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City of Huntington Beach v. Public Utilities Commission of the State of California

March 14, 2013


(CPUC Nos. D.10-10-007 & D.11-01-027)

The opinion of the court was delivered by: Ikola, J.



Original proceeding; review of decisions of the Public Utilities Commission of the State of California. Decisions affirmed in part and reversed in part.

Public Utilities Code section 7901*fn1 grants "telephone corporations" the privilege to construct infrastructure upon public rights of way, subject to a municipality's "right to exercise reasonable control as to the time, place, and manner in which roads, highways, and waterways are accessed" (§ 7901.1, subd. (a)). In the proceeding under review, the California Public Utilities Commission (commission or PUC) classified NextG*fn2 as a telephone corporation and approved NextG's proposed construction project in the City of Huntington Beach (the City).

The City is opposed to aspects of NextG's project. As its first line of defense to the NextG project, the City asserts that NextG is a wireless provider and therefore not a telephone corporation. The City contends that the definition of "telephone corporation" for purposes of section 7901 does not include wireless providers, as opposed to traditional landline providers. But in our view, the commission correctly interpreted and applied the Public Utilities Code in designating NextG as a telephone corporation entitled to the privileges of section 7901.

As its second line of defense to the NextG project, the City relies on municipal ordinances requiring, subject to exceptions, the undergrounding of wires and other communications equipment. The City claims the commission erred by purporting to "preempt" local ordinances in approving NextG's construction project in the City. We agree with this contention. Throughout the PUC proceedings, the parties and the commission emphasized that a court, not the commission, would adjudicate the validity of the City's municipal ordinances. The commission exceeded the scope of the proceedings when it ruled, via a modification to its initial decision, that its approval of NextG's project preempted local ordinances

We therefore affirm in part commission decisions D.10-10-007 (the October 2010 initial decision) and D.11-01-027 (the January 2011 rehearing decision), but reverse and set aside those portions of the decisions purporting to preempt local ordinances. (§§ 1758, subd. (a) [appellate court "shall enter judgment either affirming or setting aside the order or decision"], 1759, subd. (a) [providing jurisdiction to reviewing court to "reverse" PUC orders and decisions].)


NextG builds and owns fiber optic networks. However, NextG does not directly serve individual customers whose calls are carried over NextG's networks. Instead, NextG sells capacity on its networks to other companies, who use the capacity to serve their end-use customers. NextG is thus a "carrier's carrier."

The project at issue is "the completion of [a distributed antenna system] within the City . . . . The . . . communications network is intended to transmit wireless voice and data communications to clients in the City" (The Project). The Project includes aerial fiber cable and underground fiber cable. Part of the Project already has been constructed under previously granted authority. NextG's customer for the Project is MetroPCS, a company that provides commercial mobile radio service to its customers.

NextG's regulatory status with the PUC and the history of the dispute between NextG and the City are relevant to our review. This summary chart of the PUC proceedings mentioned in this opinion may be useful as a reference point.


Decision No.


Jan. 2003


NextG's certificate of public convenience issued

Apr. 2007


Amended certificate issued

Jul. 2007


Rehearing of April 2007 decision

Oct. 2010


Initial decision at issue in this proceeding

Jan. 2011


Rehearing of October 2010 decision

The January 2003 Decision (D.03-01-061)

In January 2003, the commission issued a certificate of public convenience and necessity to NextG, which authorized NextG "to provide limited facilities-based and resold local exchange, access and interexchange telecommunications services." The authorization was conditioned on NextG complying with various rules applicable to its class of competitors. NextG's application was uncontested.

The commission issued the certificate under the authority of section 1001, which provides in relevant part, "No . . . telephone corporation . . . shall begin the construction of . . . a line, plant, or system, or of any extension thereof, without having first obtained from the commission a certificate that the present or future public convenience and necessity require or will require such construction." It is implied in the issuance of a certificate under section 1001 that the PUC considered NextG to be a "telephone corporation," but the January 2003 decision did not explicitly address this question.

The April 2007 Decision (D.07-04-045)

In April 2007, the commission issued a decision granting NextG's "request for full facilities-based local exchange services authority and expedited environmental review" like that previously authorized for firms engaged in similar activities. This expansion of NextG's authority was necessary for it to engage in "(1) new pole installations, (2) small-scale trenching and underground conduit installation, and (3) micro-trenching and installation of laterals."

The commission also approved the use of its previously developed expedited CEQA*fn3 review process for individual NextG projects. NextG would submit a description of the proposed project to the CEQA staff in the Energy Division of the PUC, with all necessary documentation required to support the project's fast-track approval under CEQA.

With regard to the issue of "utility poles in underground districts," the commission ruled that "the procedure we adopt here will apply to installing utility poles in underground districts where local jurisdictions grant such exceptions." The April 2007 decision did not purport to preempt all local ordinances that would limit NextG's ability to engage in ground breaking activities. Indeed, in denying NextG's petition for rehearing of the April 2007 decision, the commission observed: "We are aware that the California Constitution does provide this Commission with preemptive authority over local jurisdictions with respect to the regulation of utilities. At the same time, the Constitution provides cities the power to make and enforce local ordinances and regulations not in conflict with general laws. The process adopted in [the April 2007 decision] is consistent with long standing Commission policy to recognize local government concerns and ...

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