MCC Iowa, LLC v. City of Iowa City

• Decision Date: 04 April 2018
• Docket Number: No. 16-3696,16-3696
• Citation: 887 F.3d 370
• Parties: MCC IOWA, LLC, doing business as Mediacom, Plaintiff–Appellant v. CITY OF IOWA CITY; ImOn Communications, LLC, formerly known as JB and SG Communications, LLC, Defendants–Appellees Charter Communications, Inc., Amicus on Behalf of Appellant(s) Iowa League of Cities, Amicus on Behalf of Appellee(s)
• Court: U.S. Court of Appeals — Eighth Circuit

887 F.3d 370

MCC IOWA, LLC, doing business as Mediacom, Plaintiff–Appellant

v.CITY OF IOWA CITY; ImOn Communications, LLC, formerly known as JB and SG Communications, LLC, Defendants–Appellees

Charter Communications, Inc., Amicus on Behalf of Appellant(s)

Iowa League of Cities, Amicus on Behalf of Appellee(s)

No. 16-3696

United States Court of Appeals, Eighth Circuit.

Submitted: October 19, 2017

Filed: April 4, 2018

Elizabeth Jane Carter, Terri Combs, Stacie L. Gonsalves, Lance W. Lange, Richard R. Patch, FAEGRE & BAKER, Des Moines, IA, for Plaintiff–Appellant.

Michael A. Dee, Sheila K. Tipton, Haley Rose Van Loon, BROWN & WINICK, Des Moines, IA, for Defendant–Appellee City of Iowa City.

Nancy J. Penner, Mark L. Zaiger, SHUTTLEWORTH & INGERSOLL, Cedar Rapids, IA, for Defendant–Appellee ImOn Communications, LLC.

James Aaron George, Gardner Fordyce Gillespie, SHEPPARD & MULLIN, Washington, DC, for Amicus on Behalf of Appellant(s) Charter Communications, Inc.

Jason Michael Craig, Ivan T. Webber, AHLERS & COONEY, Des Moines, IA, for Amicus on Behalf of Appellee(s) Iowa League of Cities.

Before GRUENDER and BENTON, Circuit Judges, and TUNHEIM,¹ District Judge.

BENTON, Circuit Judge.

MCC Iowa, LLC, doing business as Mediacom, provides cable and telecommunications services in Iowa City. Mediacom sued the City of Iowa City and ImOn Communications, LLC. The district court² granted summary judgment to the City and ImOn. Mediacom appeals. Having jurisdiction under 28 U.S.C. § 1291, this court affirms.

I.

Mediacom—the only cable provider in the City—has a franchise agreement with the City, as required by federal and state law. See 47 U.S.C. § 541(b) ; Iowa Code § 477A.2(1) . The agreement requires Mediacom to pay fees and provide cable services to almost all the City.

In 2015, ImOn—provider of cable and telecommunications in other Iowa cities—publicly stated an intent to provide services, including cable, in the City. The City Council passed three resolutions to facilitate ImOn's construction of a fiber-optic network, including access to public rights-of-way. The next month, ImOn began providing internet to City residents. The next year, it began providing telephone service. ImOn has not provided cable services in the City and has not applied for a cable franchise. It claims to have abandoned plans to provide cable services in the City.

Mediacom believed the City and ImOn were colluding to its disadvantage. In Iowa, if another cable provider applies for a franchise in a municipality, the incumbent provider (here, Mediacom) can apply for a state certificate of franchise authority for that municipality. Iowa Code § 477A.2(6) . This guarantees the incumbent provider the "same ... terms and conditions" the new provider gets. Id.

Mediacom sued the City, later adding ImOn as a defendant. The lawsuit sought declarations that the resolutions were void and that the City could not permit a potential cable provider to construct a "cable system" without acquiring a cable franchise. Mediacom also alleged contract violations, tortious interference, civil conspiracy, and Equal Protection violations, all depending on whether ImOn could lawfully build a fiber-optic network without a franchise.

Both parties moved for summary judgment. Mediacom also moved for discovery. The district court denied the discovery motion and granted summary judgment to the City and ImOn. The court ruled that "ImOn is not presently required to seek a cable franchise" because it "is not now delivering cable programming."

This court reviews de novo the district court's grant of summary judgment. Torgerson v. City of Rochester , 643 F.3d 1031, 1042 (8th Cir. 2011) (en banc). Summary judgment is proper if the court finds "there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a) .

II.

Title VI of the Communications Act requires a franchise only before providing cable service, not before constructing the infrastructure to provide it. "[A] cable operator may not provide cable service without a franchise." 47 U.S.C. § 541(b)(1) (emphasis added). But Mediacom argues that local franchising authorities (LFAs) may require a franchise earlier than federal law does. And Mediacom believes the City, as an LFA, did so in its Cable Television Franchise Enabling Ordinance:

No person, firm, company, corporation or association shall construct , install, maintain or operate within any public street in the city, or within any other public property of the city, any equipment or facilities for the distribution of cable service over a cable television system or an open video system to any subscriber unless a franchise authorizing the use of the streets or properties or areas has first been obtained pursuant to the provisions of this chapter, and unless such franchise is in full force and effect.

Iowa City Code § 12-4-6(A) (emphasis added).

The Ordinance must be interpreted consistent with federal law. See Iowa Code § 477A.11(1) ("This chapter is intended to be consistent with [Title VI] ... "); Iowa City Code § 12-4-2 (adopting, almost word-for-word, Title VI's definition of "cable system" as the definition of "cable television system or cable system"). Mediacom's interpretation—requiring a franchise before construction of ImOn's fiber-optic network—is inconsistent with Title VI and an FCC order.³

Common carriers—as relevant here, companies providing telecommunications (internet and phone) service—are regulated under Title II of the Communications Act. 47 U.S.C. §§ 201 - 76 . Cable providers are regulated under Title VI of the Act. §§ 521-73 . At one time, Title II and Title VI did not overlap because telecommunications and cable had different infrastructures. See National Cable Television Ass'n, Inc. v. FCC , 33 F.3d 66, 69 (D.C. Cir. 1994) (discussing the history of copper-wire, coaxial-cable, and fiber-optic technology). Today, "mixed-use" infrastructure—such as fiber-optic networks—can provide both telecommunications and cable. See id.

Title VI grants LFAs franchising authority over cable systems. See § 541(a) . But this authority is limited. As relevant here, Title VI exempts common-carrier facilities regulated under Title II from the definition of "cable system" unless they are used to provide cable services:

[T]he term "cable system" means a facility ... designed to provide cable service ... but such term does not include ... (C) a facility of a common carrier which is subject, in whole or in part, to the provisions of [Title II], except that such facility shall be considered a cable system (other than for purposes of section 541(c)(2) of this title) to the extent such facility is used in the transmission of video programming directly to subscribers ....

§ 522(7) .

The FCC has stated:

We clarify that LFAs' jurisdiction applies only to the provision of cable services over cable systems ... [A]n LFA has no authority to insist on an entity obtaining a separate cable franchise in order to upgrade non-cable facilities. For example, assuming an entity (e.g., a LEC^{[4 ]}) already possesses authority to access the public rights-of-way, an LFA may not require the LEC to obtain a franchise solely for the purpose of upgrading its network.[ ] So long as there is a non-cable purpose associated with the network upgrade, the LEC is not required to obtain a franchise until and unless it proposes to offer cable services. For example, if a LEC deploys fiber optic cable that can be used for cable and non-cable services, this deployment alone does not trigger the obligation to obtain a cable franchise.

In re Implementation of Section 621(a)(1) of the Cable Communications Policy Act of 1984 , 22 F.C.C.R. 5101, 5155 (2007) (hereinafter FCC order ). See also Illinois Bell Tel. Co. v. Village of Itasca , 503 F.Supp.2d 928, 937 (N.D. Ill. 2007) (holding that a company upgrading its telecommunications network to fiber-optic "is not a ‘cable operator’ under the terms of [Title VI] because it is not providing the transmission of video programming. Right now it is simply constructing a local distribution system capable of delivering video programming."). See generally Competitive Telecommc'ns Ass'n v. FCC , 117 F.3d 1068, 1071 (8th Cir. 1997) (deference to FCC order interpreting Title II), citing Chevron USA Inc. v. Natural Res. Def. Council, Inc. , 467 U.S. 837, 843–44, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984).

Title VI, by itself, says that a common carrier's mixed-use facility is a cable system once the "facility is used" to provide cable services. See § 522(7)(C) ; MediaOne Grp., Inc. v. County of Henrico , 257 F.3d 356, 364 (4th Cir. 2001) ("[Title VI] therefore contemplates that multi-purpose facilities will receive different regulatory classification and treatment depending on the service they are providing at a given time." (citing § 522(7)(C) ) ). As the FCC order says, LFAs must have franchise authority before actual use, i.e. , when a company "proposes" to provide cable services. See FCC order , 22 F.C.C.R. at 5155. Together, Title VI and the FCC order establish that LFAs may regulate a common carrier's mixed-use facilities consistent with Title VI only when the operator provides or proposes to provide cable services. Because ImOn has not provided or proposed to provide cable services, deployment of its mixed-use, fiber-optic network does not require it to obtain a cable franchise.

III.

Mediacom argues that neither § 522(7)(C) nor the FCC order applies here, where a common carrier constructing a mixed-use, fiber-optic network was not then providing telecommunications in the area. But § 522(7)(C) and the FCC order apply to a common carrier's facilities "subject ... to" Title II, regardless whether they have yet been used to provide telecommunications services. See § 522(7)(C) ; FCC order at 5155 ("[D]eployment [of mixed-use facilities] alone does not trigger the obligation to obtain a cable franchise."). Mediacom's argument conflicts with the FCC...