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

18 December 2018 by Steve Blum
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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.