Small-Cell Costs, Local Aesthetics Get 9th Circuit Oral Argument Attention

Judge Jay Bybee asked multiple lawyers about the dollar threshold at oral argument. Judges and lawyers often referred to infrastructure siting examples just outside the courthouse and in nearby Los Angeles, and elsewhere.

Bybee, an appointee of President George W. Bush, suggested he didn’t “see much data” on how the amount was determined. FCC lawyer Scott Noveck replied that the figure is "simply a safe harbor. There is not a cap.” At another point, responding to the same attorney, the judge said "it’s interesting, counsel, that you characterize it as you believe” this is what the order says, since the rules don’t seem to spell things out further.

Much discussion centered on whether the FCC effectively limiting rates in one city would mean carriers will invest any savings in other places where 5G wasn’t being deployed as quickly. Best Best's Joe Van Eaton, representing Portland, Oregon, and many other cities, said “there’s no economic theory that supports that idea.” He said USF doesn’t operate on the principle that telecoms “take good money and pour that into an area that’s not profitable out of the goodness of their heart.”

Oral argument focused on the extent to which the agency is prohibiting towns from imposing aesthetic requirements on wireless deployments such as for small cells, and whether municipalities’ requirements on the times when carriers can build can have limits for safety and other considerations. “The FCC never considers whether one can plan around the Rose Bowl parade, which of course they can’t,” Van Eaton said, meaning there’s no practical way such construction could proceed around the time of the parade. The commission, in his view, assumes "any delay is going to be a prohibition” on such deployment, which the rules forbid.

The FCC’s Noveck said Van Eaton didn’t accurately describe “the orders here in many respects,” and “there’s no reason to think those parade of horribles will happen.” The rules have “a number of guardrails,” allow coordinating construction schedules, accounting for hurricanes, keeping public safety in mind, and other considerations, Noveck replied to a judge. It “doesn’t preclude” taking some aesthetic requirements into account, he added. “We simply impose some modest procedural constraints.” A locality could require a pole be replaced with a similar structure, he said. FCC General Counsel Tom Johnson, among those from the commission in attendance, declined to comment afterward.

FCC Flexibility?

Van Eaton thinks industry and FCC lawyers signaled there's more flexibility than his clients feared from the agency to account for aesthetics. Though the wireless industry contended the rules leave communities little discretion, “we’re reading the order wrong, and there actually is plenty of latitude,” based on comments in court. “That’s the thing I take away” from the hearing, he said in an interview. “That’s frankly going to make a huge difference” to localities if reflected in future FCC actions, he said. Bybee’s focus on the data behind the $270 safe harbor may not signal much about how he will rule, Van Eaton said: It seems only to indicate how he asks questions in such situations.

Judges “seemed to be giving the FCC lawyer the hardest time,” said New Street’s Blair Levin, who live-streamed the argument. But, he added, “I don’t think you can tell” what the decision is likely to be. He found it “notable” there were many questions about whether lower pole prices in one area mean carriers will spend more in other communities. Although the issue of federalism undergirds the case, Levin “did not see that sensibility” in judges’ questions, he told us: The ruling might be more narrow.

Acknowledging access to a process to review siting disputes “was an issue that is troubling your honors,” Wiley’s Joshua Turner tried to address those concerns. The lawyer representing CTIA and industry said the rules are meant to reduce the number of spats, and thus legal challenges. Judge Mary Schroeder, appointed by President Jimmy Carter, asked for the attorney’s take “on the controversy over the aesthetic regulation.”

Turner replied that “the FCC has laid down a fairly modest marker” and can “decrease the number of conflicts that ultimately lead to litigation.” Given the hundreds of thousands of dollars it can cost and years it can take to resolve a legal dispute, “it’s simply not tenable to have those fights” always, Turner said. “Our members have seen a tremendous increase in the number of cities that are opting into” this regime and “we think the order is working exactly as intended,” he continued. “We think some cities are ignoring it," and hoping the court makes a change, he said. Turner declined to comment later.

Arguing for the American Public Power Association, Sean Stokes with the Baller firm said the FCC overstepped in applying some rules to municipal power providers: “The FCC [had] never once suggested it has authority over public power facilities." Judges asked him several questions about that. “The FCC has flipped that” viewpoint that government entities are shielded from such regulations unless the law specifies otherwise by finding they aren’t protected unless specifically stated, he said. Stokes noted judges “seemed to be focusing on whether Section 253 was a source of authority,” he told us later, referring to the Communications Act. In court filings, the FCC seemed to do what he called “cleanup work” on such issues.

5G Safety

A majority of the 9th Circuit judges asked skeptical questions of a lawyer for Montgomery County, Maryland. It’s challenging infrastructure rules on grounds they don’t address 5G RF safety.

Judges noted that the FCC appeared to address those considerations, in a later action after the orders in dispute in this case. The panel’s newest member, President Donald Trump appointee Daniel Bress, noted the municipality’s complaint was that the regulator needed to have completed the spectrum health safety rulemaking “during the pendency of this proceeding.” And “they have now done that,” Bress said of the FCC. Keller & Heckman’s Eric Gotting disagreed, saying “nowhere in those six pages do they ever discuss the 5G environment; they don’t discuss densification” of cellular siting.

Gotting replied to Bress that it could take time and another lawsuit for the county to seek relief if denied here. Schroeder noted “we don’t have the latter issue before us,” in some challenge to the 5G RF document. Gotting replied that the issue was raised in this case.

Schroeder said the court doesn’t have to review the merits here. Bybee noted this was the subject of another appeal. Gotting said that case may be consolidated in the D.C. Circuit, where it was filed, and it was also filed in this circuit. Gotting declined to comment afterward.

Power Poles

Judges also devoted time to probing pole attachment issues.

Eric Langley, representing investor-owned utilities, took issue with a pole attachment action as usurping his client’s oversight of their poles. Asked by Bress if Langley is saying this is a Chevron step 1 issue, in terms of level of deference courts give an expert agency, the lawyer said yes. Bybee said there may be “a huge leap” to consider that adding a box to a power pole creates a safety issue.

FCC attorney James Carr said utilities can charge pre-existing pole attachers for violations but can’t delay giving access to another attacher. “There shouldn’t be undue delay to the new attacher, who has no responsibility” for the earlier violation, he said. “It’s kind of like no harm, no foul,” wondered Schroeder. Yes, replied Carr. “What we were finding was these violations were going unreported for long periods for time. This was not for reasons of safety.” Such delays were to avoid extra costs, he said. “We’ve ended that practice.”

How much ILECs pay to use pole space for communications equipment also came up. Changes “were incremental, next steps” from a “series of reforms,” said Wiley’s Claire Evans, for USTelecom and Verizon. She described “tailored” solutions to help accelerate broadband deployment at just and reasonable rates. These were trying to “rationalize” rental rates for same communications services using same space on a pole as others, she said, so they “would pay about the same rate.”