TELECOMMUNICATIONS OVERVIEW

Session I – 9:00 am – 10:15 am

Presented By: Eric AndersonSr. Assistant City AttorneyCity of Scottsdale

Friday, May 29, 2015

FEDERAL LAW

• Federal Telecommunications ACT (“FTA”) 47 U.S.C. 101 et seq.:

o Definitions; 47 U.S.C. § 153

• (11) Common Carriero The term “common carrier” or “carrier” means any person engaged as a

common carrier for hire, in interstate or foreign communication by wire or radio or interstate or foreign radio transmission of energy, except where reference is made to common carriers not subject to this chapter; but a person engaged in radio broadcasting shall not, insofar as such person is so engaged, be deemed a common carrier.

• Note: Under the FTA, “telecommunications corporation” has been determined to be synonymous with “common carrier” Virgin Islands Telephone Corp. v. FCC, 198 F.3d 921 (D.C. Cir. 1999)

Cont’d…

FEDERAL LAW

• (24) Information serviceo The term “information service” means the offering of a capability for

generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications, and includes electronic publishing, but does not include any use of any such capability for the management, control, or operation of a telecommunications system or the management of a telecommunications service.

• (33) Mobile serviceo The term “mobile service” means a radio communication service carried on

between mobile stations or receivers and land stations, and by mobile stations communicating among themselves, and includes (A) both one-way and two-way radio communication services, (B) a mobile service which provides a regularly interacting group of base, mobile, portable, and associated control and relay stations (whether licensed on an individual, cooperative, or multiple basis) for private one-way or two-way land mobile radio communications by eligible users over designated areas of operation, and (C) any service for which a license is required in a personal communications service established pursuant to the proceeding entitled “Amendment to the Commission's Rules to Establish New Personal Communications Services” (GEN Docket No. 90-314; ET Docket No. 92-100), or any successor proceeding.

FEDERAL LAW

• (50) Telecommunicationso The term “telecommunications” means the transmission, between or among

points specified by the user, of information of the user's choosing, without change in the form or content of the information as sent and received.

• (51) Telecommunications carriero The term “telecommunications carrier” means any provider of

telecommunications services, except that such term does not include aggregators of telecommunications services (as defined in section 226 of this title). A telecommunications carrier shall be treated as a common carrier under this chapter only to the extent that it is engaged in providing telecommunications services, except that the Commission shall determine whether the provision of fixed and mobile satellite service shall be treated as common carriage.

• (53) Telecommunications serviceo The term “telecommunications service” means the offering of

telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used.

FEDERAL LAW47 U.S.C. § 253 (“barriers to entry”)

Applies to all telecommunications corporations (“wired and wireless”)

• (a) In generalo No 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.

• (b) State regulatory authorityo Nothing in this section shall affect the ability of a State to impose, on a

competitively neutral basis and consistent with section 254 of this title, requirements necessary to preserve and advance universal service, protect the public safety and welfare, ensure the continued quality of telecommunications services, and safeguard the rights of consumers.

cont’d

FEDERAL LAW47 U.S.C. § 253 (“barriers to entry”)

• (c) State and local government authorityo Nothing in this section affects the authority of a State or local

government to manage the public rights-of-way or to require fair and reasonable compensation from telecommunications providers, on a competitively neutral and nondiscriminatory basis, for use of public rights-of-way on a nondiscriminatory basis, if the compensation required is publicly disclosed by such government.

• (d) Preemptiono If, after notice and an opportunity for public comment, the Commission

determines that a State or local government has permitted or imposed any statute, regulation, or legal requirement that violates subsection (a) or (b) of this section, the Commission shall preempt the enforcement of such statute, regulation, or legal requirement to the extent necessary to correct such violation or inconsistency.

FEDERAL LAW47 U.S.C. § 332 (“wireless barriers to

entry”)

• (c) Regulatory treatment of mobile serviceso (1) Common carrier treatment of commercial mobile services

• (A) A person engaged in the provision of a service that is a commercial mobile service shall, insofar as such person is so engaged, be treated as a common carrier for purposes of this chapter, except for such provisions of subchapter II of this chapter as the Commission may specify by regulation as inapplicable to that service or person. In prescribing or amending any such regulation, the Commission may not specify any provision of section 201, 202, or 208 of this title, and may specify any other provision only if the Commission determines that--

o (2) Non-common carrier treatment of private mobile services• A person engaged in the provision of a service that is a private

mobile service shall not, insofar as such person is so engaged, be treated as a common carrier for any purpose under this chapter. . . .

Cont’d

o (3) State preemption• (A) Notwithstanding sections 152(b) and 221(b) of this title, 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, except that this paragraph shall not prohibit a State from regulating the other terms and conditions of commercial mobile services. . . .

***o (7) Preservation of local zoning authority

• (A) General authorityo Except as provided in this paragraph, nothing in this chapter

shall limit or affect the authority of a State or local government or instrumentality thereof over decisions regarding the placement, construction, and modification of personal wireless service facilities.

Cont’d

FEDERAL LAW47 U.S.C. § 332 (“wireless barriers to

entry”)

• (B) Limitationso (i) The regulation of the placement, construction, and

modification of personal wireless service facilities by any State or local government or instrumentality thereof--• (I) shall not unreasonably discriminate among providers of

functionally equivalent services; and• (II) shall not prohibit or have the effect of prohibiting the

provision of personal wireless services.o (ii) A State or local government or instrumentality thereof

shall act on any request for authorization to place, construct, or modify personal wireless service facilities within a reasonable period of time after the request is duly filed with such government or instrumentality, taking into account the nature and scope of such request.

cont’d

FEDERAL LAW47 U.S.C. § 332 (“wireless barriers to

entry”)

o (iii) Any decision by a State or local government or instrumentality thereof to deny a request to place, construct, or modify personal wireless service facilities shall be in writing and supported by substantial evidence contained in a written record.

o (iv) No State or local government or instrumentality thereof may regulate the placement, construction, and modification of personal wireless service facilities on the basis of the environmental effects of radio frequency emissions to the extent that such facilities comply with the Commission's regulations concerning such emissions. [tab 1]

FEDERAL LAW47 U.S.C. § 332 (“wireless barriers to

entry”)

FEDERAL LAW

• Federal Regulation – FCC • FAA may have input on antenna tower siting near airports

o “Shot Clock” for wireless siting decisions [tab 2]

o “Super Shot Clock” x 2 for collocation decisions [tab 3]

FEDERAL LAW• Section 6409:

o “Notwithstanding Section 704 of the Telecommunications Act of 1996 (Public Law 104-104) or any other provision of law, a State or Local government may not deny, and shall approve, any eligible facilities request for a modification of an existing wireless tower or base station that does not substantially change the physical dimensions of such tower or base station.” 47 U.S.C. §1455• 60 Day Shot Clock for Section 6409(a) Eligible Facilities

Applications and Modifications

• For purposes of this subsection, the term “eligible facilities request” means any request for modification of an existing wireless tower or base station that involves:o (A) Collocation of new transmission equipment;o (B) Removal of transmission equipment; oro (C) Replacement of transmission equipment.

• This involves collocation, removal or replacement. Contrary to common sense, collocation now means the first antenna on a facility (everyone used to think it meant a secondary piece of equipment).o Collocation means “the mounting or installation of transmission equipment

on an eligible support structure for the purpose of transmitting and/or receiving Radio Frequency signals for communications purposes.”

• FCC: Base Station is a “A structure or equipment at a fixed location that enables Commission-licensed or authorized wireless communications between user equipment and a communications network.”

FEDERAL LAW

• What is modification:o Per the FCC, a modification substantially changes the physical dimensions

of an eligible support structure if one of the following happens:• (i) For towers not in the public rights-of-way the height is increased by

more than 10% or by the height of an additional antenna array with separation from the nearest existing antenna not to exceed 20 feet, whichever is greater or for towers in the public rights-of-way, the height is increased by more than 10% or more than 10 feet whichever is greater.

• (ii) For towers other than those in the public rights-of-way, it involves adding an appurtenance to the body of the tower that would protrude more than 20 feet or more than the width of the tower structure at the level of the appurtenance whichever is greater; for those in the public rights-of-way it involves adding an appurtenance that would protrude by more than 6 feet;

• (iii) For any eligible support structure, it involves installation of more than 4 equipment cabinets; or for towers in the public rights-of-way, it involves new equipment cabinets or ground cabinets that are more than 10% larger than other ground cabinets;

FEDERAL LAW

FEDERAL LAW

• Substantial Change

o (iv) It entails excavation or deployment outside the current site;

o (v) It would defeat the concealment efforts of the eligible support structure; or

o (vi) It does not comply with conditions associated with the siting approval of the construction or modification of the support structure or base station equipment subject to certain caveats

FEDERAL LAW

• 90-Day Shot Clock for Section 332 - Other Collocation Applicationso original FCC shot clock; not automatically deemed granted; o slower but broader;

• 150-Day Shot Clock for Other Requests (New Tower Site)o not automatically deemed granted

• State Law can be more favorable but not less favorable to Providers

STATE LAWArizona has its own version of a Telecommunications Act which is much narrower than the federal version but may have some practical impact. A.R.S. § 9-581 et seq.

• A.R.S. 9-581 (Definitions)o 4. “Telecommunications” means the transmission, between or among

points specified by the user, of information of the user's choosing, without change in the form or content of the information as sent and received. The term does not include commercial mobile radio services, pay phone services, interstate services or cable services.

o 5. “Telecommunications corporation” means any public service corporation to the extent that it provides telecommunications services in this state.

o 6. “Telecommunications services” means the offering of telecommunications for a fee directly to the public, or to such users as to be effectively available directly to the public, regardless of the facilities used.

STATE LAW• A.R.S. § 9-582

o A. A political subdivision shall not levy a tax, rent, fee or charge on a telecommunications corporation, including a telecommunications corporation that provides interstate services as described in § 9-583, subsection C, for the use of a public highway to provide telecommunications services, or levy a tax, fee or charge upon the privilege of engaging in the business of providing telecommunications services within that political subdivision other than:

• 1. Any transaction privilege tax authorized by law . . . .

• 2. A telecommunications application fee for the issuance of a telecommunications license . . . .

• 3. A telecommunications construction permit fee for the issuance of a construction permit to place telecommunications facilities in the public highways . . . .

* * *Cont’d

STATE LAWo B. All application fees, permit fees and charges levied by a political

subdivision on telecommunications corporations pursuant to subsection A, paragraphs 2 and 3 of this section shall be levied on a competitively neutral and nondiscriminatory basis and directly related to the costs incurred by the political subdivision in providing services relating to the granting or administration of applications or permits. These fees and charges also shall be reasonably related in time to the occurrence of the costs.

* * *o E. Notwithstanding subsection D of this section, any

telecommunications corporation that was providing telecommunications service within this state on November 1, 1997 pursuant to a grant made to it or its lawful predecessors prior to the effective date of the Arizona Constitution may continue to provide telecommunications service pursuant to that state grant until it is lawfully repealed, revoked or amended. Such telecommunications corporation shall require no additional grant from any political subdivision to provide telecommunications services.

STATE LAW• Cable Television: A.R.S. § 9-505 et seq.

o Issue license in lieu of franchiseo 5% of gross revenue

“Under no circumstances may the total of the rates of the license fee and of any transaction privilege taxes on gross revenues levied or assessed by a licensing authority for the privilege of providing cable service and related use of the public streets, roads or alleys to provide cable service exceed a rate of five per cent . . . .”• Ariz. Rev. Stat. Ann. § 9-506(3)

STATE LAW• State Regulation [tab 4]

o AZ Corporation Commission (limited)• limited to “public service corporations”• FCC denied permission for ACC to regulate commercial mobile radio

services (CMRS)

• ** Impact of recent FCC Open Internet Order is not yet fully known

• ** DAS Example:• NextG, NewPath, Crown Castle• mixture between wired and wireless• is provider willing to trade the burdens of potential ACC Regulation for

the protections of § 9-581 et seq.

 • *** will we see straight broadband providers looking

to enter the ROW?

STATE LAW• B. Municipal Telecom Interests

o 1. Three Basic Categories:

• a. Private Property w/in municipal boundaries o municipal zoning interests prevail

• b. Municipal proprietary property (parks, fire stations, ball fields) [tab 5]o city management of own property/regulatory questions

• c. Municipal R.O.W.o regulatory interestso management interests

STATE LAWOn its face, Measure C is not the sort of local land use regulation or decision that is subject to

the limitations of § 332(c)(7), but rather is a voter-enacted rule that the City may not lease or

sell city-owned property for certain types of construction unless authorized by a majority of

the electors. Cf. Simons, 63 Cal.App.3d at 468, 133 Cal.Rptr. 721; Cal. Const. art. 11, § 5(a).

Unlike a legislative land use regulation, Measure C does not classify public and private

property or impose design and use restrictions on the different classifications. Indeed,

Measure C does not prevent the City from agreeing to any sort of construction or use of public

land, provided that the City obtains public approval. Nor was Measure C promulgated by the

local governmental authorities (i.e., the City Council or Planning Commission) that are

authorized by law to engage in such legislative land use decision making. Measure C simply

provides a mechanism for the City, through the voters, to decide whether to allow

construction on its own land. It does not regulate or impose generally applicable rules on “the

placement, construction, and modification of personal wireless service facilities,” § 332(c)(7)

(B)(i) and (iv), and so the substantive limitations imposed by these subsections are

inapplicable

Omnipoint Commc'ns, Inc. v. City of Huntington Beach, 738 F.3d 192, 199-200 (9th Cir. 2013)

STATE LAW

Not all actions by state or local government entities, however, constitute regulation, for such an entity, like a private person, may buy and sell or own and manage property in the marketplace. A State does not regulate ... simply by acting within one of these protected areas. When a State owns and manages property, for example, it must interact with private participants in the marketplace. In so doing, the State is not subject to pre-emption by the [federal statute], because pre-emption doctrines apply only to state regulation.

Sprint Spectrum L.P. v. Mills, 283 F.3d 404, 417 (2d Cir. 2002)

STATE LAW

Practice Tip: Toe The Line:

There may be a fine line between proprietary activity and regulation. Even when procuring contracts, a government may be acting in a regulatory capacity if it sweeps too broadly. See Wisconsin Department of Industry, Labor and Human Relations v. Gould, Inc., 106 S.Ct. 1057(1986) (Statute requiring debarment of contractors who had multiple labor relations violations preempted by National Labor Relations Act.)

STATE LAW• C. Revenue Considerations.

o 1. Can we charge fees?o 2. Can we tax?

• Federal Law:o A. Generally back to § 253 – subsection (a) versus subsection (c)

• most challenges address reoccurring fees such as annual licensing fee, rather than one-time start-up fees

• Unknown: reoccurring fees for non-municipal property

o 1. subsection (a) is the barrier to entry provision

o 2. subsection (c) is the safe harbor? Qwest Communications Inc. v. City of Berkeley, 433 F.3d 1253, 1256 (9th Cir. 2006) (overruled on other grounds by Sprint Telephony)

STATE LAW• (c) State and local government authority

o Nothing in this section affects the authority of a State or local government to manage the public rights-of-way or to require fair and reasonable compensation from telecommunications providers, on a competitively neutral and nondiscriminatory basis, for use of public rights-of-way on a nondiscriminatory basis, if the compensation required is publicly disclosed by such government

Note: Does § 253(c) provide a positive right for providers to use a City/Town ROW?

Note: What is the scope of the municipal property interest being used? Does your town’s easement or ROW live and breathe? Does the municipality’s ROW, PUE, or other property interest allow for the construction of WCF?

STATE LAW• B. What is Fair and Reasonable

Compensation?o 1. Some Courts have held that means cost recovery only

AT & T Communications of the Southwest, Inc. v. City of Dallas, 8 F.Supp.2d 582, 593 (N.D.Tex.1998); XO Missouri, Inc. v. City of Maryland Heights, 256 F.Supp.2d 987, 993 (E.D.Mo.,2003)

o 2. Most courts have held that compensation contemplates reasonable profit

TCG Detroit v. City of Dearborn, 206 F.3d 618, 624 ( 6th Cir. 2000); Puerto Rico Telephone Co., Inc. v. Municipality Of Guayanilla, 450 F.3d 9, 22 (1st Cir. 2006)

Ninth Circuit is kind of cloudy (probably allows revenue based): City of Portland, Or. v. Electric Lightwave, Inc., 452 F.Supp.2d 1049, 1068 -1075 (D.Or.,2005); Qwest Communications Inc. v. City of Berkeley, 433 F.3d 1253, 1257 (C.A.9 (Cal.),2006)

STATE LAWPractice Tip: Does federal court have jurisdiction over a § 253 challenge under Tax Injunction Act [Tab 6]

Note: Tax Savings Provision of the FTA (§ 602); see Qwest Corp. v. City of Surprise, 434 F.3d 1176, 1179 (9th Cir. 2006) U.S. West v. Tucson (fee charged to telecommunications provider for use of right of way which was based on percentage of gross income = TPT) [Tab 7]

(Does your Municipality have a limit on TPT?)

Example Charter Provision: The council shall have the power to levy a transaction privilege tax provided that no such tax levy computed or measured on the gross receipts, gross income or gross proceeds of sales of the taxpayer without deduction for cost of goods, or property or services sold or other costs shall be levied at a rate in excess of one percent of such gross receipts, gross income or gross proceeds of any such taxpayer unless such rate is approved by a majority of the qualified electors of the city, voting on the question whether such a rate should be approved at a general or special election wherein such question has been submitted.