Rochester’s Annual Telecom Fee Falls ‘in the Middle of the Pack,’ Says City

Rochester, New York, denies the allegations of Crown Castle, Extenet and Verizon that the new telecommunications code the city enacted three years ago imposes excessively high fees on telecom providers in violation of federal law (see 2308010002), said the city’s post-trial memorandum of law Friday (docket 6:19-cv-06583) in U.S. District Court for Western New York in Rochester. Its opposition to the companies’ motion for judgment in their favor followed a two-day consolidated bench trial in early June (see 2212200065).

Rochester presented trial evidence demonstrating that the telecom fees charged are less than a reasonable approximation of the city’s objectively reasonable costs related to telecommunications in the public rights of way, said the city’s memorandum. The companies allege the $1,500 annual fee that Rochester charges for small-cell facilities attached to city-owned poles in the public ROW is more than five times the $270 presumptively reasonable rate the FCC said would rarely need to be exceeded.

Rochester’s $1,500 annual fee falls “in the middle of the pack of 16 other cities,” said the city’s memorandum. In addition to Rochester’s recurring small-cell fee being in line with other similar fees in other cities across the country, it’s also a number that Verizon “indicated that it would be able to pay without prohibitive effect,” it said.

The plaintiffs are wrong to argue Rochester has failed to reasonably approximate its objectively reasonable costs caused by telecommunications facilities in the ROW because it doesn’t specifically “track those costs,” said the city’s memorandum. “This argument lacks any legal support and includes not a single citation” from the FCC’s January 2019 “barriers” order, it said.

This is “unsurprising,” as the barriers order “is silent as to the methodology to be used in approximating costs,” said the city’s memorandum. The barriers order does, however, “stress that it requires only an approximation,” it said. This makes sense, “as municipalities are generally in the business of providing services, not the business of tracking the municipal costs accrued” as a result of third-party use of the city’s ROW, it said.

The plaintiffs also are wrong to argue that the costs identified by the city aren’t recoverable because the city would have incurred such costs anyway, regardless of whether telecom facilities were installed in the ROW, said the city’s memorandum. But the barriers order “never once mentions incremental costs,” it said. Where the barriers order gives examples of recoverable costs that are related to and caused by the deployment of telecommunications facilities, they cite “exactly the types of personnel and infrastructure costs” that the city used in its cost analysis, it said. Those costs “are not incremental costs,” it said.

“All told,” the barriers order doesn’t “require perfection” but only “a reasonable approximation” of a city’s costs, said the city’s memorandum. Rochester carefully considered the costs to be included, and how to “parse out what percentage of personnel capital costs are properly attributable” to city work caused by telecommunications facilities, it said. “Unfortunately, the FCC did not deign to provide a roadmap for this work,” it said. The “reasonableness” of the city’s effort “should be weighed with that in mind,” it said.