FCC Wireline Deployment Fight Sharpens: Who Controls the Clock — and What Counts as “Fair and Reasonable” Compensation?

The battle lines are becoming much clearer in the FCC’s latest effort to accelerate broadband infrastructure deployment.

On September 21, 2026, parties filed comments in the FCC’s Build America: Eliminating Barriers to Wireline Deployments proceeding, WC Docket No. 25-253. The proceeding could materially change the rules governing how telecommunications providers obtain state and local approvals, access public rights-of-way (“ROWs”), and pay monetary and nonmonetary compensation associated with fiber and other wireline construction.

The Commission has proposed a 120-day rebuttable presumption for processing all state and local authorizations associated with a wireline deployment; a standard generally limiting ROW fees to a reasonable approximation of a government’s actual, direct costs; potentially standardized fee “safe harbors”; rules requiring the value of in-kind compensation to count toward those safe harbors; and restrictions on imposing additional requirements simply because the same infrastructure may support services other than telecommunications. Reply comments are due November 5, 2026.

Those proposals have produced several identifiable camps. But perhaps the most consequential fight is not the 120-day clock. It is over four words Congress placed in Section 253(c): “fair and reasonable compensation.”

Telecommunications providers and broadband advocates generally argue that the present patchwork of permitting rules, open-ended review processes and unpredictable charges creates precisely the type of economic barrier Section 253 was intended to prevent.

AT&T strongly supports federal intervention, particularly on fees. It argues that recoverable “direct costs” should be expenses traceable to the particular provider’s ROW use and that “actual costs” should be supported by invoices, time records or comparable evidence rather than unsupported estimates. AT&T also supports counting required in-kind contributions toward any compensation limit.

AT&T also contends that the FCC’s proposed 120 days may be too generous. Based on data from more than 123,000 permit applications dating to 2023, AT&T reports an average decision time of 27.8 days and says roughly 90% were acted on within 90 days. It therefore supports a framework of approximately 60 days for standard projects and 90 days for complex projects.

ACA Connects takes a similar view, but makes an important conceptual point: 120 days should be an outer bound, not a target. ACA argues that projects can suffer prohibitive effects well before Day 120 as capital, contractors and construction schedules remain tied up without a reliable approval date. It also supports safe-harbor fees tied to typical costs of reviewing permits, inspecting construction and administering ROW access.

WTA – Advocates for Rural Broadband likewise supports the FCC’s cost-based approach, arguing that excessive ROW charges can affect not only the jurisdiction imposing them but also deployment elsewhere as providers reallocate limited capital. WTA relies in part on the Ninth Circuit’s decision in City of Portland v. United States, which upheld the FCC’s use of actual, direct costs as a reasonable method of assessing “fair and reasonable” compensation in the small-wireless context.

One of the more concrete filings comes from MCC Network Services, operating as Metro Comm and Conxxus, a regional fiber provider. Metro says its 2026 permitting tracker contained 731 individual permit and crossing applications across approximately 215 projects through mid-September. It describes how a single unresolved permit or railroad crossing can strand an otherwise completed route, cause a provider to miss an entire construction season, require contractor remobilization and redirect capital away from other communities. Metro urges the FCC to begin the federal clock at the first mandatory procedural step, use one clock for the governmental approvals associated with a deployment, require prompt and specific notices of incompleteness, and prevent governmental review from being held open indefinitely because of separate railroad or private-property approvals.

That real-world operational evidence may prove particularly important because Section 253(a) is concerned not only with outright prohibitions but requirements that have the effect of prohibiting the provision of telecommunications service. The FCC itself has framed the NPRM around evidence that excessive delays and charges can cause providers to scale back, postpone or abandon deployments.

Policy organizations including the Progressive Policy Institute and the U.S. Hispanic Chamber of Commerce also support federal guardrails, emphasizing predictability, efficient use of deployment capital and the relationship between permitting costs and broader broadband-expansion efforts. PPI, for example, argues that cost predictability becomes particularly important as publicly supported broadband projects move from planning into construction.

A second camp agrees with the FCC’s basic direction but argues that the Commission has not gone far enough.

ITIF supports a “deemed granted” remedy: if a permitting authority does not act by the applicable deadline, the application should automatically be approved. Its reasoning is straightforward—a deadline that simply triggers another dispute or enforcement proceeding may provide little practical certainty to a provider trying to schedule crews and capital. ITIF also supports cost-based fees but cautions that numerical safe harbors themselves should be supported by evidence of legitimate ROW-management costs.

ICLE makes much the same point. In its view, whether the FCC ultimately selects 90, 120 or some other number of days may matter less than what happens when the deadline expires. ICLE argues that a shot clock without a meaningful consequence can leave essentially the same uncertainty in place and likewise advocates a deemed-granted remedy. It also favors beginning the clock at the first required procedural step rather than allowing the government to control the starting gun through open-ended completeness review.

This produces an interesting split even among supporters of FCC action. One question is how long government should have to act. Another is whether the rule should merely create a presumption of illegality after a deadline—or actually allow construction to proceed.

Those are very different regulatory models.

Municipalities, counties and their associations are attacking the proposals at a more fundamental level.

Section 253(a) prohibits state or local requirements that prohibit or have the effect of prohibiting telecommunications service. But Section 253(c) simultaneously preserves state and local authority to manage public ROWs and to require “fair and reasonable compensation” from telecommunications providers on a competitively neutral and nondiscriminatory basis. The statute itself does not use the phrase “cost-based compensation.”

That textual distinction is at the heart of the local-government case.

A coalition including the U.S. Conference of Mayors, National League of Cities, National Association of Counties and NATOA argues both that the FCC is undervaluing legitimate ROW-management functions and that Section 253(d) does not confer the sweeping rulemaking authority the Commission claims. Among other things, the coalition reads Section 253(d) as authorizing preemption of particular offending requirements rather than nationwide displacement of broad classes of local regulation.

The League of California Cities puts the compensation issue even more squarely: Congress authorized “fair and reasonable compensation,” it argues, and did not say that compensation is limited to the incremental direct cost of processing an application. Cal Cities points to engineering review, utility coordination, traffic management, construction inspection, pavement management, accessibility requirements, relocation and long-term maintenance as legitimate costs associated with infrastructure occupying public ROWs.

That is a stronger and more precise framing of the dispute than simply asking whether public ROWs should be treated as valuable public assets.

The real legal question is: When does “fair and reasonable compensation” become an economic barrier that effectively prohibits telecommunications service?

The FCC acknowledges that the statutory words themselves do not expressly require a cost-based methodology.

Its theory instead draws from Section 253 as a whole, prior judicial decisions, and its earlier Small Cell Order. In the current NPRM, the Commission tentatively concludes that a government does not violate Section 253(a) merely by requiring a provider to bear its actual and direct costs associated with the provider’s use of the ROW—but that amounts above those costs generally should not qualify as “fair and reasonable compensation” under Section 253(c).

The Commission has an important precedent on its side.

In City of Portland v. United States, the Ninth Circuit upheld the FCC’s cost-based framework for small wireless facilities. The court reasoned that actual, direct cost is a recognized means of determining reasonable compensation and rejected the proposition that Section 253(c) necessarily permits governments to earn a profit from ROW access. At the same time, the existing precedent arose in the wireless context, and the present proceeding asks the FCC to extend a similar interpretive framework to wireline infrastructure.

That makes the issue more nuanced than either side’s shorthand suggests.

The statutory text does not literally say “actual and direct costs.” But neither does the text establish market value, percentage-of-revenue fees or profit as the measure of what is “fair and reasonable.” The Commission is attempting to supply that limiting principle by connecting compensation to the costs actually generated by the provider’s use of the ROW.

Expect that question to receive substantial attention in the reply round—and potentially in any eventual judicial review.

The NPRM’s treatment of in-kind compensation deserves particular attention.

Governments sometimes require more than money as a condition of deployment. Requirements can include additional conduit, fiber strands, facilities, discounted or free services, infrastructure work or other nonmonetary benefits.

The FCC tentatively concludes that such demands cannot simply sit outside whatever fee restrictions ultimately apply. Instead, the value of required in-kind compensation would count toward the applicable safe harbor. The NPRM gives a concrete example: if a safe harbor were $3,000 and a provider were required to construct $1,200 of additional conduit for municipal use, the $1,200 would count against the $3,000 limit.

The Commission has not yet decided how those contributions should be valued. It asks whether valuation should turn on the provider’s actual cost, market value or another methodology. It is also asking where legitimate restoration obligations end and compensatory demands begin—for example, whether requiring restoration beyond the area actually disturbed by construction can constitute in-kind compensation.

The NPRM goes further still. The Commission tentatively concludes that where an in-kind demand is unrelated to the provider’s use of the ROW and increases deployment costs in a manner that effectively prohibits telecommunications service, Section 253(c) may not save it from preemption.

For providers negotiating ROW agreements, that could be one of the most consequential aspects of the entire proceeding.

A government authority’s demand for conduit, fiber, services or some other nonmonetary benefit would not necessarily escape scrutiny merely because no check changes hands. Under the FCC’s proposed approach, the economic value of the demand becomes part of the Section 253 analysis.

A fourth camp does not necessarily reject the objective of faster deployment. Instead, these commenters argue that a simple federal clock risks treating fundamentally different kinds of approvals as though they were interchangeable.

The Virginia Department of Transportation says a 120-day limit should be achievable for most permits, but stresses that poor or incomplete plans are a leading cause of delay and that unusually complex structures and Virginia limited-access ROW arrangements may require substantially more review. VDOT also raises an important compensation issue of its own: some limited-access ROW arrangements use resource-sharing agreements based in part on the value of the ROW occupied, a practice potentially affected by a rule focused solely on direct governmental costs.

The Washington State Department of Transportation similarly supports eliminating unnecessary barriers while arguing that the clock should begin only once the permitting authority has a complete application and should stop when the agency is awaiting information from the applicant. WSDOT says its existing fee structure already largely follows an actual-and-direct-cost methodology, although it questions whether a fixed safe harbor could fairly account for large differences in project complexity.

The Washington Public Utility Districts Association raises a more specialized objection: pole-attachment engineering should not be treated like an ordinary administrative permit. WPUDA points to structural loading, pole conditions, electrical clearances, make-ready work and utility-specific engineering considerations and asks the FCC to exclude government-owned electric-utility pole attachments from the proposed 120-day presumption.

And several water and wastewater utility associations inject a public-safety issue into the debate. They cite utility strikes associated with large-scale fiber construction and argue that any shot clock should preserve local authority to respond to contractors with poor damage-prevention records. Their filing goes so far as to suggest reporting requirements and suspension of shot-clock protections where providers or contractors exceed specified utility-strike thresholds.

These comments illustrate why some of the most important provisions in any final rule may concern not the headline “120 days,” but the mechanics underneath it: when the clock begins, what makes an application complete, what pauses the clock, how applicant-caused delay is treated, whether different approvals share a single clock, and what special treatment applies to technically complex or safety-sensitive infrastructure.

This proceeding may ultimately do much more than speed up paperwork.

For fiber builders and telecommunications providers, a cost-based compensation framework could materially change project economics and negotiating leverage with municipalities, counties, highway authorities and other public entities.

For governments, it could narrow the universe of charges, contributions and conditions traditionally imposed as part of ROW agreements.

And for investors, lenders, purchasers and sellers of communications infrastructure, it reinforces a broader point: ROW and permitting exposure is not simply a regulatory compliance issue. It is a valuation issue.

A fiber build that appears economically viable based on route miles, passings and construction cost can look very different once permitting delays, recurring occupancy charges, pavement-restoration obligations, required conduit or fiber, railroad approvals, pole access and DOT conditions are added to the model.

The same is true in transactions. Understanding what rights a network actually possesses—and what continuing obligations, fees and restrictions accompany those rights—is increasingly part of meaningful regulatory and infrastructure due diligence.

Reply comments in WC Docket No. 25-253 are due November 5, 2026.

The next round should sharpen several questions that remain unresolved: whether Section 253 permits the FCC to adopt nationwide substantive rules of this breadth; whether the Small Cell Order and City of Portland provide a sufficient foundation for extending a cost-based compensation rule to wireline infrastructure; how any safe harbors should be calculated; how in-kind compensation should be valued; whether a missed deadline should result in automatic approval; and how the Commission should distinguish genuine governmental delay from incomplete applications, complex engineering and legitimate safety concerns.

For companies deploying or acquiring fiber networks, this is a proceeding worth following closely. The eventual rules could alter not merely the speed of permitting, but the economics of ROW access and the balance of leverage between network operators and the public entities controlling the corridors those networks must traverse.

The CommLaw Group’s Broadband & Telecom Infrastructure Practice helps broadband providers, network operators, infrastructure developers, data center companies, investors and other stakeholders navigate the legal, regulatory and commercial issues that can slow—or derail—deployment. Our team advises on public and private rights-of-way, permitting and regulatory approvals, pole attachments, railroad and utility crossings, fiber and conduit access, construction and infrastructure agreements, commercial negotiations, deployment disputes, and infrastructure-related M&A and due diligence.

Just as importantly, we recognize that infrastructure companies do not always need—or want—traditional outside counsel billed exclusively by the hour. The CommLaw Group offers flexible Alternative Fee Arrangements, including fixed and capped fees, budget-based fee ranges and fee collars, as well as infrastructure-specific General Counsel-on-Demand and Fractional Chief Infrastructure Counsel arrangements. These models can give companies predictable access to experienced infrastructure counsel without the cost or commitment of adding full-time legal headcount.

Our objective is straightforward: put the Right Professionals on the Right Projects at the Right Price, and involve experienced counsel early enough to identify risks before they become permitting delays, construction problems, disputes or cost overruns.

The CommLaw Group will continue monitoring WC Docket No. 25-253, including the November 5 reply-comment round and any resulting FCC action. Companies confronting ROW fees, in-kind demands, permitting delays, infrastructure negotiations or other deployment obstacles are encouraged to contact our Broadband & Telecom Infrastructure team:

James F. “Jim” Booth
703-714-1320 | jfb@commlawgroup.com

Leela Vangala
703-714-1300 | lgv@commlawgroup.com