Opinion ID: 1658888
Heading Depth: 1
Heading Rank: 8

Heading: State and local government authority

Text: 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. (Emphasis supplied.) 47 U.S.C. § 253. Federal courts interpreting the statute generally hold that subsection (a) imposes a substantive limitation on state and local governments, while subsections (b) and (c) are safe harbors or exceptions to the general prohibition stated in subsection (a). See, Missouri Mun. League v. F.C.C., 299 F.3d 949 (8th Cir.2002); New Jersey Payphone Ass'n v. Town of West New York, 299 F.3d 235 (3d Cir.2002); BellSouth Telecommunications v. Town of Palm Beach, 252 F.3d 1169 (11th Cir. 2001). Federal preemption arises from the Supremacy Clause of the U.S. Constitution and is the concept that state laws that conflict with federal law are invalid. Eyl v. Ciba-Geigy Corp., 264 Neb. 582, 650 N.W.2d 744 (2002), citing U.S. Const. art. VI, cl. 2. There are three varieties of preemption: express, implied, and conflict preemption. Id. Express preemption arises when Congress has explicitly declared federal legislation to have a preemptive effect. It can also arise when a federal agency, acting within the scope of authority conferred upon it by Congress, has expressly declared an intent to preempt state law. Id. LES contends that express preemption arises from the plain language of 47 U.S.C. § 253(a) because it is an entity which Congress has determined may not be prohibited by the state from providing telecommunications services. Thus, it contends that §§ 86-128(1)(b) and 86-575(2) are preempted and unconstitutional. On the other hand, NTA argues that under rules governing federal statutory construction, the phrase any entity in 47 U.S.C. § 253(a) does not include municipalities which are traditionally subject to the overriding control of state legislatures, and thus the Nebraska statutes are not preempted. Both arguments are supported by case law. NTA relies upon City of Abilene, Texas v. F.C.C., 164 F.3d 49 (D.C.Cir.1999), in which the U.S. Court of Appeals for the District of Columbia Circuit upheld a determination by the Federal Communications Commission (FCC) that § 253(a) did not preempt a Texas statute forbidding municipalities from providing telecommunications services. In its analysis, the court determined that § 253(a) must be construed in accordance with the precept enunciated in Gregory v. Ashcroft, 501 U.S. 452, 111 S.Ct. 2395, 115 L.Ed.2d 410 (1991), because [t]o claim ... that § 253(a) bars Texas from limiting the entry of its municipalities into the telecommunications business is to claim that Congress altered the State's governmental structure. City of Abilene, Texas, 164 F.3d at 52. The precept of Gregory, supra, requires that if Congress intends to alter the usual constitutional balance between a state and its municipalities, it must make its intention `unmistakenly clear' in the language of the statute. Gregory, 501 U.S. at 460, 111 S.Ct. 2395, quoting Atascadero State Hospital v. Scanlon, 473 U.S. 234, 105 S.Ct. 3142, 87 L.Ed.2d 171 (1985) (specific holding superseded by statute). In City of Abilene, Texas, the court concluded that there was no such clarity in § 253(a), reasoning that the term `entity' was not defined in the Telecommunications Act. 164 F.3d at 52. Noting that it was linguistically possible to include a municipality under the heading entity, the court found that it was not enough under the Gregory standard that the statute could bear such meaning. City of Abilene, Texas, supra . Instead, the court focused on the fact that there was no textual evidence to suggest that Congress, in using the word entity, deliberated over the effect such use would have on state-local governmental relationships. Id. Noting that Gregory requires construction of a statute in favor of state sovereignty when the text fails to indicate congressional intent to the contrary, the court held that § 253(a) did not preempt the Texas statutes. City of Abilene, Texas, supra . A similar conclusion was reached by the Iowa Supreme Court in Iowa Telephone Ass'n v. City of Hawarden, 589 N.W.2d 245 (Iowa 1999). In that case, the court began its analysis with the plain-statement rule derived from Gregory, supra, that the courts will not interpret a federal statute in such a way as to intrude upon an area traditionally regulated by the states absent a clear expression of congressional intent to do so. City of Hawarden, 589 N.W.2d at 251. Relying on the decision of the FCC in City of Abilene, Texas (which was affirmed on appeal by the D.C. Circuit Court as discussed above), the Iowa court held without significant additional analysis that § 253(a) did not prevent the State of Iowa from regulating the provision of telecommunications services by its political subdivisions. Subsequent to the decisions in City of Abilene, Texas, supra, and City of Hawarden, supra, two courts have reached the opposite conclusion. In City of Bristol, VA. v. Earley, 145 F.Supp.2d 741 (W.D.Va.2001), a municipality sought a declaratory judgment that a Virginia statute prohibiting local governmental entities from offering telecommunications services to the general public was preempted by § 253(a). The court acknowledged that the challenged law related to the relationship between states and their political subdivisions, an area traditionally regulated by states. It also affirmed the principle that when a federal statute touches on an area traditionally within the exclusive control of states, Congress must make its intention to preempt `clear and manifest' based on Gregory v. Ashcroft, 501 U.S. 452, 111 S.Ct. 2395, 115 L.Ed.2d 410 (1991). Earley, 145 F.Supp.2d at 747. However, guided by Supreme Court decisions holding that the use of the modifier any denoted an unambiguous legislative intent to impart an expansive scope to a statutory term, the district court determined that Congress' use of the phrase `any entity' made it `clear and manifest' that § 253(a) was intended to have sweeping application, including application in those areas in which states traditionally enjoyed exclusive regulatory power. 145 F.Supp.2d at 747, citing Salinas v. United States, 522 U.S. 52, 118 S.Ct. 469, 139 L.Ed.2d 352 (1997), and United States v. Gonzales, 520 U.S. 1, 117 S.Ct. 1032, 137 L.Ed.2d 132 (1997). On this basis, the court held that the Virginia statute was preempted by § 253(a) and therefore invalid and unenforceable under the Supremacy Clause. In Missouri Mun. League v. F.C.C., 299 F.3d 949 (8th Cir.2002), released after the instant case was argued and submitted, the U.S. Court of Appeals for the Eighth Circuit employed similar reasoning to conclude that a Missouri statute which prevented municipalities and municipally owned utilities from providing telecommunications services or facilities was preempted by § 253(a). In vacating an FCC order which relied heavily upon City of Abilene, Texas v. F.C.C., 164 F.3d 49 (D.C.Cir.1999), the court acknowledged its responsibility under Gregory, supra, to determine whether the statutory language plainly requires preemption. Focusing on the phrase `any entity,' the court determined that the plain meaning of the term `entity' included all business or governmental organizations, including municipalities. Missouri Mun. League, 299 F.3d at 953. Noting that [t]ime and time again the Court has held that the modifier `any' prohibits a narrowing construction of a statute, id. at 954, the court concluded that Congress's use of [the term] `any' to modify `entity' signifies its intention to include within the statute all things that could be considered as entities. Id. at 953-54, citing, inter alia, Gonzales, supra, and Salinas, supra . Specifically rejecting the reasoning of City of Abilene, Texas, the court in Missouri Mun. League stated: The court, however, made no mention of the Supreme Court's cases regarding the effect of the modifier any on the modified term, referring instead to Congress's tone of voice regarding the term any and the emphasis Congress meant to place on different words. [Citation omitted.] ... Whatever the reason for the D.C. Circuit's decision not to consider and discuss Salinas and like cases, we view the lack of such a discussion as detracting from the persuasiveness of its opinion. The Supreme Court has repeatedly instructed us regarding the proper manner of interpreting the modifier any, and we follow that direction here. 299 F.3d at 955. The court therefore concluded that municipalities are included within the phrase any entity as used in § 253(a). Under the Supremacy Clause of the U.S. Constitution, state courts have a concurrent duty to enforce federal law. Howlett v. Rose, 496 U.S. 356, 110 S.Ct. 2430, 110 L.Ed.2d 332 (1990); Preister v. Madison County, 258 Neb. 775, 606 N.W.2d 756 (2000). The Supreme Court has not addressed the specific preemption issue before us, and in the absence of an interpretation of § 253(a) by the Court, we are not bound by any circuit court's interpretation. See In re Search Warrant for 3628 V. St., 262 Neb. 77, 628 N.W.2d 272 (2001). See, also, Lockhart v. Fretwell, 506 U.S. 364, 113 S.Ct. 838, 122 L.Ed.2d 180 (1993) (Thomas, J., concurring) (state courts bound by Supreme Court's interpretation of federal law, but not bound by circuit court's interpretation); Bromley v. Crisp, 561 F.2d 1351 (10th Cir.1977) (state courts may express differing views on federal questions until guided by binding decision of Supreme Court). Here, we are persuaded by the reasoning of the Eighth Circuit that under the rule of statutory construction applied by the Supreme Court in Salinas v. United States, 522 U.S. 52, 118 S.Ct. 469, 139 L.Ed.2d 352 (1997), and other cases, Congress' use of the phrase any entity in § 253(a) is indicative of an expansive statutory scope which includes a governmental entity, such as a municipally owned utility, seeking to provide telecommunications services. We conclude that §§ 86-128(1)(b) and 86-575(2) are absolute prohibitions which, as a matter of law, do not fall within the safe harbor provisions in § 253(b) and (c). Therefore, by virtue of the Supremacy Clause, §§ 86-128(1)(b) and 86-575(2) are preempted by federal law and are unconstitutional.