Cable One, Inc. v. Oklahoma State Board of Equalization

RAPP, J.,

specially concurring in part and dissenting in part:

¶ 1 I respectfully specially concur in part and dissent in part.

¶ 2 I agree that Cable One, Inc. (COI) is not a transmission company under the tax code, but only insofar as its business.is cable television. 68 O.S:2011 and Supp. 2015, 2801-*3882899. However, I would limit- the scope of that ruling to provide that COI’s television cable business is not a transmission company for purposes of the Oklahoma Tax Code. This limitation -is consistent with the provision in Section 2847(B) that the definitional exemption applies “As used in the Ad Valorem Tax Code.” Therefore, I specially concur, in part, that COI is not a transmission company, but I would limit that ruling to purposes of the Ad Valorem Tax Code and COI’s cable television business component.

¶ 3 I dissent from the ruling that the telephone component of COI’s business is included in the Ad Valorem Tax Code exemption. Section 2808(B) of the statute, as amended in 2010, provides:

B. As used in the Ad Valorem Tax Code, “transmission company” and “public service corporation” shall not be construed to include cable television companies.

¶4 Here, “cable television,” “internet access” and connection to Voice Over Internet Protocol (VoIP) are not shown to be identical forms of service. While it is not clear when COI (or any other cable television company) initiated its telephone service component, the fact is that the statute’s exemption language does not mention the three forms of service.

¶ 5 I would hold that the statute is ambiguous and that the construction of the statute by the state agencies is reasonable and conforms to the general policy of the State of Oklahoma. Thus, under the Chevron doctrine,1 this Court will defer to the agencies’ interpretation and not disturb their conclusion. Schulte Oil Co., Inc. v. Oklahoma Tax Comm’n, 1994 OK 103 n.5, 882 P.2d 65 n.5.

¶ 6 The United States Supreme Court applied the Chevron doctrine in review of the interpretation of the phrase “telecommunications service.” National Cable & Teleeommu-nications Ass’n v. Brand X Internet Services, 545 U.S. 967, 980, 125 S.Ct. 2688, 2699, 162 L.Ed.2d 820 (2005) (“If a statute is ambiguous, and if the implementing agency’s construction is reasonable, Chevron requires a federal court to accept the agency’s construction of the statute, even 'if the agency’s reading differs from what the court believes is the best statutory interpretation.”)2

¶ 7 The Federal Communications Commission '(FCC) had ruled that cable modem service was not telecommunications service. The FCC construed the Federal Communications Act of 1934, as amended by -thé Telecommunications Act of 1996. The FCC ruled that cable companies providing broadband internet access did not provide “telecommunications service” as the Communications Act defined that term, and thus were exempt from mandatory'common-carrier regulation,

¶ 8 The Supreme Court distinguished telecommunications service from broadband internet access. The Court reviewed the technical differences between “telecommunications services” and “cable modem services” and concluded that the two services were not the same; The Court confirmed an FCC'ruling that cable companies providing broadband internet service were not providers of telecommunications service and thus were exempt from regulation. In so doing, the Supreme Court applied the Chevron doctrine because the statute did not unambiguously classify and define the two types of service.

¶ 9 American Council on Education v. Federal Communications Commission, 451 F.3d 226 (D.C. Cir. 2006), is a case that exemplifies the point that an unambiguous statute governs the result. The FCC had ruled that providers of broadband internet access and voice over internet protocol services were subject to regulation as “telecom*389munications carriers” under Communications Assistance for Law Enforcement Act (CA-LEA).

¶ 10 The Court examined the CALEA specificity of definition of “telecommunications earner” and compared that to the less specific definition in the Telecommunications Act. The Court determined that the FCC interpretation was reasonable and in accord with the provisions of CALEA.

¶ 11 I am of the opinion that the component of COI used in providing telephone service is not exempt under the Ad Valorem Tax Code. It is not uncommon for public service companies to have dual purposes and the statutes require them to account accordingly. See, 17 Q.S.2011,154.3

¶ 12 Therefore, I would remand this matter to the Appellants for the purpose of ascertaining the taxable portion of COI’s business that is not exempt.

. Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). The Court discussed Chevron’s meaning in National Cable & Telecommunications Ass’n, 545 U.S. at 980, 125 S.Ct. at 2699 (citations omitted).

In Chevron, this Court held that ambiguities in statutes within an agency’s jurisdiction to administer are delegations of authority to the agency to fill the statutory gap in reasonable fashion. Filling these gaps, the Court explained, involves difficult policy choices that agencies are better equipped to malee than courts. If a statute is ambiguous, and if the implementing agency’s construction is reasonable, Chevron requires a federal court to accept the agency’s construction of the statute, even if the agency's reading differs from what the court believes is the best statutory interpretation.

. The issue was "whether cable companies providing cable modem service are providing -a 'telecommunications service’ in addition to an ‘information service.' ’’ National Cable & Telecommunications Ass’n, 545 U.S. at 986, 125 S.Ct. at 2702-03.

. Section 154 reads:

In case the owner or operator of any public utility is engaged in carrying on any other business in connection with the operation of such public utility, the Commission may require the cost of the operation and gross revenues of such joint business to be kept in such form and manner as may be prescribed by the Commission so that the cost of the operation and gross revenues of the public utilily may be ascertained, '