Federal Court Enjoins Application of L.A. County Zoning Code to Wireless Facilities

In another important decision limiting the imposition of burdensome and discretionary local zoning requirements on wireless telecommunications deployment, on June 20, 2007, the United States District Court for the Central District of California granted NextG Networks of California, Inc. (NextG) a preliminary injunction, enjoining the County of Los Angeles (the County) from enforcing its zoning requirements on NextG’s installation of wireless telecommunications facilities. In doing so, the court found that the County’s zoning requirements, as applied to the deployment of wireless facilities, was preempted by Section 253(a) of the federal Communications Act and did not fall within the authority reserved to local governments under Section 253(c) to manage the public rights-of-way.¹

NextG is a telecommunications company that constructs Distributed Antenna Systems (DAS), which combine a fiber optic network with low power antennas located on utility or street-light poles in public rights-of-way. NextG uses its DAS networks to provide transport and networking to wireless carriers, empowering them to provide greater coverage and capacity. Because NextG’s network included antennas, the County required NextG to comply with the County zoning code. Like many local wireless zoning ordinances, the County’s code was complicated, burdensome and highly discretionary. Moreover, the County did not impose the requirements on non-wireless facilities, even though located in the public rights-of-way, like NextG’s.

NextG filed for preliminary injunction, alleging that the County’s zoning requirements violated its federal rights and prevented it from meeting obligations requiring NextG to construct facilities for customers by specified dates.

In granting NextG’s motion for preliminary injunction, the court identified four common elements that result in preemption of a local ordinance by Section 253: “(1) a complicated application process (including reporting of financial information) and high fees; (2) a public hearing on the application; (3) imposition of criminal and civil sanctions for violations; and (4) unfettered discretion to approve or deny the application, or revoke a permit once issued.” The court found that all of the common elements were present in the County’s zoning requirements, which required submission of a variety of detailed plans, maps, and any other information that the County might require, and put the burden on the applicant to prove such “subjective and imprecise concepts” as: “health, peace, and comfort” of area residents; “use, enjoyment or valuation of property;” and “public health, safety or general welfare.” The court found that these requirements were “so burdensome and Byzantine as to erect a barrier to providing telecommunications services.” The court also found that the highly burdensome application process was complicated by two separate public hearing requirements, including one that was not codified, and by the imposition of criminal and civil sanctions. Finally, the court found that the County’s zoning ordinance “provides unfettered discretion to County officials at multiple points in the approval process, including discretion to ultimately deny the application, the ‘ultimate cudgel’ in the preemption analysis.”

The court rejected the County’s arguments that its zoning code (1) does not require a franchise, and (2) is of general applicability. The court noted that the County’s “not a franchise” argument was recently rejected by the Ninth Circuit in Sprint Telephony PCS, L.P. v. County of San Diego. The court held that the deciding characteristic is not the label attributed to the requirement, but whether the requirement has the effect of prohibiting the provision of telecommunications services. For similar reasons, the court also found the general applicability of the zoning requirements to be irrelevant, stating that Section 253(a) “plainly preempts not only statutes that may ‘prohibit’ the provision of services on their face, but also that ‘have the effect’ of prohibiting the provision of services in their application…”

The court also rejected the County’s argument that its zoning requirements constituted “management” of the public rights-of-way within the “safe harbor” of Section 253(c). The court found that the requirements went beyond management of the right-of-way because they incorporated unrelated factors such as the “use, enjoyment and valuation of adjoining property, and the peace, comfort and welfare of neighbors.” Of perhaps even greater importance, the court found that County’s broad discretion to deny an application on amorphous factors, such as “good zoning practice” and “functional development design,” as well as the County’s discretion to request whatever additional information it wanted from the applicant, also exceeded the County’s management of the right-of-way. Lastly, the court found that the zoning requirements exceeded the Section 253(c) safe harbor because they discriminated against wireless facilities.

Having found NextG likely to succeed on the merits of the case, the court held that absent the requested relief, NextG would suffer irreparable harm to its goodwill and reputation. The court noted that “[t]he wireless telecommunications industry is capital-intensive and consists of only a small number of major players, so the inability to dispatch services and the resulting loss of current revenue could result in insufficient funding for future projects and inhibit Plaintiff’s ability to grow its business.” The court rejected the County’s argument that NextG brought the harm upon itself by agreeing to unrealistic contractual commitments, holding that NextG should not be required to build into its contracts time to comply with an invalid permit process and that the harm stems from the passage of the requirements, not from NextG’s contractual obligations.

The NextG v. Los Angeles County decision provides further support for the proposition that local governments cannot impose burdensome and open-ended zoning codes on wireless telecommunications providers. The decision reiterates that federal policy promoting the rapid deployment of competitive and advanced telecommunications networks must not be thwarted by a patchwork quilt of local requirements and the fickle winds of local politics.

Footnote

1 NextG also made claims under Sections 7901 and 7901.1 of the California Public Utilities Code. However, finding that federal law was dispositive on the issues presented, the court declined to consider whether the zoning ordinance was also preempted by state law. The scope of local government’s authority over wireless telecommunications facilities in the public rights-of-way under Section 7901 and 7901.1 is presently at issue before the California Supreme Court in Sprint Telephony PCS v. County of San Diego. 

Davis Wright Tremaine attorneys Scott Thompson and William Bly represented NextG in the case. Please feel free to contact us if you have questions about or would like a copy of the court’s decision.