The Town Crier - Legislative Backgrounder

On Thursday, December 10, 2020, the Assembly Telecommunications and Utilities Committee advanced with amendments, A-1116.  The purpose of this legislation is to provide for uniform regulation of small wireless facility deployment in the State and attempts to mirror and in some cases goes beyond current Federal law. 

As most are keenly aware, small cell wireless facilities are needed to deploy 5G and the next generation of broadband internet access.  The facilities are not like the current wireless facilities that function using large towers and antennas.  Instead, because 5G does not travel as far as current wireless waves, smaller, more numerous antennas are needed to develop a functioning system.  And, wireless service providers have offered that the most efficient and cost effective way is to place these antenna and small cell facilities within the public rights-of-way. 

Being a limited asset, it is up to local officials to manage and protect the municipal rights-of-way for current and future use.  However, due to recent federal regulations that preempt State and local authority to regulate small cell facility deployment, local officials are limited in their ability to act as an appropriate manager. 

Preemption of local control over the deployment and siting of small wireless facilities and equipment within the municipal rights-of-way has been a hot-button issue throughout the country and in New Jersey for several years now.  The issue intensified in 2018 after the Federal Communications Commission (FCC) adopted several orders, including most notably Declaratory Ruling and Third Report and Order (FCC Order) which severely inhibits the authority of state and local governments to regulate the deployment of small cell wireless facilities within their rights-of-way (ROW). 

Below is a review of the FCC Order as it currently stands along with an outline of A-1116 and how the two compare.

Overview of FCC Order as Adopted

The FCC Order definitively concluded that Sections 253 and 332(c)(7) of the Federal Communications Act (“Act’) apply to state and local governments’ review of applications to place small cell wireless facilities within the municipal ROW.  These sections of the Act, now considered applicable to small cell facilities, restrict what conditions and standards local governments can place on those seeking access to the ROW.  This includes limitations and standards set by local governments for aesthetic and system resiliency purposes, along with the types and amount of fees and rates that can be charged.

The Order sets presumptively reasonable fees that state and local governments can charge for processing applications.  To be clear, under the FCC Order, local governments can still impose higher fees so long as it can be demonstrated that the fees are limited to recovery of actual and reasonable costs. In practicality the actual costs for permitting review is difficult to determine and the burden would on be the reviewing entity to prove the necessity of the higher fee. The FCC has also set presumptively valid caps on the rates that can be charged to wireless service providers for things such as pole attachments and ROW access charges.

cell wireless facilities.  Under the FCC Order, review of applications would need to be completed within 60 days for collocation on preexisting structures and 90 days for new builds.  While the shot clock creates a limited time in which applications must be reviewed, it stops short of providing a so-called “deemed approved” provision, which would result in a permit application being considered approved should the reviewing entity not approve or deny an application within the proscribed period.  This “deemed approved” provision is something the telecommunication industry lobbied hard for and continues to lobby for within New Jersey and in statehouses throughout the country.

One other important aspect of the FCC Order is that it created requirements for conditions related to aesthetics, undergrounding, and spacing of small cell facilities.  The FCC Order mandates that local aesthetic requirements must be (1) reasonable, (2) no more burdensome than those applied to other types of infrastructure deployments, and (3) objective and (4) published in advance. While these four requirements were originally included in the FCC Order, litigation in the 9^th Circuit has provided some relief to these limitations, at least in regards to numbers 2 and 3.  This is discussed in more detail below. 

Changes to FCC Order After 9^th Circuit Ruling

Local governments across the country do not look upon the FCC Order favorably.  In response, a coalition of states and the League’s federal partners at the National League of Cities filed a lawsuit challenging the Order as a whole along with certain specific provisions.

In August of 2020, the 9^th Circuit Court of Appeals issued its decision in City of Portland v. U.S., 969 F.3d 1020. This decision largely upheld the FCC Order.  Provisions of the Order pertaining to the shot clock were upheld, despite additional efforts by the wireless industry to have the court go beyond the Order and include a deemed approved remedy.  The court also upheld the presumptively valid limitations on fees and rates, although there was some dissent amongst the panel on this issue.  The court did, however, overturn certain aspects of the FCC Order’s limitations on aesthetic requirements.

In regards to the four requirements-as-noted-above the court vacated as arbitrary and capricious the FCC’s rule that aesthetic requirements must be objective and the rule that aesthetic requirements on small cell facilities be no more burdensome than those applied to other types of infrastructure.  The court further noted that aesthetic requirements by their very nature are not objective.   

Requirements must still be “reasonable,” and the court construed reasonable narrowly to mean only that aesthetic requirements must be “technically feasible and reasonably directed” at remedying aesthetic harms. 

The legal battle over the FCC Order is not over.  The 9^th Circuit’s decision can still be appealed to the U.S. Supreme Court; but at this time it is unclear if either side will seek review and should they, if the Court would grant review.

NJ Legislation: A-1116

Even before the FCC Order, the telecommunications industry had been lobbying state legislatures across the country to introduce and pass legislation similar to what is found in the FCC Order.  In most cases they lobbied for more regulations even more favorable to their needs, at the detriment of local governments.  New Jersey is no exception and A-1116 is the result of that lobbying. 

To the credit of the wireless industry and to Assemblywoman Carol Murphy, the primary sponsor of the bill, League concerns have been and continue to be considered.  Since first being introduced the League has been working with a group of wireless service providers in attempts to come to some agreement on bill amendments.  On Thursday, December 10, 2020, the Assembly Telecommunications and Utilities Committee reviewed these amendments and advanced the bill.

It is anticipated that A-1116 will be second referenced to the Assembly Appropriations Committee. S-2674, the Senate companion to A-1116 is sponsored by Senate President Sweeney has not been scheduled for a committee hearing. 

From the beginning the League identified four main concerns with the FCC Order and the attempts to expand the Order’s preemption through State Legislation. These included:

1. Permit review “shot clocks”;
2. Deemed approved provision;
3. Permit application review fees;
4. Aesthetic requirements.

Permit Review “Shot Clocks”

A-1116 as amended provides that a municipality must within 10 days after an application is received determine and notify the applicant in writing whether the application is complete.

Permit applications must be reviewed within 60 days of receipt of an application for a permit involving collocation of a small wireless facility on an existing structure; and, within 90 days for a permit involving the deployment of a small cell facility using a new or replacement pole.  These processing deadlines may be tolled by agreement between the applicant and municipality.  These deadlines are in lockstep with those imposed by the FCC Order.

Deemed Approved Provision

Failure of the municipality to review and process the application within any of the deadlines or possible extensions as outlined above, will result in the application being deemed approved.  The FCC Order stops short of including a deemed approved provision.  Due to this, wireless service providers have been pushing hard to get a deemed approval provision passed through state legislation in New Jersey and throughout the country.  The industry also attempted to have the 9^th Circuit require the FCC adopt a deemed granted provision but were unsuccessful.  However, the industry has been successful in their efforts to have state legislatures throughout the country adopt such provisions.

The League has pushed back against the deemed approval provision and continues to oppose this measure.  Amendments to A-1116, however, do included a bit of a negotiated compromise which attempts to soften the draconian nature of a deemed approval provision by allowing for an automatic 30-day deadline extension.

The deadlines noted above to be extended automatically for up to 30 days, if a municipality provides written notification within 10 days of receiving an application certifying that it is experiencing an unusually high level of permitting activity or other circumstances beyond the municipality’s control that prevents the municipality from processing and reviewing the application before the deadline.


 Permit Application Review Fees

A-1116 as amended would cap permit application review fees and limited them to:

$500 for a single up-front application for collocation of a small cell wireless facility that includes up to five small wireless facilities, with an additional $100 for each small cell wireless facility included in the same application thereafter;

$250 for the modification or replacement of an existing pole, together with the mounting or installation of an associated small wireless facility in the right-of-way; and

$1,000 for the installation of a new pole, together with the mounting or installations of an associated small cell wireless facility in the right-of-way.

While it may appear that these permit fees mirror the presumptively valid limitations within the FCC Order, they really are not.  As noted above the FCC Order only sets presumptively valid fee limitations, meaning a municipality could charge more but only if the fees were to recover actual costs. The languages in A-1116 as amended provides for a strict cap on fees.  A hard cap such as this could run afoul of the N.J. Constitution’s prohibition on unfunded state mandates.  The League is continuing to review this language and anticipates offering suggestions to improve the bill.

Aesthetic Requirements

From the onset the League was concerned with limitations on the types of aesthetic requirements that a municipality could impose upon small wireless facilities.  The FCC Order greatly limited municipal authority to impose such requirements although local regulation was not completed preempted.

As introduced, A-1116 required aesthetic requirements be “reasonable, in that they are technically feasible and reasonably directed at avoiding or remedying unsightly or out-of-character deployments, are no more burdensome than those applied to other types of infrastructure deployments, and are objective and published in advance.” 

These limitations were virtually identical to the limitations set in the FCC Order before the 9^thCircuit made its ruling overturning certain aesthetic requirement limitations.  Although the 9^thCircuit struck down the FCC Order in this regard this does not prevent a state legislature from placing the same kind of limitations found in the original FCC Order.  However, after this ruling the League successfully negotiated a change within A-1116 to adopt the holdings of the 9^thCircuit.  Now language within the bill would allow for subjective aesthetic requirements and a municipality may set different aesthetic requirements for different infrastructure.

Conclusion

The League continues to monitor federal legislation that seeks to overturn or alter the FCC Order, and is reviewing the impact this could have on legislation within the Garden State.  Another factor that is sure to have an impact on this legislation as well as how broadband in general is regulated is the impending change in the federal administration and who President-Elect Biden will choose to serve on the FCC, once inaugurated.

While A-1116 is not a perfect bill, a number of municipal concerns have been addressed.  We will continue to work with the sponsors and the coalition of wireless service providers to further improve the legislation. 

We would also like to thank the NJ Conference of Mayors who the League worked with closely for their assistance, and specifically Mayor Gary Passanante of Somerdale for being an active part of the discussions with the industry. 

Contact: Frank Marshall, Esq., Associate General Counsel, FMarshall@njlm.org or 609-695-3481 x 137.