Qwest Corporation, doing business as CenturyLink QC; Windstream Communications, LLC, Formerly doing business as Windstream Communications, Inc.; McLeodUSA Telecommunications Services, L.L.C. Plaintiffs - Appellants
City of Des Moines, Iowa Defendant-Appellee
Submitted: May 16, 2018
from United States District Court for the Southern District
of Iowa - Des Moines
BENTON, KELLY, and STRAS, Circuit Judges.
case, several wire-line telecommunications carriers
(collectively, the Carriers) contest an ordinance enacted by
the City of Des Moines, Iowa. The ordinance charges the
Carriers for their use of public rights-of-way. The Carriers
claim the ordinance is preempted by federal law, and exceeds
the City's powers under Iowa Code chapter 480A. We affirm
in part, vacate in part, and remand for further proceedings.
carriers transmit telecommunications data through wires and
cables. Often these wires are buried under, or suspended
above, public rights-of-way like city streets and sidewalks.
Iowa law requires municipalities to give private companies
(like the Carriers) access to their rights-of-way, but allows
municipalities to charge fees related to that access. At
issue in this case are fees for "management costs,"
which Iowa municipalities can charge to public utilities that
use the rights-of-way. Iowa Code § 480A.3. We will call
these "management fees."
Moines first imposed a management fee in 1998. Back then, the
City calculated the fee each year based on each individual
carrier's total feet of line. Between 2002 and 2015, the
management fees ranged from $0.0083/foot to $0.009/foot. In
2015, the City amended its management fee ordinance; this
amendment went into effect on January 1, 2018. Under the
amended ordinance, the City stopped calculating management
fees each year. Instead, the City adopted a schedule whereby
it would increase the fee by $0.02/foot every year until it
reached a target fee of $0.12/foot. With this lawsuit, the
Carriers challenge the new fee schedule.
district court entered judgment for the City following a
bench trial. With regards to the Carriers' claim that the
ordinance was preempted by federal law, the district court
The City's Ordinance does not violate federal law . . .
The [Carriers] presented no credible evidence to prove the
Ordinance would have an actual adverse effect that would
eliminate their ability to provide telecommunications
services. . . . [The Carriers] presented no evidence that
increased fees would actually or effectively prohibit the
provision of services. Even the [Carriers'] expert
witness . . . was unable to explain in testimony any actual
adverse impact on the services to be provided.
regards to the Carriers' claim that Des Moines had
exceeded its authority under Iowa law, the district court
The City's Ordinance does not violate State law . . . .
[The City's expert's s]tudy demonstrated that the
Ordinance is competitively neutral and reflects
proportionately the costs incurred by the City as a result of
the various types of uses of the [public rights-of-way]. The
City's estimates of future costs complies with the
general language of the Iowa Supreme Court [precedent] . . .
a bench trial, our role is to review the district court's
legal conclusions de novo and its factual findings for clear
error. Urban Hotel Dev. Co. v. President Dev. Grp.,
L.C., 535 F.3d 874, 879 (8th Cir. 2008). On questions of
Iowa state law, we are bound by the decisions of the Supreme
Court of Iowa. See St. Paul Fire & Marine Ins. Co. v.
Schrum, 149 F.3d 878, 880 (8th Cir. 1998). Absent Iowa
case law directly on point, "we may consider
'relevant state precedent, analogous decisions,
considered dicta, . . . and any other reliable
data.'" Id. (quoting Lindsay Mfg. Co.
v. Hartford Accident & Indem. Co., 118 F.3d 1263,
1267 (8th Cir. 1997)).
begin with the federal preemption issue. The federal
Telecommunications Act preempts state and local laws and
regulations if they "prohibit or have the effect of
prohibiting the ability of any interstate or intrastate
telecommunications service." 47 U.S.C. § 253(a). In
the first step of this analysis, the Carriers must show that
the City "formally or effectively prohibit[ed] entry
into the [telecommunication services] market." Level
3 Comms., LLC v. City of St. Louis, 477 F.3d 528, 532
(8th Cir. 2007). The Carriers present no evidence that the
fee increase formally or effectively prohibits entry into the
Des Moines telecommunications market. Absent any such
evidence, we conclude that the Telecommunications Act does
not preempt the City's ordinance. We affirm the district
court's finding of non-preemption.
to the state-law issue, the question is whether the City
exceeded its authority under Iowa law when it adopted a new
management fee schedule. Iowa Code § 480A.3 authorizes
the City to charge the Carriers management fees. The statute
limits fees to "those management costs caused
by the public utility's activity in the public
right-of-way." Iowa Code § 480A.3 (emphasis added).
The code defines "management costs" as "the
reasonable costs a local government actually incurs in
managing public rights-of-ways." Iowa Code §
480A.2(2) (emphasis added). Read together, these provisions
authorize the City to collect fees to cover costs that (1)