Crown Castle NG E. LLC v. Pa. Pub. Util. Comm'n

• Decision Date: 07 June 2018
• Docket Number: No. 697 C.D. 2017,697 C.D. 2017
• Citation: 188 A.3d 617
• Parties: CROWN CASTLE NG EAST LLC and Pennsylvania–CLE LLC, Petitioners v. PENNSYLVANIA PUBLIC UTILITY COMMISSION, Respondent
• Court: Pennsylvania Commonwealth Court

188 A.3d 617

CROWN CASTLE NG EAST LLC and Pennsylvania–CLE LLC, Petitioners

v.PENNSYLVANIA PUBLIC UTILITY COMMISSION, Respondent

No. 697 C.D. 2017

Commonwealth Court of Pennsylvania.

Argued: February 7, 2018

Decided June 7, 2018

Thomas S. Thompson, Washington, DC, for petitioners.

David E. Screven, Assistant Counsel, and Tiffany L. Tran, Assistant Counsel, Harrisburg, for respondent.

Daniel S. Cohen, Pittsburgh, for intervenors Pennsylvania State Association of Boroughs, Pennsylvania State Association of Township Commissioners, Pennsylvania State Association of Township Supervisors, and Pennsylvania Municipal League.

BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge, HONORABLE RENÉE COHN JUBELIRER, Judge, HONORABLE PATRICIA A. McCULLOUGH, Judge, HONORABLE ANNE E. COVEY, Judge, HONORABLE MICHAEL H. WOJCIK, Judge, HONORABLE CHRISTINE FIZZANO CANNON, Judge, HONORABLE ELLEN CEISLER, Judge

OPINION BY JUDGE COHN JUBELIRER

The Petitioners in this case operate neutral-host Distributed Antenna System (DAS) networks, which are used by various wireless companies to transport wireless data and voice traffic. For 10 years, the Pennsylvania Public Utility Commission (Commission) certificated DAS networks as public utilities. On March 17, 2017, the PUC issued an Order (DAS Order) in which it reversed its longstanding practice, finding that DAS network operators are not public utilities under the Pennsylvania Public Utility Code (Code)¹ and, therefore, are not within the Commission's jurisdiction. After the Commission denied reconsideration of the DAS Order, Petitioners Crown Castle NG East LLC and Pennsylvania–CLE LLC (together, Crown Castle), petitioned for review of the Commission's Orders. While the facts may be quite technical, the legal principles involved are straightforward. After reviewing the relevant language in the Code, this Court's precedent, the decisions related to the certification of DAS networks by public utility commissions in other jurisdictions, and relevant federal law, we conclude the Commission erred in its interpretation of the Code to exclude DAS network operators from the definition of public utility, and, accordingly, we reverse.

I. Background

A. DAS Networks

Generally, neutral-host DAS networks provide transport services to their Wireless Service Provider (WSP) customers, such as AT & T Wireless or Verizon Wireless, via the networks' fiber optic lines, which run between remote, fixed-point "nodes" and a centrally-located "hub."² The DAS network works in conjunction with the facilities and equipment owned by the WSPs and the WSPs' retail customer, the cell phone or smart phone user, to provide transport to wireless communication. DAS networks essentially provide increased coverage and/or capacity within a localized area by collecting wireless traffic from a WSP's retail end-user, transmitting it over the DAS network (typically using terrestrial fiber optic lines) and delivering it back to the WSP's network. An advantage of a DAS network is that it "us[es] components that are a fraction of the size of macrocell deployments, [that] can be installed—with little or no impact—on utility poles, buildings, and other existing structures." In Re: Acceleration of Broadband Deployment by Improving Wireless Facilities Siting Policies , 29 FCC Rcd. 12865, 12867 (F.C.C. 2014) ( 2014 Wireless Infrastructure Order ). "DAS deployments offer robust and broad coverage without creating the visual and physical impacts of multiple macrocells." Id. at 12879. They can be deployed in "densely populated urban areas, where traditional towers are not feasible or in areas, such as stadiums, where localized wireless traffic demands would require an unrealistic number of macrocells." Id. at 12880. DAS networks may be owned and operated by a WSP for the sole use of its customers, or owned and operated by a neutral-host, such as Crown Castle NG East LLC, which may lease its network to multiple WSPs.

B. The Commission's Treatment of DAS Networks from 2005 to 2015

Between 2005 and 2015, the Commission granted certificates of public convenience (Certificate) to DAS network operators as competitive access providers (CAPs)³ on the basis that they were public utilities under subsection (1)(vi) of the definition of public utility under the Code:

(1) Any person or corporations now or hereafter owning or operating in this Commonwealth equipment or facilities for:

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(vi) Conveying or transmitting messages or communications, except as set forth in paragraph (2)(iv), by telephone or telegraph or domestic public land mobile radio service including, but not limited to, point-to-point microwave radio service for the public for compensation.

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(2) The term does not include:

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(iv) Any person or corporation, not otherwise a public utility, who or which furnishes mobile domestic cellular radio telecommunications service.

Section 102 of the Code, 66 Pa. C.S. § 102. At least five DAS network operators, including Crown Castle,⁴ were granted Certificates by the Commission during that time period.

In 2015, during the Commission's consideration of an application for a Certificate filed by the DAS network operator SQF, LLC, (SQF), two members of the Commission began questioning the Commission's historical treatment of DAS network operators as public utilities under subsection (1)(vi) of the Code. See Appl. of SQF, LLC for Approval to Offer, Render, Furnish or Supply Telecomm. Servs. as a Competitive Access Provider to the Pub. in the Commonwealth of Pa. , No. A–2015–2490501 (Pa. P.U.C. 2015), Statements of then-Vice Chairman John F. Coleman, Jr., and former-Commissioner Robert F. Powelson.⁵ If DAS networks' operators were not public utilities under subsection (1)(vi), they stated, then the Commission did not have jurisdiction to regulate or issue Certificates to those operators. See id. ; Section 501 of the Code, 66 Pa. C.S. § 501 (setting forth the Commission's general powers to, inter alia , supervise and regulate all public utilities in the Commonwealth). The Commission granted a Certificate to SQF, but directed the opening of formal proceedings to investigate the question of whether DAS network operators were public utilities over which the Commission had jurisdiction.

C. The Commission's 2016 Investigatory Proceedings

In February 2016, the Commission opened a formal investigatory proceeding on the jurisdictional question. In particular, this question was whether DAS network operators were public utilities under subsection (1)(vi) as an entity that conveyed or transmitted messages or communications, as they had been historically treated, or fell within the exclusion from that definition set forth in subsection (2)(iv) for "[a]ny person or corporation, not otherwise a public utility, who or which furnishes mobile domestic cellular radio telecommunications service." 66 Pa. C.S. § 102. The term "mobile domestic cellular radio telecommunications service" is not defined in the Code, but has been considered synonymous with the term "commercial mobile radio service" (CMRS), (Reproduced Record (R.R.) at 18a n.4), which is defined by Section 20.3 of the federal telecommunications regulations (Federal Regulations), 47 C.F.R. § 20.3.⁶ Traditionally, it is the WSPs that provide CMRS to their retail cell phone customers, because CMRS is an interconnected, mobile wireless communication service that is provided to the public for profit. Vice Chairman Coleman and Commissioner Powelson suggested that DAS network operators were, in actuality, furnishing CMRS because the services and infrastructure the DAS network operators offered to their WSP customers could not be separated from the federally-regulated CMRS the WSPs offered to their own retail end-users. Under this interpretation, they contended, the services provided by DAS network operators were outside the Commission's jurisdiction.

The investigation did not include a hearing, and, instead, the Commission requested comments and reply comments from stakeholders regarding whether: "DAS [operators] are public utilities under Pennsylvania law that can be certificated"; "the Commission should or is required to certificate these carriers in furtherance of federal law"; "DAS service is an interstate service, intrastate service, or both"; and "a C[ertificate] is needed to confer property rights to DAS [operators] to site the facilities/equipment used to provide DAS service, including access to rights-of-way and eminent domain."⁷ (R.R. at 19a.) Further, the stakeholders were to address in their responses whether DAS network operators furnish CMRS, thereby precluding them from being a public utility under subsection (2)(iv).

Numerous stakeholders responded. Crown Castle and ExteNet Systems, Inc.⁸ (ExteNet) and organizations representing DAS network providers and owners of telecommunications facilities, including CTIA—The Wireless Association (CTIA) and PCIA—The Wireless Infrastructure Association (together, Industry Stakeholders), responded with comments. Also responding were the Pennsylvania Municipal League, the Pennsylvania State Association of Township Supervisors, the Pennsylvania State Association of Boroughs, and the Pennsylvania State Association of Township Commissioners (together, Municipal Stakeholders). Finally, the Office of Consumer Advocate (Consumer Advocate) offered comments.

Industry Stakeholders indicated that DAS network operators should retain their status as public utilities under subsection (1)(vi) as intrastate telecommunications service providers, as they historically have been treated by the Commission and numerous other jurisdictions. Industry Stakeholders maintained that DAS network operators were not furnishing CMRS because they do not offer mobile or wireless services regulated by the Federal Communications Commission (FCC). Rather, DAS network operators offer wholesale point-to-point transport services to WSPs, similar to those that were considered certificated telecommunications services in Rural...