Bell Atlantic-Maryland v. Prince George's County
| Decision Date | 24 May 1999 |
| Docket Number | No. Civ. CCB-98-4187.,Civ. CCB-98-4187. |
| Citation | 49 F.Supp.2d 805 |
| Parties | BELL ATLANTIC-MARYLAND, INC. v. PRINCE GEORGE'S COUNTY, MARYLAND. |
| Court | U.S. District Court — District of Maryland |
James P. Garland, Matthew Sturtz, Miles & Stockbrige, Baltimore, MD, for plaintiff.
Sean Wallace, Upper Marlboro, MD, Nicholas P. Miller, William Malone, Miller & Van Eaton, PLLC, Washington, DC, for defendant.
Now pending before the court is the motion to dismiss filed by the defendant, Prince George's County, Maryland ("the County"). In the complaint, the plaintiff, Bell Atlantic-Maryland, Inc. ("Bell Atlantic"), challenges the legality of Prince George's County ordinance CB-98-1998, known as the "Telecommunications Franchise Law" ("the ordinance"). The ordinance establishes a comprehensive "franchise" scheme regulating the use of the County's public rights-of-way by telecommunications companies seeking to do business in Prince George's County. Bell Atlantic attacks the ordinance on a variety of federal and state statutory and constitutional grounds. Since the parties have agreed that this matter is to be decided in its entirety on the present motion, Bell Atlantic's opposition to the County's motion will be treated as a counter-motion for judgment on the pleadings. See Fed. R.Civ.P. 12(c).
For the reasons that follow, the court will grant Bell Atlantic's motion and issue an injunction permanently enjoining the County from enforcing the ordinance. Bell Atlantic's request for damages, attorneys' fees, and costs will be denied.
Bell Atlantic is a Maryland corporation that provides telephone services to individuals, businesses, and governments in Prince George's County and throughout Maryland. As the incumbent local exchange carrier for Prince George's County, Bell Atlantic has constructed and continues to construct a network of telephone lines and related facilities needed to provide telephone services in the county. These lines and facilities use the County's public rights-of-way. See Compl. ¶¶ 2, 5, 18. Prince George's County is a Maryland home-rule county, having adopted a charter form of government in 1970. Compl. ¶ 3. As a home-rule county, Prince George's County has been authorized by the state legislature to exercise all of the powers set forth in Article 25A, section 5, of the Annotated Code of Maryland of 1957.
In the fall of 1998, the county council passed and the county executive signed into law Prince George's County ordinance CB-98-1998, entitled "An Act concerning Telecommunications Franchises for the Use of Public Property and Public Rights-of-way in the County." The ordinance declares that no person shall
construct, operate, replace, reconstruct or maintain a telecommunications system on, over, or under any public rights-of-way in ... the County without a franchise granted by the County to provide telecommunications services within the County.
Sec. 5A-151(a). The County's "franchise" requirement applies equally to telephone services providers, like Bell Atlantic, which own and operate their own telephone lines and facilities,2 as well as to telecommunications companies which provide services through lines and facilities owned and maintained by others.3 Furthermore, the franchise requirement covers both existing lines and facilities and future lines and facilities.4 Failure to obtain a franchise before using the County's public rights-of-way may subject a telecommunications company to "the immediate revocation of any existing permits, licenses or franchises issued by the County...." Sec. 5A-159(c). In addition, the County "may order prompt removal" of the company's existing lines and facilities "at the [company's] expense." Id.
In order to obtain a franchise from the County, the ordinance requires a telecommunications company to complete an application form providing the following information:
(1) The name, address, telephone and facsimile number of the applicant;
(2) The name, address and telephone number of a responsible person whom the County may notify or contact at any time concerning the applicant's telecommunications system;
(3) An engineering site plan showing the proposed location of the telecommunications system, including any manholes or overhead poles, the size, type and proposed depth of any conduit or other enclosures, the relationship of the system to all existing poles, utilities, sidewalks and other improvements within the public rights-of-way, and the facility or public property address;
(4) The technical standards that the applicant proposes to follow in construction and operation of the telecommunications system;
(5) A description of the telecommunications services to be provided;
(6) The period of time the applicant intends to use the public property or rights-of-way;
(7) Financial information;
(8) A list of other jurisdictions in which the applicant operates or has operated a telecommunications system; and
(9) Any additional information the County's application form may require.
Sec. 5A-152(a)(1)-(9). There also is a $5,000 application fee. Sec. 5A-152(b).
Completed applications that "meet[ ] all the requirements of the Division" then undergo a public hearing. Sec. 5A-152(d). At the hearing, oral and written testimony and "any other relevant material" may be presented for and against the application. Id. The ordinance provides that, in evaluating a franchise application, "the County may consider" the following factors:
(1) The applicant's managerial, technical, financial and legal qualifications to construct and operate a telecommunications system on County property;
(2) The nature of the proposed facilities, equipment, and services;
(3) The applicant's recent performance record of using public rights-of-way in providing telecommunications services in other communities, if any;
(4) Whether the proposal will serve and protect the public interest;
(5) The effects of a grant of a franchise on the use of the public rights-of-way, including consideration of the effect on current authorized users of the rights-of-way; and
(6) Such other factors as the County may deem relevant.
Sec. 5A-152(e)(1)-(6). Based on these factors, the County recommends either that a franchise be granted or that the application be denied. Sec. 5A-152(f).5 Even if the County recommends that a franchise be granted, however, this is not the end of the process. The next step is for the applicant and the county executive to negotiate a "franchise agreement." Sec. 5A-152(g).
A franchise agreement sets forth the terms and conditions of a telecommunications company's authorization (i.e., its "franchise") to use the County's public rights-of-way.6 It is not meant to replace any existing rules and regulations governing the use of the County's roads and property, which remain in effect.7 A franchise agreement must be agreed upon by the parties "within ninety (90) days from the notice of the proposed grant," otherwise "the notice of proposed grant shall become void" and the process starts over. Sec. 5A-152(g).8 Once agreed upon by the county executive, however, a franchise agreement remains subject to the final approval of the county council. Sec. 5A-152(h).9 Until a franchise agreement between the County and the applicant has been executed and approved, any franchise granted by the County to a telecommunications company "shall not become effective." Sec. 5A-153(a).10 The maximum term of a franchise agreement is 15 years, subject to renewal by the County "in its sole discretion." Sec. 5A-153(a), (f). Telecommunications companies whose franchises are not renewed by the County may be required by the County to remove their existing lines and facilities at their own expense. See Sec. 5A-158(e).
Each executed and approved franchise agreement must include the following terms and conditions:
(1) Insurance, bond and indemnification requirements (2) Requirements and conditions for construction in and use of the rights-of-way;
(3) A description of the type and location of the system facilities to be placed on public property or within the public rights-of-way;
(4) Reporting and record-keeping requirements, including financial audits and reconciliation of right-of-way charge payments; [and]
(5) Any other provision or requirement deemed necessary by the County.
Sec. 5A-153(d). In addition, the County expressly reserves the right, "to the extent permitted by law, to require a franchisee, as part of a franchise agreement, to provide telecommunications services, facilities, equipment and/or capacity for use to the County, at no charge to the County." Sec. 5A-154(d). Moreover, where the County deems it necessary, "for public purposes, to utilize the public property and/or rights-of-way that are occupied by a franchisee," the ordinance authorizes the County to require the franchisee, at its expense, to "remove any facilities and equipment within sixty (60) days ... and restore the public property or rights-of-way to its original condition or to such comparable condition as may be requested by the County." Sec. 5A-153(c).
Along with regulating which telecommunications companies may use the County's public rights-of-way and on what terms, the County's telecommunications franchise law also imposes a 3% "right-of-way charge" on all franchisees "for the privilege of using the public property and/or public rights-of-way." Sec. 5A-154(a). This 3% charge is levied on each franchisee's annual gross revenues. The ordinance defines "gross revenues," in pertinent part, as
all revenues derived directly or indirectly by the franchisee, its affiliates, subsidiaries, parent companies and any person in or with whom the franchisee has a financial interest, or revenues received by the franchisee from a person with whom the franchisee has a revenue-producing agreement, from the operation of the Telecommunications System in the designated franchise area....
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