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

20 December 2018 by Steve Blum
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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.