Wireless service providers, such as Verizon Wireless and AT&T, are continually upgrading their networks given the ubiquitous nature of smart phones and the incredible growth of mobile data traffic.  One technology that is being deployed to address this exponential growth and the resulting demand for additional network capacity is distributed antenna system (DAS) networks.  A DAS network is a network of antenna nodes that are deployed to provide wireless coverage to indoor (e.g., arenas, airports, etc.) or outdoor areas.  Some DAS networks are installed by companies that are not wireless service providers and are referred to as neutral host DAS networks since they provide the infrastructure (e.g., antenna nodes, fiber lines, etc.) that carries the wireless traffic of the wireless service providers.

In Pennsylvania, the Public Utility Commission (“PUC”) had recognized neutral host DAS network operators as public utilities and issued certificates of public convenience to the operators since 2005.  The certificate of public convenience is important to a DAS network operator since it affords the operator access to public rights-of-way and limits the applicability of municipal regulation to DAS networks.  In 2017, the PUC reversed course and determined that DAS network operators were not public utilities.  The PUC decided that it would no longer issue certificates of public convenience to DAS network operators and would review previously issued certificates of public convenience to determine if they should be rescinded.  The PUC’s order was subsequently appealed to the Commonwealth Court.

The Commonwealth Court recently determined that the PUC erred and reversed the PUC’s order.  The PUC had relied upon statutory language that excludes any person or corporation that “furnishes mobile domestic cellular radio telecommunications services,” from the general definition of a public utility.  The PUC found that although neutral host DAS networks don’t actually furnish the service, they provide the equipment that allows the services to be to be provided by the wireless service providers.  The PUC argued to the Commonwealth Court that this interpretation is entitled to substantial deference.  However, the Commonwealth Court found that this later interpretation was not entitled to much deference at all since the statute had not changed since the PUC started issuing certificates of public convenience to DAS network operators in 2005.  The Commonwealth Court ultimately determined that the PUC’s new interpretation of the statute was “not supported by the plain language of the Code or the principles of statutory construction, the precedent of this Court, the determination of public utility commissions in other jurisdictions, or the 2014 Wireless Infrastructure Order.”  Accordingly, neutral host DAS network operators will continue to be recognized as public utilities in Pennsylvania and will be issued certificates of public convenience that will grant the operators access to public rights-of-way and limit municipal regulation of the network facilities.

The issues of access to public rights-of-way and municipal regulation of new facilities are receiving attention at both the state and federal levels.  Legislation was introduced last month in the Pennsylvania General Assembly that would address, among other things, access to public rights-of-way for the installation of small wireless service facilities.  House Bill 2564 is currently being discussed as municipal and industry stakeholders look to strike a balance between permitting access to public rights-of-way for the deployment of new technologies and providing municipal oversight and regulation of the installation of new facilities.  A number of states have already passed small cell legislation with additional states currently considering legislation.  In addition, the Federal Communications Commission is considering policies that, it is anticipated, will serve to facilitate and streamline the deployment of new facilities in the public rights-of-way.

Please contact a member of the McNees Wallace & Nurick Land Use Group with questions regarding this post, or for assistance with any land use matters, including land use appeals to court.