Court Won't Decide Rochester Small-Cell Cases Yet

While the court made no final decision on the three lawsuits’ merits, it “found that none of these companies had established, as a matter of law, that the City of Rochester’s Telecommunications fees are out of step with federal law,” said Linda Kingsley, the city’s corporation counsel, in a statement.

Industry is challenging Rochester small-cell fees from a February 2019 telecom city code (see 2111190046), including a $2,000 per pole, one-time charge for right-of-way work, the court said. Also, the city charged $2,500 per replacement pole and $1,500 annually for each small-cell attachment, and assessed “initial and annual fees per linear foot for underground or aerial conduit containing telecommunications facilities such as fiber,” said the court: The city argues the fees are less than a reasonable estimate of its costs. Crown Castle declined to comment Tuesday. Other industry plaintiffs didn’t comment.

Wolford disagreed with Rochester arguments that a 2008 case in the 2nd U.S. Circuit Court of Appeals, NextG Networks v. New York City, prevents providers’ challenge. The 2nd Circuit barred causes of action for damages for Telecom Act Section 253 violations, but Verizon didn’t seek damages, said Wolford in the Verizon decision. “It is ultimately immaterial whether Section 253 provides for a private right of action,” with the 2nd Circuit long holding that a PRA isn’t required for federal preemption claims, said Wolford: Verizon has standing and claims are ripe.

Rochester asked the court to find the FCC’s 2018 small-cell order “irrational and inconsistent with the language of Section 253 and accordingly entitled to no deference,” said Wolford, but the court said the FCC order is “valid on the merits.” Assuming the court may assess whether the FCC order “is consistent with Section 253, the Court finds no inconsistency,” she said. And Wolford found “persuasive” the 9th Circuit’s decision upholding fee limits in the FCC order. “Assuming without deciding that the Court has the authority to consider Defendant’s challenge to the FCC’s interpretation of Section 253, that challenge fails on the merits.”

A plaintiff needn't show an effective prohibition of service before the municipality must show its fees are a reasonable approximation of costs, the judge said. The FCC small-cell order “unequivocally places the burden of demonstrating that the fees at issue are a reasonable approximation of costs on the municipality." Also, Wolford agreed with Verizon “that there is no basis for applying a different standard to fees charged for linear telecommunications facilities than for fees charged for small wireless facilities.”

Congress didn’t limit the court's ability to grant injunctive relief for Section 253 violations, Wolford said in the Crown Castle decision, which incorporated the Verizon order. The judge disagreed Section 253 implicitly prohibited that by including an administrative remedy.

But as with the Verizon case, "genuine issues of material fact exist regarding whether the City’s fees are reasonably based on its costs,” Wolford said. The court wasn’t persuaded it should decide merits of Crown Castle’s dormant commerce clause and First Amendment claims against the city prohibiting passing costs through to customers, she said. "Because the pass-through prohibition is severable, a finding” that the ban “is unconstitutional would not resolve the parties’ dispute -- it would still be necessary to conduct a trial regarding the reasonableness of the City’s fees.” The court won’t grant summary judgment on Crown Castle’s 5th Amendment takings claim because the company didn’t make an argument, the judge said.

"Reasonableness is not the sort of determination that is generally amenable to resolution as a matter of law,” said Wolford in the judge's ExteNet decision, which incorporated the Verizon and Crown Castle orders. The court for now rejects ExteNet’s First Amendment claim against the pass-through prohibition because it doesn’t “find, on the current record, that it should exercise its discretion to enter a declaratory judgment on an issue that may ultimately be mooted” by plaintiff’s challenge under Sections 253 and 332. However, Wolford said the city’s “contention that the challenged provision … regulates only conduct and not speech lacks merit and does not justify entry of summary judgment in favor of the City.”

Local governments are disappointed the judge “erroneously extended” the FCC small-cell order’s “specific limitation of fees to costs to all telecom facilities falling within 253 or 332(c)(7) as both the Constitution and the Act guaranteed communities the right to collect fair and reasonable compensation for the use of their property by private enterprise,” said Best Best attorney Gerard Lederer. The judge’s “interpretation of costs renders meaningless” the FCC’s $270-per-attachment safe harbor rate, which was limited to the attachment and didn’t cover power and backhaul, he said.

Industry must also be disappointed it didn’t get summary judgment, said Lederer: “One of the stated reasons” for the 2018 order was to speed 5G deployment, but the industry litigation undercuts the expedited decisions and permitting that the FCC sought. Delay isn’t good for companies or communities, the local government lawyer said. “Fairly balancing the benefits and burdens of technology deployment is best achieved in cooperative agreements. Hopefully, these and other recent setbacks in industry led litigation will advance that lesson.”

Crown Castle settled a wireless infrastructure complaint last week against a New York town that the wireless infrastructure provider said delayed its distributed antenna system applications for years (see 2104160065). Crown Castle and Hempstead, New York, filed their agreement at the U.S. District Court for Eastern New York. The town will issue permits for 43 nodes and return $121,273.40 to Crown Castle in consultant escrow funds, it said. Crown Castle agreed to construct nodes "in accordance with the plans and specifications filed" with the town, with no deviations unless approved by the town. After construction, the company will seek final inspection and provide all reasonable and customary documentation, said the pact: No additional fees will be required.