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Big legal battle brewing over FCC's 5G small-cell orders

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Big legal battle brewing over FCC's 5G small-cell orders

A tide of local opposition is rising against two recent orders from the U.S. Federal Communications Commission aimed at streamlining 5G deployment, casting doubt on the agency's ability to speed things along.

In an open meeting this summer, the FCC voted first to prohibit state and local governments from blocking the deployment of telecom equipment through moratorium statutes. Then in another open meeting, the regulator set limits on the fees municipalities can charge and the time they can take to review small-cell siting applications from network operators such as AT&T Inc., Verizon Communications Inc., T-Mobile US Inc. and Sprint Corp. Small cells are cellular base stations and antennas that are typically the size of a pizza box. Operators are set to deploy hundreds of thousands of small cells to power their next-generation 5G networks.

Republican FCC Commissioner Brendan Carr, who led the small-cell initiative, called the agency's approach "balanced," saying it eliminated uncertainty and respected local concerns. But since the start of October, a number of cities and towns have taken steps to challenge the measures in court, arguing the FCC overreached its powers.

Portland, Ore., filed a petition for review of the FCC's moratorium order with the U.S. Court of Appeals for the Ninth Circuit. Similarly, Seattle Mayor Jenny Durkan announced her city's intention to appeal the FCC's order setting limits around small-cell reviews, arguing the order diminishes local control of public rights-of-way. The law firm Best Best & Krieger LLP has formed a coalition of communities to fund a court challenge to the small-cell order, and multiple groups — including various mayors, state senators and the Coalition of Concerned Utilities — have filed directly with the FCC asking for a reconsideration of one or both measures.

Asked in an interview if these legal challenges could slow 5G deployment, Blair Levin, a fellow at the Brookings Institution's Metropolitan Policy Program who previously served as executive director of the FCC's Omnibus Broadband Initiative, said "I think it probably will, but there are a lot of variables. I can say with absolute certainty that [the FCC orders] will not achieve the primary objective … of accelerating and broadening the deployment of 5G — that's not going to happen."

One reason why Levin believes the FCC's orders could fail to speed deployment is the "number of very serious legal arguments from the cities," including constitutional arguments around states' rights.

"When there are big legal challenges, everyone just stops," Levin said.

One major legal question centers on the FCC's interpretation of Sections 253 of the Communications Act, which generally says no state or local statute may prohibit the ability of any entity to provide telecommunications service. The statute specifies state and local governments have the authority to manage their public rights-of-way and to require "fair and reasonable" compensation. But it also gives the FCC certain pre-emption powers. Section 332 addresses similar issues specifically for mobile service.

"In both 253 and 332, there is a lot of deference to the local jurisdictions to manage their rights-of-way," Doug Jarrett, a partner at Keller and Heckman LLP, said in an interview, adding that he believes the FCC's orders diminish local authority.

"There's a big state's rights issue that's not going away," said Jarrett, who represents associations and major corporations before the FCC on issues such as rural broadband deployment.

But Davis Wright Tremaine LLP partner Scott Thompson, who represents telecommunications industry clients before the FCC, said he does not expect the legal battle over the FCC's order to impact 5G deployment.

"Litigation is not unusual, particularly after an order like this," he said, noting that past experience has shown the overall majority of governments will respect the FCC's orders.

"There will be those who challenge it, but on the whole, it won't slow things down," Thompson said.

A local government lawyer with experience on the issue, however, said many towns and cities simply will be unable to comply with the FCC's order. The lawyer pointed to the small-cell order's 60-day limit on reviewing applications for collocating small cells on existing infrastructure and its 90-day limit on reviewing applications for new small-cell structures.

"This whole idea that local government doesn't have the right to adopt fair compensation is just not workable. The idea that local government can get all this done in 60 days is just not workable," the lawyer said.

Levin agreed, saying "permitting is a serious challenge."

"There are only so many people in the permitting department, and you have hotels going up and roads that need repair and you've got electrical utilities," he said. "What the FCC is saying is, 'We don't care about any of that. We want you to prioritize [5G].'"

FCC Commissioners Carr and Michael O'Rielly seemed to anticipate the legal battle over the recent orders. After the agency's vote prohibiting moratoria, O'Rielly acknowledged "I know it will be challenged in court," while Carr has said there is a "cottage industry of consultants spurring lawsuits and disputes in courtrooms and city halls around the country over the scope of Sections 253 and 332."

The FCC also included a paragraph in its small-cell order stating that if any provision in the order is held to be unlawful, the remaining unchallenged rules shall remain in effect.

"In that paragraph, the FCC indicated its lack of confidence in the portions of the decision," Jarrett said.

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