Localities, Utilities Seek En Banc Review in 5G Infrastructure Case

Local governments and utilities challenged FCC-asserted authority upheld by the 9th U.S. Circuit Court of Appeals in August. Locals and the American Public Power Association separately sought en banc rehearing of a three-judge panel decision mostly supporting FCC 2018 wireless infrastructure orders on small cells and local moratoriums. Commissioner Brendan Carr responded Tuesday that the court’s August decision supports quick infrastructure deployment.

“En banc rehearing is needed to ensure decisional uniformity, hold the FCC to the congressionally imposed limits on its authority, and forestall the imposition of an unprecedented federal regulatory and rent control regime over state and local government property,” localities wrote (in Pacer). They noted the panel split on “whether the FCC acted lawfully in limiting to cost recovery what localities may charge small-cell wireless operators for occupying public rights-of-way and poles.” The decision conflicted with past Supreme Court, 9th Circuit and other U.S. appeals court rulings, they said.

The 9th Circuit panel enabled the FCC, “under the guise of ‘oversight,’ to assert authority to regulate the rates, terms, and conditions of access to” public power utility “poles in direct violation of Congress’s explicit rejection in [Telecom Act] Section 224 of any such authority,” the APPA petitioned (in Pacer). That PPUs may bring case-by-case challenges “is little comfort and an unreasonable burden.” APPA cited conflicts with Supreme Court and 9th and other circuit precedents. American Electric Power and Southern Co. sought a panel rehearing only of another pole issue (in Pacer).

The small-cells order “has accelerated the build out of high-speed services at a time when more Americans than ever are relying on the Internet,” Carr said in a statement. “In the first half of this year alone, the pace of wireless builds and upgrades doubled and the number of communities benefiting from small cell builds recently increased from three- to four-fold depending on the provider.” The 9th Circuit’s “sound decision allows these accelerated builds to continue.” The FCC declined to comment.

“The 9th Circuit issued a strong decision” upholding FCC orders “almost in their entirety,” the Wireless Infrastructure Association said. “It’s a high bar for a court to grant rehearing en banc.” CTIA referred us to its Aug. 12 statement.

Local Priority

The case is “very important” to local governments, NATOA General Counsel Nancy Werner emailed. The court vacating aesthetic conditions “was a great win for communities,” but the FCC “got more than just that issue wrong,” she said. NATOA, the National League of Cities and local groups from California, Colorado, Texas and Oregon joined the appeal with many big cities, including Atlanta, Boston, Chicago, Dallas, Los Angeles, New York City, Philadelphia, San Francisco and Seattle. Localities had been weighing a challenge since August (see 2008250023). Some from the initial appeal didn’t seek rehearing for logistical reasons, local telecom attorneys said.

The pandemic reduced local tax receipts, meaning “some communities were not in a position to financially support the effort,” said Best Best telecom attorney Gerard Lederer, whose firm represents many of the cities. Spiegel McDiarmid’s Tim Lay said a couple of his clients couldn’t join because they’re involved in two other federal appeals -- of the FCC’s June wireless infrastructure declaratory ruling in the 9th Circuit and last year’s cable local franchise authority order in the 6th Circuit.

Municipalities cited Judge Daniel Bress’ partial dissent, which disagreed with upholding the FCC preempting fees to telecom providers that exceed a locality’s costs. Allowing FCC cost-based limits contradicts the Supreme Court’s 1999 AT&T v. Iowa Utilities Board that increases in cost don’t impair provision of telecom services, they said. The 9th Circuit panel didn’t heed SCOTUS guidance from a 1993 case describing a presumption that Congress doesn’t intend to preempt state and local proprietary activities, they said.

Upholding the FCC interpretation of effective prohibition contravenes precedent, localities said. The 9th Circuit's 2008 en banc ruling in Sprint v. San Diego said Communications Act sections 253 and 332 preempted only local regulations that actually prohibit telecom or wireless services, they said. Sprint says "express preemption statutory provisions should be given a narrow interpretation,” but August’s decision took "an extremely broad interpretation that would intrude into areas of traditional local concern without a clear statement from Congress, and encroach on the constitutional limits set by the Fifth and Tenth Amendments,” local governments said: At least six circuits "require an actual wireless service gap to establish an effective prohibition.”

Government-owned utilities are outside the scope of Section 224, the FCC's "only source of authority to regulate attachments to electric utility poles,” APPA argued. The 9th Circuit "failed to give the relevant issues the attention they deserved" and made mistakes, it said. "Had the panel dived more deeply into the Commission’s obfuscations in the face of APPA’s extensive factual and legal showings, it could have avoided these errors.”

Managing government-owned facilities in the public right of way isn't inherently a regulatory activity where sections 253 and 332 would apply, APPA said. The court incorrectly equated control over ROW access with access to government-owned facilities within ROW, it said. Previous 9th Circuit decisions in 2004's Qwest v. Portland and 2013’s Omnipoint v. Huntington Beach said sections 253 and 332(c) don't preempt state and local propriety actions, it said.

The court missed that the pole attachment rule incorrectly presumes ILECs and CLECs are the same, AEP and Southern said. The opinion misapplied the high court’s 2002 NCTA v. Gulf Power, which addressed whether the FCC has pole attachment jurisdiction over cable TV providers that provide internet service, they said. In upholding a hard cap on rates in ILEC complaint rules, the 9th Circuit misunderstood the difference between joint use agreements that utilities have with ILECs and pole license agreements that they have with cable and other telecom companies, the electric companies said.