IN THE SUPREME COURT OF MISSOURI. Defendant-Appellant. Cause No. SC082519

Transcription

1 IN THE SUPREME COURT OF MISSOURI CITY OF SUNSET HILLS, vs. Plaintiffs-Respondent SOUTHWESTERN BELL MOBILE SYSTEMS, INC., Defendant-Appellant. Cause No. SC THE CELLULAR TELECOMMUNICATIONS INDUSTRY ASSOCIATION S SUGGESTIONS AS AMICUS CURIAE IN SUPPORT OF SOUTHWESTERN BELL MOBILE SYSTEMS, INC. S APPLICATION FOR TRANSFER Michael D. Moeller, #42324 Shook, Hardy & Bacon L.L.P Main Street Kansas City, Missouri Michael F. Altschul Vice President, General Counsel Cellular Telecommunications Industry Assoc Connecticut Avenue, N.W., Suite 800 Washington, D.C Attorneys for Cellular Telecommunications Industry Association, Amicus Curiae

2

3 The Cellular Telecommunications Industry Association ( CTIA ), as amicus curiae, suggests that the Application for Transfer of City of Sunset Hills v. Southwestern Bell Mobile Systems, Inc., ED should be granted. That will enable this Court to determine whether Section 332(c)(3)(A) of the Communications Act of 1934, as amended (the Communications Act ), 47 U.S.C. 332(c)(3)(A), preempts local governments efforts to license the equipment or operations of wireless telecommunications service providers licensed by the Federal Communications Commission. This issue is one of critical importance to the telecommunications industry generally and wireless telecommunications service providers in particular as they attempt to implement the federal government s policy and mandate to develop nationwide wireless telecommunications networks. CTIA is the international organization of the wireless communications industry. CTIA's members include a variety of Commercial Mobile Radio Service ( CMRS ) providers, including more than 140 cellular and broadband personal communications service ("PCS") providers. CTIA members include the cellular and PCS carriers licensed by the Federal Communications Commission to provide service in Missouri. In City of Sunset Hills v. Southwestern Bell Mobile Systems, Inc., the Missouri Court of Appeals held that the City s Ordinance assessing a business license fee on the placement of antennas was not preempted by the Communications Act. The Sunset Hills Ordinance provides for and requires a $1,000 per antenna license fee. Sunset Hills Code of Ordinances 15-9(b). Obtaining a license from the city involves filing a license application and obtaining aldermanic approval. Id. at 15-3 and As the trial court s decision demonstrates, failure to obtain a business license or to pay the business license fee subjects a person to penalties and fines

4 The decision of this Court regarding preemption of local regulatory ordinances as barriers to entry by CMRS carriers under Section 332(c)(3)(A) of the Communications Act will affect not only the parties to this matter, but undoubtedly will impact CMRS providers throughout the country. The appellate court s decision permits local governments to prohibit the siting of wireless facilities in their communities -- and thus restrict or prevent the provision of wireless services -- by imposing license requirements, including the exaction of costly license fees, at whatever level is needed to discourage carriers from entering the community. Indeed, already one Missouri municipality has created a $10,000 per antenna annual license fee ten times the per antenna fee charged by Sunset Hills. See of the City Zoning Code, City of Overland, Missouri. CTIA respectfully submits this brief to provide the Court with its views regarding the federal preemption of such "license fees." The imposition by a municipality of a business license fee on each wireless antenna in the community constitutes regulation of the entry of CMRS providers which is clearly prohibited by Section 332(c)(3)(A) of the Communications Act. As amended in 1993, that statute provides: [N]o State or local government shall have any authority to regulate the entry of or the rates charged by any commercial mobile service or any private mobile service, except that this paragraph shall not prohibit a State from regulating the other terms and conditions of commercial mobile services. 47 U.S.C. 332(c)(3)(A). This prohibition against state and local rate and entry regulation is designed to ensure the rapid build out of a nationwide wireless communications infrastructure. See H.R. Rep. No. 111, 103 rd Cong., 1 st Sess. 260 (1993). Indeed, the 1993 amendments to Section 332(c)(3)(A) represent the culmination of congressional efforts to create a competitive, nationwide wireless telecommunications infrastructure free of unwarranted state burdens. Implementation of Section 6002(b) of the OBRA, Third Report, 12 Comm. Reg. 623, 624, 13 FCC Rcd , 1998 FCC LEXIS 2816 (June 11, 1998)

5 Section 332 was enacted specifically to prohibit state and local governments from regulating CMRS market entry and thereby hindering the goal of a vibrant, state-of-the-art, competitive CMRS market. See Matter of Arizona Corporation Comm., 10 FCC Rcd. 7824, 7839, 1995 FCC LEXIS 3376, **70 (FCC 1995). In 1996, Congress again addressed barriers to the implementation of CMRS when it dealt with the impact of zoning decisions on the build out of CMRS networks. Congress preserved some local zoning authority over antennas, but subjected such authority to certain limitations. See Cellular Telephone Co. v. Town of Oyster Bay, 166 F.2d 490, (2d Cir. 1999). It mandated that actions taken by State or local governments shall not prohibit or have the effect of prohibiting the placement, construction or modification of personal wireless services. See Joint Explanatory Statement of the Committee of Conference, Conference Report of Telecommunications Act of 1996, printed July 31, 1996, Section 704. It imposed the additional requirement that local regulations not unreasonably discriminate between and among wireless and other functionally equivalent services. 47 U.S.C. 332(c)(7)(B)(i)(I, II). Although Section 332 reserved for state and local governments traditional zoning authority to decide the placement, construction and modification of wireless facilities, the licensing ordinance adopted by Sunset Hills goes beyond that limited authority. See 47 U.S.C. 332(c)(7)(A). It discriminates against CMRS providers in favor of providers of functionally equivalent service. Antenna license fees uniquely impact wireless carriers and do not affect the facilities of landline telephone companies, long-distance carriers, cable companies or other providers. The resulting impact on competition is precisely what the drafters of Section 332 sought to prevent. See H.R. Conf. Rep. No. 213, 103 rd Cong., 1 st Sess. 493, 494 (1993)

6 The Sunset Hills Ordinance regulates the entry of CMRS carriers as well. The ability of municipalities to forestall the placement of wireless facilities by imposing license fees will serve to lessen competition, contrary to the spirit and intent of Section 332(c)(3)(A). The Ordinance and the appellate court s ruling effectively authorize municipalities to accomplish what Congress specifically prohibited an outright ban on the placement of wireless facilities. The precedent set by the decision gives other communities the means to prohibit the placement of CMRS facilities simply by imposing large license fees. Because antennas are critical to the provision of wireless services, any effort to regulate the ownership, maintenance or operation of such antennas will necessarily affect the ability of CMRS providers to enter a geographic market and to provide CMRS service. See Southwestern Bell Wireless Inc. v. Johnson County, 199 F.3d 1185, 1191 (10 th Cir. 1999). The unrestrained ability of a municipality to set license fee rates at whatever level it desires can effectively prohibit the placement of facilities in a municipality. Moreover, the penalty/fine for failure to comply with the Ordinance is itself a prohibition on entry. AT&T Communications v. City of Austin, 975 F. Supp. 928, 939 (W.D. Tex. 1997) ( The threat of criminal sanctions and fines for the failure of an entity to obtain municipal consent can indubitably only be described as a prohibition. ). Because the Ordinance in effect provides the City with authority to determine whether to allow such antennas within the city limits, it erects a clear barrier to entry to the CMRS market. The Ordinance is therefore preempted by Section 332 and void under the Supremacy Clause of the United States Constitution. The conclusion that the Ordinance is preempted by Section 332 and is an impermissible fee is buttressed by several cases finding that the Communications Act preempted similar regulations of landline telecommunications carriers. See Bell Atlantic-Maryland, Inc. v. Prince George s County, 49 F. Supp. 2d 805, 813 (D. Md. 1999) (County s telecommunications franchise law was preempted by the - 4 -

7 Communications Act); AT&T Communications v. City of Austin, 975 F. Supp. 928, 939 (W.D. Tex. 1997) (holding 253(a) of the Communications Act preempted ordinance that prohibited AT&T from providing local service without the city s consent); AT&T Communications v. City of Dallas, 8 F. Supp. 2d 582, 593 (N.D. Tex. 1998) ( [A]ny fee that is not based on AT&T s use of the city rights-of-way... [i]s an economic barrier to entry ). Similarly, the Federal Communications Commission ( FCC") has denied state petitions seeking to regulate the entry of or rates charged by CMRS carriers, agreeing that attempts by state or local governments to regulate entry to a CMRS market are preempted. Matter of Arizona Corporation Comm., 10 FCC Rcd. 7824, 7839, 1995 FCC LEXIS 3376, **70 (FCC 1995) (Section 332(c)(3)(A) is a clear preemption of continued state regulation of CMRS entry ); Matter of State of Ohio, 10 FCC Rcd. 7842, 7850, 1995 FCC LEXIS 3379, **32 (FCC 1995) ( Section 332(c)(3)(A) of the Act wholly displaces state regulation of CMRS entry. ); Matter of Connecticut Dep t of Public Utility Control 10 FCC Rcd. 7025, 7033, 1995 FCC LEXIS 3381, **16 (FCC 1995) (denying petition to retain regulatory control of rates), aff d sub nom Connecticut Dep t of Pub. Util. Control v. FCC, 788 F.3d 842 (2d Cir. 1996). The business license fee mandated by the Sunset Hills Ordinance is an attempt to regulate the entry and provision of wireless service to Sunset Hills. As such, the Ordinance serves to thwart competition, and is in direct contravention of the federal statute. The Missouri Court of Appeals erred in affirming the trial court s determination that the Ordinance is not preempted by Section 332. Because of the importance of this issue, CTIA respectfully requests that this Court accept transfer of this case

8 Respectfully submitted, SHOOK, HARDY & BACON L.L.P. By Michael D. Moeller, #42324 One Kansas City Place 1200 Main Street Kansas City, Missouri / FAX: 816/ Michael F. Altschul Vice President, General Counsel Cellular Telecommunications Industry Assoc Connecticut Avenue, N.W., Suite 800 Washington, D.C ATTORNEYS FOR CELLULAR COMMUNICATIONS INDUSTRY ASSOCIATION, AMICUS CURIAE A copy of the foregoing was mailed postage prepaid this day of April, 2000, to: Robert C. Jones Clayton Center Suite 450, 120 S. Central Avenue Clayton, Missouri and Kenton Knickmeyer Thompson Coburn LLP One Firstar Plaza St. Louis, Missouri

9 Attorney for Cellular Communications Industry Association, Amicus Curiae - 7 -