FirstDigital's Agreements in Utah Violate FCC Exclusive Access Prohibition Order: Comcast

FirstDigital entered into easements and agreements it claims grant it exclusive access and other rights to build communications networks in developments in Lehi City and Vineyard City, Utah, though the ISP isn't authorized to provide or offer cable service or other multichannel video services in either, the complaint said.

The complaint cited the FCC’s expansion in 2008 of its First Exclusive Access Prohibition order, barring exclusive agreements by telecom carriers to serve residential multi-unit premises. The FCC expressly extended the Commission’s prior action to conclude that "in residential settings, carriers may not enter into contracts for the provision of telecommunications services with premises owners that restrict consumers’ access to other telecommunications providers, and that such carriers may not enforce telecommunications service exclusivity contracts in predominantly residential multi-tenant environments,” it said.

The FCC found that such prohibited agreements are “unjust and unreasonable practices” prohibited by 47 U.S.C. Section 201(b) because they “perpetuate the barrier” to facilities-based competition that the Telecommunications Act “was designed to eliminate,” the complaint said. The commission defined multi-unit premises as contiguous areas under common ownership or control that contain multiple distinct units.

Lehi City, with 80,000 residents, manages the use and construction in the public rights of way and public easements within the city limits, including cable franchising authority under the Cable Act, the complaint said. The 3,600-home Traverse Mountain development, recorded with the Utah County recorder in June 2007, is a multi-dwelling unit under the FCC’s Second and Third Exclusive Access Prohibition orders, it said. Mountain Home Development dedicated the streets within Traverse Mountain to Lehi City, making the streets within Traverse Mountain “public rights-of-way,” the complaint said.

A 10-foot-wide public utility easement dedicated to Lehi City runs through Traverse Mountain where Comcast operates its cable system, the complaint said. Under the Cable Act, the Lehi-Comcast franchise grants Comcast the authority to install and operate its cable system “in, along, among, upon, across, above, over, under, or in any manner connected with Public Ways,” in Lehi City,” it said. Public ways include public utility easements and dedicated utility strips, and “any easement now or hereafter held by the Franchising Authority within the [city] for the purpose of public travel, or for utility or public service use dedicated for compatible uses,” the complaint said.

The franchise entitles Comcast to the use of easements or ROWs for installing its cable system over wires, cables, conductors, ducts, vaults, manholes, amplifiers, appliances, attachments, and other property, it said. On July 26, Dec. 21 and Jan. 24, Lehi City granted permits to Comcast authorizing underground construction and installation of its cable system in the Lehi easement, it said, and Comcast began work in August.

In late August, an individual “purporting to represent Lehi City visited the Comcast worksite in Traverse Mountain and ordered the crew to stop work,” claiming the company didn’t have the right to serve Traverse Mountain, the complaint said. Comcast met with city officials about the purported stop-work order and was informed that no city official had visited the worksite or issued a stop-work order, it said. The Traverse homeowner’s association didn’t object to the construction of Comcast’s cable system, either, and “welcomed competitive service offerings for its residents,” the complaint said.

On Jan. 10, FirstDigital notified Comcast that it held exclusive rights to the easement, plus the exclusive rights to grant easements in the area with respect to telecom rights, the complaint said. It didn’t grant an easement for Comcast’s equipment and facilities, making that company’s actions “unauthorized trespass and a direct affront to FirstDigital’s exclusive rights,” it said. FirstDigital asserted Comcast had to pay for the right to interconnect with FirstDigital’s network and for the defendant to deliver Comcast’s services over its communications facilities, it said.

In some cases, the per subscriber fee demanded by FirstDigital would be as much as double what Comcast charges a new customer for a particular tier of its broadband service, the complaint said. Besides preventing competition, such an arrangement “would not be economically feasible, effectively excluding Comcast from offering competitive services in Traverse Mountain, even using FirstDigital’s network,” the complaint said. Without the ability to cross the easement with customer service drops, Comcast “is precluded from providing facilities-based telecommunications, multichannel video, or other services" to requesting customers using its cable system in the Lehi utility easement, it said.

FirstDigital’s “scheme” in Vineyard City is similar, except that there, the defendant claims the public utility easement “excludes all communications providers other than FirstDigital, and that it has an overlapping exclusive communications easement prohibiting any other facilities-based competitor from entering,” the complaint said.

Comcast seeks a declaration that it's authorized to construct its facilities in the public utility easements of Lehi City and Vineyard City and that it’s entitled to connect its cable system from the easements to customers’ homes, “regardless of the existence of a separate easement or other exclusive arrangements granted to FirstDigital,” said the complaint.

The plaintiff seeks injunctions requiring Vineyard defendants to reissue permits for Comcast’s construction of its cable system and to approve new applications for permits there. It also seeks an injunction barring FirstDigital from attempting to enforce an agreement that would prevent Comcast from connecting its cable system from any public utility easement or public ROW across property owned by customers requesting its service.