CITY OF PORTLAND v. UNITED STATES OF AMERICA; FEDERAL COMMUNICATIONS COMMISSION
No. 18-72689; No. 19-70490; No. 19-70123; No. 19-70124; No. 19-70125; No. 19-70136; No. 19-70144; No. 19-70145; No. 19-70146; No. 19-70147; No. 19-70326; No. 19-70339; No. 19-70341; No. 19-70344
United States Court of Appeals for the Ninth Circuit
August 12, 2020
FCC Nos. 18-111; 18-133; 83-fr-51867; 83-FR-51867
FOR PUBLICATION
CITY OF PORTLAND, Petitioner, v. UNITED STATES OF AMERICA; FEDERAL COMMUNICATIONS COMMISSION, Respondents, CITY AND COUNTY OF SAN FRANCISCO; CITY OF ARCADIA; CITY OF BELLEVUE; CITY OF BROOKHAVEN; CITY OF BURIEN; CITY OF BURLINGAME; CITY OF CHICAGO; CITY OF CULVER CITY; CITY OF DUBUQUE; CITY OF GIG HARBOR; CITY OF KIRKLAND; CITY OF LAS VEGAS; CITY OF LINCOLN; CITY OF MONTEREY; CITY OF PHILADELPHIA; CITY OF PIEDMONT; CITY OF PLANO; CITY OF SAN BRUNO; CITY OF SAN JACINTO; CITY OF SAN JOSE; CITY OF SANTA MONICA; CITY OF SHAFTER; COUNTY OF LOS ANGELES; HOWARD COUNTY; MICHIGAN MUNICIPAL LEAGUE; CTIA - THE WIRELESS ASSOCIATION; TOWN OF FAIRFAX; TOWN OF HILLSBOROUGH, Intervenors.
AMERICAN ELECTRIC POWER SERVICE CORPORATION; CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC; DUKE ENERGY CORPORATION; ENTERGY CORPORATION; ONCOR ELECTRIC DELIVERY COMPANY, LLC; SOUTHERN COMPANY; TAMPA ELECTRIC COMPANY; VIRGINIA ELECTRIC AND POWER COMPANY; XCEL ENERGY SERVICES INC., Petitioners, v. FEDERAL COMMUNICATIONS COMMISSION; UNITED STATES OF AMERICA, Respondents, VERIZON; US TELECOM—THE BROADBAND ASSOCIATION, Respondents-Intervenors.
SPRINT CORPORATION, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION; UNITED STATES OF AMERICA, Respondents, CITY OF BOWIE, Maryland; CITY OF EUGENE, Oregon; CITY OF HUNTSVILLE, Alabama; CITY OF WESTMINSTER, Maryland; COUNTY OF MARIN, California; CITY OF ARCADIA, California; CULVER CITY, California; CITY OF BELLEVUE, California; CITY OF BURIEN, Washington; CITY OF BURLINGAME, California; CITY OF GIG HARBOR, Washington; CITY OF ISSAQUAH, Washington; CITY OF KIRKLAND, Washington; CITY OF LAS VEGAS, Nevada; CITY OF LOS ANGELES, California; CITY OF MONTEREY, California; CITY OF ONTARIO, California; CITY OF PIEDMONT, California; CITY OF PORTLAND, Oregon; CITY OF SAN JACINTO, California; CITY OF SAN JOSE, California; CITY OF SHAFTER, California; CITY OF YUMA, Arizona; COUNTY OF LOS ANGELES, California; TOWN OF FAIRFAX, California; CITY OF NEW YORK, New York, Intervenors.
VERIZON COMMUNICATIONS, INC., Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION; UNITED STATES OF AMERICA, Respondents, CITY OF ARCADIA, California; CITY OF BELLEVUE, California; CITY OF BURIEN, Washington; CITY OF BURLINGAME, California; CITY OF GIG HARBOR, Washington; CITY OF ISSAQUAH, Washington; CITY OF KIRKLAND, Washington; CITY OF LAS VEGAS, Nevada; CITY OF LOS ANGELES, California; CITY OF MONTEREY, California; CITY OF ONTARIO, California; CITY OF PIEDMONT, California; CITY OF PORTLAND, Oregon; CITY OF SAN JACINTO, California; CITY OF SAN JOSE, California; CITY OF SHAFTER, California; CITY OF YUMA, Arizona; COUNTY OF LOS ANGELES, California; CULVER CITY, California; CITY OF NEW YORK, New York; TOWN OF FAIRFAX, California, Intervenors.
PUERTO RICO TELEPHONE COMPANY, INC., Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION; UNITED STATES OF AMERICA, Respondents, CITY OF ARCADIA, California; CITY OF BELLEVUE, California; CITY OF BURIEN, Washington; CITY OF BURLINGAME, California; CITY OF GIG HARBOR, Washington; CITY OF ISSAQUAH, Washington; CITY OF KIRKLAND, Washington; CITY OF LAS VEGAS, Nevada; CITY OF LOS ANGELES, California; CITY OF MONTEREY, California; CITY OF ONTARIO, California; CITY OF PIEDMONT, California; CITY OF PORTLAND, Oregon; CITY OF SAN JACINTO, California; CITY OF SAN JOSE, California; CITY OF SHAFTER, California; CITY OF YUMA, Arizona; COUNTY OF LOS ANGELES, California; CULVER CITY, California; TOWN OF FAIRFAX, California; CITY OF NEW YORK, New York, Intervenors.
CITY OF SEATTLE, Washington; CITY OF TACOMA, Washington; KING COUNTY, Washington; LEAGUE OF OREGON CITIES; LEAGUE OF CALIFORNIA CITIES; LEAGUE OF ARIZONA CITIES AND TOWNS, Petitioners, v. FEDERAL COMMUNICATIONS COMMISSION; UNITED STATES OF AMERICA, Respondents, CITY OF BAKERSFIELD, California; CITY OF COCONUT CREEK, Florida; CITY OF LACEY, Washington; CITY OF OLYMPIA, Washington; CITY OF RANCHO PALOS VERDES, California; CITY OF TUMWATER, Washington; COLORADO COMMUNICATIONS AND UTILITY ALLIANCE; RAINIER COMMUNICATIONS COMMISSION; COUNTY OF THURSTON, Washington; CITY OF ARCADIA, California; CITY OF BELLEVUE, Washington; CITY OF BURIEN, Washington; CITY OF BURLINGAME, California; CITY OF GIG HARBOR, Washington; CITY OF ISSAQUAH, Washington; CITY OF KIRKLAND, Washington; CITY OF LAS VEGAS, Nevada; CITY OF LOS ANGELES, California; CITY OF MONTEREY, California; CITY OF ONTARIO, California; CITY OF PIEDMONT, California; CITY OF PORTLAND, Oregon; CITY OF SAN JACINTO, California; CITY OF SAN JOSE, California; CITY OF SHAFTER, California; CITY OF YUMA, Arizona; COUNTY OF LOS ANGELES, California; CULVER CITY, California; TOWN OF FAIRFAX, California; CITY OF NEW YORK, New York, Intervenors.
CITY OF SAN JOSE, California; CITY OF ARCADIA, California; CITY OF BELLEVUE, Washington; CITY OF BURIEN, Washington; CITY OF BURLINGAME, California; CULVER CITY, California; TOWN OF FAIRFAX, California; CITY OF GIG HARBOR, Washington; CITY OF ISSAQUAH, Washington; CITY OF KIRKLAND, Washington; CITY OF LAS VEGAS, Nevada; CITY OF LOS ANGELES, California; COUNTY OF LOS ANGELES, California; CITY OF MONTEREY, California; CITY OF ONTARIO, California; CITY OF PIEDMONT, California; CITY OF PORTLAND, Oregon; CITY OF SAN JACINTO, California; CITY OF SHAFTER, California; CITY OF YUMA, Arizona, Petitioners, v. FEDERAL COMMUNICATIONS COMMISSION; UNITED STATES OF AMERICA, Respondents, CTIA - THE WIRELESS ASSOCIATION; COMPETITIVE CARRIERS ASSOCIATION; SPRINT CORPORATION; VERIZON COMMUNICATIONS, INC.; CITY OF NEW YORK, NEW YORK; WIRELESS INFRASTRUCTURE ASSOCIATION, Intervenors.
CITY AND COUNTY OF SAN FRANCISCO, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION; UNITED STATES OF AMERICA, Respondents.
CITY OF HUNTINGTON BEACH, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION; UNITED STATES OF AMERICA, Respondents, CITY OF ARCADIA, California; CITY OF BELLEVUE, Washington; CITY OF BURIEN, Washington; CITY OF BURLINGAME, California; CITY OF GIG HARBOR, Washington; CITY OF ISSAQUAH, Washington; CITY OF KIRKLAND, Washington; CITY OF LAS VEGAS, Nevada; CITY OF LOS ANGELES, California; CITY OF MONTEREY, California; CITY OF ONTARIO, California; CITY OF PIEDMONT, California; CITY OF PORTLAND, Oregon; CITY OF SAN JACINTO, California; CITY OF SAN JOSE, California; CITY OF SHAFTER, California; CITY OF YUMA, Arizona; COUNTY OF LOS ANGELES, California; CULVER CITY, California; TOWN OF FAIRFAX, California; CITY OF NEW YORK, New York, Intervenors.
MONTGOMERY COUNTY, Maryland, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION; UNITED STATES OF AMERICA, Respondents.
AT&T SERVICES, INC., Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION; UNITED STATES OF AMERICA, Respondents, CITY OF BALTIMORE, Maryland; CITY AND COUNTY OF SAN FRANCISCO, California; MICHIGAN MUNICIPAL LEAGUE; CITY OF ALBUQUERQUE, New Mexico; NATIONAL LEAGUE OF CITIES; CITY OF BAKERSFIELD, California; TOWN OF OCEAN CITY, Maryland; CITY OF BROOKHAVEN, Georgia; CITY OF COCONUT CREEK, Florida; CITY OF DUBUQUE, Iowa; CITY OF EMERYVILLE, California; CITY OF FRESNO, California; CITY OF LA VISTA, Nebraska; CITY OF LACEY, Washington; CITY OF MEDINA, Washington; CITY OF OLYMPIA, Washington; CITY OF PAPILLION, Nebraska; CITY OF PLANO, Texas; CITY OF RANCHO PALOS VERDES, California; CITY OF ROCKVILLE, Maryland; CITY OF SAN BRUNO, California; CITY OF SANTA MONICA, California; CITY OF SUGARLAND, Texas; CITY OF TUMWATER, Washington; CITY OF WESTMINSTER, Maryland; COLORADO COMMUNICATIONS AND UTILITY ALLIANCE; CONTRA COSTA COUNTY, California; COUNTY OF MARIN, California; INTERNATIONAL CITY/COUNTY MANAGEMENT ASSOCIATION; INTERNATIONAL MUNICIPAL LAWYERS ASSOCIATION; LEAGUE OF NEBRASKA MUNICIPALITIES; NATIONAL ASSOCIATION OF TELECOMMUNICATIONS OFFICERS AND ADVISORS; RAINIER COMMUNICATIONS COMMISSION; THURSTON COUNTY, Washington; TOWN OF CORTE MADERA, California; TOWN OF HILLSBOROUGH, California; TOWN OF YARROW POINT, Washington; CITY OF ARCADIA, California; CITY OF BELLEVUE, Washington; CITY OF BURIEN, Washington; CITY OF BURLINGAME, California; CITY OF CULVER CITY, California; CITY OF GIG HARBOR, Washington; CITY OF ISSAQUAH, Washington; CITY OF KIRKLAND, Washington; CITY OF LAS VEGAS, Nevada; CITY OF LOS ANGELES, California; CITY OF MONTEREY, California; CITY OF ONTARIO, California; CITY OF PIEDMONT, California; CITY OF PORTLAND, Oregon; CITY OF SAN JACINTO, California; CITY OF SAN JOSE, California; CITY OF SHAFTER, California; CITY OF YUMA, Arizona; COUNTY OF LOS ANGELES, California; TOWN OF FAIRFAX, California, Intervenors.
AMERICAN PUBLIC POWER ASSOCIATION, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION; UNITED STATES OF AMERICA, Respondents, CITY OF ALBUQUERQUE, New Mexico; NATIONAL LEAGUE OF CITIES; CITY OF BROOKHAVEN, Georgia; CITY OF BALTIMORE, Maryland; CITY OF DUBUQUE, Iowa; TOWN OF OCEAN CITY, Maryland; CITY OF EMERYVILLE, California; MICHIGAN MUNICIPAL LEAGUE; TOWN OF HILLSBOROUGH, California; CITY OF LA VISTA, Nebraska; CITY OF MEDINA, Washington; CITY OF PAPILLION, Nebraska; CITY OF PLANO, Texas; CITY OF ROCKVILLE, Maryland; CITY OF SAN BRUNO, California; CITY OF SANTA MONICA, California; CITY OF SUGARLAND, Texas; LEAGUE OF NEBRASKA MUNICIPALITIES; NATIONAL ASSOCIATION OF TELECOMMUNICATIONS OFFICERS AND ADVISORS; CITY OF BAKERSFIELD, California; CITY OF FRESNO, California; CITY OF RANCHO PALOS VERDES, California; CITY OF COCONUT CREEK, Florida; CITY OF LACEY, Washington; CITY OF OLYMPIA, Washington; CITY OF TUMWATER, Washington; TOWN OF YARROW POINT, Washington; THURSTON COUNTY, Washington; COLORADO COMMUNICATIONS AND UTILITY ALLIANCE; RAINIER COMMUNICATIONS COMMISSION; CITY AND COUNTY OF SAN FRANCISCO, California; COUNTY OF MARIN, California; CONTRA COSTA COUNTY, California; TOWN OF CORTE MADERA, California; CITY OF WESTMINSTER, Maryland, Intervenors.
CITY OF AUSTIN, Texas; CITY OF ANN ARBOR, Michigan; COUNTY OF ANNE ARUNDEL, Maryland; CITY OF ATLANTA, Georgia; CITY OF BOSTON, Massachusetts; CITY OF CHICAGO, Illinois; CLARK COUNTY, Nevada; CITY OF COLLEGE PARK, Maryland; CITY OF DALLAS, Texas; DISTRICT OF COLUMBIA; CITY OF GAITHERSBURG, Maryland; HOWARD COUNTY, Maryland; CITY OF LINCOLN, Nebraska; MONTGOMERY COUNTY, Maryland; CITY OF MYRTLE BEACH, South Carolina; CITY OF OMAHA, Nebraska; CITY OF PHILADELPHIA, Pennsylvania; CITY OF RYE, New York; CITY OF SCARSDALE, New York; CITY OF SEAT PLEASANT, Maryland; CITY OF TAKOMA PARK, Maryland; TEXAS COALITION OF CITIES FOR UTILITY ISSUES; MERIDIAN TOWNSHIP, Michigan; BLOOMFIELD TOWNSHIP, Michigan; MICHIGAN TOWNSHIPS ASSOCIATION; MICHIGAN COALITION TO PROTECT PUBLIC RIGHTS-OF-WAY, Petitioners, v. FEDERAL COMMUNICATIONS COMMISSION; UNITED STATES OF AMERICA, Respondents, CITY OF ALBUQUERQUE, New Mexico; NATIONAL LEAGUE OF CITIES; CITY OF BROOKHAVEN, Georgia; CITY OF BALTIMORE, Maryland; CITY OF DUBUQUE, Iowa; TOWN OF OCEAN CITY, Maryland; CITY OF EMERYVILLE, California; MICHIGAN MUNICIPAL LEAGUE; TOWN OF HILLSBOROUGH, California; CITY OF LA VISTA, Nebraska; CITY OF MEDINA, Washington; CITY OF PAPILLION, Nebraska; CITY OF PLANO, Texas; CITY OF ROCKVILLE, Maryland; CITY OF SAN BRUNO, California; CITY OF SANTA MONICA, California; CITY OF SUGARLAND, Texas; LEAGUE OF NEBRASKA MUNICIPALITIES; NATIONAL ASSOCIATION OF TELECOMMUNICATIONS OFFICERS AND ADVISORS; CITY OF BAKERSFIELD, California; CITY OF FRESNO, California; CITY OF RANCHO PALOS VERDES, California; CITY OF COCONUT CREEK, Florida; CITY OF LACEY, Washington; CITY OF OLYMPIA, Washington; CITY OF TUMWATER, Washington; TOWN OF YARROW POINT, Washington; THURSTON COUNTY, Washington; COLORADO COMMUNICATIONS AND UTILITY ALLIANCE; RAINIER COMMUNICATIONS COMMISSION; CITY AND COUNTY OF SAN FRANCISCO, California; COUNTY OF MARIN, California; CONTRA COSTA COUNTY, California; TOWN OF CORTE MADERA, California; CITY OF WESTMINSTER, Maryland, Intervenors.
CITY OF EUGENE, Oregon; CITY OF HUNTSVILLE, Alabama; CITY OF BOWIE, Maryland, Petitioners, v. FEDERAL COMMUNICATIONS COMMISSION; UNITED STATES OF AMERICA, Respondents, CITY OF ALBUQUERQUE, New Mexico; NATIONAL LEAGUE OF CITIES; CITY OF BROOKHAVEN, Georgia; CITY OF BALTIMORE, Maryland; CITY OF DUBUQUE, Iowa; TOWN OF OCEAN CITY, Maryland; CITY OF EMERYVILLE, California; MICHIGAN MUNICIPAL LEAGUE; TOWN OF HILLSBOROUGH, California; CITY OF LA VISTA, Nebraska; CITY OF MEDINA, Washington; CITY OF PAPILLION, Nebraska; CITY OF PLANO, Texas; CITY OF ROCKVILLE, Maryland; CITY OF SAN BRUNO, California; CITY OF SANTA MONICA, California; CITY OF SUGARLAND, Texas; LEAGUE OF NEBRASKA MUNICIPALITIES; NATIONAL ASSOCIATION OF TELECOMMUNICATIONS OFFICERS AND ADVISORS; CITY OF BAKERSFIELD, California; CITY OF FRESNO, California; CITY OF RANCHO PALOS VERDES, California; CITY OF COCONUT CREEK, FLORIDA; CITY OF LACEY, Washington; CITY OF OLYMPIA, Washington; CITY OF TUMWATER, Washington; TOWN OF YARROW POINT, Washington; THURSTON COUNTY, Washington; COLORADO COMMUNICATIONS AND UTILITY ALLIANCE; RAINIER COMMUNICATIONS COMMISSION; CITY AND COUNTY OF SAN FRANCISCO, California; COUNTY OF MARIN, California; CONTRA COSTA COUNTY, California; TOWN OF CORTE MADERA, California; CITY OF WESTMINSTER, Maryland, Intervenors.
On Petitions for Review of Orders of the Federal Communications Commission
Argued and Submitted February 10, 2020 Pasadena, California
Filed August 12, 2020
Before: Mary M. Schroeder, Jay S. Bybee, and Daniel A. Bress,
Opinion by Judge Schroeder; Partial Dissent by Judge Bress
SUMMARY*
Federal Communications Commission
The panel granted in part, and denied in part, petitions for review of three orders of the Federal Communications Commission (“FCC“) concerning the newest generation of wireless broadband technology known as “5G” that requires the installation of thousands of “small cell” wireless facilities.
Petitioners seeking review of the FCC orders are numerous local governments, public and private power utilities, and wireless service providers. The orders were promulgated under the authority of the Telecommunications Act of 1996 (the “Act“). The orders, issued in 2018, are known as the Small Cell Order, the Moratoria Order, and the One Touch Make-Ready Order. The first two orders spelled out the limits on local governments’ authority to regulate telecommunications providers. The third order was intended to prevent owners and operators of utility poles from discriminatorily denying or delaying 5G and broadband service providers access to the poles.
The panel held that, given the deference owed to the agency in interpreting and enforcing the Act, the Small Cell and Moratoria Orders were, with the exception of one provision, in accord with the congressional directive in the Act, and not otherwise arbitrary, capricious, or contrary to law. The exception was the Small Cell Order provision dealing with the authority of local governments in the area of aesthetic regulations. The panel held that to the extent that provision required small cell facilities to be treated in the same manner as other types of communications services, the regulation was contrary to the congressional directive that allowed different regulatory treatment among types of providers, so long as such treatment did not “unreasonably discriminate among providers of functionally equivalent services.”
The panel upheld the One Touch Make-Ready Order. The panel concluded that the FCC reasonably interpreted Section 224 of the Act as a matter of law, and the Order was not otherwise arbitrary or capricious. The panel rejected petitioners’ challenges to four secondary aspects of the Order: rules for overlashing, preexisting violations, self-help, and
rate reform. The panel held that the rules were an appropriate exercise of the FCC‘s regulatory authority under the Act.
The panel granted the petitions for review as to the FCC‘s requirement in the Small Cell Order that aesthetic regulations be “no more burdensome” than requirements applied to other infrastructure deployment, and the FCC‘s requirement that all local aesthetic regulations be “objective,” vacated those portions of the rule, and remanded them to the FCC. The petition of Montgomery County was dismissed as moot. As to all other challenges, the panel denied the petitions for review.
Judge Bress joined the majority opinion except as to Part III.A.1, which upheld the FCC‘s decision to preempt any fees charged to wireless or telecommunications providers that exceed a locality‘s costs for hosting communications equipment. In Judge Bress‘s view, the FCC did not adequately explain how all above-cost fees amounted to an “effective prohibition” on telecommunications or wireless service under
22 CITY OF PORTLAND V. UNITED STATES
COUNSEL
Petitioners/Intervenors
Joseph Van Eaton (argued) and John Gasparini, Best Best & Krieger LLP, Washington, D.C.; Gail A. Karish, Best Best & Krieger LLP, Los Angeles, California; Michael J. Watza, Kitch Drutchas Wagner Valitutti & Sherbrook, Detroit, Michigan; for Petitioners/Intervenors Cities of San Jose, Arcadia, Bellevue, Burien, Burlingame, Culver City, Gig Harbor, Issaquah, Kirkland, Las Vegas, Los Angeles, Monterey, Ontario, Piedmont, Portland, San Jacinto, Shafter, Yuma, Albuquerque, Brookhaven, Baltimore, Dubuque, Emeryville, La Vista, Medina, Papillion, Plano, Rockville, San Bruno, Santa Monica, Sugarland, Austin, Ann Arbor, Atlanta, Boston, Chicago, College Park, Dallas, Gaithersburg, Lincoln, Myrtle Beach, Omaha, Philadelphia, Rye, Scarsdale, Seat Pleasant, and Takoma Park; Los Angeles, Anne Arundel, Clark, Howard, and Montgomery Counties; Towns of Fairfax, Ocean City, and Hillsborough; Townships of Meridian and Bloomfield, Michigan Townships Association; District of Columbia; Michigan Coalition to Protect Public Rights-of-Way, National League of Cities, Michigan Municipal League, League of Nebraska Municipalities, and Texas Coalition of Cities for Utility Issues.
Sean A. Stokes (argued) and James Baller, Baller Stokes & Lide PC, Washington, D.C., for Petitioner American Public Power Association.
Eric P. Gotting (argued), Keller and Heckman LLP, Washington, D.C., for Petitioners/Intervenors Montgomery County, Maryland; and International Municipal Lawyers
CITY OF PORTLAND V. UNITED STATES 23
Association; International City/County Management Association.
Eric B. Langley (argued) and Robin F. Bromberg, Langley & Bromberg LLC, Birmingham, Alabama, for Petitioners American Electric Power Service Corporation, Duke Energy Corporation, Entergy Corporation, Oncor Electric Delivery Company, Southern Company, and Tampa Electric Company.
Joshua S. Turner (argued), Sara M. Baxenburg, and Boyd Garriott, Wiley Rein LLP, Washington, D.C.; Thomas Power, Senior Vice President and General Counsel, CTIA - The Wireless Association, Washington, D.C.; for Intervenor CTIA - The Wireless Association.
Claire J. Evans (argued) and Christopher S. Huther, Wiley Rein LLP, Washington, D.C., for Intervenor US Telecom—The Broadband Association.
Kenneth S. Fellman and Gabrielle A. Daley, Kissinger & Fellman PC, Denver, Colorado; Robert C. May III and Michael D. Johnston, Telecom Law Firm PC, San Diego, California; for Petitioners/Intervenors Cities of Bakersfield, Coconut Creek, Fresno, Lacey, Olympia, Rancho Palos Verdes, Seattle, Tacoma, Tumwater; Town of Yarrow Point; King and Thurston Counties; League of Oregon Cities, League of California Cities, League of Arizona Cities and Towns, Colorado Communications and Utility Alliance, and Rainier Communications Commission.
Brett H. Freedson, Charles A. Zdebski, and Robert J. Gastner, Eckert Seamans Cherin & Mellott LLC, Washington, D.C., for Petitioners CenterPoint Energy Houston Electric and Virginia Electric and Power Company.
24 CITY OF PORTLAND V. UNITED STATES
David D. Rines and Kevin M. Cookler, Lerman Senter PLLC, Washington, D.C., for Petitioner Xcel Energy Services.
Christopher J. Wright and E. Austin Bonner, Harris Wiltshire & Grannis LLP, Washington, D.C., for Petitioner/Intervenor Sprint Corporation.
Henry Weissmann, Munger Tolles & Olson LLP, Los Angeles, California; Jonathan Meltzer, Munger Tolles & Olson LLP, Washington, D.C.; for Petitioner/Intervenor Verizon Communications.
Megan L. Brown and Jeremy J. Broggi, Wiley Rein LLP, Washington, D.C., for Petitioner Puerto Rico Telephone Company.
Tillman L. Lay and Jeffrey M. Bayne, Spiegel & McDiarmid LLP, Washington, D.C., Dennis J. Herrera, City Attorney; Theresa L. Mueller, Chief Energy and Telecommunications Deputy; William K. Sanders, Deputy City Attorney; Office of the City Attorney, San Francisco, California; for Petitioners/Intervenors Cities of Eugene, Huntsville, Bowie, Westminster; Town of Corte Madera; and Counties of San Francisco, Marin, and Contra Costa.
Michael E. Gates, City Attorney; Michael J. Vigliotta, Chief Assistant City Attorney; Office of the City Attorney, Huntington Beach, California; for Petitioner City of Huntington Beach.
CITY OF PORTLAND V. UNITED STATES 25
Nancy L. Werner, General Counsel, Alexandria, Virginia, as and for Intervenor National Association of Telecommunications Officers and Advisors.
Zachary W. Carter, Corporation Counsel; Richard Dearing, Claude S. Platton, and Elina Druker, Attorneys; Office of Corporation Counsel, New York, New York; for Intervenor City of New York.
Amanda Kellar and Charles W. Thompson Jr., Rockville, Maryland; for Intervenors International Municipal Lawyers Association and International City/County Management Association.
Jennifer P. Bagg, Harris Wiltshire & Grannis LLP, Washington, D.C., for Intervenor Competitive Carriers Association.
Thomas Scott Thompson and Patrick Curran, Davis Wright Tremaine LLP, Washington, D.C.; for Intervenor Wireless Infrastructure Association.
Respondents
Sarah E. Citrin (argued), Scott M. Noveck (argued), and James M. Carr (argued), Counsel; Richard K. Welch, Deputy Associate General Counsel; Jacob M. Lewis, Associate General Counsel; Thomas M. Johnson Jr., General Counsel; Federal Communications Commission, Washington, D.C.; Robert B. Nicholson, Adam D. Chandler and Patrick M. Kuhlmann, Attorneys; Michael F. Murray, Deputy Assistant Attorney General; Andrew C. Finch, Principal Deputy Assistant Attorney General; Makan Delrahim, Assistant Attorney General; United States Department of Justice,
26 CITY OF PORTLAND V. UNITED STATES
Washington, D.C.; for Respondents United States of America and Federal Communications Commission.
Amici Curiae
James E. Moore and Tim R. Shattuck, Woods Fuller Shultz & Smith P.C., Sioux Falls, South Dakota, for Amicus Curiae Missouri Basin Municipal Power Agency.
Ellen F. Rosenblum, Attorney General; Benjamin Gutman, Solicitor General; Rolf C. Moan, Senior Assistant Attorney General; Office of the Attorney General, Salem, Oregon; for Amicus Curiae State of Oregon.
Thomas E. Montgomery, County Counsel; Jeffrey P. Michalowski, Senior Deputy; Office of County Counsel, San Diego, California; for Amicus Curiae County of San Diego.
Spencer Q. Parsons, Beery Elsner & Hammond LLP, Portland, Oregon, for Amici Curiae Nebraska Municipal Power Pool and Lincoln Electric System.
Gerit F. Hull, Jennings Strouss & Salmon PLC, Washington, D.C.; Lisa G. McAlister, SVP & General Counsel for Regulatory Affairs; American Municipal Power
Emily Fisher, Aryeh Fishman, and Amanda Aspatore, Edison Electric Institute, Washington, D.C.; Brett Kilbourne, Vice President Policy and General Counsel, Utilities Technology Council, Arlington, Virginia; Jeffrey L. Sheldon and Stephen J. Rosen, Levine Blaszak Block & Boothby LLP, Washington, D.C.; Brian O‘Hara, Senior Director Regulatory
CITY OF PORTLAND V. UNITED STATES 27
Issues, National Rural Electric Cooperative Association, Arlington, Virginia; for Amici Curiae Edison Electric Institute, Utilities Technology Council, and National Rural Electric Cooperative Association.
Matthew A. Love, Van Ness Feldman LLP, Seattle, Washington, for Amicus Curiae Northwest Public Power Association.
Sblend A. Sblendorio, Mallory L. Homewood, and Cara Mae Acibo, Hoge Fenton Jones & Appel Inc., Pleasanton, California, for Amicus Curiae Berkshire-Litchfield Environmental Council.
Terry M. Jarrett, Healy Law Offices LLC, Jefferson City, Missouri, for Amici Curiae Iowa Association of Municipal Utilities Association, Missouri Association of Municipal Utilities, and Arkansas Municipal Power Association.
W. Scott Snyder, Ogden Murphy Wallace, Seattle, Washington, for Amicus Curiae Association of Washington Cities.
David A. Rosenfeld, Weinberg Roger & Rosenfeld, Alameda, California, for Amici Curiae Communications Workers of America, National Digital Inclusion Alliance, and Public Knowledge.
Jane Luckhardt, General Counsel, Northern California Power Agency, Roseville, California; Jody Lamar Finklea, General Counsel & Chief Legal Officer; Dan O‘Hagan, Assistant General Counsel & Regulatory Compliance Counsel; Florida Municipal Power Agency, Tallahassee, Florida; James N. Horwood and Latif M. Nurani, Spiegel & McDiarmid LLP,
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Washington, D.C.; for Amici Curiae Northern California Power Agency; Municipal Electric Power Association of Virginia; Florida Municipal Electric Association, Inc.; City of Fort Meade; Fort Pierce Utilities Authority; City of Jacksonville Beach (Beaches Energy Services); Utility Board of the City of Key West, Florida (Keys Energy Services); Kissimmee Utility Authority; City of Lakeland (Lakeland Electric); City of Mount Dora; Utilities Commission, City of New Smyrna Beach; Orlando Utilities Commission; and City of Wauchula.
CITY OF PORTLAND V. UNITED STATES 29
OPINION
SCHROEDER, Circuit Judge:
I. INTRODUCTION
These matters arise out of the wireless revolution that has taken place since 1996 when Congress passed amendments to the Telecommunications Act to support the then nascent technology. The revolution now represents the triumph of cellular technology over just about everything else in telecommunications services.
The newest generation of wireless broadband technology is known as “5G” and requires the installation of thousands of “small cell” wireless facilities. These facilities have become subject to a wide variety of local regulations. The Federal Communications Commission (FCC) in 2018 therefore promulgated orders relating to the installation and management of small cell facilities, including the manner in which local governments can regulate them. The principal orders we review here thus constitute the FCC‘s contemporary
That expansion has been met with some resistance where 5G is concerned, however, particularly from local governments unhappy with the proliferation of cell towers and other 5G transmission facilities dotting our urban landscapes. Petitioners seeking review of the FCC orders
30 CITY OF PORTLAND V. UNITED STATES
thus include numerous local governments, the lead Petitioner being the City of Portland, Oregon. Also unhappy with the expanded installation of 5G technology contemplated by the FCC‘s orders are public and private power utilities, whose utility poles are often used for wireless facility deployment. Here as well are wireless service providers, who largely support the FCC‘s orders, but argue the FCC should have gone even further in restricting the authority of state and local governments.
Before us are three FCC orders, issued in 2018, that deal with myriad issues arising from the application of a twentieth century statute to twenty-first century technology. The two orders we deal with first are known as the Small Cell Order and the Moratoria Order. Accelerating Wireless Broadband Deployment by Removing Barriers to Infrastructure Inv., 33 FCC Rcd. 9088 (2018) [hereinafter Small Cell Order]; Accelerating Wireless Broadband Deployment by Removing Barriers to Infrastructure Inv., 33 FCC Rcd. 7705, 7775–91 (2018) [hereinafter Moratoria Order]. The Orders spell out the limits on local governments’ authority to regulate telecommunications providers.
The FCC‘s statutory authority for limiting local regulation on the deployment of this technology is contained in Sections 253(a) and 332(c)(7) of the Act and reflects congressional intent in 1996 to expand deployment of wireless services. Those provisions authorize the FCC to preempt any state and local requirements that “prohibit or have the effect of prohibiting” any entity from providing telecommunications services. See
Many of the issues before us concern whether challenged provisions constitute excessive federal regulation outside the
CITY OF PORTLAND V. UNITED STATES 31
scope of that congressional preemption directive, as understood by our Circuit‘s leading case interpreting the statute, Sprint Telephony PCS, L.P. v. County of San Diego, 543 F.3d 571 (9th Cir. 2008) (en banc). We conclude that, given the deference owed to the agency in interpreting and enforcing this important legislation, the Small Cell and Moratoria Orders are, with the exception of one provision, in accord with the congressional directive in the Act, and not otherwise arbitrary, capricious, or contrary to law. See
The exception is the Small Cell Order provision dealing with the authority of local governments in the area of aesthetic regulations. We hold that to the extent that provision requires small cell facilities to be treated in the same manner as other types of communications services, the regulation is contrary to the congressional directive that allows different regulatory treatment among types of providers, so long as such treatment does not “unreasonably discriminate among providers of functionally equivalent services.”
The third FCC order before us is intended to prevent owners and operators of utility poles from discriminatorily denying or delaying 5G and broadband service providers access to the poles.
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to pole attachers under some circumstances. Several utilities object to discrete aspects of the One-Touch Make-Ready Order. We uphold the Order, concluding that the FCC reasonably interpreted Section 224 as a matter of law, and the Order is not otherwise arbitrary or capricious.
II. STATUTORY AND INTERPRETIVE FRAMEWORK AND BACKGROUND
What we know as 5G technology is so named because it is the fifth generation of cellular wireless technology. It is seen as transformational because it provides increased bandwidth, allows more devices to be connected at the same time, and is so fast that connected devices receive near instantaneous responses from servers.
Although 5G transmits data at exceptionally fast speeds, it does so over relatively short distances. For this reason, wireless providers must use smaller power-base stations in more locations, as opposed to the fewer, more powerful base stations used for 4G data transmission. These smaller base stations, known as “small cells,” are required in such numbers that 5G technology is currently being deployed on a city-by-city basis. See generally Brian X. Chen, What You Need to Know About 5G in 2020, N.Y. Times (Jan. 8, 2020), https://www.nytimes.com/2020/01/08/technology/personaltech/5g-mobile-network.html?searchResultPosition=1; Clare Duffy, What Is 5G? Your Questions Answered, CNN Business (Mar. 6, 2020), https://www.cnn.com/interactive/2020/03/business/what-is-5g/index.html; Sascha Segan, What Is 5G?, PCMag (Apr. 6, 2020), https://www.pcmag.com/news/what-is-5g. The prospective proliferation of “small cell” structures throughout our cities, coupled with the inevitable efforts of local governments to regulate their looks and
CITY OF PORTLAND V. UNITED STATES 33
location, gave rise to the FCC‘s Small Cell and Moratoria Orders—with which local governments are not entirely happy and which were issued under the general provisions of a decades-old statute.
The heart of these proceedings therefore lies in the early efforts of Congress, and now the FCC, to balance the respective roles of the federal government and local agencies in regulating telecommunications services for a rapidly changing technological world. A key statute in these proceedings is Section 253 of the Act. Entitled “Removal of Barriers to Entry,” it reflects Congress‘s intent to encourage expansion of telecommunication service. Section 253(a) provides that “[n]o state or local statute or regulation . . . may prohibit or have the effect of prohibiting . . . telecommunications service.”
In dealing with mobile services, Section 332(c)(7) similarly preserves local zoning authority while recognizing some specific limitations on traditional authority to regulate wireless facilities.
34 CITY OF PORTLAND V. UNITED STATES
prohibiting the provision of personal wireless services.“). The other major limitation on local authority relates to ensuring fair treatment of different services. See
In the One-Touch Make-Ready Order, the FCC was concerned with facilitating attachment of new cellular facilities to existing utility poles. The FCC‘s authority to regulate pole attachments is found in Section 224 of the Act. That section provides that the FCC “shall regulate the rates, terms, and conditions” imposed upon pole attachments by utilities to ensure that such rates are “just and reasonable,”
In their petitions, private utilities contend several provisions of the One-Touch Make-Ready Order violate Section 224 or are otherwise arbitrary or capricious in restricting a utility‘s ability to deny access to attachers. We uphold this Order in all respects.
CITY OF PORTLAND V. UNITED STATES 35
As relevant to this litigation, the most disputed provision of the Act has been Section 253(a). The provision says that “[n]o State or local statute or regulation, or other State or local legal requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service.”
This court‘s leading case interpreting Section 253 is our en banc decision in Sprint, 543 F.3d 571. We there straightened out an errant panel decision that had been concerned with the phrase “no State or local statute or regulation . . . may prohibit . . .” in Section 253. That decision read the phrase to mean that Section 253 preempted any state or local regulation that “might possibly” have the effect of prohibiting service. Id. at 578. We held in Sprint that more than “the mere possibility” of prohibition was required to trigger preemption. Id. There must be an actual effect, and we recognized the continuing validity of the material inhibition test from California Payphone. See id. (“[W]e note
36 CITY OF PORTLAND V. UNITED STATES
Many of the issues we must decide here involve contentions by Petitioners that various provisions of the Small Cell and Moratoria Orders limit state and local regulatory authority to a greater degree than that contemplated in the Act, as interpreted by California Payphone and Sprint. The application of the FCC‘s “material inhibition” standard thus comes into play when we consider a number of the challenged provisions.
As a threshold issue, Local Government Petitioners argue that the FCC must demonstrate that an “actual prohibition” of services is occurring before preempting any municipal regulations, and that anything less than that showing is contrary to Section 253(a) and our decision in Sprint. We must reject this argument. The FCC‘s application of its standard in the Small Cell and Moratoria Orders is consistent with Sprint, which endorsed the material inhibition standard as a method of determining whether there has been an effective prohibition. The FCC here made factual findings, on the basis of the record before it, that certain municipal practices are materially inhibiting the deployment of 5G services. Nothing more is required of the FCC under Sprint.
Local Government Petitioners raise a corollary general objection to the Small Cell and Moratoria Orders, contending that the FCC, without a reasoned explanation, has departed from its prior approach in California Payphone, and has made it much easier to show an effective prohibition. California Payphone‘s material inhibition standard remains controlling, however. The FCC has explained that it applies a little differently in the context of 5G, because state and local regulation, particularly with respect to fees and aesthetics, is more likely to have a prohibitory effect on 5G technology than it does on older technology. The reason is that when
CITY OF PORTLAND V. UNITED STATES 37
compared with previous generations of wireless technology, 5G is different in that it requires rapid, widespread deployment of more facilities. See, e.g., Small Cell Order ¶ 53 (explaining that “even fees that might seem small in isolation have material and prohibitive effects on deployment, particularly when considered in the aggregate given the nature and volume of anticipated Small Wireless Facility deployment” (footnote omitted)). The differences in the FCC‘s new approach are therefore reasonably explained by the differences in 5G technology.
We therefore turn to Petitioners’ challenges to specific provisions of the Orders. We deal with the Small Cell and Moratoria Orders together. Both Orders relate to the ways state and local governments can permissibly regulate small cell facilities.
III. SMALL CELL AND MORATORIA ORDERS
The FCC initiated proceedings leading to the Small Cell and Moratoria Orders in response to complaints from wireless service providers. They reported that a variety of state and local regulations and practices were delaying and inhibiting small cell deployment nationwide in violation of Section 253. Those state and local governments now seek review of the Orders. We here summarize the challenged provisions of each Order.
The FCC issued the Moratoria Order in August 2018, and the Small Cell Order the following month. Two principal types of state and local regulation the agency considered relate to fees and aesthetic requirements. The FCC concluded such requirements frequently materially inhibit 5G deployment. The FCC found that when state and local
38 CITY OF PORTLAND V. UNITED STATES
governments charge excessive fees for wireless facility applications,
With respect to local aesthetic requirements, the FCC concluded such regulations were materially inhibiting small cell deployment within the meaning of the California Payphone standard. A key provision of the Small Cell Order sets 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. Id. ¶ 86. To qualify as a “reasonable” aesthetic requirement, an ordinance must be both “technically feasible and reasonably directed to avoiding or remedying the intangible public harm of unsightly or out-of-character deployments.” Id. ¶ 87.
Another important provision of the Small Cell Order modified the rules for when local jurisdictions have to act on wireless permitting requests, the so-called “shot clock” rules. Nearly a decade earlier, the FCC adopted the first shot clock rules, requiring zoning authorities to decide applications for wireless facility deployment on existing structures within ninety days, and all other applications for zoning permits within 150 days. Petition for Declaratory Ruling, 24 FCC Rcd. 13,994 (2009) [hereinafter 2009 Order]; see City of Arlington v. FCC, 668 F.3d 229, 235–36 (5th Cir. 2012), aff‘d, 569 U.S. 290 (2013). Under the 2009 Order, when a
CITY OF PORTLAND V. UNITED STATES 39
local zoning authority exceeded a shot clock, it was presumed that the municipality violated the statutory requirement to respond within a reasonable time. City of Arlington, 668 F.3d at 236. When a local zoning authority failed to act within the proscribed time, the permit applicant could then file a lawsuit seeking a declaration that the city‘s delay was unreasonable, and the city would have the opportunity to rebut the presumed statutory violation. 2009 Order ¶¶ 37–38.
The 2018 Small Cell Order broadens the application of these shot clocks to include all telecommunications permits, not just zoning permits, and it shortens the shot clocks. State and local governments now have sixty days to decide applications for installations on existing infrastructure, and ninety days for all other applications. Small Cell Order ¶¶ 104–05, ¶ 132, ¶ 136. The Order does not add enforcement mechanisms. If a state or local government misses a permitting deadline, the applicant still must seek an injunction.
In the Moratoria Order, the FCC found that municipal actions that halt 5G deployment, deemed “moratoria,” violate Section 253(a) of the Act when they effectively prohibit the deployment of 5G technology. The FCC recognized two general moratoria categories: express and de facto. As with the Small Cell Order, the Moratoria Order does not specifically preempt or invalidate any particular state or local requirement. See Moratoria Order ¶ 150. (“[W]e do not reach specific determinations on the numerous examples discussed by parties in our record . . . .“). It lays out the applicable standards.
40 CITY OF PORTLAND V. UNITED STATES
A. Challenges to the Small Cell Order
Following the publication of the Small Cell Order, Local Government and Public Power Petitioners filed these petitions for review, asserting a number of legal challenges. We evaluate these challenges
To the extent that Petitioners challenge factual findings, we review them for substantial evidence, that is, evidence “a reasonable mind might accept as adequate to support a conclusion.” Biestek v. Berryhill, 139 S. Ct. 1148, 1154 (2019) (internal quotation marks omitted). “[W]hatever the meaning of substantial in other contexts, the threshold for such evidentiary sufficiency is not high.” Id. (internal quotation marks omitted).
The Small Cell Order covers three major subjects and sets out the standards by which local regulations will be judged in determining whether they are preempted. Local Government Petitioners are not happy with any of them. The subjects are
fees, aesthetics, and the time for approving permit applications (shot clocks). We deal with each of them in turn.
1. Fees
State and local governments generally charge a wireless service provider fees to deploy facilities in their jurisdictions. These fees include one-time fees for new wireless facility deployment, as well as recurring annual fees on existing facilities in the public rights-of-way. The FCC concluded in the
...
The
The FCC offers two principal rationales for limiting fees above the safe harbor to costs. When local governments charge fees in excess of their costs, they take funds of wireless service providers that would otherwise be used for additional 5G deployment in other jurisdictions. Statements in the record from wireless service providers, and an empirical study, are cited to support the conclusion that limiting fees will lead to additional, faster deployment of 5G technology throughout the country. See
Local Government Petitioners challenge the fee limitations on a number of grounds. Their primary argument is that there is no rational connection between whether a particular fee is higher than that particular city‘s costs, and whether that fee is prohibiting service.
The FCC did not base its fee structure on a determination that there was a relationship between particular cities’ fees and prohibition of services. The FCC instead found that above-cost fees, in the aggregate, were having a prohibitive effect on a national basis. See id. ¶ 53 (explaining that “even fees that might seem small in isolation have material and prohibitive effects on deployment, particularly when considered in the aggregate given the nature and volume of anticipated Small Wireless Facility deployment” (footnote omitted)).
The FCC found there was no readily-available alternative. See id. ¶ 65 n.199 (explaining that “the record does not reveal an alternative, administrable approach to evaluating fees without a cost-based focus“). Administrability is important. In Mayo Foundation for Medical Education & Research v. United States, 562 U.S. 44, 58-59 (2011), the Supreme Court explained that an agency‘s rule “easily” satisfies Chevron‘s step two, reasonable interpretation requirement, when the agency concluded that its new approach would “improve administrability.” As the FCC explained here, its cost-based standard would prevent excessive fees and the effective prohibition of 5G services in many areas across the country.
Local Government Petitioners are implicitly suggesting an alternative approach that would require an examination of the prohibitive effect of fees in each of the 89,000 state and local governments under the FCC‘s jurisdiction, a nearly impossible administrative undertaking. Local Government Petitioners do not contend that this is required by statute, nor do they offer any other workable standard. The FCC here made the requisite “rational connection between the facts found and the choice made.” Burlington Truck Lines v. United States, 371 U.S. 156, 168 (1962).
Our colleague‘s partial dissent offers one legal objection to the fee regulation. The dissent quotes language from our decision in Qwest Communications Inc. v. City of Berkeley, 433 F.3d 1253, 1257 (9th Cir. 2006), overruled on other grounds by Sprint Telephony, 543 F.3d at 578, to suggest that the FCC‘s cost based fee regulation should be vacated because it contravenes our precedent. In Qwest, however, we considered a challenge to a particular city‘s fee that was not based on costs. On the basis of then-binding authority we held that city‘s fee was preempted, but cautioned that we were not holding that “all non-cost based fees are automatically preempted.” Id. 1257. Instead we said that in reviewing a particular city‘s ordinance “courts must consider substance of the particular regulation at issue.” Id.
The Qwest language has no relevance in this case where we review a nationwide administrative regulation the FCC has adopted, after careful study and notice and comment, that invokes
The record also supports the FCC‘s factual conclusion that high fees in one jurisdiction can prevent deployment in other jurisdictions. In addition to relying on firsthand reports of service providers, the FCC looked to an academic study, known as the Corning Study. A group of economists there estimated that limiting 5G fees could result in carriers reinvesting an additional $2.4 billion in areas “previously not economically viable.” The FCC reasonably relied upon this study to support its conclusion that a nationwide reduction in fees in “must-serve,” heavily-populated areas, would result in significant additional deployment of 5G technology in other less lucrative areas of the country. The FCC therefore has easily met the standard of offering “more than a mere scintilla” of evidence to support its conclusions regarding the prohibitive effect of above-cost fees. See Biestek, 139 S. Ct. at 1154.
We also conclude that the FCC‘s fee limitation does not violate
Moreover, the FCC did not require local jurisdictions to justify all fees with costs. The FCC adopted presumptively permissible fee levels. In setting those levels, the FCC looked to a range of sources, including state laws that limit fees. See
2. Aesthetics
Local governments have always been concerned about where utilities’ infrastructure is placed and what it looks like. When Congress enacted the
Because it recognized that state and local governments often have legitimate aesthetic reasons for accepting some deployments and rejecting others, Congress preempted only regulations that “unreasonably discriminate” among providers.
The provisions of the
In the
Local Government Petitioners point out that the FCC‘s standard amounts to requiring similar treatment and does not take into account the differences among technologies. The FCC‘s own justification for its provision bears this out. The FCC asserts that any application of different aesthetic standards to 5G small cells necessarily “evidences that the requirements are not, in fact, reasonable and directed at remedying the impact of the wireless infrastructure deployment.” Id. ¶ 87. Thus, in the FCC‘s view, when a state or local government imposes different aesthetic requirements on 5G technology, those requirements are pretextual, unrelated to legitimate aesthetic goals, and must be preempted.
Yet the statute expressly permits some difference in the treatment of different providers, so long as the treatment is reasonable. Indeed, we have previously recognized that
The FCC‘s regulation here departs from the carefully crafted balance found in
The Supreme Court has told us that “an agency may not rewrite clear statutory terms” and that this is a “core administrative-law principle.” Util. Air Regulatory Grp. v. EPA, 573 U.S. 302, 328 (2014). The FCC has contravened this principle here by placing a limitation on local zoning authority that departs from the explicit directive of Congress in
Congress prohibited unreasonable discrimination, but permitted state and local governments to differentiate in the regulation of functionally equivalent providers with very different physical infrastructure. Members of Congress, in writing
The other problematic limitation in the
The FCC explained that it adopted this requirement in response to wireless service providers’ complaints that they were being kept in the dark about what requirements they had to meet, and that those requirements were often so subjective that they had no readily ascertainable meaning. As the Order explained, the providers complained that they are unable to “design or implement rational plans for deploying Small Wireless Facilities if they cannot predict in advance what aesthetic requirements they will be obligated to satisfy to obtain permission to deploy a facility at any given site.” Id. The FCC responded by requiring aesthetic regulations to be “objective and published in advance.” Id. ¶ 86. The condition of advance publication is not seriously challenged, but the requirement that all local aesthetic regulation be “objective” gives rise to serious concerns.
We have previously expressed considerable doubt about the view that “malleable and open-ended,” aesthetic criteria per se prohibit service. Sprint, 543 F.3d at 580. In Sprint, we recognized that “[a] certain level of discretion is involved in evaluating any application for a zoning permit,” and that while “[i]t is certainly true that a zoning board could exercise its discretion to effectively prohibit” service, “it is equally true (and more likely) that a zoning board would exercise its discretion only to balance the competing goals of an ordinance,” including “valid public goals such as safety and aesthetics.” Id.
The FCC‘s position that all subjective aesthetic regulations constitute a per se material inhibition must therefore be viewed with considerable skepticism. Its justification for this limitation is that all subjective aesthetic requirements “substantially increase providers’ costs without providing any public benefit or addressing any public harm.”
The FCC says that its objectivity requirement is “feasible” because some states have adopted laws that prevent cities from applying subjective aesthetic requirements. See id. nn.246–47. As the FCC itself recognizes in its brief, aesthetic regulation of small cells should be directed to preventing the “intangible public harm of unsightly or out-of-character deployments.” Such harm is, at least to some extent, necessarily subjective. The fact that certain states have prohibited municipalities from enacting subjective aesthetic standards does not demonstrate that such standards never serve a public purpose. We conclude that the FCC‘s requirement that all aesthetic regulations be “objective” is arbitrary and capricious. At the very least, the agency must explain the harm that it is addressing, and the extent to which it intends to limit regulations meant to serve traditional zoning objectives of preventing deployments that are unsightly or out of neighborhood character.
The only remaining argument of Local Government Petitioners with which we must deal is a challenge to the FCC‘s requirement that aesthetic regulations be “reasonable.” Petitioners contend that it is unduly vague and overbroad. We read this requirement as the FCC does, however, and conclude that it should be upheld. The FCC explains that the reasonableness requirement results in preemption only if aesthetic regulations are not “technically feasible and reasonably directed” at remedying aesthetic harms. Id. ¶ 87. We recognized in Sprint that imposing an aesthetic requirement that is not technically feasible would constitute an effective prohibition of service under the Act. 543 F.3d at 580. The FCC‘s justification for adopting this rule is therefore consistent with our case law, as well as congressional intent in enacting
In sum, the requirement that aesthetic regulations be “no more burdensome” than those imposed on other technologies is not
3. Shot Clocks
Since 2009, the FCC has set time limits, known as shot clocks, for local authorities to act on applications to deploy wireless facilities. In the
To remedy a violation of the 2009 requirements, the applicant had to seek an injunction. During this rulemaking, providers urged the FCC to adopt a “deemed granted” remedy, i.e. where, at the expiration of a shot clock, a permit would be “deemed granted” and the city would have to file a lawsuit to prevent the wireless service provider from beginning construction. The FCC ultimately did not change the remedy, so under the
Local Government Petitioners are unhappy with the shortened time limits for decisions on applications, and with the expansion of shot clocks beyond zoning applications to all applications for deployment of wireless services. We consider their challenges first.
Local Government Petitioners attack the shortened shot clock time frames, contending they arbitrarily restrict municipalities’ ability to conduct traditional zoning review that may take longer than the prescribed shot clock requirements. Petitioners criticize the FCC‘s reliance on a limited survey of state and local laws, contending that those laws had unusual, shorter time frame requirements. Petitioners contend that most state and local governments will be unable to decide permits within the time limits prescribed under the
The FCC‘s reliance on the survey of local laws and practices was reasonable, however, because it served only a limited purpose. The FCC used the survey only to support its unremarkable assertion that some municipalities “can complete reviews more quickly than was the case when the existing Section 332 shot clocks were adopted” in 2009.
The
The FCC also provided sound reasons for this expansion. It explained that limiting shot clocks to zoning permits could lead states and localities to “delay their consideration of other permits (e.g., building, electric, road closure or other permits) to thwart the proposed deployment.”
For their part, Wireless Service Provider Petitioners contend that the FCC did not go far enough in modifying the shot clock requirements. Petitioners contend that the FCC should have adopted a deemed granted remedy for shot clock violations, and argue that the
This argument relies on a mischaracterization of the FCC‘s factual findings. It is true that the FCC found that delays under the old shot clock regime were so serious they would “virtually bar providers from deploying wireless facilities.”
Wireless Service Providers next argue that the failure to adopt a deemed granted remedy is arbitrary and capricious because the FCC adopted the remedy in a different statutory context, the
4. Regulation of Property in the Public Rights of Way
Local governments generally exercise control over public rights-of-way for purposes of determining where installations such as utility poles and traffic lights should be placed. Some of these installations are owned by the municipalities themselves and some are owned by other entities, such as public and private utilities. Local Government and Public Power Petitioners (American Public Power Association et al.) argue that under Supreme Court authority, the preemption provision of
The Supreme Court has considered whether a provision of the
Local Government Petitioners and Public Power Petitioners here contend that the municipalities are acting like private property owners in controlling access to, and construction of, facilities in public rights-of-way and that the Act‘s preemption provision therefore does not apply. They thus contend the FCC lacks authority to regulate the fees they charge for access to the rights-of-way and to the property on the rights-of-way. They emphasize that the provisions of the
The issue thus becomes whether the FCC reasonably concluded that local jurisdictions are acting like private property owners when the jurisdictions charge fees or otherwise control the access to public rights-of-way. The FCC‘s regulations in the
This conclusion is supported by case law in this Circuit, where we have held that cities operate in a regulatory capacity when they manage access to public rights-of-way and public property thereon. See Olympic Pipe Line Co. v. City of Seattle, 437 F.3d 872, 881 (9th Cir. 2006). For example, in Olympic Pipe Line, we concluded that the City of Seattle operated in a regulatory capacity when it made certain demands of an oil pipeline that operated under city-owned streets in the public rights-of-way. Id.; see also Shell Oil Co. v. City of Santa Monica, 830 F.2d 1052, 1057–58 (9th Cir. 1987) (holding that the City of Santa Monica does not act as a market participant when it sets franchise fees for pipelines that run under its streets).
The FCC‘s conclusions here about the Order‘s scope are reasonably explained, and do not violate any presumption against preemption of proprietary municipal conduct. Municipalities do not regulate rights-of-way in a proprietary capacity.
5. Section 224
The FCC adopted the
The
Because
6. Radiofrequency Exposure
More than twenty years ago, the FCC first adopted “radiofrequency standards,” (RF standards) which limit the amount of radiation that can be emitted from wireless transmitters. Guidelines for Evaluating the Envtl. Effects of Radiofrequency Radiation, 11 FCC Rcd. 15,123 (1996). The FCC is obligated to evaluate the potential impacts of human exposure to radiofrequency emissions under the
In 2013, the FCC opened a “Notice of Inquiry,” requesting comments on whether it should reassess its RF standards. See Reassessment of Fed. Commc‘ncs Comm‘n Radiofrequency Exposure Limits and Policies, 28 FCC Rcd. 3498 (2013). The agency did not take immediate action on that docket. During the later process leading up to the adoption of the
Petitioner Montgomery County now challenges the FCC‘s Small Cell Order as unlawful because the FCC did not complete the 2013 docket review before adopting the Small Cell Order. After its petition was filed, however, the FCC adopted a new order examining radiofrequency exposure in the 5G environment, and concluded that it did not warrant changes to its 1996 standards. Challenges to the FCC‘s failure
There is no merit to Montgomery County‘s further suggestion that we should penalize the FCC for what the County calls evasive litigation tactics in not acting earlier. The Supreme Court has emphasized that agencies have “significant latitude as to the manner, timing, content, and coordination of [their] regulations.” Massachusetts v. EPA, 549 U.S. 497, 533 (2007); see also Mobil Oil Expl. & Producing Se. Inc. v. United Distrib. Cos., 498 U.S. 211, 230-31 (1991) (“An agency enjoys broad discretion in determining how best to handle related, yet discrete, issues in terms of procedures and priorities. . . . [A]n agency need not solve every problem before it in the same proceeding.” (citations omitted)). More important, Montgomery County now has what it wanted; the FCC has examined the effects of 5G technology on its RF standards, and closed the 2013 docket. Any challenges to the adequacy of that final agency action must now be brought in a new proceeding.
B. Challenges to the Moratoria Order
The FCC adopted the Moratoria Order in response to complaints from a “broad array of large and small wireless providers” that state and local ordinances and practices were either explicitly or having the effect of barring small cell deployment. Moratoria Order ¶ 143. In the Order, the FCC concluded that ordinances and practices were materially inhibiting small cell deployment, and the agency provided general standards to differentiate between permissible municipal regulations and impermissible “moratoria.” The Moratoria Order describes two general categories of moratoria: express and de facto. See id. ¶ 144. It defined express moratoria as “statutes, regulations, or other written legal requirements” in which state or local governments “expressly . . . prevent or suspend the acceptance, processing, or approval of applications or permits necessary for deploying telecommunications services.” Id. ¶ 145. The Order provided such bars to 5G deployment qualify as moratoria even though they are of a limited duration. Id.
The FCC then defined de facto moratoria as “state or local actions that are not express moratoria, but that effectively halt or suspend the acceptance, processing, or approval of applications or permits for telecommunications services or facilities in a manner akin to an express moratorium.” Id. ¶ 149. De facto moratoria violate
The Order provides a new definition of
The City of Portland, not joined by the other Local Government Petitioners, challenges the Order with a handful of criticisms. The City‘s primary contention is that the Order‘s definitions of moratoria are overly broad, and therefore unreasonable, because, in the City‘s view, the Moratoria Order preempts even benign seasonal restrictions on construction, such as freeze-and-frost laws. The City also contends that the Moratoria Order is an invalid application of
As an initial matter, we do not read the Moratoria Order as broadly as the City does in arguing that it would preempt all restrictions on construction, even seasonal ones that cause some delay in small cell deployment. The FCC carefully explained in the Order that municipal ordinances of general applicability will qualify as de facto moratoria only where the delay caused by the ordinances “continues for an unreasonably long or indefinite amount of time such that providers are discouraged from filing applications.” Id. ¶ 150. Municipal regulations on construction are therefore not preempted if they “simply entail some delay in deployment.” Id. The explanation is supported by the FCC‘s assurance in the Order that municipalities retain authority over “construction schedul[ing].” Id. ¶ 160. The City‘s concerns about the breadth of the Moratoria Order are therefore unfounded. The Order does not preempt necessary and customary restrictions on construction.
The City argues that the Moratoria Order preempts laws of general applicability, while
Nor is the Moratoria Order contradictory in its definitions of express and de facto prohibitions. After examining the factual record, the FCC found that some localities had repeatedly re-authorized temporary bans on 5G installation to prohibit the installation of 5G cells indefinitely. Moratoria Order ¶ 148 n.546. The FCC therefore clarified that such explicit bans on 5G deployment qualify as express moratoria, even if they have a “limited, defined duration.” Id. ¶ 148. In a separate paragraph dealing with de facto prohibitions resulting from more general laws, the FCC explained that generally applicable laws, i.e. those that do not facially target small cells, are not preempted unless they cause a delay that “continues for an unreasonably long or indefinite amount of time.” Id. ¶ 150. There is nothing inconsistent or unexplained in the FCC‘s separate definitions of express and de facto moratoria.
Finally, the City challenges the FCC‘s purportedly narrow construction of
The Moratoria Order is not arbitrary, capricious, or contrary to law on a facial basis. As the FCC has recognized, objections to specific applications of the Moratoria Order may be made on a case-by-case basis.
C. Constitutional Challenges to Both Orders
Local Government Petitioners also argue that the Small Cell and Moratoria Orders violate the Fifth and Tenth Amendments. First, Petitioners argue that the Small Cell Order is a physical taking in
Petitioners also argue that the Small Cell Order constitutes a regulatory taking by limiting cost recovery. The Supreme Court rejected a similar argument in FCC v. Florida Power Corp., 480 U.S. 245 (1987), holding that limiting cost recovery to actual costs did not result in a regulatory taking. Id. at 254. Because the Small Cell Order allows for the recovery of actual costs as well, the Order does not constitute a regulatory taking. See Small Cell Order ¶ 50 (explaining that the Small Cell Order continues to allow for fees that “are a reasonable approximation of the state or local government‘s costs“).
Finally, Local Government Petitioners argue that, by requiring municipalities to respond to applications for use from 5G and broadband installers within a prescribed period of time or risk immediate control of its property, the Small Cell and Moratoria Orders compel Petitioners to enforce federal law in violation of the Tenth Amendment. In support, they cite National Federation of Independent Businesses v. Sebelius, 567 U.S. 519, 579-80 (2012) (plurality opinion), where the Court held that financial inducement had the effect of compelling states to enforce a federal program. Nothing like that is happening here. Instead, the FCC is interpreting and enforcing the
. . .
IV. ONE-TOUCH MAKE-READY ORDER
In adopting the One-Touch Make-Ready Order, the FCC intended to make it faster and cheaper for broadband providers to
Petitioners American Electric Power Service Corporation et al., a group of private utility companies, do not challenge the most important aspects of the One-Touch Make-Ready Order. Instead, they challenge four secondary aspects of the Order: rules for overlashing, preexisting violations, self-help, and rate reform. For the following reasons, we uphold them all.
A. Overlashing
Overlashing is the process by which attachers affix additional cables or other wires to ones already attached to a pole. The overlashing rule prohibits a utility from requiring overlashers to conduct pre-overlashing engineering studies or to pay the utility‘s cost of conducting such studies. Id. ¶ 119 n.444.
Petitioner utility companies first contend the overlashing rule contradicts the text of
Petitioners also argue that the overlashing rule undermines a utility‘s
Finally, Petitioners argue that by prohibiting the utilities from charging overlashers for the cost of conducting pre-overlashing studies, the overlashing rule contradicts
B. Preexisting Violation Rule
The preexisting violation rule prohibits utilities from denying access to a new attacher solely because of a preexisting safety violation that the attacher did not cause. One-Touch Make-Ready Order ¶ 122. Petitioners contend that this is contrary to
The rule defines the term “reasons of safety” as preventing a utility from denying access to a new attacher because of a safety hazard created by a third party. Id. ¶ 122. Such denials have the effect of forcing an innocent would-be attacher to fix the violation. This rule prevents the utilities from passing the costs off on entities that did not cause the safety problem in the first place. The FCC confirmed at oral argument that the preexisting violation rule would not prevent utilities from rejecting proposed attachments that increase safety risks on a utility pole. The rule thus operates to prevent utilities from relying on preexisting violations pretextually to deny pole access to attachments that pose no greater safety risk than existing attachments. Because the preexisting violation rule reasonably defines the term “reasons of safety,” the FCC‘s interpretation is reasonable.
C. Self-Help Rule
Prior to the One-Touch Make-Ready Order, attachers could hire contractors to perform preparatory work only on the lower portion of a pole. The self-help rule lets the utility-approved contractors prepare the entire pole for attachment. Id. ¶¶ 97-99. Petitioners argue that this expansion is contrary to
The rule represents a change from earlier rules on what self-help measures an attacher could perform, and the FCC explained that use of approved contractors would improve efficiency. Id. ¶ 97. A complaint process in the old self-help rule allowed new attachers to file complaints when a utility was not preparing the pole in a timely fashion. This did not encourage efficiency. It was an “insufficient tool for encouraging [a utility‘s] compliance with [the FCC‘s] deadlines.” Id. ¶ 98. The FCC reasonably views the deployment of new 5G technology to be a matter of “national importance,” justifying extension of the self-help rule to promote timely installations. Id. ¶ 97. The self-help rule is thus not arbitrary or capricious.
Petitioners also argue that the FCC lacks authority to regulate utility-owned pole attachments, since
Petitioners mount a procedural challenge to the rule, arguing that the FCC did not comply with the APA‘s notice requirement,
D. Rate-Reform Rule
The rate reform rule continues regulatory efforts to remove rate disparities between telecommunications carriers who historically owned utility poles (so-called incumbent local exchange carriers, or ILECs) and telecommunications carriers who do not own utility poles (so-called competitive local exchange carriers, or CLECs). See Am. Elec. Power Serv. Corp. v. FCC, 708 F.3d 183, 185-86 (D.C. Cir. 2013). This rule establishes a presumption that all telecommunication carriers are similarly situated and thus entitled to the same rates. One-Touch Make-Ready Order ¶ 123. But if a utility successfully rebuts the presumption by showing that an ILEC continues to retain “net benefits” that other telecommunications providers do not enjoy, then the rate reform rule imposes a maximum rate that ILECs and utilities may negotiate. See id. ¶¶ 128-29.
This rule does, for the first time, set the same presumptive rates for ILECs and CLECs, and the FCC explained why its record supported such a rule. See One-Touch Make-Ready Order ¶ 126. A study by US Telecom showed that earlier efforts to decrease rate disparities between ILECs and CLECs had not been successful, and that historic differences between
Finally, Petitioners argue that the rate reform rule may result in their incomplete recovery of costs, because if a utility successfully rebuts the presumption that an ILEC should have the same rates as CLECs, the rule imposes a maximum rate ILECs and utilities may negotiate. See id. ¶ 129. The maximum negotiable rate is not arbitrary or capricious, however, because FCC set the rate at a value that is higher than both CLEC and cable operator rates, and the FCC had previously determined those rates were just, reasonable, and allowed full cost recovery. Id. ¶ 129 n.483; see also Implementation of Section 224 of the Act, 26 FCC Rcd. 5240, ¶ 183 (2011).
The rate reform rule, like the overlashing, preexisting violations, and self-help rules, is an appropriate exercise of the FCC‘s regulatory authority under the
V. CONCLUSION
We therefore hold that the FCC‘s requirement in the Small Cell Order that aesthetic regulations be “no more burdensome” than regulations applied to other infrastructure deployment is contrary to the controlling statutory provision. See
BRESS, Circuit Judge, dissenting in part:
The majority opinion carefully addresses an array of legal challenges to a series of FCC Orders designed to accelerate the deployment of 5G service. I join the court‘s fine opinion except as to Part III.A.1, which upholds the FCC‘s decision to preempt any fees charged to wireless or telecommunications providers that exceed a locality‘s costs for hosting communications equipment. In my view, the FCC on this record has not adequately explained how all above-cost fees amount to an “effective prohibition” on telecommunications or wireless service under
The
The Act does not define what it means for a local policy to “have the effect of prohibiting” service. Since 1997, however, the FCC has interpreted the phrase to preempt local policies that “materially inhibit” the ability of providers “to compete in a fair and balanced legal and regulatory environment.” See Small Cell Order ¶ 35 (quoting Cal. Payphone Ass‘n, 12 FCC Rcd. 14191, 14206 (1997)). This standard does not require a “complete or insurmountable” barrier to service. Id. But it
In the Small Cell Order, the FCC concluded that state and local fees materially inhibit telecommunications and wireless service when they exceed a locality‘s reasonable cost of accommodating communications facilities. Small Cell Order ¶¶ 50, 53. The FCC cited evidence that certain exorbitant fees have stopped providers from offering service in certain locales. See, e.g., AT&T Aug. 10, 2018 Ex Parte Letter (AT&T “has not deployed any small cell sites in Portland, Oregon” due to the city‘s $7,500 attachment fee and recurring fee of $3,500 to $5,500). The agency also found that “even fees that might seem small in isolation have material and prohibitive effects on deployment particularly considered in the aggregate.” Small Cell Order ¶ 53. This latter finding was based on the FCC‘s determination that reduced fees generate cost-savings for providers, which enables them to use the newfound savings to expand wireless and telecommunications coverage. See id. ¶¶ 50, 55-56, 64-65 & nn.194-95. The agency estimated aggregate cost-savings from a reduction in fees to be over $2 billion, relying on a 2018 study by Corning, Inc. Id. ¶¶ 7, 60 & n.169.
The FCC carved out a safe harbor from the Order‘s broad preemption rule for pole construction fees up to $1,000, attachment fees up to $500 (or $100 after a provider‘s first five 5G facilities), and recurring fees up to $270. Id. ¶ 79. Fees may exceed the levels in the Small Cell Order‘s safe harbor only if they reasonably approximate a locality‘s costs, which include expenses “related to processing an application,” street closures, issuing “building or construction permits,” and access to and maintenance of public rights of way. Id. ¶¶ 32 n.71, 50 n.131, 79.1
No one doubts that exorbitant fees can impede the deployment of communications infrastructure. See, e.g., P.R. Tel. Co. v. Mun. of Guayanilla, 450 F.3d 9, 17-19 (1st Cir. 2006). But fees are prohibitive because of their financial effect on service providers, not because they happen to exceed a state or local government‘s costs. Consider a $500 fee in Small Town A that exceeds the town‘s costs by 1¢, and a $2,000 cost-based fee in Big City B. By the Small Cell Order‘s logic, the lower fee is preempted, but the higher fee is not. It is hard to rationalize the former under the statute, which requires an actual and material inhibition of telecommunications or wireless service. Sprint Telephony, 543 F.3d at 578.
Perhaps for this reason, this court over a decade ago “decline[d]” to hold “that all non-cost based fees are automatically preempted” under the
On this record, the FCC has not adequately explained its basis for concluding, contra our precedent, that there is an intrinsic relationship between a fee‘s approximation of costs and its prohibitive effect on service providers. The FCC‘s reliance on individual fees it considers “excessive” tells us that fees can work effective prohibitions. But this does not on its own justify a blanket prohibition on all above-cost fees. A $7,500 fee in Portland may well prohibit service, but that is because of the financial toll it inflicts, not because it exceeds the city‘s costs. And the FCC has not identified in the administrative record the frequency of above-cost fees or the amounts that localities have generally charged above cost.
The FCC has instead determined that a prohibition on all above-cost fees is justified because all above-cost fees, in the aggregate, effectively prohibit 5G deployment. The linchpin of the agency‘s aggregation theory is a 2018 study by Corning, Inc., which estimates at over $2 billion the cost-savings and reinvestment from reduced fees. Small Cell Order ¶¶ 7, 60 & n.169. But the Corning Study is not about fees above costs. And the FCC has not explained how this study tells us about the prevalence of above-cost fees or the burden such fees place on service providers.
Instead, the Corning Study calculated “the cost savings from capping fees at a level in line with the median of recent state regulations,” estimating that amount at over $2 billion. Because this is not a measure of fees above costs, the Corning Study does not say whether the caps it used to measure savings approximate costs. Indeed, the Corning Study notes that “[t]here is still significant uncertainty around what ‘typical’ rates are.” The study further states that “attachment and application fees” are “lesser drivers” of 5G deployment economics, raising questions about the extent to which all fees above costs necessarily effectively prohibit service.
At bottom, what the Corning Study conveys is that if fees are reduced, it will produce cost savings to those who pay the fees. Small Cell Order ¶¶ 50, 53, 55-56, 60 & n.169, 64-65 & nn.194-95. But that commonsense observation would be true of any fee considered in the aggregate. And it would seemingly mean that any fee in any amount could qualify as an effective prohibition, once aggregated. The same would be true of the aggregate effects of any form of regulation that localities would apply outside the fee context. I am therefore concerned that on the record as it stands, the FCC‘s approach lacks a limiting principle. At least absent some estimated quantification of above-cost fees in the aggregate (which the Corning Study does not provide) or some further estimate tied to the rule it adopted, the FCC‘s logic would appear to justify the preemption of any state or local rule.
The FCC‘s “reinvestment” theory invites similar concerns. It may be true that every fee imposes some cost that, if avoided, could potentially be reinvested to expand 5G coverage. But it does not follow that every type of fee rises to the level of an “effective prohibition,” which is the line Congress drew in the
On this record, the FCC thus has not shown that above-cost fees effectively prohibit service in many, most, or a plurality of cases. I therefore cannot conclude that the agency has articulated “a rational connection between the facts found and the choice made.” Motor Vehicle Mfgs. Ass‘n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (quotations omitted).
The FCC itself recognizes that “in theory, a sufficiently small departure from actual and reasonable costs might not have the effect of prohibiting service,” but concludes its cost-based standard is still appropriate because “the record does not reveal an alternative, administrable approach to evaluating fees.” Small Cell Order ¶ 65 n.199. Concerns about administrability, though important as a policy matter, must still be operationalized under the statute‘s effective prohibition standard. A rule prohibiting fees that exceed cost by $1 would be equally administrable, but that does not mean such fees are invariably effective prohibitions on service, which is the relevant question under §§
The Order‘s safe harbors underscore my concerns. The FCC concedes that its safe harbors, which are not based on estimated costs, tolerate fee levels “in excess of costs in many cases.” Small Cell Order ¶ 79 n.233. That makes it more difficult to credit the agency‘s finding that above-cost fees are per se effective prohibitions on service. The safe harbor also allows local governments to charge recurring fees of $270, which is substantially greater than the $150 cap on recurring fees used to calculate cost-savings in the Corning Study. There are also discrepancies between the FCC‘s safe harbors for application fees and the Corning Study‘s caps. The FCC does not estimate how much of the over $2 billion in cost-savings from the Corning Study would be left over under its more expansive safe harbors. Nor has the agency explained what portion of that figure can be attributed to above-cost fees.
I would have vacated and remanded the Small Cell Order‘s prohibition on above-cost fees. See