A freshly inked state law exempting streaming TV services from paying franchise fees to local governments in Kansas could upend a city's lawsuit against Hulu and Netflix at a state appeals court. Gov. Laura Kelly (D) signed a bill (SB-144) to carve out satellite and over-the-top video services from the Kansas Video Competition Act (KVCA). The streamers filed briefs last week in the case at the Kansas Court of Appeals (docket 22-125784-A).
Adam Bender
Adam Bender, Senior Editor, is the state and local telecommunications reporter for Communications Daily, where he also has covered Congress and the Federal Communications Commission. He has won awards for his Warren Communications News reporting from the Society of Professional Journalists, Specialized Information Publishers Association and the Society for Advancing Business Editing and Writing. Bender studied print journalism at American University and is the author of dystopian science-fiction novels. You can follow Bender at WatchAdam.blog and @WatchAdam on Twitter.
While T-Mobile appeals to the 9th U.S. Circuit Court of Appeals, the U.S. District Court for Northern California should stay enforcement of the California Public Utilities Commission’s order to shift to a connections-based USF contribution method, T-Mobile and subsidiaries said Monday. T-Mobile gave notice of its appeal earlier that day (see 2304030056). The 9th Circuit assigned the appeal Tuesday to docket 23-15490. The district court should either stay enforcement of the CPUC rule pending appeal or issue an administrative stay pending a 9th Circuit decision on a forthcoming motion for stay pending appeal, T-Mobile said in case 3:23-cv-00483-LB. Since the USF order took effect Saturday, plaintiffs want a ruling by April 7, it said. "The balance of the equities supports grant of a stay. Plaintiffs made a strong, unrebutted showing of irreparable harm, and the CPUC made no contrary showing.” A stay won’t harm the CPUC, T-Mobile added. The carrier also filed a motion to shorten the briefing schedule for responding to its stay request. Defendants don’t object to a proposed schedule where the agency would respond by Thursday and T-Mobile could respond to the commission Friday, the carrier said. "Shortening Defendants’ time to respond to the motion will not impose any prejudice on the CPUC, which has been on notice of Plaintiffs’ intent to stay enforcement of the Connections-Based Rule since before the filing of Plaintiffs’ preliminary injunction motion on February 1, 2023.” The court grants the motion to shorten time as proposed, it said in a text entry Tuesday. NARUC would likely file an amicus brief at the 9th Circuit supporting the CPUC, the state regulator association’s General Counsel Brad Ramsay told us. “It is patently obvious [that] a $1.11 fee doesn’t burden the federal fund nor is it inconsistent with the federal program,” he emailed. “Charging all competitors the same flat fee is the definition of ‘competitively neutral.’”
California businesses asked a state court to delay enforcement of the California Privacy Rights Act (CPRA) until one year after the California Privacy Protection Agency adopts final rules.
Comcast and Verizon said a constitutional exception allowed them to challenge Maryland’s digital ad tax in court before exhausting all administrative remedies. Responding Friday to the state’s brief last month at the Maryland Supreme Court (see 2303020067), the carriers also disagreed that the tax isn’t preempted by the federal Internet Tax Freedom Act (ITFA). The state Supreme Court is reviewing a lower state court decision to strike down the digital ad tax as unconstitutional. No administrative remedies were available to the plaintiffs when the suit began because the Maryland comptroller hadn't yet made any tax assessments "and the earliest she could possibly do so is April 17, 2023, when first [digital ad tax] returns are due,” the companies said (case No. 32, September 2022 term). That would have been two years after the tax was enacted. “In the meantime, Plaintiffs stood to lose substantial rights every day the constitutionality … remained unresolved because they were forced to conduct their businesses without knowing whether the contracts they were entering in 2021 and 2022 and likely 2023 were subject to a legally enforceable tax and without knowing how or whether they could recover” the tax because of its ban on passing through costs to customers. “This case is a textbook example for why the constitutional exception was created,” Comcast and Verizon said. The tax law violates the supremacy clause because it singles out internet ads in violation of ITFA, they said. By applying only to companies outside Maryland, it discriminates against interstate commerce in violation of the commerce clause. And because the tax exempts certain types of content like news, "it makes explicit, content-based distinctions in violation of the First Amendment.”
T-Mobile appealed to the 9th U.S. Circuit Court of Appeals after a district court refused to stop California from switching to a connections-based method for state USF contribution. The carrier notified the U.S. District Court for Northern California about the appeal Monday.
New Jersey prorating rules are allowed under the federal Cable Act, the New Jersey Supreme Court ruled Monday. No justices opposed the opinion by Justice Douglas Fasciale to reinstate the state Board of Public Utilities’ 2019 cease-and-desist order against Altice for failing to prorate canceled bills.
Telecom law has a “squishy” standard for finding conflict between state and federal USF rules, said U.S. Magistrate Judge Laurel Beeler for Northern California in San Francisco at a virtual motion hearing Thursday. T-Mobile and subsidiaries want the court to preliminarily enjoin a $1.11 monthly per-line fee from taking effect April 1 in the state (see 2303100046). Beeler said she plans to issue a decision by Monday (docket 3:23-cv-00483).
The California Public Utilities Commission unlawfully treated two-thirds of MetroPCS revenue as intrastate, the T-Mobile subsidiary claimed Tuesday at the U.S. District Court in San Francisco (case 3:17-cv-05959-JD). The company said it will move for summary judgment at an April 27 hearing.
"Maryland lawmakers wish to avoid political responsibility for the increased cost of digital advertising services" in the state from a tax targeting big businesses and “make it harder for appellants’ members to recover the costs … from their customers,” U.S. Chamber of Commerce replied Thursday at the 4th U.S. Circuit Court of Appeals. The Chamber disagreed with Maryland that the appeals court should dismiss its appeal from the U.S. District Court for Maryland, even though the Tax Injunction Act (TIA) preempts federal court review of state taxes.
California Public Utilities Commission opposition to T-Mobile’s challenge of USF contribution changes “is as legally indefensible as it is inequitable,” the carrier said Thursday at the U.S. District Court of Northern California. T-Mobile and subsidiaries seek a preliminary injunction to stop the CPUC’s October decision to switch to connections-based contribution from taking effect April 1 (see 2302280037 and 2302020058). T-Mobile disagreed with CPUC opposition that it lacks standing and failed to show the new surcharge is inconsistent with federal law.