Talkie's Preemption Petition Looks Persuasive

An item in today's Law360 Telecommunications newsletter, "Md. Gov't Agencies Oppose Talkie's FCC Preemption Bid,"caught my attention. [A subscription is required to access Law360.] The report involves a petition filed with the Federal Communications Commission by Talkie Communications, Inc., in January 2026, asking the agency to preempt Queen Anne's County in Maryland from enforcing what it claims are local zoning requirements that have the effect of prohibiting Talkie from attaching its communications equipment to a utility pole owned by Talkie.

According to Talkie, the county's bureaucratic permitting roadblocks are preventing it from providing voice, data, and cable services to Maryland residents and businesses. In recent years, Talkie has made significant investments to deploy its broadband services, including high-speed Internet services, in order to expand its competitive footprint.

 

Like many of the disputes between wireless and wireline communications providers and local authorities, there is a lot of back-and-forth, with assertions and counter-assertions. I haven't taken the time to independently investigate the facts of this dispute. But after reviewing Talkie's preemption petition, it looks to me like Talkie has presented a good prima facie case.

 

This is just one of many, many instances in which local cities and counties across the country implement onerous and often costly requirements, or engage in bureaucratic delay tactics, that prevent the timely deployment of new communications services and advanced broadband infrastructure. It's important that, when appropriate, the FCC grant meritorious preemption petitions. Talkie's petition looks like it may be just such a case.

 

The proper exercise of the Commission's preemption authority in a timely fashion is crucial to the full realization of FCC Chairman Brendan Carr's important, much-needed "Build America" agenda.

 

Two Victories for Constructing Cell Tower Infrastructure

 As reported in Law360 [subscription required] on August 13, both the Fourth and the Eleventh Circuits issued decisions on the same day affirming lower court actions that had rejected local governments denial of permission to cell tower companies to build out cell tower infrastructure. There continue to be attempts by some municipalities and counties to improperly forestall cell tower projects, hindering the deployment of a robust 5G networks. So these two new appeals court decisions are welcome, especially coming on the day.

In one case, the Fourth Circuit said that Culpeper County, Virginia, officials let the 150-day clock run out without approving or denying the application, and that, under federal law, that was sufficient for it to be "deemed granted." In other words, the locality can simply sit on the application and "run out the clock."

                                               

 

In the other case, the Eleventh Circuit determined that Brevard County, Florida, couldn't deny a conditional-use permit to build a cell tower for "solely aesthetic concerns." The appeals court agreed with a lower court's finding that those concerns about the tower intended to enhance service for T-Mobile weren't supported by substantial evidence, adding that "we have consistently held that generalized aesthetic objections, standing alone, cannot justify denial of an otherwise qualified application." Therefore, according to the court, " the district court correctly concluded that the county's factual support for its decision fell short of the substantial evidence requirement."

 

As the Law360 report concludes: "The Telecommunications Act of 1996 is the law that most cell tower disputes are filed under, and it forbids localities from regulating cell towers in a way that prohibits telecom services. Local governments also can't deny permits based on environmental concerns, which courts have generally interpreted to include health concerns, and applications are deemed granted if municipalities leave them untouched for long enough."

Competition and Federal Law Preclude COLR Regulation of Wireless

The California Public Utilities Commission (PUC) has an open rulemaking proceeding in which it is considering whether to impose "carrier of last resort" (COLR) regulation on wireless voice providers. COLR rules are outdated and unjustifiable in today’s competitive market environment. And federal law preempts state COLR regulation of wireless voice providers.

A voice services carrier designated as a COLR typically is required to serve all customers within a territory, even if that means requiring them to build out their networks. COLRs must obtain permission from regulators before exiting the market. Also, COLRs typically are required to charge rates that are limited to what the regulating authority deems “just and reasonable.” 

COLR obligations are premised upon the existence of local monopoly conditions for voice telephone services. But those conditions do not exist anymore. Instead, today's voice market gives consumers choices among competing providers. As comments filed by CTIA on September 30 with the California PUC observed: 

Wireless providers in California operate in an intensely competitive market where “there are multiple providers that compete for wireless subscribers” and “consumers have the ability to switch providers” if they wish to do so. Due to this fierce competition, wireless providers in California experience customer switching rates between 9% and 34%.

FSF President Randolph May made a similar point about the competitive landscape for voice services and the outdatedness of COLR obligations in a blog post from June of this year:

In an era before consumers in almost all areas of the country, including California, had more than a single option from which to choose for the provision of basic voice telephone service, it may have made sense for the government to have the power to require that a service provider be designated as the Carrier of Last Resort. Needless to say, nowadays, consumers in most all areas have several options for acquiring voice telephone service from various providers that employ different technologies – copper wires, coaxial cable, fiber, cellular, satellite, and hybrid networks combining these facilities.

Additionally, Section 332(c)(3)(A) of the Communications Act contains a state preemption provision that effectively precludes states from imposing COLR obligations on wireless providers. The statute provides, in relevant part, that “no State or local government shall have any authority to regulate the entry of or the rates charged by any commercial mobile service or any private mobile service.” CTIA’s comments correctly point out that “[r]ate regulation has always been a key element of COLR regulation” and point out various ways that the California PUC regulates the rates of COLRs. Any attempt by California regulators to control the basic rate for wireless service would be preempted by federal law. 

 

Moreover, any COLR obligation that required a wireless provider to build out its network to serve customers surely would be preempted as a regulation of entry under Section 332(c)(3)(A). Indeed, any state COLR regulation regarding wireless providers exit likely would clash with the FCC’s decision, in its 1994 CMRS Order, to forbear from exit approval requirements for wireless providers. As CTIA’s comments described that order:

The FCC specifically elected to forbear from exercising its statutory authority to require CMRS providers to obtain approval for market exit for specific policy reasons, including that “barriers to exit may also deter potential entrants from entering the marketplace” and “the time involved in the decertification process can impose additional losses on a carrier after competitive circumstances have made a particular service uneconomic,” such that “forbearance will better serve the public interest by avoiding the social costs identified in this paragraph.”

COLR obligations impose costs on voice providers, and those costs can undermine a provider’s competitiveness. For the California PUC, the better policy for voice consumers, and the lawful one, would be to promote competition and not undermine it with outdated COLR regulations. 

Preemption Bill on Government-Owned Networks Rests on Shaky Legal Ground

On April 19, Sen. Cory Booker introduced in the U.S. Senate a bill called the Community Broadband Act of 2023 – S.1197. A House version of the Act – H.R. 2552 – previously was introduced in the 118th Congress, and was on the agenda for an April 19 hearing held by the House Communications & Technology Subcommittee. The legislation, if passed by Congress, would amend Section 706 of the Telecommunications Act of 1996 to prohibit state laws, regulations or other legal requirements that would prohibit state or local governments from entering into the broadband Internet access services market as a competitor against private market providers. 

A serious objection to government-owned broadband networks is the danger of local governments using their powers to favor their own networks above competing private market providers, including through permitting processes and setting fees. The Community Broadband Act appears to perceive this objection, but includes a provision that prohibits a local government from applying its laws and rules in a way that discriminates in favor of itself or of any provider that it owns. 

However, even if that provision alleviates that serious objection to government-owned broadband networks, there is another serious objection, based on the U.S. Constitution. While it almost certainly is permissible for Congress to forbid state and local governments from discriminating in favor of government-owned networks and against private networks, the Community Broadband Act isn't merely a bill that would regulate interstate commerce. Indeed, the bill necessarily would impermissibly regulate states as states. Decisions about whether or not to enter the broadband market as a provider as well as decisions about where and under what conditions to provide service necessarily are decisions about state governance, and structural federalism principles forbid Congress from interfering with those decisions. 

A February 2014 Perspectives from FSF Scholars, "FCC Preemption of State Bans on Municipal Broadband Networks is Most Likely Unlawful," and the Free State Foundation's August 2014 public comments filed with the FCC in its government-owned networks preemption proceeding make the case for why federal agency preemption of state law limits on government-owned network operations fails as a matter of constitutional law. Ultimately, the U.S. Court of Appeals for the Sixth Circuit vacated the Commission's preemption order in Tennessee v. FCC (2016). The same constitutional principles underlying that decision's interpretation of Section 706 also prohibit Congress from expressly preempting state law limits on whether, where, and under what conditions their local governments may enter into the broadband Internet access services business. 

Aside from government favoritism and structural constitutional issues, there are other serious policy objections to government-owned networks. But here it is enough to say that constitutional problems with federal preemption of state laws limiting market entry by government-owned broadband networks cannot be cured by non-discrimination provisions. Congress should not pass the Community Broadband Act of 2023. 

ISPs Drop Case Against California's Net Neutrality Law

On May 4, broadband ISPs challenging California's net neutrality law decided against taking further legal action in ACA Connects v. Bonta. Dismissal of the case followed the Ninth Circuit's denial of the ISPs' petition for rehearing en banc. Free State Foundation scholars supported the legal position of the ISPs that the FCC's 2017 Restoring Internet Freedom Order (RIF Order) preempts California's net neutrality law. And though that case is over in the Ninth Circuit, the Second Circuit may soon reach a different conclusion about the preemptive force of the RIF Order, creating a circuit split ripe for Supreme Court review.

In ACA Connects v. Bonta, a Ninth Circuit panel held that, as a result of the FCC's decision to classify broadband Internet access service as an "information service," the agency did not decline to exercise its authority to regulate broadband; instead, the agency lacked authority to regulate broadband. In other words, Ninth Circuit determined that the Restoring Internet Freedom Order resulted in a withdrawal of FCC jurisdiction over broadband Internet access services. And the court held that because the FCC lacks jurisdiction over broadband, it can't preempt state laws. The full Ninth Circuit declined to review this decision en banc and the ISPs will not ask for Supreme Court review.

 
But the end of the ACA Connects litigation over California's net neutrality law does not definitively resolve the issue about the preemptive effect of the RIF Order. The Ninth Circuit's interpretation of the law is at odds with the June 2021 decision by the U.S. District Court in New York Telecommunications Association v. James. That case involves a legal challenge to New York's broadband price control law. The District Court in James determined that the New York law was preempted by the RIF Order. It recognized that the FCC has some, though limited, regulatory jurisdiction over information services under Title I of the Communications Act and can thus preempt state law on that ground. Free State Foundation Director of Policy Studies Seth Cooper explained and endorsed the District Court's reasoning in a June 2021 Perspectives from FSF Scholars.

The District Court's decision in James is now on appeal and the same preemption issue involving the Restoring Internet Freedom Order is pending before the Second Circuit. A prospective decision by the Second Circuit that recognizes the preemptive force of the RIF Order could create a circuit split with the Ninth Circuit.

Indeed, Free State Foundation President Randolph May believes the ISPs' termination of the ACA Connects litigation may be a strategic decision to prioritize the Second Circuit case. As quoted in the May 6 edition of Communications Daily:

ISPs might "think they have much better odds" in the 2nd Circuit case, emailed Free State Foundation President Randolph May. "The ISPs prevailed in the trial court on their claim that the New York law is preempted by the FCC's deregulatory policy established in the Restoring Internet Freedom Order," and have a good chance to win on appeal, he said. The New York law clearly involves setting rates, which "makes it an even easier preemption case for a court to understand than one" about net neutrality, said May: The possible circuit split would increase the odds of Supreme Court review. The continued litigation "highlights why it would be preferable for Congress finally to adopt a law setting forth an appropriate framework for broadband regulation," he added.

Ninth Circuit Denies En Banc Rehearing on California's Net Neutrality Law

On April 20, the U.S. Court of Appeals of the Ninth Circuit denied a petition for a rehearing en banc of the January 2022 decision by a 3-judge panel in ACA Connects v. Bonta. In that decision, the Ninth Circuit panel upheld California's 2018 law imposing public utility regulation on broadband Internet access services. The petition of broadband Internet service providers who were seeking an en banc rehearing was the subject of my blog post from February 25 of this year. Among other things, petitioning ISPs argued that the panel decision incorrectly interpreted the FCC's Restoring Internet Freedom Order as an act of surrender or abandonment of the agency's statutory authority over broadband that extinguished the agency's conflict preemptive authority.

The U.S. District Court for the Eastern District of New York reached a completely different conclusion on the issue of the preemptive authority of the Commission under the RIF Order. The District Court's decision in New York State Telecommunications Association v. James is analyzed in my June 2021 Perspectives from FSF Scholars, "Court Halts New York Price Controls on Broadband Internet Services: California's Net Neutrality Law Should Suffer Similar Fate." Here's the paper's key paragraph on this point:

As the District Court rightly recognized, "[t]he FCC’s affirmative decision" in its 2018 Restoring Internet Freedom Order to reclassify broadband Internet as a Title I information service "is different from an abdication of jurisdiction writ large." Pursuant to that affirmative determination, the Commission may still impose regulatory obligations on the service under its Title I ancillary jurisdiction. Drawing on D.C. Circuit precedents, the District Court observed that the Communications Act confers on the Commission "various bases of jurisdiction and various tools to protect the public interest," and the agency has discretion in selecting the basis and corresponding regulatory tools to best accomplish that objective. Thus, the court wrote that choosing Title I "does not tender jurisdiction to the states to regulate interstate broadband providers as common carriers." Instead, the Commission "cement[ed] its long-standing policy choice concerning the propriety of imposing common-carrier rate regulations upon broadband internet service." 

The District Court's decision in James is now on appeal to the Second Circuit, as I discuss in a January 2022 Perspectives.

 

Getting back to ACA Connects v. Bonta: The Ninth Circuit's April 20 order likely will be followed by a petition for certiorari to the U.S. Supreme Court. Expect to hear more from Free State Foundation scholars as the case involving California's broadband Internet regulation law continues. 

Ex-Commissioners Unite, Urge Second Circuit to Affirm Lower Court Decision Enjoining Enforcement of NY Broadband Price Control Law

Four recent members of the Federal Communications Commission, representing both sides of the political aisle, have filed with the Second Circuit Court of Appeals an Amicus Curiae brief in response to the state Attorney General's appeal of the lower court decision in New York State Telecommunications Association v. James.

In their submission, the ex-Commissioners urge the Second Circuit to affirm the U.S. District Court for the Eastern District of New York's conclusion that a New York state law prescribing the prices that broadband providers may charge low-income households constitutes an impermissible attempt to regulate interstate communications rates.

The Affordable Broadband Act (ABA) is a New York state statute that was passed in early 2021. It requires providers of high-speed Internet access operating in New York to make available to eligible low-income households service at specific speeds and, critically, prices: 25 megabits per second (Mbps) downstream for $15 per month and 200 Mbps downstream for $20 per month. It also mandates that broadband providers "make all commercially reasonable efforts to promote and advertise the availability of" these plans.

As Free State Foundation Director of Policy Studies and Senior Fellow Seth L. Cooper noted in "Court Halts New York Price Controls on Broadband Internet Services: California's Net Neutrality Law Should Suffer Similar Fate," a June 2021 Perspectives from FSF Scholars, the U.S. District Court for the Eastern District of New York earlier that month appropriately enjoined the state of New York from enforcing the ABA.

Specifically, the court held (1) that the ABA regulates rates; (2) that "rate regulation is a form of common carrier treatment"; and (3) that because the FCC has classified broadband as an "information service" rather than a "telecommunications service" (that is, a common carrier offering), the ABA "conflicts with the implied preemptive effort of both the FCC's 2018 [Restoring Internet Freedom Order] and the Communications Act."

For a detailed discussion of the conflict preemption issues raised by the ABA, please see Mr. Cooper's January 2022 Perspectives, "State-Level Price Controls on Broadband Conflict With Federal Policy: Court Should Affirm the Preemptive Force of the FCC's 2018 Order."

In their friend-of-the-court brief, Former FCC Chairman and Commissioner Ajit Pai, former Acting Chairwoman and Commissioner Mignon Clyburn, and Former Commissioners Jonathan Adelstein and Michael O'Rielly express their agreement with the district court's conclusion. In doing so, they focus on the big picture:

While much ink has been spilled debating whether broadband is an information service that is regulated under Title I of the Communications Act … or a telecommunications service that is regulated under Title II …, that question does not determine the proper resolution of this case. Whatever the answer, broadband remains an interstate communications service, and broadband rates may not be regulated by state governments.

A copy of their brief is available here.

Section 253 Petition Rendered Moot by Responsive State Law

Once again, the possibility that the FCC might exercise its authority to preempt "excessive, unreasonable, and discriminatory" right-of-way requirements under Section 253 of the Communications Act has prompted positive change at the local level.

On May 10, 2021, Bluebird Network (Bluebird) submitted to the Commission a Petition for Declaratory Ruling seeking relief under Section 253(d). Bluebird argued that the $1.91 per linear foot right-of-way fee charged by the City of Columbia, Missouri, "violates Section 253 by materially inhibiting Bluebird's ability to bring competitive broadband services to customers in the City, which will constrain broadband deployment and perpetuate the digital divide."

Pursuant to Section 253(a), "[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."

After Bluebird filed its petition, the Missouri legislature passed H.B. 271, which bars the City of Columbia from collecting the fees at issue. In response, Bluebird filed a Motion to Withdraw on November 9, 2021.

This outcome evokes the dispute I described in a recent post to the Free State Foundation's blog, "City's Preferential Treatment of Fiber-Based Broadband Raises Competition Concerns."

In that case, Mediacom Communications Corporation (Mediacom) objected to actions by the City of West Des Moines, Iowa, that it argued would provide Google Fiber, as a practical matter, with exclusive use of a $50 million city-financed fiber-specific conduit network.

Shortly After Mediacom filed its Petition for Expedited Declaratory Ruling, the City of West Des Moines and Google Fiber amended their agreement to reduce the period of the latter's exclusive use of the conduit network from 18 to 6 months.

And on October 15, 2021, Mediacom and West Des Moines notified the FCC that they had negotiated an agreement in principle to settle their dispute.  In response, the Wireline Competition Bureau on October 25, 2021, adopted an Order pausing the pleading cycle to provide the parties with additional time to work out the specific details of their settlement.

Thus, it appears that the mere specter of Commission preemption pursuant to Section 253 performs a potent role in assuring that providers have reasonable access to local rights-of-way.

City's Preferential Treatment of Fiber-Based Broadband Raises Competition Concerns

In July 2020, the City Council of West Des Moines, Iowa, voted (1) to spend $50 million to construct within public rights-of-way (ROW) a so-called "open access conduit network" that it readily concedes is designed for the exclusive use of fiber-to-the-premises (FTTP) broadband providers, and (2) to enter an "anchor tenant" agreement with Google Fiber that raises serious factual questions as to the ability of even other fiber-based Internet service providers (ISPs) to utilize that infrastructure on reasonably equitable terms.

Given that West Des Moines (the City) also serves as the gatekeeper to those ROW, these actions inevitably create worrisome conflicts of interest. They also violate the principle of technological neutrality and are at direct odds with our nation's longstanding and proven (intramodal as well as intermodal) competition-based approach to the deployment and expansion of broadband access. Moreover, given the abysmal financial track record of municipal involvement in the broadband marketplace generally, a topic I addressed in an August 2021 Perspectives from FSF Scholars, they unnecessarily place taxpayers in economic jeopardy.

MCC Iowa LLC, a subsidiary of Mediacom Communications Corporation (Mediacom), is the local cable system operator in West Des Moines. It provides broadband service throughout the City via a hybrid fiber coaxial (HFC) network at speeds up to a gigabit (1000 megabits per second (Mbps)) downstream and 50 Mbps upstream. Notably, these rates far exceed not only the definition of "broadband" embraced by the Federal Communications Commission (FCC or Commission) – 25/3 Mbps – but also the threshold for a "served" area agreed to by a bipartisan group of Senators in the $1.2 trillion infrastructure bill currently before the House – 100/20 Mbps.

Mediacom is able to provide this level of service to City residents only because it has (1) committed the large amounts of private capital required to build out its network, and, critically, (2) complied with the City's formal permitting processes in order to gain access to ROW.

In May of this year, Mediacom filed with the FCC a Petition for Expedited Declaratory Ruling (Petition) pursuant to Section 253 of the Telecommunications Act of 1996 arguing that the City's actions, which reduce substantially the construction and permitting obligations of fiber-based providers – and, as a result, their costs and time to market – as a practical matter constitute an "effective prohibition" under Section 253 for providers other than Google Fiber. This is particularly so for broadband providers that embrace distribution technologies other than end-to-end fiber (for example, cable HFC networks rely upon coaxial cable for the last-mile connection to the home) and therefore are foreclosed, at least in part, from utilizing this taxpayer-funded infrastructure.

More recently, the City and Mediacom informed the Commission on October 15, 2021, that they have agreed, at least at a high level, to resolve this dispute. As a result, the FCC's Wireline Competition Bureau issued an Order earlier this week pausing the pleading cycle in order to provide the parties with additional time to hammer out the specific details of a settlement.

The fact remains, however, that the City's underlying decision to align its economic interests with a specific distribution technology (if not a specific company utilizing that distribution technology) violates the competition-fostering principle of technological neutrality, incentivizes the City to perform its permitting function in a discriminatory fashion, and arguably implicates Section 253 itself.

Given that Mediacom and the City are in the process of negotiating specific settlement terms, it is conceivable that at least some of the disputed provisions of the City's agreement with Google Fiber will change. In one important respect, that is something we already have observed: a month after Mediacom filed its Petition, the City and Google Fiber agreed to reduce the length of time that the latter would have exclusive use of completed portions of the conduit network from 18 to 6 months.

Accordingly, at this time I will not discuss in detail other aspects of the agreement, particularly those relating to the implications of the conduit network's technical design for other providers, whether fiber-based or not. (I will note, however, that Mediacom's Petition did make numerous compelling allegations regarding the practical ability of other fiber-based ISPs to utilize the conduit network in a manner equivalent to that afforded Google Fiber.)

Instead, I want to highlight a more fundamental question raised by the City's decision to not just express a preference for fiber-based service, but to take substantial steps to reduce the costs and administrative burdens solely for fiber-based providers: Should a municipality's actions to promote a specific distribution technology be evaluated under Section 253?

As Free State Foundation President Randolph May and I explained in "Biden Broadband Plan: 'Future Proofing' Is Likely 'Fool's Proofing'," a June 2021 Perspectives, progress towards reaching the goal of universal broadband access hinges upon adherence to the pro-competitive principle of technological neutrality.

The United States is a large nation, one that encompasses areas with vastly different geographic features and population densities. Truly ubiquitous broadband coverage, as well as price competition and heightened innovation, will be realized only through policies that embrace the unique strengths and weaknesses of the range of distribution technologies – not just FTTP but also cable HFC networks, mobile and fixed 5G, fixed wireless, and satellite – that ISPs leverage to provide consumers with the capacity that they in fact demand.

As such, a policy approach that exclusively prioritizes fiber – for example, the Biden Broadband Plan as articulated in a March 2021 White House Fact Sheet – is wasteful and ultimately counterproductive. But when pursued by a municipality, is it also at odds with the pro-competitive thrust of the Telecommunications Act of 1996, specifically Section 253?

Section 253(a) states 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" (emphasis added). And subsection (d) empowers the Commission to "preempt the enforcement of such statute, regulation, or legal requirement to the extent necessary to correct such violation or inconsistency."

Per the FCC's 2018 Declaratory Ruling and Third Report and Order, (1) "a state or local legal requirement constitutes an effective prohibition if it 'materially limits or inhibits the ability of any competitor or potential competitor to compete in a fair and balanced legal and regulatory environment'" (emphasis added), and (2) "an insurmountable barrier is not required to find an effective prohibition under Section 253(a)."

It seems evident that the City, in choosing to spend $50 million on a conduit network that can be used only by those ISPs that embrace a FTTP model, is making it relatively more difficult for providers utilizing other viable distribution technologies to compete.

In its Opposition to Mediacom's Petition, Google Fiber dedicates an entire section to the concern that the grant of Mediacom's requested relief could have "broad, negative implications on local investment in broadband infrastructure." In response, I offer the following two points. One, as Free State Foundation scholars have pointed out on many occasions, attempts by municipalities to enter the broadband marketplace overwhelmingly have failed to achieve independent financial viability. (See the "Further Readings" at the end of this recent Perspectives from FSF Scholars for examples.) Consequently, those claimed "broad, negative implications" in fact, may generate positive economic outcomes for taxpaying residents.

Two, where the policies and/or spending by a municipality discriminate so heavily in favor of a specific provider (as alleged here, Google Fiber) or a subset of providers (as freely acknowledged here by the City, those ISPs that embrace a FTTP model), does a line exist that, once crossed, benefits one or more competitors rather than, as Congress intended in 1996, competition?

If so, a scenario may arise where preemption pursuant to Section 253(d) by the FCC of a project that so strongly rejects the principle of technological neutrality is warranted.

As noted above, this proceeding remains open. The Wireless Competition Bureau only temporarily suspended the deadline for replies. I will provide further updates on this dispute as developments warrant.

Supreme Court Order Ends Legal Challenge to FCC's Wireless Infrastructure Orders

On June 28, the U.S. Supreme Court denied certiorari in City of Portland v. FCC. Thus, the Court left undisturbed the August 2020 decision by the Ninth Circuit Court of Appeals that upheld most of the Commission's 2018 Small Cell Order, Moratoria Order, and One Touch Make-Ready Order. The Small Cell and Moratoria Orders defined limits on local governments' permitting authority regarding wireless infrastructure siting for small cells. And the OTMR Order established limits on local governments' discretion regarding pole attachments involving wireless networks. Those orders effectively removed local regulatory obstacles to deploying advanced wireless networks, including 5G networks.  

The Supreme Court's order is important because it leaves standing important circuit court precedent recognizing the preemptive authority of the FCC prohibit certain actions by state and local governments that effectively prohibit the offering of wireless communications services. That authority comes from the 1996 Telecommunications Act and the Constitution's Commerce Clause. The Court's order also leaves undisturbed the Ninth Circuit's rejection of Tenth Amendment-related anti-commandeering challenges to the Commission's rules regarding permitting fees, shot clocks for decisionmaking on permit applications, and moratoria on reviewing permit applications. The Ninth Circuit concluded (rightly) that the Commission's orders did not require state or local officials to take action to implement any federal regulatory scheme, but instead they secured a federal right to place and modify cell sites subject only to certain federal constraints. 

The Ninth Circuit's decision in City of Portland v. FCC was discussed in more detail in my September 2020 blog post. Free State Foundation President Randolph May and I also discuss the Ninth Circuit's decision as well as the Small Celland Moratoria Orders in our June 2021 Perspectives from FSF Scholars paper, "Wireless Infrastructure Reforms Rest on Solid Constitutional Foundations: Congress Should Preempt Local Obstacles to 5G Deployment." 

Federal Court Bars Enforcement of New York's Price Controls on Broadband Internet Services

On June 11, the U.S. District Court for the Eastern District of New York granted a preliminary injunction barring New York State Attorney General Letitia James from enforcing that state's new law imposing rate controls on broadband Internet access services.  

In a May 5 blog post, I called attention to the legal challenge to the New York law that was filed by broadband Internet service providers in New York Telecommunications Association v. James. The case was assigned to Senior Judge Denis Hurley. Although provided in the context of a motion for preliminary relief and substantial likelihood of success on the merits standard, Senior Judge Hurley's ruling rightly recognized that New York's law is federally preempted -- on conflict preemption as well as field preemption grounds:

Putting it all together, the ABA conflicts with the implied preemptive effect of both the FCC's 2018 Order and the Communications Act. The ABA's common carrier obligations directly contravenes the FCC’s determination that broadband internet "investment," "innovation," and "availab[ility]" best obtains in a regulatory environment free of threat of common-carrier treatment, including its attendant rate regulation… the ABA thereby stands as an obstacle to the FCC's accomplishment and execution of its full purposes and objectives and is conflict-preempted. 

…

Plaintiffs have demonstrated a likelihood of success on the merits based on field preemption. The ABA is not a "purely intrastate affordable-pricing scheme," nor is it reasonable to read its statutory text in that manner: It covers providers with "the capability to transmit data to and receive data from all or substantially all internet endpoints."… The ABA’s plain terms apply (absent an exemption) to the telecommunications provider transmitting this interstate communication. In other words, the ABA is not confined to intrastate communications services. 

Free State Foundation scholars may have more to say about this well-reasoned decision by the Eastern District of New York. Stay tuned. 

District Court Allows California's Net Neutrality Law to Go Forward

It has been reported in many outlets that the U.S. District Court for the Northern District of California has denied a motion to enjoin enforcement of California law mandating public utility regulation of broadband Internet services. Apparently, this will allow California's law – which goes beyond the FCC's now-repealed Title II restrictions – to go into effect. However, this is not likely the end of the litigation. Professor Daniel Lyons, a Member of the Free State Foundation's Board of Academic Advisors, made the case for why CA SB-822 is most likely preempted in his Perspectives from FSF Scholars paper, "Day of Reckoning Approaches for California Net Neutrality Law." 

Also, FSF President Randolph May and I appealed to a broader set of principles to make the case for why preemption of SB-822 is consistent with a constitutionalist outlook in our Federalist Society Review paper, "John Marshall's Jurisprudence Supports Preemption of California's Net Neutrality Law." And for more on these subjects, consult our book, A Reader on Net Neutrality and Restoring Internet Freedom. 

Leaving aside for now any future changes in federal broadband policy by the FCC, FSF scholars repeatedly have made the point that state-level regulation of broadband Internet access services is a bad idea. Broadband networks are interstate services. State and local restrictions effectively seek to regulate services that transcend state borders and run risk of conflicting with each other. And public utility regulation of broadband Internet services is harmful and justifiable. Policy for broadband Internet services should be set at the federal level, not the state or local level. 

Court Rules that the Commission's RF Rules Preempt State Law Claims

On October 29, the U.S. District Court for the Northern District of California ruled that the FCC's radio frequency (RF) emissions regulations preempt disclosure-related tort and consumer fraud claims. In Cohen v. Apple, District Judge William Alsup issued an order on summary judgment that dismissed putative class action claims that Apple marketed iPhones for use on or in close proximity to the body but failed to disclose that such use would allegedly expose consumers to RF radiation levels above federal standards and also failed to disclose the alleged risks from that exposure. 

According to a statement filed with the District Court by FCC General Counsel Thomas Johnson: "if plaintiffs were to prevail in that challenge, they would undermine the FCC's efforts to create and implement a uniform and reliable process for certifying that cell phones comply with RF limits." 

Applying preemption precedents such as Geier v. American Honda Motor Company (2000), the District Court agreed with the Commission:

The equipment-authorization regime represents a "deliberate choice" to establish uniform technical standards embodying a careful balance between safety and efficiency. If successful, plaintiffs' claims could set the stage for a patchwork of state-required testing procedures, increasing the burden on manufacturers and thereby upsetting the efficiency that the uniform standards and testing procedures provide. Geier, 529 U.S. [861] at 879–81; Buckman [Co. v. Plaintiffs' Legal Comm., 531 U.S. [341] at 353 [(2001)]. As it stated, "[l]awsuits like this one would needlessly disrupt the Commission's certification process and improperly impede the marketing of cell phones that the FCC has found to be safe" (FCC Statement at 16). Even though plaintiffs' state-law claims "attempt[ ] to achieve one of the same goals as federal law" — namely, safety — the enforcement of the equipment-authorization regime by state tort suits such as plaintiffs' would upset the balance struck by the regulations and must fall aside. Arizona [v. U.S.], 567 U.S. [387] at 406 [(2012)]. 

The District Court was unpersuaded that plaintiffs' claims that the iPhones exceeded the Commission's safety standards and thereby avoided any conflict with federal objectives. As the District Court observed: "The Commission is amply empowered to investigate complaints and petitions calling into question the continued compliance of certified devices with its technical standards." And the court noted that the FCC Lab investigated the Chicago Tribune story about supposed iPhone noncompliance with the Commission's RF standards that prompted the putative class action lawsuit. Wrote the court: 

 

The FCC Lab tested commercially-available iPhones as well as a model iPhone provided by Apple, and each demonstrated compliance when tested at the test separation distances used in their original certification filing (not at two millimeters, as the Tribune additionally had) and consistent with OED's parameters. The Lab found no evidence of violations of the technical standards. Apple’s iPhones have thus demonstrated compliance with its exposure limits not once but twice (Dkt. No. 104-11). Allowing a federal jury to now second-guess the agency determinations would interfere with the balance struck in the equipment-authorization program. The federal regulations must displace plaintiffs' claims. 

 

Additionally, the District Court pointed out that plaintiffs and would-be plaintiffs are not left without remedies: "Aside from enforcement bureau actions as described, which are triggered by complaints or petitions filed with the Commission, plaintiffs may also challenge agency rulemaking directly." The court referred to the pending legal challenge to the Commission's 2019 RF Order, which is pending at the D.C. Circuit in Environmental Health Trust v. FCC.

 

The District Court's ruling appears sound and consistent with preemption precedents. My blog post from September 21 discussed a decision by the Northern District of California that the City of Berkeley's ordinance overwarned against the dangers of RF emissions and is preempted by FCC regulation. 

 

Cohen v. Apple provides a useful example of a court applying the Supreme Court's decision in Geier to conflicting state law claims. In his September 2020 Perspectives from FSF Scholars paper "Day of Reckoning Approaches for California Net Neutrality Law," Professor and Free State Foundation Board of Academic Advisors Member Daniel Lyons discusses Geier and conflict preemption in the context of the legal challenge to California's net neutrality regulation law in U.S. v. California – a case now pending before the Eastern District of California. 

FCC Orders on Broadband Infrastructure Withstand Further Legal Challenges

On October 22, the U.S. Court of Appeals for the 9th Circuit issued an order denying en banc review of the August 2020 decision in City of Portland v. U.S. In that earlier decision, a panel of the 9th Circuit upheld FCC orders that reformed the agency's rules regarding broadband infrastructure siting and pole attachments. Among other things, the court's decision upheld most of the Commission's Small Cell Order, which clears away barriers to installing antennas that are crucial for 5G network services.  

The City of Portland v. U.S. decision was the subject of my blog post on September 2. 

Incidentally, FCC General Counsel Thomas Johnson's October 2020 legal opinion on the authority of the Commission to interpret Section 230 of the Communications Act cited the court's decision. His opinion touched on the court's holding regarding the Commission's authority to interpret of ambiguous statutory provisions and the preemptive effect of such interpretations: 

[I]n City of Portland v. FCC, 969 F.3d 1020 (9th Cir. 2020), the U.S. Court of Appeals for the Ninth Circuit earlier this year largely affirmed two FCC orders clarifying the scope of a preemption provision in the Communications Act that provides that states and localities may not take actions that "have the effect of prohibiting" telecommunications service. Citing City of Arlington, the court said that "[w]here terms of the Telecommunications Act are ambiguous, we defer to the FCC's reasonable interpretations."

General Counsel Johnson went on to write that "City of Arlington [v. FCC, 569 U.S. 290 (2013)] and City of Portland make clear that the FCC can clarify even those ambiguous statutory provisions within the Act that are arguably directed toward courts—such as preemption or jurisdictional provisions."

Court Rules that Berkeley's "Overwarning" Ordinance on RF Emissions is Preempted

On September 17, the U.S. District Court for the Northern District of California ruled that a 2015 City of Berkeley ordinance requiring retailers to provide specific warning labels regarding cellphone radio frequency (RF) emissions for point-of-sale purchases is preempted by the FCC's regulatory actions. 

After analyzing the Commission's 2019 RF Order as well as the agency's Statement of Interest filed in the case, the District Court concluded:  

Given the specificity of the warning required by the Berkeley ordinance, the implied risk to safety if the warning is not followed (a risk the FCC has concluded does not exist), and the acknowledged 'controversy concerning whether radio-frequency radiation from cell phones can be dangerous if the phones are kept too close to a user's body over a sustained period,'… the FCC could properly conclude that the Berkeley ordinance – as worded – overwarns and stands as an obstacle to the accomplishment of balancing federal objectives by the FCC.

The District Court's ruling in Berkeley v. CTIA applied Skidmore deference rather than Chevron deference to both the 2019 RF Order and the Statement of Interest. The court held that even by according to the less deferential standard the Berkeley ordinance conflicted with federal policy articulated by the Commission. Along the way, the court provided an insightful analysis of conflict preemption doctrine, savings provisions, and the Third Circuit's 2010 decision in Farina v. Nokia. For more on this case, see my blog post from June.  

Petitioners Decline to Seek Supreme Court Review of Mozilla v. FCC

On July 7, John Eggerton reported at Multichannel News that the Petitioners in Mozilla v. FCC have decided against seeking review of the D.C. Circuit's 2019 decision that decision upheld most of the FCC's Restoring Internet Freedom Order (2018). Although the D.C. Circuit upheld the order's reclassification of broadband Internet access services as "information services" under Title I of the Communications Act, it vacated the order's express Preemption Directive regarding state and local laws and regulations that conflict with the FCC's light touch, free market policy regarding interstate information services.

Expect attention to return to pending litigation over state laws and executive orders that seek to impose net neutrality regulation and more at state level. This includes the pending lawsuit over California's 2018 net neutrality law. In a Perspectives from FSF Scholars paper titled "Express and Conflict Preemption of State Net Neutrality Efforts," Prof. Daniel Lyons, a member of the FSF Board of Academic Advisors, helpfully analyzed preemption principles and explained why most or all state net neutrality regulations fail under conflict preemption doctrine. Also, Free State Foundation President Randolph May and I made a principled case for preemption in an article published in the Federalist Society Review titled "John Marshall's Jurisprudence Supports Preemption of California's Net Neutrality Law." 

FCC's General Counsel: Federal Law Preempts Berkeley's "Overwarning" Ordinance

Based on a review of available scientific evidence, the FCC's 2019 RF Order reaffirmed that certified cell phones pose no health risk. Yet, a City of Berkeley, California ordinance would require retailers in Berkeley to provide specific notice at the point of sale that warns against radio frequency (RF) emissions by those phones. This ordinance is the subject of a pending legal challenge in CTIA v. City of Berkeley. On June 22, the U.S. Department of Justice filed a statement of interest in the case that incorporates a letter by FCC General Counsel Thomas M. Johnson. 

In his letter, the General Counsel rightly explains: "The notice mandated by the Berkeley ordinance inaccurately suggests that cell phones are unsafe. Thus, it has the potential to 'overwarn' consumers and impede the accomplishment of the FCC's goal of fostering a safe and robust wireless communication system." 

The letter's cites to court precedents regarding federal agency preemption, including precedents regarding federal policy interests in preventing state regualtions that result in "overwarning." As the General Counsel correctly concludes, Berkeley's ordinance is preempted federal law. 

Regarding certified cell phone safety, the General Counsel's letter quotes the FCC's 2013 notice, which states that the agency's limits on RF emissions:

[A]re set at a level on the order of 50 times below the level at which adverse biological effects have been observed in laboratory animals as a result of tissue heating resulting from RF exposure. This "safety factor can well accommodate ... the potential for exposures to occur in excess of [the FCC's RF] limits without posing a health hazard to humans."

The General Counsel's letter is sensible and it succinctly sums up both the FCC's findings and its policy concerning the safety of certified cell phones. Certainly, Berkeley's ordinance appears unsupportable as a matter of fact and of law. Hopefully, the U.S. District Judge in CTIA v. City Berkeley will dismiss the case anon.

In the event that local governments field concerns from citizens about RF emissions from cell phones, local officials should carefully consult the General Counsel's letter. And I wrote in a December 2019 blog post, they also should consult the 2019 RF Order. Local governments should be mindful of the FCC's findings that certified cell phones pose no health risk, and they should refrain from taking actions that run contrary to federal law and policy.

Regarding the safety of 5G networks, I also commend FCC General Counsel Thomas Johnson's June 4 op-ed in the Washington Post titled "5G Conspiracy Theories Threaten the U.S. Recovery."