The Fourth U.S. Circuit Court of Appeals has been asked to overturn a lower-court decision that allows Virginia municipalities to offer telecommunications services.
The Virginia Telecommunications Industry Association last week filed an appeal of a recent U.S. District Court decision, which struck down a 1999 Virginia law prohibiting cities from providing telecom services to their citizens.
The VTIA, which represents cable, wireless, local and long-distance carriers, said Judge James P. Jones misread the law when he ruled that the Virginia statute conflicted with the 1996 Telecommunications Act.
"There is little doubt that the judge erred in this decision," VTIA president Dana Coltrin said in a statement. "We're confident the Fourth Circuit of Appeals will agree with us."
Coltrin, vice president and general manager for Cox Virginia Telecommunications Inc. — Cox Communications Inc.'s telephony division — said the ruling would "stifle competition, not stimulate it."
"What company in its right mind would enter a community to offer telecommunications service in competition with the local government?" he asked.
The district court decision was a victory for Bristol, Va., which wants to lease its telecommunications network to an outsider that would then offer enhanced services to 1,800 residents.
Jones ruled that it defied "logic" to believe the federal law, which prevents a state or local government from taking any action that prohibits "any entity" from entering the local telecom market, can be interpreted to exclude local governments from offering telecom service.
"We think [Jones] gave that a broader interpretation than logic warrants," VTIA spokesman Earl Bishop said.
Bishop said a court in Abilene, Texas, and the Federal Communications Commission have both ruled that the phrase "any entity" does not mean that Congress specifically meant municipal governments.
The VTIA is concerned that the Blue Ridge Power Authority, a coalition of municipal electric utilities, would cite the ruling in launching its own telecom network.
In Virginia, local governments are precluded from offering any service unless the legislature specifically grants them that right.
The VTIA has also asked Jones to issue a stay of his own ruling until the fourth circuit has a chance to rule. It was encouraged by the fact that Jones gave Bristol only until June 6 to respond.
"We think that indicates that he's aware of the importance of the case," Bishop said.
Jim Baller, a partner with The Baller Herbst Law Group, a Washington law firm that represented Bristol, said a stay was unlikely.
"It's the same argument that they made to the judge, and which he disagreed with," Baller said. "We think we wrote a very strong opinion, and we hope to see the fourth circuit agree."
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