obligated since 1996 to regulate Boston Edison's use of cable and conduit in order to create a level playing field among competitors in the Boston telecommunications market. We determine that § 253(c) did not place such an obligation on the PIC. Thus, we affirm, albeit on different grounds, the district court's conclusion that Cablevision is unlikely to prevail on its § 253(c) claim.
33 Cablevision's § 253(c) argument can only be evaluated by placing that subsection in the larger context of the TCA. Although the TCA is technically written as a set of amendments to the Communications Act of 1934, 47 U.S.C. § 151 et seq., it actually represents a dramatic shift in the nature of telecommunications regulation. Regulation of the telephone industry (once the principal form of telecommunications) was long premised on the belief that only monopolies could provide reliable, universal service. Thus, state and federal regulators spent decades protecting monopolies from competition. The TCA takes the opposite approach: rather than shielding incumbent telephone companies from competition, it requires them to provide other participants in the telecommunications market with competitive access to their networks and services. This shift exemplifies a widespread change in the laws governing regulated industries. See Kearney & Merrill, The Great Transformation of Regulated Industries Law, 98 Colum. L. Rev. 1323, 1325-26 (1998) (Instead of striving for equality of treatment among end-users and reliability of service, the new paradigm seeks to encourage multiple providers to offer different packages of services at different prices to end-users, on the theory that competition among these providers will enhance consumer welfare.) 34 Three central provisions of the TCA -- § 251, § 252, and § 253 -- instantiate this policy. Section 251 defines the duties of different classes of telecommunications providers. See 47 U.S.C. § 251. All telecommunications carriers have a duty to interconnect directly or indirectly with the facilities and equipment of other telecommunications carriers. Id. § 251(a). [L]ocal exchange carriers (i.e., those who provide telephone service, see id. § 153(26)) also have a duty to allow resale of their services, to provide number portability and dialing parity, to establish reciprocal compensation agreements, and to afford access to th[eir] poles, ducts, conduits, and rights-of-way . . . to competing providers. Id. § 251(b). An incumbent local exchange carrier (i.e., a telephone service provider in existence when the Act was passed, see id. § 251(h)) is further obligated to provide interconnection with its network and unbundled access to individual network elements on just, reasonable, and nondiscriminatory terms and to offer its services for resale at wholesale rates. Id. § 251(c). 35 Section 252 provides the means of enforcement for the requirements that § 251 places on incumbent local exchange carriers. See 47 U.S.C. § 252. It sets out procedures for negotiation, arbitration, and approval of interconnection or service agreements between incumbent local exchange carriers and other carriers. See id.; see also Puerto Rico Tel. Co. v. Telecommunications Regulatory Bd., Slip Op. at 13-32 (1st Cir. Aug. __, 1999) (discussing § 252). 36 Section 253 is aimed at those who might impede the open competition engendered by §§ 251 and 252. Section 253(a) ensures that state and local regulations do not serve as barriers to entry into the telecommunications market: 37 No State or local statute or regulation, or other State or local legal requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service.47 U.S.C. § 253(a). Congress apparently feared that some states and municipalities might prefer to maintain the monopoly status of certain providers, on the belief that a single regulated provider would provide better or more universal service. Section 253(a) takes that choice away from them, thus preventing state and local governments from standing in the way of Congress's new free market vision. Cf. Town of Amherst v. Omnipoint Communications Enters., Inc., 173 F.3d 9, 12-16 (1st Cir. 1999) (discussing 47 U.S.C. § 332(c)(7)(B)(i), a similar provision in the TCA which provides that the regulation of . . . personal wireless service facilities . . . shall not prohibit or have the effect of prohibiting the provision of personal wireless service). 38 However, Congress also recognized the continuing need for state and local governments to regulate telecommunications providers on grounds such as consumer protection and public safety, which are separate from any intent to create or maintain barriers to entry. Thus, it carved out safe harbors for these types of regulations: 39 (b) State regulatory authority 40 Nothing in this section shall affect the ability of a State to impose, on a competitively neutral basis and consistent with section 254 of this section, requirements necessary to preserve and advance universal service, protect the public safety and welfare, ensure the continued quality of telecommunications services, and safeguard the rights of consumers. 41 (c) State and local government authority 42 Nothing in this section affects the authority of a State or local government to manage the public rights-of-way or to require fair and reasonable compensation from telecommunications providers, on a competitively neutral and nondiscriminatory basis, for use of public rights-of-way on a nondiscriminatory basis, if the compensation required is publicly disclosed by such government. 43 47 U.S.C. § 253(b),(c). 44 These subsections take the form of savings clauses, preserving certain state or local laws that might otherwise be preempted under § 253(a). At the same time, the division between (b) and (c) seems to define the boundaries of each body's regulatory authority: it suggests that states may regulate broadly with respect to public safety and welfare, service quality, and consumer protection, while local governments, in addition to any powers specifically delegated by the state, have narrower residual authority to manage and demand compensation for the use of their rights of way. See AT&T Communications of the Southwest, Inc. v. City of Dallas, 8 F. Supp. 2d 582, 591 (N.D. Tex. 1998) (noting that while the more general authority of § 253(b) is reserved for the states, they have the power to delegate such authority to local governments); In re TCI Cablevision, 12 F.C.C.R. 21,396, ¶ 102-104, 109 (Sept. 19, 1997) (stating that (b) and (c) define the subject area of permissible regulation at the state and local level). 45 Other aspects of § 253(b) and (c) are less clear. One open question is whether state or local regulations that are not competitively neutral or nondiscriminatory necessarily constitute violations of § 253(a). If so, then § 253(b) and (c) are only savings clauses, which happen to restate, in different terms, the general rule of § 253(a). If, on the other hand, a regulation could fail to be competitively neutral or nondiscriminatory without constituting a de facto prohibition on entry, then (b) and (c) could be read to impose requirements of competitive neutrality and nondiscrimination that are separate from § 253(a)'s restriction against prohibitions on entry. 46 If the latter interpretation were correct, then an additional question would arise: how could the putative competitive neutrality and nondiscrimination requirements be enforced? The next subsection of § 253 could be read to provide a partial answer to this question: 47 (d) Preemption 48 If, after notice and an opportunity for public comment, the Commission determines that a State or local government has permitted or imposed any statute, regulation, or legal requirement that violates subsection (a) or (b) of this section, the Commission shall preempt the enforcement of such statute, regulation, or legal requirement to the extent necessary to correct such violation or inconsistency. 49 Id. § 253(d). The creation of an enforcement mechanism for § 253(b) suggests that this provision, while styled as a savings clause, also imposes a requirement on state regulation that is separate from that imposed by § 253(a). On this reading, the FCC would be able to enforce the requirement under § 253(d). 50 But § 253(d) raises more questions than it answers. It is not clear, for instance, whether Congress intended FCC preemption to be the sole means of enforcing § 253(a) and (b), or, if a private cause of action does exist to enforce either of these subsections, whether the FCC is intended to have primary jurisdiction. Compare, e.g., GST Tucson Lightwave, Inc. v. City of Tucson, 950 F. Supp. 968, 970 (D. Ariz. 1996) (assuming that § 253(d) was meant to be an exclusive remedy for violations of § 253), with City of Abilene v. FCC, 164 F.3d 49, 51-52 (D.C. Cir. 1999) (deciding a § 253(a) preemption claim on the merits), Bell Atlantic-Maryland, Inc. v. Prince George's County, 49 F.Supp.2d 805, 813 (D. Md. 1999) (assuming that a cause of action exists to bring a § 253(a) claim), and AT&T Communications, 8 F. Supp. 2d at 589 (rejecting the argument that the FCC has primary jurisdiction over § 253(a) claims). 51 In addition to these uncertainties, Section 253(d) raises questions about the proper analysis of § 253(c). If § 253(b) imposes a restriction separate from the one in § 253(a), it would seem most natural for § 253(c) to impose such a restriction as well, since the language of (c) is nearly identical to the language of (b). Yet Congress chose to include (b), and not (c), under the FCC preemption provision of § 253(d). There are at least two ways to understand this choice. 52 One explanation is that Congress intended § 253(c) (if not § 253(b)) to be a savings clause only. Under this interpretation, § 253(c) could only be used defensively, in the context of a § 253(a) challenge; the statute would simply not apply to local regulations that are not competitively neutral and nondiscriminatory but nonetheless do not constitute prohibitions on entry. See GST Tucson Lightwave, 950 F. Supp. at 971 (adopting this interpretation of § 253). 53 Alternatively, the exclusion of § 253(c) from § 253(d) might reflect Congress's selection of a forum for § 253(c) claims, limiting jurisdiction to federal or state courts instead of forcing municipalities with limited resources to defend rights-of-way regulations and fee structures before the FCC in Washington, D.C. Cablevision argues for this reading, which has been adopted by a number of courts on statutory interpretation and legislative history grounds. See, e.g., TCG Detroit v. City of Dearborn, 977 F. Supp. 836, 840 (E.D. Mich. 1997) (finding that the implication [of § 253(d)'s exclusion of § 253(c)] is that any violation of 253(c) could not be preempted [by the FCC] but rather would have to be[] challenged locally and that legislative history supports this interpretation). If this interpretation were correct, it would become necessary to decide whether the proper cause of action for a § 253(c) claim is created by § 253(c) itself or arises from some other source. 54 We prefer to reserve judgment on these questions, since they are not, in the end, dispositive of this appeal and so may be viewed as theoretical. Because the TCA is extremely complex and its provisions highly interrelated, it is wiser to interpret it only as needed in light of specific facts. Like the district court, we will assume arguendo that § 253(c) does impose a competitively neutral and nondiscriminatory requirement and that a cause of action exists to enforce that requirement. 9 We turn now to a subset of statutory interpretation questions regarding the scope of this assumed requirement. 55
56 According to Cablevision, the City's obligation to manage its grant-of-location process in a competitively neutral and nondiscriminatory manner can be read directly from the language of § 253(c). The district court disagreed, finding that [t]he syntax of [§ 253(c)] renders its meaning ambiguous, and in particular, that [i]t is not clear whether the phrase 'competitively neutral and nondiscriminatory' applies only to the compensation that can be required, . . . or whether it also applies to the management of public ways . . . . Cablevision, 38 F. Supp. 2d at 58. 57 As a matter of bare syntax, we find the language to be unambiguous: the phrase on a competitively neutral and nondiscriminatory basis can only apply to compensation schemes, not management decisions. To see why this is so, it is necessary to look closely at that phrase in context: 58 Nothing in this section affects the authority of a State or local government to manage the public rights-of-way or to require fair and reasonable compensation from telecommunications providers, on a competitively neutral and nondiscriminatory basis, for use of public rights-of-way on a nondiscriminatory basis, if the compensation required is publicly disclosed by such government. 59 47 U.S.C. § 253(c) (emphasis added). The scope of the emphasized language would be ambiguous if the text following the emphasized phrase were omitted. In that case, the sentence would present what linguists label a prepositional phrase attachment problem, i.e., an ambiguity arising from the fact that a prepositional phrase within a sentence might attach to the sentence's syntactic structure at more than one level. 10 See Akmajian et al., Linguistics: An Introduction to Language and Communication 169-70 (1995) (giving a representation for such structural ambiguities). But no such attachment problem is presented here. 60 In context, the emphasized language can only modify the immediately preceding phrase, to require fair and reasonable compensation from telecommunications providers. There is a technical linguistic basis for this reading: because -- for semantic rather than syntactic reasons -- the following phrase for use of public rights-of-way on a nondiscriminatory basis can only attach to the phrase to require fair and reasonable compensation from telecommunications providers, it traps the phrase on a competitively neutral and nondiscriminatory basis at this same level. 11 And contrary to Cablevision's argument, the commas surrounding the phrase on a competitively neutral and nondiscriminatory basis do not automatically alter the phrase's syntactic scope; the commas merely enhance the readability of § 253(c) without changing its syntax. Even apart from technical linguistic rules, there is a strong argument that the plain meaning of the statute, despite the contrary interpretation by the FCC and other courts, is that on a competitively neutral and nondiscriminatory basis does not refer to management of rights of way at all. 61 But the task of statutory interpretation involves more than the application of syntactic and semantic rules to isolated sentences. Even plain meaning can give way to another interpretation if necessary to effectuate Congressional intent. See Greenwood Trust Co. v. Massachusetts, 971 F.2d 818, 825 (1st Cir. 1992) (Terms in an act whose meaning may appear plain outside the scheme of the statute can take on a different meaning when read in their proper context.... In short, the plain-meaning doctrine is not a pedagogical absolute.); SEC v. Lehman Bros., Inc., 157 F.3d 2, 8 (1st Cir. 1998) (literal language does not always prevail). Rather than culling selected words [or sentences] from a statute's text and inspecting them in an antiseptic laboratory setting, a court engaged in the task of statutory interpretation must examine the statute as a whole, giving due weight to design, structure, and purpose as well as to aggregate language. O'Connell v. Shalala, 79 F.3d 170, 176 (1st Cir. 1996); see also King v. St. Vincent's Hospital, 502 U.S. 215, 221 (1991) ([T]he cardinal rule [is] that a statute is to be read as a whole, since the meaning of statutory language, plain or not, depends on context. (citation omitted)). 62 At times, an examination of the context of disputed language can lead courts to decide that a linguistically implausible interpretation best reflects the legislature's intent. Section 253(c) may require this sort of generous reading. See California Fed. Sav. & Loan Ass'n v. Guerra, 479 U.S. 272, 284 (1987); Bob Jones Univ. v. United States, 461 U.S. 574, 586 (1983) (It is a well-established canon of statutory construction that a court should go beyond the literal language of a statute if reliance on that language would defeat the plain purpose of the statute....); Watt v. Alaska, 451 U.S. 259, 266 (1981) (The circumstances of the enactment of particular legislation may persuade a court that Congress did not intend words of common meaning to have their literal effect.); United Steelworkers v. Weber, 443 U.S. 193, 201 (1979) (rejecting literal reading of statute in light of Congressional purposes in enacting statute). To the extent that Congress intended to impose any requirement that local regulations be competitively neutral and nondiscriminatory, the larger context suggests that it would have wanted to impose that requirement on both management of rights of way and compensation schemes, since discriminatory or competitively slanted management of the public rights of way could interfere with open competition among telecommunications providers just as easily as discriminatory or competitively slanted compensation schemes. 63 At present, the weight of authority seems to favor this contextual interpretation of § 253(c) over a literal, syntactically accurate one. The FCC did appear to limit the competitively neutral and nondiscriminatory language to compensation schemes in its Suggested Guidelines for Petitions for Ruling Under Section 253, 63 Fed. Reg. 66,806 (1998). See id. at 66,808 (including the following in the list of questions for filers to answer: Does the challenged statute, regulation, ordinance, or legal requirement pertain to the management of, or compensation for access to, rights-of-way? . . . If compensation is involved, is it fair and reasonable and required on a competitively neutral and nondiscriminatory basis?). But in its decisions, the FCC has clearly adopted -- without any discussion -- the broader reading of § 253(c). See In re Classic Telephone, Inc., 11 F.C.C.R. 13,082, ¶ 39 (Oct. 1, 1996); TCI Cablevision, 12 F.C.C.R. at ¶ 108. Courts and commentators have also adopted the broader reading without considering the possibility that the phrase competitively neutral and nondiscriminatory does not refer to the management of rights of way. See, e.g., TCG Detroit, 977 F. Supp. at 840-41 (assuming the broader reading without discussion); Worstell, Note, Section 253 of the Telecommunications Act of 1996: A Permanent Physical Appropriation of Private Property that Must Be Justly Compensated, 50 Fed. Comms. L. J. 441, 447-49 (1998) (decrying the effects of the broader reading without mentioning the syntactically more plausible narrow reading). But see AT&T Communications, 8 F. Supp. 2d at 587 (adopting narrow reading without discussion). 64 Cablevision's reading of § 253(c) is not frivolous. But once again, we choose to set aside a difficult interpretative question when the answer to that question is not dispositive of the appeal. We will assume arguendo that the phrase competitively neutral and nondiscriminatory in § 253(c) refers to the City's management of its rights of way 12 and focus our analysis on the interpretation of that phrase. 65
66 The critical issue for our purposes -- and the point on which the parties actually disagree 13 -- is whether the City has violated any obligation under § 253(c) to manage its public rights of way so as to enhance the level of competition in the Boston telecommunications market. 67 To understand the parties' differing positions on this issue, it is helpful to first consider the many points on which the parties seem to agree. 14 68 First, the parties have sensibly centered their arguments on the term competitively neutral, since Cablevision does not, and could not, seriously dispute the district court's conclusion that the City has managed its rights of way in a nondiscriminatory manner. As long as the City makes distinctions based on valid considerations, it cannot be said to have discriminated against Cablevision in favor of Boston Edison. Here, as the district court points out, those valid considerations are obvious: 69 Constructing new conduit requires digging up the City's streets and attendant disruption. Putting new cable in existing conduit or converting existing cable to new uses does not require digging up streets or disruption. Thus, it is not discrimination for the City to have different policies for the construction of conduit that is new and for the conversion of the uses to which existing conduit can be put. 70 Cablevision, 38 F. Supp. 2d at 60. 71 Second, the parties seem to agree that the City's new oral policy regarding the conversion of cable or conduit complies with § 253(c)'s competitive neutrality requirement, because it results in equivalent notice obligations for all market participants. Assuming that the policy requires Boston Edison 15 to petition for amended grants of location before it converts cable or conduit, competitors receive notice before new cable is pulled through existing conduit (or alternatively, before cable is put to a new use 16 ) as well as before new conduit is installed. 72 Cablevision does make a halfhearted effort to argue that, in order to achieve competitive neutrality, the City's policy on conversions would have to impose requirements identical to those imposed by the City's policy for the construction of new conduit, including the requirement that shadow conduit be built alongside any converted cable or conduit. But Cablevision does not insist on this interpretation -- perhaps because it so obviously runs counter to Congress's intent in § 253(c) to allow[] [local governments] to preserve the physical integrity of streets and highways. TCI Cablevision, 12 F.C.C.R. at ¶ 103. 73 Instead, Cablevision seems to view the competitive neutrality requirement as limited by an implicit practicability constraint. As Cablevision reads § 253(c), it requires the City to manage its rights of way in order to enhance competitive neutrality -- but only to the extent that this goal is practicable for the City. It is clearly not practicable to force those who are merely converting conduit or cable to take the same steps as those installing new conduit, and thus to incur all the same costs, since this could result in significant disruption of Boston's streets. 74 Perhaps for this reason, Cablevision's interpretation of the competitive neutrality requirement centers on the need to ensure early notice of competitors' activities rather than a need to equalize costs across competitors: in its view, § 253(c) requires the City to use its grants of location process to ensure that telecommunications providers have the maximum information available regarding their competitors' cable networks. Here again, the parties seem to agree. Without explicitly conceding the point, the City seems to assume that it is desirable for local authorities, whether mandated by § 253(c) or not, to seek to enhance competition among providers by maximizing the sharing of information among them. 75 Thus, while the parties are not in perfect agreement, their only point of fundamental disagreement concerns the burden any § 253(c) competitive neutrality requirement would have imposed during the time period between the enactment of the TCA and the City's adoption of the conduit conversion policy, some two years later. Cablevision argues that the competitive neutrality requirement applied with full force from the moment of the TCA's enactment. The City pleads instead for the application of some sort of grace period that would allow it sufficient time to conform its regulatory scheme to the statute's less than transparent language. 76 Rather than settling this disagreement, we reject its underlying premise. The disagreement is premised on the idea that Congress intended the phrase competitively neutral to place an affirmative obligation on local authorities -- an obligation to enact regulations that create effective competition among telecommunications providers. We find this interpretation implausible, on a number of grounds. 77 Most obvious is the form of § 253(c) itself. If Congress meant to impose an affirmative obligation on local authorities to promulgate regulations to ensure a level playing field among telecommunications providers, it would not be likely to bury that obligation in the middle of a savings clause to a preemption provision. 78 The legislative history of the statute is also contrary to this interpretation. Although Congress located the phrase competitively neutral and nondiscriminatory within a savings clause, there is a fair amount of support for the argument that Congress intended this phrase to impose a negative restriction on local authorities' power to regulate. See, e.g., 141 Cong. Rec. H8460, H8461 (daily ed. Aug. 4, 1995) (discussing the need to ensure that cities' franchise fee schemes treat competitors equally). But there is no evidence to suggest that Congress intended the phrase to impose on local governments an affirmative obligation to enact regulations. If the phrase were meant to impose such an obligation, this point would surely have been mentioned prominently in the legislative history. 79 Common sense also argues against affirmative obligation reading of § 253(c). If Congress directly obligated local authorities to regulate toward certain ends (outside of the context of conditional federal funding), local authorities would need to keep a constant watch over Congress's activities, so that they could respond in a timely manner with the necessary regulations. This continuing obligation could place a great burden on local resources. The text and legislative history of § 253 show no desire on Congress's part to impose such a burden. 80 Finally, we note that an affirmative obligation reading of the term competitively neutral would raise significant constitutional issues regarding Congress's ability to commandeer local regulatory bodies for federal purposes. See Printz v. United States, 521 U.S. 898, 934 (1997) (The Federal Government may [not] issue directives requiring the States to address particular problems . . . .); id. at 961 (Stevens, J., dissenting) (agreeing that the notion of cooperative federalism does not include a direct mandate to state legislatures to enact new rules); id. at 975 (Souter, J., dissenting) (agreeing with the majority that Congress may not require a state legislature to enact a regulatory scheme). This consideration again makes it unlikely that Congress intended to include such an affirmative obligation in § 253(c). 81 We conclude that the term competitively neutral in § 253(c) imposes -- at most -- a negative restriction on local authorities' choices regarding the management of their rights of way. This means that the statute would not require local authorities to purposefully seek out opportunities to level the telecommunications playing field. If, however, a local authority decides to regulate for its own reasons (e.g., to minimize disruption to traffic patterns), §253(c) would require that it do so in a way that avoids creating unnecessary competitive inequities among telecommunications providers. 82 Cablevision is unlikely to be able to show that the City violated this requirement. As long as the City was uninterested in recording altered uses of existing conduit (apparently finding its map of underground Boston adequate without this information), it was under no obligation to record those uses for Cablevision's benefit. Certainly nothing in § 253(c) would have obligated the City to collect and deliver to Cablevision the comprehensive information demanded in Cablevision's proposed preliminary injunction. The City would have been free, under § 253(c), to remain forever uninformed about Boston Edison's conversions. 83 Once the City concluded that it did want information about altered uses of previously installed conduit and cable, it began collecting that information in a manner that (to all appearances, at least) is competitively neutral. It is easy to imagine a conversion policy that would fail to be competitively neutral -- for example, a policy under which only certain applicants were required to file public petitions, while others were allowed to keep their petitions private. But there is no such allegation here. 17 84 In the end, Cablevision's TCA claim fails for a simple reason: it is directed at the wrong party. The City is not the cause of any competitive problems faced by Cablevision, and it cannot be commandeered via § 253(c) to solve problems caused by others. 18 In sum, Cablevision's theory fails to state a claim on which relief may be granted.