Virginia Town Wins Big Telecom Case

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A small Virginia town has prevailed in a court fight that could tempt other municipalities to get into the telecommunications business.

A U.S. District Court last week ruled in favor of Bristol, Va. — a city of 1,800 near the Tennessee border — in its federal challenge of a state statute that prohibited localities from building, operating or leasing capacity on city-owned telecommunications networks.

Judge James P. Jones said the Federal Communications Commission misread the 1996 Telecommunications Act when it declined to pre-empt the Virginia law. Jones said the U.S. Court of Appeals for the District of Columbia Circuiterred in upholding the FCC's decision.

"The judge said that was in conflict with the 1996 Telecommunications Act," said National Association of Telecommunications Officers and Advisers president Ron Mallard, who is also director of the Fairfax County, Va., department of telecommunications and consumer services in Fairfax County.

"This is good news for Virginia," he added. "Municipal governments now have a court decision that says that cities are empowered to install fiber-optic telecommunications networks."

FCC officials said it was not immediately clear if the agency would appeal.

A 1999 Virginia law precluded municipalities from offering advanced telecommunications services, said Jim Baller, an attorney with Washington firm The Baller Herbst Law Group, which represented Bristol.

The only exceptions contained requirements so "onerous" that they discouraged any outside entities from seeking to form a partnership with a municipal government, he added.

The district court decision means Virginia cities are no longer obliged to adhere to the law, or the exceptions it contained, Baller said.

That's important to Bristol, which wants furnish access to a telecom network to an outside entity that would introduce broadband service.

Bristol seeks a system capable of delivering download speeds of up to 1 gigabyte per second, more than can be offered by cable-modem or digital subscriber line providers.

"This means outside entities that would never have given Bristol a second thought will see a system they can use to offer services," Baller said.

In the decision, Jones wrote that Section 253(a) of the 1996 act said that states or local governments cannot enact barriers that have the effect of barring "any entity" from entering the local telecom market.

Jones said it "strains the logic" to believe that the phrase "any entity" wouldn't include local governments.

Baller said the Virginia decision could influence a similar case in Missouri. There, the FCC refused to exempt a state law banning city-owned telecom utilities. The U.S. Court of Appeals for the Eighth Circuit has been asked to review that FCC decision.

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