November 12, 2018 Reprinted with Permission of the Texas Municipal League
Last week, TML joined a nationwide coalition in a lawsuit to overturn the federal communications commission’s preemptive “small cell” order. The order, discussed in a previous article, would federalize municipal right-of-way authority and compensation. Coalition members include, among dozens of others, the National League of Cities, the U.S. Conference of Mayors, the National Association of Telecommunications Officers and Advisors (NATOA), the Texas Coalition of Cities for Utilities Issues, and the Cities of Dallas and Plano.
In support of the lawsuit, the coalition also filed a “motion for stay” at the FCC. The motion will provide evidence that the coalition has first sought relief at the FCC by seeking to delay the implementation of the order until substantive legal issues can be litigated. The key arguments against the order are as follows:
- Tenth Amendment: The order violates the Tenth Amendment to the U.S. Constitution., which reserves to the states powers not given to the federal government. The argument is particularly poignant in this case because the FCC isn’t merely preempting state laws. Rather, the federal government is actually appropriating state property (municipal rights-of-way and facilities) for private use by cell phone providers. According to one court, the order is nothing less than “[a] forced transfer of property that is in principle no different from a ‘congressionally compelled subsidy from state governments’” to cell phone companies.
- Fifth Amendment: The order caps rental fees at $270 per small cell node annually. That artificially low cap means that the order actually works an uncompensated taking on the city’s residents in violation of the Fifth Amendment to the U.S. Constitution. (Texas law also caps annual rental fees, and the League is also participating in a state court lawsuit to overturn that cap.)
- Proprietary Rights: The federal government can’t deprive a state (and its cities) from its authority as a proprietor (i.e., owner) of property. In other words, cities aren’t acting as regulators over companies that want to place their facilities on city equipment. Instead, the city is an owner of that equipment. As such, the FCC has no power to tell a city how to use it.
- Other Arguments: The order: (1) violates a city’s due process rights by imposing unreasonable “shot clocks” within which installations must be approved; (2) goes beyond the authority granted to the FCC by the federal Telecommunications Act; and (3) ignores evidence in the record submitted by local governments, including evidence related to fair market value of public rights-of-way (TML has submitted comments in this and other FCC proceedings explaining that the Texas Constitution requires fair market value rent for municipal rights-of-way).
Two other local government lawsuits have also been filed. In addition, Sprint and AT&T have filed lawsuits claiming that the order doesn’t go far enough. Industry is generally arguing that their applications should be automatically granted if a city fails to comply with the mandates in the order. Because the appeals have been filed in various federal courts, federal rules provide that they will soon be consolidated in one of the courts.
The order has been officially published in federal register, which means that it will be effective on January 14, 2019. In spite of the motion for stay and the lawsuit, city officials should consider reviewing their procedures in light of the upcoming effective date. NATOA has made available a free webinar that reviews the order’s mandates.
Cities that expect small cell installations should consider participating in the coalition. To do so, contact Gerard “Gerry” Lederer, partner at Best Best and Krieger LLP in Washington, D.C. by email at Gerard.email@example.com