Tag Archives: fcc

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.

Net neutrality ruling sinks FCC local pole ownership preemption theory

by Steve Blum • , , , ,

Although a federal appeals court in Washington, D.C. blessed the Federal Communication Commission’s “2018 Order” repealing network neutrality rules, the judges hearing the case overturned one section that tried to preempt any effort by state or local governments to step into the gap. If the plain language of Tuesday’s opinion is also applied to the FCC’s attempt to preempt local ownership and control of street light poles and other publicly owned assets located in the public right of way, then it’s a slam dunk bet that it’ll be overturned too.

Last year, the FCC issued two far reaching decisions preempting nearly all state and local authority over construction of broadband infrastructure, one dealing with small cell sites and the other dealing primarily with wireline projects. It claimed the authority to do so based on an expansive interpretation of federal communications law that boiled down to we’re in charge of national broadband policy, so what we say goes for everyone.

“No dice”, said the D.C. appeals court. Its opinion made two particular points: 1. congress never gave the FCC the necessary authority to occupy policy territory that legally belongs to states, and 2. if the FCC wants to exercise the authority it does have, it has to do so case by case, by the evidence…

Not only is the Commission lacking in its own statutory authority to preempt, but its effort to kick the States out of intrastate broadband regulation also overlooks the Communications Act’s vision of dual federal-state authority and cooperation in this area specifically. Even the 2018 Order itself acknowledges the States’ central role in “policing such matters as fraud, taxation, and general commercial dealings…remedying violations of a wide variety of general state laws,” and “enforcing fair business practices” — categories to which broadband regulation is inextricably connected…

We have long recognized that “whether a state regulation unavoidably conflicts with national interests is an issue incapable of resolution in the abstract,” let alone in gross…

Because a conflict-preemption analysis “involves fact-intensive inquiries,” it “mandates deferral of review until an actual preemption of a specific state regulation occurs.” Without the facts of any alleged conflict before us, we cannot begin to make a conflict-preemption assessment in this case, let alone a categorical determination that any and all forms of state regulation of intrastate broadband would inevitably conflict with the 2018 Order.

The ninth circuit federal appellate court in San Francisco is hearing the challenges to the FCC’s blanket preemption of local and state authority over right of ways and public property. It’s not obligated to follow the D.C. circuit’s opinion, but given that it has a history of being even more skeptical of federal agency supremacy than its Washington colleagues, it’s heavy odds that it will.

Hope for California’s net neutrality law, as court upholds repeal of federal rules

by Steve Blum • , , , ,

Open internet dont tread on me 2

The Federal Communications Commission’s republican majority acted properly and within the limits of its authority in 2018 when it cancelled network neutrality rules approved in 2015 by the then-democratic controlled FCC. Mostly. A three judge panel on the federal appellate court based in Washington, D.C. – aka the DC circuit – issued its opinion yesterday, providing support for California’s enactment of its own net neutrality rules, but otherwise rejecting most of the arguments made by net neutrality advocates.

But not all. The judges overturned “the portion of the 2018 [FCC] order that expressly preempts ‘any state or local requirements that are inconsistent with its deregulatory approach’”. That action could open the door to state-level net neutrality regulations, similar to what the California legislature enacted last year when it approved Senate Bill 822.

The ink on governor Jerry Brown’s signature was barely dry, when a plague of lobbyists and lawyers descended on Sacramento and challenged the new law in federal court. Yesterday’s ruling removes a major pillar of their case – the FCC’s attempt to specifically preempt state-level action – but they still have a general argument to make, based on federal authority over interstate commerce. Winning that argument will be harder though, because the D.C. circuit opinion resolves a regulatory paradox in California’s favor.

Following the decision, the bill’s author, state senator Scott Wiener, tweeted “SB 822 remains intact & isn’t preempted”.

Even so, SB 822 is in limbo. California attorney general Xavier Becerra agreed not to enforce it while the case against the FCC’s net neutrality repeal was underway. Yesterday’s decision is a major milestone, but not necessarily the last word. Becerra issued a press release claiming victory, but it didn’t mention what he plans to do about reviving and defending SB 822.

The appeals court judges also said the FCC has to flesh out some aspects of its net neutrality decision in light of public safety, pole attachment and lifeline program considerations, ruling in some specific respects the agency’s actions were “arbitrary and capricious”. That’ll be a paper-pushing exercise; any changes that result will almost certainly be minor.

But other than that, the D.C. circuit panel said that the FCC’s rollback of net neutrality rules will stand.

The judges cited more than 20 years of precedent – and back-and-forth FCC decisions – regarding how broadband service is or isn’t regulated. The central question was whether congress gave the FCC the authority to make such decisions, and the judges’ answer is yes. They pointed out that they “do not inquire as to whether the agency’s decision is wise as a policy matter; indeed, we are forbidden from substituting our judgment for that of the agency”. The FCC’s decision has to be “reasonable”, though, and the judges determined that it was. Much of the nearly 200 pages of the opinion was devoted to explaining why. One recurring theme was that, in many respects, the republican-majority FCC simply restored previous, widely accepted rules overturned by the democratic-majority in 2015. The judges also rejected arguments that, as a whole, the FCC’s decision was arbitrary and capricious, although they said in some respects the commission’s work “is no model of agency decision making”.

Yesterday’s decision can be appealed, either directly to the federal supreme court, or by asking all the judges assigned to the D.C. circuit to review en banc the ruling made the opinion of the three judge panel. It could yet be a long time before we get a final answer.

Sprint took megabuck subsidies for inactive lifeline customers, federally and in California

by Steve Blum • , , , ,

Sprint mwca 2018

Sprint could be collecting payments from California’s broadband and telephone lifeline subsidy program for hundreds of thousands of inactive accounts. A Federal Communications Commission press release accuses Sprint of taking “tens of millions of dollars” for 885,000 federally subsidised customers who weren’t using the service anymore. That represents 30% of Sprint’s national lifeline customer base, says the FCC.

Sprint is the 500 pound gorilla of the California Public Utilities Commission’s lifeline program, which supplements the $9.25 monthly federal subsidy with up to $15 per month. According to a brief submitted by the CPUC’s public advocates office during the ongoing review of Sprint’s proposed merger with T-Mobile…

Sprint, through its Virgin Mobile brand, is the only [facilities-based mobile network operator] that participates in the California LifeLine program. Under the trade name of “Assurance Wireless brought to you by Virgin Mobile,” Virgin Mobile serves roughly 482,000 LifeLine wireless customers in California, over 200,000 more customers than the next largest LifeLine wireless carrier, and more than all other LifeLine wireline carriers combined.

If the FCC’s 30% “inactive” rate applies equally to Sprint’s California lifeline base, then the CPUC gave the company subsidies for 145,000 non-existent customers. There isn’t enough information available yet to figure out how much money that represents, but on a back of the envelope basis, 145,000 inactive accounts subsidised at $15 each comes out to about $2.2 million per month. Even given that every payment wasn’t the $15 max, it doesn’t take too many months for California’s outlay to land in the FCC’s “tens of millions of dollars” ballpark too.

The Communications Workers of America union is one of the leading opponents of the T-Mobile/Sprint merger, in California and federally, and has already asked the FCC to put everything on hold “until [Sprint’s corporate] character issue is investigated and resolved”. It’s a fair bet that T-Mobile and Sprint will have to answer for the false billing – Sprint is calling it an “error” dating back to 2016 – as they try to gain CPUC approval for their merger. A hearing to decide next steps in the case is scheduled at the CPUC on 10 October 2019.

FCC’s weed whacker work fails another court test

by Steve Blum • , , , ,

The Federal Communications Commission’s republican majority is now 0 for 2 in federal appeals court challenges to its weed whacker campaign to prune back telecommunications and media regulations. In an opinion released yesterday, the third circuit federal appeals court, based in Philadelphia, voted 2 to 1 to overturn an FCC ruling that loosened restrictions on media ownership, because republican commissioners blew off concerns about the effect it would have on women and minorities. In August, Washington, D.C.-based federal appellate judges overturned an FCC decision that scrapped environmental reviews for small cell site, saying it was “not logical and rational”.

The Philadelphia judges were likewise scathing in their criticism of the process, or lack thereof, that the FCC used in reaching its decision. It’s the second time in two months that federal appellate judges have rejected a controversial, party line FCC ruling because the republican majority did not do its homework…

Problems abound with the FCC’s analysis. Most glaring is that, although we instructed it to consider the effect of any rule changes on female as well as minority ownership, the Commission cited no evidence whatsoever regarding gender diversity…

Even just focusing on the evidence with regard to ownership by racial minorities, however, the FCC’s analysis is so insubstantial that it would receive a failing grade in any introductory statistics class.

The case has to do with how many TV stations a single company can own, and whether a company can own a TV station and a newspaper in the same media market. It’s not an issue I follow closely, so if you want more background on it, take a look at this story on CNET by Marguerite Reardon.

The court’s opinion has broader significance, because it shows an increasing lack of deference to the FCC’s supposed policy expertise and decreasing tolerance for sloppy decision making that begins with an idealogical conclusion and then supports it with sophomoric legal arguments rather than basing it on the evidence in the record. Appellate court challenges to two more FCC rulings – one rolling back Obama-era network neutrality rules and the other preempting local ownership of street light poles and similar infrastructure in the public right of way – are based on similar grounds. A ruling on the net neutrality case could come at any time. The appeals of the right of way decisions still have several months, at least, to run.

Five years and two FCCs later, FTC settles data throttling case against AT&T

by Steve Blum • , , , ,

The slow motion network neutrality enforcement ping pong match between the Federal Communications Commission and the Federal Trade Commission resulted in a data throttling settlement with AT&T, according to a story by Bevin Fletcher in FierceWireless. The details haven’t been released yet, but if approved by FTC commissioners it would end a dispute over how AT&T manages – throttles – the bandwidth consumed by millions of customers with grandfathered unlimited data plans.

AT&T’s mobile data throttling isn’t limited to legacy all-you-can-eat customers, at least according to research published last year, but the FTC’s enforcement action is limited to legacy data plans that are no longer offered.

The dispute tracks with the history of net neutrality regulation. It began in 2014 with a consumer rights lawsuit filed by the FTC against AT&T, when there were no federal rules in effect regarding net neutrality. When the Obama-era FCC declared broadband to be a common carrier service, AT&T’s response was to claim the FTC no longer had jurisdiction…

The agency said AT&T had been throttling speeds since 2011, and in some cases customers’ data speeds were reduced by nearly 90%. AT&T previously said it has been “completely transparent" with customers since starting its unlimited data throttling practices in 2011.

AT&T’s website currently discloses that for unlimited plans “AT&T may temporarily slow data speeds when the network is busy.”

AT&T had also argued the FTC lacked authority under the then-imposed net neutrality regulations enforced by the FCC, which in 2015 reclassified internet service providers as common carrier telecommunications service providers under Title II of the Telecommunications Act.

Then the Trump administration’s FCC reversed that ruling, saying that broadband isn’t a common carrier service, but instead it’s an information service that’s overseen by the FTC. That reversal led to the pending settlement.

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.