The FCC issued a Notice of Proposed Rulemaking titled Build America: Eliminating Barriers to Wireline Deployments. The stated purpose of the proposed new rules is “to cut red tape and excessive fees imposed by some state and local governments in the public rights-of-way for wireline deployments”. There are several important provisions in the new rules.

First, the FCC proposes a 120-day shot clock for local governments to approve a request for rights-of-way. If the local government doesn’t respond in that time frame, then the application is presumed to be approved. That may seem like a reasonable time frame when you first hear about. It doesn’t seem unreasonable to ask a local government to approve or reject a right-of-way request to build fiber on a single street or a small neighborhood. But consider if a fiber overbuilder requests rights-of-way for an entire city. Such requests are complicated. Such a request would include residential neighborhoods and business districts. A city would have to consider a lot of factors, like planned road relocations or rebuilds, other construction activity that is already occurring, and issues related to the condition of existing rights-of-ways that might already be overcrowded with other utilities.

The docket also proposes to limit fees to a reasonable approximation of the government’s actual, direct costs of managing the rights-of-way with respect to a particular application. This implies the FCC will only allow fees associated with establishing the original right-of-way and will not allow fees to cover some of the costs for managing the right-of-way over future years.

The FCC plans to establish safe harbor fees for rights-of-way. For those not familiar with that term, a safe harbor fee generally means a standard rate or affordable guideline. The problem with safe harbor rates is that they don’t recognize the difference between a right-of-way fee in a small rural town and one for the biggest metropolitan areas of a state.

The new rules will count in-kind compensation as part of any fee. Local governments often negotiate in-kind contributions with fiber builders. For example, they might grant a right-of-way and ask the fiber builder to provide a few free fibers to connect between government buildings. The FCC new rules will mandate that any such in-kind contribution be counted as part of the fee. That would mean putting a dollar value on the in-kind contribution and subtracting it from the fees. That may sound reasonable, but this is being done in the context where the local government has to prove its fees are cost-based while a fiber builder will not. I have many clients who have been handed inflated estimates from cable companies for providing short fiber routes.

Finally, the new rules will prohibit a local government from charging higher fees when the proposed infrastructure will support multiple purposes. An example would be a fiber route that is being built to bring fiber to a neighborhood and also serve a cell tower.

The most interesting thing about the docket to me is that FCC Chairman Carr said when he took the job that his philosophy was “light touch regulation”, meaning he didn’t foresee the FCC implementing a lot of new regulations. Instead, this and other FCC proceedings are adding a lot of new federal regulations. Many of the other FCC proceedings are similar to this one in that the FCC wants to wrest away any regulatory authority from states and localities and regulate everything at the federal level.

I’m sure that industry comments will include some horror stories from fiber builders about cities that have stonewalled new fiber construction or that charge a lot of fees. My guess is that these are the exception rather than the rule since most communities want more fiber and are willing to work with anybody willing to invest in their market.