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City of Dubuque, An Iowa v. Iowa Utilities Board

January 9, 2013


Appeal from the Iowa District Court for Dubuque County, Thomas A. Bitter, Judge.

The opinion of the court was delivered by: Tabor, J.

MCC Iowa, LLC d/b/a/ Mediacom and the Iowa Utilities Board appeal the district court's reversal and remand of the board's declaratory order. REVERSED AND REMANDED.

Heard by Potterfield, P.J., and Danilson and Tabor, JJ.

This appeal raises procedural issues involving declaratory orders under Iowa Code section 17A.9 and substantive issues regarding cable franchises under Iowa Code chapter 477A (2009). Specifically, the question is whether the city of Dubuque-as an intervenor-was entitled to present evidence in advance of the Iowa Utilities Board (the board) deciding a petition for declaratory order filed by a cable service provider. In response to questions from MCC Iowa, LLC d/b/a/ Mediacom (Mediacom), the board concluded Mediacom's service area under its state-issued certificate included the city of Dubuque and that the previous municipal franchise between Mediacom and the city was terminated.

On judicial review, the district court reversed the board's order and remanded to allow the parties to present evidence at a contested hearing. The board and Mediacom now appeal.

Because the board's declaratory ruling did not seek to resolve a contested factual dispute, the district court erred in reversing and remanding for an evidentiary hearing. Accordingly, we reverse the district court's remand order. We affirm the board's declaratory order in its legal determinations that, based on statutes in effect at the time of the relevant events, a competing cable provider's failure to provide notice to the city of its intent to offer services was not a condition precedent to an incumbent provider's expansion of its state franchise and an incumbent provider who already had a board-issued certificate of franchise could use the service area revision process rather than filing a separate application for a new certificate.

I. Background Facts and Proceedings

The city of Dubuque issued a cable franchise to Mediacom that was effective June 5, 2005, and scheduled to remain in effect until 2020. In 2007 our legislature enacted Iowa Code chapter 477A to encourage competition in providing cable or video services and to encourage new providers to offer consumers additional cable and video services. 2007 Iowa Acts ch. 201 § 1. Section 477A.2(1) forbids any person from providing cable or video services in the state without a franchise issued by either the Iowa Utilities Board or a municipality.*fn1

In 2008, Mediacom applied to the board for a state franchise to provide cable service. In the same year, the board issued Certificate C-0002 to Mediacom; the certificate authorized the company to provide cable service in various Iowa municipalities, not including Dubuque. Because of the 2005 municipal franchise, Mediacom was already Dubuque's incumbent cable provider.*fn2

On February 20, 2009, Phalanx Technology Holdings, LLC d/b/a/ fyreSTORM Cable & Fiber, Inc. (Phalanx) notified Mediacom of its intent to compete with Mediacom's cable services, including those offered in Dubuque. The city contends it did not receive notice from Phalanx of its intent to obtain a state franchise to compete in Dubuque, while Mediacom asserts in its petition to the board that Phalanx provided the city with notice. Phalanx applied for the certificate of franchise authority on March 16, 2009, and the board approved Phalanx's application on April 6, 2009, issuing Certificate VC-0005 to the provider. The certificate includes a list of 302 Iowa cities covered by the franchise, including Dubuque.

On October 9, 2009, Mediacom filed a "notice of service area revision" with the board to expand its state franchise to include Dubuque. A letter from Mediacom accompanying the notice cited the application by the competitor Phalanx for a certification of authority to operate within the city of Dubuque as permitting Mediacom's conversion of its municipal franchise to its state certification of franchise.

On November 16, 2009, the manager of the board's telecommunications section informed Mediacom that its application was accepted for filing. Four days later, Mediacom advised the city that it regarded its municipal franchise as terminated under section 477A.2, but that the company would continue providing services to the city through its state franchise certificate C-0002.

On December 7, 2010, the city filed a petition for declaratory judgment in the district court asserting Mediacom's board-issued state franchise did not include Dubuque and that the city-issued municipal franchise remained in effect. Mediacom countered that the city failed to exhaust its administrative remedies and the action should be addressed by the board.

Mediacom petitioned the board on January 31, 2011, seeking a declaratory ruling addressing the following two questions:

(1) Does the service area of Mediacom's state cable service franchise, Certificate Number C-002, include the City?

(2) Has Mediacom's municipal franchise with the City been terminated?

Back in district court, Mediacom filed a motion to stay proceedings, which the court granted in March 2011.

The city filed a petition to intervene in the agency proceeding to decide the board's petition for declaratory ruling. The city requested "the opportunity to participate fully in [the] proceeding" and expressed its intent to submit testimony and exhibits, and to cross-examine witnesses. Although the board granted the city's petition to intervene and allowed it to file a brief, it denied the city's request to present testimony.

On April 1, 2011, the board issued a declaratory order finding Mediacom's state franchise certificate C-0002 included the city of Dubuque and that Mediacom's municipal franchise was terminated. It interpreted section 477A.2 as providing for the automatic grant of an incumbent's application for a state-issued certificate rather than being subject to a municipality's challenge. The board further found section 477A.3(1)(d) allowed service providers to revise previously issued certificates of franchise by ...

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