Tag Archives: ab57

FCC’s $270 pole rental limit for wireless attachments might be “arbitrary and capricious”, appellate judge says

by Steve Blum • , , , ,

Los angeles streetlight cell 1 23oct2019

Federal appeals court judges hearing the challenge brought by local governments to the Federal Communications Commission’s 2018 preemption of ownership and control of street lights tried to get an FCC lawyer to explain how the commission settled on $270 as the allowable annual pole rental limit. The attorney, Scott Noveck, couldn’t oblige judges Jay Bybee and Mary Schroeder…

Bybee: I’d still like you to get to how you get to the $270.

Novek: So your honor, what I believe happened is that the commission took a look at various state small cell bills…

Bybee: It’s interesting, counsel, that you just characterised it as ‘you believe’. Because there isn’t anything in the record that tells us what the commission did, other than look at bills that were pending in a number of states, mostly in the heartland, not on the coast.

Novek: I want to try to answer that, but I just want to say to preface that, that this is just a safe harbor. And this order would have been perfectly reasonable even without any safe harbor at all.

Schroeder: When you say safe harbor, what do you mean? Do you mean that if it’s below that there’s no problem with it?

Novek: So, what I think what the commission was doing here was recognising that there exists a certain level of fees below which the fees are so likely to pass muster, they’re so likely to be within what the actual costs are, that it wouldn’t make sense to be expending resources on litigating those…But nothing at all precludes localities from charging higher fees where their costs are higher.

Bybee: Does the commission have an obligation to explain why it chose $270 as opposed to, let’s say, $250 or $300?

Novek: Well, I do think that at that point you’re in the area of paradigmatic line drawing, where agencies, I think, are at their greatest deference.

Bybee: They could have chosen $200 or $400 – that’s significant, isn’t it?

Novek: Your honor, I don’t think that this was, um, something that we were able to calculate with mathematical precision…

Bybee: You can calculate it with mathematical approximation. I don’t even see the approximation.

Novek: So, what the commission did here…

Bybee: The numbers that are in the bills that the commission relied on…are in the range of about $100. So the $270 appears – I mean, it may be generous for the cities, and maybe it was out of an abundance of caution. I’m just trying to figure out whether they just drew a number out of a hat, which might make it arbitrary and capricious.

The $270 figure originally came from lobbyists for mobile carriers, such as AT&T, Verizon, T-Mobile and Sprint. In 2017, they convinced California lawmakers – whom they and their colleagues influence with millions of dollars in payments – to enact a similar limit, which was vetoed by governor Jerry Brown.

The challenge to the FCC’s 2018 preemption is now in the hands of the three judges from the federal ninth appellate circuit, who heard the case last week in Pasadena. Their decision is likely to come sometime in the next three to six months.

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

FCC’s rural 5G justification for urban wireless preemption is comfort to AT&T but not to Fresno, appeals court told

by Steve Blum • , , , ,

Ninth circuit oral argument pole preemption 10feb2020

Federal appellate judges drilled down into arguments made by local governments and the Federal Communications Commission on Monday, as they considered a challenge to the FCC’s 2018 decision to cap rental rates for locally owned street light poles and other assets in the public right of way, and effectively give mobile carriers unfettered use of public property.

One justification for this preemption of local property ownership was that if big cities with big potential for subscriber revenue charge high fees, then carriers like AT&T and Verizon won’t have money left over to spend in less profitable small cities and rural communities. That prompted a question from judge Jay Bybee about whose rights and whose benefits are being protected…

So the FCC’s theory is that the reason we’re not going to allow costs above a certain level – anything above costs – is prohibited and preempted is because, the theory is, that the carriers could then take that money and invest in rural areas, other cities and so forth.

So if the City of Los Angeles agrees to $400 – the city says it’s $400, it’s our cost – and the carriers all agree, because they’re very anxious to get into Los Angeles immediately, and the City of Fresno comes and says ‘we don’t think it’s above $300’, does the City of Fresno have the right to bring an action, because these carriers are being slow to develop 5G in Fresno?

Joseph Van Eaton, with the Best, Best and Krieger law firm, which represents many cities in California and elsewhere, replied…

No, in fact that’s one of the flaws, the basic flaw in this whole cross subsidy argument, because that’s what this really is, that carriers will take money saved in Los Angeles and invest it in an area that’s not now profitable.

There’s no economic theory that supports that idea. The whole universal service fund is based on the idea that a rational investor will make money where they can make money and then they don’t take good money and pour it into an area where it’s not profitable out of the goodness of their hearts. That’s why we actually have evidence where Lincoln, Nebraska dropped the fee to $95 and said ‘all you have to do is build out these less profitable areas’ and they got no takers.

There’s no evidence that cross subsidy actually results in the impacts, effects the FCC has, and certainly the FCC doesn’t require it, and it doesn’t give anyone any enforceable right to say ’if you’re saving money in LA, you gotta come to our community".

All three judges asked questions of both the FCC and local government challengers during the hearing in Pasadena. Conventional wisdom is that questions asked aren’t a good guide to what judges are thinking – they might be sceptical, or they might be floating conclusions that they’re leaning towards. We’ll have to wait for them to issue their ruling, which is probably three to six months away.

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

FCC tells appeals court if electric or cable companies can install “larger, uglier, blighted” equipment on poles, then wireless carriers can too

by Steve Blum • , , , ,

Small cell olympic blvd 22oct2019

The Federal Communications Commission defended its 2018 preemption of local property ownership and permitting authority in front of a panel of three federal appeals court judges in Pasadena yesterday. Its lawyers faced some pointed questions from the judges.

FCC attorney Scott Noveck tried to dance around the reality of the FCC’s preemption order and claim that it really wasn’t doing much at all, particularly in regards to limits on the aesthetic requirements that cities can impose on wireless facilities. Judge Daniel Bress didn’t seem convinced…

Bress: The other side has raised this point, that when you just compare the standards – the one in the small cell order as compared to the one in the statute – there’s some possible misalignment, right, where it says no more burdensome, which would suggest parity, whereas the statute suggests actually there’s some amount of discrimination that would be allowed?"

Noveck: I think the order suggests parity among similarly situated infrastructure, which I think brings those into alignment.

Bress: What does that mean?

Noveck: Well, so for instance, the problem we have here sometimes, you have times when you have, say, cable equipment or electrical equipment, and what the record shows is that in many localities they were imposing very burdensome requirements on wireless equipment that might be smaller and less, um, more unobtrusive than similar equipment you might see on a utility pole or on a pole that was being used to provide cable service, was being used to provide electrical service but, for whatever reasons, localities were subjecting the wireless carriers to far more onerous requirements. So the non-discrimination principle here is just saying that if you are claiming that small cells need to meet some burdensome aesthetic requirements, but you’re allowing other utilities to put larger, uglier, blighted infrastructure on the same poles, it’s hard to think that this is a legitimate aesthetic requirement you’re imposing.

Noveck was trying to create a false equivalence between electrical equipment, such as transformers, that are installed on utility poles, which are often placed as far out of view as practicable, and wireless equipment placed on street light poles which, by their very nature, are placed where everyone can see them. Bress didn’t seem convinced, but that’s not necessarily his thinking – appeals court judges are notoriously (and properly) hard to read. All we can do now is wait for a ruling. There’s no particular timeline for that, but three to six months is typical.

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

Game on today, as cities take on FCC in court over pole ownership preemption

by Steve Blum • , , , ,

Downtown salinas

Local ownership of street light poles and other facilities planted in the public right of way is at stake, as lawyers for dozens of cities and counties and the Federal Communications Commission square off in a Pasadena court room later this morning.

A panel of three federal appellate court judges will hear arguments about why, or why not, the FCC has the authority to tell local agencies how much they can charge mobile carriers to attach equipment to their poles, and to largely replace negotiated rental contracts with simple, non-discretionary permits. Other issues, such as access to utility poles (which fall under different laws and regulations) and road maintenance policies that prohibit digging when the danger of freeze/thaw damage is greatest, will also be taken up.

In 2018, the FCC capped the rental rate that cities can charge wireless companies for pole attachments at $270 per year. That’s in contrast to negotiated market rate deals that often top $1,000 per year and sometimes go much higher.

If they prevail, the FCC’s republican majority is ready to double down on preemptions of state and local authority over right of way management and permits for wireless facilities. At the CES show in Las Vegas last month, republican commissioner Michael O’Rielly was defiant. He said local control is “problematic” and the FCC’s response “does come with the P-word…it requires preemption. And that is something the commission is going to have to continue to do”.

Another federal appeals court, based in Washington, D.C., might have made O’Rielly’s dream less likely. In a decision that otherwise upheld the FCC’s repeal of network neutrality rules, the judges ruled that the commission overstepped its authority when it tried to preempt any and all regulation of broadband service by states. If the FCC wants to big foot state governments, it has to wait until there’s an actual regulation to preempt, and then come up with a specific basis for doing it.

February oral arguments set for appeal of FCC pole ownership preemption

by Steve Blum • , , , ,

Los angeles streetlight cell 1 23oct2019

We might know by next summer if local governments will be able to lease public property, such as street lights, at fair market rates to private wireless companies, or whether those rates will be capped at $270 per pole per year.

The challenge by cities and counties to the Federal Communications Commission’s preemption of local ownership of public assets in the public right of way, and control of the public right of way itself, will be heard in Pasadena in February. The San Francisco-based ninth circuit court of appeals scheduled oral arguments for 10 February 2020. The judge-shopping appeals filed by mobile carriers will be heard at the same time.

It should be possible to watch the arguments live via the ninth circuit’s website or watch a recording later.

There’s no particular deadline for a decision by the ninth circuit, but three to six months would be a reasonable guess. So maybe in the May to August time frame?

The ninth circuit is allowing a total of eighty minutes for arguments. Cities and counties will get 20 minutes to make their case. Often, allocated time is eaten up by questions from the judges. The FCC will have 20 minutes to defend its ruling, then mobile carriers get their turn and the FCC has another 20 minutes to respond.

One question that won’t be answered until shortly before the hearing is who is hearing it? The ninth circuit will choose a panel of three appellate judges, which might include some on temporary duty, to listen to arguments and decide the case among themselves. Usually, that ends up being the final decision, although appeals the losing side can ask that it be reviewed by all the judges assigned to the ninth circuit, and/or appeal to the federal supreme court. But historically, fewer than 1% of the ninth circuit’s rulings are taken up by the supreme court.

Federal court fast not-so-slow tracks appeals of FCC’s preemption of local pole ownership

by Steve Blum • , , , ,

The good news is that the appeal of the Federal Communications Commission’s preemption of local ownership of streetlight poles will be fast tracked. The not so good news – which isn’t exactly news to people who follow such things – is that fast is a relative term.

An order issued yesterday by the ninth circuit federal appellate court in San Francisco granted a request “to expedite oral argument” in the case, made by dozens of local governments. What that means is that the court is looking at “dates for February 2020 and the two subsequent…months” for those arguments to happen.

The judges hearing the case will also have to decide whether to handle everything at once, or break it up into more manageable bits. The primary case involves two decisions made by the FCC last year, both dealing with the way state and local governments manage access to roads and anything else considered to be the public right of way, and the degree of ownership control they can exercise over structures, such as light poles or traffic signals, they install there. One decision dealt mostly with deployment of wireline telecoms infrastructure, the other with wireless facilities.

One issue that’s particular to municipal electric utilities – whether federal law allows the FCC to regulate their utility poles – was separated out earlier. The cities and counties litigating the main case asked for arguments for and against one touch make ready rules for privately-owned utilities to be heard separately. Yesterday’s order said the three judge panel will sort that out later.

Assuming that oral arguments happen sometime between February and April, and the judges issue a decision in a three to six month time frame (typical, but it could be longer or shorter), then we won’t know if the FCC’s decisions will stand until this time next year. That’ll add to the uncertainty faced by cities as they try to manage the expected avalanche of permit applications for small cell facilities and associated fiber optic installations.

Cities ask federal court to speed up review of pole ownership preemption, FCC says keep it slow

by Steve Blum • , , , ,

La small cell

Local governments from around the U.S. asked the federal appeals court in San Francisco to speed up consideration of their challenge to the Federal Communications Commission preemption of local ownership and control of the public right of way and assets located in it, such as street light poles and traffic signals.

In a motion filed last month, they told judges that on the one hand, disputes are piling up, and on the other, the FCC is aggressively pushing ahead…

First, there are several other cases progressing through the lower courts that will be affected by the outcome of this appeal…Delay in resolution will simply complicate the work of district courts and Circuit Courts of Appeal throughout the country, as more applications are filed and more disputes arise.

Second, this appeal is a matter of great importance to virtually every locality in the nation. While this appeal is pending, Local Government Petitioners and Supporting Intervenors and similarly situated parties are confronted with uncertainty as to how to develop and apply local standards for small cell deployment, which is rapidly occurring…

Third, the Commission is not waiting for this Court to decide the validity of the Orders challenged on appeal. In fact, the Commission is currently building on those Orders, which makes possibly unwinding them all the more difficult.

The FCC opposes anything that would speed up what increasingly looks like a case it will lose. Its response says, in effect, there’s no reason to hurry, because any problems that are created can be fixed later. That was the gist of a ruling earlier this year by federal appellate judges in Denver, just before they handed everything off to their colleagues in San Francisco.

That’s a line of argument that might apply equally well to the FCC’s preemption orders, which also set tight deadlines for action on permit applications filed with local government by telecoms companies.

FCC is a mouthpiece for telecoms industry’s “self-interested assertions”, local governments tell federal court

by Steve Blum • , , , ,

Riverside pole mount

The rounds of written arguments and counter arguments in the appeals of last year’s FCC decisions preempting state and local governments’ control of public right of ways and ownership of property, such as street light poles and traffic signals, they install there is drawing to a close. Several groups filed rebuttals to the FCC’s defence of its preemption. The primary opposition came from a reply brief filed by a long list of cities and counties in the federal appeals court based in San Francisco, which is hearing the combined challenges to two sweeping rulings made by the FCC last year.

The local governments shot down the FCC’s claim that mobile carriers will build more infrastructure if pole rental fees are lower isn’t based on independent evidence or company track records…

The Commission tries to fill the gap with industry’s self-interested assertions that they will increase small cell investment in response to lower fees. But the record shows that providers have not increased deployment when offered lower fees. The Commission relies on AT&T’s assertion that it has not deployed any small cells in Portland, Oregon, due to the current fee levels. Yet when Portland conducted a pilot project, lasting more than three years, that set lower annual rights-of-way fees, AT&T did not submit a single small cell application.

And, they said, the FCC falsely accuses cities of monopolising access to streets, while ignoring the real monopolists…

The Commission’s claim that local fees reflect “monopoly pricing” ignores record evidence that, unlike the case with wireline facilities, private property alternatives to rights-of-way and rights-of-way infrastructure exist for locating wireless facilities. It also overlooks this Court’s recognition in Charter Communications, Inc. v. County of Santa Cruz that unlike private businesses, local governments are accountable to voters with interests beyond profit maximization.

The FCC’s preemption of ownership of municipal property placed in the public right of way, such as street light poles and traffic signals, isn’t based on powers granted by congress, the local governments’ brief further argues…

The Communications Act of 1934’s only affirmative grant of authority with respect to regulation of access to utility poles and similar structures…does not reach municipal property…There is no response to our argument that the Act gives the Commission no general roving authority to regulate private or public property merely because it is convenient or even necessary for use in telecommunications.

The American Public Power Association, which represents municipal electric utilities, also made the argument that federal law specifically bars the FCC from regulating poles owned by government agencies.

Four mobile carriers – AT&T, Verizon, Sprint and the Puerto Rico Telephone Company – filed a desultory brief in support of the judge shopping lawsuits they filed in four different appellate districts. I can imagine the conversation: I know we gotta make it look good, but keep the billable hours to a minimum please. And Montgomery County, Maryland’s quest to make tin foil hats great again continued.

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

FCC’s bromance with mobile lobbyists shines through in briefs. Court briefs, that is

by Steve Blum • , , , ,

The FCC’s subservience to the telecommunications companies it’s supposed to regulating – or at least the grovelling of its republican majority – is highlighted by the industry’s defence of sweeping preemptions issued by the commission last year. In a brief filed with the San Francisco-based ninth circuit federal appeals court, carriers and their lobbyists effectively admit they were gaming the judicial system when they tried to steer the case to a friendlier court, with the collusion of the FCC. Four cell companies filed the same argument – that the FCC committed a heinous error by not automatically granting construction permits when shot clocks expire – in four different appellate courts.

In this latest reply, which is signed by two of the four, Verizon and Sprint, mobile industry mouthpieces said the FCC’s “authority to interpret and apply the Communications Act” is “well-established”, and the rules it adopted were “common-sense interpretations of the statutes as they apply to all telecommunications services, an action clearly within its statutory discretion”.

They go even further, and say flat out that requiring carriers to go to court to get permission to build once a shot clock runs out is “reasonable” and “the commission’s decision to take a more moderate tack is thus more than justified by the record”.

That’s not what they said when they went judge shopping.

Although mobile carriers won the judicial lottery – the case was first assigned to Sprint’s favored judges in the Denver-based tenth circuit – the wheels of judicial procedure continued to grind, and an earlier challenge mounted by the City of Portland was given precedence. As a result, all the cases filed by cities and carriers were bundled into one big proceeding in San Francisco.

The tight relationship between industry lobbyists and republican commissioners was made crystal clear during the FCC’s broadband deployment advisory committee charade. That was enough to get a wish list published, but it will take more than a bromance to convince federal judges.

Verizon mounts dubious legal assault on pole rental fees in Rochester

by Steve Blum • , , , ,

Rochester street light

Verizon is using a legally shaky ruling by the Federal Communications Commission to shake down the City of Rochester, New York. Last year, the FCC ruled that publicly owned property, such as light poles or traffic signals, located in the public right of way were, in fact, part of the public right of way and not municipal property.

Rochester wants to charge Verizon up to $1,500 a year in rental fees for the use of city-owned poles in the public right of way. That’s considerably more than the FCC’s “safe harbor” rental rate of $270 per pole per year. So Verizon filed a lawsuit against the City of Rochester in federal court (h/t to Jon Brodkin at Ars Technica for the pointer.

The problem with Verizon’s claim is that the FCC has already cut the legs out from underneath it. In its filing, Verizon described the FCC’s $270 figure as a “presumptively reasonable limit”.

Unfortunately for Verizon, in its defence of its pole preemption ruling in a San Francisco-based federal appeals court, the FCC said that “there is no presumption that fee amounts outside the safe harbor are impermissible or preempted. A safe harbor is not a ceiling”.

Rochester’s initial response to Verizon’s objections was “we have concluded that our permit fees and recurring fees for use of the City’s rights of way, including those for pole attachments related to the deployment of small wireless facilities, comply with all federal law requirements and limitations”.

Hardball of this sort is part of Verizon’s style. In North Little Rock, Arkansas, Verizon sent a similarly threatening letter to the city, telling it to tear up a master lease agreement that had already been negotiated and agreed by both sides. I’ve seen it take the position that attaching a small cell to a publicly owned light pole should cost no more than attaching a fiber optic cable to a privately owned utility pole – something in the neighborhood of $25 per year in California, according to a formula set by the California Public Utilities Commission.

Threats and lawsuits might scare some cities into giving Verizon what it wants. But the decisive battle is being fought in San Francisco, and so far it doesn’t look like Verizon will end up on the winning side.