MediaOne Group, Inc. v. County of Henrico ( 2001 )

Filed: July 16, 2001
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
Nos. 00-1680(L)
(CA-00-33-3)
MediaOne Group, Inc., et al.,
Plaintiffs - Appellees,
versus
GTE Intelligent Network Services, Inc., etc.,
Intervenor - Appellant.
O R D E R
The court amends its opinion filed July 11, 2001, as follows:
On page 7, section 2, lines 10-11 -- the name of Theodore W.
Ullyot is removed from list of counsel “on brief.”
For the Court - By Direction
/s/ Patricia S. Connor
Clerk
PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
MEDIAONE GROUP, INCORPORATED;
MEDIAONE OF VIRGINIA,
INCORPORATED; AT&T CORPORATION,
Plaintiffs-Appellees,
v.
COUNTY OF HENRICO, VIRGINIA,
Defendant,
BELL ATLANTIC CORPORATION; BELL
ATLANTIC-VIRGINIA, INCORPORATED;
BELL ATLANTIC INTERNET SOLUTIONS,
INCORPORATED,
Intervenors/Defendants,
No. 00-1680
and
GTE INTELLIGENT NETWORK
SERVICES, INCORPORATED, d/b/a
GTE.net,
Intervenor-Appellant.
VIRGINIA CITIZENS CONSUMER
COUNCIL; CONSUMER FEDERATION OF
AMERICA; CENTER FOR MEDIA
EDUCATION; DISTRICT OF COLUMBIA;
CITY OF TACOMA, WASHINGTON;
MONTGOMERY COUNTY, MARYLAND;
U.S. CONFERENCE OF MAYORS;
NATIONAL LEAGUE OF CITIES;
NATIONAL ASSOCIATION OF COUNTIES;
NATIONAL ASSOCIATION OF
TELECOMMUNICATIONS OFFICERS AND
ADVISORS; VIRGINIA ASSOCIATION OF
TELECOMMUNICATIONS OFFICERS AND
ADVISORS; TEXAS ASSOCIATION OF
TELECOMMUNICATIONS OFFICERS AND
ADVISORS; MINNESOTA
ASSOCIATION OF COMMUNITY
TELECOMMUNICATIONS
ADMINISTRATORS; OPENNET
COALITION; HANDS OFF THE
INTERNET; FEDERAL COMMUNICATIONS
COMMISSION; NATIONAL CABLE
TELEVISION ASSOCIATION; VIRGINIA
TELECOMMUNICATIONS ASSOCIATION;
WEST VIRGINIA TELECOMMUNICATIONS
ASSOCIATION; CABLE
TELECOMMUNICATIONS ASSOCIATION OF
MARYLAND, DELAWARE AND THE
DISTRICT OF COLUMBIA,
INCORPORATED; NORTH CAROLINA
CABLE TELECOMMUNICATIONS
ASSOCIATION; SOUTH CAROLINA
TELEVISION ASSOCIATION,
Amici Curiae.
2
MEDIAONE GROUP, INCORPORATED;
AT&T CORPORATION; MEDIAONE OF
VIRGINIA, INCORPORATED;
Plaintiffs-Appellees,
v.
COUNTY OF HENRICO, VIRGINIA,
Defendant,
GTE INTELLIGENT NETWORK
SERVICES, INCORPORATED, d/b/a
GTE.net,
Intervenor/Defendant,
and
No. 00-1709
BELL ATLANTIC CORPORATION; BELL
ATLANTIC-VIRGINIA, INCORPORATED;
BELL ATLANTIC INTERNET SOLUTIONS,
INCORPORATED,
Intervenors-Appellants.
VIRGINIA CITIZENS CONSUMER
COUNCIL; CONSUMER FEDERATION OF
AMERICA; CENTER FOR MEDIA
EDUCATION; CITY OF TACOMA,
WASHINGTON; MONTGOMERY COUNTY,
MARYLAND; DISTRICT OF COLUMBIA;
U.S. CONFERENCE OF MAYORS;
NATIONAL LEAGUE OF CITIES;
3
NATIONAL ASSOCIATION OF COUNTIES;
NATIONAL ASSOCIATION OF
TELECOMMUNICATIONS OFFICERS AND
ADVISORS; VIRGINIA ASSOCIATION OF
TELECOMMUNICATIONS OFFICERS AND
ADVISORS; TEXAS ASSOCIATION OF
TELECOMMUNICATIONS OFFICERS AND
ADVISORS; MINNESOTA
ASSOCIATION OF COMMUNITY
TELECOMMUNICATIONS
ADMINISTRATORS; OPENNET
COALITION; HANDS OFF THE
INTERNET; FEDERAL COMMUNICATIONS
COMMMISSION; NATIONAL CABLE
TELEVISION ASSOCIATION; VIRGINIA
TELECOMMUNICATIONS ASSOCIATION;
WEST VIRGINIA TELECOMMUNICATIONS
ASSOCIATION; CABLE
TELECOMMUNICATIONS ASSOCIATION OF
MARYLAND, DELAWARE AND THE
DISTRICT OF COLUMBIA,
INCORPORATED; NORTH CAROLINA
CABLE TELECOMMUNICATIONS
ASSOCIATION; SOUTH CAROLINA
TELEVISION ASSOCIATION,
Amici Curiae.
4
MEDIAONE GROUP, INCORPORATED;
MEDIAONE OF VIRGINIA,
INCORPORATED; AT&T CORPORATION,
Plaintiffs-Appellees,
v.
COUNTY OF HENRICO, VIRGINIA,
Defendant-Appellant,
and
GTE INTELLIGENT NETWORK
SERVICES, INCORPORATED, d/b/a
GTE.net; BELL ATLANTIC
No. 00-1719
CORPORATION; BELL ATLANTIC-
VIRGINIA, INCORPORATED; BELL
ATLANTIC INTERNET SOLUTIONS,
INCORPORATED,
Intervenors/Defendants.
VIRGINIA CITIZENS CONSUMER
COUNCIL; CONSUMER FEDERATION OF
AMERICA; CENTER FOR MEDIA
EDUCATION; CITY OF TACOMA,
WASHINGTON; MONTGOMERY COUNTY,
MARYLAND; DISTRICT OF COLUMBIA;
U.S. CONFERENCE OF MAYORS;
NATIONAL LEAGUE OF CITIES;
5
NATIONAL ASSOCIATION OF COUNTIES;
NATIONAL ASSOCIATION OF
TELECOMMUNICATIONS OFFICERS AND
ADVISORS; VIRGINIA ASSOCIATION OF
TELECOMMUNICATIONS OFFICERS AND
ADVISORS; TEXAS ASSOCIATION OF
TELECOMMUNICATIONS OFFICERS AND
ADVISORS; MINNESOTA
ASSOCIATION OF COMMUNITY
TELECOMMUNICATIONS
ADMINISTRATORS; OPENNET
COALITION; HANDS OFF THE
INTERNET; FEDERAL COMMUNICATIONS
COMMMISSION; NATIONAL CABLE
TELEVISION ASSOCIATION; VIRGINIA
TELECOMMUNICATIONS ASSOCIATION;
WEST VIRGINIA TELECOMMUNICATIONS
ASSOCIATION; CABLE
TELECOMMUNICATIONS ASSOCIATION OF
MARYLAND, DELAWARE AND THE
DISTRICTOF COLUMBIA,
INCORPORATED; NORTH CAROLINA
CABLE TELECOMMUNICATIONS
ASSOCIATION; SOUTH CAROLINA
TELEVISION ASSOCIATION,
Amici Curiae.
Appeals from the United States District Court
for the Eastern District of Virginia, at Richmond.
Richard L. Williams, Senior District Judge.
(CA-00-33-3)
Argued: September 27, 2000
Decided: July 11, 2001
Before WIDENER, WILKINS, and MICHAEL, Circuit Judges.
6
Affirmed by published opinion. Judge Michael wrote the opinion, in
which Judge Wilkins joined. Judge Widener wrote a concurring opin-
ion.
_________________________________________________________________
COUNSEL
ARGUED: Edward Joseph Fuhr, HUNTON & WILLIAMS, Rich-
mond, Virginia; Andrew Gerald McBride, COOPER, CARVIN &
ROSENTHAL, P.L.L.C., Washington, D.C., for Appellants. David
William Carpenter, SIDLEY & AUSTIN, Chicago, Illinois, for
Appellees. ON BRIEF: Stacy C. Taylor, Eric H. Feiler, HUNTON
& WILLIAMS, Richmond, Virginia; Joseph P. Rapisarda, Jr., Joseph
T. Tokarz, II, Karen M. Adams, COUNTY ATTORNEY'S OFFICE,
Richmond, Virginia, for Appellant Henrico. Michael A. Carvin, Noel
J. Francisco, COOPER, CARVIN & ROSENTHAL, P.L.L.C., Wash-
ington, D.C., for Appellant GTE; Brett M. Kavanaugh,
KIRKLAND & ELLIS, Washington, D.C., for Appellant Bell
Atlantic. Peter D. Keisler, David L. Lawson, SIDLEY & AUSTIN,
Chicago, Illinois; James C. Roberts, Carter Glass, IV, Dabney Carr,
IV, MAYS & VALENTINE, L.L.P., Richmond, Virginia; Mark C.
Rosenblum, Laura A. Kaster, AT&T CORPORATION, Basking
Ridge, New Jersey; Sean Lindsay, David White, MEDIAONE
GROUP, INC., Englewood, Colorado, for Appellees. Andrew Jay
Schwartzman, Cheryl A. Leanza, Harold J. Feld, MEDIA ACCESS
PROJECT, Washington, D.C., for Amici Curiae Consumer Council,
et al. Nicholas P. Miller, William Malone, Joseph Van Eaton, John F.
Noble, James R. Hobson, MILLER & VAN EATON, P.L.L.C.,
Washington, D.C., for Amici Curiae NATOA, et al. William P. Cook,
Pamela J. Marple, MANATT, PHELPS & PHILLIPS, L.L.P., Wash-
ington, D.C., for Amicus Curiae OpenNET. Christopher Wolf, Bruce
E. Boyden, PROSKAUER ROSE, L.L.P., Washington, D.C.; Tanya
L. Forsheit, PROSKAUER ROSE, L.L.P., Los Angeles, California,
for Amicus Curiae Hands Off. William B. Schultz, Acting Assistant
Attorney General, Jacob M. Lewis, Mark Davies, UNITED STATES
DEPARTMENT OF JUSTICE, Washington, D.C.; Christopher J.
Wright, General Counsel, Jonathan E. Nuechterlein, Deputy General
Counsel, James M. Carr, FEDERAL COMMUNICATIONS COM-
MISSION, Washington, D.C., for Amicus Curiae Commission. How-
7
ard J. Symons, Tara M. Corvo, MINTZ, LEVIN, COHN, FERRIS,
GLOVSKY & POPEO, P.C., Washington, D.C., for Amici Curiae
National Cable Television, et al.
_________________________________________________________________
OPINION
MICHAEL, Circuit Judge:
AT&T Corporation is still the largest long distance telephone com-
pany in the country, and this case is about its recent entry into the
broadband telecommunications market that provides high-speed
access to the Internet. AT&T has acquired MediaOne Group, Inc.
(MediaOne), which has a cable franchise in Henrico County, Virginia.
In approving the transfer of control of the franchise, the Henrico
County Board of Supervisors (the County) required MediaOne to pro-
vide any requesting Internet Service Provider (ISP) with access to its
cable modem platform. AT&T and MediaOne sued the County in fed-
eral court, arguing that the open access provision was preempted by
federal law (the Communications Act) and, in any event, violated
state law. The district court agreed and granted summary judgment
for AT&T and MediaOne. We affirm as follows. Under Bell Atlantic
Md., Inc. v. Prince George's County, 212 F.3d 863 (4th Cir. 2000),
we must consider the state law question first. However, because Vir-
ginia law does not provide an independent ground for disposition of
the case, we proceed to the preemption question. Henrico County's
open access provision violates the federal Communications Act, 47
U.S.C. § 541(b)(3)(D), by forcing MediaOne to provide its telecom-
munication facilities (its cable modem platform) to any ISP as a con-
dition for the County's approval of the transfer of control of the
franchise. Because the open access provision is inconsistent with the
federal Communications Act, it is preempted and superceded.
I.
Most residential and small business consumers gain access to the
Internet through slower narrowband technology, specifically, through
the traditional dial-up telephone modem that is connected to copper
lines. Broadband technology is beginning to provide many of these
8
consumers with a high-speed alternative to Internet access, and ana-
lysts are forecasting substantial growth in the demand for broadband
services. The most common forms of broadband technology are cable
modem platforms and digital subscriber lines (DSLs). A broadband
pipeline, like the basic telephone infrastructure, serves as a conduit
between an Internet user and an ISP, such as America Online, Juno,
or Prodigy.
In 1998 and 1999 AT&T began a major effort to establish a foot-
hold in broadband markets around the country. AT&T sought to enter
these markets by acquiring existing cable television companies. One
of its first acquisition targets was MediaOne, a large cable company
with a franchise in Henrico County, Virginia. Like most cable opera-
tors, MediaOne provides traditional cable television service. How-
ever, the company has upgraded its cable systems, including the one
in Henrico County, to include a cable modem platform that provides
a high-speed link to the Internet. In connection with this upgrade
MediaOne joined with others to form a company doing business as
"Road Runner." Road Runner provides a "bundled" service that com-
bines MediaOne's broadband pipeline (the cable modem platform)
with the Internet services usually offered by an ISP. MediaOne cus-
tomers who want Internet access over cable do not have the option of
using just MediaOne's cable modem platform; rather, they must sub-
scribe to Road Runner and take the Internet services it offers.
Although Road Runner customers may subscribe to an ISP unaffili-
ated with MediaOne, most customers have no incentive to do that
because the features offered by most outside ISPs are nearly identical
to those offered by Road Runner. Instead of paying for a duplicative
Internet service from an outside ISP, most MediaOne customers sim-
ply stick with the bundled service provided by Road Runner.
On May 6, 1999, AT&T and MediaOne entered into an agreement
to merge. The merger, which has now been finalized, gives AT&T
control of all of MediaOne's cable television systems, including the
system that holds a franchise in Henrico County. In July 1999 AT&T
and MediaOne applied to the County for formal approval of the trans-
fer of control. The County gave its approval in an ordinance adopted
in December 1999. The County's approval, however, was conditioned
on the requirement that "[n]o later than December 31, 2000, [Medi-
aOne] shall provide any requesting Internet Service Provider (ISP)
9
access to its cable modem platform (unbundled from the provision of
content) on rates, terms, and conditions that are at least as favorable
as those on which it provides such access to itself, to its affiliates, or
to any other person." This open access condition would require Medi-
aOne to open its broadband pipeline to unaffiliated ISPs. MediaOne
customers would thus be able to access the Internet over MediaOne's
cable modem platform without subscribing to the bundled Road Run-
ner service.*
AT&T and MediaOne chafed under the open access condition
mandated by Henrico County. They sued the County in federal court
in the Eastern District of Virginia, seeking a declaratory judgment
that the condition violates the First Amendment and the Commerce
Clause, is preempted by federal law, and is void under Virginia law.
AT&T and MediaOne also asked for an injunction against the
enforcement of the condition. They moved promptly for summary
judgment on the grounds that the open access requirement is pre-
empted by the Communications Act of 1934, as amended by the Tele-
communications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56
(1996), and is unenforceable under Virginia law. GTE Intelligent Net-
work Services, Inc., Bell Atlantic Corp., Bell Atlantic Virginia, Inc.,
and Bell Atlantic Internet Solutions, Inc. (collectively "Verizon")
were allowed to intervene as defendants on the side of the County.
Verizon, of course, offers a DSL service that competes with Medi-
aOne's Road Runner service. The County and Verizon filed a cross-
motion for summary judgment asserting that the open access condi-
tion was not preempted by federal law and that it was a valid exercise
of the County's authority under Virginia law.
_________________________________________________________________
* In its order approving the transfer of control of MediaOne's federal
licenses to AT&T, the Federal Communications Commission noted that
MediaOne has "committed to open [its] cable modem platform to unaffil-
iated ISPs as soon as . . . its exclusive contract with Road Runner expires
in December 2001." In the Matter of Applications for Consent to the
Transfer of Control of Licenses and Section 214 Authorizations from
MediaOne Group, Inc., Transferor, to AT&T Corp. Transferee, 15
F.C.C.R. 9816, ¶ 120 (2000). Specifically, MediaOne has agreed to
negotiate, upon the expiration of its exclusive contract with Road Run-
ner, mutually acceptable access agreements with unaffiliated ISPs. See
id. ¶ 121.
10
The district court granted AT&T and MediaOne's motion for sum-
mary judgment. See MediaOne Group, Inc. v. County of Henrico, 97
F. Supp. 2d 712 (E.D. Va. 2000). The court concluded that the open
access condition was preempted by several provisions of the Commu-
nications Act. First, it held that the condition violates 47 U.S.C.
§ 541(b)(3)(D) by requiring MediaOne to provide its telecommunica-
tions facilities "to any requesting ISP" as a condition for the County's
approval of the transfer of control. Id. at 714. Second, the court held
that the open access condition violates 47 U.S.C. § 544(e) because it
would condition and restrict the use of MediaOne's transmission tech-
nology. Id. at 715. Third, after concluding that Road Runner is a
"cable service," the court held that the open access condition is also
barred by 47 U.S.C. §§ 541(c) and 544(f)(1). Because the condition
would require MediaOne to provide all ISPs nondiscriminatory access
to its cable modem platform, the court concluded that the County was
attempting to regulate MediaOne as a "common carrier" in violation
of § 541(c). Id. at 715-716. The court also held that the condition is
contrary to § 544(f)(1)'s prohibition against "requirements regarding
the provision or content of cable services." Id. at 716. Finally, the dis-
trict court held that the open access requirement is void under Vir-
ginia law because nothing in the Virginia Code (as it relates to the
regulation of cable systems) expressly or impliedly authorizes the
County to impose such a condition.
The County and Verizon appeal the district court's order granting
MediaOne and AT&T's motion for summary judgment. We review a
summary judgment decision de novo. See AT&T Communications of
Va. v. Bell Atlantic-Va., Inc., 197 F.3d 663, 668 (4th Cir. 1999).
II.
This case boils down to two questions: (1) the federal constitutional
question of whether the Communications Act preempts any power
Henrico County has under the Virginia Code to enact an open access
provision and (2) the state law question of whether the County has the
authority under the Virginia Code to enact such a provision.
Recently, in Bell Atlantic Md., Inc. v. Prince George's County, 212
F.3d 863 (4th Cir. 2000), we observed that the question of "whether
a federal statute preempts a state statute . . . is a constitutional ques-
11
tion." Id. at 865. We went on to hold that when a court is faced with
a constitutional question of federal preemption and a question of state
law, the court should "decide only" the state law question if it pro-
vides an independent "ground upon which the case may be disposed
of." Id. at 866 (quoting Ashwander v. Tenn. Valley Auth., 297 U.S.
288, 346-47 (1936) (Brandeis, J., concurring)). This rule is based on
the principle that "courts should avoid deciding constitutional ques-
tions unless they are essential to the disposition of a case." Id. at 865.
To complete the point, we state the obvious: an independent state law
ground is one that allows us to avoid deciding a constitutional ques-
tion. See id. at 865 (noting that the federal statute at issue reserved to
local governments "specific powers" that might provide grounds for
deciding the case). In sum, according to Bell Atlantic, if a case with
a constitutional question of preemption also presents an independent
and dispositive question under state law, we should confine ourselves
to the latter. We turn, then, to Virginia law to see whether it provides
an independent ground for disposition of this case.
A Virginia county's authority under state law to license and regu-
late cable television operators is found in Va. Code Ann. § 15.2-2108
(the "cable statute"). The General Assembly's grant of regulatory
authority to the county (or locality) under the cable statute is broad:
Localities may by ordinance exercise all the regulatory pow-
ers over cable television systems granted by the Cable Tele-
vision Consumer Protection and Competition Act of 1992
(P.L. 102-3085, 1992). These regulatory powers shall
include the authority (i) to enforce customer service stan-
dards in accordance with the Act, (ii) to enforce more strin-
gent standards as agreed upon by the cable television system
operator through the terms of the franchise, and (iii) to regu-
late the rates for basic cable service in accordance with the
Act.
Va. Code Ann. § 15.2-2108(F). A Virginia county must exercise this
regulatory power in a way that prevents cable operators from taking
unfair advantage of their franchises. Specifically, a county must regu-
late in a manner consistent "with the policy of the Commonwealth to
provide for the adequate, economical, and efficient delivery of [cable]
systems to the consuming public [and] to protect the public from
12
excessive prices and unfair competition." Id. § 15.2-2108(E). Again,
the Virginia cable statute confers broad authority on counties to regu-
late cable television systems, and there is no specific provision in the
statute that prevents a county from enacting an open access ordinance.
The Virginia statute does have a catchall provision that limits a coun-
ty's authority to regulate cable operators: section 15.2-2108(E) of the
Virginia Code prohibits any cable regulation or ordinance that is "in-
consistent with either the laws of the Commonwealth or federal law."
We have searched and have not found any Virginia statute or any
decision of the courts of the Commonwealth that would prohibit the
County's open access provision. The provision is thus not inconsistent
with the laws of the Commonwealth. Because the open access provi-
sion is not prohibited by either the Virginia cable statute or by other
laws of the Commonwealth, we do not (thus far) have any indepen-
dent state law ground that allows us to avoid the federal preemption
question.
The Virginia cable statute does, of course, prohibit any cable regu-
lation or ordinance that is "inconsistent . . . with federal law." Va.
Code Ann. § 15.2-2108(E). This raises the question of whether Vir-
ginia law, by embracing federal law, provides an independent state
law ground for decision, thereby requiring us to avoid the constitu-
tional question of federal preemption under the rule of Bell Atlantic
Md., Inc. v. Prince George's County, 212 F.3d 863 (4th Cir. 2000).
If we were to decide this case under § 15.2-2108(E) of the Virginia
cable statute, the question would be whether Henrico County's open
access provision is "inconsistent . . . with federal law," that is, the
Communications Act. This is the same question we would ask under
a federal preemption analysis. See 47 U.S.C. § 556(c) ("[A]ny provi-
sion of law of any . . . franchising authority . . . which is inconsistent
with [the Communications Act] shall be deemed to be preempted and
superceded."). If we were to decide the state law question first, we
would in effect be deciding the federal preemption question as well.
Thus, the state law ground in this case is not independent because it
does not allow us to "avoid deciding [the] constitutional question[ ]"
of federal preemption. Bell Atlantic, 212 F.3d at 865. We are there-
fore free under Bell Atlantic to proceed to the question of federal pre-
emption and determine whether Henrico County's open access
provision "is inconsistent with" the Communications Act. See 47
U.S.C. § 556(c).
13
The district court held that the open access provision is inconsistent
with 47 U.S.C. § 541(b)(3)(D) because it would require MediaOne to
provide telecommunications facilities as a condition for approving
transfer of control of MediaOne's cable franchise to AT&T. See
MediaOne Group, Inc. v. County of Henrico, 97 F. Supp. 2d 712, 714
(E.D. Va. 2000). Section 541(b)(3)(D) says that "a franchising author-
ity may not require a cable operator to provide any telecommunica-
tions service or facilities, other than institutional networks, as a
condition of the initial grant of a franchise, franchise renewal, or a
transfer of a franchise." 47 U.S.C. § 541(b)(3)(D) (emphasis added).
The term "telecommunications" is defined as"the transmission,
between or among points specified by the user, of information of the
user's choosing, without change in the form or content of the informa-
tion as sent and received." Id. § 153(43). Although the Communica-
tions Act does not define the word "facilities" as used in
"telecommunications facilities," it is evident from the language of the
statute that these facilities are the physical installations or infrastruc-
ture necessary for transmission.
MediaOne's Road Runner service combines the use of a cable
modem platform with access to the Internet. Road Runner's cable
modem platform, separated from its Internet service component, is a
telecommunications facility because it is a pipeline for telecommuni-
cations, that is, for "the transmission . . . of information of the user's
choosing, without change in the form or content." Id. § 153(43)
(defining "telecommunications"). As a condition for approving the
change in control of the MediaOne franchise, the County required
MediaOne to provide its "cable modem platform (unbundled from the
provision of content)" to "any requesting Internet Service Provider."
The provision unbundles Road Runner's Internet access service from
its cable modem platform and compels MediaOne to offer the plat-
form to unaffiliated ISPs for use as a transmission pipeline for their
services. The open access provision therefore requires MediaOne to
provide "telecommunications . . . facilities . . . as a condition of . . .
a transfer of a franchise" in violation of § 541(b)(3)(D).
The County and Verizon argue that even if the cable modem plat-
form is a telecommunications facility, § 541(b)(3)(D) still does not
outlaw the open access provision. Section 541(b)(3)(D), they say,
only prohibits localities from requiring cable operators to construct
14
new telecommunications facilities, and the provision here does not
impose any such requirement. That argument ignores the statute's
plain language. Again, § 541(b)(3)(D) declares that franchising
authorities may not require cable operators "to provide any telecom-
munications . . . facilities" as a condition to the transfer of a franchise.
The section does not limit itself to new construction. Rather, it bars
any condition that requires a cable operator to provide telecommuni-
cations facilities regardless of whether the facilities are in existence
or must be built.
The County makes a separate argument that MediaOne's facilities
qualify as a "cable system" that cannot be said to include any tele-
communications facilities. Under the Communications Act a cable
system is defined as "a facility . . . that is designed to provide cable
service which includes video programming and which is provided to
multiple subscribers within a community." 47 U.S.C. § 522(7). The
County points out that MediaOne offers traditional "cable services,"
like video programming, over its facilities. It therefore asserts that
because its system is "designed to provide cable service" it cannot be
considered a telecommunications facility. According to the County,
providing Internet access over its cable system does not magically
transform the cable system into a telecommunications facility.
We disagree with the County. The Communications Act recognizes
that some facilities can be used to provide more than one type of ser-
vice. The Act therefore contemplates that multi-purpose facilities will
receive different regulatory classification and treatment depending on
the service they are providing at a given time. For example, under 47
U.S.C. § 522(7)(C) the definition of "cable system" does not include
a facility of a common carrier that offers telecommunications services
"except that such facility shall be considered a cable system . . . to the
extent that such facility is used in the transmission of video program-
ing directly to subscribers, unless the extent of such use is solely to
provide interactive on-demand services." In addition, under 47 U.S.C.
§ 153(46) the term "telecommunications service" is defined as "the
offering of telecommunications for a fee directly to the public . . .
regardless of the facilities used." (emphasis added). Therefore,
although MediaOne maintains a "cable system," its facilities can be
properly classified as telecommunications facilities when they pro-
vide a transmission path to the Internet.
15
Because the open access condition violates § 541 (b)(3)(D) of the
Communications Act, our analysis of federal law may stop at that.
Some of the parties want us to go further, however, and determine the
specific regulatory classification of MediaOne's Road Runner service.
The County argues that Road Runner is a "cable service" under the
Communications Act. See 47 U.S.C. § 522(6) (defining the term
"cable service" as "(A) the one-way transmission to subscribers of (i)
video programming, or (ii) other programming service, and (B) sub-
scriber interaction, if any, which is required for the selection or use
of such video programming or other programming service"). It is very
much in the County's interest to have Road Runner classified as a
cable service. This would allow the County to regulate a cable opera-
tor's provision of Internet access over cable lines. See 47 U.S.C.
§§ 541-49 (authorizing localities to establish and enforce require-
ments for cable facilities, equipment, and customer service). Verizon,
on the other hand, urges us to hold that the Road Runner service is
a "telecommunications service." 47 U.S.C. § 153(46) (defining the
term "telecommunications service" as "the offering of telecommuni-
cations for a fee directly to the public, or to such classes of users as
to be effectively available directly to the public, regardless of the
facilities used"). Verizon has an incentive to make this argument. Any
determination that Road Runner is a "telecommunications service"
could have significant regulatory consequences. Certain federal com-
mon carrier obligations could arise, see, e.g., 47 U.S.C. §§ 201(b),
251, and all providers of "interstate telecommunications services"
must contribute to the universal service fund supporting affordable
telephone service, see 47 U.S.C. §§ 153(44), 202, 254. At bottom,
Verizon seeks regulatory parity because its DSL service is already
regulated as a telecommunications service. See, e.g., In re Deploy-
ment of Wireline Servs. Offering, Advanced Telecommunications
Capability, 15 F.C.C.R. 385, ¶ 9 (1999). Finally, although no one
makes the argument here, Road Runner might even be considered an
"information service" under the Communications Act. See 47 U.S.C.
§ 153(20) (defining "information service" as "the offering of a capa-
bility for generating, acquiring, storing, transforming, processing,
retrieving, utilizing, or making available information via telecommu-
nications"). If Road Runner is classified as an information service, it
would not be subject to local franchising or common carrier regula-
tion. See Federal-State Joint Bd. on Universal Serv., Report, 13
F.C.C.R. 11,501, ¶ 39 (1998).
16
As the preceding paragraph illustrates, the issue of the proper regu-
latory classification of cable modem service, such as Road Runner, is
complex and subject to considerable debate. The outcome will have
a marked effect on the provision of Internet services. The FCC, in its
amicus brief, has diplomatically reminded us that it has jurisdiction
over all interstate communications services, including high-speed
broadband services. The FCC also advises us that it has initiated a
proceeding, through a notice of inquiry, to examine classification and
open access issues. See Inquiry Concerning High-Speed Access to the
Internet Over Cable and Other Facilities, 65 Fed. Reg. 60,441 (2000).
The FCC's notice seeks comment on whether cable modem technol-
ogy should be classified as a cable service, a telecommunications ser-
vice, or an information service, and it also seeks comment on the
implications of adopting any particular classification. See In the Mat-
ter of Inquiry Concerning High-Speed Access to the Internet Over
Cable and Other Facilities, No. 00-355, 2000 WL 1434689, ¶ 15
(Sept. 28, 2000). In addition, the notice indicates that the FCC is
interested in determining whether open access to cable modem plat-
forms is necessary to further the "goals of promoting competition,
deregulation, innovation, and the deployment of high-speed services."
Id. ¶ 32. Of course, the merits of open access are not before us. And,
as we have already indicated, we do not have to reach the question
of whether MediaOne's bundled Road Runner service is a cable ser-
vice, a telecommunications service, or an information service. For the
time being, therefore, we are content to leave these issues to the
expertise of the FCC.
We simply hold that Henrico County violated § 541(b)(3)(D) when
it conditioned the transfer of control of MediaOne's cable franchise
by requiring MediaOne to unbundle its Road Runner service and pro-
vide open access to its telecommunications facilities, that is, its cable
modem platform. Because the open access provision is inconsistent
with the federal Communications Act, it is preempted. We therefore
affirm the judgment of the district court.
AFFIRMED
WIDENER, Circuit Judge, concurring:
I concur in the result. I arrive at that result, however, by a different
route from that of the majority.
17
In this case, Henrico County, by ordinance, required open access
to its cable modem platform, which requirement is in violation of the
Federal Communications Act, 47 U.S.C. § 541(b)(3)(D), slip op. at 8.
A Virginia statute, Virginia Code § 15.2-2108(E) (1998), provides,
in pertinent part, that "[n]o locality may regulate cable television sys-
tems by regulations inconsistent with either laws of the Common-
wealth or federal law relating to cable television operations." (italics
added)
Thus, Virginia has tried, as best as she may, even by specific stat-
ute, to prevent her counties from running afoul of the Federal Com-
munications Act.
The determination of whether or not a local law has been pre-
empted by federal law is a Constitutional question. It "is essentially
a two-step process of first ascertaining the construction of the two
statutes and then determining the Constitutional question of whether
they are in conflict." Chicago & NWTR Co. v. Kalo Brick & Tile Co.,
450 U.S. 311, 317 (1981) (internal quotations omitted).
In Virginia, a county has only the powers expressly granted to it
by the Commonwealth, or necessarily implied, and a local ordinance
in violation thereof is invalid. Bd. of Supervisors of Augusta County
v. Countryside Inv. Co., 522 S.E.2d 610, 613 (Va. 1999).
The second rule of construction in Ashwander v. TVA, 297 U.S.
288, 346-47 (Brandeis, J., concurring) (1936), is: "The court will not
anticipate a question of Constitutional law in advance of the necessity
of deciding it . . . . It is not the habit of the Court to decide questions
of a Constitutional nature unless absolutely necessary to a decision of
the case." (internal quotations omitted) And the fourth rule of Ash-
wander is: "The Court will not pass upon a Constitutional question,
although properly presented by the record, if there is also present
some other ground upon which the case may be disposed of." Ash-
wander, 297 U.S. at 346-47. I suggest the majority decision violates
both these rules.
In my opinion, the Henrico County ordinance is in violation of
state law, being "inconsistent with . . . federal law" under Virginia
18
Code § 15.2-2108(E). Thus, our decision should rest on the fact that
the Henrico County ordinance is contrary to state law, that ground
having presented itself, instead of, contrary to Ashwander, deciding
a Constitutional question which gets the same result.
What purpose is served by States trying to cooperate, as here, if
their statutes are to be routinely Constitutionally preempted?
19