Cities Ask Supreme Court to Review Validity of Fees Levied on Cable Providers

According to a petition for a writ of certiorari filed on Monday, the Cities of Eugene and Portland, Ore. (together, Eugene) want the nation’s high court to weigh in on conflicting decisions rendered by the Sixth Circuit and the Oregon Supreme Court regarding governmental fees on cable providers.

The question is whether the federal Cable Communications Policy Act of 1984 (Cable Act) preempts state and local governments from collecting fees from cable service operators for their use of the rights-of-way to provide non-cable services, like broadband internet.

The petition was filed in a case related to seven others. As such, and in addition to the two Oregon cities, more than a dozen petitioners, namely other municipalities and trade organizations, have taken up the cause. The filing recounts how the Sixth Circuit upheld a Federal Communications Commission (FCC) ruling that explicitly repudiated a 2016 Oregon Supreme Court ruling.

Regarding the latter decision, the state court held that “fees on non-cable services are not preempted based on a straightforward textualist reading of the Cable Act, including its savings clauses preserving state and local authority,” the petition said. By contrast, the Sixth Circuit affirmed the FCC’s invalidation of fees like Eugene’s based on “rights impliedly given to cable operators by the Cable Act to use the rights-of-way without paying any generally applicable fees on their provision of non-cable services like broadband internet services.”

Eugene first argues that review is necessary to resolve conflict between the state and federal rulings on an important federalism issue. The petitioner then asserts that the challenged ruling is problematic because it exempts cable operators, and those companies alone, from “all otherwise generally applicable fees like Eugene’s, granting them a unique, preferential advantage over broadband providers that are not also cable operators.”  

The decision thus impacts competition in the communications industry, tipping the scales in favor of cable-only service operators in comparison to broadband internet providers. “Nothing in the Cable Act’s text, history, or its subsequent amendments remotely suggests that Congress intended such favoritism,” the petition states.

Eugene also argues that review is warranted to provide clarity on the proper approach to implied preemption in a case where the statute contains express preemption clauses that do not prohibit a particular action, together with express savings clauses that clearly preserve state and local authority. Unless the court takes up the issue and sets forth a high threshold for implied preemption, “federal agencies and lower courts may preempt broadly with little tether to statutory text,” the petition warns.

The City of Eugene is represented by Spiegel & McDiarmid LLP and co-petitioner the City of Portland by Best Best & Krieger LLP.