NEWSReport No. CC 97-37 COMMON CARRIER ACTION July 17, 1997 COMMISSION DENIES CALIFORNIA PAYPHONE ASSOCIATION'S PETITION FOR PREEMPTION (CC Docket No. 96-152) The Commission has denied the California Payphone Association's (CPA's) petition for preemption of Ordinance No. 576 NS of the City of Huntington Park, California, finding that the record did not support a finding of a violation of either section 253(a) or section 276 of the Communications Act, as amended. The Commission's action does not preclude CPA from filing a new petition with additional support for preemption. On December 23, 1996, CPA filed a petition asking the Commission to preempt Ordinance No. 576 NS of the City of Huntington Park, California (Ordinance), on the grounds that it violated sections 253 and 276 of the Act. The Ordinance prohibits payphones on private property in Huntington Park's central business district unless located completely within an enclosed leasable building and more than ten feet from any pedestrian opening into a building. The City stated that the Ordinance is principally intended to minimize potential public nuisances such as loitering and solicitation and other indirect criminal activity including the sale of illegal substances and telephone calling card fraud. Section 253 requires the Commission to preempt the enforcement of any state or local statute, regulation, or legal requirement that: (i) prohibits or has the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service; and (ii) falls outside the scope of regulatory authority expressly reserved for the States and, if so delegated, to municipalities. Moreover, Congress has expressly preempted any state requirement that is inconsistent with regulations promulgated by the Commission to implement section 276, which is designed "to promote competition among payphone service providers and promote the widespread deployment of payphone services to the general public." In assessing whether the Ordinance should be preempted under section 253, the Commission first considered whether the Ordinance "prohibit[s]" any entity from providing any interstate or intrastate telecommunications service. The Commission concluded that the record did not support such a finding. Specifically, the Commission found that the Ordinance, by its terms, does not legally bar prospective competitors from providing payphone services throughout Huntington Park's central business district, but, rather, specifies certain locations in the central business district where payphones may not be installed. In considering whether the Ordinance "has the effect of prohibiting" the ability of any entity to provide payphone service in the central business district, the Commission examined whether the Ordinance materially inhibits or limits the ability of any competitor or potential competitor to compete in a fair and balanced legal and regulatory environment. The Commission concluded that the present record did not support such a finding. Accordingly, the Commission did not find, based on the record before it, a violation of section 253(a). Given that conclusion, the Commission did not reach the question whether the Ordinance falls within the scope of authority expressly reserved for the States by section 253(b). The Commission also concluded, based on the record before it, that the Ordinance does not violate section 276. Specifically, the Commission did not find that the Ordinance draws any legal or practical distinctions that allow some class of competitors and not others to enter the payphone market in Huntington Park's central business district. Rather, the Ordinance identifies areas -- in this case, outdoors on private property in the central business district -- where no competitor can place a payphone. Action by the Commission July 16, 1997 by Memorandum Opinion and Order (FCC 97-251). Chairman Hundt, Commissioners Quello and Ness with Commissioner Ness issuing a separate statement and Commissioner Chong dissenting and issuing a separate statement. -FCC- News media contact: Rochelle Cohen at (202) 418-0253. Common Carrier Bureau contact: Alex Starr at (202) 418-1580.