MEMORANDUM. Managers, Administrators, Clerks, Attorneys, and Planners

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1 MEMORANDUM To: From: Managers, Administrators, Clerks, Attorneys, and Planners Kimberly S. Hibbard, General Counsel Date: September 15, 2013 Re: City Authority to Regulate Wireless Telecommunications HB 664 Cell Tower Deployment Act (S.L ) There has been a long-standing tension between the wireless industry, which seeks to maximize capacity to provide cell and data services in a competitive environment and therefore prefers an expedited, streamlined and predictable regulatory process, and local governments, which seek to apply land use controls and processes that take into account local conditions, aesthetics, public safety, comprehensive plans, and citizen concerns. Although much of this dynamic has unfolded at the federal level, with Congress, the Federal Communications Commission (FCC) and the courts playing key roles, state legislatures are increasingly stepping into the debate to make state policy decisions as to where the balance should lie. During the 2013 session, the N.C. General Assembly did so, enacting HB 664 Cell Tower Deployment Act (S.L ). The legislation amends existing statutes to further restrict the authority of local governments with regard to the siting of new wireless structures and the collocation of wireless facilities on existing structures. This memorandum provides an overview of federal law and a brief background on the push for state legislation, followed by a summary of existing law and the major changes contained in HB 664. I. Federal Law The legal framework for the regulation of wireless telecommunications is a complex mix of federal laws and administrative rules, state statutes, local ordinances, and case law.

2 Pertinent federal law is found primarily in the Telecommunications Act of That act generally preserves local government authority to regulate the placement, construction, and modification of personal wireless service facilities. However, it specifies that such regulation cannot prohibit or have the effect of prohibiting the provision of personal wireless services and cannot unreasonably discriminate among providers of functionally equivalent services. It requires that local governments act on any request for authorization to place, construct, or modify personal wireless service facilities within a reasonable time, taking into account the nature and scope of the request. Decisions to deny requests must be in writing and supported by substantial evidence in the written record. Further, it prohibits regulation on the basis of the environmental effects of radio frequency emissions as long as the facility in question is in compliance with the FCC s regulations concerning such emissions. 47 U.S.C. 332(c)(7). In 2009, the FCC issued a declaratory ruling interpreting the reasonable time for taking action on requests. This ruling, setting presumptive time limits on local government review of applications, is widely known as the shot clock. Under the FCC ruling, local governments have 90 days to render a decision regarding a collocation on an existing cell tower and 150 days for all other types of applications. Litigation challenging the FCC s authority to interpret the ambiguous language in the federal statute was resolved earlier this year, with the U.S. Supreme Court ruling that the shot clock interpretation is within the broad authority granted to the FCC to implement the Telecommunications Act. City of Arlington, Texas v. Federal Communications Commission, 569 U.S. (decided May 20, 2013). Meanwhile, Congress amended the federal Telecommunications Act as a part of the Middle Class Tax Relief and Job Creation Act of A key new provision expressly limits local government authority to control the collocation of new facilities or the removal or replacement of existing facilities on existing towers. Section 6409 (Wireless Facilities Deployment) provides that 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 (emphasis added). Under the amendment, an eligible facilities request is defined to mean any request for modification of an existing wireless tower or base station that involves collocation of new transmission equipment, removal of transmission equipment, or replacement of transmission equipment. The federal statute did not provide a definition of what constitutes a modification or a substantial change in physical dimensions. 47 U.S.C. 1455(a). The FCC stepped in again to fill in the blanks on what constitutes a substantial change in dimensions. See FCC Public Notice, DA (dated January 25, 2013). In its guidance (not yet a rulemaking), the FCC suggested use of the test developed in the Nationwide Collocation Agreement, an agreement created in the context of historic 2

3 preservation issues. Under this test, a substantial change in physical dimensions would occur if (1) the proposed antenna would increase the existing height of the tower by more than 10%, or by the height of one additional antenna array with separation from the nearest existing antenna not to exceed twenty feet, whichever is greater (may exceed these size limits if necessary to avoid interference with existing antennas); (2) the proposed antenna would involve the installation of more than the standard number of new equipment cabinets for the technology involved, not to exceed four, or more than one new equipment shelter; (3) the proposed antenna would involve adding an appurtenance to the body of the tower that would protrude from the edge of the tower more than twenty feet, or more than the width of the tower structure at the level of the appurtenance, whichever is greater (may exceed these size limits if necessary to shelter the antenna from inclement weather or connect the antenna to the tower via cable; OR (4) the proposed antenna would involve excavation outside the current tower site, defined as the current boundaries of the leased or owned property surrounding the tower and any access or utility easements currently related to the site. The Middle Class Tax Relief and Job Creation Act also included provisions directing the establishment of a nationwide public safety wireless broadband network. FirstNet, the authority tasked with building the network, is to use existing infrastructure to the maximum extent economically desirable, see 47 U.S.C. 1428, and it is anticipated that a large increase in collocations will be necessary to accomplish this.. II. State Law While agency action and litigation were playing out at the federal level, the industry turned to state legislatures to seek relief from local requirements and processes perceived as roadblocks to deployment. In the 2007 session, the N.C. General Assembly responded to industry frustration by enacting Part 3E of G.S. Chapter 160A, Article 19 (Wireless Telecommunications Facilities), and parallel provisions for counties in G.S. Chapter 153A, Article 18. Those statutes generally set forth local government authority, specified categories of collocations that are entitled to streamlined processing, and established a state law shot clock for action on such collocations. 3

4 The smartphone explosion occurred in the years after the 2007 state law was enacted and has exponentially increased the demand for data transmission capacity. As a result, the wireless industry sought amendments to state law this year. The industry argued that further expediting local government approvals for collocations is necessary to aid in the rapid deployment of mobile broadband infrastructure, both to facilitate the national emergency communications network contemplated by the 2012 federal amendment and to meet the public s growing demand for state-of-the-art wireless services. Legislation was also pitched as a way to conform state law to federal, lifting some of the confusion that might result from inconsistencies between the two. The 2013 session was marked by a focus on regulatory reform as a way to remove impediments to economic growth. The League advocated for a version of HB 664 that would make only those changes necessary to conform to federal law. During a rapid negotiation process, some improvements to early versions were achieved and several proposed changes were scaled back. In the end, however, the legislation as enacted goes beyond conformance to federal law and impacts city authority in significant ways, reflecting the General Assembly s public policy decision to strike the balance in favor of a reduced regulation. III. Summary of HB 664 Following are the major provisions of HB 664. A brief summary of the existing statute is provided to give a better picture of what has changed. a. General municipal authority Existing statute. Unless expressly stated otherwise, cities may regulate wireless facilities and structures based on land use, public safety, and zoning considerations, including aesthetics, landscaping, structural design, setbacks, and fall zones, or state and local building code requirements, consistent with the provisions of federal law. Public safety does not include requirements relating to radio frequency emissions. G.S. 160A (a). New state law: The existing provisions setting forth the basic parameters of city authority were moved to new GS 160A A. The new provision clarifies that public safety is broadly defined to include, without limitation, federal, state, and local safety regulations other than those relating to radio frequency emissions. b. New wireless support structures Existing statute. Applications for new support structures such as cell towers may only be reviewed for compliance with public safety, land use, and zoning issues addressed in 4

5 the city s regulations. The city can look at evidence as to whether existing structures could be used for antenna placement instead of constructing a new tower, whether the proposed height of the new tower is necessary to provide the designed service, and whether residential, historic and scenic areas cannot be served from outside those areas. Cities can also require applicants to evaluate whether collocation on an existing structure is reasonably feasible. However, the city may not evaluate the applicant s business decisions about its designed service, customer demand, or quality of service to or from particular areas. G.S. 160A (c). Decisions to approve or deny applications must be made within a reasonable period of time consistent with the issuance of other land-use permits. G.S. 160A (e). New state law. Although the amended statute retains the language summarized above, it further restricts the type of information that can be requested of the applicant. The city may not require information about the specific need for a new wireless support structure, including whether the service from the new structure is to add additional wireless coverage or capacity, and may not require proprietary, confidential, or other business information to justify the need for the new structure. G.S. 160A (c). It is not entirely clear how cities can continue to evaluate all of the items in G.S. 160A (c) in light of this prohibition. The additional prohibition may make it very difficult for cities to gather substantial evidence to support the denial of an application as required under federal law. The amended statute retains the reasonable period of time for decisions, but note that this period should not exceed the 150 days allowed for non-collocation applications under the federal shot clock. c. Substantial modification of a wireless support structure Existing statute. Existing law does not include the term substantial modification. It differentiates between those collocations that are entitled to streamlined processing and those that are not, but an increase in physical dimensions is only one of the criteria considered in making that determination, and any amount of increase in height or width can be a disqualifier. New state law. HB 664 makes the approval procedures and limitations that are applicable to new wireless support structures also applicable to a subset of collocations that are considered substantial modifications. Substantial modification is defined in the statute as the mounting of a wireless facility on a wireless support structure that substantially changes the physical dimensions of the support structure. The definition creates a presumption that a change meeting any of three listed criteria is a substantial modification, but it leaves the door open for a city to demonstrate that other types of changes constitute a substantial modification. G.S. 160A (7a). Note that HB 664 s definition of substantial modification is not the same as that contained in the FCC s guidance outlined on page 2-3 above. The FCC guidance criteria 5

6 (1) and (3) are included in the state statutory definition, while (2) and (4) are not. The state law definition also includes an additional category of substantial modification increasing the square footage of the existing equipment compound by more than 2,500 square feet. The overall effect of HB 664 s definition is to create a much broader set of collocations that will not meet the definition of substantial modification and will therefore be entitled to streamlined processing rather than the same standards and procedures as new wireless structures. It also raises the possibility that state law will be inconsistent with federal law once the FCC completes a rulemaking to establish a binding interpretation as to what constitutes a substantial change in physical dimensions. d. Mandatory approval of some requests Existing statute. Existing state law does not mandate approval. New state law. The amended law cites to the federal Middle Class Tax Relief and Job Creation Act and provides that pursuant to that act a city may not deny and shall approve any eligible facilities request. G.S. 160A (a). An eligible facilities request is defined as a request for modification of an existing wireless tower or base station that involves collocation of new transmission equipment or replacement of transmission equipment but does not include a substantial modification. G.S. 160A (4a). This significant removal of local discretion generally tracks the amended federal law. Note that the federal definition of an eligible facilities request includes removal of equipment, an item not included in the state definition. e. Streamlined processing and shot clock Existing statute. Under existing law, two categories of collocations are entitled to streamlined processing: (1) collocations where an additional wireless facility is within the number of facilities previously approved for the support structure and meets all the requirements and conditions of the original approval, and (2) collocations that do not increase the overall dimensions of the tower, do not increase the ground area for equipment enclosures, comply with regulations and conditions applied to the initial wireless facilities placed on the tower, comply with federal, state and local safety requirements; and do not exceed weight limits for the structure. Under the existing streamlined processing, the application is reviewed for conformity with site plan and building permit requirements but is not otherwise subject to zoning requirements or public hearings. The local government must review the application and identify any deficiencies within 45 days of submission, and a written decision to approve or deny a completed application must then be made within 45 days. 6

7 New state law. The amended statute applies streamlined processing to all types of collocations (except those that create a substantial modification) and to the new category of eligible facilities requests (see definition above). A collocation is the placement of wireless facilities on an existing structure, not limited to towers, while an eligible facilities request involves modification of an existing tower or base station. The new law retains the state shot clock for streamlined processing 45 days to identify deficiencies in the completeness of the application and 45 days to render a decision in writing once the application is complete. [For an eligible facilities request, the decision must be to approve; for a collocation that is not an eligible facilities request, the decision is either to approve or deny.] A city may deem an application incomplete if there is insufficient evidence provided to show that the proposal will comply with federal, state, and local safety requirements, but the city may not deem applications incomplete for any issue not directly related to the actual content of the application and subject matter of the collocation or eligible facilities request. f. Maintenance of equipment Existing statute. Maintenance of structures and facilities is subject to the city s general authority to regulate applications. G.S. 160A (a). New state law. Federal law treats the replacement of transmission equipment for existing towers and base stations as an eligible facilities request that must be approved, presumably after an application has been reviewed. The amended state law includes replacement of transmission equipment in the definition of eligible facilities request as well, but goes on to specify that nothing in the statute requires an application and approval for routine maintenance or limits routine maintenance of support structures and facilities. Routine maintenance is defined to include activities associated with regular and general upkeep of structures and facilities, including replacement of existing facilities with facilities of the same size. G.S. 160A (a). g. Consultant fees Existing statute: Consultant fees must be reasonable and not in excess of what is usual and customary for such services. G.S. 160A (f). New state law: Under the new provisions, consultant fees are further limited. For new wireless support structures and collocations that are substantial modifications, fees for the review of an application may not be used for a consultant s travel and meal expenses, or for a contingent fee consultant arrangement. G.S. 160A (f). For eligible facilities requests and collocations that are not substantial modifications, cities may not impose a consultant fee in excess of $1,000 and there is a similar prohibition on 7

8 use of application fees for consultant s travel and expenses or contingent consultant arrangement. G.S. 160A (a3). h. State property Previous statute. The state may lease property for the construction and placement of communications towers on state land and for the placement of antennas on state-owned structures. City and county ordinances apply to towers and antennas so authorized. G.S New state law. The state may lease property or grant an easement or license for towers and equipment on state land and for installing and operating equipment on towers, buildings, or ground area owned or leased by the state. The Governor, with approval of the Council of State, may adopt rules authorizing the Department of Administration to approve and execute classes of leases, easements, and licenses. Land in the state parks system may only be leased or conveyed with approval of the Secretary of the Department of Environment and Natural Resources. The provision regarding city and county ordinances remains unchanged. G.S i. Effective date The amendments to the city and county enabling statutes will become effective October 1, The provisions dealing with state lands were effective June 26, IV. Local action needed Please review as soon as possible any local ordinances that regulate wireless structures and facilities, in close consultation with the city attorney and planning staff. Amendments to conform to the new provisions in HB 664 are likely to be necessary. This is also an opportunity to ensure that ordinances are in line with all recent developments at the federal level. For further reading on the regulation of wireless sites, see these School of Government s blog posts: Can We Top Off Our Tower? and Wireless Telecommunications Facilities: Can North Carolina Communities Avoid Shot-Clock Violations? The League will be working to update materials on the website as well. 8

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