Murtha Cullina's Communications Law Practice Group Prevails
December 18, 2012
In a four year old effort, Murtha’s Communications Law Practice Group, in conjunction with the firm’s Administrative Appeals and State Tax Practice Group, prevailed at the New Hampshire Supreme Court on behalf of its cable and telecommunications industry clients to eliminate barriers to all competitive telephone entry into territories served by New Hampshire’s rural incumbent telephone companies.
Our cable clients and other competitive telephone companies were hampered by a pre-competition era statute that required competitive phone companies seeking entry into rural territories to prove that their entry was for the "public good." The required public good finding, in turn, mandated consideration of a half-dozen vague, burdensome and internally inconsistent factors such as "fairness; economic efficiency; universal service; carrier of last resort obligations; the incumbent utility’s opportunity to realize a reasonable return on its investment; and the recovery from competitive providers of expenses incurred by the incumbent utility to benefit competitive providers, taking into account the proportionate benefit or savings, if any, derived by the incumbent as a result of incurring such expenses." This contrasts unfavorably with telecom entry statutes in the non-rural parts of New Hampshire and in most other states that require the entrant to submit an application establishing managerial, technical and financial fitness that is reviewed by PUC staff without the need for adjudication. The expectation of incurring high legal fees and an extensive regulatory proceeding against a determined opponent seeking to protect its historic rural telephone monopoly, in addition to actual equipment and other costs associated with entering a new service area, scared off virtually all efforts to enter New Hampshire’s rural territories.
Murtha’s team sought to surmount these entry barriers for its client by arguing to the Public Utilities Commission that a 2008 statutory change afforded discretion to the PUC to waive the requirement of a full adjudicatory proceeding in appropriate rural entry cases. The Commission then waived the hearing requirement for a Murtha client and approved its application. In a 2010 Decision, the NH Supreme Court concluded that the statute did require an adjudicatory proceeding in all rural entry cases but ordered a remand back to the PUC for consideration of whether this mandatory multi-factor adjudication requirement should be deemed a barrier to competitive telephone entry subject to federal preemption under the Telecommunications Act of 1996. On remand, and now representing all New Hampshire cable companies through the regional cable company trade association, Murtha attorneys secured a Fall 2011 PUC order from the Commission that the statutory multi-factor test did constitute a federally preempted telecommunications entry barrier. Following an appeal from the rural carriers, last month the NH Supreme Court affirmed the PUC preemption order. The November 28, 2012 Decision is available at the following link: http://www.courts.state.nh.us/supreme/opinions/2012/2012117brettonwoods.pdf.
Murtha’s team included attorneys Rob Munnelly, Burt Cohen, Cherie Phoenix and Olga Gordon.
If you would like any additional information, please feel free to contact any of the attorneys in our Communications Law Practice Group.