The FCC Moves to Spur 5G Deployment

Doug Brake September 10, 2018
September 10, 2018

(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.)

In a recent speech, Brendan Carr, commissioner of the Federal Communications Commission, announced the long-awaited next steps on FCC action to facilitate wireless deployment. 5G and advanced 4G are moving to a new small-cell architecture. With an eye toward facilitating a rapid deployment of this new architecture, the FCC is looking to change a number of policies with a new order to be voted on at its meeting on September 26, 2018. This is a good decision that will spur buildout, and ITIF supports it, but successful 5G deployment will depend on genuinely cooperative effort between operators and local authorities—this order only gets us part way there.

Unlike the big, 100-foot-tall towers for yesterday’s wireless technologies, the next generation of mobile—5G—will rely on much smaller, lower-powered, but far more numerous “small cells.” Today, there are a couple hundred thousand towers in the United States; with 5G, this number is expected to swell 10 or 100 times. Accenture has estimated that during the next three or four years, the total number of cell sites in the United States will need to roughly double to see a successful 5G transformation.

Utility poles or light poles are the perfect infrastructure for these small cells—they are about the right height, are already placed along popular urban corridors, and have easy access to power and fiber back-haul. However, many of the rules around siting, permitting, and access to rights-of-way are designed for an age of much larger, higher-powered cells—so called macro cells. Local authorities have developed regulations and processes assuming a different architecture.

This issue—the streamlining of small cell infrastructure deployment—has been percolating for some time. The Broadband Deployment Advisory Council has given the FCC advice on how to spur additional broadband deployment, with a particular eye to small cell infrastructure. The FCC has held a long proceeding and received input from a variety of stakeholders, including broadband providers, local authorities, and others. Numerous panel discussions have debated the issue. Legislation is pending in Congress, most notably the STREAMLINE Small Cell Deployment Act.

These small cell reforms will no doubt will help advance 5G deployment, and the FCC is right to move forward. The modernization of small cell siting can help lower the cost of deployment for operators and mitigate against holdout problems where wealthier cities can demand high fees that get passed along to all users of the network—whether they live in the city or not.

So, what are the actual reforms the FCC is advancing? The most important change relates to the fees cities can charge for wireless facilities. Under the Communications Act, states and localities are allowed “fair and reasonable compensation” for use of public rights-of-way by telecommunications providers. The FCC, with fairly wide deference to interpret the statute, now argues that the significant increase in the number of cells required for advanced wireless services means fees that once may have been reasonable in the era of 200-foot-tall macro towers now represent an impediment to the deployment of telecommunications services. Under the new rules, state and local governments would only be able to charge “cost-based” fees—fees that reflect an approximation of the cost to process applications and manage the public rights-of-way.

This limitation on fees represents a significant reduction in the amount cities can potentially recover for small wireless deployments. While controversial with mayors who today see significant income from access to rights-of-way, the fact is interests of a municipality can diverge from the broader national interest for better broadband. From the local officials’ perspective, the optimal fees for a small cell deployment would be the highest possible price where the provider would still deploy the infrastructure. The mayor of San Jose, for example, was at one point seeking “best pricing” whereby “if another city get[s] better rates than San Jose, then San Jose shall be entitled to that rate as well.”

San Jose later struck bespoke agreements with AT&T and Verizon. While such negotiations between cities and operators will continue to play an important roll in the successful deployment of small cell systems, the FCC’s order is an important attempt to curtail outlier cities that leverage control over rights-of-way to extract outsized fees. Cities with valuable wireless customers—wealthy, tech-savvy residents—know they can get large fees from providers, fees that unfairly add significant expense to the overall competitive wireless system and can discourage wider deployment in communities on the margin of receiving initial 5G build-out.

Another big change the FCC is set to vote on is a tightening on shot clocks for small wireless facilities. Basically, a local authority has two months to respond to a small cell being attached to an existing tower, and about three months to respond if someone wants to build a new wireless structure. This is down from the 90 and 150 day shot clocks for larger facilities. If cities can hit these time targets it would be a big step toward a much more rapid deployment of the small cells needed for 5G.

However, the commission did not include what is known as a “deemed granted” provision. Under the new rules, if a local authority does not approve or deny the deployment within those timeframes, an operator would have to go to a court and get an injunction, rather than presuming the application granted and moving ahead. This means operators would do well to communicate directly with localities and assist in updating the processes for reviewing small cell permits. Most cities do not have an individual point person for broadband deployments, let alone small cells. If additional staff and process streamlining can speed review of siting proposals such that these shot clocks can be hit, it is likely in operator’s interest to help in that regard, rather than wait for a judge to issue an injunction. The FCC’s action functionally gives providers reasonable recourse for truly intransigent localities, otherwise it is still in everyone’s interest to get along. After all, carriers want to explore new business opportunities through the capabilities of 5G, and city officials should want to get 5G networks to their communities as quickly as possible, not just for their constituents but also to improve smart city services.

The FCC also offered some guidance on aesthetics. The FCC suggests aesthetic restrictions—requiring cell towers to fit in with the surroundings—are okay if they are no more burdensome than those applied to similar infrastructure deployments and published in advance. Overall the changes the FCC looks set to make will likely be controversial with some mayors and local consultants looking to maintain higher fees, and the order will likely not be the final word in this process.

As a nation we should want to accelerate the deployment of new wireless technologies, but we will only see flourishing 5G if cities and wireless carriers work together. There are all sorts of legitimate challenges that come with a new, denser wireless architecture. Cities want to ensure their utility poles don’t become a tangle of wires and that towers don’t stick out like sore thumbs. Equitable coverage of new deployments remains an issue, with 5G likely to be first deployed in areas of highest demand. A vocal minority is wrongly concerned about the health effect of wireless. Mayors and city councils get an earful on all of these issues from constituents, I’m sure.

Carriers and infrastructure deployers generally don’t want to have a confrontational relationship with the cities they operate in. A truly successful 5G deployment will depend on the cooperation between operators and cities where they deploy. The FCC’s actions here will hopefully work to curtail outlier authorities charging outsized fees or otherwise stonewalling deployment of advanced wireless services. The FCC deserves praise for paving the road for a quick 5G buildout, but the hard work still lies ahead.