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5G Infrastructure Fight Between Cities, FCC to Continue in 2020

Jan. 3, 2020, 11:01 AM

A fight between the FCC and dozens of cities over the placement of 5G infrastructure will continue to play out in federal court in 2020, with oral arguments scheduled for early in the year.

At issue is whether the Federal Communications Commission can restrict how much municipalities can charge wireless carriers like AT&T Inc. to attach pizza box-sized wireless antennas, or small cells, to light poles and other city-owned infrastructure. The FCC’s ruling, adopted in September 2018, also imposes shot clocks for local and state governments to approve or deny carriers’ small cell applications.

The ruling—aimed at speeding carriers’ 5G deployment—will go before the U.S. Court of Appeals for the Ninth Circuit Feb. 10.

The FCC is the “slight favorite” going into the argument because it “wins most lawsuits and has a strong record against cities,” but the case is a close call, Bloomberg Intelligence analyst Matthew Schettenhelm said in a Dec. 3 note.

“The agency starts with an edge, yet it’s pushing the limits of the law before a potentially skeptical court,” Schettenhelm said.

Inconvenient or Prohibitive?

The FCC, to justify its small cell order, relies on a section of federal law that bans states and local governments from prohibiting carriers from offering wireless service. Eugene, Ore., Huntsville, Ala., Bowie, Md., and other cities suing to overturn the restrictive order say that higher costs are an inconvenience to carriers, not a prohibition, and that the FCC didn’t distinguish between the two.

Unlike 4G networks, which consist of 200-foot cell towers placed miles apart, urban 5G networks will be based on thousands of backpack-size small cells placed on hundreds of feet apart throughout cities.

The FCC order limits municipalities from imposing an application fee of more than $100 and an annual attachment fee of $270. A study by Corning Inc. estimates the order would reduce carriers’ costs to deploy small cells by $7,500 per small cell over the next five years.

The ruling creates a 60-day deadline for local authorities to approve or deny an application to attach a small cell on an existing structure, and a 90-day deadline for a new structure. Failing to act on an application constitutes a “presumptive prohibition” that could expose a municipality to litigation, the FCC said in the order.

Cities are also challenging an August 2018 FCC order that makes it easier for telecom providers to rearrange and move previously installed wires on utility poles to make room for new cables.

While cities argue against the FCC’s limits, wireless carriers, including Sprint Corp., claim the agency hasn’t gone far enough.

In a separate suit also going before the Ninth Circuit Feb. 10, the carriers will argue that the FCC should have imposed a “deemed granted” rule that would automatically approve small cell applications if municipalities fail to act. The agency argues that such a rule is unnecessary because carriers have other options for regulatory relief.

Sprint’s case is a “long shot” because it’s hard to argue that “deemed granted” was the agency’s only choice to give carriers regulatory relief, Schettenhelm said. But the lawsuit may indirectly help the FCC prevail in the cities’ challenge by calling attention to the fact that the agency could have gone even further than it did in its small cell order, he said.

The Ninth Circuit has consolidated those cases, as well as several other related lawsuits.

More Changes

The FCC in 2020 may act on changes sought by the wireless industry to make it easier for carriers to modify existing wireless equipment for 5G.

The Wireless Infrastructure Association and CTIA argue that some municipalities are refusing carriers’ requests to modify their wireless facilities over aesthetic and other issues, contrary to a 2012 federal law.

Carriers are also having difficulty gaining access to some utility-owned light poles, they say. The groups are calling on the FCC to clarify the 2012 law to ensure that they can modify their existing facilities and access utility-owned poles to promote 5G deployment.

Municipalities and utilities opposed to the petitions say the proposed changes amount to modifying existing law, instead of clarifying it, which presents legal problems.

FCC Chairman Ajit Pai hasn’t spoken on the issue, but the agency’s two GOP commissioners are supportive of the petitions.

“That’s something I would like to get across the finish line in 2020,” FCC Commissioner Brendan Carr told reporters after the agency’s December meeting.

The consolidated case is City of Eugene, Oregon v. FCC, 9th Cir., No. 19-70344, oral argument scheduled 2/10/20

To contact the reporter on this story: Jon Reid in Washington at jreid@bloomberglaw.com

To contact the editors responsible for this story: Melissa Robinson at mrobinson@bloomberglaw.com, Keith Perine at kperine@bloomberglaw.com

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