AT&T Can't Put U-verse in Kentucky Just Yet

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AT&T will be back in court facing a challenge to its right to install its U-verse cable television package in Kentucky under an 1886 telephone franchise from the state, the U.S. Court of Appeals for the Sixth Circuit held March 2, reversing a dismissal from the court below.

The perpetual franchise given to AT&T's predecessor-in-interest, BellSouth Telecommunications Inc., gave the company the right to “purchase, construct, maintain and operate, within this State and elsewhere, telephone lines, exchanges and systems, and to conduct all the business incident and pertaining thereto,”and to “construct, equip and maintain telephone lines along, over or under the highways, streets and alleys, and across any water-course within this Commonwealth, so as not to obstruct the same.” A competitor argued that under the state constitution and local law AT&T needed a new cable franchise.

The district court granted AT&T's motion to dismiss, but the appeals court said that the lower court “prematurely reached the question of law, and improperly dismissed the case in the absence of a sufficient factual record.” It explained that the district court did not apply the correct standard for a motion to dismiss, and erred by noting the question presented by the competitor was “whether the transmission of IP video signals is outside the scope” of AT&T's franchise, when the proper question at the motion to dismiss stage was “whether the plaintiff's complaint includes ‘enough facts to state a claim to relief that is plausible on its face.' ”

It also said that the district court “relied on self-serving facts written by AT&T in a stipulated agreement—facts that conflicted with the well-pleaded facts in the complaint—to make findings about the nature of U-verse service, and its applicability to AT&T's telephone franchise” (Mediacom Southeast LLC v. BellSouth Telecommunications Inc., 6th Cir., No. 10-6117, 3/2/12). Full text at http://pub.bna.com/lw/106117.pdf