A federal judge in Baltimore has ordered Prince George's County to stop charging telecommunications companies rent to use the public right of way in a decision that has put the brakes on similar efforts by other Washington area governments trying to control a burgeoning industry.
U.S. District Judge Catherine C. Blake issued a permanent injunction last month barring the county from enforcing a six-month-old law that required telecommunications companies to turn over a portion of their profits when their cables and wires cross public land.
The decision was one of the first in the country seeking to resolve the question of what role local governments can play in regulating the rapid expansion of Internet, cable and other services.
Bell Atlantic-Maryland and two other communications companies, AT&T of Maryland and Sprint Communications, sued alleging that the county's ordinance violated the Telecommunications Act of 1996, which opened the local phone markets to competition and created new markets for companies.
Blake agreed with Bell Atlantic, ruling that the ordinance exceeded federal law by creating an application process that was so "burdensome" it would prevent a company from entering the marketplace. She also found that the county's fees exceeded the cost of compensating the public for any harm done and amounted to an improper attempt to raise new revenue.
The Prince George's ordinance, the judge concluded, went "well beyond the bounds of legitimate local governmental regulation."
County Council Chairman M.H. Jim Estepp (D-Upper Marlboro), who sponsored the legislation, disagreed and said taxpayers have a right to demand compensation for use of public land.
"A federal court has allowed private companies to come in and confiscate public property," he said. "The big telecommunications companies have pretty much been calling the shots. . . . A federal court has continued to let them."
Prince George's is not alone as it struggles to find a way to manage the demand for public land and to keep track of what companies are digging in what roads on what days.
Many suburban leaders point to streets in the District as examples of what they want to prevent -- uneven and broken roadways that have been patched and repatched after telecommunications companies have laid down their cables.
Prince George's answer was a comprehensive law -- the first of its kind in the region -- that required companies such as Bell Atlantic to negotiate a franchise agreement with the county for permission to lay cables and build cellular transmission towers on public land. As part of the agreements, the companies were forced to turn over 3 percent of their gross revenue or provide in-kind services such as Internet and high-speed phone lines to government offices and schools.
But John W. Dillon, Bell Atlantic's vice president of external affairs, said Prince George's wanted more than compensation for road repairs and maintenance.
"They saw this as an opportunity to generate revenue as opposed to a way to recoup the costs," Dillon said. "If there are expenses they are incurring, we are more than happy to reimburse them for it."
The lawsuit against Prince George's is one of four test cases nationally being closely watched by government officials, telecommunications companies and industry lawyers. In two other cases, federal judges also have ruled against the local governments trying to control the rights of way. But in one case, in Dearborn, Mich., a federal judge ruled that the Telecommunications Act gave the city the right to charge rent and to monitor the use of public land.
Nicholas P. Miller, a District-based telecommunications lawyer who represents Prince George's, expects the issue will have to be resolved by the U.S. Supreme Court. The county has filed a notice to appeal.
In the meantime, Montgomery County will stop charging telecommunications companies 5 percent of gross revenue to use public rights of way, said Jane Lawton, the county's cable communications administrator.
"You do have to make changes because of the decision," Lawton said. "It's a troublesome decision."
Jack Foley, acting cable administrator for Howard County, said Howard allows telecommunications firms to apply for permits to use public land but does not ask for compensation other than a one-time fee. But "all of us realize this issue is going to land in our laps eventually," he said. "If you don't control the right of way, you lose it, and if you lose it, the public loses as the land gets torn up."
CAPTION: County Council Chairman M.H. Jim Estepp said taxpayers have a right to demand compensation for use of public land.