News

Court Ruling Backs Cities

9/27/2007 9:13 AM Eastern

The communications licensing system used by the city of St. Louis doesn’t prevent a telecom provider from serving the city, according to a ruling from the U.S. District Court for the Eastern District of Missouri.

The case, which was remanded back to district court by the U.S. Court of Appeals for the 8th Circuit in February, involved a dispute between the city and Level 3 Communications, which was certificated by the state to provide phone services.

Level 3 argued, in a lawsuit filed in 2004, that before it could build infrastructure, city officials forced the provider to obtain a communications transmission system license. The provider asserted that the licensing was unfair because federal law forbids “burdensome legal requirements” and limits the amount of fees localities can charge. Level 3 protested the city’s license fee, charged based on the number of linear feet of plant installed in the right-of-way and adjusted annually for inflation.

The original suit argues the city’s minimum charge of $1.73 per linear foot is “grossly in excess of the cost” of occupying the right of way.

But it a terse ruling issued Sept. 25, Judge Charles Shaw stated that the city’s fee provisions do not prohibit or have the effect of prohibiting Level 3’s ability to provide telecommunications to the city, based on his interpretation of the Telecommunications Act of 1996.

Municipal attorneys called the decision a major victory, because it demonstrates that telecommunications providers must provide evidence of actual or effective prohibition, not just the potential for prohibition, to successfully challenge localities on their rights-of-way fees.

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