California has fewer worries about local property preemptions as FCC cedes ground in defence of wireless permit ruling

by Steve Blum • , , , ,

Monty python run away

Tactical retreat well describes much of the Federal Communication Commission’s defence of its heretofor sweeping rewrite of rules regarding local government pole rentals and permits for small(ish) cell sites. It goes to great lengths to explain that its bargain basement “safe harbor” price for permits and rental rates “is not a ceiling”.

It also backs down from what appeared to be a total preemption of publicly owned property located in the public right of way, limiting it to cases where “the property in question is controlled by the same government entity that controls the rights-of-way” and there’s a “‘temptation’ for governments to seek to ‘insulate conduct from federal preemption’ by ‘blending’ their regulatory and proprietary roles”.

The key question for Californian cities and counties is whether the FCC’s more tightly worded interpretation of its authority applies here. California law gives telecoms companies broad access to the right of way, and they don’t have to pay annual rent for the space they occupy. Except for upfront permit fees – which already must be cost-based under California law – telecoms companies use the right of way for free, and local governments can’t prevent them from doing so. Local discretion is limited to time, place and manner requirements. Cities do not own the right of way. Californian cities manage the logistics of accessing and sharing the right of way, but do not “control” it. It’s the difference between being a landlord and a traffic cop.

On the other hand, California law allows – arguably requires – local governments to act like a responsible landlord and charge market-based rents for the use of municipal property that they do own.

The worst case scenario for California is looking a lot better. The FCC’s shorter shot clocks for wireless permits do not have a practical effect here: the California legislature was, on the whole, even more generous to mobile carriers. Fees for services of all kinds, including permit processing, are limited to actual costs. Cities have robust processes in place to figure out what those are.

The question is whether the San Francisco-based federal appeals court considering the challenge to the September 2018 wireless ruling buys any of the FCC’s arguments. The FCC’s brief offers scant support for its property rights preemption. It cites a lower court case in New York where that concept was mentioned, and then goes through some awkward legal contortions to falsely imply that the judge specifically endorsed the idea.

Democratic FCC commissioner Jessica Rosenworcel’s observation that “it seems increasingly likely” that the courts will nix at least some elements of recent small cell rulings was prescient. A D.C. appeals court did just that on Friday, saying the FCC’s attempt to kill environmental and historical preservation reviews for small cells was “not logical and rational” and its decision making process was “arbitrary and capricious”.

It’s not going to look any better in San Francisco.

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