The information below pertains to the Ninth Circuit Court of Appeal’s litigation decision regarding Federal Communications Commission orders on wireless infrastructure deployments (small cells), moratorium, and pole attachments. As your attorneys, we believe that this information will be useful for you as you respond to a possible change in rules by the FCC that may impact your city’s wireless regulatory ordinances. Please reach out to our office if you have any questions or follow-up.
On August 12, 2020, a three-judge panel of the Ninth Circuit Court of Appeals issued a mixed decision1 to the challenge of several cities to the Federal Communications Commission (FCC) small cell2, moratorium3, and pole attachment4 orders. These orders place limitations on cities to regulate wireless infrastructure deployments (small cells). The telecom industry has been aggressive in placing small cells in the city’s right-of-way to roll out 5G next generation cellular services.
To the benefit of what many consider to be a telecom industry friendly commission at the FCC, the Court upheld most portions of the FCC order. The telecom industry retains most of its favored rules, especially those pertaining to fees and shot clocks.
However, the decision is partially successful for cities in that the Court sided with the cities regarding aesthetics. The Court found that the “FCC’s requirement that all local aesthetic regulations be ‘objective’ is not adequately explained and is therefore arbitrary and capricious,” as well as the requirement that requires local aesthetic requirements to be “no more burdensome” than similarly situated infrastructure contrary to existing statute. Also, those elements of the FCC’s aesthetic standard was found to be arbitrary and capricious.5 The Court granted relief as to those requirements and vacated and remanded those portions of the rule to the FCC.6
BRIEF SUMMARY OF SPECIFIC AREAS
The Court returned a decision that on whole is more beneficial to the cities, by overruling some of the restrictions that the FCC placed on cities.
The Small Cell Order set out the applicable criteria: aesthetic restrictions are preempted unless they are (1) reasonable, (2) no more burdensome than requirements placed on other facilities, and (3) objective and published in advance.7 The Court upheld the reasonability and advanced publication requirements. However, the Court overturned and sent back to the FCC the “no more burdensome” requirement because it did not take into account that 5G facilities could be different than other infrastructure deployments.8 The Court also found that the FCC’s objective requirement was arbitrary and capricious.9
The Court upheld the FCC’s rules on the limitations on what cities can charge for applications and use of the city’s right-of-way.
The Small Cell Order limits the fees that a state or local government can assess, above a presumptive safe harbor amount, to the government’s approximate costs of processing applications and managing the right-of-way.10 The safe harbor sets fees that are presumptively lawful if, for each wireless facility, application fees are less than $500 per application, and recurring fees are less than $270 per year.11 Higher fees are not automatically preempted, but can be justified when localities can demonstrate that their actual costs exceed the presumptive levels.12
The cities challenging the Small Cell Order disputed cost recovery as a measure of what it may charge the telecom industry and the extremely low safe harbor amounts. The Court sided with the FCC, finding that the calculation of actual, direct costs is a well-accepted method of determining reasonable compensation and that “fair and reasonable” does not mean that localities should be permitted to make a profit by charging fees above costs.13
The Court sided with the FCC on the rules that force cities to process all requisite approvals within a specific time period.
The Small Cell Order set shot clocks for localities to within 60 days to decide on all necessary approvals (zoning, encroachment, etc.) for installations on existing infrastructure and ninety days for all other applications.14 A city’s failure to act on all such approvals may result in a deemed-approved application.
The cities attacked the shortened shot clock time frames and the breadth of their scope, contending they arbitrarily restrict municipalities’ ability to conduct traditional zoning review that may take longer than the prescribed shot clock. The Court found that the FCC acted in compliance with the Telecommunications Act which requires that a decision is to be made within “reasonable period of time,” and applies both to applications “to place” wireless facilities as well as requests to “construct, or modify” such facilities.15 The Court found that it could be reasonably interpreted to authorize the application of shot clocks to building construction and zoning permits.16
Radio Frequency (RF) Exposure
The Court left in place FCC’s authority in deciding what are safe RF standards and the FCC’s finding in refusing to update them in light of 5G.
Local governments originally challenged the standards set in the Small Cell Order because the FCC had not concluded its study on whether it should update its previous RF safety standard. After the adoption of the Small Cell Order, the FCC concluded that no additional update of the standard was required. The Court considered the matter moot and deferred to the FCC’s RF safety standard.17
The Court made upheld the FCC’s regulatory limitation and prohibition on moratoria that restrict the local implementation of certain wireless facilities.
The City of Portland challenged the Moratoria Order on grounds that the Order’s definitions of moratoria are overly broad and therefore unreasonable. Section 253(b) of the Telecommunications Act provides an exemption for local regulations that protect “the public safety and welfare.” In furthering that definition, the Order permits what it describes as “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 or emergency.18 The Court found that the Moratoria Order is not arbitrary, capricious, or contrary to the law on a facial basis and, therefore, upheld its application to moratoria, as defined.19
This decision will stand if there is no further review sought, either to the full 9th Circuit or the U.S. Supreme Court. Cities should evaluate changes to their wireless regulatory ordinances in light of this decision. Although cities retain regulatory powers over aesthetics, they are required to process approvals in a shortened timeframe and are further limited in implementing cost recovery fees.
The analysis contained herein is general in nature and does not pertain to specific situations. If you seek legal advice specific to your situation in your jurisdiction, please feel free to contact us for assistance to discuss this further before acting or relying on the information contained herein.