Macon, Ga., Officials Argue Case against Alltel Before State Supreme Court
Posted on: Tuesday, 20 January 2004, 06:00 CST
Jan. 21--ATLANTA -- Alltel doesn't serve long-distance telephone customers in the city of Macon and shouldn't be forced to pay a higher rate for the installation of phone lines, the company's lawyers argued Tuesday before the state Supreme Court.
But an attorney for the city said Macon has the right under state law to raise its fees to Alltel and other utilities, because Alltel was awarded a franchise.
"Alltel is trying to limit our right to charge a fee," said Macon attorney Thomas James III. "But cities have the right to impose a franchise fee to raise revenue."
Alltel, based in Little Rock, Ark., sued Macon in May 2001, disputing a $114,997 permit fee the city charged the company for its installation of underground fiber-optic cables. Through a contract with Georgia Power, Alltel installed more than 25,000 feet of cable.
For nearly three years -- from July 1997 until April 2000 -- the city charged Alltel $2 per foot for underground cable, the company's lawsuit stated. But in April 2000, Alltel received a bill charging $4.50 per foot. The Macon City Council increased its fee in July 1999.
Alltel refused to pay the higher rate and sent the city a check for $51,110, equal to the rate of $2 per foot.
The company shouldn't have to pay the higher rate because its fiber-optic lines simply travel through Macon, a company attorney argued.
"We have fiber-optic cables that are on telephone poles in Macon, but we don't provide services to the citizens of Macon," said Alltel attorney Nisbet Kendrick.
Additionally, Alltel was never awarded a franchise to serve Macon, as the city claims, Kendrick said.
"For a franchise to exist, there must be a grant of a property right," Kendrick said. "There's no evidence of that in this case. This is not a franchise fee."
Macon's case also was argued by the Georgia Municipal Association, which filed a brief supporting the city's case.
"We cannot overemphasize the importance of this ruling to cities around the state," said GMA attorney Robert Middleton.
Alltel's lawsuit accuses the city of violating the Federal Telecommunications Act and state utility regulations and asks the court for unspecified damages, all attorney fees and court costs, as well as a judgment preventing the city from collecting the fee. The higher rate violates state law capping the amount cities can charge at $5,000 per mile, Alltel contends.
The U.S. District Court issued an injunction against the city charging the higher rate, but the city appealed.
The hearing was held in Atlanta at the State Supreme Court. The justices must issue a ruling by the end of July, Supreme Court spokesman Rick Diguette said.
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To see more of The Macon Telegraph, or to subscribe to the newspaper, go to http://www.macon.com
(c) 2004, The Macon Telegraph, Ga. Distributed by Knight Ridder/Tribune Business News.
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