Liberty Cablevision of Puerto Rico, Inc. v. Municipality of Caguas

United States Court of Appeals
For the First Circuit
No. 04-1597

LIBERTY CABLEVISION OF PUERTO RICO, INC.,
Plaintiff, Appellee,

v.

MUNICIPALITY OF CAGUAS,
Defendant, Appellant,

WILLIAM MIRANDA-MARIN, Mayor of the Municipality of Caguas;
TELECOMMUNICATIONS REGULATORY BOARD OF PUERTO RICO,
Defendants.

Nos. 04-2136, 04-2137

LIBERTY CABLEVISION OF PUERTO RICO, INC.,
Plaintiff, Appellant,

v.

TELECOMMUNICATIONS REGULATORY BOARD OF PUERTO RICO,
Defendant, Appellant,

MUNICIPALITY OF BARCELONETA; MUNICIPALITY OF LAS PIEDRAS,
Defendants, Appellees.

APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Jay A. García-Gregory, U.S. District Judge and
Hon. Jaime Pieras, Jr., Senior U.S. District Judge]

Before
Torruella, Circuit Judge,
Stahl, Senior Circuit Judge,
and Oberdorfer,* Senior District Judge.

*
Of the District of Columbia, sitting by designation.
 Eyck O. Lugo-Rivera, with whom Humberto Guzmán-Rodríguez,
Eliseo Roques and Martínez Odell & Calabria, were on brief, for
Municipality of Caguas.
Orlando Fernández, with whom Orlando Fernández Law Offices,
was on brief, for Liberty Cablevision of Puerto Rico, Inc.
Robert F. Reklaitis, with whom Leslie Paul Machado and Nixon
Peabody LLP, were on brief, for Telecommunications Regulatory Board
of Puerto Rico.
Luis F. Colón-González, with whom Colón González Law Firm, was
on brief, for the Municipality of Barceloneta.
Enrique R. Siaca, with whom Quiñones & Sánchez, P.S.C., was on
brief, for amicus curiae Centennial Puerto Rico Cable TV Corp.

August 9, 2005

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 TORRUELLA, Circuit Judge. These consolidated and

conflicting cases present a novel question: whether municipal

ordinances which assess gross revenue fees on cable providers for

use of the municipalities' "rights-of-way" -- when similar fees are

already assessed by the state "local franchising authority" in

accordance with the Cable Communications Policy Act of 1984, 47

U.S.C. § 521, et seq. (1984) ("Cable Act") -- conflict with the

federal statute and are therefore preempted. We answer in the

affirmative, and accordingly reverse and remand the Barceloneta

case and affirm the Caguas case.

I

This appeal stems from two separate cases brought by

Liberty CableVision of Puerto Rico -- one against the municipality

of Caguas, the other against the municipalities of Barceloneta and

Las Piedras -- challenging ordinances which impose a 5% annual fee

on Liberty's gross revenues for use of the municipalities' rights-

of-way. The Telecommunications Regulatory Board of Puerto Rico

("Board") -- which assesses franchise fees for use of these rights-

of-way, 27 P.R. Laws Ann. § 269h, and which has been designated by

the Puerto Rico Legislative Assembly as the local franchising

authority in accordance with the Cable Act, id. -- was named as co-

defendant in these suits. In essence, Liberty argued that the

Cable Act necessarily preempts these ordinances because its use of

rights-of-way are already accounted for in the franchise fee paid

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to the Board -- which, as the state's designated local franchising

authority under the Cable Act -- is the lawful entity to assess

such fees.

On March 10, 2004, the district court in the Caguas case

entered summary judgment for Liberty. Liberty Cablevision of

Puerto Rico, Inc. v. Municipality of Caguas, No. 02-2429 (D.P.R.

Mar. 10, 2004). The court held that because Liberty "already pays

five percent of its yearly revenues to the Board, which is the

maximum allowed by the Cable Act, Caguas cannot impose the

additional fee mandated by the ordinance. Therefore, the

[o]rdinance is preempted by the Cable Act as applied to Liberty as

a cable operator." Id. at 17 (footnote omitted). The court also

found the fee unjustifiable under § 253 of the Telecommunications

Act of 1996, despite Liberty's provision of cable modem service,

because the Federal Communications Commission ("FCC") determined

that cable modem service was not "telecommunications service" under

the Communications Act, and because cable modem uses the same

transmission lines as cable television and thus imposes no extra

burden on Caguas.1 Id. at 17-18.

1
If cable modem service were a "telecommunications service," then
Liberty arguably would be liable to the municipalities for its use
of their rights-of-way under § 253 of the Telecommunications Act of
1996, 110 Stat. 56, despite any language in the Cable Act to the
contrary.

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 On July 2, 2004, the district court in the Barceloneta

case2 arrived at the opposite conclusion: "Municipalities must be

compensated for the use of their rights of way . . . ." Liberty

Cablevision of Puerto Rico v. Municipality of Barceloneta, 326 F.

Supp. 2d 236, 240 (D.P.R. 2004). In so holding, the court found

that these municipalities are "owners" of the rights-of-way, and

must be compensated as such, while the franchise fee paid to the

Board solely encompasses "access." Id. at 239. The court pointed

out that unlike most United States jurisdictions where the

municipality is both the franchisor and "owner" of the rights-of-

way, in Puerto Rico, the "Board is the franchisor, but a different

entity, the Municipality, is the owner of the rights of way being

utilized." Id. at 238. Thus, the court ordered Liberty to pay the

Board a franchise fee of 1.5% of the gross revenues it derives from

all municipalities, and, in addition, pay Barceloneta and Las

Piedras 1% of the gross revenues from services it derives from

those municipalities.3 Id. at 240. The court also recognized that

the municipalities would be able to state a federal takings claim

for Liberty's use of their rights-of-way once they had exhausted

the state remedy of an "inverse condemnation action." Id. at 242.

2
This case involves the municipalities of Barceloneta and Las
Piedras.
3
The court fashioned these numbers without much explanation nor
case law.

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 This appeal follows. For the sake of simplicity -- given

the parties' dual roles as both appellants and appellees, and given

their myriad claims -- we organize the issues as follows: (1)

whether the Cable Act preempts these municipal ordinances; (2)

whether the municipal fees are nonetheless justified under § 253 of

the Telecommunications Act of 1996 due to Liberty's provision of

cable modem service; and (3) whether the municipalities are

entitled to just compensation for the alleged constitutional

takings. As always, we review these abstract issues of law de

novo. See, e.g., Global Naps, Inc. v. Verizon New England, Inc.,

396 F.3d 16, 23 (1st Cir. 2005).

II

A. Preemption

In 1984, Congress enacted the Cable Act, 47 U.S.C. § 521

(amending the Communications Act of 1934, 47 U.S.C. § 151 et seq.),

to establish a national framework for regulating cable television.

See F.C.C. v. Beach Communications, Inc., 508 U.S. 307, 309 (1993).

The Act sought to "'encourage the growth and development of cable

systems and . . . [to] assure that cable systems are responsive to

the needs and interests of the local community.'" Id. (quoting

§ 601(2), 47 U.S.C. § 512(2)). That is, Congress, in enacting the

Cable Act, "was concerned both with relieving the cable industry

from unnecessary, burdensome regulation and with ensuring that

cable systems remain responsive to the needs of the public."

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American Civil Liberties Union v. F.C.C., 823 F.2d 1554, 1559 (D.C.

Cir. 1987).

To these ends, the Act empowered the "franchising

authority" -- which is defined as "any governmental entity

empowered by Federal, State, or local law to grant a franchise," 47

U.S.C. § 522(10) -- to impose a maximum of 5% of gross revenues as

"franchise fees," 47 U.S.C. § 542(b).

Franchise fees include "any tax, fee, or assessment of

any kind imposed by a franchising authority or governmental entity

on a cable operator or cable subscriber, or both, solely because of

their status as such." 47 U.S.C. § 542(g)(1). The term, however,

specifically excludes any "tax, fee, or assessment of general

applicability (including any such tax, fee, or assessment imposed

on both utilities and cable operators or their services but not

including a tax, fee or assessment which is unduly discriminatory

against cable operators or cable subscribers)." 47 U.S.C. § 542(g)

(2)(A). Franchise fees may be passed directly to customers, 47

C.F.R. § 76.922 (2002), and itemized on the customers' bills, 47

U.S.C. § 542(c).

The award of a franchise allows a cable operator to use,

among others, the public rights-of-way. 47 U.S.C. § 541(a)(2)

("[a]ny franchise shall be construed to authorize the construction

of a cable system over public rights-of-way"). "[A]ny provision of

law of any State, political subdivision, or agency thereof . . .

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which is inconsistent with [the Cable Act] shall be deemed to be

preempted and superceded." 47 U.S.C. § 556(c).

In the case of Puerto Rico, its legislature created an

agency -- the Telecommunications Regulatory Board of Puerto Rico --

to be its "franchising authority" under the Cable Act. 27 P.R.

Laws Ann. § 265 et seq. The enabling legislation, enacted on

September 12, 1996, vested the Board with the authority, among

others, to grant cable franchises, 27 P.R. Laws Ann. § 269h ("[t]he

Board shall be empowered to grant nonexclusive franchises to one or

more cable companies"), and to assess cable franchise fees, 27 P.R.

Laws Ann. § 267j(h) ("franchise fees . . . shall be paid in full to

the Board as of the effective date of this Act").

On September 25, 2001, the Board renewed Liberty's

franchise to operate cable systems in several municipalities,

including Caguas (Franchise FC-59), Barceloneta (Franchise FC-41),

and Las Piedras (Franchise FC-59). The franchise agreements

granted Liberty, among other things, "extensive and valuable rights

to operate its cable system for profit using the public rights-of-

way and public utility easements within the franchise area."

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 In November 2001, the municipalities of Barceloneta4 and

Las Piedras5 enacted ordinances imposing a 5% fee for the use of

rights-of-way within those municipalities. Caguas enacted a

similar ordinance on February 21, 2002.6

We now invalidate these ordinances to the extent they

conflict with the Cable Act. It is established beyond peradventure

that under the Supremacy Clause, U.S. Const. art. VI, cl. 2,

4
The Barceloneta ordinance authorized:

the collection of 5% of the gross income of any invoice
made out by telecommunication, cable TV and utilities
services located at the Municipality of Barceloneta.
This tax is for the use and maintenance of municipal
rights of way of easements.

Barceloneta, P.R., Ordinance 16 (Nov. 2, 2001).
5
The Las Piedras ordinance authorized:

the Director of Finance to regulate and impose the
collection of five percent (5%) of the gross income of
all billings for the use and maintenance of the right of
way easements to public properties and utilities of the
Municipality of Las Piedras to the providers of
telecommunications services, cable TV and similar
utilities.

Las Piedras, P.R., Ordinance 16 (Nov. 7, 2001).
6
The Caguas ordinance authorized:

regulations to charge for the use and maintenance of the
municipal rights of way to telecommunications, cable TV,
and public utility companies that do business, or carry
out operations in the Municipality of Caguas using these
rights of way. The charge shall be equal to 5% of the
gross income of all the services provided and billed to
their clients and subscribers during the year.

Caguas, P.R., Ordinance 02A-42 (Feb. 21, 2002).

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federal law preempts inconsistent state law when: (1) "Congress, in

enacting a federal statute, has expressed a clear intent to

pre-empt state law;" (2) "it is clear, despite the absence of

explicit preemptive language, that Congress has intended, by

legislating comprehensively, to occupy an entire field of

regulation and has thereby left no room for the States to

supplement federal law;" and (3) "compliance with both state and

federal law is impossible," or (4) "the state law stands as an

obstacle to the accomplishment and execution of the full purposes

and objectives of Congress." Capital Cities Cable, Inc. v. Crisp,

467 U.S. 691, 698-99 (1984) (internal quotations and citations

omitted); see also Rhode Island v. Narragansett Indian Tribe, 19

F.3d 685, 703 (1st Cir. 1994). "[F]or the purposes of the

Supremacy Clause, the constitutionality of local ordinances is

analyzed in the same way as that of statewide laws." Hillsborough

County, Fla. v. Automated Med. Labs., Inc., 471 U.S. 707, 713

(1985).

In the instant case, Congress has made it "unmistakably

clear" that the Cable Act will preempt any inconsistent state or

local law: "any provision of law of any State, political

subdivision, or agency thereof . . . which is inconsistent with

[the Cable Act] shall be deemed to be preempted and superceded," 47

U.S.C. § 556(c). See generally Gregory v. Ashcroft, 501 U.S. 452,

460-61 (1991) ("[I]f Congress intends to alter the 'usual

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constitutional balance between the States and the Federal

Government,' it must make its intention to do so 'unmistakably

clear in the language of the statute.'") (alteration in original)

(citing Atascadero State Hosp. v. Scanlon, 473 U.S. 234, 242

(1985)). Given the clear congressional intent to preempt, our

inquiry focuses on whether these ordinances conflict with the Cable

Act, and we find that they do. As outlined, the Act explicitly

designated the "franchising authority" as the grantor of franchises

and assessor of "franchise fees," 47 U.S.C. § 522(10); 47 U.S.C.

§ 542(b), in exchange for which the franchisee cable operator may

use the public "rights-of-way," 47 U.S.C. § 541(a)(2). In Puerto

Rico, the legislature chose to designate a state agency -- the

Board -- as its "franchising authority," 27 P.R. Laws Ann. § 265 et

seq., as opposed to granting that power to its various

municipalities like most United States jurisdictions. The Board,

in granting a franchise to Liberty, enables Liberty to use the

public "rights-of-way" within the municipalities. See 47 U.S.C.

§ 541(a)(2); Franchise Agreements. Therefore, the municipalities'

attempts to assess fees for use of these same rights-of-way are

inconsistent with the Cable Act and are necessarily preempted.

Our finding is supported by the fact that the ordinances

"stand[] as . . . obstacle[s] to the accomplishment and execution

of the full purposes and objectives of Congress" in enacting the

Cable Act. Capital Cities Cable, 467 U.S. at 699 (internal

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quotation omitted). As explained, Congress "was concerned both

with relieving the cable industry from unnecessary, burdensome

regulation and with ensuring that cable systems remain responsive

to the needs of the public." American Civil Liberties Union, 823

F.2d at 1559. We fail to see how a significant increase in

franchise fees -- 3% by the Board7 plus 5% by the municipalities,

for use of the same public rights-of-way -- would not amount to

"unnecessary, burdensome regulation," particularly in light of

Congress's explicit intent that such fees be capped at 5%, see 47

U.S.C. § 542(b). Moreover, given that franchise fees may be passed

directly to consumers, see 47 C.F.R. § 76.922 (2002), which we

suspect will certainly be the case, we find it difficult to accept

how a significant increase in franchise fees would at all ensure

that "cable systems remain responsive to the needs of the public."

American Civil Liberties Union, 823 F.2d at 1559. Thus, we find

these ordinances constitutionally infirm to the extent they

conflict with the Cable Act.

The municipalities nonetheless argue that they are

entitled to compensation as "owners" of these rights-of-way. We

disagree. It is well established that municipalities possess no

inherent powers, as all such powers are derived from the state.

See generally John F. Dillon, Commentaries on the Law of Municipal

7
The Renewal Franchise Agreements between the Board and Liberty
assess a 3% franchise fee, which can be increased to 5% after
proper notice and a hearing.

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Corporations 1846-1847 (5th ed. 1911) ("As the highways of a State,

including streets in cities, are under the paramount and primary

control of the legislature, and as all municipal powers are derived

from the legislature, it follows that the authority of

municipalities over streets . . . depends . . . entirely upon their

charters or the legislative enactments . . . ."). The Puerto Rico

Constitution, for example, empowers the "Legislative Assembly to

create, abolish, consolidate and reorganize municipalities," P.R.

Const. art. VI, § 1, which power has been recognized by the Puerto

Rico Supreme Court. López v. Commonwealth of Puerto Rico, 21 P.R.

Offic. Trans. 71, 81 (P.R. 1988) ("our legal order basically

embodies the legislative idea that municipalities are exclusively

fashioned by the Legislature or are created by the government")

(citations omitted). Some courts have recognized that the

ownership interest municipalities hold in their streets is

"governmental," and not "proprietary," and thus municipalities are

not necessarily entitled to compensation. See, e.g., City & County

of Denver v. Qwest Corp., 18 P.3d 748, 761 (Colo. 2001) (en banc);

AT & T Corp. v. Vill. of Arlington Heights, 620 N.E.2d 1040, 1044

(Ill. 1993); City of New York v. Bee Line Inc., 284 N.Y.S. 452, 456

(N.Y. App. Div. 1935). Moreover, even "when the fee of the streets

is in the city, in trust for the public," it is "a mistake to

suppose . . . [that] the city is constitutionally and necessarily

entitled to compensation." Hodges v. W. Union Tel. Co., 18 So. 84,

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85 (Miss. 1895) (internal quotation omitted). See generally

Gardner F. Gillespie, Rights-of-Way Redux: Municipal Fees on

Telecommunications Companies and Cable Operators, 107 Dick. L. Rev.

209, 212-15 (2002). This is because municipalities generally

possess no rights to profit from their streets unless specifically

authorized by the state. Id. at 215 (citing People v. Kerr, 27

N.Y. 188, 212 (1863)).

In the instant case, Puerto Rico empowers each

municipality to "[e]xercise its legislative and executive powers in

any matter of a municipal nature, . . . subject to applicable

legislation." 21 P.R. Laws Ann. § 4051(o) (emphasis added).

Despite this autonomy, "every municipal ordinance must be in

harmony with [state] government law, which shall prevail in

conflicting situations." López, 21 P.R. Offic. Trans. at 84

(citations omitted). Thus, "[e]ven in matters of a municipal

nature, the Municipal Assembly has no authority to intervene when

the Legislative Assembly has preempted that particular field." Id.

(internal quotation and citation omitted). Here, the Legislative

Assembly created the Board as its sole franchising authority, 27

P.R. Laws Ann. § 269h, and gave it broad powers, 27 P.R. Laws Ann.

§ 267i, including the power to grant franchises and to assess

franchise fees for use of the rights-of-way, 27 P.R. Laws Ann.

§ 267j(h). We therefore find that the municipalities' attempts to

regulate cable companies by charging franchise fees for the rights-

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of-way conflict with Puerto Rico legislation and necessarily fail.

Cf. Van Meter v. Township of Maplewood, 696 F. Supp. 1024 (D.N.J.

1988) (in the federal preemption context, federal regulation may

preempt local law if the agency intended to exercise exclusive

authority in the area and the agency is legally authorized to

displace local regulation). Moreover, the lack of state

authorization permitting municipalities to charge franchise fees

for use of the rights-of-way8 further supports our rejection of the

municipalities' argument for compensation as "owners" of these

rights-of-way.

8
We note that in September 2004, the Puerto Rico Legislative
Assembly amended the Puerto Rico Autonomous Municipalities Act, 21
P.R. Laws Ann. § 4001 et seq., to enable municipalities to assess
fees for use of the public rights-of-way. We read this to mean
that prior to such enactment, the municipalities possessed no such
power to assess those fees. See, e.g., Duncan v. Walker, 533 U.S.
167, 174 (2001) ("statute ought, upon the whole, to be so construed
that, if it can be prevented, no clause, sentence, or word shall be
superfluous, void, or insignificant") (internal quotations and
quotation marks omitted); Herman v. Héctor I. Nieves Transp.,
Inc., 244 F.3d 32, 36 (1st Cir. 2001) ("A primary canon of
statutory construction is that a statute should be construed so as
not to render any of its phrases superfluous.") (citation omitted).
In any event, the new legislation fails to apply retroactively to
these ordinances. See, e.g., Rivera-Flores v. Puerto Rico Tel.
Co., 64 F.3d 742, 751-52 (1st Cir. 1995) ("In Puerto Rico, statutes
generally are presumed to have prospective effect only, unless the
statute expressly or by inescapable inference demonstrates a
contrary legislative intent.") (citing P.R. Laws Ann. tit. 31, § 3
(no retroactive application of statutes absent express
retroactivity provision); Vélez Reboyrás v. Sec'y of Justice, 115
D.P.R. 533 (1984); Landgraf v. USI Film Prods., 511 U.S. 244
(1994)). We also note that this recent authorization does not
necessarily mean that the municipalities involved could come back
and enact ordinances identical to the ones at issue without
contravening the Cable Act.

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 Neither do we find the municipalities' argument that

their assessments are of "general applicability," and therefore not

"franchise fees" under the Cable Act, persuasive. The House

Committee defined a "tax of general applicability" to include:

such payments as a general sales tax, an
entertainment tax imposed on other
entertainment businesses as well as the cable
operator, and utility taxes or utility user
taxes which, while they may differentiate the
rates charged to different types of utilities,
do not unduly discriminate against the cable
operator so as to effectively constitute a tax
directed at the cable system.

H.R. Rep. No. 98-934, at 64 (1984) (emphasis added). In

determining whether the municipal assessments "effectively

constitute a tax directed at the cable system," id., we examine the

"revenue's ultimate use, asking whether it provides a general

benefit to the public, of a sort often financed by a general tax,

or whether it provides more narrow benefits to regulated companies

or defrays the agency's costs of regulation." San Juan Cellular

Tel. Co. v. Public Serv. Comm'n of Puerto Rico, 967 F.2d 683, 685

(1st Cir. 1992) (collecting cases).

Here, instead of assessing a general tax for the general

benefit of the public, the municipal ordinances target a small

group for regulatory costs associated with the "use and maintenance

of municipal rights of way." Barceloneta, P.R., Ordinance 16

(Nov. 2, 2001); see also Las Piedras, P.R., Ordinance 16 (Nov. 7,

2001); Caguas, P.R., Ordinance 02A-42 (Feb. 21, 2002). This is

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nothing short of a prototypical franchise fee. See San Juan

Cellular, 967 F.2d at 685. Moreover, given that Liberty already

pays the Board a 3% franchise fee for use of the public rights-of-

way, we fail to see how the municipalities' more-than-double

assessment for the same usage would not be "unduly discriminatory."

47 U.S.C. § 542 (g)(2)(A). Our finding is supported by the fact

that Liberty also pays these municipalities license taxes

("patentes") -- which are quintessential taxes of "general

applicability" -- for income derived from the municipalities. We

therefore find that the franchise fees are not assessments of

"general applicability" that would fall outside the purview of

Cable Act preemption.

For the reasons stated, we invalidate these ordinances as

preempted by the federal Cable Act.

B. The Telecommunications Act and Cable Modem Service

The municipalities alternatively argue that Liberty's

provision of cable modem service makes it a "telecommunications

carrier" subject to fees under § 253 of the Telecommunications Act

of 1996, 110 Stat. 56. We are not convinced.

The Telecommunications Act of 1996, which amends the

Communications Act of 1934, 48 Stat. 1064, as amended, 47 U.S.C.

§ 151 et seq., "regulates telecommunications carriers, but not

information service providers, as common carriers." National Cable

& Telecomms. Ass'n v. Brand X Internet Servs., 125 S. Ct. 2688,

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2696 (2005). Unlike "information service" providers -- i.e., those

"offering . . . a capability for . . . processing . . . information

via telecommunications," 47 U.S.C. § 153(20), "telecommunications

carriers" -- i.e., those "offering . . . telecommunications for a

fee directly to the public . . . regardless of the facilities

used," 47 U.S.C. § 153(46), are subject to mandatory Title II

regulation. Nat'l Cable, 125 S. Ct. at 2696. Of particular

relevance to this case is § 253, which provides:

Nothing in this section affects the authority
of a State or local government to manage the
public rights-of-way or to require fair and
reasonable compensation from
telecommunications providers, on a
competitively neutral and nondiscriminatory
basis, for use of public rights-of-way on a
nondiscriminatory basis, if the compensation
required is publicly disclosed by such
government.

47 U.S.C. § 253(c) (emphasis added).

The municipalities urge us to follow Brand X Internet

Serv. v. F.C.C., 345 F.3d 1120 (9th Cir. 2003), and AT & T Corp. v.

Portland, 216 F.3d 871 (9th Cir. 2000), instead of the FCC's

Declaratory Ruling in In re Inquiry Concerning High-Speed Access to

the Internet Over Cable and Other Facilities, 17 FCC Rcd. 4798,

4802-4803, ¶ 9 (2002), to hold that cable modem service is a

"telecommunications service," thereby making Liberty liable for

"fair and reasonable compensation" for its use of the "public

rights-of-way." 47 U.S.C. § 253(c).

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 This issue has recently been foreclosed by National

Cable, 125 S. Ct. at 2688. In that case, the Supreme Court upheld

the FCC's conclusion that cable modem service is not a

"telecommunications service" subject to Title II common-carrier

regulation as a lawful construction of the Communications Act under

Chevron U.S.A. Inc. v. Natural Resources Def. Council, Inc., 467

U.S. 837 (1984), and the Administrative Procedure Act, 5 U.S.C.

§ 555 et seq. Id. at 2695. As such, we reject the municipalities'

argument that Liberty's provision of cable modem service renders it

liable for fees as a "telecommunications provider" under the

Telecommunications Act.

C. Takings and Just Compensation

Finally, the municipalities argue that Liberty's use of

their rights-of-way constitutes a physical taking subject to just

compensation under Federal and Puerto Rico laws. U.S. Const.

amend. V; P.R. Const. amend. IV; 21 P.R. Laws Ann. § 4004(e). We

need not reach this issue. Even assuming arguendo that this is an

actionable claim, it is a quarrel involving the municipalities and

the state legislature, not Liberty, and is therefore beyond the

scope of this opinion.

III

For the foregoing reasons, the Barceloneta decision is

reversed and remanded, and the Caguas decision is affirmed,

consistent with this opinion.

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