Court Upholds Santa Fe's Revenue-Based Local ROW Fee

A federal court upheld a local telecom law requiring a revenue-based fee in Santa Fe, New Mexico. The U.S. District Court in Albuquerque granted summary judgment to the city in a Sept. 28 order on a case involving a challenge by local internet provider CNSP (case 1:17cv355). The company challenged Santa Fe's laws regulating broadband infrastructure in the right of way (ROW). CNSP said that by requiring a revenue-based fee of 2% of all gross charges, Santa Fe's law requires too much compensation for using the ROW, violating the 1996 Telecom Act’s Section 253. Also, CNSP said Santa Fe's contract with another ISP, Cyber Mesa, violated Section 253 by giving that company an unfair competitive advantage. Santa Fe's ROW law, including the 2% fee, doesn’t “materially inhibit the provision of broadband internet service,” ruled Judge Kenneth Gonzales. The ISP said the FCC's 2018 small-cells order banned revenue-based fees, requiring them instead to be cost-based, but the judge noted that the agency’s order was about 5G wireless infrastructure, which wasn’t involved in the CNSP case. Also, the court is bound by 10th Circuit precedent, not FCC opinion, Gonzales said. “The Court, despite the norm for deference to agencies found in” the Chevron doctrine, isn’t “persuaded that an administrative ‘Declaratory Ruling’ expressing a preference on a split in caselaw [sic] controls the courts." The 10th Circuit hasn’t “adopted a view antagonistic to revenue-based fees for wireline infrastructure,” the judge said. CNSP didn’t show the fee actually prohibited its business, said Gonzales: The company added customers during the case and plans to expand. On the contested contract, Gonzales said significant disputed facts precluded summary judgment for CNSP. "Even if the Court resolved all disputed facts in CNSP's favor, Santa Fe raises sufficient dispositive legal issues related to essential elements of CNSP's claims that the Court concludes summary judgment in the City's favor is appropriate,” he said. “CNSP has raised insufficient facts to show that an improper and preemptable competitive advantage has been bestowed upon Cyber Mesa or that an absolute prohibition or exclusion currently restricts CNSP -- even if the Cyber Mesa contract is indeed still operative and all disputes are resolved in CNSP's favor."