|8th Circuit Rules States
Cannot Bar Municipalities From Providing Telecom Services
|8/14. The U.S.
Court of Appeals (8thCir) issued its opinion
[11 pages in PDF] in Missouri
Municipal League v. FCC, vacating an FCC order
denying a request that it preempt a Missouri statute that
prohibits political subdivisions of the state from offering
telecommunications services. It held that the term "any
entity" in 47 U.S.C. § 253(a) includes political
subdivisions of states. This ruling creates a conflict between
the District of Columbia Circuit and the 8th Circuit.
Missouri Statutes, Section 392.410(7), provides that, subject
to certain enumerated exceptions, "No political
subdivision of this state shall provide or offer for sale,
either to the public or to a telecommunications provider, a
telecommunications service or telecommunications facility used
to provide a telecommunications service for which a
certificate of service authority is required pursuant to this
Various municipalities and municipal organizations filed a
petition with the Federal
Communications Commission (FCC) asking that it preempt
this statute for being in violation of 47 U.S.C. § 253(a).
U.S.C. § 253(a) provides that "No State or local
statute or regulation, or other State or local legal
requirement, may prohibit or have the effect of prohibiting
the ability of any entity to provide any interstate or
intrastate telecommunications service." (Emphasis added.)
The FCC denied the request to preempt by Memorandum
Opinion and Order [18 pages in PDF] released on January
12, 2001. (This is CC Docket No. 98-122.) The FCC wrote that
"We do not preempt the enforcement of HB 620 to the
extent that it limits the ability of municipalities or
municipally owned utilities, acting as political subdivisions
of the state of Missouri, from providing telecommunications
services or facilities. As we found in the Texas Preemption
Order, the term ``any entity´´ in section 253(a) of the
Act was not intended to include political subdivisions of the
state, but rather appears to prohibit restrictions on market
entry that apply to independent entities subject to state
The FCC added that "municipal entry into
telecommunications could raise issues regarding taxpayer
protection from economic risks of entry, as well as questions
concerning possible regulatory bias when a municipality acts
as both a regulator and a competitor."
Former Commissioners William Kennard, Gloria Tristani and
Susan Ness wrote that they concurred, with reluctance, because
they felt constrained by the Texas precedent.
The municipal parties then filed a petition for review with
the U.S. Court of Appeals (8thCir). Southwestern Bell and the
State of Missouri intervened in support of the FCC order. The National Association of
Telecommunications Officers and Advisors (NATOA) and the United Telecom Council
supported the municipal parties, as amici curiae.
The Appeals Court vacated the FCC order, and remanded. It
reasoned that "The dispute hinges on the meaning of the
phrase ``any entity´´ in § 253 of the Act. More
precisely, do the words ``any entity´´ plainly include
municipalities and so satisfy the Gregory plain
statement rule? We hold that they do."
(The Supreme Court held in Gregory v. Ashcroft, that a
court must not construe a federal statute to preempt
traditional state powers unless Congress has made its
intention to do so unmistakably clear in the language of the
The Appeals Court concluded "that because municipalities
fall within the ordinary definition of the term ``entity,´´
and because Congress gave that term expansive scope by using
the modifier "any," individual municipalities are
encompassed within the term ``any entity´´ as used in
Conflict with the DC Circuit. This is not the first
time municipalities have sought to have a state statute
preempted under Section 253. The FCC considered, and rejected,
such a challenge arising in the state of Texas. The FCC, by a
Memorandum Opinion and Order, also known as the Texas
Preemption Order, declined to preempt a Texas statute that is
very similar to the Missouri statute. The City of Abilene and
others filed a petition for review with the U.S. Court of Appeals (DCCir).
The DC Circuit issued its opinion
in 1999 upholding the FCC order. (See, City of Abilene v.
FCC, 164 F.3d 49.)
The Eighth Circuit, in the present case, addressed the DC
Circuit opinion. It wrote bluntly, "we do not find City
of Abilene to be persuasive."
Judge Robert Wollman wrote the opinion for the 8th Circuit.
Judge Raymond Randolph wrote the opinion for the DC Circuit.
|FTC Requires MSC Software
to License Nastran Software Royalty Free
|8/14. The Federal Trade
Commission (FTC) issued an administrative complaint
against MSC Software
Corporation alleging violations of Section 5 of the
Federal Trade Commission Act (FTCA) and Section 7 of the
Clayton Act in connection with its 1999 acquisitions of
Universal Analytics, Inc. (UAI) and Computerized Structural
Analysis & Research Corp. (CSAR). The FTC also entered
into an Agreement
Containing Consent Order [22 pages PDF].
This proceeding is titled "In the Matter of MSC.Software".
It is FTC Docket No. 9299. The FTC did not publish a copy of
the complaint in its web site. Rather, it described the
allegations in a press
release. See also, MSC
MSC sells simulation software, and related services and
systems. The FTC stated that MSC was the dominant supplier of
Nastran software, which is an engineering simulation software
program used in the aerospace and automotive industries, with
an estimated 90% of worldwide revenue; UAI and CSAR each had
sales of about 5% of worldwide revenue. MSC then acquired UAI
Under the terms of the proposed agreement, MSC must divest at
least one copy of its current advanced Nastran software,
including the source code. The divestiture will be through
royalty free, perpetual, non-exclusive licenses to one or two
acquirers who must be approved by the FTC.
FTC Commissioner Mozelle Thompson wrote a concurring
statement. He wrote that "I voted to accept the
agreement; however, I am concerned that industry and the
private bar do not mistakenly make too much of the fact that
the Commission did not require an up-front buyer for this
licensing divestiture. As a general rule, the Commission is
more likely to require that parties present up-front buyers
for assets when divesting less than an ongoing business. In
this unique case, however, the Commission decided to resolve
its concerns about MSC.Software's two consummated acquisitions
by accepting an order requiring a prompt divestiture to
restore lost competition, instead of potentially delaying
relief further by first forcing MSC.Software to negotiate an
asset sale to a potential buyer."
|Computer Chips v. Corn
|8/14. President Bush gave a speech
at a McCallum for Governor luncheon in Milwaukee, Wisconsin.
He stated that "For the first time in a long time I now
have what's called trade promotion authority. And I understand
good trade policy will yield good jobs. If you're confident
about something, you try to promote it. I'm confident about
the American people's ability to out produce anybody in the
world. ... I'm confident that our high tech entrepreneurs are
the best in the world. I'm confident that we can compete with
a level playing field. I intend to use trade promotion
authority to sell U.S. products abroad, which will be good for
high paying jobs here in America."
Bush elaborated on this subject in a speech
in Des Moines, Iowa. He said that "Farmers are, I'm sure,
skeptical when they hear about trade. After all, the
agriculture sector had been kind of a part of trade
negotiations. Then when times got tough, they just kind of
tossed the farmers aside, said they'd rather focus on computer
chips than corn chips. But those days have changed. Those days
have changed. See, I understand you start with strength when
it comes to playing the American hand. I understand that if
you're interested in economic security for every American, you
do what you're good at. And what we're good at is growing food
and hogs and cattle. And it's my job and the job of this
administration, now that I've got trade promotion authority to
do everything we can to knock down the barriers so you can be
selling your products all over the world."
After a lengthy discussion of export of farm products and farm
equipment, he concluded, "You see, trade is not only good
for the farmers and ranchers, the entrepreneurs and the high
tech people. Trade is good for the working people here in
America, and I intend to make America a free trading
He did not mention U.S. steel tariffs.
|People and Appointments
|8/14. Guy Lewis was named Director of the Executive Office for
United States Attorneys (EOUSA) of the Department of
Justice (DOJ). He was previously the U.S. Attorney for the
Southern District of Florida. See, DOJ
8/14. Keith Lourdeau was named Chief of the Federal Bureau of Investigation's
(FBI) Cyber Crime Section, Cyber Division. Lourdeau has been
with the FBI since 1986, most recently as Assistant Special
Agent in Charge of the St. Louis Division. See, FBI
8/14. Thomas Richardson was named Assistant Director of
the Federal Bureau of
Investigation's (FBI) Investigative Technologies Division.
Richardson has been with the FBI since 1975. See, FBI
|6th Circuit Affirms
District Court Cellular Tower Variance Order
|8/14. The U.S.
Court of Appeals (6thCir) issued its opinion
Par v. City of Saginaw, affirming a District
Court order compelling a local zoning board to grant New Par a
variance to allow it to construct a cell tower, pursuant to 47
U.S.C. § 332.
Background. New Par, which does business as Verizon Wireless,
provides cellular telephone service in the Detroit, Michigan
area, including in the City of Saginaw. New Par sought to fill
in a gap in its coverage area by constructing a new cellular
tower in Saginaw. In March 2000, New Par submitted an
application for a building permit for 150 foot tall cellular
telephone monopole on a parcel of property owned by New Par.
The property was zoned light industrial, but was smaller than
the minimum size for light industrial use. Hence, New Par
sought a variance from the Saginaw Zoning Board of Appeals
from the minimum size requirements. Saginaw denied the
request. It issued a written order which did not explain its
reasons, other than that it was based "on the facts
presented and the Board's determination".
Statute. 47 U.S.C.
§ 332 provides, at § 332(c)(7)(A) that "Except
as provided in this paragraph, nothing in this chapter shall
limit or affect the authority of a State or local government
or instrumentality thereof over decisions regarding the
placement, construction, and modification of personal wireless
service facilities." § 332(c)(7)(B) then provides
limitations to this general rule. § 332(c)(7)(B)(ii)
prevents state and local governments from unreasonably
discriminating among providers, and from prohibiting the
provision of service. However, this case involves the "in
writing" and "substantial evidence"
requirements of § 332(c)(7)(B)(iii), which provides that
"Any decision by a State or local government or
instrumentality thereof to deny a request to place, construct,
or modify personal wireless service facilities shall be in
writing and supported by substantial evidence contained in a
District Court. New Par filed a complaint in the U.S. District Court (EDMich)
alleging that the Board's denial of its request for a variance
violated Section 332, violated New Par's substantive due
process rights, and constituted a regulatory taking. The
District Court granted summary judgment to New Par on the
grounds that it failed to meet the "substantial
evidence" requirement of Section 332. It held that
Saginaw met the "in writing" requirement. The Court
did not address the two other causes of actions. The Court
also issued an injunction ordering Saginaw to grant the
variance. Saginaw appealed.
Appeals Court. The Appeals Court affirmed the District
Court's grant of summary judgment and injunction order.
However, it went further in its reasoning. It held that
Saginaw violated both the "in writing" requirement,
and the "substantial evidence" requirement.
The Appeals Court adopted a definition of "in
writing". It wrote that "We hold that for a decision
by a State or local government or instrumentality thereof
denying a request to place, construct, or modify personal
wireless service facilities to be ``in writing´´ for the
purposes of 47 U.S.C. § 332(c)(7)(B)(iii), it must (1)
be separate from the written record; (2) describe the reasons
for the denial; and (3) contain a sufficient explanation of
the reasons for the denial to allow a reviewing court to
evaluate the evidence in the record that supports those
reasons." The Appeals Court added that "Board's
order denying New Par's variance request was separate from the
written record, but it did not contain any explanation of the
reasons for the denial."
The Court also held that Saginaw failed to meet the
"substantial evidence" requirement, and that an
injunction order (as opposed to a remand order) was
|8/14. Qwest announced
that "it believes that the U. S. Attorney's Office is
investigating various matters that also are subject to the
investigation by the Denver Regional Office of the Securities
and Exchange Commission (SEC). Qwest has previously disclosed
investigations under way by the SEC, Congress and the U. S.
Attorney's office in Denver. The U. S. Attorney's office has
requested that Qwest make presentations similar to those made
by the company to the SEC on these matters." See, Qwest
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