22 F.4th 287
1st Cir.2022Background
- Maine enacted the "Pro Rata Act" (effective June 16, 2020) requiring cable franchisees to grant a pro rata credit or rebate for days remaining in a monthly billing period when a subscriber cancels service ≥3 working days before period end, and to notify customers of that right.
- Spectrum Northeast (Charter) sued, seeking a declaratory judgment and injunction, arguing the law is preempted by the Cable Act because Maine cable operators are subject to "effective competition." The FCC presumption of effective competition is applicable to Maine.
- The district court concluded the Pro Rata Act "regulates 'rates for the provision of cable service'" and granted judgment for Spectrum. The Attorney General appealed; the district court did not enter a preliminary injunction enforcing the law.
- The First Circuit framed the sole legal question as whether the Maine statute is preempted under 47 U.S.C. § 543(a)(2) and reviewed de novo.
- The First Circuit reversed: it held the Pro Rata Act does not regulate "rates for the provision of cable service" because it applies only after service has terminated and functions as a consumer-protection measure; the court did not decide whether the law independently qualifies as a §552(d)(2) customer-service requirement.
Issues
| Issue | Plaintiff's Argument (Spectrum) | Defendant's Argument (Frey) | Held |
|---|---|---|---|
| Whether Maine's Pro Rata Act is preempted by the Cable Act's ban on state regulation of "rates for the provision of cable service" | The law effectively prescribes a daily rate during the final month by forcing pro rata calculation, thus directly regulating rates | The law simply requires refunds for the post-termination period at the operator's charged rate and protects consumers from being charged for service not provided; it does not set ongoing rates | Reversed—the Act is not preempted: it governs the period after service provision and is a consumer-protection measure, not regulation of "rates for the provision of cable service." |
Key Cases Cited
- United States v. Southwestern Cable Co., 392 U.S. 157 (explained limits of FCC authority over cable prior to later developments)
- Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691 (upheld broad FCC preemption power over state cable regulation)
- Cable Television Ass'n v. Finneran, 954 F.2d 91 (2d Cir.) (held state regulation of downgrade/disconnection charges did not constitute preemption of rates)
- Time Warner Entm't Co. v. FCC, 56 F.3d 151 (D.C. Cir.) (interpreted uniform-rate provisions and scope of §543 rate exemptions)
- AT&T Co. v. Central Office Tel., 524 U.S. 214 (clarified that "rates" derive meaning only when tied to services provided)
- Massachusetts Dept. of Telecomms. & Cable v. FCC, 983 F.3d 28 (1st Cir.) (context on FCC's presumption of effective competition and regulatory scope)