Wireless Facility Siting Issues: Small Cells and OTARD Rules – Part II (Continental Airlines)

Wireless Facility Siting Issues: Small Cells and OTARD Rules – Part II (Continental Airlines)

As indicated in Part I, carrier “hub” or “relay antennas”, which are used to transmit to and/or receive wireless signals from multiple customer locations, are not shielded from local land use regulation by the FCC’s OTARD rule. The decision to exclude so-called “carrier hub” facilities from OTARD’s protections was made in the same Order that extended OTARD’s scope to include wireless telecommunications facilities together with satellite television antennas. All of this is explained in the FCC’s very important Competitive Networks Order, issued in year 2000.

It important to understand that the exclusion of “carrier hub” facilities from OTARD had nothing to do with any intrinsic difference between reception and transmission devices or the mast-facilities on which they are mounted, but with economics. The Commission’s reasonably assumed that a wireless carrier like AT&T placing antennas at a hub site has significantly greater bargaining power vis-à-vis the owner of a multi-tenant building than does an individual end-user in negotiating with a landlord for the placement of a customer-end antenna on the building. After all, the policy goal was to facilitate the deployment of wireless facilities; if there were practical obstacles to achievement of that goal in one sector of the market, then Federal regulatory intervention was justified in that sector. Where such obstacles did not exist, regulation (in the form of Federal preemption) was not justified. As a matter of simple economics, individual customers are less able to negotiate access to real property for the deployment of wireless devices than are presumably large wireless carriers. Therefore, local regulation of customer-end reception devices (commonly used by individual customers) would be preempted by the FCC, whereas local authority over carrier hub facilities was preserved under Section 332 (c) (7) of the Communications Act. Sometimes, however, and increasingly so, it can be difficult to distinguish between a wireless reception device and a hub facility for the simple reason that data communications are essentially two-way communications, and in general fixed wireless devices both receive and transmit wireless signals.

What is a “carrier hub”?

While the OTARD rules do not protect “hub” or “relay antennas”, these terms are not precisely defined. The FCC’s Competitive Networks Order says:

… the [OTARD] rules apply to antennas that transmit and receive signals, only transmit signals, or only receive signals. We make clear, however, that the protection of Section 1.4000 applies only to antennas at the customer end of a wireless transmission, i.e., to antennas placed at a customer location for the purpose of providing fixed wireless service (including satellite service) to one or more customers at that location. We do not intend these rules to cover hub or relay antennas used to transmit signals to and/or receive signals from multiple customer locations.[1]

Suppose that the owner of a multi-tenant building mounts a mast on the building’s rooftop. If the building owner attaches to the mast devices that are used both to receive fixed wireless signals and to distribute those signals to end-users residing at the antenna-site location, then the mast and antenna facilities are subject to OTARD protections. However, if devices are attached that are used to transmit signals to end-users not residing in the building, to and from “multiple customer locations”, then the facilities constitute a “carrier hub” and are not subject to OTARD protections. Consequently, the municipality may require the owner to secure a permit for the facilities, subject to the limitations of 47 U.S.C. § 332 (c) (7).

Thus, it appears that the question of whether a wireless device is subject to OTARD or to Section 332 turns not on whether the device is used to receive or to transmit wireless signals, but on whether the device is used to transmit to and receive signals from customers exclusively located at the antenna site or at “multiple customer locations.” Does this make sense?

Whether or not it makes sense depends on the goals to be achieved by the rule. One policy goal is to encourage the deployment of wireless networks while not unduly infringing on the authority of local governments to regulate wireless facilities siting based on aesthetic, safety and other traditionally local criteria.

The FCC’s decision to extend OTARD coverage to include wireless data facilities was made in the Competitive Networks Order issued in 2000. As is almost always the case, the FCC’s ruling effectuated a compromise among competing industry viewpoints. AT&T, Teligent and various wireless carrier trade associations argued that the OTARD rule should cover all fixed wireless devices in accordance with the Commission’s mandate under Section 706 of the Telecom Act of 1996 to “promote the deployment of advanced telecommunications capability” regardless of the technology used. Had that viewpoint prevailed, carriers would be able to erect unsightly 50-foot cell towers with very little government oversight. On the other side, the multi-family real estate industry, represented by the Real Access Alliance, argued that any extension of OTARD coverage would ignore the explicit reference in Section 207 to “video programming” services. Had that viewpoint won the day, residents in MDU buildings and HOA-governed communities could mount small satellite television dish antennas on balconies or rooftops but other installations, such as wireless data facilities, would require extensive negotiation with landlords or HOAs. The FCC’s decision to extend OTARD coverage only to fixed wireless devices that are used to service on-site customers appears to have been less the result of a strict application of coherent policy and logic than a desire to appease competing interest groups. It is therefore not surprising that as wireless technology evolves, grey areas are increasingly evident.

The Continental Airlines Case

In 2006 the FCC was asked to issue a declaratory ruling on a petition filed by Continental Airlines regarding its use of a WiFi antenna within Continental’s lounge area at Boston-Logan International Airport, after the airport’s owner, Massport, demanded removal of the antenna in accordance with Continental’s lease. The lounge area was exclusively controlled by Continental and used by Continental passengers and employees. The WiFi antenna was located in a closet inside the lounge.

Massport argued that Continental’s WiFi antenna could not be an OTARD device because it was not used primarily to deliver wireless services to Continental itself, which owned and operated the antenna. On the contrary, according to Massport, the antenna was a “hub” that was used to distribute services to customers of Continental who were guests in the President’s Club lounge. Continental was in effect re-selling wireless Internet services to members of the public; therefore, Continental was functioning as a “carrier” and its antenna was a hub for the distribution of services to customers.

The FCC ruled that Continental’s WiFi antenna was indeed a protected OTARD device, but the basis for that ruling is a bit fuzzy. The thrust of Massport’s characterization of the WiFi antenna as a “carrier hub” was that the antenna was used not primarily to provide wireless service to Continental itself, but to other customers – passengers waiting for their departures on Continental airplanes – and that Continental charged a fee (in the form of membership dues to the President’s Club) to those customers for access to Continental’s WiFi network. In this sense, Continental looked like a provider of wireless data services, not a customer.

The Commission’s ruling pushes to the side the nuances of Massport’s argument and instead relies on the fact that access to the network was limited to end-users who were physically present within the lounge area where the antenna device was located. So long as end-users of the WiFi service were physically present within the confines of its President’s Club room, Continental was using the device “for its own purposes”. “When a leaseholder or property owner uses an antenna to send and receive signals strictly within its premises, and not to ‘multiple customer locations,’ the antenna user is using the antenna for its own purposes under the OTARD rule.”[2] The fact that Continental used the antenna “for its own purposes” meant that Continental was an “antenna user” whose right to install, operate and maintain the antenna device could not be impaired by Massport’s lease restrictions.[3]

I say that the FCC’s ruling “pushes to the side” the nuances of Massport’s argument because Massport’s claim was based on the distinction between: (a) the person or entity that has exclusive control over the property on which the device is located (Continental), and (b) everyone else. (a) must be the “antenna user”, and if the antenna is used to deliver services to (b), the antenna cannot be covered under the OTARD rule. In other words, if the antenna is used to provide service to anyone other than (a), it is a “hub” and not an end-user antenna. The FCC’s ruling dismissed rather than directly confronts – namely, the distinction between a device that is used to service: (c) end-users who are physically located within the premises housing the antenna, and (d) end-users who are physically located outside of the antenna premises.

The FCC’s logic is certainly more conducive to the deployment of wireless networks than the alternative. If the concept of “antenna user” as used in the OTARD rule were limited to the person or entity that (via its employees) owns or leases the real property on which the antenna is mounted, the rule would protect only individual end-user consumers of wireless services and would do little or nothing to promote the use of innovative technologies like WiFi that are designed to service multiple end-users within coverage range. That does not mean, however, that the FCC’s logic is without problems of its own.

Questions

In particular, if OTARD protects only antenna devices that are used to service customers who are physically located at “the same location” that houses the antenna, how is the word “location” to be defined? In fact, the concept of “location” is inherently indeterminate. For example, what if Continental’s WiFi antenna was powerful enough to reach outside the physical limits of the President’s Club lounge and provide connectivity to laptops and smart phones in an adjacent room (e.g., a coffee shop open to Continental customers who were not members of the President’s Club, or even to the general public). Suppose that instead of being limited to users who had paid for access to the room called the “President’s Club” (where the antenna was housed), the WiFi service were a courtesy service provided by Continental to users not physically located within that room. It would still be true that Continental was using the antenna “for its own purposes” (for example, to generate good will), and no conceivably relevant physical attribute of the antenna would be different, and no greater burden would be placed on Massport[4] – but the antenna would nonetheless be excluded from OTARD coverage based on the FCC’s criteria as stated in the Declaratory Ruling. My point is that the phase “same location” is elastic and indeterminate, and therefore provides a shaky ground on which to construct an important legal distinction, especially when then trend in wireless technology is to make physical obstacles such as walls and other physical barriers less relevant as limitations on wireless connectivity.

Nonetheless, the Continental Airlines case is important because it clarifies the meaning of the term “antenna user” as used in the OTARD rule. In particular, the case demonstrates that the “antenna user” – whose right to install, operate and maintain a fixed wireless device may not be impaired – need not be the person or entity who installs, operates and maintains the device, and may well include multiple end-users who receive wireless services provided by the person who installs, operates and maintains the wireless antenna. Thus, the Continental Airlines case represents an incremental erosion of the seemingly clean distinction between “user-end antennas” and “carrier hubs”.

[1] Promotion of Competitive Networks in Telecommunications Markets, Wireless Communications Association International, Inc., Petition for Rulemaking to Amend Section 1.4000 of the Commission’s Rules to Preempt Restrictions on Subscriber Premises Reception or Transmission Antennas Designed to Provide Fixed Wireless Services, Implementation of the Local Competition Provisions in the Telecommunications Act of 1996, Review of Sections 68.104 and 68.213 of the Commission’s Rules Concerning Connection of Simple Inside Wiring to the Telephone Network, First Report and Order and Further Notice of Proposed Rulemaking, WT Docket No. 99-217, 15 F.C.C.R. 22983, ¶ 99 (2000) (“Competitive Networks Order”).

[2] Continental Airlines; Petition for Declaratory Ruling Regarding the Over-the-Air Reception Devices (OTARD) Rules, Memorandum Opinion and Order, 21 FCC Rcd 13201, ¶ 21 (2006).

[3] The OTARD rule says: “Any restriction, including but not limited to any state or local law or regulation, including zoning, land-use, or building regulations, or any private covenant, contract provision, lease provision, homeowners' association rule or similar restriction, on property within the exclusive use or control of the antenna user where the user has a direct or indirect ownership or leasehold interest in the property that impairs the installation, maintenance, or use of” a qualifying antenna. 47 C.F.R. § 1.4000 (a) (1).

[4] In footnote 68, the Memorandum Opinion and Order states that the fact that the WiFi service is used by passengers in addition to Continental employees “does not change any conceivably relevant attribute that the antenna would have – or introduce any greater burden on Massport than the antenna would otherwise have – were it used exclusively for Continental personnel.” Notice that the same statement could be true even if the WiFi service were used by passengers or by non-passengers outside of the lounge area, but the WiFi antenna would not fall within OTARD’s protections.