The 9th Circuit Backs the FCC in Small Wireless Appeal

Written by W. Scott Snyder and Daniel Kenny. This article first appeared in Cityvision. 

On August 12, 2020, a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit (Court) entered its decision on five consolidated cases challenging the Federal Communications Commission's (FCC) Orders preempting many aspects of local government regulation of small wireless facilities. The five cases presented the Court with a wide variety of administrative law, statutory, and constitutional challenges to the multi-part FCC Orders. The panel primarily upheld the Orders but overturned portions of the Orders that restricted local government’s ability to impose aesthetic regulation on small cell wireless facilities.

The following provisions of the FCC's Orders were upheld:

Review Standard. The adoption of the "material inhibition” standard for review of local government permitting decisions and regulatory structures was upheld. The Court approved the new national standard, replacing the former Ninth Circuit's “significant gap/least inclusive means” test.

Limitation on Local Permitting Fees. The Court noted that the FCC Orders create safe harbors, not hard cost recovery limitations. Communities can charge higher fees if they establish that the fees represent the actual cost of processing. Washington communities are familiar with the requirement that the fees cities impose be based upon objective, actual cost information.           

Deemed Approved Rejected. The Court rejected wireless industry claims that the FCC should impose "deemed granted" relief for delayed small cell application approvals/denials. A delayed or unsuccessful applicant has a judicial remedy in federal court.

Shot Clock/Reasonably Presumptive Review Period. The Court upheld the shortened FCC "shock clock" for all permits and authorizations associated with the small wireless deployment. The Court clarified that these shot clocks are only presumptive and are subject to extension by the permitting authority should circumstances in a particularly difficult situation require additional review. The industry has the right to challenge any delay through injunctive relief in Federal Court.

Ban on Moratoria Upheld. Prohibited moratoria must do more than merely delay construction, and most result in delays that continue "for an unreasonably long or indefinite amount of time." The limitation is based on the theory that the providers would be discouraged from filing applications by excessive delay.

The One-Touch Make-Ready Regime for Utility Poles. Because public utility challenges were two minor and secondary aspects of the Orders, the Court chose to uphold all of that Order, including overlashing and self-help provisions.

Control of the Public Rights of Way (ROW).The Court rejected local government constitutional challenges to FCC preemption of local ROW control, holding that cities were acting as regulatory entities, not property owners.

Radio Frequency Regulation. City councils are well aware of citizen concerns over the health impacts of radio frequency (RF) radiation. Montgomery County challenged the Orders as unlawful because they were adopted before the FCC completed its review of RF regulation. The Court found no merit in this assertion noting that the FCC has "examined the effects of 5G technology on its RF standards and closed the 2013 docket." Any challenges to the Order relating to RF regulation must now be brought in a separate proceeding.

Aesthetic Regulation

The Ninth Circuit panel struck down the FCC’s restrictive standard for aesthetic requirements imposed by local governments. The Orders’ requirement that aesthetic regulations be "no more burdensome" than regulations applied to other infrastructure deployment was vacated and remanded to the Commission. This is the one bright spot in the ruling. Cities may establish aesthetic standards for small wireless facilities regardless of whether a city has different regulations for electric or other utility facilities or indeed, none at all.

The Court also remanded the provision that standards be "objective" finding that this requirement was not explained by the Commission and was therefore arbitrary and capricious. The Court's ruling emphasized that communities need latitude to establish aesthetic requirements, particularly for residential and signature commercial districts as well as historic districts. This portion of the Order is likely to be addressed shortly but is unlikely to have a significant impact in our state. Washington cities have long utilized objective standards in the exercise of local zoning authority under the direction of the Washington courts in cases such as Anderson v. Issaquah, 70 Wn. App.64, 851 P.2d. 744 (1993). The panel expressly validated local governments’ legitimate public goals "such as safety and aesthetics," as well as the cities’ interest in protecting signature neighborhoods.

One portion of the Order relating to aesthetic regulations was upheld — the requirement that aesthetic regulations be “reasonable.” Reasonable is defined as “technically feasible and reasonably directed” at remedying aesthetic harms.

Takeaways

Cities that have adopted small cell regulations based on the FCC Order can continue to implement them — No changes are required. The only portion of the FCC Order that was overturned strengthens cities by providing a more difficult review standard for challenges. Cities that have not finalized their small cell regulations or begun to implement them should proceed immediately.

Given the large number of parties in the five consolidated cases and the wide variety of issues presented, it is likely that one or more of the numerous parties will request either En Banc review of the decision by the Ninth Circuit or a U.S. Supreme Court appeal. For now, the majority of the FCC's Order has been upheld.

Scott Snyder and Daniel Kenny are members of Ogden Murphy Wallace’s Municipal Practice Group. Scott authored the Amicus Curiae brief submitted to the 9th Circuit on behalf of the AWC. Daniel is the Chair of OMW’s Telecommunication Practice group.