The FCC will address municipal processing speeds, costs and aesthetic requirements to ensure that they do not effectively prohibit the deployment of small cells when it votes on the Declaratory Ruling and Third Report and Order on Sept. 25, according the draft of the document made available last week. The municipal community is already expressing its displeasure with the effort.
One of the most controversial sections of the draft Order states that a small cell fee is only permissible if it is a “reasonable approximation of the local government’s objectively reasonable costs.” That language on municipal fees was of particular interest to Nancy L. Werner, NATOA general counsel, who said the order basically prohibits municipalities from charging wireless carriers rent for using the right of way.
“The FCC has rejected the idea that local governments can receive any rent-type compensation no only for the right of way but also for structures that they own within the right of way,” Werner said. “So the standard they set out would, for example, deem the agreements between the carriers and the City of San Jose as an effective prohibition of service.”
Local governments and their tax payers may be concerned that the FCC has a dominant role in deciding how much for-profit companies will have to pay to use taxpayer-owned assets.
“A lot of people would be shocked by it. It doesn’t reflect what they think the federal government should be doing with local property,” Werner said.
Legally, Werner said she believed the FCC has misinterpreted Section 253 A of the Communications Act, which preempts a local government from prohibiting wireless service, and ignored the language in Section 332 C (7) with respect to restrictions on municipalities relative to wireless facilities.
“They missed the mark. I certainly disagree with their interpretation of Section 253 C, finding that compensation is limited to recovery of costs. If Congress had meant costs, it would not have used the word compensation,” she said.
Another possible, and unintended, effect of the Third Report and Order, according to Werner, would be to impact the amount paid by non-small cell providers to inhabit the right of way. Those right of way inhabitants, which include cable companies, utilities and wireless telcos, currently pay rent based on a revenue formula.
“The Commission’s Order opens the door for the argument that the interpretation of Section 253 A applies to all facilities in the right of way,” she said.
Also, according to the draft, the FCC plans to provide guidance on state and local non-fee requirements, including aesthetic and undergrounding requirements. According to the proposed regulation, aesthetic and undergrounding requirements may not create a prohibition of service.
Additionally, the FCC plans to establish two new shot clocks for small wireless facilities (60 days for collocation on preexisting structures and 90 days for new builds). Failure to act within those windows will constitute a prohibition of service, triggering deemed-granted status.