Today California cities and counties face preemption battles from multiple sides. The State Legislature has recently enacted preemptive bills in the areas of housing, ride-sharing, municipal broadband networks, and tax and expenditure limitations.1 The American Planning Association article The Double-Edged Sword of Preemption in the November 2019 issue of Planning offered insight into the housing preemption laws in California, particularly in relation to the Vallco Shopping Center reuse project in Cupertino, CA.
In this article we discuss another recent preemption topic affecting California local governments, the Federal Communications Commission’s (FCC) “small cell” order that attempts to help the wireless industry rapidly install their latest 5G wireless technology.2 As preemption actions become more common, local governments need to continue to find new tools to challenge laws that are not in the best interest of their community.
State-Level Preemption
Preemption is often achieved by state legislatures who enact new laws that nullify local ordinances. The current wave of preemptive laws has its roots in the 1980s and 1990s when tobacco industry and gun lobbyists levied the power of states over local governments to further their own industry interests. A review of major court decisions informs us that cities are considered “creatures of the state.” As Lauren Phillips summarizes, “citizens do not have a constitutional right to local government,”3 although local government is more familiar with and able to react to the needs of local communities, and in turn to individuals.
Active areas of preemption currently cover a wide range of issues including: housing policy, workplace equity, employment benefits, fair wages, anti-discrimination, sanctuary cities, rent control, fracking, ride-sharing, short-term rentals, plastic bag and straw bans, soda taxes, 5G wireless technology, e-cigarettes, gun control and even local elections.4 Historically, preemption laws were a reaction to local laws already in place. However, the new preemption trend involves states enacting legislation before local governments have even contemplated the topic.5
Another factor is the “implied preemption” of local governments overwhelmed by the number of lawsuits by private interest groups that are not always seen to be in the community’s best interest. The breadth of issues and level of activity by corporate interests (either individually or under the umbrella of the American Legislative Exchange Council, “ALEC”) and private interest groups creates a difficult atmosphere for local governments that want to encourage community involvement and innovation.6
“Preemption is the use of state [or federal] law to nullify a municipal ordinance or authority… States [and the Federal Government] can preempt cities from legislating on particular issues either by statutory or constitutional law.” NLC Report
Federal-Level Preemption
An additional layer of preemption can come from quasi-legislative sources, such as the FCC. The FCC’s 2018 Declaratory Ruling and Third Report and Order focused on “small cell” wireless equipment installation: the application process timelines (“shot clocks”), application fees, whether local aesthetic or undergrounding requirements constitute an effective prohibition of service, and a finding that a failure to act within the shot clock timeframes “constitutes a presumptive prohibition [on the provision of services],”7 leaving local governments exposed to industry lawsuits. This ruling attempted to reduce uncertainty and costs for wireless providers rolling out 5G networks on small cell equipment, but also created uncertainty and loss of control for local governments.
The FCC ruling affects multiple areas of city and county government. Physical assets such as rights-of-way are affected by the temporary increase in construction activities and the long-term aesthetic impacts of the equipment.8 Citizens are very concerned about aesthetics and the health effects of radiofrequency radiation as small cell equipment proliferates.9 The high-band “millimeter waves” used for 5G require equipment every few hundred feet, meaning that communities will need small cell equipment installed throughout their neighborhoods to create a fully functional network.10 City and county staff will need to review each small cell siting application, the majority of which will be placed in public rights-of-way.
Local governments must dedicate increasing amounts of staff time for small cell project review with short notice and cost tracking to ensure application fees are a “reasonable approximation of the locality’s reasonable costs.”11 Local governments must decide if they want to have their fee structures possibly audited by the FCC if they exceed the amounts stated in the 2018 small cell ruling, which are: $500 in non-recurring fees for 1-5 facilities, with an additional $100 for each additional facility; or $1,000 for non-recurring fees for a new pole; and $270 per facility per year for all recurring fees, regardless of local market rental value.
Some local governments may choose to lose money on their actual costs or market-rate right-of-way rental fees in order to stay clear of an audit or legal challenge. This conundrum brings us to the largest issue for city and county governments: the increased threat of legal action by the FCC or wireless companies.
The variety of language used by FCC Commissioners in their separate statements accompanying the 2018 ruling is enlightening. Commissioner Carr focuses on “winning the 5G race” against China in his statement, which leads him to believe that he needs to “[get] government out of the way.”12 He also believes that this order “ensure[s] that no city is subsidizing 5G” without offering much proof of research on reasonable costs of staff review time or other local government costs for such applications. Commissioner Rosenworcel’s statement, in contrast, indicates very mixed feelings about the order’s effect on local governments:
“Instead of working with our state and local partners to speed the way to 5G deployment, we cut them out. We tell them that going forward Washington will make choices for them—about which fees are permissible and which are not, about what aesthetic choices are viable and which are not, with complete disregard for the fact that these infrastructure decisions do not work the same in New York, New York and New York, Iowa. So it comes down to this: three unelected officials on this dais are telling state and local leaders all across the country what they can and cannot do in their own backyards. This is extraordinary federal overreach.”13
Commissioner Rosenworcel offers innovative alternatives: having the FCC develop model codes for small cells with public and industry input and creating incentives for small cells in a wide set of federal departments. Regarding rising costs, she points out the role of tariffs on Chinese goods that form the bulk of network equipment. Lastly, she encourages the use of competition within the industry by updating FCC rules on siting equipment.
Tools for Local Governments
What tools do local lawmakers have to push back against unwanted preemption? One of the biggest tools is consensus building, both with state lawmakers and with other local governments. Consensus building with state lawmakers centers on the utility of preemption generally and how it can be wielded in cooperation with local governments rather than against.
Maresa Strano and Lydia Bean of New America summarize Richard Briffault’s “[identification of] two areas of potential political consensus: the idea that localism has democratic merits but should not be unlimited, and that strong cooperation between different levels of government produces better outcomes.”14 Local Solutions Support Center (LSSC) highlights the success of the coalition ‘Local Maryland’ in working with state legislators to pass a state minimum wage bill that did not preempt local ordinances, so acting as a wage floor instead of a wage ceiling. Other highlights in the LSSC report included local government coalitions in Florida and Texas to fight against unnecessary preemption by the state. State legislators in Colorado have chosen to repeal some preemption measures in 2019 covering minimum wages, oil and gas drilling and tobacco products.15 The National League of Cities (NLC) encourages local governments to reframe the preemption narrative as “cities help the state.”16Angelina Panattieri of the NLC specifically states that “cities have an image problem” when it comes to leadership on wireless technology and need to reach out to policymakers to “counter the lobbying by wireless companies” for preemptive actions.17 Strano and Bean agree in their report Punching Down that coalition building is important but list their number one strategy as “pursue legal remedies.”18 Legal remedies are most convenient for home rule cities and counties with strong standing in their state constitutions, such as in California. Charter cities and counties have especially strong standing under our [California] state law.19 Molly Cohen suggests that “[local governments] should consider banding together with either local or large nonprofits, advocacy groups, or unions seeking a similar goal” even in their court battles. She also states that drafting very narrow laws that fit “alongside” state areas of preemption can help avoid some battles altogether.20 The National League of Cities has created a coalition of governments that are currently suing the FCC in Federal Court over the small cell wireless ruling.21 Many other cities and counties have also sued the FCC independently. These cases have been consolidated as City of Eugene, Oregon, et al v. FCC, et al, case number 19-70344, and the most recent arguments were heard by the judges of the U.S. Court of Appeals in the Ninth Circuit on February 10, 2020. On the same day, wireless carriers argued that the FCC order had not gone far enough by not requiring “deemed granted” status of applications that were not acted upon within FCC shot clocks.22 California local governments have had to contend with the “deemed granted” sanction since the passage of AB57 in 2015 (§65964.1)23, but it is worth watching to see what stance the Ninth Circuit judges take on lessening or increasing the FCC’s preemptive power. California cities and counties should still look to improve their cost-tracking procedures and their small cell ordinances with aesthetic requirements that are “objective and published in advance,”24 if they wish to avoid preemption by the FCC or other sources.“[Dillon’s Rule] affirms the previously held, narrow interpretation of a local government's authority, in which a sub-state government may engage in an activity only if it is specifically sanctioned by the state government…Home rule is a delegation of power from the state to its sub-units of governments (including counties, municipalities, towns or townships or villages). That power is limited to specific fields, and subject to constant judicial interpretation…“ NLC Website
California cities and counties should still look to improve their cost-tracking procedures and their small cell ordinances with aesthetic requirements that are “objective and published in advance,” if they wish to avoid preemption by the FCC or other sources.
CITED ARTICLES:
1. DuPuis, Nicole, Trevor Langan, Christiana McFarland, Angelina Panettieri and Brooks Rainwater, “City Rights in an Era of Preemption: A State-by-State Analysis,” NLC: February 2018, https://www.nlc.org/sites/default/files/2017-03/NLC-SML%20Preemption%20Report%202017-pages.pdf
2. Lai, Claire S., “How Do Municipalities Comply with the FCC’s New Rule on Small Cell Wireless Deployment?” Meyers Nave: January 30, 2019, https://www.meyersnave.com/event/municipalities-comply-fccs-new-rule-small-cell-wireless-deployment/
3. Phillips, Lauren E., “Impeding Innovation: State Preemption of Progressive Local Regulations,” Columbia Law Review 117, no.8 (December 2017), https://columbialawreview.org/content/impeding-innovation-state-preemption-of-progressive-local-regulations/
4. Partnership for Working Families, “Mapping State Interference,” https://www.forworkingfamilies.org/preemptionmap and Grassroots Change, “Preemption Watch,” https://grassrootschange.net/preemption-watch/#/map. Accessed February 18, 2020.
5. Briffault, Richard, “The Challenge of the New Preemption,” Stanford Law Review 70, no.6 (June 2018), https://review.law.stanford.edu/wp-content/uploads/sites/3/2018/06/70-Stan.-L.-Rev.-1995.pdf
6. Phillips, “Impeding.”
7. Federal Communications Commission, Accelerating Wireless Broadband Deployment by Removing Barriers to Infrastructure Investment, Declaratory Ruling and Third Report and Order, 33 FCC Rcd 9088 (2018), ¶13 https://docs.fcc.gov/public/attachments/FCC-18-133A1.pdf
8. Rutngamlug, Ray and Amanda Witt, “California Supreme Court Incommodes Wireless Access to Rights of Way,” SheppardMullin: December 20, 2019, https://www.fcclawblog.com/2019/12/articles/fcc/rights-of-way/
9. “Cellular Phone Towers,” American Cancer Society, last revised November 5, 2018, https://www.cancer.org/cancer/cancer-causes/radiation-exposure/cellular-phone-towers.html
10. Nordrum, Amy, Kristen Clark and IEEE Spectrum Staff, “Everything You Need to Know About 5G,” IEEE Spectrum, January 27, 2017, https://spectrum.ieee.org/video/telecom/wireless/everything-you-need-to-know-about-5g
11. FCC, Accelerating, ¶11.
12. FCC, Accelerating, 111-113.
13. FCC, Accelerating, 114-116.
14. Strano, Maresa and Lydia Bean “How Red States are Steamrolling Blue Cities,” Washington Monthly, December 4, 2019, https://washingtonmonthly.com/2019/12/04/how-red-states-are-steamrolling-blue-cities/
15. Haddow, Kim, Anthony Gad, and Katy Fleury, “The Growing Shadow of State Interference: Preemption in the 2019 State Legislative Sessions,” Local Solutions Support Center & State Innovation Exchange: August 2019, https://www.supportdemocracy.org/s/LSSCSiXReportAugust2019.pdf
16. DuPuis, “City Rights,” 24.
17. Panettieri, Angelina, “Five Takeaways from the FCC’s Small Cell Preemption Order,” NLC CitiesSpeak: September 26, 2018, https://citiesspeak.org/2018/09/26/five-takeaways-for-cities-from-the-fccs-small-cell-preemption-order/
18. Bean, Lydia and Maresa Strano, “Punching Down: How States are Suppressing Local Democracy,” New America: last updated July 11, 2019, https://www.newamerica.org/political-reform/reports/punching-down/part-two-how-to-address-preemption
19. Cantú Montoy, Hilda, “History of Municipal Home Rule,” League of California Cities: 2007, https://www.cacities.org/Resources-Documents/Resources-Section/Charter-Cities/History-of-Municipal-Home-Rule-2
20. Cohen, Molly, “A Lawyer’s Playbook to Fight State Preemption,” CityLab: July 19, 2017, https://www.citylab.com/equity/2017/07/a-lawyers-playbook-to-fight-state-preemption/533862/
21. “FCC Sides with Wireless Industry on Policy that Erodes Local Control, Lowers Standards for Deployment of Wireless Small Cell Equipment,” League of California Cities: October 1, 2018, https://www.cacities.org/Top/News/News-Articles/2018/October/FCC-Sides-with-Wireless-Industry-on-Policy-that-Er
22. Reid, Jon, “5G Infrastructure Fight Between Cities, FCC to Continue in 2020,” Bloomberg Law, January 3, 2020, https://news.bloomberglaw.com/tech-and-telecom-law/5g-infrastructure-fight-between-cities-fcc-to-continue-in-2020
23. Assem. Bill 57, 2015-2016 Reg. Sess., ch. 685, 2015 Cal. Stat. http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160AB57
24. FCC, Accelerating, ¶86.
RELATED ARTICLES OF INTEREST:
https://www.nlc.org/sites/default/files/2019-12/Restoring-City-Rights-in-an-Era-of-PreemptionWeb.pdf
https://www.nlc.org/resource/small-cell-wireless-technology-in-cities
https://scientists4wiredtech.com/2019-ca-supreme-court-decision-t-mobile-v-san-francisco/
https://www.npr.org/templates/story/story.php?storyId=92292747
https://www.theatlantic.com/business/archive/2017/08/st-louis-minimum-wage-preemption/538182/
https://www.epi.org/publication/black-white-wage-gaps-expand-with-rising-wage-inequality/#epi-toc-19
https://scholarship.law.berkeley.edu/cgi/viewcontent.cgi?article=4382&context=californialawreview
https://review.law.stanford.edu/wp-content/uploads/sites/3/2018/06/70-Stan.-L.-Rev.-2029.pdf
Sidebar #1: (definition of preemption): “Preemption is the use of state [or federal] law to nullify a municipal ordinance or authority… States [and the Federal Government] can preempt cities from legislating on particular issues either by statutory or constitutional law.” From NLC report below: https://www.nlc.org/sites/default/files/2017-03/NLC-SML%20Preemption%20Report%202017-pages.pdf
Sidebar #2: (home rule vs. Dillon’s rule): “[Dillon’s Rule] affirms the previously held, narrow interpretation of a local government's authority, in which a sub-state government may engage in an activity only if it is specifically sanctioned by the state government…Home rule is a delegation of power from the state to its sub-units of governments (including counties, municipalities, towns or townships or villages). That power is limited to specific fields, and subject to constant judicial interpretation…” from NLC website: https://www.nlc.org/resource/cities-101-delegation-of-power
Sidebar #3: (emphasizing the conclusion): California cities and counties should still look to improve their cost-tracking procedures and their small cell ordinances with aesthetic requirements that are “objective and published in advance,” if they wish to avoid preemption by the FCC or other sources.