The United States is in the midst of transitioning to the newest generation of wireless broadband technology known as 5G, which requires the installation of small cell wireless facilities. State and local governments across the United States have adopted various regulations to control the development of small cell infrastructure. In response, in 2018 the Federal Communications Commission (“FCC”) promulgated several orders to remove regulatory barriers that inhibit the deployment of small cell wireless facilities. At that time, the FCC specifically adopted the Small Cell Order[1] and Moratoria Order[2] to limit local governments’ abilities to regulate telecommunication providers and 5G technology. These orders were promulgated under the authority of the Telecommunications Act of 1996 (the “Act”). Numerous local governments, public and private power utilities, and wireless service providers reacted to the FCC’s actions by submitting petitions seeking review of the Small Cell Order and the Moratoria Order. The United States Judicial Panel on Multidistrict Litigation originally consolidated the petitions and chose the Tenth Circuit to hear the case. On January 10, 2019, the Tenth Circuit then granted a motion[3] filed by the City of San Jose, California and other local governments on November 29, 2018, to transfer the case to the Ninth Circuit.[4]
On August 12, 2020, the United States Court of Appeals for the Ninth Circuit rendered its decision in City of Portland v. United States[5], concluding that, given the deference owed to the agency in interpreting and enforcing the Telecommunications Act of 1996, the FCC’s Small Cell and Moratoria Orders are, with the exception of the FCC’s limitations with respect to local aesthetic regulations, in accord with the congressional directive in the Act, and not otherwise arbitrary, capricious, or contrary to law.
5G Technology
5G technology is the fifth generation of cellular wireless technology. This technology provides increased bandwidth, allows more devices to be connected simultaneously, and is significantly faster than 4G. 5G technology will operate on the millimeter-wave spectrum. These are radio waves that operate at a much higher frequency. 5G is the first wireless standard to take advantage of the millimeter-wave spectrum. Millimeter-waves are precise and dense, but can only cover small areas and cannot handle much interference. Even a minor obstacle such as the roof a car roof or a raincloud, can obstruct millimeter-wave transmissions.
Small cell wireless facilities allow wireless providers to deploy the required 5G millimeter-wave spectrum. However, because small cell wireless facilities can only transmit data short distances and are not capable of transmitting data through buildings, structures and other obstacles, many more small cell wireless facilities are needed to roll out 5G.
The Small Cell Order
On September 26, 2018, the FCC issued guidance and adopted rules to streamline the wireless infrastructure siting review process to facilitate the deployment of small cell wireless facilities. The Small Cell Order covers three major subjects: fees, aesthetics, and shot clocks requirements. In the Small Cell Order, the FCC identified presumptively reasonable state and local fees associated with the deployment of small cell wireless facilities, and prohibited certain local aesthetic requirements impacting the construction of such technology.
Keane & Beane, P.C. has provided several Legal Alerts on the FCC’s Small Order which discuss the impacts of local governments. These Legal Alerts are available at the links below:
- State and Local Government Regulation of the Placement, Construction, and Modification of Small Cell Wireless Facilities
- Part 2: State and Local Government Regulation of the Placement, Construction, and Modification of Small Cell Wireless Facilities- The FCC’s Issuance of the Wireless Infrastructure Order
- Part 3: New Shot Clocks for Small Wireless Facility Deployments
- Part 4: Adopting Aesthetic Requirements for Small Cell Wireless Facilities
Fees
The FCC’s Small Cell Order provides guidance for local and state fees charged with respect to one-time fees generally (i.e. application fees), and recurring fees for deployments in the public rights-of-way (i.e. rental fees). The FCC limited the fees state or local government may impose to fees that represent “a reasonable approximation of the local government’s objectively reasonable costs, and are non-discriminatory.” Small Cell Order ¶ 50. Under the Small Cell Order, the following fees were declared presumptively reasonable: (a) $500 for non-recurring fees, including a single up-front application that includes up to five wireless facilities, with an additional $100 for each small cell wireless facility beyond five, or $1,000 for non-recurring fees for a new pole; and (b) $270 per small cell wireless facility per year for all recurring fees, including any possible right-of-way access fee. Id. ¶ 79. Any amount above such amounts must be justified and must reflect the equal the actual costs incurred by the state or local government.
Local Aesthetic Requirements
Concerning local aesthetic requirements, the FCC concluded that local aesthetic regulations are preempted unless they are (1) reasonable, (2) no more burdensome than requirements placed on other types of infrastructure deployments, and (3) objective and published in advance. Id. ¶ 86. A reasonable aesthetic requirement is one that is both “technically feasible and reasonably directed to avoiding or remedying the intangible public harm of unsightly or out-of-character deployments.” Id. ¶ 87.
Shot Clocks
The FCC established two new shot clocks for small cell wireless facilities. The shot clock periods require zoning authorities to decide applications for small cell wireless facilities within a specified period of time. Under the Small Cell Order, state and local governments have sixty (60) days to decide applications for small cell wireless installations on existing infrastructure and ninety (90) days for all other small cell wireless applications. Id. ¶¶ 104-05, ¶ 132, ¶136.
Ninth Circuit Decision
The Ninth Circuit upheld the FCC’s presumptively reasonable fees and shot clock requirements. However, the Court found the requirements for local aesthetic regulations set forth in the Small Cell Order contrary to the congressional standard that allows different regulatory treatment among types of providers, so long as such treatment does not “unreasonably discriminate among providers of functionally equivalent services.” 47 U.S.C. § 332(c)(7)(B)(i)(I). The Court explained that to establish “unreasonable discrimination” providers must demonstrate that they have been treated differently from other providers whose facilities are similarly situated in terms of structure, placement, or cumulative impact as the facilities in question. The Small Cell Order instead requires that small cell aesthetic requirements must be “no more burdensome” than those imposed on other small cell facility providers. The Small Cell Order requires states and local governments to compare aesthetic regulation of 5G deployments to the regulation of any other infrastructure deployments. In contrast, Section 332 of the Act only requires a comparison of functionally equivalent infrastructure deployments. Therefore, the Court concluded that the FCC’s standard requiring aesthetic regulations on small cell wireless facilities be no more burdensome than those applied to other technologies be vacated. The Court also held that the FCC’s requirement that all aesthetic criteria be “objective” lacked a reasoned explanation. Aesthetic regulations must be technically feasible and reasonably directed to prevent the intangible public harm of unsightly or out-of-character deployments. The FCC failed to explain its conclusion that subjective standards are without public benefit.
In light of the Ninth Circuit’s decision, local governments are free to apply different standards for physically different infrastructure deployments under their zoning authority. Local governments can impose different aesthetic regulations on 5G technology. Such regulations must be the same for functionally equivalent structures that are similar in terms of structure, placement and impact. These regulations can be subjective as long as they are technically feasible and reasonably directed to remedy aesthetic harms. As long as a municipality can explain the purpose of a subjective aesthetic regulation and how it will prevent or mitigate small cell deployments that are unsightly or out of character with the community, such regulation will be deemed acceptable. This portion of the Ninth Circuit’s decision will benefit municipalities with respect to their abilities to maintain community character and protect aesthetic resources.
In addition, the Court found the Small Cell Order does not constitute a physical taking or regulatory taking under the Fifth Amendment. Under the Small Cell Order, the Ninth Circuit determined municipalities have the ability to deny a provider’s access to municipal property, including the public rights-of-way, for a number of reasons. The Small Cell Order only prohibits states and local governments from charging unreasonable fees and does not compel access to municipal property and therefore does not constitute a physical taking. As discussed above municipality retains the right to impose reasonable aesthetic regulations and deny applications that fail to meet the municipalities aesthetic requirements. Furthermore, the Court found that limiting costs to actual costs incurred by the state or local government does not create a regulatory taking.
The Moratoria Order
On August 2, 2018, the FCC barred state and local governments from implementing moratoria on telecommunications services. The FCC found that both express moratoria and de facto moratoria on telecommunications services and facilities deployment are barred by Section 253(a) of the Act because they “prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service.” Moratoria Order ¶ 4. Express moratoria are defined as “state or local statutes, regulations, or other written legal requirements that expressly, by their very terms, prevent or suspend the acceptance, processing, or approval of applications or permits necessary for deploying telecommunications services and/or facilities.” Id. ¶ 145. De Facto Moratoria are defined as “state or local actions that are not express moratoria, but that effectively halt or suspend the acceptance, processing, or approval of applications or permits for telecommunications services or facilities in a manner akin to an express moratorium.” Id. ¶ 149. Municipal ordinances will qualify as de facto moratorium where the delay caused “continues for an unreasonably long or indefinite amount of time such that providers are discouraged from filing applications.” Id. ¶ 150. Restrictions on construction customary and necessary are not preempted by the Moratoria Order.
The FCC included an exemption for emergency bans on the construction of 5G facilities to protect public safety and welfare, but only where those laws are (1) competitively neutral, (2) necessary to address the emergency, disaster or related public needs, and (3) target only those geographic areas affected by the disaster. Id. ¶ 157.
Ninth Circuit Decision
The Ninth Circuit found that the Moratoria Order is not arbitrary, capricious, or contrary to law on a facial basis.
Conclusion
Keane & Beane, P.C. continues to monitor federal and state regulations and legislation concerning 5G technology and small cell wireless facilities. Our office will continue to provide Legal Alerts on any decision, rule, law, regulation or order relating to small cell wireless facilities and local government regulation. Should you have any questions, please contact Nicholas M. Ward-Willis.
[1] Accelerating Wireless Broadband Deployment by Removing Barriers to Infrastructure Inv., 33 FCCC Rcd. 9088 (September 26, 2018)(Small Cell Order) https://docs.fcc.gov/public/attachments/FCC-18-133A1.pdf
[2] Accelerating Wireless Broadband Deployment by Removing Barriers to Infrastructure Inv., 33 FCC Rcd. 7705, 775-91 (August 2, 2018)(Moratoria Order) https://docs.fcc.gov/public/attachments/FCC-18-111A1.pdf
[3] https://www.tellusventure.com/downloads/policy/fcc_row/san_jose_motion_fcc_wireless_ruling_29nov2018.pdf
[4] City of San Jose v. FCC, 10th Cir., No. 18-9568, 1/10/19, https://src.bna.com/EDa
[5] City of Portland v. United States, N. 18-72689 (9th Cir. 2020), https://cases.justia.com/federal/appellate-courts/ca9/18-72689/18-72689-2020-08-12.pdf?ts=1597251829
