Preemption of Local Telephone Rules

The FCC voted yesterday that telecom deployments are now exempt from any environmental or historic preservation reviews. This is seen as the first step at the FCC making it easier to deploy 5G.

It’s an interesting rule change because in my experience those rules have more often applied to federally funded broadband projects than to local ones. For example, the BTOP stimulus grants added costs to every project by requiring both environmental and historic preservation reviews – even when it was obvious they didn’t apply. The vast majority of telecom deployments want to put fiber or telecom equipment into already-established rights-of-way. It’s hard to justify doing an environmental review when fiber is to be laid on the shoulder of an existing road or on poles. And the vast majority of 5G equipment will be on utility poles, light poles or buildings, so it’s hard to think that there can be much environmental impact from using established rights-of-way.

But that doesn’t mean that there is never a reason for a locality to have these requirements. Consider my town of Asheville, NC. There is a neighborhood around the Biltmore mansion that has strict zoning codes to keep it looking historic. The City ought to have the option to review and approve 5G or any utility deployments that might clutter the historic nature of such an area. Cities have often forced utilities into the ground in historic districts, but 5G transmitters can’t be put underground, by definition. I’ve seen some proposed small cell transmitters that are large and unsightly, and it doesn’t seem unreasonable for a community to have some say into where such gear can be used. Do we really need to see unsightly telecom equipment in Williamsburg, the Gettysburg battlefield or near the Liberty Bell? Local communities also need to have some say before a telecom deployment disturbs graves or archaeological sites.

The same goes for an environmental review. A better rule would be to only allow an environmental review when new telecom facilities are to be built into virgin rights-of-way – and where there is some local concern. We don’t really want to allow somebody to lay fiber through a sensitive wetland or bird sanctuary without some local say in the deployment.

These rules are the first step in what is perceived as the FCC desire to preempt all local control over 5G deployments. This FCC created various Broadband Deployment Advisory Committees (BDAC) to look at various industry issues and one of these committees looked at ‘Removing State and Local Regulatory Barriers”. It’s fairly obvious from the name of the group that they made a long list of local regulations that should be preempted.

That BDAC group essentially recommended that the FCC override all local control of rights-of-ways or any kind of review of telecom infrastructure deployment. Their recommendations read like a wish list from the lobbyists of the large cellular carriers and ISPs. If the FCC enacts all of the BDAC group’s recommendations, they will have handed over control of the 5G deployment process to wireless carriers and ISPs with no local say in the process.

I am certainly sympathetic to carriers that encounter major barriers to infrastructure deployment. I will have a blog coming soon on a particular egregious abuse of local authority that is greatly increasing the cost of a rural fiber deployment. But I’ve worked with hundreds of fiber deployments and mostly local rules are sensible and realistic. For example, cities have legitimate concerns over fiber deployments. They usually insist in getting records so that they have some record of what is deployed under their streets. They often require contractors to use sensible traffic control and to clean up after construction. And they often have fees which compensate the city for processing permits, for locating existing utilities and for inspecting the construction. If these kinds of rules are overridden by the FCC we’ll soon see horror stories of fiber builders who dig up streets and then walk away with no consequences. In my experience local rules are needed to stop utilities from taking shortcuts to save money.

I was talking to a colleague about this topic and they asked if we really need to be concerned as much about 5G as we are about fiber deployments. After some thought my answer is yes – the same sort of common sense local rules need be allowed for 5G. I picture a future where there will be multiple companies deploying 5G into neighborhoods. It’s not hard to picture wireless devices of various sizes hanging from every available pole and structure. It’s not hard to envision wireless providers erecting 100’ poles on streets to reach above the tree canopy. It’s not hard to envision 5G providers drastically trimming trees to give them line of sight to homes. I know I want my city to have some say in this before AT&T and Verizon make a mess out of my own street.

I am sure these new rules will be challenged in court. The legal question will be if the FCC has the authority to override local laws on these issues. I have no idea of how the law might apply to environmental or historic preservation reviews. But if the FCC tries to do the same with 5G pole attachments they run smack into the Telecommunications Act of 1996 which gives States (and by inference, localities) the ability to craft their own local laws concerning poles, conduits and rights-of-way. It’s always a tug of war when the FCC tries to override states and the courts are almost always the final arbiter of these attempts.

Court Setback for Municipal Competition

Scale_of_justice_2_newThe Sixth Circuit Court of Appeals in Cincinnati ruled that the FCC didn’t have the authority to overturn state limitations on municipal broadband. Specifically the case looked at the two FCC orders that would have overturned state restrictions for Chattanooga, Tennessee and Wilson, North Carolina to expand their municipal systems to serve customers outside of their base service territory.

While this ruling has only been to one court so far, I could foresee an opposite reading from another court on the same facts. This is one of those cases working in the gray areas where the court has to interpret the intent of a law, not just the specific language.

The specific issue at hand in these cases was whether the FCC had the authority to overturn the state prohibitions against broadband under Section 706 of the Telecommunications Act of 1996. In that Act the Congress had instructed the FCC and State Commissions as follows:

The Commission and each State commission with regulatory Jurisdiction over telecommunications services shall encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans (including, in particular, elementary and secondary schools and classrooms) by utilizing, in a manner consistent with the public interest, convenience, and necessity, price cap regulation, regulatory forbearance, measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment. (Bold emphasis is mine)

In that Act the Congress clearly told the FCC and State regulatory commissions to encourage broadband competition and to remove barriers to infrastructure investment. The judges in this case did not dispute that the FCC was tackling a barrier to infrastructure investment in their orders.

Interestingly, the court didn’t dispute any of the facts in the case. They recognized the benefits of fiber broadband and acknowledged that the areas where Chattanooga and Wilson want to build have no existing competition (or even any broadband). The court also recognized that the state laws in the two states were clearly barriers to infrastructure investment by the cities.

It would seem by accepting the facts presented by the cities that the court would then rule in their favor. But they didn’t and the court’s ruling boiled down to deciding that the FCC didn’t have a clear mandate to preempt state law under the authority of Section 706. The court says that the language in Section 706 is not strong enough to support preemption.

I guess it all comes down to an interpretation of language. Certainly the statute uses the word ‘encourage’ (instead of some stronger word). But the Act goes on to suggest that the FCC use the regulatory rules at its disposal (such as regulatory forbearance) to effectuate this encouragement. To me, a non-lawyer, that sounds like Section 706 is instructing the FCC to act, not just to passively encourage competition.

As is usual with these kinds of appeals, this case is not only an interpretation of the language that I’ve highlighted above. Various parties intervened in the case and argued that this was an issue of states’ rights versus federal authority. And I am sure that the politics and the underlying judicial philosophy on that larger issue had a lot to do with the decision.

The FCC is an interesting federal agency because they regularly preempt states’ rights on telecom issues. The most recent such decision was one that ordered state and local calling rates from prisons be reduced in line with federal rate guidelines. The agency has a long history of overriding state Commissions to bring state telecom rules in lines with FCC policies.

I’m not enough of a lawyer to understand if there is an obvious appeal to the Supreme Court, or what the likelihood of winning such an appeal might be. But I have followed appeals of FCC decisions for a long enough time in my career to see that this ruling is not strong enough to be the final word on the issue. I am sure we’ll see this topic come up again.