FCC Action on Wireless Infrastructure Hamstrings Cities but Won’t Spur More 5G Deployment

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On Wednesday, the Federal Communications Commission will vote on an Order and Declaratory Ruling it claims will promote deployment of next-generation wireless networks. The crux of the FCC’s action will impose stringent limits on the fees states and localities charge wireless companies to install and maintain small cells in public rights-of-way (ROW) and on other government property. Additionally, the FCC substitutes decision-making by local elected officials with its own on issues ranging from public safety to community aesthetics when a locality considers a wireless small cell application.

While the FCC is correct to take steps to promote broadband deployment (like its recent Order promoting a one-touch-make ready regime for pole attachments), its proposal to limit state and local oversight of wireless deployments on public property is likely to have little success in promoting deployment, and instead is little more than a brazen wealth transfer of $2 billion from state and local taxpayers to the nation’s largest wireless companies. The sad fact is that the FCC didn’t have to take this approach of pitting broadband providers against state and local governments. The Commission should have pursued a consensus solution that promoted flexibility for local officials to work with wireless companies to find solutions that work for the individual jurisdictions. Instead, the FCC opted for Washington-imposed unfunded mandate on state and local governments that constrains local decision-making and substitutes the judgement of three FCC commissioners for local elected officials.

As Ars Technica explains, the fee structure the FCC recommends states and localities abide by for ROW fees is insufficient to cover the costs that cities incur when determining whether wireless infrastructure should be approved for installation in public ROW. In addition to setting a ceiling for fees, the FCC also establishes tight shot clocks for states and cities to approve or deny wireless company small cell applications, and explains the FCC expects the grant of applications after expiration of the shot clock, regardless of whether the locality has had the time to conduct an appropriate review of the proposed deployment. This is further compounded by the fact the FCC gives carriers a green light to file hundreds or thousands of applications all at the same time, and does not grant any flexibility in its shot clocks for state and local governments to process this flood of applications. The FCC explains that ROW fees should be similar to the costs incurred and that aesthetic and other determinations by local governments have to be “reasonable.” However, in a move that makes a mockery of this Commission’s claims of “regulatory humility,” the FCC’s proposal announces the Commission will inserts its judgement in place of local officials regarding what is and is not “reasonable” in these instances.

As former FCC official Blair Levin explains, not only is the FCC’s plan a giveaway to the largest wireless carriers, it is unlikely to actually solve the problem the Commission claims it is trying to address -- promoting deployment of next-generation wireless networks to rural areas. First, the FCC’s premise is implausible -- that a multi-billion reduction in ROW fees in major U.S. markets will lead to wireless carriers investing their windfall in unprofitable rural areas. In reality, carriers are unlikely to ever deploy 5G networks (or other advanced networks) in areas that don’t offer sufficient return on investment. Further, the millimeter wave spectrum that is necessary to deliver the low-latency, gigabit speeds being promised by 5G deployments is wholly unsuited for rural deployments. In all likelihood, rather than investing in unserved communities, carriers will almost certainly invest in executive bonuses, higher stockholder dividends, and stock buybacks. Unfortunately, the FCC’s action will actually undermine and prevent the innovative and pro-deployment arrangements that cities and wireless carriers have negotiated that actually serve to connect disadvantaged and unserved communities. And, for all of the hoopla earlier this year about the FCC establishing an Office of Economics and Analytics, the premise underlying the FCC’s proposal appears based on little more than two paragraphs of anecdotal evidence from the largest wireless carriers and an industry-sponsored study.

Lastly, and critically, the Commission’s action essentially boils down to merely hoping against hope (and economic reality) that wireless companies will invest excess revenues in unprofitable areas, all without any deployment obligations or federal, state, or local oversight to prevent the digital redlining that has occurred where broadband providers have deployed fiber networks. Instead, carriers are likely to pocket this new FCC-provided windfall; proceed with their already announced 5G network deployment plans; sue state and local governments that attempt to ensure 5G deployments reach unserved and underserved communities; and deplete the limited budgets that local governments rely on to pay for public safety services and public schools.

The Commission has the requisite authority (under Title II of the Communications Act) to take positive steps to spur broadband deployment to all Americans. However, rather than take actual steps toward achieving its historical universal service mission to make communications services more accessible and more affordable, this FCC action only enriches wireless carriers while doing nothing to change the economic realities of rural broadband deployment or require providers serve communities they have left behind.


Image credit: Wikimedia Commons user Rohanmkth

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