The FCC Ignores Reality in 5G Proposal

The Coalition for Local Internet Choice and the National Association of Telecommunications Officers and Advisors asked for my view of the Federal Communications Commission’s pending order, proposing to cap the fees that state and local governments may charge for small-cell attachments. According to the FCC’s draft order, these price‐caps will save the industry $2 billion in costs to operate in metropolitan areas—which will translate into $2.5 billion in new wireless investment, primarily in rural areas. Here are my concerns:

• First, focusing on state and local government fees and processes is a distraction from the real obstacles to accelerated and ubiquitous deployment of next-generation mobile services, which are that broadband deployment economics are very challenging and have to be addressed at all levels of government and through creative collaboration with the private sector.
• Second, local governments have a strong recent track record of endeavoring to enable and facilitate broadband deployment, as the Google Fiber experience conclusively demonstrated. 
• Third, 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.
• Finally, the draft order presents a framework in which industry gets all the benefits (reduced fees to access state and local property) with no obligations to reinvest the resulting profits in rural broadband—even though the purported rationale for the reduced fees is that they will lead to new investment.