Small Cell Order Goes into Effect; Appeal Goes to 9th Circuit

By J. Sharpe Smith, Senior Editor

January 15, 2019

After the U.S. Court of Appeals for the 10th Circuit denied the cities’ request for a stay, the FCC’s Declaratory Ruling and Third Report and Order on small cell deployment went into effect this week.

Known as the September Small Cell Order, the item states that fees charged by a municipality for applications or rent must be limited to costs or they may be deemed as “effective prohibitions of service.” Aesthetic and undergrounding requirements may also be deemed to be a prohibition of service small cell deployment. Additionally, it established new small cell shot clocks and codified previous ones, as well.

However, the courtroom drama is not over. In a second order, the 10th Circuit remanded the cities’ motion to review their petitions against the September Order back to the U.S. Court of Appeals for the 9th Circuit.

The 9th Circuit was already considering a lawsuit against the FCC’s August Order banning municipal moratoria, which is basically part of the same rule making as the Small Cell Order. So with the transfer, both the moratoria and the Small Cell Order will be examined by the same court.

“The August Order interpreted Section 253 of the Telecommunications Act, laying the groundwork for where the FCC needed to be to adopt the Small Cell Order,” said Robert “Tripp” May, partner, Telecom Law Firm. “Those two items will be considered together. That is significant.”

Which circuit rules on an appeal can have a big impact on the final outcome of the case. The 9thCircuit looks like it will be more supportive of the cities’ point of view. May noted that numerous 9th Circuits precedents were overruled by the FCC’s Small Cell Order.

“When the FCC and its industry supporters oppose our brief, they will have to prove that not only are the local governments wrong but that the 9th Circuit’s precedents are wrong,” May said.

Section 253 of the Telecommunications Act states that local regulations may not prohibit telecommunications services. The FCC Small Cell Order attempted to expand upon the definition of what would be deemed as a prohibition.

“The FCC Small Cell Order lowered the bar for a local regulation to be deemed as an effective prohibition, but the 9thCircuit has continuously upheld a higher standard,” May said. “The 9th Circuit has previously ruled that the ‘plain and unambiguous’ meaning of Section 253 is that it requires an actual prohibition, not the just the mere possibility of a prohibition,” May said. “In order for the FCC to justify its Order, it will have to convince the 9th Circuit that its previous rulings were wrong.”

Another wrinkle in this case, the FCC currently does not have a lawyer working on this with the partial government shutdown. If it is not reopened in time, the Dept. of Justice will argue the case.

Congress Getting in on the Act

The cities have also taken their fight against the FCC to Capitol Hill. Congresswoman Ana Eshoo introduced the “Accelerating Broadband Development by Empowering Local Communities Act of 2019,’’ on Jan. 14 to preserve the rights of state and local governments, essentially nullifying the August and September small cell orders by the FCC: ‘‘Accelerating Wireless and Wireline Broadband Deployment by Removing Barriers to Infrastructure Investment’’ and Declaratory Ruling in ‘‘Third Report and Order and Declaratory Ruling.”