As far back as 2016 and continuing in more recent times, a number of wireless cellular service providers have approached the City desiring to deploy new small cell facilities, also known as wireless communications facilities (WCF), within the City rights-of-way which would provide enhanced wireless services throughout the community. A small cell or WCF includes an antenna and associated equipment that are typically placed on existing infrastructure located within the public rights-of-way, such as a traffic signal or streetlight, but they could also require the placement of a new vertical pole or structure.

Cellular service providers are experiencing increased customer demand, particularly with respect to data capacity and speed. Because of this increasing data consumption, wireless providers are seeking rapid investment in the necessary infrastructure to meet not only current data demands but to prepare for consumer deployment of fifth generation wireless systems (5G) technology. Unlike in the past, when cellular sites tended to be leased on private property, wireless providers are more interested in locating new facilities within public rights-of-way. Wireless providers noted that new locations for wireless installations on private property are limited and more difficult to negotiate and permit. Given the increasing cost and frequent public concern and resulting delay associated with leases on private property, the wireless providers sought out alternatives to allow continued expansion, leading them to advocate for less expensive and more streamlined deployment on utility poles and other publicly owned structures in the public rights-of-way.

Regulatory Environment

The California Public Utilities Commission (“CPUC”) has determined that wireless providers are a utility and, therefore, have all the rights of use on the public rights-of-way as any other utility. The public rights-of-way have existing infrastructure, such as utility poles, traffic signals, and streetlights, which can support wireless infrastructure.

Because of both federal and State legislation, the City’s ability to regulate WCF is narrowed to the ability to examine and control proposed WCF in the right-of-way for aesthetics and health and safety reasons. In 2017 at the State level, Senate Bill 649 was proposed to further limit local control, but then Governor Jerry Brown vetoed the legislation. In 2018, the Federal Communications Commission (FCC) issued a series of Orders that included the following key provisions limiting local control:

• Shortens the time cities have to process applications for small cells to either 60 or 90 days, depending on whether they are being mounted on an existing or new structure;
  
  

• Limits the presumed safe-harbor fee amount for application fees for small cell sites in the right-of-way to $500 for non-recurring fees, including a single up-front application that includes up to five sites, plus an additional $100 per site beyond five, or $1,000 for non-recurring fees for a new pole intended to support one or more WCF;
  
  

• Limits the presumed safe-harbor fee amount for recurring fees for small cells in the rights-of-way to $270 per site, per year;
  
  

• Prohibits cities from assessing fees that include anything other than a “reasonable approximation” of “reasonable costs” directly related to maintaining the rights-of-way and the small cell facility; and
  
  

• Limits aesthetic review and requirements (including undergrounding and historic/environmental requirements) to those that are reasonable, comparable to requirements for other rights-of-way users, and published in advance.

Subsequently, numerous local governments, public and private utilities and wireless service providers challenged these Orders in federal court and, on August 12, 2020, the United States Court of Appeals for the Ninth Circuit upheld the Orders but determined that some of the requirements pertaining to aesthetic regulations were inconsistent with the controlling statute and/or were arbitrary and capricious. The court noted that because there are differences among providers, local governments have flexibility to treat facilities that create different aesthetic concerns differently, even if those facilities provide functionally equivalent services, so long as the City’s regulations are reasonable.

Because small cell wireless facilities to be located in the City’s rights-of-way will require the issuance of an encroachment permit by the City’s Public Services Department, on April 12, 2019, the Director of Public Services issued processing and design requirements for small cell facilities consistent with the FCC Orders and as authorized by the Rocklin Municipal Code Section 12.04.080 (A). Accordingly, applicants are aware of those requirements that the Director intends to apply to the issuance of encroachment permits for the installation of wireless communications facilities in the City’s public rights-of-way in advance of submission of any permit applications.

Master License Agreement

The City has worked extensively with small cell wireless providers (“providers”) to develop the Master License Agreement (“MLA”) that would be entered into between the City and the providers and that is now being proposed for City Council approval. The MLA establishes the legal relationship and provides the overall framework under which the providers may apply to the City to use portions of City poles and City right-of-way for the installation of small cell equipment. Each specific location would require an individual Pole License. The MLA requires the providers to submit an initial and annual master plan showing the approximate number of Pole License applications and their approximate locations, and then the providers would submit a Pole License application for each individual location. 

The key provisions of the MLA are discussed below.

Purpose and Scope (Article 1)

1. The MLA allows for the location of wireless facilities in the City’s rights-of-way on City poles (under certain conditions), or the installation of a new pole.

2. The MLA establishes the rights and obligations of the City and the providers and the process for which a Pole License can be issued for each location where a wireless facility is to be installed.

Term of Master License and Term of Pole License & Pole License Approvals (Articles 2 and 3)

1. The term of the MLA is for a period of ten (10) years, with the option to extend for up to two (2) periods of five (5) years each.
2. The term of a Pole License is for a period of ten (10) years, with the option to extend for up to two (2) periods of five (5) years each.
3. Pole License terms may extend beyond the MLA expiration date, but are subject to the same terms and conditions of the MLA until the Pole License expires or is otherwise terminated.
4. The City may deny a Pole License when: i) the total load on the City pole will exceed its designed load capacity; ii) the wireless facility would materially compromise the City’s intersection traffic control operations; iii) the wireless facility’s installation would not comply with electrical codes; iv) the wireless facility would create a hazardous or unsafe condition, or v) the wireless facility would conflict with existing municipal plans for the License Area.

License Fee and Application Fees (Article 4)

1. The annual license fee is $270 per wireless facility per year installed on a License Area. The City may perform a cost study at any time during the term of the MLA to determine the City’s actual and reasonable costs and if they are greater than the current license fee, then the City will present that cost study to the providers and to the City Council.
2. There is an administrative fee of $2,000 to reimburse the City for the costs associated with the preparation and administration of the MLA.
3. There is an administrative fee of $500 per Pole License application for up to five (5) installations for consolidated applications, plus an additional $100 for each additional wireless facility above five (5), and an administrative fee of $1,000 per application for the installation of a new pole. These fees are intended to reimburse the City for the costs associated with the review and administration of the Pole License application process.
4. The City may conduct a cost study at any time during the term of the MLA and Pole License to determine the City’s actual and reasonable costs and if they are greater than the current license fee, and may perform another cost study every five (5) years following the first cost study, and update the fee accordingly.

Use (Article 5)

1. A wireless facility may not be installed until all approvals and permits have been issued, and the wireless facility must meet all of the City’s aesthetic design standards.
2. Wireless facilities may be co-located, however providers agree that they will not install, or allow to be installed, wireless facilities that materially interfere with any pre-existing City-owned and operated equipment and pre-existing wireless facilities.
3. The providers must provide documentation demonstrating that the proposed wireless facility will operate within radio frequency emissions and electromagnetic fields exposure limits established by the FCC.

Installation, Maintenance, Repairs and Alterations (Article 6)

1. The City has the option, but not the obligation, to repair any License Area if it were to be damaged.

2. The providers may request to make any necessary repairs, after giving the City notice of their intent to do so.

3. The City has twenty-one (21) days to elect to prohibit providers from such repairs, or otherwise providers may make any repairs and may abate the annual license fee to recover said costs until they have been fully reimbursed.

4. If the City elects to bar such repairs, the City is required to help identify a mutually agreeable location for a temporary installation within the vicinity of the original location, until such time as a mutually agreeable alternative permanent location is identified.

5. If a City pole is inadequate for a wireless facility installation, the providers have the option of replacing the pole at its own cost and at the discretion of the City, and the pole shall be dedicated to the City.

6. A wireless facility installation must include an emergency shut-off switch to allow the power supply to the wireless facility to be cut off, as well as signage with information identifying the name and phone number of an on-call representative to allow the City to quickly contact the providers in case of emergencies.

7. Each wireless facility may connect to the existing power supply located within a City pole, but the providers must use a “smart meter” to allow their electrical use to be separately calculated and charged to the providers.

Indemnity, Insurance and Liens (Article 7)

1. The MLA requires insurance requirements meeting the Northern California Cities Self Insurance Fund (NCCSIF) standards.

2. The MLA includes the City’s standard indemnification and hold harmless obligations.

Utilities (Article 10)

1. The providers are responsible for their own utility costs to operate the wireless facility(ies).

Assignment (Article 12)

1. Neither the Master License, nor any Pole License, may be assigned without the prior consent of the City, except for the following listed “permitted assignments” to: i) an affiliate of the providers; ii) a subsidiary of the providers; iii) an entity that acquires all or substantially all of the providers assets in the market in which the License Area(s) are located (as the market is defined by the FCC); iv) an entity that acquires a provider by a change of stock ownership or partnership interest, or v) an entity controlled by a provider or that, with a provider, us under the ultimate common control of a third party.

Defaults; Remedies; Termination; Condemnation (Article 13)

1. The provider’s failure to comply with any of their obligations under the MLA as to one or more Pole Licenses shall be deemed a default of that Pole License(s), and it includes a 30-day notice and cure provision.

2. The provider’s failure to comply with any of their obligations under the MLA regarding indemnification, insurance, or non-discrimination shall be deemed a default of the MLA, and it includes a 30-day notice and cure provision.

3. The provider’s failure to cure authorizes the City to terminate the Pole License or MLA, as applicable.

4. The City may also terminate a Pole License for the following reasons: i) City Council finding based upon empirical evidence that the wireless facility poses an imminent threat to public health or safety; ii) if a provider loses or fails to satisfy any required conditions of any permits required by the City for the operation of the wireless equipment; or iii) if the provider ceases to operate as a telecommunications provider under Federal law.

5. The City’s failure to comply with any of their obligations under the MLA shall be deemed a default of the MLA, and it includes a notice and cure provision.

6. The providers may also terminate a Pole License for the following reasons: i) the provider is unable to obtain or loses any required permits necessary to lawfully operate the wireless facility; ii) the provider determines, based upon evidence and to the reasonable satisfaction of the City, that the License Area is inappropriate for technological reasons beyond its control, such as signal interference, or iii) for any reason or no reason upon 180-day’s notice to the City.

7. The City may, but is not required to, cease issuing additional Pole Licenses if the FCC Order is rescinded or overturned by a U.S. court of competent jurisdiction, upon City providing 30-day notice to providers. The MLA, and any Pole Licenses already issued prior to the date of cessation shall otherwise remain in effect under the terms of the MLA.
   

There is no negative fiscal impact to the City’s budget to administer the MLA and Pole Licenses because they would be administered by existing City staff. However, as discussed below, the MLA and Pole Licenses can provide a positive fiscal impact to the City’s budget.

The MLA provides for an annual license fee to be paid by the providers of $270 per wireless facility per year installed on a License Area. There is an administrative fee to be paid by the providers of $2,000 to reimburse the City for the costs associated with the preparation and administration of the MLA. There is an administrative fee to be paid by the providers of $500 per Pole License application for up to five (5) installations for consolidated applications, plus an additional $100 for each additional wireless facility above five (5), and an administrative fee of $1,000 per application for the installation of a new pole. These fees are intended to reimburse the City for the costs associated with the review and administration of the Pole License application process.