AT&T Wireless Services Inc. filed a lawsuit against the city of Eugene, Ore., claiming a tax the city is charging all telecommunications carriers to fund public projects violates federal law and creates a barrier to market entry.
Eugene’s city council passed an ordinance in April that requires all public telecommunications carriers to register with the city and pay an annual registration fee of 2 percent of their gross revenues plus a one-time processing fee. Carriers must pay an additional 7-percent license fee if their facilities use or are located in public rights-of-way.
According to one published report, the city estimated the fees would raise about $440,000 per year, of which $180,000 would go to a program regulating towers, underground cables and other telecommunications facilities. The rest of the money would be designated for public projects.
AT&T Wireless is seeking to permanently ban the city from collecting the fees and to overturn the licensing and registration rules, claiming they constitute a barrier to entry.
The carrier contends that the ordinance violates the Communications Act-which prohibits local governments from regulating the entry or rates charged by any commercial mobile service-as well as several state laws.
AT&T Wireless also believes the fees the city is charging are excessive, unfair and unreasonable because they discriminate against companies, like itself, that have only one facility located on public property, and exceed the costs incurred by the city in administering its regulatory and licensing program.
“On its face, the license fee does not distinguish between a provider of telecommunications services that places a line down every street in the city and one that merely has a single facility on public property,” said the complaint. “Fees that are disproportionate to the burden placed in the public right-of-way by a provider of telecommunications services are not `fair and reasonable’ as required by [the Communications Act] … In addition, because the license fee so applied would have a disproportionate impact on one type of telecommunications provider, it is not competitively neutral and nondiscriminatory, as required” by the Communications Act.
The 2-percent registration fee, said AT&T Wireless, is an excessive fee imposed solely on providers of telecommunications services and is not fair or reasonable.
“The industry as a whole doesn’t object to paying its fair share in local communities, but something like this is discriminatory,” said Ken Woo, a spokesman for AT&T Wireless. “What we’re really asking for is fairness.”
Eugene City Attorney Glenn Klein could not be reached for comment at press time.
