[1st-mile-nm] Telecoms Sue Over High-Speed Links

[Richard Lowenberg]

The article below, from the current National Law Journal, in addition to its
primary content, cites a Qwest vs. City of Santa Fe legal suit.  I have added a
brief note at the end of this posting, for further information on the 2004 case.

I will also note that the (OSPN) Open Service Provider Network model, of local
deployment and ownership of (fiber) infrastructure, without providing
commercial services, but rather opening the network to competitive service
providers, including incumbents, circumvents the unfair practices issues, while
also fostering more financially viable public-private partnerships to achieve
'true broadband for all'.
rl
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Telecoms Sue Over High-Speed Links

www.law.com/jsp/legaltechnology/pubArticleLT.jsp?id=1202422769174&rss=ltn

Peter Page
The National Law Journal
July 07, 2008

Telecommunications companies are suing cities around the nation to stop the
construction of publicly owned fiber optic systems to bring high-speed
Internet, telephone and cable television to communities far from metropolitan
centers.

Attorneys for cities say the telecommunications suits, whether brought under
state law, the Federal Telecommunications Act or other laws, are veiled
attempts to stop construction of competing public systems providing an
essential utility in the digital age.

"It's a national playbook. The longer they [telecom companies] delay things, the
better for them," said Patrick Ottinger, general counsel for Lafayette, La.

The city's plans for a $125 million municipal broadband system were delayed by
suits brought by BellSouth and Cox Communications Inc. One suit resulted in the
city holding a referendum to approve the bond sale. The other was resolved when
the city amended the bond ordinance adopted after the referendum to conform
with an unfavorable appellate decision. BellSouth Telcoms. Inc. v. City of
Lafayette, 919 So. 2d 844 (La. 3d Ct. App.).

Attorneys for telecommunications companies say the litigation is needed because
municipalities with the ability to borrow money cheaply -- and not hobbled by
the need to return a profit -- have unfair competitive advantages.

"Our position has never been that it is unlawful for cities to do this, but you
can't use your powers as a city to create an uneven playing field," said David
Goodnight in Stoel Rives' Seattle office, who has represented Qwest
Communications International Inc. against cities in numerous suits since 2000.
Two pivotal cases Goodnight won upended the telecommunications ordinances in
Berkeley, Calif., and Sante Fe, N.M. Qwest v. City of Berkeley, 433 F.3d 1253
(9th Cir. 2006); Qwest v. City of Santa Fe, 380 F.3d 1258 (10th Cir.).

A FIGHT IN UTAH

Goodnight cited an association of Utah cities formed to promote the construction
of a broadband networks in smaller cities and rural areas. "What we found during
discovery was that the cities were providing facilities and personnel at no
cost, interest-free loans and, in some instances, outright cash infusions," he
said.

Steve Allread, a solo practitioner in Salt Lake City who represents the Utah
association, countered that "[I]f the private sector had been more responsive,
there would not have been a need for the project. This litigation was an
attempt [by Qwest] to recreate the old monopolistic system." The suit settled
in 2006. Qwest Corp v. Utah Telecommunication Open Infrastructure Agency, No.
2:05-cv-00471 PGC (D. Utah.).

Jim Baller of the Baller Herbst Law Group in Washington has participated in many
of the suits and is an advocate for policies favoring municipal broadband
networks. "It is common for the affected cable company to sue over these
initiatives," Baller said. "This is similar to electrification a century ago
when small towns and rural areas were left behind, so they formed their own
authorities."

Many involved in the issue see a typical clash of viewpoints in the litigation
embroiling Monticello, Minn., a town near Minneapolis, and TDS Telecom, a
subsidiary of Bridgewater Telephone Co.

The city, complaining that neither TDS nor its competitor Charter Communications
Inc. would bring fiber cable to every home and business, won a 74 percent
majority in a referendum to build a municipal system. TDS sued on the eve of a
city council meeting to finalize the plan.

"The municipal system will be in direct competition with private companies,"
said David Johnson of Sidley Austin in Chicago, who is representing TDS. "The
city is construing public convenience so broadly it would allow the city of
Monticello to go into competition with any business in the city if it didn't
like the prices or services, and they could do it with tax-free financing with
no need to make a profit."

John Baker of Greene Espel in Minneapolis, who represents the city, said cities
across the state had used the broadly worded state law to sell bonds backed by
anticipated revenues to build water parks, ambulance services, ski areas and
Internet services.

"TDS is trying to take the open-ended authority of Minnesota municipalities to
issue revenue bonds for public convenience and define 'public convenience'
right out of existence," Baker said. A motion for dismal is scheduled to be
argued on July 18. Bridgewater Telephone Co. v. Monticello, No. 86-CV-08-4555.

------

Note:  Qwest Corporation v. City of Santa Fe, 380 F.3d 1258 (10th Cir. 2004).
Rejected Qwest's Section 1983 claims and claim that right-of-way fees were
limited to costs, but held that a substantial increase in the fee was a prima
facie showing of prohibition. Joseph Van Eaton represented the City.

http://bulk.resource.org/courts.gov/c/F3/380/380.F3d.1258.02-2269.02-2258.html



-----------------
Richard Lowenberg
1st-Mile Institute
P.O. Box 8001, Santa Fe, NM 87504
505-989-9110;   505-603-5200 cell
rl at 1st-mile.com  www.1st-mile.com

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