A recent declaratory ruling and order issued by the Federal Communications Commission (FCC or Commission) that the FCC said could help to remove regulatory barriers that inhibit the deployment of infrastructure necessary for 5G and other advanced wireless services may also result in FCC pole attachment oversight and regulation of public power utilities, despite the explicit exemption for public power in Section 224 of the Communications Act.
More specifically, under the ruling and order, the FCC could be able to preempt state and local laws or requirements governing access to public rights-of-way (ROW) and publicly-owned infrastructure within the ROW, including rates, terms, or conditions of pole attachment agreements, using Section 253 (related to rights-of-way), and Section 332 (related to wireless services) of the Communications Act.
At issue is a Sept. 26 decision from the FCC in which the Commission explains the national need for next-generation technology and outlines approaches to curtailing actions of cities and states that the FCC claims “threaten to limit the deployment of 5G services.”
The FCC solution to state and local laws it deems “barriers” to deployment is to preempt state and local laws, rules, regulations, or agreements that do not fall within rigid limitations set forth by the FCC within the order. For communities with public power utilities, the FCC suggests that laws, regulations, or terms and conditions of agreements pertaining to public power utility pole attachments could also be preempted.
The FCC ruling and order uses two sections of the Communications Act to preempt state and local laws and requirements.
The Commission noted that Section 253 provides that “[n]o state or local statute or regulation, or other state or local legal requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service.”
It also discussed Section 332, a provision that, among other things, prohibits states and localities from discriminating among providers of wireless service or prohibiting the provision of personal wireless services.
The Commission made it clear that it believes Congress drafted Sections 253 and 332 broadly. The FCC offers several examples of its orders interpreting these provisions broadly in favor of expanded Commission authority.
The FCC believes that the congressional and FCC decisions point to “consistent federal action…to ensure that our country’s approach to wireless infrastructure deployment promotes buildout of the facilities needed to provide Americans with next-generation services.”
The order highlights state and local siting laws and agreements that effectively and efficiently facilitate the deployment of 5G and other next-gen infrastructure. It then focuses on those “outliers” where cities and states “impede” build-out. None of the examples listed include a public power utility.
The Commission makes a sweeping determination that state and local governments’ terms for “use of or attachment to government-owned property within…ROW, such as new, existing and replacement…utility poles” are not made as “market participants.”
The Commission said that Sections 253 and 332 make no distinction between a state or locality’s regulatory or proprietary conduct, and that in the case of broadband deployment where access to ROW or public infrastructure is required, states and localities are “fulfilling regulatory objectives.”
The Commission also states that Section 253 can be applied equally to charges imposed via contracts and other arrangements “between a state or local government and a party engaged in wireless facility deployment.”
Association filed comments
Prior to the late September decision from the FCC, the American Public Power Association filed comments and reply comments with the FCC noting the existence of the public power exemption from FCC regulation of pole attachments set forth in Section 224 of the Communications Act, as well as the distinction between local government actions that are proprietary versus those that are regulatory in nature – such as pole attachment decisions made by public power utilities.
The Commission ultimately ignored the argument in its order regarding the public power exemption from pole attachment regulation, and it failed to provide any meaningful analysis of how Sections 253 and 332 are impacted by Section 224.
Rather, the FCC conflates publicly-owned ROW and facilities, which may or may not be appropriately covered by Sections 253 and 332, with publicly-owned electric utility poles located in public ROW that are covered under Section 224.
For example, the Commission continuously referred to “utility poles” when discussing publicly-owned infrastructure, which the Commission said in its ruling and order is subject to preemption under Sections 253 or 332.
The FCC also alluded to Section 224 when discussing “reasonable fees,” and it used the existing FCC pole attachment rate formula when determining appropriate fees for purposes of its analysis.
The Commission also rebuffed the association’s argument that public power utility decisions are proprietary in nature. It turned aside the argument that neither Section 253 nor Section 332 apply to governmental entities when acting in a proprietary capacity, and it found that Section 253 and Section 332 are not limited to governmental activities, and that attachments to government-owned facilities are governmental activities. The Commission expanded the reach of these sections to “agreements” and “contracts” between a state or local government and a wireless provider.
In addition, the Commission makes it clear that the effect of its ruling is not limited to new attachment agreements but could also apply to preempt portions of existing agreements that are found to contain terms or conditions that are contrary to the findings of the order.
Broadband legislation, S. 3157, introduced in the U.S. Senate by John Thune (R-S.D.) and Brian Schatz (D-Hawaii), “would effectively repeal public power’s exemption from federal pole attachment regulation,” noted Desmarie Waterhouse, vice president of government relations and counsel at the Association, at the Association’s Legal and Regulatory Conference in October.
The committee has not had a legislative hearing on the bill and there has not been a markup. With few days left on Congress’ legislative calendar this term, “we don’t anticipate this bill is going anywhere,” Waterhouse said at the conference. “However, the wireless industry has gotten very clever. They have taken a three-pronged attack going after” public power utilities at the state level, at the FCC, and before Congress.
“The FCC seems to be trying to do with regulation what [the Senate bill] would do legislatively,” Waterhouse said.
Commenting on the Sept. 26 FCC order, Waterhouse said, “This is something that is hugely problematic and would impact all of our members.” She added, “[w]e have a good prospect of getting this reversed, but it is going to be a huge fight.”