Maine, Charter Joust Over Rate Regulation in Prorating Legislation

Maine's bid to have Charter's lawsuit challenging the state's law requiring prorated refunds when customers end service partway through a billing cycle (see 2006030036) could focus on whether a cable TV subscription is analogous to buying fruit at the store. State and Charter outside counsel and U.S. District Judge Jon Levy of Bangor all toyed with that analogy Tuesday during oral argument on Maine's motion to dismiss (docket 20-cv-00168). A decision is expected after Aug. 24 when briefing is to be finalized. Buying lemons and then returning some moldy ones for a refund doesn't change the rate the store charges, argued Maine Attorney General's Office lawyer Paul Suitter: Same holds true for a prorated refund, and thus Maine's law doesn't run afoul of Section 543 of the Cable Act, barring state or federal cable rate regulation. He said the state law doesn't affect ongoing rates consumers pay other than not charging consumers for service post-cancellation. He said even if the court finds there's ambiguous language in the state statute, Maine is entitled to a presumption against federal preemption. Pressed by Levy whether a cabler gets to define the quantity of service it provides, Suitter said a subscription is an ongoing relationship rather than buying a discrete piece of produce. But asked by Levy about a scenario where the Maine legislature requires cable operators to bill customers weekly rather than monthly, Suitter acknowledged that gets at rate structure issues. Since that's a different matter, Suitter told the judge, "Thankfully that's not the call you have to make." And even if it is rate regulation, Suitter said, once service has been canceled a cable company is no longer protected by Section 543. "There is some wordplay going on here," replied Charter counsel Matthew Hellman of Jenner & Block, because the issue is straightforward -- Charter sells subscriptions on a monthly basis, and requiring it to be sold on a daily basis is rate regulation. He said courts and the FCC have reached that conclusion repeatedly in different prorating contexts.