Posted by: Dwight Merriam, Partner, Robinson & Cole, LLP
In the spirit of the holidays, I come bearing two gifts.
This is a tough time of the year to get legal news. Few decisions are rendered, there aren’t many bombastic public hearings, and even IMLA is off until after New Years. I searched for something good to report and found nothing, until…a bright star appeared in the sky and I was led to these two stories on Christmas Eve.
First, this time of the year, our thoughts usually turn to nativity scene naysayers. That pesky Establishment Clause in the First Amendment seems to draw the line — but not always — somewhere between sheep and three wise men being okay, and the baby Jesus in the traditional swaddling clothes (does Gap Kids™ have a line of swaddling clothes?). “Swaddle” is a verb, you know, as in “Honey, how about I swaddle the little guy before we head out to the mall.”). Anyway, cross that line, wherever it is, and you have a constitutional violation. For a good discussion of the ins and outs of this manger madness, including diluting the religious by throwing in some secular, see ACLU v. Schundler, 168 F.3d 92; 1999 U.S. App. LEXIS 2541, (3rd Cir 1999).
The fun fight this year, more fun than listening to Grandma harangue your useless nephew over the excessive time he spends playing Grand Theft Auto IV™, is over Christmas decorations at a Maryland townhouse community, the developers call it a “neo-traditional small town.” It seems that two homeowners at Worman’s Mill in Frederick have put up outside decorations without the express approval of the homeowners’ association. Debra Sachs and her neighbor Donald Suhaka have been told their decorations don’t fit the “design concept’ of the community and have been summoned before the covenants committee (that would not be the holy covenants). “Community Group Orders Removal of Christmas Decorations,” The Washington Post, Dec. 24, 2008 available here. For a view of their neat neighborhood, search Stoney Creek Road, Frederick, Maryland on www.maps.live.com or go to the marketing website http://www.wormansmill.com.
The accused have lawyered up: “Every homeowner has the right to quietly enjoy their property, and here my client simply wants to put up a Christmas display, as many people do in Frederick,” said David Greber of Greber Associates, PC. Homeowner’s Association Forcing Residents To Take Down Christmas Lights, WHAG-TV, Dec. 24, 2008 http://www.msnbc.msn.com/id/28374660/.
Second, the Court of Appeals of Maryland handed down a decision on Christmas Eve, and …wonder of wonders what should appear, but a holding: “No RLUIPA substantial impact here”…and the government folks all went off to their beds, snuggled (or swaddled) and clear in their heads… that denying a variance for such a big sign was nothing the court would ever malign. Trinity Assembly of God of Baltimore City, Inc. v. People’s Counsel for Baltimore County, et al., 2008 Md. Lexis 630. Available here. Our Annual ALI-ABA Land Use Institute fellow faculty member, Judge Harrell, wrote the decision, probably looking for a topic to speak on next summer.
Happy New Year.
Posted By: Joesph Van Eaton, Partner, Miller & Van Eaton, PLLC
Everyone’s asking for gift hints, so I created a list of things I’d like to see in the New Year as a communications attorney representing municipalities:
1. A Federal Communications Commission that gets out of Washington more, and bases its decisions on facts, not lobbyist fancies. The FCC, like many agencies, hears more from those it is supposed to regulate than those who it is supposed to protect. I’d like to see the FCC establish stronger relationships with local governments by appointing more local government representatives to a revitalized Intergovernmental Advisory Committee that might help coordinate approaches to telecommunications regulation and broadband…and I’d like to see the FCC Commissioners spend more time in the field finding out how folks are dealing with broadband/wireless issues at the local level. An FCC that looks beyond the Potomac could quickly dispose of items like the CTIA’s wireless petition, which seeks to establish federal standards for local wireless tower zoning processes.
2. States revisiting legislation limiting local control over cable systems. It has become clear that the state legislation, ostensibly passed to promote competition, has not promoted competition, does not adequately protect consumers against abuses like those in Florida, where operators relocated public, educational and government channels to digital service tiers; and is not well-designed to ensure that the public’s needs and interests are met over the long term. State laws need to be amended to reflect the fact that in return for right to use valuable public property, companies need to assume public obligations – and those need to be easily enforceable, and they need to reflect changes in technology. One solution: reinvigorate local controls.
4. A broad recognition that it may be important for local government to provide critical components of the information highway – either by itself, or in conjunction with new entities that are willing to build open infrastructure. At a time when we desperately need a wider roll-out of fiber we should recognize (as recent developments in North Carolina attest) that local governments can successfully provide vital infrastructure in a way that brings broad benefits to local communities. Local governments need to look closely at evolving opportunities for using existing resources to provide broadband to the community.
5. An adjustment to existing laws to reflect the new digital world. Existing federal and state laws were written on the assumption that voice is different from video, which is different from data….and that these could be regulated separately. This has led to disjointed policies including a broad tax exemption for one type of service (Internet access) which leaves other businesses to bear burdens of supporting local government. As the world goes digital, it may be time to revisit distinctions and exemptions, in light of some basic principles including the following: all communications companies that use public resources, like local rights of way, should pay fair compensation for their use; our communications networks have to provide real opportunities for the public, educators and government to receive and distribute information freely. Want other ideas? Check out NATOA’s broadband principles.
Posted by: Dwight Merriam, Partner, Robinson & Cole, LLP
One of the fallouts of the Kelo decision (Kelo v. City of New London, 545 U.S. 469 (2005) available at http://www.oyez.org/cases/2000-2009/2004/2004_04_108/) was the dog pile of 42 states which adopted new legislation and constitutional amendments that crushed the old ways of eminent domain.
When Kelo was decided I had T-shirts made with Susette Kelo’s pink house on the front. The house has been saved, you know, moved to the other side of town and maintained in its famous pinkness under agreement for 99 years. Click here (http://www.saveardmorecoalition.org/node/2325) to see it all, including the bronze monument and the house in its new location. Maybe it will become one of those New England sites school children visit – Faneuil Hall, Plymouth Rock, Concord’s Old North Bridge, Susette Kelo’s pink house…
On the back of the T-shirts I had printed “Winning the Battle, But Losing the War?” because I thought that with the split opinions in the Connecticut Supreme Court and U.S. Supreme Court and all the publicity, this decision was destined to foment change. So it did, beyond what most of us imagined.
One of those changes was in Missouri where the state legislature added a valuation kicker in the form of “heritage value” as an element of compensation. The Missouri Bar has a useful overview of the changes. Click here or go to http://www.mobar.org/f742d897-5e12-4e29-9451-25450553856f.aspx. Here’s how it works. If the property has been in the same family for at least 50 years, and this includes business property with fewer than 100 employees, then the compensation is 50% more than the fair market value.
On December 16, 2008, the Missouri Supreme Court had its first shot at interpreting how this compensation kicker was to be determined. C. F. White Family Partnership v. Roldan. Click here go to http://www.courts.mo.gov/file/Opinion_SC89148.pdf. The Missouri Supreme Court held 7-0 that the trial court erred in failing to have the court-appointed eminent domain commissioners decide whether property met the criteria for payment of heritage value. Section 523.039(3) provides, in relevant part, that: “The property owner shall have the burden of proving to the commissioners or jury that the property has been owned within the same family for fifty or more years.” The Court found this language dispositive.
The Court then voted 6-1 to issue a writ directing the trial court to have the commissioners make the determination. The holdout justice, Judge Breckenridge, makes the argument that the commissioners become “functus officio” because of the jury trial on valuation.
“Functus officio” sounded quite awful, something like what you don’t want your veterinarian diagnosing in your prize heifer, so I looked it up. You learn something every day. Basically, her point is that jury will now have to decide the issue anyway, so why bother to put the question back to the commissioners.
There are other procedural twists and turns discussed in the decision. The practical lesson from this case is that even the simplest of notions can be difficult to make operational when tinkering with decades old procedures. Other states will likely have their own challenges in implementing their post-Kelo laws.
Posted by: Nicholas P. Miller, Partner, Miller & Van Eaton, PLLC
There was another pair of shoes thrown last week. It occurred in Washington DC, when leaders in Congress, not frustrated Iraqis, took aim at the Federal Communications Commission.
The current Chair of the FCC, Republican Kevin Martin, has been broadly attacked to the point of being investigated for manipulating FCC processes in ways inconsistent with the agency’s own rules and in ways designed to frustrate public participation and effective consideration by other commissioners [Link]. Congress reacted strongly to statements by the Chairman that “business would continue as scheduled” in regular Commission meetings in mid-December and mid-January. In a letter dated Dec. 12, 2008, and unlike any previous in my memory, presumed Senate & House Committee Chairs Senator Rockefeller (D-WV) and Henry Waxman (D-Ca) said: Stop the boat. Focus on the Digital TV transition. And stop trying to push through major policy changes as a lame duck Commission.
Chairman Martin finally conceded it was time to stop further major Commission actions until the Presidential Transition is completed and cancelled the December and January Commission meetings, although items could still be approved with written consent of the other Commissioners.
This concession means the FCC will not likely act on any major policy issues until the Obama administration designates a new FCC Chair. Congress will also have to confirm a fifth member to the FCC as Commissioner Deborah Tate must leave the Commission upon the swearing in of the 111th Congress. Until then the FCC will be stalemated 2-2..
So why does this “inside baseball” story matter to City Attorneys? Let me list the reasons:
• The wireless industry’s effort to get FCC preemption of local cell tower zoning is stopped dead, for now. (http://fjallfoss.fcc.gov/cgi-bin/websql/prod/ecfs/comsrch_v2.hts)
• The reconsideration petition filed by local governments challenging the Commission’s preemption of local cable franchising for incumbent cable operators is further deferred. (http://fjallfoss.fcc.gov/cgi-bin/websql/prod/ecfs/comsrch_v2.hts)
• The reallocation of telephone subsidies which support rural and high cost subscribers will be left to the next administration. (http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-262A1.pdf); and
• Most important, the 700 MHz or “D Block” public-private public safety interoperability auction rules remain undetermined. ( http://fjallfoss.fcc.gov/cgi-bin/websql/prod/ecfs/comsrch_v2.hts)
Later blogs will devote more time and comment to the 700 MHz D Block issue. For now, consider these orientation comments:
1. Would 1st Responders benefit from Broadband communications capabilities on every portable laptop in every emergency vehicle?
2. Would metropolitan areas and local governments benefit from broadband and interoperable mobile?
3. Would all citizens benefit from universally available and very fast wireless internet access?
4. Would inner city and under-served rural areas benefit from robust, high-speed internet access without the expense of building wires to every location?
Too good to be true? Not if the FCC sets the right rules for the merged construction and operation the 700 MHz D Block with the existing allocation of 700MHz wideband public safety spectrum which comes available in February 2009 after television broadcasters move from analog to digital transmission.
If the D Block is successfully merged into a common network with the public safety allocation, 20MHz of spectrum would be available nationwide. This is sufficient bandwidth to meet the entire wish-list above.
Unfortunately, economics and physics have a habit of intruding on wishlists. In this case, a nationwide system of antennae and network links must be built (estimated to cost at least $10 Billion). Reception devices (PC cards @ $50-$100 each) need to be provided to each user. And someone must operate the network.
The Public Safety wideband 10 MHz has been licensed to a national consortium of public safety operators. [www.psst.org] But that group, its member agencies, and state and local government in general, do not have the financial resources to build a nationwide wireless network. The FCC had a plan to do this. [In the Matter of Auction of the D Block License in the 758-763 and 788-793 MHz Bands, Order, 23 FCC Rcd 5421 (2008)] The FCC tried to auction the D Block to a private operator, with the requirement that the successful bidder would operate the D Block along with the 10 MHz of wideband spectrum already set aside for public safety. The FCC hoped the D Block bidder would build a single nationwide network, serving both private and public wireless users. No one accepted the offer.
So the FCC has been reconsidering how to structure a new auction of the D Block. And until the Congressional letter, the lame-duckedness of the current FCC created risks. Many private sector players are trying to get the FCC to adopt quick D Block auction rules, relieving the successful bidder of the most costly obligations associated with serving public safety and building a true nationwide system.
The freeze on major FCC actions stopped this raid on public spectrum. Now state and local governments must nail theses shenanigans permanently shut. We all will benefit from a broadband, nationwide, wireless system that is soundly financed, built universally and able to support all levels of local government requirements. Doing it right will resolve major public safety communications problems as well as major problems integrating rural areas and others into the national internet economy.
More later on how the D Block/Public Safety 20MHz system should be structured.
Posted By: Adrian Herbst, The Baller Herbst Law Group, P.C.
QUESTIONS AND INTRODUCTION
Should a city in a cable service franchise include, or not include, requirements for a cable service provider to comply with build out requirements?
This memorandum is intended to discuss build out requirements and conclusions based on our experience as well as consideration of applicable law, including the most recent FCC Orders that are described below.
In any analysis of build out requirements, a city must also consider a level playing field and equal protection. The contractual obligations of a city in an incumbent franchise may give rise to a challenge of any franchise that may be awarded to a subsequent provider on terms and conditions that are more favorable than the franchise they have. However, as will be noted in this memorandum, recent FCC Orders make it clear that unreasonable build out requirements may not be enforced by a level playing field requirement in a franchise.
The federal Cable Act, including § 621(a)(4)(A) states:
“In awarding a franchise, the franchising authority – (a) shall allow the applicant’s cable system a reasonable period of time to become capable of providing cable service to all households in the franchise area. . . ”
Recent FCC Orders, interpreting the above provision, have made it clear to us that a franchising authority has flexibility with regard to the granting of franchises, build-out requirements and the application of level playing field agreements. The FCC Orders discussed and summarized below make it clear that unless new entrants are given a fair chance to develop market success, the enforcement of build out standards may be a barrier, and level playing field requirements inconsistent with this may not be enforceable.
SUMMARY OF FINDINGS BY THE FCC WITH RESPECT TO WHAT CONSTITUTES “REASONABLE” BUILD OUT REQUIREMENTS
In the FCC’s Report and Order, released on March 5, 2007 (Endnote 1) , the FCC found in part a LFA’s “refusal to grant a competitive franchise because of an applicant’s unwillingness to agree to unreasonable build out mandates constitutes an unreasonable refusal to award a competitive franchise within the meaning of Section 621(a)(1).” (Endnote 2) The FCC’s Second Report and Order, released November 6, 2007, discussed build out requirements and makes clear that the build-out requirements in the First Report and Order are not applicable to incumbents. (Endnote 3)
The FCC defined build out as “requirements that a franchisee deploy cable service to parts or all of the franchise area within a specified period of time.” (Endnote 4) The FCC noted that “the record demonstrated that build-out requirements can substantially reduce competitive entry” (Endnote 5) and that level playing field requirements in local laws or franchise agreements “compel LFAs to impose the same build-out requirements that apply to the incumbent cable-operator.” (Endnote 6) Such level playing field provisions are preempted according to the FCC. (Endnote 7)
As part of a discussion on build-out provisions the issue of “redlining” or discrimination of the basis of income must be included. The practice of redlining, also known as “cherry picking,” is when service providers deploy facilities and services only to the most affluent areas, with less-privileged regions left as a backwater. Section 621(a)(3) of the federal Cable Act states in pertinent part “In awarding a franchise or franchises, a franchising authority shall assure that access to cable service is not denied to any group of potential residential cable subscribers because of the income of the residents of the local area in which such group resides.” (Endnote 8) The FCC notes that the intent of this section is to prevent the exclusion of cable service based on income and does not mandate universal build-out.
Further, the FCC stated in its Order the “statute is thus clear that no provider of cable services may deploy services with the intent to redline…” and therefore the FCC concludes that “nothing in its action today is intended to limit LFAs’ authority to appropriately enforce Section 621(a)(3) and to ensure that their constituents are protected from discrimination.” (Endnote 9) The FCC took note of suggestions to develop anti-redlining practices or programs but declined to require them.
SUMMARY OF FINDINGS BY THE FCC WITH RESPECT TO LEVEL PLAYING FIELD PROVISIONS
The FCC found that “in many instances, level playing field provisions in local laws or franchise agreements compel LFAs to impose on competitors the same build-out requirements that apply to the incumbent cable operator. (Endnote 10) Further, the FCC found that “cable operators use threatened or actual litigation against LFAs to enforce level playing field requirements and have successfully delayed entry or driven would-be competitors out of town.” (Endnote 11) Additionally, the FCC found that level playing field mandates “unreasonably impede competitive entry into the multichannel video marketplace by requiring LFAs to grant franchises to competitors on substantially the same terms imposed on the incumbent cable operators.” (Endnote 12)
The FCC cited comments which claimed that “new entrants face steep economic challenges” and “enters the market in a fundamentally different situation” where it does not have a captive market, but instead “have to win every customer from the incumbent.” (Endnote 13)
1. In the Matter of Implementation of Section 621(a)(1) of the Cable Communications Policy Act of 1984 as amended by the Cable Television Consumer Protection and Competition Act of 1992, MB Docket 05-311, Report and Order and Further Notice of Rulemaking, FCC 06‑180 (released March 5, 2007)(“Report and Order”).
2. Id. at ¶3
3. In the Matter of Implementation of Section 621(a)(1) of the Cable Communications Policy Act of 1984 as amended by the Cable Television Consumer Protection and Competition Act of 1992, MB Docket 05-311, Second Report and Order, FCC 07‑190 (released November 6, 2007)(“Order”)
4. First Report and Order at ¶11
5. Id. at ¶ 32
6. Id. at ¶ 34
7. Id. at ¶5
8. Id. at ¶86
10. Id at ¶34
12. Id at ¶138