San Francisco is taking the Federal Communications Commission to court. Again. On Monday, the City and County of San Francisco filed a challenge to the FCC’s preemption of its broadband access ordinance with the ninth circuit federal appeals court, also based in San Francisco.
The ordinance requires building owners to allow tenants to buy broadband service from the provider of their choice. Providers are able, under the ordinance, to use any available wiring inside the building that’s owned by the landlord to deliver such service. The FCC ruled earlier this month that San Francisco can’t tell an ISP that’s already using a given wire to deliver service that it has to share it with another ISP. San Francisco’s initial response amounted to duh.
But the ordinance is still under threat, because the FCC continues it’s look into the matter, and could preempt the whole thing. So filing a federal court challenge could be one way for San Francisco to head off any further FCC action.
At this point, San Francisco isn’t saying why it thinks the FCC is out of bounds, except to say it’s aggrieved and to make the ritual claim that the ruling is “arbitrary and capricious”…
San Francisco was party to and actively participated in the underlying proceeding before the FCC that led to the Order, and is aggrieved by the Declaratory Ruling part of Order within the meaning of [federal law].
San Francisco seeks review of the Declaratory Ruling part of the Order because it: (i) was issued in excess of the FCC’s statutory authority; (ii) is arbitrary and capricious and an abuse of discretion; and (iii) is otherwise contrary to law, including the United States Constitution.
San Francisco respectfully requests that this Court hold unlawful, vacate, enjoin and set aside the Declaratory Ruling part of the Order, and grant such other relief as this Court may deem just and proper.
Another ninth circuit case that San Francisco and a long list of other cities and counties are pursuing is the challenge to last year’s preemption of local pole ownership and public right of way control by the FCC. Yesterday, the FCC ask for month’s delay in the case, which was summarily rejected by the ninth circuit. It’ll have to submit it’s reply to the case against it next month.
Jon Brodkin breaks down the back and forth in a good article in Ars Technica. The ruling formally adopted by republican commissions says that San Francisco can’t require one ISP to share wires it’s already using with another ISP. San Francisco’s response amounted to we don’t require that, so what are you all worked up about? FCC commissioner Jessica Rosenworcel, a democrat, voted against the ruling and blasted her colleagues for running scaredf making up rules on the fly…
Our preemption of this municipal ordinance is stunningly weak. We somehow claim we have unfettered authority when it comes to broadband in buildings but disown our general authority over the same in our net neutrality proceeding, where we pronounced broadband beyond the reach of this agency. So this ruling borrows from old cable signal leakage policies to suggest some new theory of preemption is appropriate. This doesn’t add up…
It is not clear this agency even understands the San Francisco law it seeks to preempt. The law prohibits building owners from interfering with the right of tenants to exercise choice when it comes to communications…the FCC contorts this into a non-existent bogeyman, suggesting that the ordinance compels sharing of wiring that is already in use. This is simply not true…Why are we preempting an imaginary possibility in a city ordinance in San Francisco?
The Trump administration’s FCC bases its rollbacks and preemptions on tortured, case by case reasoning that starts with the result desired by the likes of AT&T and Comcast – repealing net neutrality, preempting local ownership of streetlight poles – and proceeds to justify it on the basis of nonsensical, one-off legal theories – Internet address lookup as an information service, use of the public right of way as a quitclaim deed – that a corporate lawyer would only use as a last resort.
Both FCC chair Ajit Pai and commissioner Brendan Carr represented big telecoms companies in their past legal careers, and they act like they still do. Federal appeals courts are reviewing claims that their net neutrality and pole preemption decisions are “arbitrary and capricious”. Their San Francisco ruling belongs on that list.
Democrats in the U.S. house of representatives want to block plans to preempt San Francisco’s broadband access ordinance. Last week, the house voted more or less on party lines to prevent the Federal Communications Commission from implementing new rules that would overturn any local regulations that require landlords to give competitive Internet service providers access to wiring inside their buildings.
Porter defended the San Francisco ordinance, telling Ars, “The communications industry is in dire need of more competition. San Francisco’s Article 52 has been incredibly effective in promoting broadband competition—giving residents the benefit of competition and choice in the market, increasing their service quality while decreasing their monthly bills.”
Porter’s amendment will likely have only symbolic value. The appropriations bill now goes to the U.S. senate, where republicans will almost certainly cut it out, along with all the other policy pronouncements tacked on to the house-approved version. The FCC is scheduled to vote on the specific San Francisco preemption and on beginning the process of writing its own general regulations for MTE broadband next week.
The Federal Communications Commission is preparing to preempt part of a San Francisco ordinance that requires landlords to open up access to existing wiring within a building, and allows any Internet service provider to use it to deliver service to tenants. In a draft ruling released yesterday, the FCC proposes to block any requirement that forces a landlord to share wiring it owns that’s already in use. It would apply to both residential buildings, such as apartments or condos, and office buildings – “multiple tenant environments” (MTEs), as the FCC puts it.
Just in case you were worried that the FCC will stomp all over any local effort to improve access to broadband service, the draft also declares that it does not “preempt state and local efforts to promote facilities-based broadband deployment and competition”.
Well, not really.
In language that would do George Orwell proud, the FCC’s draft says it’ll only preempt local initiatives that “contravene federal law and policy”. Since the FCC reckons that it’s in charge of making federal telecoms policy, it’s actually saying if we don’t like it, we’ll preempt it.
The draft is clear that the FCC doesn’t think the City and County of San Francisco should have any say about who can use whom’s facilities, but for now the preemption would be limited to rules about wires are in use. If a customer in San Francisco, say, cancels broadband service from Comcast but keeps video service, then a competitive ISP wouldn’t also be able to use the wiring that serves the apartment. On the other hand, if the customer cancels all services and there’s unused coax between the apartment and a telecoms closet, then the landlord is still obligated to lease it to a competitive ISP of the tenant’s choice. For now.
San Francisco’s ordinance requires landlords to allow tenants to buy broadband service from any ISP, via existing wiring if that’s the most desirable way. ISPs have to pay “just and reasonable compensation” for the use of those facilities, and follow particular procedures for giving notice to landlords, but at the end of the day they can come in.
The San Francisco preemption and the pledge to only preempt things it doesn’t like are just a couple of items in a long to do list in yesterday’s draft. The FCC also plans to take a broad look at the relationship between telcos, cable companies and independent ISPs, landlords and tenants. Assuming commissioners vote to approve it at their meeting next month – which is a pretty safe bet – they’ll ask for public comments what else they might do to “accelerate the deployment of next-generation networks and services within MTEs” and on “the impact that revenue sharing agreements between building owners and broadband providers, exclusivity agreements regarding rooftop facilities, and exclusive wiring arrangements have on broadband competition and deployment”.
San Francisco’s options, according to the report, range from continuing to arm wrestle with PG&E, to building some limited extensions of existing city-owned electric distribution lines, to simply taking over PG&E assets and operations…
The City can completely remove its reliance on PG&E for local electricity services through purchasing PG&E’s electric delivery assets and maintenance inventories in and near San Francisco, and operating them as a public, not for profit service. The City will pay PG&E a fair price for the assets that reflects asset condition. In this option, the City will also offer jobs to PG&E’s union and other employees who currently operate the grid.
This option would also involve bundling in the City’s limited municipal electric system and customers from the City’s community choice aggregator, one of many such county and regional-level agencies created in California to serve as a middle man between investor-owned utilities, such as PG&E, and electric customers.
The three biggest questions – how to convince PG&E to sell, how much would it cost and how would it be paid for – are left hanging. Presumably, the federal bankruptcy judge in charge of PG&E’s restructuring will have something to say about it all. The price of a buyout is described as “dependent on fair market value analysis; could be a few billion dollars initially”. The report is even more opaque about what happens after “initially”.
The money “would be revenue bond‐funded by the SFPUC using its borrowing authority”. That means that the City would repay bond obligations with the revenue collected from electric customers, after it pays its own expenses. The report estimates that gross revenue would be in the $500 million to $750 million range, but doesn’t try to figure out how much of that would be available to pay back the “few billion dollars” it would have to borrow.
Broadly speaking, there are two kinds of revenue bonds: those that are backed by taxpayer money and those that aren’t. If the former, any shortfall in revenue (or cost overruns) would come out of the City’s budget. If the latter, the bondholders could, ultimately, be stiffed. Which might seem like a fine thing to some, except that the greater risk is offset by higher interest rates on the money that’s borrowed, which in turn will be paid by electric customers through higher rates. Although it would technically be a not-for-profit business, it would have to generate a sufficient surplus – a profit in everything but name – to make those payments.
This is the second time in as many years that the City and County of San Francisco has looked at operating a major utility. Last year, the City floated a proposal to build and operate a citywide fiber to the premise broadband system, that would have cost a couple of billion dollars. That project was shelved shortly after Breed won the mayor’s job in a special election.
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 California Supreme Court is about to rule on whether California law allows cities to regulate the appearance of cell sites. It posted a notice earlier today that a decision will be published at 10am tomorrow (Thursday, 4 April 2019). Background on the case is here. The key question: does mobile infrastructure that offends local aesthetic sensibilities “incommode the public use” of the public right of way? A California appeals court said yes, it does. T-Mobile, Crown Castle and Extenet beg to differ. We’ll get the final California word tomorrow. Stay tuned.
The Office of Contract Administration sent a June 13 letter to the three bid teams informing them of the delay. “The City and County of San Francisco has decided to further consider factors essential to the success of the project prior to issuing a Request for Proposals (RFP),” the letter said. “Given the groundbreaking nature, complexity, and cost of this project, it is important that we reduce uncertainties to the extent possible prior to issuing an RFP.”
The letter continued, “In the coming months, the City intends to research a number of factors, including how market conditions and the construction environment would affect the project.”
Ferrell iced the project because a poll showed that voter approval of a tax increase “was just short of the two-thirds needed to pass”, according to the Examiner. Perhaps. It’s also relevant that Ferrell will soon hand over the mayor’s job to London Breed, who won the job in a special election earlier this month. She hasn’t said yet what she plans to do and all Ferrell can say is that he’s leaving behind a “briefing binder”. Translation: they’re not besties.
Three teams were in the running to manage, operate and, perhaps, partly fund the project. At least two were led by local Internet service providers, Monkey Brains (with the assistance of Black and Veatch, Nokia and Zayo) and Sonic.net. The third contender is list only as “FiberGateway”. There’s no obvious broadband company that goes by that, but for what it’s worth, Altice, a mid sized cable operator with a relative handful of systems in California, uses it as a product name.
The City and County of San Francisco is still tight-lipped regarding details of its $2 billion fiber-to-the-premise project, but its latest cryptic update indicates that the scheduled one-on-one interviews with potential bidders are complete and the first cut was made.
Notice of Pre-Qualified Bidders for Citywide Fiber to the Premises Network, Lit Fiber and Wi-Fi Services RFQ
The City has completed its evaluation of Citywide Fiber to the Premises Network, Lit Fiber and Wi-Fi Services RFQ. Respondent Teams that are selected and placed on the pre-qualified bidders list are not guaranteed a contract. The following Respondent Teams have been selected:
Bay City Broadband Partners FiberGateway Sonic Plenary SF Fiber
Protests of the Pre-Qualified Bidders for this RFQ must be received…no later than 12:00 P.M. (PST) on April 26, 2018.
Before the interviews, the City acknowledged that four groups were in the hunt. This latest list is missing Golden Gate Broadband Partners, of which no public information or even basis for speculation exists. Same story with FiberGateway, unless you count the fact that a cable operator, Altice, uses it as a brand name.
The three remaining contenders are still a long way from getting any kind of a contract. Later this year, the City will issue a formal request for proposals, and only the three blessed “respondent teams” will be eligible to bid. Although the City indicated it would be contributing money to the project, it hasn’t said how much.