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Amicus curiae brief of local franchising authorities (LFAs) in support of Portland. Re: AT&T v. Portland (cable access case). U.S. Court of Appeals, Ninth Circuit, Appeal No. 99-35609. Date: September 14, 1999. Source: City of San Francisco. Editor's Notes: No. 99-35609 IN THE UNITED STATES COURT OF APPEALS AT&T CORP., TELECOMMUNICATIONS, INC., Appellants, v. CITY OF PORTLAND AND MULTNOMAH COUNTY, Appellees. On Appeal From The United States District Court
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STATEMENT OF INTEREST Amici submit this brief in support of appellees, the City of Portland and Multnomah County (collectively "Portland"). Amici's participation is authorized by consent of all the parties under Federal Rule of Appellate Procedure 29(a). Amici are organizations whose members include state, county, and city governments and officials located throughout the United States. Amici organizations include the U.S. Conference of Mayors, the National Association of Counties, the National League of Cities, and the National Association of Telecommunications Officers and Administrators. Many of these organizations participated in negotiations that resulted in the Cable Communications Policy Act of 1984 ("1984 Cable Act"), and have a vital interest in any judicial interpretations of its provisions. Amici are also individual and collective county and city governments who act as local cable television franchising authorities ("LFAs"). Amici include Jefferson County, KY, King County, WA, the Montgomery County Council, MD, the Michigan Coalition To Protect Public Rights Of Way From Telecommunications Encroachments, the Sacramento Metropolitan Cable Television Commission, the San Mateo County Telecommunications Authority, and the Bell-Cudahy Cable Television Authority. Amici also include the Cities of Arvada, Atlanta, Baltimore, Boston,[1] Dearborn, Los Angeles, New York, Rancho Palos Verdes, San Diego, San Francisco, San Jose and Walnut Creek. Amici have a vital interest in legal issues that affect the powers and responsibilities of LFAs. The specific issue before this Court is whether Portland can decide to impose a nondiscrimination condition on AT&T during the transfer of a cable franchise. Far broader issues, however, are raised by the arguments of AT&T and its amici. AT&T's arguments threaten not only the power of LFAs to impose nondiscrimination conditions on cable operators, but more ominously -- the retained sovereign powers of LFAs to enact legislation to protect their citizens. A broad decision by this Court adverse to Portland would raise serious questions about the regulation of cable television franchises under the sovereign powers retained by LFAs. Each condition imposed by a LFA -- no matter how important, no matter how necessary -- could be challenged as preempted under federal law. LFAs could be paralyzed from responding to the needs and interests of their citizens by the threat of potential litigation by cable operators. Amici ask this Court to affirm the decision of the district court holding that Portland retains the authority to impose a nondiscrimination provision as a condition of approving a franchise transfer. INTRODUCTION AND SUMMARY OF ARGUMENT This case presents the issue of whether local franchising authorities may be stripped of their sovereign power to ensure that cable systems are responsive to community needs and interests. The district court held that Portland's nondiscrimination condition was "within the authority of the City and County to protect competition." Opinion, AT&T E.R. at 200. Nevertheless, AT&T and its amici argue that the Communications Act of 1934 ("Act") preempts Portland's nondiscrimination condition. Portland and the Intervenors make clear that the four statutory provisions AT&T relies on do not authorize such preemption, and that the Federal Communications Commission ("FCC") has taken no formal action to preempt Portland's condition. Amici agree. These arguments have been well discussed and developed in briefs submitted by Portland and the Intervenors. Amici believe that AT&T's claim of preemption fails for another reason. AT&T's entire argument to this Court rests on a single premise that is fundamentally wrong: AT&T assumes that under Title VI of the Act LFAs retain authority "only over uses of public rights-of-way and related aspects of cable service." AT&T Br. at 8. Amici supporting AT&T share that assumption. See, e.g., National Cable Television Association, et al. ("NCTA") Br. at 35; Hands Off The Internet Br. at 10. But that view distorts beyond recognition the primary role of LFAs in the regulation of cable television franchises. No decision of the Supreme Court or the Ninth Circuit has ever held or even intimated that LFAs may be limited to regulation "over uses of public rights-of-way and related aspects of cable service" under Title VI of the Act. No provision of the Communications Act or the 1984 Cable Act has limited the authority of LFAs in this way. Nor does the FCC itself support AT&T's interpretation of the Act. To the contrary, as the district court correctly recognized: "Congress intended to interfere as little as possible with existing local government authority to regulate cable franchises." Opinion, AT&T E.R. at 201; see City of Dallas v. FCC, 165 F.3d 341, 347 (5th Cir. 1999). AT&T's expansive reading of preemptive authority turns federalism on its head. AT&T fails to mention that interpretation of preemption provisions "start[s] with the assumption that the historic police powers" are not preempted. Cipollone v. Liggett Group, 505 U.S. 504, 516 (1992 ). AT&T also fails to point out that this burden may be overcome only by "unmistakably clear" statutory language to the contrary. Gregory v. Ashcroft, 501 U.S. 452, 460 (1991) (citation omitted). This requirement of a clear statement ensures that Congress will be held directly accountable to the people for closing the doors of state and city legislatures on the issue of nondiscriminatory access to cable modem facilities. Any congressional intent to override an LFA's authority to determine for itself whether to impose a nondiscrimination condition can only be justified by "unmistakably clear" statutory language to preempt -- language that is absent from the Act. Further, AT&T's broad view of federal preemption is contradicted by the history of cable television regulation, and the text and legislative history of the 1984 Cable Act. Long before federal regulation, states and local governments protected their citizens by ensuring cable operators were responsive to community needs and interests. In enacting the 1984 Cable Act, Congress intended to enhance the primary role of LFAs, not to undermine it. Accordingly, it expressly preserved the full range of traditional powers of LFAs over cable operators. Where the 1984 Cable Act did not expressly address certain matters, Congress confirmed that state and local authorities retained the pre-existing power to address them. As the district court found: absent express statutory preemption, LFAs retain their sovereign authority to decide whether to impose a nondiscrimination condition. The judgment of the district court should be affirmed.
As the district court correctly recognized, "[i]f Congress wants a statute to preempt a power traditionally held by states or local governments, Congress must make its intent 'unmistakably clear' in the statute's wording." Opinion, AT&T E.R. at 201 (citations omitted). Applying this statutory canon, the district court could not find "unmistakably clear" language in the Act that Congress intended to preempt the sovereign power of Portland to adopt the nondiscrimination condition. See id. at 200.
"[O]ur Constitution establishes a system of dual sovereignty between the States and the Federal government." Gregory v. Ashcroft, 501 U.S. 452, 457 (1991) . Under this constitutional system "the States retain substantial sovereign powers . . . , powers with which Congress does not readily interfere." Id. at 457; U.S. Const. amend. X ("The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people"). Recognizing this system of dual sovereignty, the Supreme Court has uniformly imposed a heavy burden on a party asserting preemption. First, interpretation of preemption provisions "start[s] with the assumption that the historic police powers" are not preempted. Cipollone v. Liggett Group, 505 U.S. 504, 516 (1992) ; Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947) . The burden of overcoming this presumption is especially heavy with respect to state and local laws in traditional areas of local concern. Hillsborough County v. Automated Medical Labs., Inc., 471 U.S. 707, 715 (1985). As the district court correctly recognized, one historic power of state and local governments is the power to enact legislation to "promote competition in the local economy."[2] Opinion, AT&T E.R. at 201. Second, the presumption may be overcome only by "unmistakably clear" language of the statute.[3] Gregory , 501 U.S at 461 (emphasis added). This requirement that Congress clearly express its intent to preempt state law is essential to protecting the states' role in our federal system of government. See id. at 460-61. "The Constitution . . . contemplates that a State's government will represent and remain accountable to its own citizens." Printz v. United States, 521 U.S. 898, 920 (1997). When Congress preempts the power of states and local governments to legislate on issues of local concern, "the requirement of clear intent assures that the legislature has in fact faced, and intended to bring into issue, the critical matters involved in the judicial decision." Gregory, 501 U.S. at 461 (quoting United States v. Bass, 404 U.S. 336, 349 (1971) ); see also Will v. Michigan Dept. of State Police, 491 U.S. 58, 65 (1989).
A clear statement of preemptive intent forces Congress to stand directly accountable to the electorate. Congress must state explicitly a decision to erode state authority and reduce the benefits of federalism, such as "decentralized government that is more sensitive to the diverse needs of a heterogeneous society [and that] increases opportunity for citizen involvement in democratic processes." Gregory , 501 U.S. at 458. When Congress knows that it will answer directly to the people for the preemption of state sovereign authority, this political accountability curbs unwarranted intrusion upon the autonomy of state and local governments. Absent such a clear statement of intent to supplant state and local authority, the electorate cannot hold Congress accountable. As the Supreme Court explained in a state challenge to a federal law: "If the citizens of New York, for example, do not consider that making provision for the disposal of radioactive waste is in their best interest, they may elect state officials who share their view." New York v. United States, 505 U.S. 144, 168 (1992) . If the issue is clearly preempted by Congress, "it is the Federal Government that makes the decision in full view of the public, and it will be federal officials that suffer the consequences if the decision turns out to be detrimental or unpopular." Id. By contrast, without a clear statement of preemption, Congress can dodge accountability for the political effects of its actions. State and local officials suffer the brunt of public disapproval, while federal officials are insulated from the political results of their decision. "Accountability is thus diminished when . . . elected state officials cannot regulate in accordance with the views of the local electorate in matters not pre-empted by federal regulation." Id. This case illustrates the importance of the clear statement rule. If Congress had stated an "unmistakably clear" intent to preempt the historic power of LFAs from deciding to protect competition in their jurisdictions, the 1984 Cable Act and subsequent amendments would have been subject to a very different constellation of political forces. Congress may have rejected the 1984 Cable Act if it unambiguously provided that local cable subscribers could not appeal to their local legislature for protection from anti-competitive practices by their cable operators. Indeed, there may have been no possibility of enactment if Congress also clearly stated that it was preempting all historic powers of LFAs over cable operators. Here, if Congress had stated an "unmistakably clear" intent to preempt the LFAs from imposing nondiscrimination provisions on cable operators during the transfer of a cable franchise, citizens would know which officials to hold accountable. Citizens would know whether to petition Washington for redress, or knock at the doors of the State Capitols or local City Halls. And citizens would know whom to vote out of office. Congress did not state clearly in the Act any intent to override an LFA's authority to determine for itself whether to impose a nondiscrimination condition, such as Portland's. As the district court correctly found, "Congress intended to interfere as little as possible with existing local government authority to regulate cable franchises." Opinion, AT&T E.R. at 201. The FCC itself does not support any of AT&T's four express preemption arguments, and does not ask this Court to reverse the decision of the district court. FCC Br. at. 27-30. Absent "unmistakably clear" statutory language to preempt the sovereign power of LFAs to decide to enact a nondiscrimination provision, the Court should not broadly construe the four provisions of the Act to preempt Portland's action.
In challenging Portland's decision, AT&T and its amici raise the specter of "30,000" local franchising authorities imposing different policies. AT&T Br. at 26; NCTA Br. at 23. Curiously, they never explain why. They fail to explain why complying with a nondiscrimination provision in Portland, but not elsewhere would produce "chaos." AT&T's argument comes down to this: Portland cannot make AT&T provide nondiscriminatory access to their cable modem facilities. But the history of cable television franchise regulation, and the text and the legislative history of the 1984 Cable Act confirm that LFAs retain the sovereign power to decide whether to enact a nondiscrimination provision. Congress expressly contemplated that each cable franchise would be tailored to "the needs and interests of the local community." See 47 U.S.C. § 521(2). Each local franchise already subjects cable operators to differing provisions for "facilities and equipment" and "broad categories of video programming or other services." Id. at § 544(b). And each local franchise requires different public, educational, and governmental use channels, facilities, equipment, and institutional networks. Id. at § 531. As amici well know -- no two cable franchise agreements are alike. By preventing Portland from meaningfully exercising its retained sovereign power, AT&T's theory of preemption would directly conflict with the provisions of the Act. Section 556(a) expressly preserves state and local authority to regulate matters of public health, safety, and welfare. 47 U.S.C. § 556(a). And Section 553(d) expressly recognizes the power of LFAs to preserve competition for cable services. 47 U.S.C. § 553(d). Such conflict with express provisions of the Act cannot be justified by the four statutory provisions that AT&T relies on or broad policy statements by the FCC. Thus, Portland's nondiscrimination condition falls within the scope of an LFA's traditional authority, which Congress intended to leave intact.
Prior to the enactment of the Cable Act in 1984, "[m]ost decisions related to the award of a cable franchise [had] historically been made at the municipal level." H.R. Rep. 98-934 at 23 (1984). State and local governments exercised their police powers to require franchise terms and conditions that were responsive to community needs. See, e.g., TV Pix, Inc. v. Taylor, 304 F. Supp. 459 (D. Nev. 1968) , aff'd per curiam, 396 U.S. 556 (1970). As the FCC itself concluded, "local governments are inescapably involved in the process of [franchising] because cable makes use of streets and ways and because local authorities are able to bring a special expertness to such matters." Cable Television Report and Order, 36 FCC 2d 143, 207 (1972) (emphasis added). Thus, the FCC recognized a "deliberately structured dualism" of authority between itself and local governments. Id. In adopting a national cable television policy, Congress did not displace state and local franchising with a system of federal permits, as it has done in the case of broadcasting.[4] Instead, Congress adopted a policy that "continues reliance on the local franchising process as the primary means of cable television regulation." H.R. Rep. 98-934 at 19 (1984) (emphasis added). As Congress recognized, "city officials have the best understanding of local communications needs and can require cable operators to tailor the cable system to meet those needs." Id. at 24. Thus, Congress intended to "preserve the critical role of municipal governments in the franchise process . . . ." Id. at 19. As the Supreme Court noted, Congress continued to "permit[]the local franchising authorities to regulate many aspects of cable services, facilities, and equipment . . ." other than technical standards relating to signal quality. City of New York v. FCC, 486 U.S. 57, 67 (1988). Congress declared that one of the major policy goals of the 1984 Cable Act was to "assure that cable systems are responsive to the needs and interests of the local community." 47 U.S.C. § 521(2). To this end, Congress confirmed the power of state and municipal governments to grant and enforce franchises, id. at §§ 541, 544, to establish requirements for "facilities and equipment" and "broad categories of video programming or other services," id. at 544, to require public, education, and government access channels, facilities and equipment, id. at §§ 531, 544, and to consider a number of factors including "future cable-related community needs and interests" when renewing a franchise. Id. at § 546. Congress also expressly preserved state and local authority to regulate matters affecting public health, safety and welfare, id. at § 556(a), system construction, id. at § 552(a), consumer protection, id. at § 552(d), prohibitions on discrimination, id. at § 543(e)(1), equipment facilitating the reception of cable services by the hearing impaired, id. at § 543(e)(2), obscene programming, id. at § 544(d)(1), and the protection of subscriber privacy. Id. at § 551(g). Where the 1984 Cable Act did not expressly address certain matters, Congress left such matters to the exercise of state and local authorities. H.R. Rep. 98-934 at 59 (1984). For example, the 1984 Cable Act did not address certain terms and conditions related to the grant of a franchise, the construction and operation of the system, and the enforcement and administration of a franchise. Id. Congress confirmed that such matters not expressly addressed were subject to pre-existing state and local government regulation. Id. Absent express statutory preemption, Congress left each LFA free to decide for itself how best to tailor its cable system to the needs and interests of its community.
AT&T's expansive view of federal preemption is contradicted by the express language of the 1984 Cable Act. AT&T never mentions that Congress expressly preserved the full range of traditional sovereign powers that LFAs may exercise. Section 556 of the Act, titled "Coordination of Federal, State and Local Authority," provides in subsection (a) that "[n]othing in [Title VI] shall be construed to affect any authority of any State, political subdivision, or agency thereof, or franchising authority, regarding matters of public health, safety, and welfare, to the extent consistent with the express provisions of [Title VI]." 47 U.S.C. § 556(a). Subsection (b) expressly reserves jurisdiction in the States to regulate consistent with Title VI: "[n]othing in [Title VI] shall be construed to restrict a State from exercising jurisdiction with regard to cable services consistent with [Title VI]." Id. at § 556(b). As the district court correctly recognized, Section 556 in its entirety "shows that Congress intended to interfere as little as possible with existing local government authority to regulate cable franchises." Opinion, AT&T E.R. at 201. Congress explained that under Section 556, a state may "exercise authority over the whole range of cable activities," including "consumer protection . . . and other franchise-related issues -- as long as the exercise of that authority is consistent with Title VI." H.R. Rep. No. 98-934, at 94 (1984) (emphasis added). The inclusion of Section 556, expressly preserving the traditional sovereign power of LFAs, undermines any argument that the Act reflects an "unmistakably clear" intent to override local decisions such as Portland's nondiscrimination condition.
1992 amendments to the 1984 Cable Act confirm the primary role of LFAs in regulating various aspects of cable service. As the district court concluded, Section 533(d) of the Act "specifically recognizes the power of local franchising authorities to preserve competition for cable services." Opinion, AT&T E.R. at 201. That section expressly confirms that LFAs have the power to prohibit the transfer of ownership or control of a cable system in "circumstances in which the [LFA] determines that the acquisition of such a cable system may eliminate or reduce competition in the delivery of cable service in such jurisdiction." 47 U.S.C. § 533(d)(2). Congress enacted this provision specifically to overrule a federal district court ruling that, under the 1984 Cable Act, only the FCC was authorized to disapprove a cable transfer for competitive reasons. See H.R. Rep. 102-628, at 91 (1992), citing Cable Ala. Corp. v. City of Huntsville, 768 F. Supp. 1484, 1499 (N.D. Ala. 1991). The fact that Congress amended the Act specifically to overrule a limitation on local authority confirms that LFAs have the authority to block franchise transfers for competitive reasons. Absent express statutory preemption, the Act confirms that LFAs may exercise their traditional sovereign power to decide whether to enact a nondiscrimination condition. In whichever way an LFA discharges its responsibility, the Act does not affect the sovereign power of the LFA to choose conditions responding to the "needs and interests of the local community." Thus, the Act leaves an LFA free to impose a nondiscrimination provision -- if it chooses to do so. Conversely, nothing in the Act compels an LFA to give effect to AT&T's current access policy. Intrusion into state and local sovereignty as invasive as that urged by AT&T and its amici should be rejected absent "unmistakably clear" statutory language to preempt -- language absent from the Act. For these reasons, and for those stated in the briefs of Portland and the Intervenors, the Court should affirm the district court's judgment.
There are no related cases pending in this Court. CERTIFICATE OF COMPLIANCE I hereby certify that pursuant to Fed. R. App. Pro. 29(d) and 9th Cir. R. 32-1, this brief has been prepared using double-spaced 14 point Times New Roman typeface. According to the "Word Count" feature in my Microsoft Word for Windows software, this brief contains 4,247 words up to and including the signature lines that follow the brief's conclusion. I declare under penalty of perjury that this Certificate of Compliance is true and correct and that this declaration was executed on September 14, 1999.
I, hereby certify that on the 14th day of September, 1999, I caused two true and correct copies of the foregoing Amicus Brief of the U.S. Conference of Mayors, the National Association of Counties, the National League of Cities, the National Association of Telecommunications Officers and Administrators, Jefferson County, KY, King County, WA, Montgomery County, MD, the Michigan Coalition To Protect Public Rights of Way from Telecommunications Encroachments, the Sacramento Metropolitan Cable Television Commission, the San Mateo County Telecommunications Authority, the Bell-Cudahy Cable Television Authority, and the cities of Arvada, Atlanta, Baltimore, Boston, Dearborn, Los Angeles, New York, Rancho Palos Verdes, San Diego, San Francisco, San Jose and Walnut Creek, in support of Appellees city of Portland and Multnomah County, et al., to be served by overnight mail upon the following: Terence L. Thatcher Gerald Itkin Joseph Van Eaton Paul T. Fortino Lloyd Cutler Bruce J. Ennis Daniel M. Waggoner David W. Carpenter Mark C. Rosenblum I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct, and that this Certificate was executed on September 14, 1999. /s/ Catherine Pearson [1] The City of Boston joins the amici on the issue of preservation of local authorities' ability to regulate under the Communications Act. However, the City of Boston does not take a position at this time on any ancillary or subsidiary issues that may be raised regarding this matter. [2] See Proprietors of Charles River Bridge v. Warren Bridge, 36 U.S. (11 Pet.) 420, 547-48 (1837) (finding it "the object and end of all government [] to promote . . . the prosperity of the community by which it is established."); see also Holt Cargo Syst., Inc. v. Delaware River Port Author., 20 F. Supp. 2d 803, 828 (E.D. Pa. 1998) (finding that "[a]n interest in maximizing revenues or encouraging the development of competing private enterprises is a legitimate and rational purpose" for a local ordinance); One World Family v. City and County of Honolulu, 76 F.3d 1009, 1013 (9th Cir. 1996) (finding the "attract[ion] and preserv[ation of] business" a "legitimate preoccupation of local government"); McDevitt v. Short Yellow Cab Co., 36 A.2d 880, 883 (affirming revocation of taxicab license based on violation of ordinance seeking to maintain fair competition between cab companies). [3] The FCC claims that the district court erred in stating that "local regulation of cable service can only be preempted by an 'unmistakably clear' statutory provision." FCC Br. at 27. The FCC invites this Court to allow the FCC to preempt local regulation such as Portland's. However, as the FCC concedes -- agency preemption was not before the district court. Id. Further, only "properly promulgated, substantive agency regulations have the 'force and effect of law'" necessary "to pre-empt state law under the Supremacy Clause." Chrysler Corp. v. Brown, 441 U.S. 281, 295-96 (1979) (citations omitted). In the absence of formal regulatory proceedings, a regulatory agency such as the FCC cannot preempt state and local law. While Amici also dispute the FCC's broad view of agency preemption, this issue was not properly raised before the district court. [4]See, e.g., 47 U.S.C. § 301. |
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