COURT OVERTURNS VA. STATUTE BARRING MUNICIPAL ENTRY INTO TELECOM
Rejecting FCC’s interpretation of Telecom Act that no state or local statute could prohibit ability of “any entity” to provide telecom service, U.S. Dist. Court, Abingdon, Va., Wed. invalidated Va. statute that barred localities from competing with commercial providers of telecom services and equipment. Granting summary judgment to City of Bristol, which challenged statute, Judge James Jones rejected U.S. Circuit Court, D.C., interpretation of federal law. Va. statute is “invalid and unenforceable” under Supremacy Clause of Constitution, he said.
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Holding that words “any entity” in federal statute included municipality, court said issue wasn’t whether it was good public policy to allow local govts. to compete with commercial providers. That decision had been made by Congress, it said, and under Commerce Clause, “its decision trumps any conflicting state law.”
In Jan. 12 order, FCC declined to preempt Mo. statute that prohibited municipalities from providing telecom services, ruling that term “any entity” in Sec. 253(a) of Act wasn’t intended to include political subdivisions of state but rather “appeared to prohibit” restrictions on market entry that applied to independent entities (CD Jan 16 p6). Acting on preemption petition filed by Mo. Assn. of Municipal Utilities, FCC said that if municipally owned utility sought to provide telecom service or facility as independent corporate entity that was separate from state, Commission could have reached different result.
Although word “entity” isn’t defined in Act, plain meaning of word suggests broad applications, court said, and such interpretation is confirmed by use of modifier “any.” Supreme Court has said use of modifier “any” in federal statute precludes narrow interpretation of law’s application, court said citing Salina v. U.S.
FCC first articulated its “erroneous” interpretation of “any entity” in Public Utility Commission of Texas, Jones said, pointing out that FCC had concluded that term wasn’t intended to include political subdivisions of state, reasoning that application of Sec. 253(a) to municipalities would encroach upon area traditionally controlled by states. On appeal, D.C. Circuit upheld ruling, finding that term “any entity” was ambiguous and therefore couldn’t preempt traditional area of state control, Jones said.
Rejecting state’s argument that court must defer to FCC’s interpretation under principles of Chevron, Jones ruled that court wasn’t bound by FCC’s decision. He said D.C. Circuit didn’t apply principle of statutory interpretation, repeated in Supreme Court opinions, that use of modifier “any” in a statute precluded narrow construction of term it modifies. Saying D.C. Circuit had rationalized its “narrow reading” of term “any” by explaining that it couldn’t “hear” Congress’s “tone of voice” with regard to term, he said courts always had been called upon to interpret written rather than spoken words of legislature.
Calling decision “clear and important victory” for Va. cities, attorney James Baller, who represented Bristol, said it was first federal court decision on issue in cities’ favor. As for its implications for cities in other states, he said “strong” reasoning by judge on Supreme Court precedent would help bolster the case of municipalities.