New Act Limits County Road Commissions’ Autonomy in Looming 5G Rollout

Late last year, the Michigan Legislature enacted the Small Wireless Communications Facilities Deployment Act (the “Act”), which will have a significant impact on municipalities’ ability to collect fees for new technology added to utility poles.

The Act purports to streamline Michigan’s rollout of small cell 5G technology. But it does so by significantly limiting the autonomy of County Road Commissions and other authorities to regulate their road rights-of-way and restricting certain fees Road Commissions can impose to recapture costs for approving the new technology.

Passage of the Act appears to be the culmination of a lobbying effort by major U.S. wireless companies who argue, among other things, that the differing standards and fees of municipalities and authorities are overly burdensome. Most notably, the Act limits the fees for collocated antennae on existing utility poles (co-location is the practice of placing equipment on existing utility poles, which can often serve multiple purposes).

Road Commissions will be required to charge no more than $20 per year for each collocated antennae on existing utility poles, even though reviewing permit applications and conducting required inspections costs much more than $20 per year. If a new utility pole is constructed after March 12, 2019 (the effective date of the Act), the allowable annual fee jumps to $125 per year. But these fee restrictions are raising concerns among municipal entities, including Road Commissions, because they limit the ability to recoup administrative costs related to the permitting process.

The Act also overrides the agreed-upon fees in existing contracts, which often are in excess of $20 per year. Road Commissions and other authorities are now required to bring any existing fee agreements into compliance with the Act by June 10, 2019. This will be a serious detriment to Road Commissions and other municipal entities that negotiated agreements with wireless carriers and were depending on the revenue in their budget processes.

The Act also delineates how Road Commissions review and process applications submitted by wireless carriers. When the co-location of small cell technology is sought in the road rights-of-way, authorities may require wireless carriers to obtain a permit. Permit applications in turn may obligate carriers to ensure that the facility for which the permit is sought will be operational within one year after the permit is issued. This is likely a guard against carriers attempting to stockpile permits that they never intend to use.

Once an application is submitted, the authority must notify the applicant within 25 days if the application is complete. Generally, within 60 days after an application is complete, the authority must approve or deny the application. Application denials are appealable to either the authority, if an appeal process exists, or the appropriate circuit court.

As is often the case with new regulations, the true breadth of the effects is not likely to be known for some time. But it seems clear that the Act will prevent individual Road Commissions, and other municipal entities, from determining the best possible permitting process for small cell technology within their communities. It will also significantly reduce the revenues that can be raised from co-location of these facilities, limiting the ability of municipalities to recoup even the cost of processing applications.

Devin Sullivan focuses his practice on eminent domain matters, property law, and commercial litigation in the trial courts, on appeal, and at arbitration.