A federal appeals court commissioner has, for now, set a schedule that sorts out the various challenges to last year’s Federal Communications Commission decisions that preempted local ownership of streetlights and similar infrastructure, and put tight restrictions on how local governments manage public right of ways. Last week Peter Shaw, a commissioner for the ninth circuit federal appeals court in San Francisco, met with attorneys for local agencies and associations that are challenging various aspects of the order, and with lawyers for mobile carriers that are pretending to be upset with the FCC’s decisions, but are actually jumping in on its side.
The result is a schedule that has the final round of written arguments completed in September, which could lead to a decision in 2020.
If the San Francisco appeals court judges allow the cases to move ahead at all. They still have to decide if they’re going to grant the FCC’s request to put everything on hold until the commission gets around to closing out its proceeding.
Some of the Small Cell Appeals were filed by local governments and publicly-owned utilities (the public petitioners), and separate appeals were filed by various providers of wireless services (industry petitioners). Their positions are in opposition, and industry petitioners, as well as certain intervenors, will support the FCC in opposing the public petitioners, and vice versa.
In a landmark decision, the California Supreme Court gave cities a major victory today, ruling that the way San Francisco regulates the appearance of wireless facilities is legal, and isn’t preempted by state law or California Public Utilities Commission regulations. Its interpretation goes beyond lower court decisions and adopts a narrower view of state-level restrictions on municipal control of telecommunications infrastructure. The unanimous opinion also opened the door to further regulation of cell sites and other telecoms facilities – wired or wireless – by drawing a line between specific limits the legislature put on local oversight of construction activities, and the general ability of cities to set standards for the appearance, placement and, potentially, other aspects of wireless equipment after it’s built.
Today’s California Supreme Court decision endorsed that finding…
Neither the plain language of [public utilities code] section 7901 nor the manner in which it has been interpreted by courts and the PUC supports plaintiffs’ argument that the Legislature intended to preempt local regulation based on aesthetic considerations. The statute and the ordinance can operate in harmony. Section 7901 ensures that telephone companies are not required to obtain a local franchise, while the [San Francisco] Ordinance ensures that lines and equipment will not unreasonably incommode public road use.
But municipal authority goes beyond that, according to the Supreme Court. The ruling said that state law only restricts some of the broad discretion and power that cities have under the California constitution. Cities can’t effectively prohibit telecoms companies from building infrastructure or regulate their operations, but…
The Legislature has not adopted a comprehensive regulatory scheme. Instead, it has taken the limited step of guaranteeing that telephone corporations need not secure a local franchise to operate in the state or to construct local lines and equipment. Moreover, the statute leaves room for additional local action and there are significant local interests relating to road use that may vary by jurisdiction.
Nor does the authority given to the CPUC override local control or responsibilities. The commission regulates “a utility’s relations with its customers”, the decision says, but municipalities “are forbidden from yielding to the PUC their police powers to protect the public from the adverse impacts of utilities operations”…
Consistent with these statutes, the PUC’s default policy is one of deference to municipalities in matters concerning the design and location of wireless facilities. In a 1996 opinion adopting the general order governing wireless facility construction, the PUC states the general order “recognize[s] that primary authority regarding cell siting issues should continue to be deferred to local authorities… . The [PUC’s] role continues to be that of the agency of last resort, intervening only when a utility contends that local actions impede statewide goals … .” The order itself “acknowledges that local citizens and local government are often in a better position than the [PUC] to measure local impact and to identify alternative sites. Accordingly, the [PUC] will generally defer to local governments to regulate the location and design of cell sites … .”
Finally, the Supreme Court said that public utilities code section 7901.1, which puts specific limits on local control of the public right of way, only applies while construction work is going on…
It is eminently reasonable that a local government may: (1) control the time, place, and manner of temporary access to public roads during construction of equipment facilities; and (2) regulate other, longer term impacts that might incommode public road use under section 7901. Thus, we hold that section 7901.1 only applies to temporary access during construction and installation of telephone lines and equipment. Because the City treats all entities similarly in that regard, there is no section 7901.1 violation.
In other words, the requirement that all telecoms companies be treated that same only applies while facilities are being installed. Cities are free to adopt wireless-specific ordinances that apply after construction work is completed.
Bottom line: California cities can set aesthetic standards for cell sites, and have more authority over wireless and wireline infrastructure than they or telecoms companies thought. It’s a comprehensive defeat for T-Mobile, Crown Castle and Extenet, who sued the City and County of San Francisco. They’ll even have to pay San Francisco legal costs.
Although the ruling opens the door to further local regulation of wireless facilities, including stricter aesthetic standards, the extent of that discretion wasn’t defined, and there are still federal preemptions of state and local authority that could apply. But today’s decision gives California cities a green light to test those limits.
My clients are mostly California cities, all of whom are directly affected by this case. I’m not a disinterested commentator. Take it for what it’s worth.
San Franciso’s aesthetic standards for cell sites are legal under California law. The California Supreme Court rejected an appeal by T-Mobile, Crown Castle and Extenet of lower court rulings that allowed the City and County of San Francisco to regulate the appearance of cell sites. The ruling, posted minutes ago, is here. The ruling is broader than the lower courts’ opinions, though, and appears to expand the scope for local governments to control the use of public right of ways and issue permits for wireless facilities. More to come…
The federal appellate court review of two Federal Communications Commission rulings that preempt local authority over wireless attachment and wireline excavation permits, and take away local ownership of streetlight poles and similar property will continue, albeit slowly. Yesterday, the ninth circuit court of appeals in San Francisco refused to ice the case completely, as requested by the FCC and as dutifully echoed by wireless carriers.
Instead, the court consolidated the twelve separate appeals of the September wireless attachment order into a single case, and assigned it to the same set of judges who will consider two appeals of the August wireline excavation order. A “special master” was given the job of sorting out the nuts and bolts of consolidating the twelve challenges to the wireless attachment ruling, and combining them with the two wireline excavation appeals.
Conduct a case management conference with the parties. The special master shall consider any issues he deems appropriate to manage the petitions effectively, including but not limited to the development of a briefing plan for the above-listed twelve petitions. The case management conference will be scheduled by separate order of the special master…
Proceedings in these consolidated petitions other than the case management conference are stayed pending the case management conference.
There are what amount to three interlocking cases in play. The cities, counties and associations challenging the September wireless order say that the FCC overstepped its authority in many regards, especially when it declared that municipal poles and other structures in the public right of way don’t belong to the agencies that installed them. The ones challenging the August wireline order make similar arguments about a blanket preemption of local rules regarding when telecoms companies can dig in the street, including seasonal restrictions – working on ice covered streets during spring freeze/thaw cycles, for example, can turn a nice stretch of asphalt into a dirt road.
There’s no hardship, the FCC told the San Francisco-based ninth circuit federal appeals court in its reply. Reiterating arguments it made when it successfully beat back the cities’ request for a judicial stay of the new rules, the FCC said its shot clocks and fee limits are just guidelines, and it’s not actually ordering local governments to do anything…
The Order thus does not compel a locality to take any action unless “a court of competent jurisdiction” independently orders the locality to do so after affording it full legal process and taking into account all relevant facts and circumstances.
Nor is there any reason to assume that, should any disputes arise, localities would necessarily lose such cases. Fees exceeding the Order’s safe harbors “may be permissible if the fees are based on a reasonable approximation of costs and the costs themselves are objectively reasonable.” Similarly, if particular localities are unable to act within the new shot clocks, they may “rebut the presumptive reasonableness of the shot clocks based upon the actual circumstances they face.” Localities thus may continue to charge any fees necessary to cover the full amount of their reasonable and actual costs, and may continue to take as long as reasonably necessary to review new siting applications, simply by explaining why these practices are necessary or appropriate under the particular circumstances they face.
California law also offers local agencies safe harbors, of a sort. The California legislature set 90 and 150 day shot clocks for wireless permit reviews when it passed AB 57 in 2015. Unlike the FCC’s, those shot clocks have teeth – if time expires, permits are “deemed approved”. In theory (it hasn’t been tested yet) it offers a faster path to a wireless permit than a lawsuit.
Two Californian ballot initiatives – propositions 218 and 26 – already limit local government fees to actual expenses, and cities and counties have established procedures for figuring it all out. Even AT&T has acknowledged that Prop 26, particularly, is as good a safe harbor as the FCC figures.
The big problem with the FCC’s September ruling is the way it treats municipal property. The FCC brushed aside common sense and its own previous rulings (do not confuse the two) when it said cities and counties don’t own assets they’ve built in the public right of way – things like traffic signals or street light poles. Instead, the FCC believes that locally owner property is actually part of the public right of way, and can’t be rented out at market rates. Unlike, say, an identical structure two feet away on publicly (or privately) owned land.
Wireless carriers are using the FCC’s ruling as a blunt instrument in negotiations with cities and counties. Even so, the FCC is correct up to a point: there will be no irreparable harm so long as local agencies refuse to be bullied.
The cities and counties that are challenging the Federal Communication Commission’s preemption of local ownership of streetlight poles and other assets located in the public right of way don’t want any delays in their cases. In filings yesterday with the ninth circuit federal appeals court in San Francisco, local agencies objected to the FCC’s request to put everything on hold while it thinks about whether it’s going to reconsider its decision. Which could take months, or longer.
The primary objections came from a large group of agencies led by the City of San Jose. Pointing out that the FCC’s “September order” is already in effect and commissioners are bragging about, the group said it’s now in the court’s hands…
There is no evidence suggesting the September Order is anything other than the final result of its decision-making process. The FCC continues to publicly stand by the September Order as adopted. Commissioner Brendan Carr, who has been leading the FCC’s infrastructure efforts, recently highlighted the September Order in a February 5, 2019 speech, asserting that the agency was “not going to slow down” in its infrastructure efforts, and that the September Order (which had at the time been effective for only 22 days, and then only in part) was already impacting local government practices and wireless deployment. There is no reason, therefore, to suppose that further delay will somehow actually resolve the issues raised in these appeals, or that the September Order on appeal here is anything other than the “final administrative work.”
Some Municipal Parties, consistent with state law and with prior court precedent, charge rent-based fees for commercial use of municipal property. San Francisco, for example, has licensed access to hundreds of its streetlight poles and transit poles for small cell facilities at an agreed-upon rate in excess of $4,000 per year. Demand for access to those poles has continued unabated since the FCC issued the Order. Further, many of those licenses have reached the end of their first year and must be renewed for the agreed-upon license fee. Again, while the Order is in effect, a local government must either comply (e.g., charge only cost-based fees at or below the Order’s presumptive thresholds) or risk litigation over its actions on every wireless siting application it receives, or at renewal of any existing license agreement.
The FCC order took direct aim at agencies like San Francisco that charge what it, and its mobile carrier friends, consider to be exorbitant. As far as the FCC is concerned, $270 per year is sufficient.
For now, the ninth circuit hasn’t ruled on the FCC’s request and the cases are still moving forward.
Dozens of cities, counties and associations sued the FCC, challenging its preemption of local ownership of street light poles and other assets in the public right of way. Several have also asked the FCC to reconsider its September decision, which is a routine administrative request that is routinely denied. But the FCC hasn’t done anything with it yet, and is using its own inaction as an excuse to stall the court case.
The FCC told the ninth circuit federal appeals court in San Francisco that waiting until it’s figured out what to do will make the judges job simpler or more complicated or something…
The FCC’s proceedings on reconsideration may simplify judicial review—either by resolving issues that the Court would otherwise need to address, or by providing additional analysis on issues that ultimately remain in dispute. Equally important, because the agency’s disposition of a petition for reconsideration may give parties a new opportunity to challenge the Order, either in this Court or in another court of appeals where venue lies, allowing the agency to address the petition for reconsideration before these cases proceed would mitigate the possibility of piecemeal (and possibly inconsistent) judicial review.
There’s no indication of how long the FCC wants keep the case on ice. It only promised to check in with the court every couple of months. According to the FCC, local agencies don’t want the case stalled, while the mobile companies who are accused of colluding with the FCC to game the system are happy to let it gather dust for as long as it takes. Forever would probably suit them.
The FCC also asked the ninth circuit to bundle all of the dozen or so separate challenges into a single case. That seems to be less controversial – it’s standard operating procedure in these circumstances – but it’s possible objections could be raised.
It has come to our attention that certain individuals at the FCC may have urged companies to challenge the Order the Commission adopted in order to game the judicial lottery procedure and intimated the agency would look unfavorably towards entities that were not helpful. If true, it would be inappropriate for the FCC to leverage its power as a regulator to influence regulated companies to further its agenda in seeking a more friendly court. To date, four FCC licensees have petitioned the federal judiciary for review of the Order in separate filings and in separate circuits.
Whether or not the four mobile carriers colluded with friends at the FCC to find a friendly court, in the end it didn’t matter. The City of San Jose completed a legal Hail Mary pass and got the all the cases sent to the ninth circuit federal appeals court in San Francisco, which tends to take a more skeptical view of FCC authority.
The mobile companies, which claim the FCC committed a grievous error by not giving them the pink slip along with the keys to the city, are still in a position to disrupt the appeals launched and joined by dozens of cities, counties and associations from every corner of the U.S. To head that off, local governments are asking the ninth circuit to hold a “case management conference”…
Because this case involves appeals by representatives of industry (which argue that the agency did not go far enough in adopting remedies sought by industry) and representatives of local governments and organizations (which argue the FCC’s actions significantly exceeded the agency’s authority), there is also likely to be a more complex pattern of briefs filed in support of, and in opposition to the FCC’s Order than is reflected in a typical agency appeal.
Right now, nine cases – three filed by mobile carriers and six by local governments – are in the San Francisco court, with four more – one by AT&T and three by local governments – apparently inbound from the federal appeals court in Washington, D.C.
The challenge to the Federal Communications Commission’s September Order preempting local ownership and control of municipal property grinds on. The local governments and companies appealing the order, which strips cities and counties of ownership rights to streetlight poles and other such assets in the public right of way, filed brief statements –mediation questionnaires – with the San Francisco-based federal appeals court hearing the case yesterday.
Mobile companies are appealing the order because, they say, the FCC didn’t go far enough and give them everything they wanted. It would be overly optimistic to say the likelihood of the courts agreeing with them is slim. But by filing their appeals, they get a seat at the table so they can, presumably, disrupt the cases brought by local governments.
In its questionnaire, Verizon repeated its amazing argument that the FCC isn’t allowed to not automatically allow it to attach wireless equipment to city poles if the review process takes too long – in other words, if the “shot clocks” expire…
In the underlying Order, the FCC considered state and local regulatory barriers to the wireless infrastructure siting review process, particularly the siting of next-generation infrastructure. The FCC’s refusal to implement the “deemed granted” remedy is arbitrary and capricious in violation of the Administrative Procedure Act, and is an abuse of the Commission’s discretion. It also violates other federal laws, including, but not limited to, the Communications Act of 1934.
Huntington Beach, on the other hand, restated the basic argument it and other local governments have made – that the FCC doesn’t have the authority to confiscate local property…
The Order significantly limits the rights of state and local governmental entities such as Petitioner, City of Huntington Beach, to regulate, and lease its own property for the installation of Small Wireless Facilities (“SWF”) in the public rights-of-way (“ROW”) and on city-owned streetlights, and traffic signals. SWFs will be installed primarily for the deployment of 5G Wireless Networks. The Order is an unlawful pre-emption of local and state government authority.
In the “other thoughts” box on the form, the City of Seattle added that this isn’t the kind of question that’s suitable for mediation…
Every major wireless service and infrastructure provider, hundreds of communities, and many individuals and associations participated in the Commission proceedings which resulted in the Declaratory Ruling and Third Report and Order that is the subject of this appealed. We do not believe it possible that this matter can be resolved through mediation owing to the nature and scope of the issues at hand and the numerous participants.
Mediation, or at least considering it, is a standard step in a federal appeals case. Given the scope of the issues involved and the necessary process at the Federal Communications Commission, it’s a pretty safe assumption that the case will be argued, and not mediated away.
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.