Mediaone Group, Inc. v. County of Henrico, Vir.

• Decision Date: 10 May 2000
• Docket Number: No. Civ.A. 3:00CV33.,Civ.A. 3:00CV33.
• Citation: 97 F.Supp.2d 712
• Court: U.S. District Court — Eastern District of Virginia
• Parties: MEDIAONE GROUP, INC., MediaOne of Virginia, Inc., and AT & T Corp., Plaintiffs, v. COUNTY OF HENRICO, Virginia, Defendants, GTE Intelligent Network Services, Inc. and Bell Atlantic Corporation; Bell Atlantic-Virginia, Inc., Bell Atlantic Internet Solutions, Inc., Intervenor-Defendants.

97 F.Supp.2d 712

MEDIAONE GROUP, INC., MediaOne of Virginia, Inc., and AT & T Corp., Plaintiffs, v.COUNTY OF HENRICO, Virginia, DefendantsGTE Intelligent Network Services, Inc. and Bell Atlantic Corporation; Bell Atlantic-Virginia, Inc., Bell Atlantic Internet Solutions, Inc., Intervenor-Defendants.

No. Civ.A. 3:00CV33.

United States District Court, E.D. Virginia, Richmond Division.

May 10, 2000.

James C. Roberts, Mays & Valentine, Richmond, VA, for MediaOne Group, Inc., AT & T Corp.

Edward J. Fuhr, Hunton & Williams, Richmond, VA, for County of Henrico.

Andrew G. McBride, Cooper, Carvin & Rosenthal, Washington, DC, for GTE Intelligent Network.

MEMORANDUM OPINION

RICHARD L. WILLIAMS, Senior District Judge.

This matter is before the Court on the partiescross-motions for summary judgment on the legality of Henrico County, Virginia OrdinanceNo. 469B-99(the "Ordinance").MediaOne Group, Inc., MediaOne of Virginia, Inc., and AT & T Corp.("MediaOne" or the "plaintiffs") have filed a Motion for Summary Judgment on Federal Statutory Preemption and Virginia Law Claims asserting that the Ordinance is preempted by the Communications Act, 47 U.S.C. § 521 et seq.("the Act") and that the Ordinance is ultra vires and thus invalid under Virginia law.The County of Henrico("Henrico" or "the County") and the intervenor-defendants, GTE Intelligent Network Services, Inc. and Bell Atlantic Corporation, Bell Atlantic-Virginia, Inc., and Bell Atlantic Internet Solutions, Inc.(collectively "the defendants") have filed a Cross-Motion for Summary Judgment on Federal Statutory Preemption and Virginia Law Claims, asserting that the Ordinance is not preempted and that Henrico did not act outside its authority in enacting the Ordinance.The issues raised in the cross-motions for summary judgment address the first and fourth claims for relief in the plaintiffs' Complaint.¹Responses have been filed and, accordingly, the motions are ripe for adjudication.

Summary judgment may be granted if, after consideration of such items as depositions, affidavits or certifications, and after viewing the facts in the light most favorable to the non-moving party, "there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law."Fed.R.Civ.P. 56(c);Celotex Corp. v. Catrett,477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265(1986).No material facts are in dispute and thus, summary judgment is appropriate.For the reasons stated below, the Court grants plaintiffs' motion for summary judgment, and denies the defendants' motion for summary judgment.The Court permanently enjoins defendants from enforcing Henrico County OrdinanceNo. 469B-99.

I.FACTUAL BACKGROUND

MediaOne of Virginia, Inc.("MediaOne Virginia") is a wholly-owned subsidiary of MediaOne Group, Inc.("MediaOne Group").MediaOne Group is a holding company that owns numerous subsidiaries that provide cable services to subscribers in various regions of the United States.Pursuant to the terms of a merger agreement between AT & T and MediaOne Group, AT & T is acquiring control of MediaOne Virginia, the franchise holder, from MediaOne Group.Recent technological advances now permit cable systems to provide high-speed access to the Internet.MediaOne currently holds a local cable franchise in Henrico County, Virginia and offers cable services to approximately 80,000 cable subscribers in Henrico County.MediaOne's cable system in Henrico includes a "cable modem platform" which can be used to provide high-speed, two-way connection to the Internet.A customer who connects to the Internet using this cable modem platform has an "always on" connection that allows users such benefits as receiving immediate news alerts, e-mails and other information without first dialing up and then logging onto the Internet.

MediaOne and others formed a company named ServiceCo LLC, which provides internet service and does business as "Road Runner."Road Runner provides high-speed, interactive modem service, a two-way interactive offering that includes broadband connectivity between a cable operator and a subscriber, access to the Internet, interactive content and programming, menus, navigational aids, electronic mail, access to newsgroups, a web browser, hosting and other features.A MediaOne Road Runner customer can access any content on the Internet.

The Henrico County Code provides that the franchisee must obtain approval for a transfer of control of the franchise holder.Henrico County Code§ 7-66.Plaintiffs submitted an application with Henrico County in July 1999 to obtain the County's approval for the change in control of MediaOne Virginia from MediaOne Group to AT & T.In reviewing the proposed transfer, the County conducted a series of public meetings and hearings over the period of several months.On December 14, 1999 the Board of Supervisors enacted OrdinanceNo. 469B-99, which approves the transfer of control but conditions that approval on the requirement that "[n]o later than December 31, 2000, [MediaOne Virginia] shall provide any requesting Internet Service Provider ("ISP") 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."(Ordinance ¶ (c)).Under the Ordinance, if this condition is not satisfied, "then the Board's consent to, and approval of, the transfer of control is hereby denied as of the date hereof."(Ordinance¶ 2).

II.LEGAL ANALYSIS

A.Preemption

The County's Ordinance is preempted by several provisions of Title VI of the Communications Act, which was enacted, among other reasons, "to establish a national policy concerning cable communications" and to "... minimize unnecessary regulation that would impose an undue economic burden on cable systems."47 U.S.C. §§ 521(1), (6).Congress also declared that "[i]t is the policy of the United States to preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by Federal or State regulation."47 U.S.C. § 230(b)(2).

The decision whether or not a state or local law is preempted "at bottom, is one of statutory intent."Morales v. Trans World Airlines, Inc.,504 U.S. 374, 383, 112 S.Ct. 2031, 119 L.Ed.2d 157(1992).Therefore, preemption analysis "begin[s] with the language employed by Congress and the assumption that the ordinary meaning of that language accurately expresses the legislative purpose."FMC Corp. v. Holliday,498 U.S. 52, 57, 111 S.Ct. 403, 112 L.Ed.2d 356(1990)(citation omitted).Regarding its preemptive effect, the Communications Act provides that "... any provision of law of any State, political subdivision, or agency thereof, or franchising authority, or any provision of any franchise granted by such authority which is inconsistent with this Act shall be deemed to be preempted and superseded."47 U.S.C. § 556(c).Henrico OrdinanceNo. 469B-99 is "inconsistent" with four separate provisions of the Communications Act and thus, the Ordinance is preempted by the Act.See47 U.S.C. §§ 541(b)(3)(D),544(e),541(c),544(f)(1).

1.Title 47 U.S.C. § 541(b)(3)(D)

Section 541(b)(3)(D) provides that "... a franchising authority may not require a cable operator to provide any telecommunications service or facilities, other than institutional networks, as a condition of the initial grant of a franchise, a franchise renewal, or a transfer of a franchise."The Henrico Ordinance requires MediaOne Virginia to provide telecommunications facilities.This requirement is an unlawful condition placed upon the transfer of control of MediaOne Virginia, the holder of a Henrico County cable franchise.

Congress has explained that under the statute, "[t]he term `telecommunications' means 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 information as sent and received."47 U.S.C. § 153(43).The Henrico Ordinance requires MediaOne to provide "its cable modem platform" facility to any requesting ISPs "unbundled from the provision of content" which the ISPs themselves supply.Ordinance¶¶ 1(c), 2.Under the Ordinance, MediaOne would be forced to operate its cable modem platform to provide transmission between the points selected by requesting ISPs and their customers, without change in content.The County is therefore requiring MediaOne to provide a telecommunications facility as a condition for the approval of the transfer of control, and accordingly, the Ordinance is in violation of Section 541(c)(3)(D).

2.Title 47 U.S.C. § 544(e)

In 1996, Congress enacted the current version of Section 544(e) which provides that "... [n]o State or franchising authority may prohibit, condition, or restrict a cable system's use of any type of subscriber equipment or any transmission technology."Although the exact technology required cannot be determined from the record, in order to provide access to multiple ISPs, MediaOne Virginia would have to make technological modifications to its current system.Accordingly, the Henrico Ordinance requires MediaOne Virginia to use some kind of multiple access technology and equipment that will accommodate requesting third-party ISPs if MediaOne Virginia itself decides to offer Road Runner.Because of this requirement, the Ordinance violates Section 544(e) and therefore the Ordinance is preempted by Section 544(e).

3.Title 47 U.S.C. § 541(c)

Section 541(c) provides that "[a]ny cable system shall not be subject to regulation as a common carrier or utility by reason of providing any cable service."The MediaOne Virginia services that trigger application of the Henrico Ordinance are "cable service" as "(A) the one-way transmission to subscribers of (i) video programming, or (ii) other programming...