Ninth Circuit Takes on FCC Small Cell Orders

The U.S. Ninth Circuit Court of Appeals handed local governments some wins in a decision last week arising from the court’s consolidation of five appeals from three FCC 5G small cell infrastructure orders. The three-judge panel sent back to the FCC portions of one order that requires aesthetic regulations be “no more burdensome” than regulations applied to other infrastructure deployed. The panel also noted that the requirement that aesthetic regulations be objective is arbitrary and capricious. Aesthetic rules must still be both published in advance and reasonable, which the court found to mean technically feasible. It is also worth noting that there may be the same fatal flaws for the FCC’s treatment of undergrounding and spacing requirements in the opinion. The court also rejected the wireless industry-backed appeal that the FCC should have imposed a “deemed granted” regime for failure to meet a shot clock.

The three 2018 orders addressed in the case are the FCC’s Small Cell Order, the Moratoria Order and the One Touch Make-Ready Order. The first two orders established limits on local governments’ authority to regulate small cell deployments while the third sought to facilitate 5G providers access to poles.

The court, however, did not find that limiting fees to costs was neither barred by Telecommunications Act section 253’s guarantee of “fair and reasonable compensation” nor did it rise to a constitutional taking. The court focused its decision on a footnote in the Small Cell Order that seems to clarify that access is not mandated to municipal property, but then fails to distinguish between rights of way and vertical infrastructure, even when the infrastructure is owned by a municipal utility. Moreover, the court seems to invite litigation on the legality of cost-only fees for use of municipal property. The panel was not unanimous, however, that limiting price to cost was necessary to avoid a finding of effective prohibition.

In addition, the court deferred to the FCC’s shortening and expansion of shot clocks to include non-zoning requirements, such as building and construction permits. Citing to section 332’s timely action obligation, the court and the FCC seemed to use local governments’ prior actions against them. “The FCC’s reliance on the survey of local laws and practices was reasonable, however, because it served only a limited purpose,” the opinion states. It goes on to add that: “…shot clock requirements create only presumptions…. [I]f permit applicants seek an injunction to force a faster decision, local officials can show that additional time is necessary under the circumstances.”

There are several possible next steps following this decision, including asking the panel for a rehearing, asking that the case be reviewed by the entire Ninth Circuit or appealing the decision to the U.S. Supreme Court.

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