In a Superior Court decision dated November 12, 2019, Judge Trial Referee Joseph Shortall concluded that municipalities may use the municipal gain on utility poles and in underground utility conduits for the provision of broadband internet service. In doing so, Judge Shortall overturned a PURA ruling that the provision of such services by a municipality via the municipal gain (either by the municipality itself or with a third-party provider of such services), violates Federal and State Law.
By way of background, Conn. Gen. Stat. §16-233 authorizes municipalities to use one “gain” (a portion of the physical space on utility poles and in conduits) for “any purpose”, subject only to PURA’s authority to specify the location of such gain. In September 2017, a consortium of utility workers and providers of telecommunications and broadband services, requested a ruling from PURA that the above statute authorizes a municipality’s use of the municipal gain solely for its own internal purposes; and more specifically, that the statute does not authorize the use of the municipal gain for the provision of broadband internet service to a municipality’s residents, either directly or indirectly through a third party. This request for ruling was opposed at PURA by CCM, the State Office of the Consumer Counsel (the “OCC”; a statutory consumer advocate) and individual municipalities, who argued that the provision of broadband services by a municipality was consistent with the statute’s purposes.
In May 2018, PURA granted the requested ruling. PURA cited Federal law for the proposition that Congress intended to foster competition among providers of communications services, and that no disparate treatment was to be afforded any single provider. PURA reasoned that allowing a municipality to use the municipal gain for the provision of broadband to the public would create an uneven playing field and dampen competition. PURA also stated in its ruling that permitting such use of the municipal gain would contradict another Connecticut law directing PURA to promote competition in the provision of broadband services.
The PURA ruling was appealed to the Superior Court by CCM, OCC and others (the “Appellants”) on several grounds, including that PURA’s interpretation of the statute was contrary to law and that PURA lacked authority to consider constitutional questions concerning the interplay of Federal and State law. The Superior Court overturned PURA’s ruling, agreeing with the Appellants that the statute is clear that municipalities may use the municipal gain for any purpose, and that PURA may regulate the location of the municipal gain but not its use. Therefore, PURA exceeded its statutory authority in making its ruling. Recognizing that this case is likely headed to a higher court, the Superior Court opinion also addresses each of the Appellants’ additional grounds for appeal, agreeing with the Appellants on each such ground.
This Superior Court opinion is obviously a victory for municipalities; however and as noted above, this case will likely be the subject of additional appeals and is therefore most likely not the final judicial determination on the use of the municipal gain for the provision of broadband services. For this reason, municipalities contemplating this use of the municipal gain should pay close attention to the progress of this case and should also monitor the upcoming legislative session for any action by the legislature on this issue.