`
`IIn the SSupreme Court of the United States
`
`
`
`CITY OF EUGENE, OREGON, ET AL.,
`Petitioners,
`
`
`(additional counsel listed on inside cover)
`
`v.
`FEDERAL COMMUNICATIONS COMMISSION
`AND THE UNITED STATES OF AMERICA,
`Respondents.
`
`
`
`
`ON PETITION FOR A WRIT OF CERTIORARI TO THE
`UNITED STATES COURT OF APPEALS
`FOR THE SIXTH CIRCUIT
`
`
`
`PETITION FOR WRIT OF CERTIORARI
`
`
`
`TILLMAN L. LAY
`JOSEPH VAN EATON
`CHERYL A. LEANZA
`Counsel of Record
`JEFFREY M. BAYNE
`BEST BEST & KRIEGER LLP
`1800 K Street, NW
`LAUREN L. SPRINGETT
`Suite 725
`SPIEGEL & MCDIARMID LLP
`Washington, DC 20006
`1875 Eye Street, NW
`(202) 785-0600
`Suite 700
`Joseph.VanEaton@bbklaw.com
`Washington, DC 20006
`(202) 879-4000
`Counsel for City of
`Tim.Lay@spiegelmcd.com
`Portland,
`Oregon, et al.
`Counsel for City
`of Eugene, Oregon
`
`
`
`
`MICHAEL J. WATZA
`KITCH DRUTCHAS WAGNER
`VALITUTTI & SHERBROOK
`One Woodward Avenue
`Suite 2400
`Detroit, MI 48226-5485
`mike.watza@kitch.com
`Counsel for City of Livonia,
`Michigan, et al.
`
`
`
`
`
`
`
`
`
`
`
`i
`QUESTION PRESENTED
`The federal Cable Act requires cable operators
`to obtain a local franchise to provide cable service and
`imposes specific limitations on cable franchising,
`including limiting “tax[es], fee[s] or assessment[s]”
`imposed on cable operators “solely because of their
`status as such” to five percent of gross revenues
`derived from the cable system’s operation to provide
`cable service. 47 U.S.C. § 542. Otherwise, local and
`state authority is preserved; only laws “inconsistent
`with” the Act are preempted. Id. § 556(c). The City of
`Eugene, Oregon, requires all companies with facilities
`in the public rights-of-way, including cable operators,
`to pay a seven percent fee on broadband and other
`non-cable service revenues. The Oregon Supreme
`Court and the Sixth Circuit agree, contrary to a
`Federal Communications Commission ruling, that
`this fee is not based solely on a cable operator’s “status
`as such” and is not preempted by Section 542.
`Nevertheless, in conflict with the Oregon Supreme
`Court, the Sixth Circuit construed Sections 541(a)(2)
`and 544(b)(1) of the Cable Act to grant cable operators,
`“by implication,” a federal right to use rights-of-way
`to provide non-cable services, subject only to Section
`542’s cable revenue-based fee; it therefore preempted
`fees like Eugene’s.
`The question presented is:
`Whether the Sixth Circuit properly held, in
`conflict with the Oregon Supreme Court, that a fee
`which is consistent with the Cable Act’s only express
`provision limiting state or local fees and taxes on cable
`operators is nonetheless preempted, based on its
`conclusion that other provisions of the Act grant cable
`operators, “by implication,” a federal right to provide
`non-cable services over local rights-of-way subject
`only to a cable revenue-based fee.
`
`
`
`
`
`
`ii
`PARTIES TO THE PROCEEDING
`Petitioners are: City of Eugene, Oregon; City of
`Portland, Oregon; Anne Arundel County, Maryland;
`Boston, Massachusetts; City of Livonia, Michigan;
`District of Columbia; Fairfax County, Virginia; State
`of Hawaii; Howard County, Maryland; City of
`Kirkland, Washington; Lincoln, Nebraska; Los
`Angeles County, California; Prince George’s County,
`Maryland; The Sacramento Metropolitan Cable
`Television Commission; Texas Coalition of Cities for
`Utility Issues; Michigan Municipal League; Michigan
`Township Association; Mid-Michigan Area Cable
`Consortium; PROTEC; and National Association of
`Telecommunications Officers and Advisors.
`The Federal Communications Commission and
`the United States of America are respondents and
`were respondents in the court of appeals.
`Respondents that were petitioners below:
`Alliance
`for Communications Democracy;
`Alliance for Community Media; Baltimore, Maryland;
`Bellevue, Washington; City
`of Bellingham,
`Washington; City of Bloomington, Minnesota; City of
`Bowie, Maryland; Brookhaven, Georgia; Carmel,
`Indiana; City of Chicago, Illinois; College Park,
`Maryland; Colorado Communications and Utility
`Alliance; Chevy Chase Village, Maryland; Davis,
`California; City and County of Denver, Colorado;
`Dubuque, Iowa; Edmond, Oklahoma; Edmonds,
`Washington;
`City
`of
`Fridley, Minnesota;
`Gaithersburg, Maryland; Greenbelt, Maryland; King
`County, Washington; City of Lacey, Washington;
`Laredo, Texas; Laurel, Maryland; City of Los Angeles,
`California; County of Marin, California; Minneapolis,
`Minnesota; Montgomery County, Maryland; Mt. Hood
`Cable Regulatory Commission; National League of
`
`
`
`
`
`
`iii
`Telecommunications
`Metro
`North
`Cities;
`Commission; North Suburban Communications
`Commission; North Dakota County Cable
`Communications Commission; Northwest Suburban
`Cable Communications Commission; Oklahoma City,
`Oklahoma; City of Olympia, Washington; City of Palo
`Alto, California; Philadelphia, Pennsylvania; City of
`Pittsburgh, Pennsylvania; City of Portland, Maine;
`Rainier
`Communications
`Commission;
`Ramsey/Washington Counties Suburban Cable
`Communications Commission II; City of St. Louis
`Park, Minnesota; City of St. Paul, Minnesota; City of
`San Antonio, Texas; City and County of San
`Francisco, California; City of Seattle, Washington;
`Sioux Falls, South Dakota; South Washington County
`Telecommunications
`Commission;
`Southwest
`Suburban Cable Commission; the City of Tacoma,
`Washington; Thurston County, Washington; City of
`Tumwater, Washington; United States Conference of
`Mayors; Wilmington, Delaware; and Yuma, Arizona.
`Respondents that were petitioner intervenors
`below:
`City of Aurora, Colorado; City of Austin, Texas;
`Bloomfield Township, Michigan; Chicago Access
`Corporation; City of Coral Gables, Florida; City of
`Dearborn, Michigan; City of Fairview, Oregon;
`Florida League of Cities, Inc.; City of Grandville,
`Michigan; City of Hudsonville, Michigan; Jamestown
`Township, Michigan; City of Kent, Washington; City
`of Madison Heights, Michigan; Meridian Township,
`Michigan; City of New York; the City of Omaha,
`Nebraska; City of Pembroke Pines, Florida; City of
`Southfield, Michigan, Washington Association of
`Telecommunications Officers and Advisors; and City
`of Worthington, Minnesota.
`
`
`
`
`
`
`iv
`Respondent that was a respondent intervenor
`below:
`NCTA—The Internet & Television Association.
`
`
`RULE 29.6 STATEMENT
`Petitioners here are governmental agencies
`and therefore exempt from Rule 29.6, or are
`associations made up of governmental agencies which
`do not issue stock, have no parent corporation, and are
`not owned in any part by any publicly held
`corporation.
`
`
`RELATED PROCEEDINGS
`United States Court of Appeals (6th Cir):
`City of Eugene, Oregon v. FCC (19-4161); City
`of Portland, Oregon, et al. v. FCC (19-4162); State of
`FCC
`(19-4163);
`Hawaii
`v.
`Alliance
`for
`Communications Democracy, et al. v. FCC (19-4164);
`Anne Arundel County, Maryland, et al. v. FCC (19-
`4165); City of Pittsburgh, Pennsylvania v. FCC (19-
`4166); City of Chicago, Illinois, et al. v. FCC (19-4183),
`(August 3, 2021) (petition for reh’g denied).
`
`
`
`
`
`
`
`v
`TABLE OF CONTENTS
`
`Page
`Question Presented ............................................. i
`Parties to the Proceeding ................................... ii
`Rule 29.6 Statement .......................................... iv
`Related Proceedings .......................................... iv
`Table of Contents ............................................... v
`Table of Authorities.......................................... vii
`Petition for a Writ of Certiorari ......................... 1
`Opinions Below................................................... 1
`Jurisdiction ......................................................... 1
`Statutory and Ordinance Provisions Involved .. 1
`Introduction ........................................................ 2
`Statement of the Case ........................................ 4
`Reasons for Granting the Petition ................... 13
`I. The Sixth Circuit’s decision conflicts
`with that of the Oregon Supreme
`Court on an important question of
`federal law. ............................................ 13
`II. Unless the Court clearly establishes a
`high threshold for implied preemption,
`federal agencies and lower courts may
`preempt broadly with little tether to
`statutory text. ........................................ 20
`Conclusion ........................................................ 29
`
`
`
`
`
`
`
`
`
`
`vi
`TABLE OF CONTENTS—Continued
`Page
`
`APPENDIX
`APPENDIX A—Court of Appeals Opinions filed
`May 26, 2021 .................................................... 1a
`APPENDIX B—FCC Third Report and Order
`Adopted August 1, 2019 ................................. 27a
`APPENDIX C—Court of Appeals Denial of
`Rehearing filed August 3, 2021 .................... 237a
`APPENDIX D—Statutory and Ordinance
`Provisions ..................................................... 239a
`
`
`
`
`
`
`
`vii
`TABLE OF AUTHORITIES
`
`Page
`
`FEDERAL COURT CASES
`American Telephone & Telegraph Corp. v.
`Iowa Utilities Board, 525 U.S. 366 (1999) .. 6
`Atlantic Richfield Co. v. Christian, 140 S. Ct.
`1335 (2020) ................................................ 26
`Capital Cities Cable, Inc. v. Crisp, 467 U.S.
`691 (1984) .................................................. 23
`Chamber of Commerce of the U.S. v. Whiting,
`563 U.S. 582 (2011) .......................... 4, 24-27
`
`City of Eugene, Oregon v. Federal
`Communications Commission, 998 F.3d
`701 (6th Cir. 2021) .... 1, 10-16, 18-19, 21, 25
`City of Dallas v. FCC, 165 F.3d 341 (5th Cir.
`1999) .......................................................... 25
`City of St. Louis v. W. Union Tel. Co., 148 U.S.
`92, reh’g denied, 149 U.S. 465 (1893) ....... 25
`Complete Auto Transit, Inc. v. Brady, 430 U.S.
`274 (1977) .................................................... 3
`CSX Transportation, Inc. v. Easterwood, 507
`U.S. 658 (1993) .................................... 22, 24
`CTS Corp. v. Dynamics Corp. of American, 481
`U.S. 69 (1987) ............................................ 22
`
`
`
`
`
`
`viii
`TABLE OF AUTHORITIES—Continued
`Page
`
`Department of Revenue of Oregon v. ACF
`Industries, Inc., 510 U.S. 332 (1994) ........ 17
`
`Gade v. National Solid Wastes Management
`Ass’n, 505 U.S. 88 (1992) ...................... 4, 20
`Geier v. American Honda Motor Co., Inc., 529
`U.S. 861 (2000) ..................... 4, 21, 24, 26-27
`Hines v. Davidowitz, 312 U.S. 52 (1941)........ 20
`Merck Sharp & Dohme Corp. v. Albrecht, 139
`S. Ct. 1668 (2019) ...................................... 27
`Mozilla Corp. v. FCC, 940 F.3d 1 (D.C. Cir.
`2019) ............................................................ 7
`
`PDR Network, LLC v. Carlton & Harris
`Chiropractic, Inc., 139 S. Ct. 2051 (2019) .. 3
`
`Puerto Rico v. Franklin California Tax-Free
`Trust, 136 S. Ct. 1938 (2016) .................... 27
`Quill Corp. v. North Dakota, 504 U.S. 298
`(1992) ........................................................... 3
`Railroad Co. v. Peniston, 85 U.S. 5 (1873) ..... 17
`Rice v. Santa Fe Elevator Corp., 331 U.S. 218
`(1947) ......................................................... 17
`South Dakota v. Wayfair, Inc., 138 S. Ct. 2080
`(2018) ........................................................... 3
`
`
`
`
`
`
`ix
`TABLE OF AUTHORITIES—Continued
`Page
`
`Sprietsma v. Mercury Marine, 537 U.S. 51
`(2002) ......................................................... 24
`Tully v. Griffin, Inc., 429 U.S. 68 (1976) ....... 17
`Virginia Uranium, Inc. v. Warren, 139 S. Ct.
`1894 (2019) ..................................... 21-22, 26
`
`STATE COURT CASES
`City of Eugene v. Comcast of Oregon II, Inc.,
`375 P.3d 446 (Or. 2016) .................... passim
`
`FEDERAL AGENCY CASES
`In Re: Section 621(A)(1) of the Cable
`Communications Policy Act of
`1984 As Amended by the Cable
`Television Consumer Protection
`and Competition Act of 1992, 34 FCC
`Rcd. 6844 (2019) ..... 1, 9-10, 15-16, 18-19, 21
`
`FEDERAL STATUTES
`Administrative Orders Review Act (“Hobbs
`Act”), 28 U.S.C. § 2342(1) ........................... 3
`Communications Act of 1934, 47 U.S. §§ 151-
`664 ............................................................... 5
`Cable Communications Policy Act of 1984, 47
`U.S.C. §§ 521-573 ........................................ 2
`
`
`
`
`
`
`x
`TABLE OF AUTHORITIES—Continued
`Page
`47 U.S.C. § 152 note .................... 1, 6, 16, 22
`47 U.S.C. § 153(50) ..................................... 8
`47 U.S.C. § 153(53) ..................................... 8
`47 U.S.C. § 257(b) ..................................... 17
`47 U.S.C. § 521(2) ....................................... 5
`47 U.S.C. § 521(3) ....................................... 4
`47 U.S.C. § 522(5) ..................................... 11
`47 U.S.C. § 522(10) ................................... 18
`47 U.S.C. § 531 .......................................... 23
`47 U.S.C. § 534 .......................................... 23
`47 U.S.C. § 541 ............................... 16-17, 22
`47 U.S.C. § 541(a) ....................................... 1
`47 U.S.C. § 541(a)(2) ................................... i
`47 U.S.C. § 541(b)(1) ............................. 4, 12
`47 U.S.C. § 541(b)(3)(B) ............................ 23
`47 U.S.C. § 541(d)(2) ........................ 5, 22-23
`47 U.S.C. § 542 ...... i, 4-7, 9-10, 14-17, 20, 21
`47 U.S.C. § 542(a) ................................... 1, 5
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`xi
`TABLE OF AUTHORITIES—Continued
`Page
`47 U.S.C. § 542(a)(1)-(3) .............................. 1
`47 U.S.C. § 542(b) ......................... 1, 6, 8, 11
`47 U.S.C. § 542(g)...................................... 16
`47 U.S.C. § 542(g)(1) ................... 1, 5, 11, 15
`47 U.S.C. § 542(g)(2)(A) .............................. 1
`47 U.S.C. § 542(i) ........................................ 1
`47 U.S.C. § 544 .................... 10-11, 15-19, 22
`47 U.S.C. § 544(a) ....................... 1, 5, 10, 15
`47 U.S.C. § 544(b) ....................................... 1
`47 U.S.C. § 544(b)(1) ..........i, 7, 11-12, 18-20
`47 U.S.C. § 544(f)(1) .................................... 1
`47 U.S.C. § 544(e) ...................................... 23
`47 U.S.C. § 546 .......................................... 23
`47 U.S.C. § 551 .......................................... 23
`47 U.S.C. § 552 .......................................... 23
`47 U.S.C. § 554(i) ...................................... 23
`47 U.S.C. § 556(a) ........................... 1, 22, 24
`47 U.S.C. § 556(c) ......................... i, 5, 11, 15
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`xii
`TABLE OF AUTHORITIES—Continued
`Page
`47 U.S.C. § 573(c) ........................................ 7
`
`Telecommunications Act of 1996, Pub. L. No.
`104-104, 110 Stat. 56 ................... 5-7, 16, 22
`§ 101(a), 110 Stat. at 70 .............................. 6
`
`§ 302(a), 110 Stat. at 121 ............................ 6
`
`§ 302(b)(1), 110 Stat. at 124 ........................ 6
`
`§ 303(b), 110 Stat. at 125 ............................ 6
`
`§ 601(c), 110 Stat. at 143 .....................1, 6-7
`
`28 U.S.C. §1254(1) ............................................ 1
`
`STATE AND LOCAL STATUTES
`Eugene Code § 3.005 .................................... 1, 8
`Eugene Code § 3.405 ........................................ 1
`Eugene Code § 3.410(1)(b) ................................ 8
`Eugene Code § 3.410(3) .............................. 1, 18
`Eugene Code § 3.415(2) ................................ 2, 8
`
`OTHER AUTHORITIES
`H.R. Rep. No. 98-934 (1984) ............................. 5
`H.R. Rep. No. 104-458 (1996) (Conf. Rep.) ...... 6
`
`
`
`
`
`
`
`1
`PETITION FOR A WRIT OF CERTIORARI
`Petitioners respectfully petition for a writ of
`certiorari to review the judgment of the United States
`Court of Appeals for the Sixth Circuit.
`
`
`OPINIONS BELOW
`The opinion of the court of appeals (App. 1a-
`26a) is reported at 998 F.3d 701 (6th Cir. 2021). The
`Third Report
`and Order
`of
`the Federal
`Communications Commission (App. 27a-236a) is
`reported at 34 FCC Rcd. 6844 (2019).
`
`
`JURISDICTION
`The judgment of the court of appeals was
`entered on May 26, 2021 (App. 2a). Petitions for
`rehearing were denied on August 3, 2021 (App. 237a-
`238a). The jurisdiction of this Court is invoked under
`28 U.S.C. §1254(1).
`
`
`STATUTORY AND ORDINANCE
`PROVISIONS INVOLVED
`The following federal statutory provisions are
`involved in this case and reproduced in the appendix:
`47 U.S.C. § 542(a), (b), (g)(1), (g)(2)(A), (i) (reproduced
`at App. 239a-242a); 47 U.S.C. § 541(a)(1)-(3), (b)(1),
`(b)(3), (d)(2); (reproduced at App. 243a-244a); 47
`U.S.C. § 544(a), (b), (f)(1) (reproduced at App. 245a-
`246a); 47 U.S.C. § 556(a), (c) (reproduced at App.
`247a); Pub. L. 104-104, § 601(c) (codified at 47 U.S.C.
`§ 152 note) (reproduced at App. 248a). The following
`provisions of the Eugene Code (“EC”) are involved in
`this case and reproduced in the appendix: EC § 3.005
`(excerpt) (reproduced at App. 249a); EC § 3.405
`(reproduced at App. 250a); EC § 3.410(3) (reproduced
`
`
`
`
`
`
`2
`at App. 251a); EC § 3.415(2) (reproduced at App.
`252a).
`
`
`INTRODUCTION
`In conflict with the Oregon Supreme Court, the
`Sixth Circuit
`ruled
`that
`the
`federal Cable
`Communications Policy Act of 1984, 47 U.S.C. §§ 521-
`573, as amended (“Cable Act” or “Act”), preempts state
`and local governments from assessing fees on cable
`operators for use of the rights-of-way to provide non-
`cable services, such as broadband internet. In doing
`so,
`the Sixth Circuit
`upheld
`a Federal
`Communications Commission (“FCC”) ruling that
`explicitly repudiated City of Eugene v. Comcast of
`Oregon II, Inc., 375 P.3d 446 (Or. 2016) (“Comcast of
`Oregon”), where the Oregon Supreme Court held that
`the Cable Act did not preempt the City of Eugene,
`Oregon’s (“Eugene”) right-of-way fee on non-cable
`services, a
`fee
`that applies equally
`to all
`communications
`companies,
`including
`cable
`operators, using the rights-of-way.
`The Oregon Supreme Court found 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 Sixth Circuit upheld the FCC’s
`invalidation of fees like Eugene’s based not on the
`Cable Act’s express provision limiting fees on cable
`operators, but on its conclusion that Eugene’s fee was
`inconsistent with 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.
`
`
`
`
`
`
`3
`Review is needed to resolve the express conflict
`between a state court of last resort and a federal Court
`of Appeals as to an important question regarding the
`Cable Act’s preemptive reach. State and
`local
`government revenues depend on tax and
`fee
`authority, and issues about a federal statute’s
`preemption of that authority are critical to the
`balance of federalism. Moreover, review is needed now
`because this dispute arises from circuit court review
`of an agency decision pursuant to the Administrative
`Orders Review Act (“Hobbs Act”), 28 U.S.C. § 2342(1);
`a future circuit court split is therefore unlikely, if not
`impossible. See PDR Network, LLC v. Carlton &
`Harris Chiropractic, Inc., 139 S. Ct. 2051, 2055 (2019).
`Further, review is appropriate because of the
`decision’s significant impact on competition in the
`communications industry. Cable service subscriptions
`and revenues (and thus state and local government
`revenue from Cable Act franchise fees) are decreasing,
`while broadband internet revenues are growing. The
`Sixth Circuit’s
`interpretation
`exempts
`cable
`operators, and only cable operators, from all otherwise
`generally applicable fees like Eugene’s, granting them
`a unique, preferential advantage over broadband
`providers that are not also cable operators. Nothing in
`the Cable Act’s text, history, or its subsequent
`amendments remotely suggests
`that Congress
`intended such favoritism. Federal law should not
`lightly be read to “‘relieve’” some entities from “‘their
`just share’” of state financial burdens. South Dakota
`v. Wayfair, Inc., 138 S. Ct. 2080, 2094 (2018) (quoting
`Complete Auto Transit, Inc. v. Brady, 430 U.S. 274,
`279 (1977)). Nor should “the Judiciary . . . create
`market distortions.” Id. (quoting Quill Corp. v. North
`Dakota, 504 U.S. 298 (1992)).
`
`
`
`
`
`
`4
`This Court’s review and resolution of the
`conflict between the Sixth Circuit and Oregon
`Supreme Court also would provide much needed
`clarity on the proper approach to implied preemption,
`particularly where, as here, a statute contains express
`preemption clauses that do not forbid a particular
`action at issue, together with express savings clauses
`that preserve state and local authority and also direct
`that the statute should not be construed to impair
`such authority. The Court should use this opportunity
`to make clear that, while express preemption or
`savings clauses may not foreclose implied preemption
`entirely, Geier v. American Honda Motor Co., Inc., 529
`U.S. 861, 869 (2000), courts may not lightly infer that
`Congress creates federal rights by implication that
`preempt state and
`local actions, Chamber of
`Commerce of the U.S. v. Whiting, 563 U.S. 582, 607
`(2011) (“Whiting”) (noting the “high threshold”
`necessary for “a state law . . . to be pre-empted for
`conflicting with the purposes of a federal Act”)
`(plurality opinion) (quoting Gade v. Nat’l Solid Wastes
`Mgmt. Ass’n, 505 U.S. 88, 110 (1992)).
`
`
`STATEMENT OF THE CASE
`1. Structure of the Cable Act. Congress enacted
`the federal Cable Act in 1984 to “establish guidelines
`for the exercise of Federal, State, and local authority
`with respect to the regulation of cable systems.”
`47 U.S.C. § 521(3). Under the Act, Congress required
`a cable operator to obtain a cable television franchise
`from a state or locality in order to provide cable
`service. Id. § 541(b)(1). It permitted, but also capped,
`the fees and taxes that states and localities could
`impose on cable operators or cable services. Id. § 542.
`States and
`localities were also given primary
`
`
`
`
`
`
`5
`for ensuring cable systems are
`responsibility
`“responsive to the needs and interests of the local
`community.” Id. § 521(2); H.R. Rep. No. 98-934, at 19
`(1984). To that end, the Act left state and local
`governments with the authority to regulate the
`provision of services and the system so long as
`consistent with the Communications Act of 1934, 47
`U.S.C. §§ 151-664 (“Communications Act”), of which
`the Cable Act is a part. 47 U.S.C. § 556(c); see also id.
`§ 544(a) (“Any franchising authority may not regulate
`the services, facilities, and equipment provided by a
`cable operator except to the extent consistent with
`[the Cable Act]”). While Congress recognized that
`cable operators might also provide other services in
`addition to cable service, the Cable Act specifically
`preserved state authority to regulate cable operators’
`provision of any other communications services. Id. §
`541(d)(2).
`Two provisions of the Cable Act are at the core
`of the conflict between the Sixth Circuit and Oregon
`Supreme Court:
`a. First, the Cable Act permits, but also limits,
`the imposition of franchise fees on cable operators. 47
`U.S.C. § 542(a). The Act defines a franchise fee as
`“any tax, fee, or assessment of any kind imposed by a
`franchising authority or other governmental entity on
`a cable operator or cable subscriber, or both, solely
`because of their status as such.” Id. § 542(g)(1).
`As originally enacted in 1984, Section 542
`capped franchise fees at five percent of the cable
`operator’s revenue derived from the operation of the
`cable system. Congress amended this provision in the
`Telecommunications Act of 1996, which was enacted
`to promote competition and enable cable operators
`and local telephone companies (telecommunications
`providers) to enter each other’s markets. Pub. L. No.
`
`
`
`
`
`
`6
`104-104, 110 Stat. 56 (“1996 Act”); id. § 302(a), 110
`Stat. at 121 (adding Communications Act § 653,
`codified at 47 U.S.C. § 573); id. § 302(b)(1), 110 Stat.
`at 124 (repealing ban on telephone company provision
`of cable service); Am. Tel. & Tel. Corp. v. Iowa Utils.
`Bd., 525 U.S. 366, 371 (1999). Congress amended
`Section 542 to narrow the maximum franchise fee that
`could be imposed pursuant to the Cable Act to
`five percent of the cable operator’s revenue derived
`from operating the cable system “to provide cable
`services.” 1996 Act, § 303(b), 110 Stat. at 125
`(amending 47 U.S.C. § 542(b)) (emphasis added). At
`the same time that it narrowed the Cable Act
`franchise fee revenue base, Congress added a new
`provision preserving state and local authority to
`obtain “fair and reasonable” compensation from
`anyone using the rights-of-way in the provision of
`telecommunications services. Id. § 101(a), 110 Stat. at
`70 (codified at 47 U.S.C. § 253(c)).1
`Congress also made it clear, in a subsection
`titled “no implied effect,” that the 1996 Act and its
`amendments to the existing law “shall not be
`construed to modify, impair, or supersede Federal,
`State, or local law unless expressly so provided . . . .”
`1996 Act, § 601(c)(1), 110 Stat. at 143 (codified at 47
`U.S.C. § 152 note). To this anti-preemption clause,
`
`1 In explaining the 1996 amendment to Section 542, the
`Conference Report to the 1996 Act confirms Congress intended
`to preserve state and local authority to impose fees on cable
`operators’ non-cable services. H.R. Rep. No. 104-458, at 180
`(1996) (“Conf. Rep.”) (“[t]he conferees intend that, to the extent
`permissible under State and local law, telecommunications
`services, including those provided by a cable company, shall be
`subject to the authority of a local government to, in a
`nondiscriminatory and competitively neutral way, manage its
`public rights-of-way and charge fair and reasonable fees”).
`
`
`
`
`
`
`7
`Congress added a “tax savings provision” that
`provided further interpretive guidance by sharply
`confining which provisions in the Act may be
`construed to preempt state and local fees and taxes:
`“nothing in this Act or the amendments made by this
`Act shall be construed to modify, impair, or supersede
`. . . any State or local law pertaining to taxation,
`except as provided in [47 U.S.C. §§ 542, 573(c)] and
`section 602 of this Act.” 1996 Act, § 601(c), 110 Stat.
`at 143.2
`b. Second, the Cable Act provides that
`franchising authorities “may establish requirements
`for facilities and equipment” in their requests for
`franchise proposals or franchise renewal proposals,
`but that
`franchising authorities “may not
`. . .
`establish requirements for video programming or
`other information services.” 47 U.S.C. § 544(b)(1). The
`FCC currently classifies broadband service as an
`“information
`service,”
`as
`defined
`in
`the
`Communications Act. See Mozilla Corp. v. FCC, 940
`F.3d 1 (D.C. Cir. 2019).
`2. Eugene’s fee on non-cable services. Eugene
`granted a cable television franchise to Comcast,
`embodied in a franchise agreement. See Comcast of
`Oregon at 449. That agreement imposes on Comcast
`“the maximum cable franchise fee that federal law
`allows: five percent of Comcast’s gross revenue
`‘derived . . . from the operation of the cable system to
`
`
`2 47 U.S.C. § 542 is the cable television franchise fee provision,
`47 U.S.C. § 573(c) applies to open video systems fees, and Section
`602 of the 1996 Act prohibits local authorities (but not states)
`from imposing fees and taxes on direct-to-home satellite services.
`While Subsection 601(c)(2) of the 1996 Act refers to “taxation,”
`the provisions it references treat taxes and fees the same.
`
`
`
`
`
`
`8
`provide cable services.’” Id. (quoting 47 U.S.C.
`§ 542(b)).
`Separately, the Eugene Code (“EC”) requires
`any entity that provides telecommunications service
`through facilities in the City’s rights-of-way to obtain
`a license and pay a license fee equal to seven percent
`of its revenue from such licensed services. Comcast of
`Oregon
`at
`450. As defined
`in
`the EC,
`“telecommunications service”
`includes broadband
`service but expressly excludes cable service.3 All
`broadband service providers, including those who are
`also cable operators, are evenhandedly subject to this
`requirement, paying the relevant fee on only their
`broadband service revenues. Neither Eugene’s
`broadband fee nor the Cable Act franchise fee
`duplicates the other or is assessed on the same
`services or revenue. If a cable operator provides no
`non-cable services, it is not subject to the EC’s
`broadband license requirement or fee.
`3. The Oregon Supreme Court decision.
`Comcast and Eugene disagreed as to whether the
`City’s license fee, as applied to Comcast’s non-cable
`services, was preempted by federal law, including the
`Cable Act. In 2016, their dispute reached the Oregon
`Supreme Court, which held that application of
`Eugene’s license fee to Comcast is not preempted.
`
`
`3 The definition of “telecommunication service” in the EC is
`different than, and independent of, that used in the federal
`Communications Act. Compare EC §§ 3.005 (definition of
`“telecommunications service”), 3.410(1)(b), 3.415(2) with 47
`U.S.C. § 153(50), (53). Under the EC, “telecommunications
`service” includes “all forms of telephone services and voice, data
`and video transport, but does not include: (1) cable service” and
`certain other services not relevant here. EC § 3.005 (emphasis
`added).
`
`
`
`
`
`
`9
`a. The Oregon Supreme Court rejected
`Comcast’s argument that Eugene’s fee is inconsistent
`with the Cable Act’s cap on cable television franchise
`fees, 47 U.S.C. § 542. Comcast of Oregon at 462-63.
`The court held that under Section 542, “[a] fee is a
`franchise fee [under the Cable Act] if it is imposed on
`a company because it is a cable operator and not for
`any other reason.” Id. at 463. Here, however, the
`Eugene fee was “imposed on Comcast because it
`provides telecommunications services [as defined in
`the EC] over the city’s public rights of way,” and
`“Comcast’s status as a cable operator is only
`incidental.” Id.
`b. The Oregon Supreme Court also rejected
`Comcast’s “effort to establish a right under [the Cable
`Act] to provide [broadband and other non-cable]
`services over the city’s public rights of way” without
`paying Eugene’s fee. Id. at 456. The court explained
`that the Cable Act does not “grant[] cable operators an
`affirmative right to provide non-cable services.” Id. at
`458. Rather, any right to provide non-cable services
`over
`facilities
`in
`the City’s rights-of-way
`“is
`determined by other applicable law”—here, Eugene’s
`Code. Id.
`4. The FCC decision. In 2019, three years after
`the Oregon Supreme Court’s decision upholding
`Eugene’s fee as consistent with the Cable Act, the
`FCC issued an order that, among other things,
`broadly concluded that the only fee that may be
`charged to a cable operator for its use of the rights-of-
`way to provide any non-cable service is the Section
`542 franchise fee limited to revenues derived from the
`operation of the system to provide cable service. The
`FCC expressly “repudiate[d]” the Oregon Supreme
`Court’s reasoning in Comcast of Oregon. App. 173a-
`175a. The FCC added that Comcast of Oregon
`
`
`
`
`
`
`10
`“appears to have prompted an increasing number of
`states and municipalities to impose fees on franchised
`cable operators’ provision of non-cable services.” Id.
`a. Contrary to the Oregon Supreme Court, the
`FCC held that Eugene’s license fee, as applied to cable
`operators, was a “franchise fee” within the meaning of
`the Cable Act and thus inconsistent with the Act’s
`franchise fee limitation in 47 U.S.C. § 542. App. 153a-
`158a.
`
`b. The FCC also concluded, applying the
`“consistent with” language in 47 U.S.C. § 544(a), that
`local franchising authorities are prohibited from
`exercising Cable Act authority, or any other state-
`granted authority, to regulate “the provision of any
`service other than cable services offered over the cable
`systems of incumbent cable operators, except as
`expressly permitted in the Act.” App. 117a, 128a-
`143a. The FCC made this a rule, which it claimed
`synthesized the Act’s many provisions with respect to
`state and local authority. App. 117a.
`Applying this construction of Section 544 to
`fees on cable operators’ broadband service, t