Significant victory for cable operators and consumers bars city ordinance imposing millions of dollars in access fees on broadband and other services.
On June 29, Willkie prevailed on behalf of Comcast in a closely watched litigation relating to a city ordinance imposing costly right-of-way (ROW) access fees on Comcast’s broadband and other non-cable services. The Firm was lead counsel to Comcast in challenging a 2016 ordinance by the city of Beaverton, Oregon, that levied a fee for broadband services in addition to the existing cable franchise fee.
Judge Michael H. Simon of the U.S. District Court for the District of Oregon ruled that the city ordinance was preempted by the Cable Communications Policy Act of 1984 (Cable Act), which limits ROW access fees that cities and other franchising authorities can charge a cable operator to five percent of the company’s gross revenues from cable services.
In a 40-page ruling, the Court adhered to a Federal Communications Commission (FCC) order, upheld by the U.S. Court of Appeals for the Sixth Circuit in May 2021, ruling that a local government may not exercise its franchising authority to collect fees from or otherwise regulate a cable operator’s provision of broadband or other non-cable services over its cable system. The Oregon Court’s ruling fortifies this “mixed-use rule.”
Importantly, the Court also held that Beaverton’s fees on broadband are unlawful regardless of whether broadband, currently classified by the FCC as an information service, is ultimately reclassified as a telecommunications service.
Furthermore, in a case of first impression, the Court ruled that Comcast is entitled to a refund of the fees it paid to the city, and that a statutory bar on money damages in the Cable Act for disputes involving cable service does not apply because the fees at issue are imposed on non-cable services.
The ruling is of heightened significance as dozens of cities have enacted or are considering enacting ROW ordinances similar to Beaverton’s that would levy a tax on cable operators for broadband and other non-cable services. These fees amount to millions of dollars in additional costs that would be potentially passed on to consumers.
Willkie’s representation of Comcast was led by partner David Murray and associate Matthew Johnson.