Tag Archives: small cells

Schedule set for appeals of FCC local pole ownership preemption

by Steve Blum • , , , ,

Riverside pole mount

The federal appeals court in San Francisco set 5 April 2019 as the filing date for opening briefs in the nine challenges it’s received, so far, to the Federal Communications Commission’s September order preempting municipal ownership of streetlight poles and other potential wireless assets in the public right of way.

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.

In the meantime, the FCC wireless order is in effect. At least to the extent that it has effect, which is not as much as mobile carriers would like cities to believe.

FCC’s streetlight ownership preemption takes little effect today

by Steve Blum • , , , ,

The Federal Communications Commission’s order preempting local ownership of streetlights and other municipal property in the public right of way is now active. What does it mean to cities? Nothing much, according to a court filing by the FCC

The Order does not itself require localities to do anything, nor does it compel approval of any particular siting request; it simply articulates standards for courts to apply if and when they are confronted with any future siting disputes that might eventually arise…nor does it prevent localities from recovering all of their actual and reasonable costs…

The Order’s safe harbor for recurring fees up to $270 per small cell per year is not a “limit o[n] compensation” above that amount, as Movants wrongly assert; rather, the Order makes clear that localities may charge higher fees if a reasonable approximation of their costs exceeds that amount.

When the Order takes effect, the only consequence is that carriers may submit new requests to be processed under these standards. If a locality does not timely grant a request, the carrier must allow at least sixty days to elapse before seeking judicial review. A court must then determine whether the locality has violated the statute under the particular facts presented and whether relief is warranted—determinations that “remain within the courts’ domain.” The Order will thus have no compulsory effect until the affected locality has an opportunity to justify its decision before a “court of competent jurisdiction.”

The FCC made these statements in its successful opposition to a request by a group of local agencies, led by the City of San Jose to put the “September Order” on hold. The federal appeals court based in Denver denied the group’s request last week, saying it “failed to meet their burden of showing irreparable harm if a stay is not granted”.

Both AT&T and Verizon signalled that they intend to take a more aggressive attitude towards cities once the FCC order is, in theory, in effect. But as the FCC itself points out, there’s no urgent need to humor them. Yet.

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

My clients are mostly California cities, including some that are directly involved in this case. I’m not a disinterested commentator. Take it for what it’s worth.

FCC local pole preemption order set to take effect Monday, as federal court denies San Jose’s request to delay implementation

by Steve Blum • , , , ,

The Federal Communications Commission’s preemption of local ownership of streetlight poles and other “vertical assets” appears set to take effect on Monday, 14 January 2019. The tenth circuit federal appeals court in Denver denied a request by the City of San Jose and other cities to put the FCC order on hold while court cases move ahead. In a separate action, the tenth circuit also transferred the long list of appeals to the ninth circuit federal appeals court in San Francisco.

FCC pole preemption appeals leave Denver via loophole, land in San Francisco

by Steve Blum • , , , ,

San francisco skyline 625

Update, 11 January 2019: the federal tenth circuit court of appeals denied a request by the City of San Jose and other cities to delay implementation of the FCC’s September preemption order. It is still scheduled to take effect on Monday.

The growing list of challenges to a Federal Communications Commission decision to preempt local ownership of streetlight poles and other municipal property located in the public right of way will be decided by the San Francisco-based ninth circuit federal appeals court.

Originally, the cases were assigned by lottery to the federal tenth circuit court, headquartered in Denver. But a coalition of local governments led by the City of San Jose argued an earlier appeal of a separate but related FCC order – aka the August order, which dealt primarily with wireline issues – should take precedence as the lead case. Yesterday, the Denver appeals court agreed that the FCC’s wireless deployment order, aka the September order, which took away any ownership rights cities might have over streetlight poles is inextricably intertwined with it…

After careful consideration, we conclude that the FCC’s August Order and its September Order are the “same order” for purposes of [federal law]. Accordingly, the motion to transfer is granted and these matters are transferred to the United States Court of Appeals for the Ninth Circuit.

It’s good news for cities, counties and other local agencies, and bad news for the unholy alliance of republican FCC commissioners and mobile carriers. In the past, the ninth circuit has taken a more narrow view of what qualifies as an effective prohibition on broadband deployment. That question is central to the case against the September wireless order: the FCC claims its authority to preempt local property ownership is based on a federal law that says that state and local governments can’t “prohibit or effectively prohibit” broadband companies from building infrastructure or offering service.

The decision to send the challenges – there are at least nine, encompassing dozens of local governments and organisations – to San Francisco could create a bit of a mess for the next few days. The FCC’s wireless order is due to take effect on Monday. One request to put the order on hold was filed in St. Louis, and similar motions are expected from other challengers. That’s a lot of work on short notice.

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

Order transferring appeals of FCC “September Order” to Ninth Circuit, by Tenth Circuit, U.S. Court of Appeals

My clients are mostly California cities, including some that are directly involved in this case. I’m not a disinterested commentator. Take it for what it’s worth.

FCC’s economic illiteracy on display in muni property preemption fight

by Steve Blum • , , , ,

Sometimes the real story is in the footnotes. That’s the case with a Federal Communications Commission denial of a request to delay enforcement of its September order that would, if upheld by federal courts, take away property rights from local governments. In the denial, the FCC tries to make its case with economic nonsense: that the market value of an asset is only determined only by its “actual and direct costs”.

The market value of anything is determined by the balance between its perceived worth to the buyer and the seller. In a competitive market, the perceived worth to the seller is based primarily on two factors: the cost to make one more of the item and the profit the seller needs to stay in business. The seller’s opinion of the value the buyer places on the item also plays a role.

The FCC’s argument focuses on a single sell-side factor, ignores everything else – including buy-side valuation – and conflates practical competition with a perfectly competitive market (a mythical beast much beloved by theoretical economists).

It’s the buy-side valuation, which is based on the buyer’s expectation of generating a return from ownership of the asset, that allows a seller to legitimately maximise profit in a normally competitive market.

In the September wireless order, the FCC said that any city or county-owned assets (e.g. light poles) that are located in the public right of way and useful to mobile broadband companies, don’t actually belong to local agencies. Instead, those assets are supposed to be made available on an open access basis, under the same cost-based terms that apply to, say, installation of a utility pole.

Over the past couple of years, Californian cities and the mobile industry – carriers and infrastructure companies – have been negotiating deals for bulk leases of street lights and other municipal assets. Some cities can command a higher price than others. In and around Silicon Valley, $1,500 per pole per year is a rate that’s often mutually agreeable. In other parts of the state, the figure can be more or, usually, less than that. The amount of revenue that a carrier expects to generate from the pole leases is a major factor.

Artificially lowering the price to $270 per year, as the FCC is attempting to do, amounts to a subsidy, extracted from a city and given to a private company that would otherwise be willing to pay more, based on its profitability expectations.

Contrary to what the FCC states, there is a competitive market for pole access. Mobile carriers can install utility poles in the public right of way, lease space on private property or share facilities with their competitors. Using existing light poles is not a requirement, it’s a cost saving measure. By negotiating a price with a city – which would not want to see more poles cluttering up the right of way or to lose out on revenue – the benefits are fairly split between the buyer and the seller.

Profit is dirty word in the public sector and euphemisms such as “surplus” or “deferred spending” are usually employed. But whatever you call it, it’s a completely legitimate – and sometimes legally required – goal for a city.

Overturning FCC local pole ownership preemption seems easier in San Francisco

by Steve Blum • , , , ,

The Federal Communications Commission “seeks to redefine the relationship between state and local governments and telecommunications providers” with a new and expansive interpretation of federal law, according to a group of local agencies challenging an order that preempts local ownership of light poles and other municipal property located in the public right of way. The group, led by the City of San Jose, wants the case moved from the federal appeals court in Denver, to the ninth circuit appeals court in San Francisco.

Firing back at mobile carriers and the FCC, who oppose the move, the San Jose group said that the big question in the case – regarding what “prohibit or effectively prohibit” broadband deployment means – is the same as in an appeal of an earlier FCC order that’s being heard in San Francisco. Federal law says state and local governments can’t block – effectively prohibit – wireless infrastructure deployment. The wrangling now is about defining when the prohibition threshold is crossed…

[The FCC] interpretation finds an effective prohibition where a requirement inhibits, inter alia, “improvements to service,” or imposes costs that may prevent a provider from investing in deployment in other areas…

[This] new interpretation put forth by the [FCC] Orders conflicts with Ninth Circuit…precedent holding that the plain language of [federal telecoms law] require an actual prohibition; speculative impacts or mere barriers are not enough.

On the other hand the Denver appeals court – the tenth federal circuit – set a lower bar. According to the FCC, the Denver court believes a local ordinance fails the test if it “materially limits or inhibits the ability of any competitor or potential competitor to compete in a fair and balanced legal and regulatory environment”. Clearly, the FCC and its telecoms industry friends would rather be held to the Denver court’s standard. Equally, San Jose and its allies have reason to prefer San Francisco.

It’s now up to the Denver court to decide where the challenge to the FCC order, which takes effect in less than three weeks, will be heard.

My clients are mostly California cities, including some that are directly involved in this case. I’m not a disinterested commentator. Take it for what it’s worth.

Muni property rights are written into federal law and FCC decisions, North Little Rock tells appeals court

by Steve Blum • , , , ,

Burlingame poles

The case against the FCC’s preemption of local property ownership is taking shape. The first city to ask federal appellate court judges to put the FCC’s September wireless order on hold while legal wheels grind is North Little Rock, Arkansas, in partnership with a Missouri muni utility association.

Most of North Little Rock’s arguments are specific to municipal electric utilities. Federal law exempts municipal utilities from FCC pole attachment oversight. Muni electric utilities also have to follow more rigid safety requirements – working on high voltage lines is a dangerous job – and they have long-established procedures for working with telecommunications companies, wired and wireless alike.

One central argument, though, applies to any kind of municipal property and will be repeated many times by the other cities that are challenging the FCC order, whether or not they’re in the electric business. That argument is that FCC went way beyond the limits of its authority when it said that cities don’t have property rights over assets they build, maintain and own. The FCC, North Little Rock claims, “ignores the plain language” of federal law and “it’s own prior rulings”…

[Federal telecoms law] only applies to local and state governments acting in a governmental, regulatory capacity, so the Commission has no authority to regulate municipal utilities when they operate in a proprietary capacity.

Recognizing the regulatory versus proprietary distinction, the Commission and courts have previously concluded that these [sections of federal law] relate to state and local governments when they are acting in their regulatory capacity — e.g., issuing permits for the use of the public right of ways — as opposed to when they are acting in a proprietary capacity, such as when they lease or rent utility facilities or property. Further, the Commission recognizes this distinction as evidenced by one of its prior decisions in 2014, when it stated that neither [of those sections] apply to the "non-regulatory decisions of a state or locality acting in its proprietary capacity.”

The FCC’s September wireless order also tries to limit state and local discretion over when, where and how wireless facilities can be installed in the right of way, either directly or on privately owned infrastructure. The agency is on firmer legal ground when it’s regulating the regulators. Past federal court decisions have deferred to the FCC’s judgement in many instances. North Little Rock’s motion properly re-draws a clear line between regulation and property rights and ownership that the FCC wants to erase.

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

FCC and friends want to keep muni pole ownership preemption challenges in Denver

by Steve Blum • , , , ,

Neither the Federal Communications Commission or mobile telecoms companies want to go to San Francisco to defend the agency’s preemption of local ownership of municipal property in the public right of way. They want to keep the growing list of appeals court challenges to the FCC’s September wireless deployment order in Denver.

In separate, but very similar, rebuttals the FCC and the beneficiaries of its generosity argued that the cases shouldn’t be transferred to the ninth circuit federal appeals court in San Francisco, as requested by the City of San Jose and its partners. San Jose based its claim on the notion that its appeal and the City of Portland’s appeal of an earlier but related FCC ruling (dealing with wireline broadband deployments) were really the same things.

In its filing yesterday, the FCC said that the wireline order and the wireless order

…do not constitute “the same order” because they each address separate and discrete subjects. The [wireline order] addresses federal pole attachment rules…and state and local moratoria on new wireline and wireless infrastructure through explicit or de facto refusals to allow deployment. The [wireless order], by contrast, does not relate to either state or local moratoria or pole attachment rules, nor does it apply to wireline facilities. Rather, it addresses three discrete subjects in the specific context of small wireless facilities: fees and charges assessed by state and local governments, aesthetic requirements and similar issues, and timelines for state and local authorizations.

It’s now up to the federal appeals court judges in Denver to decide who has it right.

The list of known challengers to the FCC’s preemption order is also getting longer. The City of Eugene, Oregon (along with two other cities), the City and County of San Francisco, the City of North Little Rock, Arkansas (jointly with a muni utility association), and Montgomery County, Maryland filed their appeals in various federal courts around the U.S. The FCC filing says all are supposed to be consolidated into the Denver proceeding, as will the other cases pending in Washington, D.C.

North Little Rock also took the honor of being the first to formally ask a federal appeals court to issue a stay and put the FCC’s ruling on hold.

Responses to San Jose’s request to move the cases to San Francisco
FCC
Mobile companies and lobbyists
Seattle

New petitions appealing the FCC’s September wireless decision
Eugene, et al
San Francisco
North Little Rock, et al
Montgomery County

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

The rent in our contract is more than the FCC likes, so rip it up, Verizon tells city

by Steve Blum • , , , ,

Chevy chase chainsaw

Verizon is waving the Federal Communications Commission’s pole ownership preemption order like a chainsaw as it tries to shred existing lease contracts it signed, but doesn’t like. In a request to put that order on hold, the City of North Little Rock included a copy of a letter it received from Verizon, in response to a wireless ordinance it adopted in July.

In it, Verizon told the city…

We’ve also compared our existing Master Lease Agreement (“MLA”) with the City to the FCC Order. As an initial matter, we note that the base rent amount of $2500 as well as the 10% increase of the rent during each extension term exceeds the presumptively reasonable rates established in the FCC Order, as outlined above. Thus, we’re hopeful that the City will re-examine each fee imposed by the MLA accordingly.

The FCC order attempts to set a “safe harbor” limit of $270 per site per year for pole attachment leases, but doesn’t say anything about existing, valid contracts between cities and carriers. Verizon isn’t exactly saying that it’s no longer obligated to follow contracts it doesn’t like, but it clearly intends to stretch the language of the FCC order as far as it can get away with doing.

For example, Verizon’s letter also claims…

  • A 35 foot height limit on wireless attachments to city-owned poles – enacted to protect electric workers – is illegal “because such limitation is ”more burdensome than those the state or locality applies to similar infrastructure deployments". Verizon offered no support for that statement.
  • The total fees charged by the city, on a one time and annual basis, “are inconsistent with the FCC Order because such fees exceed the allowable thresholds”. The FCC most recently characterised those thresholds as “only safe harbors”.
  • A rule that says that companies can only apply for “a maximum of twenty-five locations” at once could be “a direct prohibition on the deployment of wireless services”.

Along with the Missouri Association of Municipal Utilities, North Little Rock filed its appeal and “motion for stay” on Friday, in a St. Louis-based federal appeals court. It’s the first city to formally ask a federal court to delay the implementation of the FCC’s order, which is otherwise scheduled to take effect on 14 January 2018.

Dozens of other cities have also challenged the FCC order, and more requests for a stay are expected. At present, all the cases – thirteen, according to the FCC – involving dozens of cities are in the process of being “consolidated” in the federal tenth circuit appeals court, headquartered in Denver.

North Little Rock and Missouri Association of Municipal Utilities, motion for stay pending appeal of FCC wireless ruling and order, 14 December 2018.

Verizon letter to North Little Rock City Attorney, 5 December 2018.

Small Wireless Communication Facility Regulation, City of North Little Rock, 23v July 2018.

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

More cities join the court battle against FCC muni property preemption ruling

by Steve Blum • , , , ,

Riverside pole mount

More than two dozen eastern, midwestern and Texan cities jumped into the court fight against the Federal Communications Commission’s preemption of local ownership of street light and other municipal property planted in the public right of way. The group, led by the City of Austin, filed its paperwork in the federal appeals court headquartered in the District of Columbia.

If I’m counting right, the deadline has now passed for any additional appeals, but there’s always the opportunity to join the fun as an intervenor, as the City of New York did. The Austin case, as well as appeals filed by AT&T and a group of municipal electric companies, are still in the D.C. circuit.

The group led by the City of San Jose also put down a marker in the DC court, asking for permission to participate in the cases there, pointing out that “local governments were consistently at odds with AT&T in the proceeding before the Commission, and do not expect AT&T to share their interests in this litigation”. Ya think?

San Jose’s entry into the DC case is presumably a precautionary measure – the expectation is that all the cases will be bundled together and heard by the tenth circuit federal appellate court, which is based in Denver. That’s where a federal judicial panel decided, by lottery, to send the appeals filed by the San Jose and Seattle-led groups, the City of Huntington Beach, Sprint, Verizon and the Puerto Rico Telephone Company.

Maybe.

A request by San Jose to move the case to San Francisco is still being considered by the Denver judges. Another related matter is under consideration by the federal appeals court based there. All this needs to be sorted out quickly. The FCC’s wireless preemption ruling takes effect in less than a month, on 14 January 2019.

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