FCC Acts to Remove State and Local Regulatory Barriers to 5G Deployment

On September 27, 2018, the Federal Communications Commission issued a Declaratory Ruling and Third Report and Order (DRO) to remove certain state and local regulatory barriers that inhibit the deployment of 5G infrastructure.¹ The DRO focuses on facilitating the installation of Small Wireless Facilities (small cells) necessary to densify wireless networks for 5G services. The DRO was published in the Federal Register on October 15, 2018 and becomes effective on January 14, 2019. As of the date of this Advisory, a number of appeals have been filed, including by local governments arguing that the DRO exceeds FCC authority and by wireless companies arguing that the DRO should have imposed greater limitations on local government decisionmaking.

Legal Background

The FCC in the DRO relied on its authority in Sections 253(a) and 332(c)(7) of the Telecommunications Act of 1996. In each of these provisions, Congress addressed state and local legal requirements that may affect the deployment of telecommunications services.

Section 253(a) provides that no state or local regulation or statute "may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service."² Section 332(c)(7) specifies that the "regulation of the placement, construction, and modification" of wireless facilities by any state or locality (1) "shall not unreasonably discriminate among providers" and (2) "shall not prohibit or have the effect of prohibiting the provision of personal wireless services."³ This section goes on to provide that state and local governments should act on requests to place or construct wireless facilities "within a reasonable period of time."⁴

Declaratory Ruling

The FCC made three declaratory rulings clarifying its interpretation of Sections 253 and 332 as those provisions relate to small cell deployment.

First, the FCC affirmed the use of the "materially inhibit" standard that was articulated in the FCC's California Payphone⁵ case as the appropriate standard for determining whether a state or local law operates as a prohibition or effective prohibition within the meaning of Sections 253 and 332.⁶ The FCC explained that an "effective prohibition occurs where a state or local legal requirement materially inhibits a provider's ability to engage in any of a variety of activities related to its provision of a covered service."⁷

Second, the FCC addressed fee requirements that can serve as an effective prohibition on the deployment of small cells. The FCC established guidelines for state and local fees that will presumptively comply with Sections 253 and 332.

1. The fees must be a reasonable approximation of the state or local government's costs.
2. Only objectively reasonable costs are to be factored into the fees.
3. The fees can be no higher than the fees charged to similarly situated competitors in similar situations.

Third, the FCC provided guidance on non-fee related state and local legal requirements that can be an effective prohibition on small cell deployment. Aesthetic requirements will not be 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.⁸

New Shot Clocks

The FCC established two new shot clocks for action by state or local governments on an application to deploy a small cell:

1. 60 days for review of an application for collocation of a small cell on a preexisting structure, and
2. 90 days for review of an application for attachment of a small cell using a new structure.⁹

In addition, the FCC determined that the failure of a state or local government to make a decision on a small cell application within the required time limit will constitute a "failure to act" and will be deemed a presumptive prohibition on the provision of personal wireless services within the meaning of Section 332. The FCC stated it would expect that, upon notifying the appropriate state or local authorities of the expiration of the shot clock, the applicant would be issued the necessary permits "absent extraordinary circumstances." If the necessary permits are not issued, then in the FCC's view, the applicant would have a "straightforward case" for obtaining expedited relief in a court of competent jurisdiction.

The FCC reaffirmed its prior determination that the shot clock will begin to run when an application is first submitted as opposed to when it is deemed complete by the state or local authority. However, the shot clock can be paused if the state or locality notifies the applicant within 30 days that the application is incomplete. The state or locality can pause the clock again by providing written notice within 10 days to the applicant that the supplemental submission is still inadequate.

Lastly, the FCC clarified that the standards addressed in this order will also apply to other previously established shot clocks outside of small cells.¹⁰

© Arnold & Porter Kaye Scholer LLP 2018 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.