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State Senate Bill Threatens to Undermine Existing Municipal Contracts

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Michael D. Homier and Alexander J. Thibodeau
November 2018 Municipal Law News
November 12, 2018

If passed, Michigan Senate Bill 637 will create the Small Wireless Communications Facilities Deployment Act (the Act.)

The general goal of the Act is to help wireless companies expand fifth generation (5g) cellular technology by removing or streamlining many of the legal and physical barriers for wireless companies.

For local governments, the Act presents a unique set of challenges since it would provide wireless companies the ability to construct, modify, maintain, and operate wireless facilities in the public rights-of-way with little oversight, regulation, or input from local governments. In effect, the Act provides that small cell wireless facilities are permitted uses not subject to zoning review or approval, except in single-family residential areas.

Additionally, the Act’s “collocation” provision targets existing infrastructure, allowing wireless companies statewide to attach their hardware to existing utility poles within the public rights-of-way, and operate under a uniform permit process with limited local restriction and fixed costs.

The permit process is complicated due to its heavy regulation under the Act. Significant for local governments, the fixed rates proposed by the Act could undermine existing contracts between municipalities and wireless providers.

The proposed law would dictate the ways in which municipalities can “prohibit, regulate, or charge” wireless companies working, not only within their jurisdiction, but upon their own public utility infrastructure.

Since many local governments already have contractual agreements with wireless providers defining the terms of that relationship, the Act would require modification of those contracts within 90 days.

Also, under § 13, ¶ 3 of the Act, municipalities would be limited to charging wireless companies $20.00 annually for each existing utility pole they install their hardware upon and $125.00 annually for each new pole or support structure they build within the public right-of-way.

The Act as currently drafted also will regulate the application process, including setting maximum application and processing fees for permits, and will limit the bases on which a municipality may deny an application, which could be at odds with existing local regulations.

The bill earned Senate approval in March and is currently in its second reading in the House of Representatives.

The bill was recommended without revision by the House Committee on Energy Policy and experts claim it is likely to pass.

With that in mind, municipal governments are wise to begin preparing for an influx in permit applications and the legal implications that are likely to arise, including amendments to existing ordinances and/or agreements.

Questions about community impact, fee assessments, application processing, or statutory interpretation may be directed to an attorney within the Municipal Group at Foster Swift.

If you have questions related directly to this article, contact Mike Homier at 616.726.2230 or at mhomier@fosterswift.com or Alex Thibodeau at 616.726.2209 or athibodeau@fosterswift.com