NMSurf’s Challenge to Santa Fe’s 2% Fee Called ‘Ripe’ for 10th Circuit Decision

Santa Fe’s March 3 response brief objected to a cost-based test for the prohibition standard under Section 253 of the Telecommunications Act, claiming the 10th U.S. Circuit Court of Appeals “had no authority to adopt such a test,” said NMSurf’s reply brief Friday (docket 22-2131). The wireless ISP is appealing the district court’s upholding of Santa Fe’s 2% revenue-based franchise fee on grounds that the fee isn’t based on the city’s cost of operating the public rights of way (ROW) for service providers and is preempted by the TCA (see 2303060001).

NMSurf says Santa Fe’s argument is “wrong” that only an en banc ruling could change the standard adopted in the 10th Circuit’s 2004 decision in Qwest v. City of Santa Fe, said the brief. The city “ignored the discussion” of Qwest in its principal brief, and NMSurf thinks the language of Qwest itself “invites the review” that NMSurf requests, it said.

Santa Fe’s response brief also failed to challenge NMSurf’s second argument on the 2% fee, based on the “disassociation” between the fee and costs incurred from use of the ROW, said the reply brief. Its response also didn’t address “the complete absence of cost incurred from deployments of telecom franchisees,” it said.

The city’s claim that the 10th Circuit “has rejected a cost-based fee test or otherwise endorsed a view of Section 253" that’s incompatible with the FCC’s 2018 small-cells order is “incorrect,” said the reply brief. The Qwest decision said the court “was open to using a cost-based test,” but it didn’t need to reach the issue because the city’s ordinance failed even the city’s “preferred totality of the circumstances test,” it said.

The choice of test was left open in Qwest, with the 10th Circuit “having adverted to costs” in reference to Section 253, said the reply brief. “The test applied was driven by the particulars of the ordinance and the parties’ position in that case,” it said. NMSurf hasn’t asked the 10th Circuit “to set aside the Qwest standard,” it said. Nor has the city explained why NMSurf’s discussion of this issue in its principal brief was incorrect, it said: “The case is ripe for a panel decision now.”