Text Version

July 16, 1997

Separate Statement


Commissioner Susan Ness

Re: City of Huntington Park

Our decision today correctly declines to preempt Huntington Park Ordinance No. 576 NS on the basis of the record before the Commission. Our decision should communicate at least three messages:

First, Congress carefully crafted the preemption language in Section 253 of the Telecommunications Act of 1996. Congress entrusted the Commission to navigate between two critical but competing objectives: (1) fostering competition, by enabling "any entity to provide any interstate or intrastate telecommunications service." (Sec. 253(a)); and (2) allowing the legitimate exercise of state and local authority (Sec. 253(b) and (c)).

In this case, the City of Huntington Park has premised its actions on the police powers of the City. We assume that the state has delegated to the City the power to enact the Ordinance. The record provides some basis for the City's assertion that its pay phone regulations are directed at crime abatement. We stress, however, that the mere incantation of concerns with public safety or crime control, without more, does not immunize a local action against preemptive action. The statute directs the Commission to evaluate the effect of local or state actions on competition -- a task which requires a thorough review of the facts in each case.

We are proceeding with great care -- and with respect for the competing considerations spelled out in Sec. 253. The Commission's decision today is evidence of the restrained judgment Congress intended the Commission to exercise in preemption cases.

Second, our decision today should not be read by state and local authorities as an endorsement of the actions taken by Huntington Park, nor should it be viewed as an affirmative finding that the City's actions are consistent with the Act. Rather, we conclude that, on this record, the petitioner has not demonstrated a violation of Section 253 or of our pay telephone orders. For example, if a government action "prohibit[s] or ha[s] the effect of prohibiting the ability of any entity to provide any telecommunications service" (253(a)), that action must be preempted unless it is shown to be "competitively neutral" and "necessary" to protect the public safety and welfare (253(b)).

In the instant case, we were not able to rule that the City violated 253(a); thus, we did not take the next step to draw conclusions on "necessity" or "competitive neutrality." It is far from clear whether, in practice, the Huntington Park Ordinance and Payphone Agreement are necessary to prevent crime, and if so, whether they do so in a competitively neutral manner.

In particular, I am troubled by the distinction the City has drawn in its central business district between private property (where no outdoor payphones are permitted) and public property (where only Pacific Bell's outdoor payphones currently exist). It is unclear why an outright ban on outdoor payphones on private property is necessary when the City permits payphones to be located on outdoor public property, even immediately adjacent. Why can't the City achieve its anticrime objectives by imposing the same operational limitations (no incoming calls, etc.) on payphones in both locations?

We are not eager to second-guess the decisions made by officials of other government agencies. By the same token, municipal and state authorities can reduce the potential for inter-jurisdictional conflict by crafting their laws, regulations, and decisions consistent with the Act's goal of robust competition in all telecommunications services.

Third, our decision in no way precludes parties from petitioning again to preempt the Ordinance. Any future filings should contain more explicit information on the effect of the Ordinance and the Payphone Agreement on payphone competition. For example, more information on the ability of other providers to enter into similar arrangements with the City would have been probative here.

Under the Payphone Agreement, the City is obligated to permit Pacific Bell to retain 80 percent of the Pacific Bell payphones installed on public outdoor property as of November 1, 1994. Although we were not asked to preempt the Payphone Agreement, I am troubled by this arrangement. Unless other payphone providers are able to negotiate similar agreements, Pacific Bell's payphones will be the only payphones located outdoors. But Huntington Park has asserted that its arrangement with Pacific Bell is not exclusive, and there is little contrary evidence, so we are unable to conclude -- at this time and on this record -- that other payphone providers are foreclosed from negotiating similar arrangements.

Congress has promised new entrants an opportunity to compete, but not freedom from every possible hindrance that may result from state or local regulation. Those who seek preemptive action by this Commission should be prepared to demonstrate, with particularity, precisely how the municipal or state action forecloses them or others from competing and what remedy will most effectively solve the problem. The stronger the evidentiary record, the greater the likelihood that we will be able to take corrective action.