Judge: Cable Modem Franchise Fee Dispute Belongs in Federal Court; NLC Litigation against FCC Goes to Court Next Month. (Advocacy in Action)

Article excerpt

A federal judge has rejected a motion by the City of Chicago to remand a franchise fee case back to a state court, ruling that the issue of franchise fees and cable modem service is a federal matter.

Following the Federal Communications Commission (FCC) ruling last March that cable modem service was an interstate information service, cable operators had stopped paying franchise fees on that service.

The City of Chicago then asked the state circuit court to make cable operators pay the contracted fees on the ground that under the franchise agreements, they still were required to pay franchise fees on revenue from cable modem service.

For NLC and its members that are opposing the FCC's order, this ruling highlights the need for success in its litigation efforts. (See below.)

U.S. Dist. Court Judge David Coar said the city had failed to demonstrate that the dispute "involves anything other than the application and interpretation of federal law" and denied the motion to remand the case to the state court.

He cited the FCC's March 2002 declaratory ruling that cable modem service is an interstate "information service" subject to the FCC's jurisdiction. …