FCC Small Cell Order – Preemption

On September 27 the FCC adopted new rules that apply to the deployment of small cells on utility poles, light poles, buildings and other infrastructure. The order largely preempts state and local authority and today’s blog will focus on the preemption issue.

The orders are in WT Docket No. 17-79; WC Docket No. 17-84 and comes in two parts. First is a Declaratory Ruling where the FCC examines and then claims authority to override local and state regulations on small cell deployment issues. The second portion of the order is a Third Report and Order that sets a new ‘shot clock’ for processing small cell applications and which sets caps on local fees for connecting small cell sites.

FCC orders often conflict with state and local regulations and the FCC always has to decide the extent to which they are willing to override state and local regulations. This is a particularly touchy topic for anything to do with pole attachments and rights-of-ways because the Telecommunications Act of 1996 explicitly gave states the right to establish their own rules governing pole attachments. Since that order 22 states have elected to establish their own rules for connecting to poles while the remaining states follow the FCC pole attachment rules. However, it’s never been clear to what extent the 1996 Act gave any rights to cities.

With that said, states are generally not allowed to establish rules that conflict with the intent of FCC rules. For example, the 1996 Act gave the rights for carriers to gain access to poles, ducts and conduits, but state regulation can’t get rid of that right. State pole attachment rules generally clarify the specific application of the FCC rules and in some cases are more stringent than the FCC rules. For examples, there are states that have shorter time lines for attaching fiber to poles than the FCC rules.

This particular order has more than the usual share of legalese, but my interpretation of this order is that it applies everywhere and that the FCC has largely preempted all state and local regulations related to small cells. For example, the order presumes that any local regulation that would cause a delay in new FCC’s expected timelines would constitute an ‘effective prohibition of service”. The FCC says explicitly that delays cause by any “state or local regulation of wireless infrastructure deployment constitutes an effective prohibition of service prohibited by Sections 253 or 332(c)(7) of the Communications Act.

In regulatory terms that’s strong language – for example, the order says that states can have rules covering issues like aesthetics or the undergrounding of utilities, but any such rules cannot delay the FCC timelines. That’s important because it provides a way for carriers to get a court injunction against any city that delays the small cell deployment process for any reason. I’ve read the order several times and my interpretation is that it’s nearly impossible for a municipality to say no to a small cell request. It looks like cities must meet the FCC timelines without exception or delay.

There was a concern by many cities that the FCC was going to end the municipal exemption for pole attachments that has excused municipally-owned poles from FCC pole attachment rules. The order doesn’t address that issue, so it doesn’t appear that these new rules would apply to utility poles owned by a municipal utility. It’s less clear to me if this order applies to light poles or other structures that don’t connect to wires. (See the first comment below – the FCC took the position in a footnote that the order applies to all municipally-owned assets in the public ROW, but is not so clear on assets outside the ROW).

There is also a practical issue that I don’t see addressed in the order. Not all parts of a small cell deployments are in the air and there can be cabinets and other devices at street level used to power the small cells. Since cities are not allowed to cause the delay of small cell deployment, that logically would preclude local that slow the ground-based part of such deployments. That is an expansion of FCC jurisdiction – they’ve never exerted jurisdiction over the placement of cabinets since those rules consider numerous local issues like safety, handicapped access and aesthetics.

This order is clearly tilted in favor of small cell carriers. The wording of the order reads like the industry wish list and even has some language suggested by the wireless carriers. The carriers want to be able to deploy small cells anywhere quickly, at a low cost, and this order grants them that right. I’ve seen articles that claim this is a billion-dollar giveaway to the carriers.

Since this order preempts local and state pole attachment authority I would expect a flood of lawsuits challenging the order. In this industry the best regulations have always been the ones that balance the needs of all parties. There are clearly local concerns about the proliferation of small cell devices and this ruling is deaf to local concerns. Interestingly the cellular carriers and a number of big cities have already negotiated solutions to deploying small cells – and in every case this ruling is more severe than arrangements the carriers have willingly agreed to. That is the best evidence that this order has gone too far in the favor of the carriers.