299 F.3d 949 (8th Cir. 2002), 01-1379, Missouri Mun. League v. F.C.C.

Docket Nº:01-1379
Citation:299 F.3d 949
Party Name:Missouri Mun. League v. F.C.C.
Case Date:August 14, 2002
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit

Page 949

299 F.3d 949 (8th Cir. 2002)

THE MISSOURI MUNICIPAL LEAGUE; The Missouri Association of Municipal Utilities; City Utilities of Springfield; City of Sikeston, Missouri; Columbia Water & Light; American Public Power Association, Petitioners,


FEDERAL COMMUNICATIONS COMMISSION; United States of America, Respondents,

Southwestern Bell Telephone Company; State of Missouri, Intervenors on Appeal.

National Association of Telecommunications Officers and Advisors; United Telecom Council, Amici on Behalf of Petitioners.

No. 01-1379.

United States Court of Appeals, Eighth Circuit

August 14, 2002

Submitted: Nov. 12, 2001.Page 950

James Bailer, argued, Washington, DC (Sean A. Stokes, Allison L. Driver, William Andrew Dalton and Richard B. Geltman, on the brief), for Petitioners.

Richard K. Welch, argued, Washington, DC, for Respondent.

Ronald Molteni, argued, Jefferson City, MO, for Intervenor State of Missouri.

Geoffrey M. Klineberg, argued, Washington, DC, for Intervenor Southwestern Bell.

Before WOLLMAN,1 Chief Judge, BOWMAN, and STAHL,2 Circuit Judges

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WOLLMAN, Chief Judge.

Various Missouri municipalities, municipal organizations, and public power companies (the Missouri Municipals) have petitioned for review of the Federal Communications Commission's (Commission) order denying the Missouri Municipals' petition to preempt a Missouri statute that prevents municipalities and municipally owned utilities from providing telecommunications services or telecommunications facilities. We vacate the order and remand to the Commission for further consideration.


In February 1996, Congress enacted the Telecommunications Act of 1996 (the Act), which extensively amended the Communications Act of 1934, 47 U.S.C.A. §§ 151-615 (West 2001). The Act's intended purposes are to increase competition in the area of telecommunications services and to ensure the delivery of universal service. To help achieve these goals, § 101(a) of the Act, codified at 47 U.S.C. § 253, provides for "removals of barriers to entry," as follows:

(a) In general

No State or local statute or regulation, or other State or local legal requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service.

(b) State regulatory authority Nothing in this section shall affect the ability of a State to impose, on a competitively neutral basis and consistent with section 254 of this section, requirements 4 necessary to preserve and advance universal service, protect the public safety and welfare, ensure the continued quality of telecommunications services, and safeguard the rights of consumers.

. . .

(d) Preemption

If, after notice and an opportunity for public comment, the Commission determines that a State or local government has permitted or imposed any statute, regulation, or legal requirement that violates subsection (a) or (b) of this section, the Commission shall preempt the enforcement of such statute, regulation, or legal requirement to the extent necessary to correct such violation or inconsistency. 47 U.S.C.A. § 253 (West 2001 Supp.).

Section 392.410(7) of the Revised Statutes of Missouri prohibits the state's political subdivisions from obtaining the certificates of service authority necessary to provide telecommunications services or facilities directly or indirectly to the public. It provides:

No political subdivision of this state shall provide or offer for sale, either to the public or to a telecommunications provider, a telecommunications service or telecommunications facility used to provide a telecommunications service for which a certificate of service authority is required pursuant to this section. Nothing in this subsection shall be construed to restrict a political subdivision from allowing the nondiscriminatory use of its rights-of-way including its poles, conduits, ducts and similar support structures by telecommunications providers or from providing telecommunications services or facilities;

(1) For its own use;

(2) For 911, E-911 or other emergency services;

(3) For medical or educational purposes;

(4) To students by an educational institution; or

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(5) Internet-type services. The provisions of this subsection shall expire on August 28, 2002. Mo.Rev.Stat. § 392.410(7) (West 2001 Supp).3

The Missouri Municipals filed a petition with the Commission, asking that it preempt Mo.Rev.Stat. § 392.410(7) as being in violation of § 253(a) of the Act. The Commission employs a two-step process in examining statutes under § 253. First, it determines whether the statute violates § 253(a). If it does, then the Commission considers whether the statute falls within the reservation clause of § 253(b). If it does not, then the Commission must preempt the statute. Finding that the Missouri statute does not violate § 253(a), the Commission denied the petition, thus eliminating the need for § 253(b) review. In the matter of the Missouri Municipal League, 16 F.C.C.R. 1157 (2001). The Commission expressed its disagreement with the policy of the Missouri statute because it had found previously that "municipally-owned utilities . . . have the potential to become major competitors in the telecommunications industry . . . [and] can further the goal of the 1996 Act to bring the benefits of competition to all Americans, particularly those who live in small rural communities." Id. at 1162; see also id. at 1173 (Separate Statement of Commissioner Susan Ness). Even though it...

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