A three-judge panel of the U.S. Court of Appeals for the Ninth Circuit (San Francisco) today delved into numerous issues being raised by municipal interests and utilities in legal challenges to orders adopted by the FCC in 2018 to streamline the deployment of wired and wireless infrastructure.
In a third report and order and declaratory ruling in WC docket 17-84 and WT docket 17-79 adopted in August 2018, the FCC approved a one-touch make-ready (OTMR) policy for attaching telecom and cable facilities to utility poles in the states that don’t regulate attachments themselves, and ruled that “blanket” state and local moratoria on telecom services and facilities deployment are barred by section 253(a) of the 1996 Telecommunications Act (TR Daily, Aug. 2, 2018).
In a declaratory ruling and third report and order adopted less than two months later in the same dockets, the Commission barred states and localities from adopting rules that prohibit the deployment of wireless infrastructure, curbed fees that municipalities can charge for reviewing small cell deployments, and set shot clocks for acting on small cell applications (TR Daily, Sept. 26, 2018).
The orders drew challenges in a number of federal circuits from nearly 100 localities and municipal groups, wireless carriers, and government- and investor-owned utilities. The cases were consolidated in the Ninth Circuit. Today’s oral argument in “Sprint Corporation v. FCC” (cases beginning with 19-70123) and “City of Portland v. USA” (cases beginning with 18-72689) was held in Pasadena, Calif.
Circuit Judge Daniel Aaron Bress and Senior Circuit Judges Mary Murphy Schroeder and Jay S. Bybee heard today’s argument.
Joseph Van Eaton, an attorney for the local government interests, argued that the FCC’s action “can’t be squared with the plain language of the law, which is intended to preserve local authority over the placement of wireless facilities, with certain exceptions.”
Among other things, he faulted the FCC’s definition of “effective prohibition” and wrongly assumed that there should be a prohibition on localities charging fees that are above costs. He called “a little bit of a stretch” the argument by industry and the FCC that if carriers pay higher-than-reasonable fees in one locality, it could impact their ability to deploy services in another.
But Judge Bybee said that the FCC was not being “irrational” by supporting that argument.
Mr. Van Eaton also said the court can question whether the FCC used “sound economic theory” in setting a benchmark of $270 as unreasonable in fees for a small cell for a year.
Sean Stokes, an attorney for the American Public Power Association, said that the FCC improperly asserted authority over publicly owned poles, adding that Congress did not give the Commission such authority over poles of such utilities and electric coops.
But Judge Bress seemed skeptical of the jurisdiction argument.
Eric Gotting, an attorney for Montgomery County, Md., received pushback to his argument that the FCC should explain why RF issues are not relevant or how it will resolve them. Judge Bress noted that the FCC released an item in its RF proceeding in December (TR Daily, Dec. 4, 2019) and asked Mr. Gotting why his client can’t challenge that order. Mr. Gotting noted that two challenges have been filed but asked the court to save his client a year in court. Judge Schroeder said the RF item was not before the panel that sat at today’s oral argument.
FCC attorney Scott Noveck said that the “parade of horribles” that Mr. Van Eaton suggested would occur as a result of the FCC’s action are overblown. He added that the FCC is purposely allowing exceptions to its rules on a case-by-case basis. For example, he said, that would be the case on moratoria relating to rights-of-way management, to protect public safety, or related to reasonable requirements concerning aesthetics.
Mr. Noveck also noted that the FCC modeled its small cell regulations on state legislation introduced across the country. “There has been no indication that the sky is falling in those states,” he said.
FCC action to streamline the deployment of small cells was needed to counter the “real impediments” and “severe burden” being imposed on wireless companies, he said.
Regarding the FCC’s restrictions on fees that localities can charge to site small cells, he said that while it might not seem like a big problem if one locality charges a bit more, in the aggregate within a community or among communities, it could be.
Judge Bybee asked numerous questions about how the FCC arrived at the $270 small cell fee figure.
Mr. Noveck said it is “simply a safe harbor” and “not a cap.” He pointed to legislation introduced by states and said the amount was not adopted “with mathematical precision.”
“I don’t even see the approximation,” Judge Bybee replied, saying that the FCC attempted to explain the figure in only one footnote. He added that if the FCC “drew a number out of a hat,” it “would make it arbitrary and capricious.”
FCC attorney Sarah Citrin said the FCC was not adopting a novel position when it said that the statute does not exempt government-run utilities from the agency’s authority. The FCC operated under its sections 332 and 253 authority, she added.
She also said that there was no need for the court to concur with Montgomery County’s arguments because the FCC has adopted its RF order and it is under appeal.
Josh Turner, an attorney for CTIA and industry interveners, spoke in favor of the FCC, including its restriction on fees. “We think the order is working precisely as intended,” he said, although he added that some jurisdictions are “ignoring” the order in hopes they win in court.
In response to the arguments supporting the FCC, Mr. Van Eaton commented it is hard for localities to challenge the agency on a case-by-case basis because the FCC’s action has the force of law.
Eric Langley, an attorney for investor-owned utilities, took aim at provisions dealing with preexisting violations, overlashing, self-help when there is undue delay, and attachment rates for incumbent local exchange carriers (ILECs).
For example, he complained that the overlashing provisions don’t give utilities advance notice of such action, and he said the FCC did not provide sufficient notice of its self-help rule provision.
FCC attorney James Carr argued that the court should reject the arguments. Regarding preexisting violations, he said, some utilities have denied pole access to new attachers unless they agreed to fix violations that they did not cause. Regarding overlashing, he said parties typically work out any disagreements and come to the FCC if they can’t.
Claire Evans, an attorney for intervenors US Telecom and Verizon Communications, Inc., said that the FCC’s pole attachment policy to rationalize rates charged ILECs makes sense, adding that there have been large disparities in such rates in the past.
At today’s oral argument, the attorneys and judges did not discuss legal challenges to the small cell order filed by wireless carriers over the fact that the Commission did not adopt a deemed granted remedy for violations of its small cell shot clocks. —Paul Kirby, [email protected]
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