Cities, Counties Say FCC 5G Plan A Massive Handout To Wireless Carriers

The FCC is once again being accused of blindly letting the telecom sector's biggest companies dictate federal policy. The FCC this week voted to move forward (pdf) with a plan that the agency claims will speed up deployment of fifth-generation (5G) wireless. Under this carrier-backed proposal, cities will be limited in terms of how much money they can charge carriers to place cell technology like small cells on government property in public rights of way (traffic lights, utility poles). It also imposes strict new timelines and operational restrictions making it harder for localities to stand up to giant nationwide cellular carriers.

On its surface, the FCC is framing these changes as a necessary shift to speed up broadband deployment and eliminate cumbersome bureaucracy as the U.S. engages in a "race to 5G" with other countries. But the upgrading of wireless networks isn't a race, 5G itself has been aggressively over-hyped as a panacea for a broken market, and cities say the FCC's new plan is largely about saving money for wireless carriers, while tying the hands of cities, counties and towns trying to improve connectivity to rural markets.

For example, the city of Philadelphia filed a complaint with the FCC (pdf) stating that the new FCC caps barely cover the costs cities incur for doing due diligence on network hardware placement, and clash with the existing, long-established systems of approval already erected on the local level:

"(The fees) are simply de minimis when measured against the costs that the City incurs to approve, support and maintain the many small cell and distributed antenna system (DAS) installations in its public rights-of-way. "In order to accommodate and support the numerous Service Providers while ensuring public safety and an environment conducive to all uses of the public rights-of-way, the City incurs significant upfront engineering costs to review and inspect each location, including structural analysis review, geographic information system (GIS) updating, and design review and approval."

Those concerns are being echoed by many rural counties (pdf) and consumer groups like Public Knowledge, who say the FCC's order tramples local authority and their ability to extract agreements that actually result in more rural areas (the ones carriers traditionally would rather ignore) from getting next-gen broadband:

"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."

While folks tend to beat around the bush on this subject, that's because Ajit Pai's FCC is effectively mirroring incumbent provider interests on largely every subject that comes across their desks, something that was made abundantly clear during the net neutrality repeal. The idea that the FCC's plan is more about saving carriers money than speeding up broadband deployment is a positiojn also shared by former FCC advisor Blair Levin, who says the FCC's proposal "ignores reality," and argues that the gutting of existing relationships between localities and carriers will do nothing to actually speed up next-gen broadband deployment, and, in fact, will likely do the exact opposite:

"The FCC's draft order is based on a fallacy that no credible investor would adopt and no credible economist endorse: that reducing or eliminating costs for small cell mounting on public property in lucrative areas of the country (thus reducing carriers' operating costs), will lead to increased capital expenditures in less-lucrative areas-thus supposedly making investment more attractive in rural areas.

"While the FCC may ignore reality, the carriers and Wall Street understand that increasing profitability in Market A will not make Market B more attractive for investment. Market B will still be an area that is unprofitable or otherwise unattractive for investment, and the new requirement that Market A subsidize carriers by reducing fees will not benefit Market B under these circumstances."

If you're playing along at home, this is all part of a game that's been played at the FCC for the better part of twenty years. One where the telecom industry prods dutiful government agencies to claim that a mindless deregulation of the telecom sector will result in broadband connectivity and competition magically springing forth from the sidewalks. But time and time again, said competition never arrives, consumer protection suffers, prices rise, and carriers pocket the proceeds of government turning a blind eye to rampant competition and coverage problems under the pretense of "encouraging innovation."

You might recall that former FCC boss Mike Powell (now the top lobbyist for the cable industry) used to justify his rampant deregulatory agenda by claiming that things like consumer protections weren't necessary because emerging technologies meant the industry's broadband competition issues would soon be a thing of the past. In his case, Powell was hyping broadband over powerline (BPL), a tech that was interference prone and never suitable for mainstream adoption. Powell's promised broadband competition revolution never arrived, and instead we got giant, even more potent natural monopolies like Comcast.

The same thing happened when telcos like AT&T and Verizon jumped into the TV business. The local franchise agreements that had worked for years to force cable broadband into rural, lower ROI markets were vilified and replaced by state-level agreements that were often little more than blind wish lists for entrenched ISPs and cable TV operators. The promise: this "streamlining" would result in a wave of new TV competition and lower prices. The reality: more of the same, with fewer consumer protections to help rein in bad behavior in a traditionally anti-consumer sector, and less local pressure to shore up coverage gaps.

Again, deregulation may help already competitive markets by freeing them from nonsensical or unnecessary bureaucracy. But when mindlessly applied to broadband (aka natural monopolies enjoying regulatory capture), it simply makes things worse, and doesn't fix any of the underlying problems. Nothing about this order deals with AT&T and Verizon's monopoly over cell tower backhaul, or the high prices that result. Nor does it address a lack of competition on the retail front, a problem that's about to get worse thanks to the merger between Sprint and T-Mobile.

It does continue the longstanding tradition of gutting all local authority over telecom monopolies under the promise that low prices, better coverage and faster service sits just over the horizon (ignoring state and local rights that used to be deemed important in the process). Someday we'll collectively realize we're just playing a glorified version of Charlie Brown and Lucy football with giant natural monopolies and the politicians paid to parrot their positions, but it's pretty clear we're years away from any meaningful realization on that front.