Tag Archives: pole attachment

Schedule set for appeals of FCC local pole ownership preemption

by Steve Blum • , , , ,

Riverside pole mount

The federal appeals court in San Francisco set 5 April 2019 as the filing date for opening briefs in the nine challenges it’s received, so far, to the Federal Communications Commission’s September order preempting municipal ownership of streetlight poles and other potential wireless assets in the public right of way.

The FCC will have a month to respond, then the challengers will have three weeks to file a final rebuttal. So it’ll be the end of May before all the opening arguments are on the table. After that, it could be a year or more before the process is complete and the San Francisco judges issue a decision.

Six of those challenges were filed by cities, counties and their associations that contend that the FCC went beyond the authority it was granted by congress, if not beyond the bounds of the federal constitution. The other three were submitted by mobile carriers who thought they should have been given even more freebies by the FCC.

Those cases were transferred to the San Francisco-based ninth circuit by the tenth circuit court of appeals in Denver, which agreed with arguments made by the City of San Jose and other local agencies that the FCC’s September wireless preemption order and its August wireline preemption order were, for legal purposes, two halves of the same decision.

There’s still a lot of housekeeping work to be done, though, before substantive arguments can begin. Four other challenges – one by AT&T and three by municipal challengers – are lodged in the federal appeals court based in Washington, D.C. Presumably those will be transferred to San Francisco, too, and then consolidated with all the others – September wireless order and August wireline order alike.

In the meantime, the FCC wireless order is in effect. At least to the extent that it has effect, which is not as much as mobile carriers would like cities to believe.

California is losing its grip on utility service and infrastructure

by Steve Blum • , , , ,

Harold lloyd safety last

The future of northern California’s energy supply, and the utility pole routes that support it, will be largely in the hands of federal judges. Pacific Gas and Electric gave notice yesterday that it will, in all likelihood, file for bankruptcy protection in two weeks. The company said that it may have to pay as much as $30 billion in damages stemming from catastrophic wildfires it apparently played a role in starting in 2017 and 2018. That’s about three times more than the company was worth before its stock price nosedived on the news. A federal bankruptcy court will have to decide how to carve up whatever is available, and who gets control of the carcass.

Another federal judge is assuming an oversight role that, in theory, the California Public Utilities Commission is supposed to fill. Last week, judge William Alsup gave PG&E until the end of the month to come up with a plan for inspecting the more than 100,000 miles of electric lines it operates in California before the next fire season begins in June. He’s essentially PG&E’s probation officer, following the corporation’s of criminal conviction related to a natural gas line explosion in San Bruno in 2010.

So far, the CPUC hasn’t made any comment about PG&E bankruptcy plans or Alsup’s encroachment on its turf. Last month, CPUC president Michael Picker launched an investigation that could result in PG&E break up, or a takeover by the state, or any number of other fates. Or could have, before financial markets, trial lawyers and the federal judiciary got tired of waiting. At the time, Picker stated in a press release that “this process will be like repairing a jetliner while it’s in flight. Crashing a plane to make it safer isn’t good for the passengers”.

Yesterday, PG&E said the plane is going down. All we passengers can do is assume the position, and hope for the best.

PG&E pulls the plug, filing for bankruptcy

by Steve Blum • , , , ,

Rampart 300

With liabilities from California wildfires amounting to unknown billions of dollars, Pacific Gas and Electric company announced this morning that it plans to file for bankruptcy as soon as it’s legally able to do so. According to a company press release

The Company today provided the 15-day advance notice required by recently enacted California law that it and its wholly owned subsidiary Pacific Gas and Electric Company (the “Utility”) currently intend to file petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code on or about January 29, 2019.

Governor Gavin Newsom released a statement saying he’s been engaged with the problem over the weekend…

The company should continue to honor promises made to energy suppliers and to our community. Throughout the months ahead, I will be working with the Legislature and all stakeholders on a solution that ensures consumers have access to safe, affordable and reliable service, fire victims are treated fairly, and California can continue to make progress toward our climate goals.

No reaction yet from the California Public Utilities Commission.

FCC’s streetlight ownership preemption takes little effect today

by Steve Blum • , , , ,

The Federal Communications Commission’s order preempting local ownership of streetlights and other municipal property in the public right of way is now active. What does it mean to cities? Nothing much, according to a court filing by the FCC

The Order does not itself require localities to do anything, nor does it compel approval of any particular siting request; it simply articulates standards for courts to apply if and when they are confronted with any future siting disputes that might eventually arise…nor does it prevent localities from recovering all of their actual and reasonable costs…

The Order’s safe harbor for recurring fees up to $270 per small cell per year is not a “limit o[n] compensation” above that amount, as Movants wrongly assert; rather, the Order makes clear that localities may charge higher fees if a reasonable approximation of their costs exceeds that amount.

When the Order takes effect, the only consequence is that carriers may submit new requests to be processed under these standards. If a locality does not timely grant a request, the carrier must allow at least sixty days to elapse before seeking judicial review. A court must then determine whether the locality has violated the statute under the particular facts presented and whether relief is warranted—determinations that “remain within the courts’ domain.” The Order will thus have no compulsory effect until the affected locality has an opportunity to justify its decision before a “court of competent jurisdiction.”

The FCC made these statements in its successful opposition to a request by a group of local agencies, led by the City of San Jose to put the “September Order” on hold. The federal appeals court based in Denver denied the group’s request last week, saying it “failed to meet their burden of showing irreparable harm if a stay is not granted”.

Both AT&T and Verizon signalled that they intend to take a more aggressive attitude towards cities once the FCC order is, in theory, in effect. But as the FCC itself points out, there’s no urgent need to humor them. Yet.

Links to motions, petitions, court documents and background material, Californian and federal, are here.

My clients are mostly California cities, including some that are directly involved in this case. I’m not a disinterested commentator. Take it for what it’s worth.

FCC local pole preemption order set to take effect Monday, as federal court denies San Jose’s request to delay implementation

by Steve Blum • , , , ,

The Federal Communications Commission’s preemption of local ownership of streetlight poles and other “vertical assets” appears set to take effect on Monday, 14 January 2019. The tenth circuit federal appeals court in Denver denied a request by the City of San Jose and other cities to put the FCC order on hold while court cases move ahead. In a separate action, the tenth circuit also transferred the long list of appeals to the ninth circuit federal appeals court in San Francisco.

FCC pole preemption appeals leave Denver via loophole, land in San Francisco

by Steve Blum • , , , ,

San francisco skyline 625

Update, 11 January 2019: the federal tenth circuit court of appeals denied a request by the City of San Jose and other cities to delay implementation of the FCC’s September preemption order. It is still scheduled to take effect on Monday.

The growing list of challenges to a Federal Communications Commission decision to preempt local ownership of streetlight poles and other municipal property located in the public right of way will be decided by the San Francisco-based ninth circuit federal appeals court.

Originally, the cases were assigned by lottery to the federal tenth circuit court, headquartered in Denver. But a coalition of local governments led by the City of San Jose argued an earlier appeal of a separate but related FCC order – aka the August order, which dealt primarily with wireline issues – should take precedence as the lead case. Yesterday, the Denver appeals court agreed that the FCC’s wireless deployment order, aka the September order, which took away any ownership rights cities might have over streetlight poles is inextricably intertwined with it…

After careful consideration, we conclude that the FCC’s August Order and its September Order are the “same order” for purposes of [federal law]. Accordingly, the motion to transfer is granted and these matters are transferred to the United States Court of Appeals for the Ninth Circuit.

It’s good news for cities, counties and other local agencies, and bad news for the unholy alliance of republican FCC commissioners and mobile carriers. In the past, the ninth circuit has taken a more narrow view of what qualifies as an effective prohibition on broadband deployment. That question is central to the case against the September wireless order: the FCC claims its authority to preempt local property ownership is based on a federal law that says that state and local governments can’t “prohibit or effectively prohibit” broadband companies from building infrastructure or offering service.

The decision to send the challenges – there are at least nine, encompassing dozens of local governments and organisations – to San Francisco could create a bit of a mess for the next few days. The FCC’s wireless order is due to take effect on Monday. One request to put the order on hold was filed in St. Louis, and similar motions are expected from other challengers. That’s a lot of work on short notice.

Links to motions, petitions, court documents and background material, Californian and federal, are here.

Order transferring appeals of FCC “September Order” to Ninth Circuit, by Tenth Circuit, U.S. Court of Appeals

My clients are mostly California cities, including some that are directly involved in this case. I’m not a disinterested commentator. Take it for what it’s worth.

FCC’s economic illiteracy on display in muni property preemption fight

by Steve Blum • , , , ,

Sometimes the real story is in the footnotes. That’s the case with a Federal Communications Commission denial of a request to delay enforcement of its September order that would, if upheld by federal courts, take away property rights from local governments. In the denial, the FCC tries to make its case with economic nonsense: that the market value of an asset is only determined only by its “actual and direct costs”.

The market value of anything is determined by the balance between its perceived worth to the buyer and the seller. In a competitive market, the perceived worth to the seller is based primarily on two factors: the cost to make one more of the item and the profit the seller needs to stay in business. The seller’s opinion of the value the buyer places on the item also plays a role.

The FCC’s argument focuses on a single sell-side factor, ignores everything else – including buy-side valuation – and conflates practical competition with a perfectly competitive market (a mythical beast much beloved by theoretical economists).

It’s the buy-side valuation, which is based on the buyer’s expectation of generating a return from ownership of the asset, that allows a seller to legitimately maximise profit in a normally competitive market.

In the September wireless order, the FCC said that any city or county-owned assets (e.g. light poles) that are located in the public right of way and useful to mobile broadband companies, don’t actually belong to local agencies. Instead, those assets are supposed to be made available on an open access basis, under the same cost-based terms that apply to, say, installation of a utility pole.

Over the past couple of years, Californian cities and the mobile industry – carriers and infrastructure companies – have been negotiating deals for bulk leases of street lights and other municipal assets. Some cities can command a higher price than others. In and around Silicon Valley, $1,500 per pole per year is a rate that’s often mutually agreeable. In other parts of the state, the figure can be more or, usually, less than that. The amount of revenue that a carrier expects to generate from the pole leases is a major factor.

Artificially lowering the price to $270 per year, as the FCC is attempting to do, amounts to a subsidy, extracted from a city and given to a private company that would otherwise be willing to pay more, based on its profitability expectations.

Contrary to what the FCC states, there is a competitive market for pole access. Mobile carriers can install utility poles in the public right of way, lease space on private property or share facilities with their competitors. Using existing light poles is not a requirement, it’s a cost saving measure. By negotiating a price with a city – which would not want to see more poles cluttering up the right of way or to lose out on revenue – the benefits are fairly split between the buyer and the seller.

Profit is dirty word in the public sector and euphemisms such as “surplus” or “deferred spending” are usually employed. But whatever you call it, it’s a completely legitimate – and sometimes legally required – goal for a city.

Overturning FCC local pole ownership preemption seems easier in San Francisco

by Steve Blum • , , , ,

The Federal Communications Commission “seeks to redefine the relationship between state and local governments and telecommunications providers” with a new and expansive interpretation of federal law, according to a group of local agencies challenging an order that preempts local ownership of light poles and other municipal property located in the public right of way. The group, led by the City of San Jose, wants the case moved from the federal appeals court in Denver, to the ninth circuit appeals court in San Francisco.

Firing back at mobile carriers and the FCC, who oppose the move, the San Jose group said that the big question in the case – regarding what “prohibit or effectively prohibit” broadband deployment means – is the same as in an appeal of an earlier FCC order that’s being heard in San Francisco. Federal law says state and local governments can’t block – effectively prohibit – wireless infrastructure deployment. The wrangling now is about defining when the prohibition threshold is crossed…

[The FCC] interpretation finds an effective prohibition where a requirement inhibits, inter alia, “improvements to service,” or imposes costs that may prevent a provider from investing in deployment in other areas…

[This] new interpretation put forth by the [FCC] Orders conflicts with Ninth Circuit…precedent holding that the plain language of [federal telecoms law] require an actual prohibition; speculative impacts or mere barriers are not enough.

On the other hand the Denver appeals court – the tenth federal circuit – set a lower bar. According to the FCC, the Denver court believes a local ordinance fails the test if it “materially limits or inhibits the ability of any competitor or potential competitor to compete in a fair and balanced legal and regulatory environment”. Clearly, the FCC and its telecoms industry friends would rather be held to the Denver court’s standard. Equally, San Jose and its allies have reason to prefer San Francisco.

It’s now up to the Denver court to decide where the challenge to the FCC order, which takes effect in less than three weeks, will be heard.

My clients are mostly California cities, including some that are directly involved in this case. I’m not a disinterested commentator. Take it for what it’s worth.

PG&E faces possible breakup, government takeover

by Steve Blum • , , , ,

Pacific Gas and Electric could be broken up, reorganised or brought under closer control by the California Public Utilities Commission. The decision to launch a broad investigation into PG&E’s future, including the possibility of a public takeover, was made by commission president Michael Picker and released late on Friday, after financial markets had closed and the holiday exodus had begun.

Radical action of this sort, taken against a major utility, is cause for concern by telecoms companies too. Generally, it signals a change to much more aggressive utility regulatory regime in California. Specifically, it increases the threat of future criminal and civil liability, affects management of and access to utility poles and conduit, and puts a major source of independent dark fiber in jeopardy.

PG&E is implicated in the ignition of the Camp Fire, which killed at least 85 people in Butte County, and destroyed entire towns. A federal judge overseeing PG&E’s probation for a past corporate criminal conviction, stemming from a gas line explosion in San Bruno that killed eight people (pictured above), is demanding answers about possible new crimes committed by the company. The CPUC opened a separate investigation into whether PG&E broke state laws regarding gas line protection, and expanded its review of electric utility wildfire prevention practices.

All that, just within the past two months. In his decision, Picker said standard remedies aren’t working…

This Commission was, and remains, concerned that the safety problems being experienced by PG&E were not just one-off situations or bad luck, but indicated a deeper and more systemic problem. The fact that imposing penalties on PG&E (the Commission’s standard tool for addressing safety problems) did not seem to change the situation reinforced this concern…

The next phase of this proceeding will consider a broad range of alternatives to current management and operational structures for providing electric and natural gas in Northern California.

Options under consideration include various methods of bringing PG&E’s executives and board of directors under tighter CPUC control, or replacing them altogether, breaking the company up into smaller pieces, on a business line and/or regional basis, and taking over the company and turning it into a publicly owned utility of one kind or another.

Picker’s decision – technically, a “scoping memo and ruling” – comes in an investigation that began in 2015. It’s just another step, albeit in a new direction, in a process that will grind on for many more years.

Muni property rights are written into federal law and FCC decisions, North Little Rock tells appeals court

by Steve Blum • , , , ,

Burlingame poles

The case against the FCC’s preemption of local property ownership is taking shape. The first city to ask federal appellate court judges to put the FCC’s September wireless order on hold while legal wheels grind is North Little Rock, Arkansas, in partnership with a Missouri muni utility association.

Most of North Little Rock’s arguments are specific to municipal electric utilities. Federal law exempts municipal utilities from FCC pole attachment oversight. Muni electric utilities also have to follow more rigid safety requirements – working on high voltage lines is a dangerous job – and they have long-established procedures for working with telecommunications companies, wired and wireless alike.

One central argument, though, applies to any kind of municipal property and will be repeated many times by the other cities that are challenging the FCC order, whether or not they’re in the electric business. That argument is that FCC went way beyond the limits of its authority when it said that cities don’t have property rights over assets they build, maintain and own. The FCC, North Little Rock claims, “ignores the plain language” of federal law and “it’s own prior rulings”…

[Federal telecoms law] only applies to local and state governments acting in a governmental, regulatory capacity, so the Commission has no authority to regulate municipal utilities when they operate in a proprietary capacity.

Recognizing the regulatory versus proprietary distinction, the Commission and courts have previously concluded that these [sections of federal law] relate to state and local governments when they are acting in their regulatory capacity — e.g., issuing permits for the use of the public right of ways — as opposed to when they are acting in a proprietary capacity, such as when they lease or rent utility facilities or property. Further, the Commission recognizes this distinction as evidenced by one of its prior decisions in 2014, when it stated that neither [of those sections] apply to the "non-regulatory decisions of a state or locality acting in its proprietary capacity.”

The FCC’s September wireless order also tries to limit state and local discretion over when, where and how wireless facilities can be installed in the right of way, either directly or on privately owned infrastructure. The agency is on firmer legal ground when it’s regulating the regulators. Past federal court decisions have deferred to the FCC’s judgement in many instances. North Little Rock’s motion properly re-draws a clear line between regulation and property rights and ownership that the FCC wants to erase.

Links to motions, petitions, court documents and background material, Californian and federal, are here.