Federal Communications Commission Preempts Local Control

By Georgia N. Crump

The Federal Communications Commission (“FCC”) has recently taken action to preempt local control over the deployment of fifth generation (“5G”) wireless infrastructure. Small cell deployments (also known as “network nodes”) are the means to support the exploding demand for wireless broadband services. Citing regulatory obstacles to the investment needed to advance the ubiquitous availability of 5G services, the FCC pointed the accusatory finger at state and local governments. The national headlines say it all: “FCC Passes Order Limiting Cities’ Review of 5G Deployment”; “Ajit Pai Slams Cities and Towns as FCC Erases $2 Billion in Local Fees”; and “FCC Oks Plan for 5G Deployment by Overriding Some Local Rules.”

The action by the FCC that’s behind these headlines took place on September 26, 2018, when the FCC adopted a Declaratory Ruling and Third Report and Order entitled, “Accelerating Wireless Broadband Deployment by Removing Barriers to Infrastructure Investment.” This extraordinary ruling imposes limitations on the right-of-way use fees that cities can impose on wireless facilities, establishes shot clock deadlines for city review of applications, and preempts multiple provisions of state law that the federal agency determined “materially inhibit” the deployment of advanced wireless services throughout the country.

The FCC has justified its action under provisions of the Telecommunications Act of 1996, specifically, 47 U.S.C. §§ 253 and 332. Section 253(a) provides that “[n]o State or local statute or regulation, or other State or local legal requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service.” Section 332(c)(7) provides that state and local regulations on the placement of personal wireless services cannot be discriminatory or have the effect of prohibiting the provision of such services. Additionally, this section provides that local governments must act on applications to place wireless facilities within a reasonable period of time.

Texas cities are familiar with these provisions, as such provisions formed the basis for the enactment of S.B. 1004 in 2017, now found in Chapter 284 of the Texas Local Government Code. However, the FCC’s recent order goes further in removing the ability of local governments to receive reasonable and adequate compensation for the use of public property by business interests and to protect the community interests inherent in local legislation. And, although the FCC cited municipal permitting and fee requirements as the primary barrier standing in the way of rural or low income areas having access to high-speed broadband, the FCC imposed no requirements on providers to invest in such areas, relying instead on market forces to incent such investment.

The Order will take precedence over state and local legislation in several material respects, and will require Texas municipalities to adjust their processes and regulatory provisions affecting the installation of wireless facilities in public rights-of-way that have been in effect for only one year. Among the provisions of Chapter 284 that have been preempted or called into question by the federal order are: antenna and pole height restrictions, protections for residential areas and parks, deference to private deed restrictions, protections for historic districts and design areas, aesthetic requirements, undergrounding requirements, and minimum spacing requirements.

The time periods in which cities must act on permit applications are similar under Chapter 284 and the FCC’s order, but are implemented slightly differently. Chapter 284 requires cities to grant or deny applications for new network nodes no later than 60 days after receipt of a complete application; the FCC order also applies a 60-day action requirement. Under Texas law, a city has 30 days to determine whether an application is complete, and the 60-day period doesn’t start to run until it is complete. The FCC order, as revised, allows only a 10-day period to determine completeness of the application, and resets the shot clock when supplemental information to remedy the incompleteness is received. The resetting of the shot clock only happens once. If the city subsequently determines that the supplemental information did not cure the deficiency (a determination that must be made within 10 days of receipt), then the shot clock is simply tolled from that date and not reset. A city may not limit the number of applications submitted at one time, and no extensions of the shot clock are allowed to accommodate the review time needed for multiple applications.

Applications for the installation of new node support poles in the right-of-way must be reviewed and approved or denied within 150 days under Texas law; and the FCC order shortens this period to 90 days, again with no ability of a city to place restrictions on the number of applications submitted at one time. This period applies not only to right-of-way permits but also to all other approvals that a city must issue under applicable laws prior to the deployment of the facilities, including: agreements for attachments to city-owned street lights, traffic lights, directional signs; presumably to pole attachment agreements for city-owned utility poles; building permits; road closure permits; electrical permits; and excavation permits.

The FCC’s order requires all fees charged by cities be set in amounts to recover a reasonable approximation of the government’s actual and reasonable costs of maintaining the right-of-way, maintaining a structure within the right-of-way, or processing an application or permit, with no consideration of the value of the use of the rights-of-way. The FCC identified presumptively reasonable fees of $500 for a single up-front application that includes up to five wireless facilities, with an additional $100 for each facility beyond five, and $270 per facility, per year, for all recurring fees, including right-of-way access fees and fees for attachments to municipally-owned structures in the right-of-way. Chapter 284 also allows for a $500 application fee for up to five network nodes, but allows an additional application fee of $250 for each facility beyond five. Under Chapter 284, cities may charge up to $1,000 for each node support pole application; thus, this fee will be preempted under the FCC’s order.

The FCC order will be effective 90 days after its publication in the Federal Register; the period for filing petitions for reconsideration or petitions for judicial review also start on the date that a summary of the declaratory ruling is published in the Federal Register. Numerous local government interests have already stated their intent to challenge what FCC Commissioner Rosenworcel has described as “extraordinary federal overreach.”

Georgia Crump is the Chair of the Firm’s Energy and Utility Practice Group. Georgia assists cities with developing and implementing right-of-way management practices relating to telecommunications, gas, and electricity. If you have any questions related to these areas or would like additional information, please contact Georgia at 512.322.5832 or gcrump@lglawfirm.com.