In Re COMPLAINT OF McLEODUSA TELECOMMUNICATIONS SERVICES, INC

751 N.W.2d 508, 277 Mich. App. 602, 2008 Mich. App. LEXIS 160
CourtMichigan Court of Appeals
DecidedJanuary 22, 2008
DocketDocket 269263
StatusPublished
Cited by4 cases

This text of 751 N.W.2d 508 (In Re COMPLAINT OF McLEODUSA TELECOMMUNICATIONS SERVICES, INC) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re COMPLAINT OF McLEODUSA TELECOMMUNICATIONS SERVICES, INC, 751 N.W.2d 508, 277 Mich. App. 602, 2008 Mich. App. LEXIS 160 (Mich. Ct. App. 2008).

Opinion

PER CURIAM.

Appellant Commerce Charter Township appeals as of right from the February 21, 2006, order of appellee Public Service Commission (PSC) approving a telecommunications permit between appellant and appellee McLeodUSA Telecommunications Services, Inc. (McLeodUSA). We affirm.

I. BASIC FACTS AND PROCEDURAL BACKGROUND

McLeodUSA is a service provider that operates a fiber-optic telecommunications system throughout much of southern Michigan. It initially obtained a permit for access to, and ongoing use of, appellant’s public rights-of-way for its fiber-optic cables under MCL 484.2251, a provision of the Michigan Telecommunications Act (MTA), MCL 484.2101 et seq., the predecessor of the Metropolitan Extension Telecommunications Rights-of-Way Oversight Act (METRO act), MCL 484.3101 et seq. McLeodUSA’s facilities in the township that are subject to the act consist of aerial fiber-optic cable that is strung between utility poles located in the rights-of-way.

The METRO act went into effect on November 1, 2002. It was designed, among other things, to encourage the introduction of new entrants to the telecommunications industry, to encourage investment in telecommunications infrastructure, to streamline the process of authorizing access to public rights-of-way for telecommunications providers, to ensure the reasonable control and management of public rights-of-way by municipalities and townships, and to provide a resolution process for telecommunications providers and municipalities in disputes over rights-of-way. MCL 484.3101(2). To this end, under the METRO act, the PSC was directed t£> *605 “prescribe the form and application process to be used in applying to a municipality for a permit. . .MCL 484.3106(1). In a collaborative process involving participating providers and municipalities, the PSC subsequently created two “standard” or “stock” permit forms, a “unilateral” form and a “bilateral” form. The initial forms to be used were those approved by the PSC as of August 16, 2001. MCL 484.3106(1). However, these stock forms were revised by the PSC on December 6, 2002.

McLeodUSA sought an updated permit issued under the METRO act. Paragraph 6.1.2 of the unilateral form, which is at issue in this dispute, provides that the telecommunications provider shall obtain liability insurance for sudden and accidental environmental contamination in the amount of at least $500,000 and providing coverage for claims discovered within three years after the term of the policy. 1 On May 26, 2004, McLeodUSA submitted a permit application containing the disputed provision. On November 14, 2004, appellant informed McLeodUSA that, before the issuance of a new permit, it would have to submit proof of environmental-contamination insurance. McLeodUSA subsequently responded and requested that the township waive this insurance requirement. McLeodUSA first maintained that its telecommunications facilities were already in place in the township and that it had no current or future plans to add any more. McLeodUSA also contended that, if it needed to perform any work in the rights-of-way in the future, it would require that its contractors obtain the liability insurance. However, the township refused the request on the ground that the insurance was a requirement under the METRO act.

*606 On October 14, 2005, McLeodUSA requested the appointment of a mediator under MCL 484.3106(2) to resolve the parties’ dispute. After reviewing the parties’ positions, the mediator found that the METRO act does not indicate that the terms of the standard form permits were nonnegotiable. He recommended that the PSC revise, rather than eliminate, the environmental-contamination insurance requirement to make the obligation to purchase the insurance contingent on McLeodUSA’s placing any new or existing facilities underground. The township subsequently submitted a request for PSC review and a resolution of the dispute pursuant to MCL 484.3106(2).

In an order dated February 21, 2006, the PSC adopted the recommendation of the mediator. The PSC first determined that the statutory language clearly provided that the parties could agree on different permit terms from those in the standard forms, and that the PSC was authorized to resolve the dispute where the parties could not agree. It then found that the environmental risks presented by underground installation and maintenance significantly differed from those involved in the installation of aerial lines. It found that the township’s litany of potential hazards in the installation and maintenance of aerial facilities were either those of the type that “exists constantly on land that is adjacent to a public road” or were “infrequent or improbable weather and accident related risks” that were not the type of environmental threats that should be insured against by McLeodUSA. It subsequently determined that paragraph 6.1.2 of the permit between the parties should be revised to “make the purchase and maintenance of sudden and accidental environmental contamination insurance in the amount of $500,000 contingent upon McLeodUSA Telecommunications Services’ decision to place any new or existing telecommu *607 nications facilities underground within the rights-of-way of the Charter Township of Commerce.”

The township now appeals.

II. THE PSC’S INTERPRETATION OF THE RELEVANT STATUTORY LANGUAGE

The township first argues, under various theories, that both the PSC’s interpretation of its power to alter the form contract and the specific alteration it made here were not authorized under the METRO act. In Attorney General v Pub Service Comm, 269 Mich App 473, 479-480; 713 NW2d 290 (2006), this Court provided the following general standard of review of PSC decisions:

The standard of review for PSC orders is narrow and well-defined. Pursuant to MCL 462.25, all rates, fares, charges, classification and joint rates, regulations, practices, and services prescribed by the PSC are presumed, prima facie, to be lawful and reasonable. A party allegedly aggrieved by an order of the PSC has the burden of proving by clear and satisfactory evidence that the order is unlawful or unreasonable. To establish that a PSC order is unlawful, the appellant must show that the PSC failed to follow a mandatory statute or abused its discretion in the exercise of its judgment. An order is unreasonable if it is arbitrary, capricious, or not totally supported by the evidence.
A final order of the PSC must be authorized by law and supported by competent, material, and substantial evidence on the whole record.
We defer to the PSC’s administrative expertise, and will not substitute our judgment for that of the PSC. We give great weight to any reasonable construction of a regulatory scheme that the PSC is empowered to administer, but we may not abandon our responsibility to interpret statutory language and legislative intent. We do not afford the same measure of deference to an agency’s initial interpretation *608 of new legislation as we do to a longstanding interpretation.

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Cite This Page — Counsel Stack

Bluebook (online)
751 N.W.2d 508, 277 Mich. App. 602, 2008 Mich. App. LEXIS 160, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-complaint-of-mcleodusa-telecommunications-services-inc-michctapp-2008.