Supreme Court Docket Report, October Term, 2002 - Number 16

Profession:Mayer, Brown, Rowe & Maw LLP

By Miriam R. Nemetz and Robert L. Bronston

Today the Supreme Court granted certiorari in and consolidated three cases of potential interest to the business community. Amicus briefs in support of the petitioners are due on Thursday, August 7, 2003, and amicus briefs in support of the respondents are due on Thursday, September 11, 2003.

Telecommunications Act of 1996 - Preemption. Under Section 101(a) of the Telecommunications Act of 1996 (the "Act"), no state or local statute or regulation "may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service." 47 U.S.C. ß 253(a). The Supreme Court granted certiorari in FCC v. Missouri Municipal League, 02-1386, Nixon v. Missouri Municipal League, 02-1238, and Southwestern Bell Telephone, L.P. v. Missouri Municipal League, 02-1405, to decide whether Section 101 preempts a state statute that forbids municipalities from offering telecommunications services.

The Act authorizes the Federal Communications Commission ("FCC") to preempt the enforcement of any statute that violates Section 101(a). See 47 U.S.C. ß 253(d). On July 8, 1998, the Missouri Municipal League, along with several municipal utilities and public power companies, petitioned the FCC to preempt enforcement of a Missouri statute that barred the State's political subdivisions from providing or offering for sale "telecommunications service[s] for which a certificate of service authority is required." Mo. Ann. Stat. ß 392.410(7).

The FCC refused to preempt Missouri's statute. In re Missouri Municipal League, 16 F.C.C. Rcd 1157 (2001). Relying heavily on an earlier decision in which it had found that political subdivisions of a State are not "entities" under Section 101 of the Act, see id. at 1159 (citing In re Public Utility Commission, 13 F.C.C. Rcd 3460 (1997)), and observing that the D.C. Circuit had affirmed this decision (see City of Abilene v. FCC, 164 F.3d 49 (1999)), the FCC extended its application to all municipally-owned utilities that do not have a corporate identity separate from the State. See 16 F.C.C. Rcd at 1160, 1166-1170. Relying on Gregory v. Ashcroft, 501 U.S. 452 (1991), the FCC also reasoned that a federal statute may not be construed to preempt "traditional state powers" unless Congress makes its intention to do so "unmistakably clear." 16 F.C.C. Rcd at 1160. Section 101 of the Act, the Commission concluded, does not indicate clear...

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