Whether streaming video or merely texting with family and friends, we all use more mobile data than ever before. In fact, monthly data usage per smartphone subscriber rose to an average of 3.9 gigabytes per subscriber per month in 2016, which represented a 39-percent increase from 2015.1 AT&T, for example, estimates that since introduction of the iPhone in 2007, mobile data usage has increased 360,000 percent on its network.2 This unprecedented increase in mobile data use on wireless networks has created an urgent need to expand capacity, in part by deploying the next generation technology—5G, which stands for “fifth-generation cellular wireless”—very soon.
February 28, 2019 Feature
Removing Barriers for 5G Wireless Infrastructure Deployment
By Andrew C. Emerson
Networks with 5G capabilities are up to 100 times faster than 4G networks, with close to zero latency, which is the delay experienced while video is temporarily stored before being displayed on your mobile device.3 This revolutionary leap in technology will allow autonomous vehicles to interact more smoothly and enable the Internet of Things to truly change our lives. From an economic perspective, wireless providers are projected to invest $275 billion over the next decade in next-generation wireless infrastructure deployments, which should generate three million new jobs and boost the nation’s GDP by half a trillion dollars.4
The Federal Communications Commission (“FCC”) took important actions in 2018 to help reduce regulatory barriers to this 5G infrastructure investment and deployment. The following provides a brief summary of some key actions.
Small Cell Infrastructure Order
On September 27, 2018, the FCC released its Declaratory Ruling and Third Report and Order in proceedings designed to accelerate wireline and wireless broadband deployment by removing barriers to infrastructure investment (hereinafter referred to as the “Small Cell Infrastructure Order”).5 In the Declaratory Ruling, the FCC adopted a “materially inhibit” standard for determining whether a state or local law operates as a prohibition or effective prohibition on the provision of telecommunications under sections 253 and 332 of the Telecommunications Act of 1996 (“the Act”).6 After explaining the basis for its interpretation, the FCC applied the standard to fees and other regulations commonly imposed by local entities on small wireless facilities, and it created preemption tests and a presumptive safe harbor for fees. In the accompanying Third Report and Order, the FCC (1) codified its existing 90- and 150-day shot clocks for wireless deployments, (2) created a new set of shot clocks for small wireless facilities, (3) determined that violating a shot clock constituted not only a “failure to act” under section 332 but also a presumptive prohibition, and (4) clarified several issues relevant to the FCC’s section 332 shot clocks. The Small Cell Infrastructure Order has been highly anticipated by both the wireless industry and local officials, as they partner to bring these network improvements to customer and constituents. The following subsections provide more detail on this important FCC action.
Declaratory Ruling
Materially Inhibit Standard
Recognizing that a number of federal appellate courts had articulated different and often conflicting views concerning what local action constitutes an “effective prohibition” under sections 253 and 332 of the Act, the FCC adopted a “materially inhibit” standard consistent with decisions of the First, Second, and Tenth Circuits, as well as the Commission’s 1997 California Payphone decision. Specifically, a state or local legal requirement constitutes an effective prohibition if it “materially limits or inhibits the ability of any competitor or potential competitor to compete in a fair and balanced legal and regulatory environment.”7 The FCC rejected the coverage gap test applied to date by many federal courts, saying, “This test is met not only when filling a coverage gap but also when densifying a wireless network, introducing new services or otherwise improving service capabilities.”8 Thus, the FCC concluded, “an effective prohibition includes materially inhibiting additional services or improving existing services.”9
State and Local Fees
The record contained multiple studies indicating that a significant increase in small wireless facilities deployment is necessary to address existing 4G LTE capacity restraints and to provide 5G services in the near future.10 For example, “A report from Accenture estimates that, overall, during the next three or four years, 300,000 small cells will need to be deployed—a total that it notes is ‘roughly double the number of macro cells built over the last 30 years.’”11 The FCC observed that the estimated small wireless facility permit volume can magnify per-facility fees charged to providers, which will act as an effective prohibition when multiplied by each of the small wireless facility deployments; further, unreasonable fees will allow first-tier cities to deplete finite capital that may otherwise have been deployed in other geographic areas where providers serve or potentially would serve.12
Noting the aggregate effects that unreasonable fees will cause due to the nature and volume of anticipated small wireless facility deployment, the FCC adopted the following standard.
ROW [right-of-way] access fees, and fees for the use of government property in the ROW . . . as well as application . . . fees imposed by a state or local government . . . , violate Sections 253 or 332(c)(7) unless . . . : (1) the fees are a reasonable approximation of the state or local government’s costs, (2) only objectively reasonable costs are factored into those fees, and (3) the fees are no higher than the fees charged to similarly-situated competitors in similar situations.”13
This standard applies (1) to any and all fees reasonably related to a deployment14 and (2) to all government property in the right-of-way. The FCC stated,
[O]ur evaluation of the material effects of fees on the deployment of Small Wireless Facilities does not differ whether the fees are for ROW access, use of government property within the ROW, or one-time application and review fees or the like—any of which drain limited capital resources that otherwise could be used for deployment—and we see no reason why the Act would tolerate a greater prohibitory effect in the case of application or review fees than for ROW fees.”15
This is important because the FCC rejected the proprietary/regulatory distinction that had developed in federal precedent, and the FCC extended the standard to cover, for example, municipal electric company-owned utility poles located in right-of-ways.16 In terms of consultant fees, the FCC explained that the costs themselves, which form the basis for any lawful fee, must be reasonable; thus, “excessive charges by third party contractors or consultants, may not be passed on through fees even though they are an actual ‘cost’ to the government.”17
To facilitate deployment, the FCC created the following fee limits, whereby any fees at or below these amounts presumptively do not constitute an effective prohibition under section 253(a) or section 332(c)(7) and are presumed to be “fair and reasonable compensation” under section 253(c):
(a) $500 for non-recurring fees, including a single up-front application that includes up to five Small Wireless Facilities, with an additional $100 for each Small Wireless Facility beyond five, or $1,000 for non-recurring fees for a new pole (i.e., not a collocation) intended to support one or more Small Wireless Facilities; and (b) $270 per Small Wireless Facility per year for all recurring fees, including any possible ROW access fee or fee for attachment to municipally-owned structures in the ROW.18
A locality can charge fees that exceed these levels by demonstrating that (1) the fees are a reasonable approximation of costs, (2) those costs themselves are reasonable, and (3) the fees are nondiscriminatory.19 The FCC did not exempt existing agreements from the statutory requirements set forth in the Declaratory Ruling; thus, any agreements entered into before the effective date will need to be evaluated.20
Aesthetics, Undergrounding, and Minimum Spacing Requirements
The FCC recognized that there are non-fee, land-use or zoning requirements that may restrict small wireless facility deployments to the degree that they have the effect of prohibiting service in violation of sections 253 and 332. To provide guidance, the FCC concluded that aesthetic requirements are not preempted if they are (1) reasonable, (2) no more burdensome than those applied to other types of infrastructure deployments, and (3) objective and published in advance.21 The FCC draws on its analysis of fees to address aesthetic requirements: “Analogously [to fees], aesthetic requirements that are reasonable in that they are technically feasible and reasonably directed to avoiding or remedying the intangible public harm of unsightly or out-of-character deployments are also permissible.”22 But “aesthetic requirements that are more burdensome than those the state or locality applies to similar infrastructure deployments are not permissible, because such discriminatory application evidences that the requirements are not, in fact, reasonable and directed at remedying the impact of the wireless infrastructure deployment.”23 The FCC provided localities until April 13, 2019, to establish and publish aesthetic standards, if they choose to do so.24
The FCC aesthetic criteria apply to both undergrounding and minimum spacing requirements.25 Thus, for example, if a locality had a requirement that non-antenna equipment associated with a small wireless facility deployment in a right-of-way be placed underground (assuming the requirement is reasonable, objective, and published in advance), but the requirement did not apply to other occupiers of the right-of-way, then the requirement would be preempted because it is more burdensome to wireless infrastructure than the requirements, if any, applied to other types of infrastructure deployments.26
Third Report and Order
In connection with interpreting what a “reasonable period of time” is for a locality to act on an application to place, construct, or modify a personal wireless service facility under section 332, the FCC adopted two new shot clocks for small wireless facilities: 60 days for review of an application for collocation of small wireless facilities using a preexisting structure and 90 days for attachment of small wireless facilities on a new structure.27 These small wireless facility clocks are the same regardless of whether one application is combined with others in a batch, but if a batch application contains both collocations and an attachment on a new structure, the longer 90-day clock will apply to the batch application.28 If the locality informs the applicant that an application is incomplete within 10 days after submittal, the applicable clock resets and begins when the missing information is provided by the applicant.29 Any additional notice of incompleteness will toll the applicable clock consistent with non-small wireless facility shot clocks—the shot clock would toll if the siting authority provides written notice within 10 days that the supplemental submission did not provide the information identified in the original notice delineating missing information.30
The FCC provides a new remedy for violations of the small wireless facility clocks. If a locality fails to act within the relevant 60- or 90-day small wireless facility shot clock, the inaction will function not only as a section 332(c)(7)(B)(v) failure to act but it will also amount to a presumptive effective prohibition under section 332(c)(7)(B)(i)(II).31 The FCC anticipates that a court would order all necessary permits without further delay if a provider is required to bring a section 332 claim for violation of a small wireless facility shot clock, which should incent localities to act within the required timelines.32
The FCC also made several clarifications in the Third Report and Order. First, it clarified that for purposes of section 332 shot clocks, “attachment of facilities to existing structures constitutes collocation, regardless whether the structure or the location has previously been zoned for wireless facilities.”33 Second, it noted that any and all permits required for deployment under section 332 must be completed within the applicable shot clocks.34 And third, it explained that the relevant shot clocks begin running when application materials are proffered by the applicant.35 Thus, a locality cannot delay a section 332 shot clock from starting by requiring a pre-application meeting or by refusing to accept an application.
Moratoria Declaratory Ruling
On August 3, 2018, the FCC released a declaratory ruling clarifying that certain local actions that halt or suspend the acceptance, processing, or approval of applications or permits for telecommunications services are unlawful under section 253 of the Act.36 The FCC characterized these actions as de facto moratoria because they have the effect of prohibiting the deployment of telecommunications service and facilities. Specifically, the FCC noted that the record included several examples of de facto moratoria, including “blanket refusals to process applications, refusals to issue permits for a category of structures, frequent and lengthy delays of months or even years in issuing permits and processing applications, and claims that applications cannot be granted until pending local, state, or federal legislation is adopted.”37 The FCC concluded that a de facto moratorium can prohibit or effectively prohibit in violation of section 253(a) “even though some de facto moratoria may leave the hypothetical possibility of a locality taking action on an application; if applicants cannot reasonably foresee when approval will be granted because of indefinite or unreasonable delay, then an impermissible de facto moratorium is in place.”38
NHPA/NEPA Order
The FCC amended section 1.1312 of its environmental and historic preservation rules to clarify that the deployment of small wireless facilities by private parties does not constitute either a federal “undertaking” within the meaning of the National Historic Preservation Act (NHPA) or a “major Federal action” under the National Environmental Policy Act of 1969 (NEPA).39 The result of this rule change is that qualifying small wireless facility deployments will not trigger the mandatory review process under either the NHPA or NEPA.40 To qualify, a deployment must fit within certain size parameters.41 The FCC adopted these same size parameters in its definition of a “small wireless facility” in the Small Cell Infrastructure Order.42 Small wireless facility deployments continue to remain subject to state and local approval requirements.43
The FCC also amended section 1.1307(A)(6) of its rules that previously required an applicant to file an environmental assessment (“EA”) solely because a proposed facility would be located within a floodplain. Under the revised rule, so long as the proposed facility is at least one foot above the base flood elevation of the floodplain, an EA is not required.44 In instances when an EA is required, the FCC revised its timelines for action on EAs to provide applicants with greater time certainty. Specifically, the FCC directed staff to perform completeness and accuracy reviews to support a finding of no significant impact (“FONSI”) within 20 days from placement on notice, either by publication of a public notice or posting on the website (“on notice”).45 Unless there is a basis for denial, the FCC directed staff to complete its review and issue a FONSI within 60 days from the placement on notice for the EA.46 If an EA is missing necessary information, staff will advise the applicant within 30 days from the day the public notice is issued, and the commission will issue a FONSI within 30 days after the applicant provides the supplemental information.47 If additional public notice is required, a new 60-day period begins upon publication of the additional notice.48
The FCC also amended its procedures for tribal consultation on large wireless facilities that are proposed to be located off tribal lands and outside reservation boundaries. In an effort to improve the timeliness and control costs associated with the Tower Construction Notification System (“TCNS”), which was created as part of the Wireless Facilities Nationwide Programmatic Agreement in 2005 to allow for tribal participation in FCC undertakings, the FCC established a new 45-day tribal consultation shot clock.49 If after 30 days, the applicant has not received a response from a tribe, the applicant may submit the matter through the TCNS to the FCC. Thus, unlike the previous open-ended procedures, which allowed tribes to hinder applicants’ efforts to involve the FCC, the revised process requires the FCC to contact a tribe within five business days by letter or email to request that it inform the Commission within 15 calendar days of the letter or email of its interest in participating in the NHPA section 106 review.50 If the tribe does not respond within 15 calendar days, the applicant’s pre-construction section 106 review obligations are discharged with respect that tribe.51 FCC also clarified that an applicant’s obligation is limited to providing tribes the FCC Form 620 (new towers), 621 (collocations), or equivalent materials in correspondence, but no other studies or reports.52 The FCC also clarified that if a tribe conditions a response upon receipt of upfront fees for consultation, the Commission will treat the conditional response as a failure to respond and allow the applicant to proceed with its project after the new 45-day shot clock period.53
Conclusion
The recent FCC actions summarized above will help attract the capital investment and infrastructure deployment necessary to upgrade existing 4G LTE networks and build the 5G wireless networks of the future. The associated jobs and economic boost, as well as the country’s place in the global race for 5G, is dependent on aligning national policy with local land use values so that permits for small wireless facilities will be processed in a timely manner and consumers nationwide can benefit from the amazing developments in wireless communications.
Endnotes
1. See Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993/Annual Report and Analysis of Competitive Market Conditions with Respect to Mobile Wireless, Including Commercial Mobile Services, Twentieth Report, 32 FCC Rcd 8968, 8972, ¶ 20 (2017), https://docs.fcc.gov/public/attachments/FCC-17-126A1.pdf.
2. See AT&T Details 5G Evolution, AT&T.com, http://about.att.com/story/att_details_5g_evolution.html (Jan. 4, 2017).
3. See Riley Davis, News, What Is 5g? A Brief Explainer, CTIA.org, https://www.ctia.org/news/what-is-5g-a-brief-explainer (last visited Jan. 16, 2019)
4. See F. Comm. Comm’n, In the Matter of Accelerating Wireless Broadband Deployment by Removing Barriers to Infrastructure Investment and Accelerating Wireline Broadband Deployment by Removing Barriers to Infrastructure Investment, Declaratory Ruling and Third Report and Order 2, FCC WT Docket No. 17-79 & FCC WC Docket No.17-84 (adopted Sept. 27, 2018; released Sept. 27, 2018; effective Jan. 14, 2019) (hereinafter “Small Cell Infrastructure Order”), https://docs.fcc.gov/public/attachments/FCC-18-133A1.pdf.
5. Small Cell Infrastructure Order, supra note 4.
6. The Act is codified as amended in scattered sections of 47 U.S.C.
7. Small Cell Infrastructure Order, supra note 4, at ¶ 35.
8. Id. at ¶ 37.
9. Id.
10. The FCC adopted a definition for “small wireless facility” in 47 C.F.R. § 1.6002(l), consistent with 47 C.F.R. § 1.1312(e)(2), from its March 30, 2018, Second Report and Order (excluding small wireless facilities from NHPA and NEPA review). A “small wireless facility” is one: (a) mounted on a structure (including antennas) that is no taller than the greater of 50 feet or 10% of adjacent structures or that extend an existing structure on which it is mounted to no taller than 50 feet or by more than 10%, whichever is greater; (b) with each antenna of ≤3 cubic feet in volume each; (c) with other associated equipment (including preexisting equipment) on the structure ≤28 cubic feet in volume; (d) that does not require antenna structure registration; (e) is not located on Tribal lands, and (f) that complies with the FCC’s radio frequency exposure rules.
11. Small Cell Infrastructure Order, supra note 4, at ¶ 47.
12. Id. at ¶¶ 48, 53, 54, and 56.
13. Id. at ¶ 50.
14. The FCC stated as follows:
Consistent with the interpretations above, the requirement that compensation be limited to a reasonable approximation of objectively reasonable costs and be non-discriminatory applies to all state and local government fees paid in connection with a provider’s use of the ROW to deploy Small Wireless Facilities including, but not limited to, fees for access to the ROW itself, and fees for the attachment to or use of property within the ROW owned or controlled by the government (e.g., street lights, traffic lights, utility poles, and other infrastructure within the ROW suitable for the placement of Small Wireless Facilities). This interpretation applies with equal force to any fees reasonably related to the placement, construction, maintenance, repair, movement, modification, upgrade, replacement, or removal of Small Wireless Facilities within the ROW, including, but not limited to, application or permit fees such as siting applications, zoning variance applications, building permits, electrical permits, parking permits, or excavation permits.
Id. at ¶ 69.
15. Id. at ¶ 54.
16. See id. at ¶ 92 and n.253.
17. Id. at ¶ 70; see also ¶ 56.
18. Id. at ¶ 79.
19. See id. at ¶ 80; see also nn.233–234.
20. See id. at ¶ 66 and n.205.
21. See id. at ¶ 86.
22. Id. at ¶ 87.
23. Id.
24. See id. at ¶ 89.
25. See id. at ¶¶ 90–91.
26. See id. at ¶ 90 (“Further, a requirement that materially inhibits wireless service, even if it does not go so far as requiring that all wireless facilities be deployed underground, also would be considered an effective prohibition of service.”).
27. See id. at ¶ 105.
28. See id. at ¶ 114.
29. See id. at ¶ 143.
30. See id.
31. See id. at ¶ 117.
32. See id. at ¶¶ 122–131.
33. Id. at ¶ 140.
34. See id. at ¶ 144.
35. See id. at ¶ 143.
36. See F. Comm. Comm’n, Accelerating Wireline Broadband Deployment by Removing Barriers to Infrastructure Investment, Third Report and Order and Declaratory Ruling, WC Docket No. 17-84 & WT Docket No. 17-79, FCC 18-111, ¶¶ 140–68 (rel. Aug. 3, 2018) (the “Moratoria Declaratory Ruling”).
37. Id. at ¶ 149.
38. Id. at ¶ 151.
39. See Accelerating Wireless Broadband Deployment by Removing Barriers to Infrastructure Investment, Second Report and Order, WT Docket No. 17-79, FCC 18-30, ¶ 36 (rel. Mar. 30, 2018) (the “NHPA/NEPA Order”).
40. See id. at ¶ 38.
41. Section 1.1312(e)(2) provides that paragraphs (a) through (d) of the section do not apply where the deployment of facilities meets the following conditions:
(i) The facilities are mounted on structures 50 feet or less in height including their antennas as defined in § 1.1320(d), or the facilities are mounted on structures no more than 10 percent taller than other adjacent structures, or the facilities do not extend existing structures on which they are located to a height of more than 50 feet or by more than 10 percent, whichever is greater; (ii) Each antenna associated with the deployment, excluding the associated equipment (as defined in the definition of antenna in § 1.1320(d)), is no more than three cubic feet in volume; (iii) All other wireless equipment associated with the structure, including the wireless equipment associated with the antenna and any pre-existing associated equipment on the structure, is no more than 28 cubic feet in volume; (iv) The facilities do not require antenna structure registration under Part 17 of this chapter; (v) The facilities are not located on Tribal lands, as defined under 36 C.F.R. § 800.16(x); and (vi) The facilities do not result in human exposure to radiofrequency radiation in excess of the applicable safety standards specified in § 1.1307(b).
42. Small Cell Infrastructure Order at ¶ 11.
43. See NHPA/NEPA Order, supra note 39, at ¶ 77.
44. See id. at ¶ 144.
45. See id. at ¶ 150.
46. See id. at ¶ 149.
47. See id. at ¶ 151.
48. See id. at ¶ 152.
49. See id. at ¶ 111.
50. See id.
51. See id.
52. See id. at ¶ 104.
53. See id. at ¶ 120.