Mobile wireless service is ubiquitous. Growth of domestic mobile data use is astronomical with growth rates expected to increase by as much as 20 times over the next five years. 4G LTE is lighting up our homes, schools, and workplaces. And 5G, we are told, is right around the corner. Growth requires infrastructure – new sites and modifications to existing facilities. Infrastructure requires permits, largely from local governments. But permit processes take time and local concerns can delay expansions. Now, however, the wireless telecommunications industry has a new tool to implement changes more quickly. And the Fourth Circuit has given the thumbs up to FCC regulations that foster these changes. See Montgomery County v. FCC, 2015 U.S. App. LEXIS 22070 (4th Cir. 2015).
This week, the United States Court of Appeals for the Fourth Circuit put the finishing touch on its decision upholding FCC regulations interpreting a 2012 law that cleared the way for a category of infrastructure expansion projects by eliminating discretionary reviews by state and local governments. The law, and the FCC’s interpretation of it, is a significant win for the wireless telecommunications industry in its efforts to streamline deployment of infrastructure, which can be slowed by state and local processes. On Feb. 16, 2016, the industry scored another victory when the court denied the petitioners’ motion seeking rehearing and rehearing en banc.
This is a big deal. Before the 2012 law, one of the most effective tools the wireless telecommunications industry could leverage for infrastructure expansions was the Telecommunications Act of 1996. Strong as that law is, it can present round-peg-square-hole challenges. After all, what mobile devices did you have in 1996? For those who had them, what did you do with your mobile devices besides make really expensive phone calls?
Fast forward to 2012 (and the age of live-streaming video on smart phones): Congress enacted a mammoth budget bill with a short section that cleared the way for swift deployment of certain wireless telecommunications infrastructure across the country by preempting the authority of state and local governments to exercise discretion with respect to applications for permits for certain types of projects. Specifically, Section 6409(a) of the Middle Class Tax Relief and Job Creation Act of 2012 prohibits state and local governments from denying certain categories of applications that seek to modify but not to substantially change the physical characteristics of the existing wireless telecommunications facility. The statute mandates that state and local governments “may not deny, and shall approve” eligible applications. In October 2014, the FCC issued its Report and Order, and promulgated regulations interpreting Section 6409(a). What’s more, the FCC regulations provide a “deemed granted” remedy for the failure of a state or local government to so act within a specified timeframe.
Because the law takes away municipal discretion, and because the FCC defined several key terms not defined in the statue, the odds for a court challenge were high from the get go. In March 2015, several municipalities brought two lawsuits challenging the FCC’s regulations. The cases were consolidated, with additional cities and industry groups intervening. The lawsuits challenge the FCC’s authority in promulgating its regulations. But the essence of the lawsuits is an “anti-commandeering” claim that the FCC’s deemed granted procedure unconstitutionally requires local governments to enforce a federal program, something that the United States Supreme Court has previously struck down as a violation of the Tenth Amendment. See Printz v. U.S., 521 U.S. 898 (1997); New York v. U.S., 505 U.S. 144 (1992). The FCC and industry intervenors (CTIA and PCIA) counter that the law merely requires local governments to stand down in this regulated field.
On Dec. 18, 2015, the Fourth Circuit issued its opinion and order upholding the FCC’s regulations. The Court explained that the FCC’s regulations do not require a state or local government to enforce the federal program; instead, “the ‘deemed granted’ remedy obviates the need for the states to affirmatively approve applications.” Montgomery County, at *11. The court also walked through the Chevron analysis and upheld the FCC’s regulations.
On Feb. 1, the petitioners requested rehearing and rehearing en banc. On Tuesday, Feb. 16, their motion was denied. Once the mandate issues, the case will be ripe for a possible petition for a writ of certiorari to the United States Supreme Court.