The 9th U.S. Circuit Court of Appeals in San Francisco granted in part, and denied in part, petitions for review from local governments led by the City of Portland of three FCC orders concerning the installation of small cell wireless facilities. Included are the Small Cell Order, the Moratoria Order and the One Touch Make-Ready Order.
FCC officials and representatives of the wireless communications industry applauded the decision by the court to uphold what they called “the vast majority” of three orders to accelerate the deployment of wireless and wireline broadband infrastructure.
“The Wireless Infrastructure Association applauds the 9th Circuit for basing its decision on the law and the facts and for affirming the FCC’s authority so that broadband infrastructure is not unreasonably impeded,” said WIA President and CEO Jonathan Adelstein. “WIA also applauds the FCC for its focus and diligence in promoting 5G deployment so that America can benefit from next-generation wireless services.”
“The court rightly affirmed the FCC’s efforts to ensure that infrastructure deployment critical to 5G — a key part of our 5G FAST Plan — is not impeded by exorbitant fees imposed by state and local governments, undue delays in local permitting, and unreasonable barriers to pole access,” said FCC Chairman Ajit Pai.
The court’s opinion covered three major subjects: fees, aesthetics, and the time for approving permit applications (shot clocks), where the FCC’s orders ruled that local regulations needed streamlining in 5G equipment deployment. Local governments appealed all three in several pleadings grouped under the title City of Portland v. United States.
Steven Berry, president and CEO of the Competitive Carriers Association, said: “The Court’s decision allows wireless carriers to continue to work with state and local governments to deploy next-generation networks and close the digital divide, while importantly ensuring that outlier regulations do not inhibit deployment. I also commend the FCC’s Office of General Counsel for its vigorous defense of these important orders.”
The court ruled that the FCC adopted “presumptively permissible” fee levels by using a range of sources as a guide, including state laws. Although local governments argued that the FCC was setting rates, the court ruled that the agency was only determining a level at which fees would be so clearly reasonable that justification was not necessary.
Fees are presumptively lawful if, for each wireless facility, application fees are less than $500 and recurring fees are less than $270 per year. Fees may exceed those levels if they are justified. In other words, localities may charge fees above these levels where they can demonstrate that their actual costs exceed the presumptive levels.
Nonetheless, the cities were pleased that the court cleared up what had been confusion as to whether the FCC had actually capped the application fees at $500 and recurring fees at $270. Cities that require an RF compliance evaluation had encountered resistance from carriers that felt that evaluations were not reasonable. This ruling expresses that it is reasonable to charge the carrier to pay the direct cost for those evaluations, even though it may add $200 per site.
The FCC had ruled that some local aesthetic requirements were slowing small cell deployments. Thus, in its Small Cell Order, the agency said aesthetics requirements must be “reasonable, (2) no more burdensome than those applied to other types of infrastructure deployments, and (3) objective and published in advance.”
In a win for the cities, the court ruled that the way Small Cell Order deals with aesthetics was “among the most problematic,” because it strays from Section 332 of the Telecommunications Act of 1996.
“Unlike Section 332, the [FCC] regulation does not permit even reasonable regulatory distinctions among functionally equivalent, but physically different, services,” according to the court. “The [FCC] order requires the comparison of the challenged aesthetic regulation of 5G deployments to the regulation of any other infrastructure deployment, while the statute only requires a comparison with the regulation of functionally equivalent infrastructure deployments.”
The panel granted the petitions for review of the FCC’s requirement that aesthetic regulations be “no more burdensome” than requirements applied to other infrastructure deployment, and the FCC’s requirement that all local aesthetic regulations be “objective.” It vacated those portions of the rule and remanded them to the FCC.
In a loss for the cities, the court ruled in favor of the FCC’s expansion of the shot clock from zoning decisions to include all permitting decisions — for example, building, electric, road closure or other permits. Delays in these related permits on the city’s part could render the shot clock moot, the court ruled.
“The FCC acted well within its authority, and in accordance with the purpose of the Act, when it broadened the application of the shot clocks to encompass all permits, in order to prevent unreasonable delays,” the court said.
In its Small Cell Order, the agency also shortened the shot clock time to 60 days for the city to consider equipment additions on existing infrastructure and 90 days for new structures, as opposed to 90 days and 150 days, respectively. The local governments disagreed with the new shot clock, saying it arbitrarily restricted their ability to review zoning requirements.
In its argument for the shortened shot clock, the FCC said delays under the old regime were so serious that they would “virtually bar” carriers from deploying small cells.
“The FCC concluded that under its new shot clock rules, which shorten the time frames and expand the applicability of the rules, there will be no similar bar to wireless deployment,” the court wrote.
In a win for the cities, the commission denied carriers’ efforts for applications to be “deemed granted” if the shot clock expires.
“Because the FCC reasonably explained it has taken measures to reduce delays that would otherwise have occurred under its old regime, the factual findings here do not compel the adoption of a ‘deemed granted’ remedy,” the court wrote.
The court ruled against the local governments’ claims that the Small Cell Order and Moratoria Orders violated the Constitution. The court also upheld the FCC’s One-Touch Make-Ready Order.
To see a copy of the court’s ruling, Click HERE.