Court Chips Away at 5G Deployment Rules

The US Court of Appeals for the D.C. Circuit ruled last week that the FCC had gone too far when it ruled that 5G cell site placement could bypass environmental and historic preservation review. The specific ruling looked at whether the FCC has the authority to bypass these kinds of reviews for sites of religious and cultural importance to federally recognized Indian Tribes. But the ruling has a far larger significance and applies to these kinds of reviews everywhere.

This type of court ruling seemed inevitable because of the brashness of the original FCC order. That order declared that the deployment of 5G is so important that all of the rules in the country applying to the deployment of new infrastructure don’t apply. For courts to buy that argument that must be convinced that 5G deployment is so important that it is indeed a national emergency.

I think everybody who understands the benefits of 5G understands that it is an important new technology – one that will create huge benefits for the country. But it’s hard to make an argument that 5G deployment is an emergency.

The biggest benefits of 5G are only going to manifest with the introduction of frequency slicing into the cellular network, and that looks to be 3 – 4 years away. The deployments that the cellular carriers are labeling as 5G today mostly marketing gimmicks and custoemrs are not yet seeing any of the real benefits from 5G.

I blame the original FCC 5G order on a poorly chosen strategy by the cellular carriers, abetted by the FCC. We are facing a cellular emergency in the country, but it’s a crisis of 4G and not 5G. Our existing 4G network is in serious trouble and it seems that the cellular carriers don’t want to admit it. Cellular data networks are swamped because customer data usage is not doubling every two years. I have seen big problems in my local AT&T network. There have been many days when it’s hard to make or hold a call – something that never happened before last year.

The explosive growth of cellular traffic is partially the fault of the cellular carriers – it comes as a result of ‘unlimited’ data plans that encourage people to watch video and use cellphone data. It wasn’t that long ago when it cost a lot to buy a data plan that exceeded 1 or 2 gigabytes of usage per month. The average customer with an unlimited plan now uses 6 GB per month, and that number is growing rapidly.

The other cause of the increased demand on cellular networks comes from the success of the industry convincing in convincing everybody to use a smartphone. A recent Pew poll showed that 95% of teens and young adults now have a smartphone. The sheer number of customers is swamping the networks.

There is a path out of the current data crisis for cellular networks. It’s a 3-prong approach that involves building more cell sites, adding more bands of frequency onto cellphones, and finally layering on the frequency slicing capabilities of 5G.

It takes at 3 – 5 years to introduce a new frequency into the cellular network. That involves upgrading cell sites, but more importantly, it means building the capability into handsets and then getting the new phones into the hands of enough people to make a difference.

With real 5G benefits still a few years off, the only immediate way to relieve pressure on the cellular network is to add small cell sites. Each small cell site grabs local callers and keeps them off the big tall cell towers. All of the hectic small cell site construction we see is not being done for 5G – it’s being done to take the pressure off the 4G network.

The big cellular companies seem unwilling to admit that their networks are hurting and are in danger of overload – the first company brave enough to say that probably loses customers. Instead, the cellular industry elected to push the 5G narrative as the reason for bypassing the normal way that we build infrastructure. In this case, the courts didn’t buy that 5G is an emergency, and the court is right because 5G isn’t even here yet. If the cellular carriers and the FCC would have declared a 4G emergency I think everybody would have gotten it. We all want our cellphones to work.

The courts are still reviewing the appeal of an issue with even more potential dire consequences to the cellular carriers. Probably the most important aspect of the FCC’s 5G ruling is that cities have little say about the placement of small cell sites and also must expedite permitting for new small cell sites. That ruling was challenged by numerous cities and is being reviewed by the US Court of Appeals for the Ninth Circuit. That issue also boils down to the question of whether deploying 5G is an emergency. I wonder if it’s too late for the cellular carriers to fess up and admit that the emergency is really for 4G – even appeal court judges would likely understand that.

Preemption of Local Telephone Rules

The FCC voted yesterday that telecom deployments are now exempt from any environmental or historic preservation reviews. This is seen as the first step at the FCC making it easier to deploy 5G.

It’s an interesting rule change because in my experience those rules have more often applied to federally funded broadband projects than to local ones. For example, the BTOP stimulus grants added costs to every project by requiring both environmental and historic preservation reviews – even when it was obvious they didn’t apply. The vast majority of telecom deployments want to put fiber or telecom equipment into already-established rights-of-way. It’s hard to justify doing an environmental review when fiber is to be laid on the shoulder of an existing road or on poles. And the vast majority of 5G equipment will be on utility poles, light poles or buildings, so it’s hard to think that there can be much environmental impact from using established rights-of-way.

But that doesn’t mean that there is never a reason for a locality to have these requirements. Consider my town of Asheville, NC. There is a neighborhood around the Biltmore mansion that has strict zoning codes to keep it looking historic. The City ought to have the option to review and approve 5G or any utility deployments that might clutter the historic nature of such an area. Cities have often forced utilities into the ground in historic districts, but 5G transmitters can’t be put underground, by definition. I’ve seen some proposed small cell transmitters that are large and unsightly, and it doesn’t seem unreasonable for a community to have some say into where such gear can be used. Do we really need to see unsightly telecom equipment in Williamsburg, the Gettysburg battlefield or near the Liberty Bell? Local communities also need to have some say before a telecom deployment disturbs graves or archaeological sites.

The same goes for an environmental review. A better rule would be to only allow an environmental review when new telecom facilities are to be built into virgin rights-of-way – and where there is some local concern. We don’t really want to allow somebody to lay fiber through a sensitive wetland or bird sanctuary without some local say in the deployment.

These rules are the first step in what is perceived as the FCC desire to preempt all local control over 5G deployments. This FCC created various Broadband Deployment Advisory Committees (BDAC) to look at various industry issues and one of these committees looked at ‘Removing State and Local Regulatory Barriers”. It’s fairly obvious from the name of the group that they made a long list of local regulations that should be preempted.

That BDAC group essentially recommended that the FCC override all local control of rights-of-ways or any kind of review of telecom infrastructure deployment. Their recommendations read like a wish list from the lobbyists of the large cellular carriers and ISPs. If the FCC enacts all of the BDAC group’s recommendations, they will have handed over control of the 5G deployment process to wireless carriers and ISPs with no local say in the process.

I am certainly sympathetic to carriers that encounter major barriers to infrastructure deployment. I will have a blog coming soon on a particular egregious abuse of local authority that is greatly increasing the cost of a rural fiber deployment. But I’ve worked with hundreds of fiber deployments and mostly local rules are sensible and realistic. For example, cities have legitimate concerns over fiber deployments. They usually insist in getting records so that they have some record of what is deployed under their streets. They often require contractors to use sensible traffic control and to clean up after construction. And they often have fees which compensate the city for processing permits, for locating existing utilities and for inspecting the construction. If these kinds of rules are overridden by the FCC we’ll soon see horror stories of fiber builders who dig up streets and then walk away with no consequences. In my experience local rules are needed to stop utilities from taking shortcuts to save money.

I was talking to a colleague about this topic and they asked if we really need to be concerned as much about 5G as we are about fiber deployments. After some thought my answer is yes – the same sort of common sense local rules need be allowed for 5G. I picture a future where there will be multiple companies deploying 5G into neighborhoods. It’s not hard to picture wireless devices of various sizes hanging from every available pole and structure. It’s not hard to envision wireless providers erecting 100’ poles on streets to reach above the tree canopy. It’s not hard to envision 5G providers drastically trimming trees to give them line of sight to homes. I know I want my city to have some say in this before AT&T and Verizon make a mess out of my own street.

I am sure these new rules will be challenged in court. The legal question will be if the FCC has the authority to override local laws on these issues. I have no idea of how the law might apply to environmental or historic preservation reviews. But if the FCC tries to do the same with 5G pole attachments they run smack into the Telecommunications Act of 1996 which gives States (and by inference, localities) the ability to craft their own local laws concerning poles, conduits and rights-of-way. It’s always a tug of war when the FCC tries to override states and the courts are almost always the final arbiter of these attempts.

The Hidden Costs of Accepting Government Money

Numismatics_and_Notaphily_iconThere are often strings attached to taking government money that must be considered before accepting such money. Some of the gotchas include having to comply with prevailing wage rules, environmental reviews and Historical Preservation Act rules.

Let me start with prevailing wages. Any company that works on a government infrastructure project is required to comply with prevailing wages. Prevailing wages are hourly rates that are created by government regulatory agencies to represent what workers and laborers of specific types must be paid in specific geographic areas. The original concept behind the prevailing wage laws was to not let public construction projects destabilize a local construction industry. Basically the government didn’t want laborers shipped into an area who would work for much lower wages than the people who lived in the area.

This sounds good in concept, but in practice, in many states the prevailing wages are set considerably higher than what local laborers are paid. In fact, in many states the prevailing wages are suspiciously close to urban union wages. And so the opposite of what the government was protecting against often happens and contractors working on government projects end up having to pay more for labor than what people in an area will willingly work for, and this can greatly inflate the cost of government projects.

The procedures of complying with prevailing wages for telecom projects is complicated. Typically the prevailing wages are published by job titles and these titles rarely line up well with the actual workers that are hired for a fiber project. And so a construction company must guess how to slot each position into one of the pre-defined wage categories and then hope that they guessed right, since their decision often doesn’t get audited until after the project has been built.

In the telecom industry there are only a few hundred construction companies around the country that build fiber networks. It’s a very specialized field and the workers are highly trained. Nobody is going to hire somebody who’s inexperienced off the street to be a cable splicer or to operate a cable plow. The fiber construction business has developed a good equilibrium between supply and demand. Construction companies can’t hire experienced workers if they don’t pay enough, and so their competitive prices include the kind of wages that cable splicers and others are willing to work for. It’s an equilibrium that the industry seems happy with.

Probably the biggest concern is that even when you take only a small amount of government money, the prevailing wages might apply to the total project. The prevailing wage doesn’t have to be very much higher than the actual wages for it to cost you money to take ‘free’ government money.

Another requirement that often comes with government money is that you have to undertake an environmental study. This means hiring somebody to certify that your project is not going to disturb endangered species, interfere with wetlands or cause pollution of the environment. But laying fiber doesn’t affect any of these items because fiber is almost always built in public right-of-way along existing roads. When the state first built the road they always set aside part of the right-of-way for utilities to build in the future. This means that fiber is placed into soil that was already excavated when the road was built. So an environmental review makes no sense and I’ve never heard of a commercial fiber project that did an environmental review when building in a public right-of-way.

There are similar issues with compliance with the Historic Preservation Act. These rules are designed to prevent construction from disturbing buildings that are designated as historic properties or to protect against disturbing archeological sites. Again, this doesn’t make sense when fiber is constructed in public rights-of-way along existing roads which were previously excavated when the road was first constructed. There are times when commercial companies undertake these reviews, such as when they build fiber across country away from roads or if they are going to build on an Indian reservation. But no commercial contractor would ever consider such a review if they are building along public roadways.

The primary problem with these requirements are that they add both cost and time to a project. The prevailing wage issue can sometimes drastically increase the cost of a project if there is a big difference between actual wages and prevailing wages. And the other reviews can cost hundreds of thousands of unnecessary dollars, but worse can add a big delay at the start of a project, which by definition makes a project more expensive.

So be careful before taking federal or state monies that you first read the fine print. I know of a number of projects that were part of the stimulus grants a few years ago where awardee returned the grant money once they understood the real cost of compliance. Sometimes government money costs more than its worth.