A federal court in Ore. denied most claims raised by Time Warner ...
A federal court in Ore. denied most claims raised by Time Warner Telecom and Qwest in a challenge to telephone franchise terms set by the city of Portland. The carriers claimed the city broke its franchise deals by operating…
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its own municipal telecom network allegedly violating Telecom Act Sec. 253 by driving private enterprise out of the marketplace for telecom service to schools and govt. agencies via below- cost pricing and control over rights of way. The U.S. Dist. Court, Portland, dismissed the Sec. 253 claim. The court (Case CV-04-1393-PA) said Sec. 253 bars govt. barriers on competition, but the carriers failed to show how the city network blocks them from competing for govt. customers. The court also said govt. customers constitute a small fraction of the Portland market. The court said Portland’s service agreements with govt. entities simply let the entities share resources, much as private firms enter into joint ventures or partnerships. The court did uphold the companies’ claims that Sec. 253 preempted provisions in the franchise agreements requiring the carriers to make in-kind contributions to the city, valued at the lowest rate provided to any commercial customer. The court said the valuation provision allowed the city too much leeway for interpretation. The court also upheld a Qwest claim that the usage-based franchise fees in its agreement were unlawful because they weren’t tied to the city’s actual right-of-way maintenance costs.