A draft ruling by the Federal Communications Commission, if – when – adopted later this month, will preempt local ownership of street light poles and other facilities in the public right of way, and severely limit local discretion over permit fees, requirements and processes. At least that’s the goal the big four mobile carriers – AT&T, Verizon, T-Mobile and Sprint – had when they steamrolled their wish list through the FCC’s broadband deployment advisory committee and, when that wasn’t sufficient, the FCC’s leadership and staff.
It’s not game over. It’s just the first move in what will be a complex, 50-state chess match.
The FCC’s draft rules are based on a single premise: that "a state or local legal requirement constitutes an effective prohibition [of mobile service] 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’”. But that argument cuts both ways.
The first counter argument is that California law – the result of propositions 218 and 26 – creates a safe harbor for permit fees and similar charges. Those voter approved measures mean that fees already meet the FCC’s proposed limit of “a reasonable approximation” of “actual and reasonable costs”. Just because a federal agency with no expertise or authority regarding municipal operations thinks $500 is a reasonable amount to charge to process all permits for as many as five small cell sites, it’s not necessarily so. The FCC can offer a safe harbor, but it needn’t be the only one.
Prop 218 and 26 limits, though, don’t apply to rental rates for public property. California law allows – requires, according to some views – cities to lease municipal assets to private companies at fair market rates.
So, the second counter argument is that the new rules only apply when a local regulation, fee or rental charge effectively prohibits small cell deployment. In California, mobile carriers are allowed to use the public right of way for free, and local governments can only impose reasonable conditions on the “time, place and manner” of construction. That privilege fits snugly inside the FCC’s safe harbor – it’s free and reasonable.
Given that, it’s not a long logical leap to say that since mobile carriers already have free and open access to California’s right of ways, there’s no basis for regulating the use of city-owned assets, such as streetlights, that happened to also be there. In that case, if a court bought that argument, the $270 annual lease rate and other limits on a city’s control of its own property wouldn’t apply.
Other restrictions proposed by the FCC on aesthetics, undergrounding, minimum spacing and other matters currently within a local agency’s discretion are vague. Does the FCC’s opinion that aesthetic requirements can be “no more burdensome than those applied to other types of infrastructure deployments” mean the highest or lowest aesthetic standard established by a city applies? Does the ban on undergrounding requirements only apply when “all” wireless facilities have to be buried, as the FCC’s draft states? Can cities require some components of a “small wireless facility” to be placed underground?
And the questions, and arguments, go on.
There’s a long road ahead before any element of the FCC’s proposed preemption of local ownership and authority is final. The FCC has to adopt it at its 26 September 2018 meeting – a foregone conclusion, to be sure – and then there’s an administrative review within the Trump administration. Once the new FCC rule book clears that hurdle and is published in the Federal Register, it can be challenged by cities in federal appeals courts. Those courts could put the rules on hold until the cases are decided, but even if they don’t the rules have to be interpreted and enforced by judges before having any direct effect on a city.
The interplay of California law and federal statutes and regulations will be complicated and take years to unravel.
Among my other sins, I assist local governments with wireless policy and lease negotiations. I’m not a disinterested commentator. Take it for what it’s worth.