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CITY OF ROME, NEW YORK v. VERIZON COMMUNICATIONS

January 17, 2003

THE CITY OF ROME, NEW YORK, PLAINTIFF
v.
VERIZON COMMUNICATIONS, INC., DEFENDANT



The opinion of the court was delivered by: David N. Hurd, District Judge.

MEMORANDUM-DECISION and ORDER

I. INTRODUCTION

Plaintiff, The City of Rome, New York ("City" or "Rome"), commenced the instant action against defendant, Verizon Communications, Inc. ("VCI") seeking a declaratory judgment construing the parties' legal rights with respect to VCI's use of public streets and rights-of-way to transact its telecommunications business within the City. VCI moved to dismiss the Complaint pursuant to Fed.R.Civ.P. 12(b)(6). Plaintiff opposed. Oral argument was heard on August 23, 2002 in Albany, New York. Decision was reserved.

II. FACTS

Rome is a municipal corporation within the State of New York. VCI is a telecommunications company that does business in the State of New York. On December 8, 1949, Rome granted VCI's predecessor, the New York Telephone Company:

permission to use all of the public streets, highways, roads, avenues, lanes and alleys, or parts thereof, in the City of Rome, Oneida County, New York, for the purpose of, from time to time, constructing, laying, maintaining, repairing and operating lines of electrical conductors under ground and of constructing, reconstructing, reinforcing, maintaining and repairing lines of electrical conduits or underground ducts or pipes for the reception of such electrical conductors, together with its manholes, lateral connections to curb poles and property lines, cables and wires not encased in conduit and its other appurtenances and fixtures, necessary in connection with the transaction of its business.

(Compl. at Ex. A.) At the time Rome granted VCI permission to use its public streets and other areas, Section 33 of the Rome City Charter, entitled "Disposition of Real Estate; franchises" provided that "[n]o franchise shall be granted or be operated for a period longer than fifty years." (Id. at Ex. B.)

By letter dated May 17, 2001, Rome sent VCI a letter stating that by operation of Section 33 of the Rome City Charter:

the franchise granted to New York Telephone expired on December 19, 1999, and must be renewed. The renewal process will enable Verizon to continue to use the City's rights-of-way, and permit both parties to discuss, among other things, reasonable compensation to be paid by Verizon for use of said rights-of-way.

(Id. at Ex. C.) By letter dated June 5, 2001, VCI responded that its franchise was not granted by Rome, but by the State of New York pursuant to N.Y. Transp. Corp. Law § 27, and therefore, "the City lacks the authority to require Verizon to enter into a franchise agreement in order to occupy and use the City's streets in order to provide telecommunications services within the City." (Id.) On June 25, 2001, Rome responded to VCI stating that:

The City understands the existence and scope of Verizon's franchise granted by New York State; however, said franchise does not permit Verizon to place, maintain, repair or operate its lines or conduits underground within the City's rights-of-way. Accordingly, the City granted Verizon's predecessor . . . the ability to lay its lines and conduits underground within the City's rights-of-way via the grant of a franchise in 1949.

(Id. at Ex. D.) The letter continued to state that the franchise expired in 1999 pursuant to Section 33 of the municipal code and that federal law "provides the City with the ability to obtain reasonable compensation for Verizon's utilization of the City's rights-of-way." (Id.) VCI persisted that Rome had no authority to request renewal of any franchise agreements.

Finding itself at an impasse with VCI, Rome commenced an action in the New York State Supreme Court seeking a declaration of the parties' rights regarding VCI's continued use of Rome's rights-of-way. VCI then removed the action to federal court claiming that, in actuality, Rome's Complaint seeks a declaration of its rights under 47 U.S.C. § 253(c).

III. STANDARD OF REVIEW

A. Conversion to Summary ...


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