FCC preemption of local streetlight pole ownership upheld by federal appeals court

by Steve Blum • , , , ,

La small cell

The Federal Communications Commission can preempt local ownership of streetlight poles and other municipal property planted in the public right of way, according to a ruling on Wednesday by a three judge panel of the federal appeals court based in San Francisco. They mostly upheld three decisions made by the FCC in 2018, including one that effectively gave wireless companies freedom to mount equipment on streetlight poles at will, and only reimburse cities or other public agency pole owners for costs incurred. In other words, cities can’t charge rent for the use of property they own in public right of ways they manage, if a wireless company wants to use it.

The opinion isn’t all bad news for local governments, though.

What cities can do is maintain a measure of control over aesthetic standards. The judges said the FCC went too far when it said that aesthetic requirements for wireless facilities can’t be any more “burdensome” than those imposed on other types of pole attachments. In other words, if an electric company can openly mount transformers on poles, then wireless equipment can be equally ugly. Federal law “expressly permits some difference in the treatment of different providers, so long as the treatment is reasonable”, the opinion says.

The judges also trimmed back the FCC’s directive that aesthetic standards be “objective and published in advance”. Advance publication is still required – aesthetic rules can’t be made up on the fly – but some level of aesthetic subjectivity is still allowed. The “objective” requirement is not “adequately defined” or explained, according to the opinion.

Local agencies can set fees that recover the actual cost to of issuing permits and maintaining streetlight poles. The litigation usefully forced the FCC to back down from its industry-centric rhetoric and clarify that the $270 per pole per year fee and $500 maximum permit fee it specified in its decision is a floor, not a ceiling. If actual costs are higher, fees can be higher.

Judges were split on basing fees on actual costs. The majority upheld the restriction, but in a limited dissent judge Daniel Bress said the FCC “has not adequately explained how all above-cost fees amount to an ‘effective prohibition’ on telecommunications or wireless service”.

The judges bought the FCC’s argument that if an agency that controls a public right of way installs a pole or other facilities, then it becomes part of the right of way and isn’t proprietary property. At least when telecommunications companies are involved. Again, the FCC admitted its directive had limits: its ownership preemption only applies if the pole owner also manages the right of way.

The other two 2018 FCC decisions – “one touch make ready” rules and a ban on construction moratoria – were completely upheld, but with important clarifications that trim back wide ranging claims made by telecoms companies. For example, a local or state agency can reasonably manage its right of way, including prohibiting excavation work because of seasonal weather conditions, such as freeze/thaw cycles.

Republican FCC commissioners wasted no time in claiming victory. The judges’ opinion isn’t necessarily the last word. Further appeals are possible.

Links to petitions, court documents and background material 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.