US Cities React in Fury to FCC’s $2 Billion Dollar Gift to Telecoms

We’ll be picking up the tab, say city officials.

Federal price cap will undercut existing agreements, says just about every big city in America.

By Kieren McCarthy in San Francisco, Sept 22, 2018 | Original The Register article here .

A plan to impose a federal price cap and one-size-fits-all model for the roll out of next-generation mobile networks has been met with fury by US cities. New York, Los Angeles, San Francisco, Philadelphia, Chicago, Las Vegas, San Diego, Seattle and dozens of other cities have responded in anger to a public comment period on two proposals from the Federal Communications Commission (FCC).

Those proposals would override the cities’ ability to charge mobile operators for positioning 5G cell towers on their property and instead impose a single, federal fee. The FCC claims that the proposal will remove $2 billlion in "unnecessary fees" and lead to $2.5 billion in additional network investment. The plans – which the FCC intends to vote on next week – would also oblige local governments to make a decision on applications for new cell sites within three months and would remove several common reasons for denying such applications.

While the FCC claims this would be a great development, the local and state governments whose authority would be undermined by the proposal are notably less excited.

The city of Chicago states [pdf] :

"We disagree with the Commission’s flawed and overreaching effort to mandate how cities manage small cell deployments. We respectfully request that the Commission delay consideration… until the document reflects a balanced approach respectful not just of industry demands but also of cities’ obligations to fairly, safely, and efficiently manage the public way and other public assets."

The mayor of Los Angeles complained [pdf] that the plan will . . .

"serve only to undercut the many successful public-private partnerships that have, and are, developing in today’s marketplace," adding that they "will insert confusion into the market, and sow mistrust between my technology team and the carriers with whom we have already reached agreements."

Brotherly love? The city of Philadelphia made much the same point [pdf]:

"The City has already established a fee structure and on-line application process to apply for small cell deployment that has served the needs of its citizens without prohibiting or creating barriers to entry for infrastructure investment."

The FCC’s flat fee of $270 per year per site with a $500 application fee for the first five applications and $100 thereafter doesn’t cover the actual costs of maintaining such sites, numerous other cities have complained.

In effect, cities will end up paying mobile operators to maintain their networks that those companies are expected to make billions of dollars of profits over the next decade.

San Francisco made the same point. It already had agreements and contract in place for 5G networks, and the FCC’s proposed order "puts these innovative local approaches at risk when it seeks to impose centralized control over inherently unique, local conditions and processes."

It also questions [pdf] the FCC’s justification for imposing this approach: that the fixed-fee approach would encourage greater investment elsewhere. That analysis "appears to compare apples and oranges," complains San Francisco, adding that there is "no basis for concluding that the Proposed Order will increase investment in rural areas or anywhere else."

Las Vegas has called the proposal "unreasonable" and "extreme"; Seattle noted its "strong opposition"; Cincinnati expressed "deep concern"; Delaware said it is an "unreasonable overreach"; and on and on and on. There are dozens of cities from every state and of every size criticizing the proposal in the strongest terms.

All in favor . . . So who is actually in favor of the proposals?

Well, AT&T, Verizon and T-Mobile USA – the three main mobile operators in the United States. They are all "strongly supportive" of the proposal. Notably their responses are formulated as summaries of meeting that their executives have held with FCC Commissioners in recent weeks. Also in favor: all the cable/mobile/telco lobbying groups, including the NCTA, CTIA, CCIA and various other acronyms. Many of those letters also relay the meetings they have held recently with FCC leadership.

What is all the more stark with this proposal from the FCC is that its chair Ajit Pai has repeatedly claimed that his philosophy behind decision-making is "light touch" regulation. At the same time, another proposal currently under discussion that is also causing a lot of anger considers scrapping a federal price cap. In that case, however, Big Cable is in favor of the proposal because it applies to a cap on what they are allowed to charge other ISPs to access their networks — meaning that competitors can offer the same service to consumers under their brands.

Ever since Ajit Pai took over as chair of the FCC, the former lawyer for Verizon has faced fierce criticism for doing the bidding of telco companies, often repeating their arguments and ignoring opposing viewpoints.

In this 5G plan, such blatant favoritism is particularly stark. Rather than lifting regulations, Pai’s FCC is seeking to impose them. And those most impacted by it are united in opposition. The only people in favor of the current proposals are the corporations that will benefit the most from it.

Done deal

And the FCC Commissioners have already signaled their intent to ignore opposition. "Policymakers can’t claim success if 5G is only deployed in big cities like New York and San Francisco," commissioner Brendan Carr, who has championed the measure, said in a statement. "Those ‘must serve’ cities will get next-gen mobile broadband almost regardless of what we do. Success means every community getting a fair shot at 5G. To achieve that success, we need to update our rules to match this revolutionary new technology."

Policy analysts note however that there is nothing in the proposals that oblige, or even ensure, that the core argument for the plan – that it will result in 5G rollouts to smaller towns and cities – ever occurs.

This is no requirement on mobile operators to expand anywhere that doesn’t make financial sense for them, and no obligation to use the money “saved” by paying lower fees in big cities to expand in less profitable areas.


One expert has already made it plain that he expects the approach to expand, rather than reduce, the digital divide between urban and rural areas. He has called the proposal "a large transfer of wealth from the public to private enterprises" that would "leave American communities and states no better positioned to bridge digital gaps." In short, it is yet more shoddy policymaking from a federal regulator that appears to take its cue exclusively from the companies it is supposed to be overseeing.

The Simpsons Meets Next-Gen Mobile Broadband Policies

By Kieren McCarthy in San Francisco Sept 26, 2018 | Original The Register article here.

If you were to pick a moment in which America’s telecoms regulator disappeared down the rabbit hole at its monthly meeting, it would probably be when the chairman of the Federal Communications Commission (FCC) Ajit Pai provided a full "up is down" statement when he addressed his fellow commissioner Brendan Carr while discussing a plan to set a federal limit on what local and state governments are allowed to charge Telecoms companies to add new 5G mobile cell sites on their property.

"I salute Commissioner Carr for his leadership in developing this order . . . He worked very closely with many state and local officials to understand their needs and to study the policies that have worked at the state and local level. It should therefore come as no surprise that this order has won significant support from mayor, local officials and state legislatures."

There’s only one problem with this statement: it is wholly, provable incorrect. In fact, the FCC just closed a short public comment period in which a very large number of mayors, city officials, and state legislatures explicitly stated the opposite: that they were entirely opposed to the plan.

You can read the letters. They are online. Among the cities implacably opposed to the measure: New York, Los Angeles, San Francisco, Philadelphia, Chicago, Las Vegas, San Diego, Seattle, Cincinnati, and Delaware.

And how exactly does Pai say mayors support the plan when his own office received a letter the United States Conference of Mayors?

"The Order establishes an unreasonable and unworkable standard of what constitutes an effective prohibition, which will impose costs on local governments and interfere with public safety and other local protections that are the heart of localism"


That letter was also signed by the

  • National Association of Telecommunications Officers and Advisors,
  • the National League of Cities,
  • the National Association of Counties, and
  • the National Association of Regional Councils.

And yet somehow, Pai’s takeaway was that they support the federal government’s efforts to take away their decision-making powers and revenues because . . . well, why? According to Pai’s logic, because they love the promise of fast 5G mobile networks — none of which are commercially available yet — more than their own rules and citizens? Such was the almost universal outcry against the FCC’s plan that even Pai was forced to admit "to be sure, there are some local governments that don’t like this order."

But then he immediately explained why:

"They would like to continue extracting as much money as possible in fees from the private sector, and forcing companies to navigate a maze of unnecessary hurdles to deploy wireless infrastructure."

Even a Telecom executive would think twice before coming out with such a brazenly one-sided and wildly inaccurate statement, but that is seemingly no barrier for the head of the federal regulator who is supposed to represent the face of objective policymaking.

The sad truth is that the FCC has more than ever come to resemble a Boys’ Club with the three majority commissioners sharing jokes, jibes, and personal photos in the middle of policy debates of national importance. This month Carr joked about running out of boring material to read his kids before they went to bed because Pai was so busy scrapping regulations. They chuckled together as the rest of the room cringed. And fellow commissioner Michael O’Reilly put pictures up of his kids before going on to discuss the next item on the agenda.

Cracking us up

Before each vote, the commissioners – for no good reason – read a little speech full of quips and pop culture references that are seemingly designed only to amuse one another. This month Pai went with a Frank Zappa quote. This frat-boy atmosphere extends to the actual reasoning and argument behind the FCC’s proposals. Trump-style machismo leads to black-and-white reasoning that is so full of internal contradictions, it is actually painful to listen to it.

While Pai was claiming the opposite of reality – that mayors and cities love his plan despite them saying, in print, that they hate it – his colleague Carr just keeps reiterating again and again and again the cable industry’s talking point of there being a "race to 5G" to the point that it starts to feel like he’s suffering some kind of Policywonk Tourette’s. Today, Carr even dragged this strange tick of his into a time machine and waxed lyrical about the "race to 4G."

What race to 4G? What is he talking about? It doesn’t matter because the three chums keep chuckling and reinforcing their own detached arguments while the rest of the Telecoms policy crowd look on with a mix of confusion and despair.

It’s worth noting that the five FCC commissioners are supposed to act as an internal balancing mechanism; each a largely independent thinker and telecoms policy expert in order to provide balance. Since Pai – a former Verizon lawyer — took over, this shaky balance has come completely off the wheels. Pai pushed for Carr to become a commissioner and persuaded the White House to nominate him. They are old pals. Carr worked for Pai for four years as his legal advisor before Pai promoted him to general counsel and then got him as an FCC commissioner to guarantee him a safe vote on key decisions.