In an attempt to streamline and accelerate the reach of 5G tech nationwide, the Federal Communications Commission (FCC) voted 3-1 to limit local governments’ ability to regulate 5G deployment on Wednesday.
The decision caps local governments’ permitting fees, sets shot clocks for local governments to review small cell deployment and also handicaps their ability to control rates. Advocates say it’s a win for 5G deployment, saying it will encourage the rapid deployment of 5G across America, but critics claim it is a setback for rural communities and will encourage rent-seeking behavior from telecommunications companies.
The FCC’s order, introduced by Commissioner Brendan Carr a few months ago, is also expected to cut $2 billion in unnecessary fees and stimulate $2.4 billion in 5G investment.
“Streamlining small cell rules will help close the digital divide by making it cost-effective for the private sector to provide coverage in more rural places,” Carr said, according to the press release. “We win the race to 5G not when New York or San Francisco get 5G coverage, but when all Americans — regardless of where they live — have a fair shot at next-gen access.”
Commissioner Jessica Rosenworcel, who many expected to vote against the order, issued a partial dissent. In her statement, she said that while she approves of the shot clocks and believes they will help accelerate 5G deployment nationwide, she disagreed with the approach.
“Instead of working with our state and local partners to speed the way to 5G deployment, we cut them out. We tell them that, going forward, Washington will make choices for them — about which fees are permissible and which are not, about what aesthetic choices are viable and which are not, with complete disregard for the fact that these infrastructure decisions do not work the same in New York, New York and New York, Iowa. So it comes down to this: three unelected officials on this dais are telling state and local leaders all across the country what they can and cannot do in their own backyards. This is extraordinary federal overreach.”
Supporters of the FCC’s decision point out cited the fact that San Jose and New York City charge telecom companies extremely high permitting fees. But as Rosenworcel argues, there are still many states in between with very different economic landscapes.
Roslyn Layton, a visiting fellow at the American Enterprise Institute who specializes in telecom, said that despite concerns about federalism, the FCC’s ruling will provide a net benefit.
“There are problems where a lot of communities will consider, hey, here comes the big telecom company, let’s shake them down and make some money, and then there are a lot of communities under financial distress,” she told InsideSources in an interview. “I understand from that perspective but on the other hand, if they capitulate on every case, they’ll never get money. So part of this is to try to set a baseline basically so that the communities have to set the rental price for the public lands at only a small amount of cost. This is a challenge because cities have a monopoly on the property they own. [The] … of lack of transparency can be abused.”
Sascha Meinrath, the Palmer Chair in Telecommunications for Pennsylvania State University, disagrees. He believed the FCC’s approach will stunt deployment by granting pricing control to the federal government.
“I think it’s going to lower competition in these places,” he told InsideSources in an interview. “What’s preventing deployment is not permitting fees from local governments, its anti-competitive behavior from the incumbents. If you study telecom history, this is a cycle that happens again and again and again.”
Several states and the U.S. Conference of Mayors have threatened to sue the FCC for preempting local governments. Meinrath finds it “highly circumspect that it will withstand judicial review,” but Layton thinks the FCC’s order is well within its authority granted by Congress.
“This is squarely in the FCC’s bread and butter stuff, and some states have already adopted this policy,” she said. “This [is] very much in line with the Republican policy around more private investment. It’s very consistent with that policy.”