TR Daily D.C. Circuit Vacates Part of FCC’s Small Cell Order
Friday, August 9, 2019

D.C. Circuit Vacates Part of FCC’s Small Cell Order

A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit today vacated a portion of an FCC order that exempted small cells from environmental and historic preservation reviews, while affirming provisions dealing with tribal review under the National Historic Preservation Act and the promulgation of the order itself.

Today’s decision in “United Keetoowah Band of Cherokee Indians in Oklahoma et al. v. FCC” (consolidated cases beginning with no. 18-1129) was a partial victory for tribes and the Natural Resources Defense Council, which had challenged a second report and order adopted by the FCC in WT docket 17-79 last year (TR Daily, March 22, 2018). It was one of several orders the Commission has advanced to streamline the deployment of wireless infrastructure, including small cells.

The order clarified that the deployment of small cells does not constitute a “federal undertaking” under the NHPA or a “major federal action” under the National Environmental Policy Act (NEPA).

For traditional, large-cell deployments, the order clarified the industry-tribal engagement process under NHPA, including shortening the time for tribal review, and ruled that companies are not required to pay tribes upfront fees for reviewing projects. The order also removed the requirement that applicants submit environmental assessments (EAs) because a proposed facility is in a floodplain if the facility is at least one foot above the base flood elevation. It also adopted a shot clock for the FCC’s processing of EAs.

A myriad of tribal entities argued that the FCC’s order posed “a grave threat to Tribes’ ability to protect irreplaceable historic and cultural properties.” The tribes argued that the FCC’s factual findings were not supported by the record or logic. Also, the tribes argued that the FCC violated section 106 of NHPA, which requires agencies to “take into account” the effects of any “undertaking,” including any federally licensed activity, on Tribal historic properties.

The tribes also argued that the FCC’s modification of its regulations to exclude small cells from preconstruction review based on size was arbitrary and capricious; the FCC’s reversal of policies regarding macro towers was arbitrary and capricious; and the FCC arbitrarily and capriciously failed to engage in meaningful consultation with tribes.

In response, the FCC argued that it “reasonably concluded that the private deployment of small cells is neither a federal undertaking within the meaning of the NHPA nor a major federal action within the meaning of NEPA. The FCC does not issue licenses, construction permits, authorizations, or otherwise control the deployment of small cells. Rather, the FCC licenses a separate project — wireless transmissions — under a ‘geographic area service license’ that does not specify where and how any particular facilities are to be deployed.”

The oral argument in the case was held in March (TR Daily, March 15).

“We grant in part the petitions for review because the Order does not justify the Commission’s determination that it was not in the public interest to require review of small cell deployments,” the court said in the opinion released today, which was written by Circuit Judge Cornelia T.L. Pillard and joined by Circuit Judge David S. Tatel and Senior Circuit Judge Harry T. Edwards. “In particular, the Commission failed to justify its confidence that small cell deployments pose little to no cognizable religious, cultural, or environmental risk, particularly given the vast number of proposed deployments and the reality that the Order will principally affect small cells that require new construction. The Commission accordingly did not, pursuant to its public interest authority, 47 U.S.C. § 319(d), adequately address possible harms of deregulation and benefits of environmental and historic-preservation review. The Order’s deregulation of small cells is thus arbitrary and capricious. We do not reach the alternative objections to the elimination of review on small cell construction. We deny the petitions for review on the remaining grounds.”

The court vacated the order’s removal of small cells from the FCC’s limited approval authority and remanded the case to the FCC.

“The Order did not follow the processes for a programmatic agreement under the NHPA, a categorical exclusion from NEPA, or any other wholesale or aggregated form of review, but simply eliminated NHPA and NEPA review on most small cells by removing them from the FCC’s limited approval authority,” the court noted. “Small cells had not previously been defined or regulated separately from macrocell towers.”

“The Commission failed to justify its determination that it is not in the public interest to require review of small cell deployments,” the opinion added. “We therefore grant the petitions in part because the Order’s deregulation of small cells is arbitrary and capricious. The Commission did not adequately address the harms of deregulation or justify its portrayal of those harms as negligible. In light of its mischaracterization of small cells’ footprint, the scale of the deployment it anticipates, the many expedients already in place for low-impact wireless construction, and the Commission’s decades-long history of carefully tailored review, the FCC’s characterization of the Order as consistent with its longstanding policy was not ‘logical and rational.’ … Finally, the Commission did not satisfactorily consider the benefits of review.”

The ruling said that “the Commission inadequately justified its portrayal of deregulation’s harms as negligible. The FCC partly based its public-interest conclusion on a picture of small cells that the record does not support. It described small cells as ‘materially different from the deployment of macrocells in terms of . . . the lower likelihood of impact on surrounding areas.’ Order ¶ 41. In its brief, the Commission sums up its explanation of the difference: ‘small cells are primarily pizza-box sized, lower-powered antennas that can be placed on existing structures.’ Resp’t Br. 3; see also Order ¶¶ 66, 92. It likened small cells to small household items that operate on radiofrequency such as ‘consumer signal boosters [and] Wi-Fi routers,’ which do not undergo review. Order ¶ 66. Small cells are, to be sure, quite different from macrocells in many ways, but the Commission fails to address that small cells are typically mounted on much bigger structures, and the Order is not limited to deployments on structures that already exist or are independently subject to review. Small cells deregulated under the Order can be ‘mounted on structures 50 feet or less in height including their antennas’ or ‘mounted on structures no more than 10 percent taller than other adjacent structures.’ 47 C.F.R. § 1.1312(e)(i). That makes them crucially different from the consumer signal boosters and Wi-Fi routers to which the FCC compares them.

“The scale of the deployment the FCC seeks to facilitate, particularly given its exemption of small cells that require new construction, makes it impossible on this record to credit the claim that small cell deregulation will ‘leave little to no environmental footprint,’” the court added, citing an estimate that 800,000 small cells could be deployed by 2026.

“The Commission also failed to assess the harms that can attend deployments that do not require new construction, particularly the cumulative harms from densification,” the court said.

“The FCC does not reconcile its assertion that planned small cell densification does not warrant review because it will ‘leave little to no environmental footprint’ with the Order’s principal deregulatory effect of eliminating review of precisely the new construction and other deployments that the Commission previously considered likely to pose cultural and environmental risks,” the court also said. “The Commission already had in place NEPA categorical exclusions and NHPA programmatic agreements covering most collocations — as well as other kinds of deployments unlikely to have cultural and environmental impacts. What the new Order accomplishes, then, is to sweep away the review the Commission had concluded should not be relinquished.”

The court also said that “in sweeping away wholesale the review it had preserved for the small cell deployments most likely to be disruptive, the Order is not, as the FCC asserts, ‘consistent with the Commission’s treatment of small wireless facility deployments in other contexts,’ but directly contrary to it. Order ¶ 42. We observe by way of example the Commission’s assertion that ‘under the Collocation [Agreement], the Commission already excludes’ from NHPA review ‘many facilities that meet size limits similar to those’ of small cells. Id. As the Commission sees it, the Order thus ‘builds upon the insight underlying these existing rules that small wireless facilities pose little or no risk of adverse environmental or historic preservation effects.’ Id. But the Collocation Agreement exclusion was defined not just by size, but by other characteristics that minimized the likelihood of cultural harm. The section of the Collocation Agreement the FCC cites in fact only excludes from individualized NHPA review ‘small wireless antennas and associated equipment on building and non-tower structures that are outside of historic districts and are not historic properties,’ which include property of religious and cultural importance to Tribes.”

“By ignoring the extent to which it had already streamlined review, the Commission also overstated the burdens of review,” the opinion added. “It said it could not ‘simply turn a blind eye to the reality that the mechanical application of [limited approval authority] requirements to each of [the] small deployments’ necessary for 5G ‘would increase the burden of review both to regulated entities and the Commission by multiples of tens or hundreds.’”

Moreover, “given that only the most vulnerable cases were still subject to individualized NHPA or NEPA review, the Commission did not adequately address either the possible benefits of retaining review, or the potential for further streamlining review without eliminating it altogether. It dismissed the benefits of historic-preservation and environmental review in a two-sentence paragraph, describing most of the comments that highlight those benefits as ‘generalized’ and the comments that point to specific benefits as ‘few.’ Id. ¶ 78. Characterizing a concern as ‘generalized’ without addressing that concern does not meet the standard of ‘reasoned decisionmaking.’”

But the court rejected the arguments of petitioners concerning tribal involvement in the section 106 review process, saying that the order’s “shortened timeline for Tribal response is reasonable and sufficiently explained,” “the Order permissibly confirms that upfront fees for Tribes to comment on proposed deployments are voluntary,” and provisions regarding non-tribal consultation concerning the historic and cultural significance of sites have not been shown to be arbitrary and capricious.

The court also rejected arguments that the FCC violated the law in the way it went about adopting the order.

“All petitioners argue that the promulgation of the Order itself violated the law. Keetoowah and Blackfeet argue that the Commission violated its duty to consult with Tribes, as established by the Tribes’ sovereign status and the government-to-government relationship recognized in Article I, Section 8 of the Constitution, the NHPA, and the Commission’s regulations. See Keetoowah Br. 40-42; Blackfeet Br. 20-21. The NRDC argues that the Order itself was a major federal action that required NEPA review. See NRDC Br. 10-11. Because the Order documents extensive consultation with Tribes, we reject the first contention. We lack jurisdiction to consider the second because the NRDC forfeited it by failing to raise it to the Commission,” the court said.

An FCC spokesman declined to comment on today’s court ruling.

In a statement, Commissioner Brendan Carr, who is the point person at the agency on wireless infrastructure issues, emphasized that the court refused to vacate the entire FCC order.

“I am pleased that the court upheld key provisions of last March’s infrastructure decision,” he said. “Most importantly, the court affirmed our decision that parties cannot demand upfront fees before reviewing any cell sites, large or small. These fees, which had grown exponentially in the last few years, created incentives for frivolous reviews unrelated to any potential impact on historic sites. Those financial incentives are gone, and we expect our fee restrictions to continue greatly diminishing unnecessary and costly delays. I’m also pleased that the court affirmed our accelerated timelines for reviews. Already, these reforms have resulted in significant new builds. We are reviewing the portion of last March’s decision that the D.C. Circuit did not affirm and look forward to next steps, as appropriate.”

Several attorneys for tribal petitioners welcomed the decision.

“The DC Court of Appeals held that the FCC Order was arbitrary and capricious and, thereby, implemented the original intent of Congress under the National Historic Preservation Act. This original intent requires meaningful consultation with Indian Tribes before any such build out can occur on historic and/or sacred lands,” said Scott Sypolt, a partner at Akerman LLP. “The Court Record made clear that Tribes have never stood in the way of economic development and that their action was solely intended to protect historic and sacred lands for future generations of Americans. Further, the Court made it clear that even those sections of the Order that were upheld had to be implemented without any damage to the Tribes and to the lands they were trying to protect. On remand, the Tribes will stand ready to work together in a collaborative and cooperative manner.”

Natalie Landreth, a senior staff attorney for the Native American Rights Fund, said, “The FCC thought it could just exempt itself from operation of the law and it failed. Of great importance to the Tribes is the fact that the Court recognized the enormous impact of the so-called ‘small cell rule’ — even accepting the FCC’s estimates as true, over 3,000 sacred and cultural sites would be destroyed. This is an incredible and unacceptable impact and the Tribes are pleased that the Court rejected this rule. All of the attorneys involved in this case are gratified that the DC Court of Appeals agreed with our Tribal clients and we are thankful to the Tribes for their unending courage.”

“Today’s ruling by the DC Circuit is an important victory for the Seminole Tribe of Florida and Indian tribes across the country, which are fighting to protect their religious and cultural sites. As recognized by the DC Circuit, the FCC’s order exempting small cell infrastructure from tribal review and consultation would have undermined federal laws that Congress put in place to protect this country’s irreplaceable cultural heritage,” said Joseph Webster, a partner at Hobbs Straus Dean & Walker LLP.

Stephen Díaz Gavin, a partner at Rimon P.C., said that while he had not spoken with tribal clients about today’s ruling, “I believe that they will be pleased with the remand, which will provide the opportunity to correct the errors by the Commission [in] the Second Report and Order.”

Gerry Lederer, a partner at Best, Best & Krieger LLP who represents local governments challenging another small cell order adopted by the FCC last year (TR Daily, Sept. 26, 2018), noted that today’s court decision “twice referenced a filing made in the FCC proceeding by the Cities of Boston, Portland and a collection of Texas cities on issue of the size of facilities.”

He added that the ruling “is notable, among other things, as it is the first court to review the ‘pizza box’ narrative, and it did not fare well. We think the decision will prove helpful to local governments before the 9th Circuit in the aesthetic arena. Bottom line is that the DC Circuit did not accept the narrative that ‘small cells’ are actually ‘small.’”

Wireless industry groups that supported the FCC’s order also weighed in on today’s decision.

“Over the past few years, the FCC has made considerable progress in removing barriers to 5G deployment, including eliminating unnecessary regulations and streamlining siting processes,” said Wireless Infrastructure Association President and Chief Executive Officer Jonathan Adelstein. “The D.C. Circuit upheld part of the FCC Infrastructure Order that will help speed deployment across the United States. The wireless industry continues to work with all relevant stakeholders to ensure that the U.S. wins the global race to 5G.”

“The FCC has rightfully sought to modernize outdated siting rules to accelerate the deployment of 5G technologies, and it’s been working,” said Tom Power, senior vice president and general counsel of CTIA. “These reforms are pushing America ahead in the global 5G race and are critical to maintaining our wireless leadership. We are pleased that the court affirmed some of these steps today, particularly with respect to fees and deadlines for siting reviews. The court’s decision also underscores the need for further legislative, judicial and regulatory action to remove barriers to deployment.” —Paul Kirby, [email protected]

MainStory: Courts FCC FederalNews WirelessDeployment

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