Tag: small cells

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The Industry

Is Cellular Quality Getting Worse?

Over the last several months I’ve had conversations with a half dozen people who tell me they believe that cellular network quality is deteriorating. The evidence they have been using is an increase in dropped calls, the occasional ability to not get a ring tone , and a decrease in voice quality during calls. I know these observations are subjective, and if I only heard this from one or two people I wouldn’t be writing this blog. But I have to also include myself in the list of those who have noticed a change.

This happened once before. It was very clear before the big carriers introduced the 5G spectrum upgrades that the 4G network was getting badly overloaded. I can remember being on calls where I could barely hear people at the other end. I remember having dropped calls several times per week.

But the network problems went away within a relatively short period of time after the introduction of 5G spectrum that also coincided with some general upgrades to the overall cellular networks. This makes a lot of sense, because the introduction of the new spectrum means that carriers were able to spread existing traffic over two networks instead of just one. Anybody using the 5G network after they were introduced got great service at first because the networks were relatively empty. 4G networks also improved as the traffic decreased.

Call quality also got noticeably better. We can’t know exactly what improved voice quality. It could have been from spreading voice calls across two networks. It also might have been due to new voice technologies. For example, the major carriers implanted Voice over LTE (VoLTE) which introduced techniques to improve the quality of audio signals. This technology is automatic for phones that are certified by the carriers to use the technology.

There are several reasons why cellular calling might be deteriorating. First is the overall continued increase in cellular data traffic that puts more stress on cell sites every year. I’ve not been able to find specific statistics for the overall increase in cellular traffic volumes nationwide, but I’ve seen folks who have speculated that it’s north of 20% per year. You don’t have to be a network engineer to do enough simple math to see that compounded 20% growth can put major stress on all components of a network after only three or four years. It was this growth of traffic that drove the carriers to rush implementation of 5G networks. There were markets before the 5G upgrades that were getting close to collapsing.

Another reason that quality might be deteriorating is that carriers decided not to implement small cells in the way they were promising five years ago. They claimed there would be a small cell site in every neighborhood by now, and the reality is that the vast majority of the small cells never got built. Carriers looked at the capital cost and decided it was too expensive except in the most densely populated places.

The final reason might be FWA cellular broadband. The big cell carriers have added over 7 million broadband customers to cell sites. This is mostly home broadband, and ISPs all understand how the broadband demand from households has continued to grow. According to OpenVault, the average home in 2019 used 218 gigabytes of data per month, and that ballooned by 561 gigabytes in 2023. Cell sites were not designed to provide the steady streaming used for home broadband uses like connecting to schools and offices, gaming, and non-stop video streaming.

The carriers acknowledge that FWA traffic can impair normal cellular traffic and the FWA product comes with the warning that the carriers might throttle traffic any time that cell traffic gets too heavy. But now that the carriers have added million of customers to FWA, I have to wonder how willing they are to cut FWA broadband speeds? All the ISPs I know tell me that the public has grown exceedingly intolerant of slowdown or lapses in broadband, and I have to wonder how many homes will keep FWA if they get throttled too often. Deterioration of cellular performance might be due to a reluctance to throttle FWA broadband customers.

All of this is conjecture and based upon purely subjective evidence from folks I know. But these are all industry folks who are good at noticing this sort of thing, and I have more problems with cell calls than I did a year ago. I speculate that cellular network deterioration would be local problem and not global, so it might matter where you live. I’m curious about the experience of readers.

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Uncategorized

Looking Back at Looking Forward

I find it interesting to sometimes look backward a few years to see what predictions were made about the future of the telecom industry. Five years ago I went to an NTCA conference where several speakers made predictions about the industry, particularly as it would impact rural America. It’s interesting to look at what was predicted about today just a few years ago. Some predictions were dead on and others fizzled. Following are some of the more interesting misses.

Broadband Technologies. There were predictions that by 2020 that we’d see upgrades to G.Fast in rural copper networks and to next-generation PON equipment for fiber deployments. Neither of these happened for various reasons. US telcos have never accepted G.Fast, although there is widespread adoption in Europe where copper networks are delivering 300 Mbps speeds to customers. The big telcos in the US are making no investments in rural copper unless the FCC fully funds it. Many smaller telcos have taken advantage of changes in the Universal Service Fund to upgrade from copper to fiber rather than upgrade DSL. Next-generation PON electronics are still waiting for one big ISP to buy enough gear to lower prices.

Widespread 5G. It’s not hard to understand why this would have been believed in 2014 since the big carriers were already in hype mode even then. One prediction was that as many as 60% of cellphones would be 5G by 2020. There were several predictions that 5G was going to enable autonomous vehicles and that building fiber along highways would be routine by 2020. There was a prediction that we’d see small cells everywhere, with deployments every 3,000 feet.

The timing of 5G is far behind those predictions. I see where Cisco recently estimated that only 3% of cellphones worldwide would be 5G enabled by 2022. Most experts today believe that the cellular networks will still predominantly rely on 4G LTE even a decade from today. The idea of building a cellular network for autonomous vehicles died – it was always hard to imagine the revenue stream that would have supported that network. We may still get to a dense small cell network someday, but calling for a small cell every 3,000 feet still sounds incredibly aggressive even decades from now.

IoT and LPWAN. There was a prediction that by 2020 that we’d have deployed low bandwidth networks using 900 MHz spectrum that would connect to huge numbers of outdoor IoT sensors. The prediction was that there is a huge revenue opportunity to charge $1 monthly for each sensor. There are still those calling for these networks today, but it’s still not getting any widespread traction.

Widespread Adoption of Augmented and Virtual Reality. Those technologies were on everybody’s future list in 2014. Oculus Rift was the leader in developing virtual reality and Magic Leap had raised several rounds of funding to develop augmented reality. There is now a sizable gaming deployment of virtual reality, but virtual reality has not yet touched the average person or moved beyond gaming. Magic Leap finally started selling a developer headset at the end of last year.

We Should Be Overrun by Now with Robots and Drones. In 2014 there was a prediction of robots everywhere by 2020. New factories are manned today by robots, but robots are still news when they are used in a public-facing function. A few hotels are trying out a robot concierge. There are a few automated fast food restaurants. There are a few hospitals with robots that transport meals and medicines. Robots deliver take-out food in a few city centers and university towns.

Drones are quietly being used for functions like mapping and inspecting storm damage. Flying small drones is now a popular hobby. Amazon keeps experimenting with drone delivery of packages but it’s still in the trial stage. Commercial use of drones is still in its infancy.

Use of Data. My favorite prediction was that by 2020 we’d have software systems that can deliver data at the right place, at the right time, to the right person, on the right device. This harkens back to the old AT&T promise that someday we’d be able to watch any movie we wanted, the minute we wanted. To some degree that old promise came to pass, although it was implemented by somebody other than AT&T.

Some businesses are meeting parts of this prediction today. These are custom platforms that send trouble tickets to technicians, notify employees to connect a new customer, automate ordering of inventory, etc. However, nothing close to that promise has yet made it into our everyday lives. In fact, except for Candy Crush most of us probably still have the same apps on our smartphones we used in 2014. Many of us are still waiting for the digital assistant we were first promised a decade ago.

Got Some Things Right. It’s easy to pick on predictions that never came to pass and I’ve made plenty of those myself. There was some great prediction in 2014. One presenter said we’d continue to see the explosive growth of residential data usage, that would continue to grow at 24% per year – that’s still a dead-on prediction. There was a prediction that businesses would migrate employees to mobile devices and it is routine today to see employees in all sorts of businesses operating from a tablet. There was a prediction of explosive growth of machine-to-machine data traffic, and today this one of the areas fastest traffic growth.

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Uncategorized

City Authority in Rights-of-Way

The California Supreme Court just joined the fray in the battle over the placement of small cells and other wireless equipment in public rights-of-ways. Currently, there are numerous lawsuits challenging the FCC ruling that wireless carriers can put their devices anywhere in the public rights-of-way. The California lawsuit preceded that order and was asking if a City has the right to dictate the appearance of wireless electronics.

We’ve recently seen wireless carriers hanging some fairly hideous devices on poles. The FCC order allows them to hang devices as large as 28 cubic feet, and that’s large enough to hang devices that sprawl across the sightlines on poles. Cities look at some of the early examples of devices on poles and are fearful of the proliferation of similar devices as each large wireless carrier and others begin hanging small cells and 5G fixed wireless loop devices.

The original suit came from T-Mobile that claimed that San Francisco had no authority to set aesthetics requirements for wireless devices. It is an interesting challenge because government entities have been dictating aesthetics requirements for years – such as cell sites one sees all over Florida that are disguised to look like palm trees – but which never do.

My guess is that T-Mobile has been emboldened by the recent federal law that guarantees wireless carriers access to utility poles, light poles and other locations inside of public rights-of-way. The FCC order effectively tells municipalities that they can’t reject requests to place devices and I’m guessing T-Mobile hoped that meant that cities had no authority over them.

T-Mobile relied on language in section 7901 of the California public utilities code:

Telegraph or telephone corporations may construct lines of telegraph or telephone lines along and upon any public road or highway, along or across any of the waters or lands within this State, and may erect poles, posts, piers, or abutments for supporting the insulators, wires, and other necessary fixtures of their lines, in such manner and at such points as not to incommode the public use of the road or highway or interrupt the navigation of the waters. (I must admit that one of the reasons I like to read legal cases is the language used in laws. This one uses the term incommode which means to inconvenience or impede.)

T-Mobile interpreted that law to mean that they have the right to construct facilities as long as they don’t obstruct the transmission path. They further argued that San Francisco could not regulate anything that is not specifically allowed by this same language.

The courts disagreed with T-Mobile’s reading of the law. The courts said that a city has inherent local authority to determine the appropriate use of land within its jurisdiction. That authority includes the right to establish aesthetic conditions for land use. The Court said the case boiled down to whether Section 7901 somehow divested the city of that inherent authority.

The Courts also said that T-Mobile’s interpretation of the term incommode was incorrect, in that T-Mobile thought they could hang a wireless device anywhere as long as they didn’t impede public road use or the ability of other utilities to use the poles. The Courts said that incommoded generally means inconvenience and that the city could object to a pole placement if it inconvenienced the city in other ways such as generating noise, causing negative health consequences, or creating safety concerns.

While the California ruling was very specific and ruled that the City of San Francisco could require wireless carriers to meet aesthetic requirements, the ruling and the discussion in the decision can be interpreted as being directly in opposition of the FCC order that allows wireless carriers to place small cells anywhere they want, without city interference.

Lawsuits generally rely on precedents and judges often consider rulings made in other courts on similar issues. It seems likely that this California Supreme Court ruling is going to make it into the challenges to the FCC ruling that preempted local control over small cell placement. That FCC ruling loses its teeth if cities can consider things like public safety or the safety of technicians that work on poles.

Wireless carriers are currently acting as if the FCC order is a done deal, even as it is being challenged by numerous states and cities. I’ve heard several people refer to carrier behavior as a land grab, where the carriers are grabbing connection space on poles even when they have no immediate use for them – they are getting on poles before courts might make it harder to do so. This Supreme Court ruling makes it clear that the small cell issue is far from resolved and we’re probably going to be following this in courts for at least a few more years.

Categories
The Industry

What Are Small Cells?

By far the most confusing industry term that is widely used today is ‘small cell’. I see at least a couple of different articles every day talking about some aspect of small cell deployment. What becomes quickly clear after reading a few such articles is that the small cell terminology is being used to describe a number of different technologies.

A lot of the blame for this confusion comes from the CTIA, the industry group that representing the large cellular carriers. As part of lobbying the FCC last year to get the ruling that allows the carriers to deploy devices in the public rights-of-way the CTIA constantly characterized small cell devices to be about the size of pizza boxes. In reality, there are devices that range from the size of a pizza box up to devices the size of dorm refrigerators.

There are a number of different kinds of deployments all being referred to as small cells. The term small cell brings to mind the idea of devices hung on poles that perform the same functions as the big cellular towers. Fully functional pole-mounted cellular sites are not small devices. The FCC set a limit for a pole-mounted small cell to be no larger than 28 cubic feet, and a cell tower replacement device will use most of that allotted space. Additionally, a full cell tower replacement device generally requires a sizable box of electronics and power supply that sits on the ground – often in cabinets the size of the traditional corner mailbox.

These cell-tower replacements are the devices that nobody wants in front of their house. They are large and can be an eyesore. The cabinets on the ground can block the sidewalk – although lately the carriers have been getting smarter and are putting the electronics in an underground vault. These are the big ‘small cell’ devices that are causing safety concerns for line technicians from other utilities that have to worry about working around the devices to fix storm damage.

Then there are the devices that actually are the size of pizza boxes. While they are being called small cells just like to giant boxes, I would better classify these smaller devices as cellular repeaters. These smaller devices re-originate cellular signals to boost coverage in cellular dead spots. I happen to live in a hilly city and I would love to see more of these devices. Cellular coverage here varies widely block by block according to line-of-sight to the big cellular towers. Cellular carriers can boost coverage in a neighborhood by placing one of these devices within sight of a large tower and then beaming from there to cover the dead spots.

If you look at the industry vendor web sites they claim shipment of millions of small cell sites last year. It turns out that 95% of these ‘small cell’ devices are indoor cellular boosters. Landlords deploy these in office buildings, apartment buildings and other places where cellular coverage is poor. Perhaps the best terminology to describe these devices is a cellular offload device that relieves traffic on cell sites. The indoor units use cellular frequencies to communicate with cellphones but then dump cellular data and voice traffic onto the broadband connection of the landlord. It turns out in urban downtowns that 90% plus of cellular usage is done indoors, and these devices help to meet urban demand cellular without the hassle of trying to communicate through the walls of larger buildings.

The next use of the term small cell is for the devices that Verizon recently used to test wireless broadband in a few test markets. These devices have nothing to do with cellular traffic and would best be described as wireless broadband loops. Verizon is using millimeter wave spectrum to beam broadband connections for a thousand feet or so from the pole-mounted devices.

The general public doesn’t understand the wide array of different wireless devices that are being deployed. The truly cellular devices, for now, are all 4G devices that are being used by the cellular carriers to meet the rapidly-growing demand for cellular data. The industry term for this is densification and the carriers are deploying full cell-tower substitute devices or neighborhood repeaters to try to relieve the pressure on the big cellular towers. These purely-cellular devices will eventually handle 5G when it is rolled out over the next decade.

The real confusion I see is that most people now equate ‘small cell’ with fast data. I’ve talked to several cities recently who thought that requests for small cell attachments mean they are going to get gigabit broadband. Instead, almost every request for a small cell site today is for the purpose of beefing up the 4G networks. These extra devices aren’t going to increase 4G data speeds, aren’t bringing 5G and are definitely not intended to beam broadband into people’s homes. These small cells are being deployed to divvy up the cellular traffic to relieve overloaded cellular networks.

Categories
The Industry

What’s the Future for Big Towers?

Late last year AT&T announced that is had contracted for the construction of hundreds of new big cellular towers through Tillman Infrastructure. AT&T and Verizon jointly struck a deal to build with Tillman in 2017 and by late last year some of the new towers came online. This doesn’t sound like big news because towers are built every year – but these new towers were built to directly compete with and replace existing big towers. AT&T’s announcement was a warning to existing tower owners – lower your prices or we’ll bypass you.

You can’t blame AT&T and Verizon for this because they pay some of the highest prices for any telecom products to hang radios and to bring bandwidth to big towers. To a large degree, this is a problem of their own making, and the history of big towers is a great example of economics that has gone awry.

When the two companies first got into the cellular business they mostly built their own towers. There were some tall towers in existence – some to support public safety radio networks and many more that were part of the AT&T, MCI, and Verizon microwave backbone networks. You might remember the towers with the big horn antennas. When AT&T longlines started to replace microwave backhaul with fiber in the 1980s they sold the whole tower network to a newly formed company, American Tower. American Tower went on to remove the big horn antennas and leased space back on these towers to AT&T and Verizon for cellular use.

Within a few years, both big cellular carriers agreed to lease towers almost everywhere from American Tower and a few other big tower companies. At the time, both AT&T and Verizon were spinning off huge cash from the rapidly growing cellular business and they both decided to avoid the capital costs of building towers and allowed others to invest in the key infrastructure component of cellular networks. Both carriers also made similar choices about allowing others to construct the fiber needed to connect to their cell sites. Their decision to avoid capital costs turns out to have been a giant mistake in the long run.

Today, cellular companies are feeling huge pressure from competition as the prices of cellular plans have tumbled. Had the big carriers decided years ago to own their key infrastructure – towers and fiber – they would have minimal costs for operating these assets today. Instead, they are paying ever-escalating prices for tower space and fiber transport.

AT&T is now demanding big reductions in tower space rental prices. Building the new towers is an obvious threat that the company is willing to bypass anybody who won’t cut prices. A few hundred new towers is barely a blip in the tower market, but the AT&T message is clear. Last year Verizon used the same tactic to put pressure on fiber providers to lower transport costs – at the risk of Verizon building fiber to their towers and bypassing existing fiber.

All of this is happening at a time when we’re also seeing the proliferation of small cell sites. When I look at the architecture of cellular networks, a significant number of tall towers could be replaced with a network of small cell sites. The cellular network today is really two separate networks. There is the network built to provide cellular traffic along major highways – you see these towers at every few exits along every interstate highway. These towers are not likely to go away, and in fact, the tall towers are needed to provide coverage across large stretches of highway.

But there are a lot of cellular towers that have been built to serve where people live and work. There has been a long-standing unease in many communities about having the big towers in somebody’s back yard. Over time the cellular companies can make many of these towers obsolete as the smaller cell sites take over. (Of course, there is also now unease about having a lot of smaller towers in neighborhoods).

The big tower companies understand this transition. American Tower is leading the way in acquiring pole rights and is building electronics vaults along city streets for small cell sites to support 5G. Like other parts of the telecom market, the cell tower market segment is facing big changes. Just five years ago the big cellular carriers, the tower companies, and the fiber transport companies were all making big money from the cellular market. Today, all are feeling the pinch due to the advent of cellular price competition. It’s going to be interesting to see if AT&T and Verizon make the same choice all over again and lease small cell sites rather than building themselves.

Categories
Technology

Femtocells Instead of Small Cells?

I have just seen the future of broadband and it does not consist of building millions of small 5G cell sites on poles. CableLabs has developed a femtocell technology that might already have made the outdoor 5G small cell site technology obsolete. Femtocells have been around for many years and have been deployed in rural areas to provide a connection to the cellular network through a landline broadband connection. That need has largely evaporated due the ability to use cellphones apps to directly make WiFi calls.

The concept of a femtocell is simple – it’s a small box that uses cellular frequencies to communicate with cellular devices that then hands-off calls to a landline data connection. Functionally a femtocell is a tiny cell site that can handle a relatively small volume of cellular calls simultaneously.

According to CableLabs, deploying a femtocell inside a household is far more efficient that trying to communicate with the household from a nearby pole-mounted transmitter. Femtocells eliminate one of the biggest weaknesses of outdoor small cell sites – much of the power of 5G is lost in passing through the external walls of a home. Deploying the cellular signal from within the house means a much stronger 5G signal throughout a home, allowing for more robust 5G applications.

This creates what I think is the ultimate broadband network – one that combines the advantages of a powerful landline data pipe combined with both 5G and WiFi wireless delivery within a home. This is the vision I’ve had for over a decade as the ultimate network – big landline data pipe last mile and powerful wireless networks for connecting to devices.

It’s fairly obvious that a hybrid femtocell / WiFi network has a huge cost advantage over the deployment of outdoor small cell sites on poles. It would eliminate the need for the expensive pole-mounted transmitters – and that would eliminate the battles we’re having about the proliferation of wireless devices. It’s also more efficient to deploy a femtocell network – you would deploy only to those homes that want to the 5G features – meaning you don’t waste an expensive outdoor network to get to one or two customers. It’s not hard to picture an integrated box that has both a WiFi modem and a cellular femtocell, meaning the cost to get 5G into the home would be a relatively cheap upgrade to WiFi routers rather than deploying a whole new separate 5G network.

There are significant benefits for a home to operate both 5G and WiFi. Each standard has advantages in certain situations within the home. As much as we love WiFi, it has big inherent weaknesses.  WiFi networks bogs down, by definition, when there too many devices calling for a connection. Shuttling some devices in the home to 5G would reduce WiFi collisions and makes WiFi better.

5G also has inherent advantages. An in-home 5G network could use frequency slicing to deliver exactly the right amount of bandwidth to devices. It’s not hard to picture a network where 5G is used to communicate with cellphones and small sensors of various types while WiFi is reserved for communicating with large bandwidth devices like TVs and computers.

One huge advantage of a femtocell network is that it could be deployed anywhere. The cellular companies are likely to cherry pick the outdoor 5G network deployments only to neighborhoods where the cost of backhaul is affordable – meaning that many neighborhoods will never get 5G just like many neighborhoods in the northeast never got Verizon FiOS. You could deploy a hybrid femtocell to one customer on a block and still be profitable. Femtocells also eliminate the problems of homes that won’t have line-of-sight to a pole-mounted network.

This technology obviously favors those who have built fast broadband – that’s cable companies that have upgraded to DOCSIS 3.1 and fiber overbuilders. For those businesses this is an exciting new product and another new revenue stream to help replace shrinking cable TV and telephone networks.

One issue that would need to be solved is spectrum, since most of it is licensed to cellular companies. The big cable companies now own some spectrum, but smaller cable companies and fiber overbuilders own none. There is no particular reason why 5G inside a home couldn’t coexist with WiFi, with both using unlicensed spectrum, with some channels dedicated to each wireless technology. That would become even easier if the FCC goes through with plans to release 6 GHz spectrum as the next unlicensed band. The femtocell network could also utilize unlicensed millimeter wave frequency.

We’ll obviously continue to need outdoor cellular networks to accommodate roaming voice and data roaming, but these are already in place today. Rather than spend tens of billions to upgrade those networks for 5G data to homes, far less expensive upgrades can be made to augment those networks only where needed rather than putting multiple small cells on every city block.

It’s been my experience over forty years of watching the industry that in the long run the most efficient technology usually wins. If CableLabs develops the right home boxes for this technology, then the cable companies will be able blitz the market with 5G much faster, and for a far lower cost than Verizon or AT&T.

It would be ironic if the best 5G solution also happens to need the fastest pipe into the home. The decisions by big telcos to not deploy fiber over the last few decades might start looking like a huge tactical blunder. It looks to me like CableLabs and the cable companies might have found the winning 5G solution for residential service.

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Regulation - What is it Good For?

FCC Small Cell Order – Timelines and Fees

Yesterday’s blog looked at the preemption issues in the FCC’s new ruling concerning small cell deployment on utility poles, light poles, buildings and other infrastructure. The order is WT Docket No. 17-79; WC Docket No. 17-84 and was approved on September 27. Today I’ll look at the rest of the order concerning timeline and fees.

The new rules establish a ‘shot clock’ for the local review of small cell deployments. The FCC established similar shot clocks in 2009 for the deployment of the traditional cell tower deployments. They said then that localities had to review an application for collocating cellular infrastructure within 90 days and gave localities 150 days to review an application for placing a new cellular tower. Cities were free to reject requests if an application failed to meet local regulations and the shot clock defined the time during which a locality had to provide a response to a cellular carrier.

The FCC just set a shorter shot clock for small cell deployment, and localities now have 60 days to process an application for collocation of small cell equipment on a facility that already has similar infrastructure and 90 days to review an application for a new placement. Interestingly, in the case of small cells, those time lines are likely reversed. Cities probably have more concerns about placing multiple small cells on the same pole, yet that situation has the shortest time frame for review.

Numerous cities intervened in the docket and argued that small cell devices are not necessarily ‘small’. While many devices are the size of a pizza box (the example used by the FCC), there have been requests to place cabinets nearly the size of refrigerators on poles. The FCC resolved these issues by defining devices covered by the new rules as ‘Small Wireless Facility’ that must meet the following parameters: the pole or structure can’t be greater than 50 feet tall; the small cell device can’t add more than 10% to the height of an existing structure; the equipment can’t be larger than 28 cubic feet (excluding antennas) and an antenna can’t be more than 3 cubic feet. This limits the devices to boxes that are just a hair larger than a 3 X 3 X 3 foot cube.

The FCC also suggested limits on the fees that a city can charge for access to rights-of-way. They suggest application fees be no more than $500 per application that can include up to five small cell devices, with an additional $100 per small cell after five. The FCC also suggested a fee limit of $270 per year per small cell to cover any recurring fees including rights-of-way. The new rules say that carriers can’t challenge rates at or below these suggested limits.

The FCC new rules would allow a city to charge fees greater than these suggested limits. However, this adds a burden on the city to demonstrate that the costs are reasonable and are a reasonable approximation of actual costs. The FCC says that it would expect only ‘limited circumstances’ under which a city could charge higher rules. Many cities filed in the docket that their costs to review an application is far greater than $100 per site since they usually do a field visit for each proposed site and often hire wireless engineers to make the review.

Many municipalities in the docket cited costs higher than these FCC limits and these low fee levels are why some are calling this a multi-billion dollar giveaway to the cellular carriers. They not only get small cells deployed more quickly, but they are paying a lot less for the applications and rights-of-way fees.

It’s clear that this docket gives 5G and other small cell providers everything on their wish list. It’s been rare in the past to see FCC orders that are so blatantly in favor of one side of an issue. As a regulator the FCC is supposed to weigh the views and needs of everyone involved in a given issue and try to compromise on common ground. However, this order is entirely one-sided in favor of wireless carriers.

Nobody doubts that 5G is an interesting new technology that will bring benefits to many. However, the recently announced Verizon 5G deployments are talking about bringing broadband speeds in the range of 200-300 Mbps. Everything I read predicts that the 5G improvements to cellular speeds will be incremental over a decade and bring speeds as fast as 100 Mbps for those in areas with multiple small cells. It’s clearly unprecedented for the FCC to come out so heavily in favor of a technology before it’s even been proven in field deployment. It’s still unusual for the FCC to protect a specific technology and it would still be nice to see them make it easier to deploy fiber.

The FCC has taken sides to protect new industries before, just not so early in the game. There were rules that fostered the deployment of cable TV, of cellphone and of landline broadband – but these rules generally were issued when it became clear that the new industry needed market protections to grow and thrive. I guess it’s due to the heavy lobbying that declares that 5G will solve all of our broadband problems – but we’re too early into the new technology to know yet if that’s true.

Categories
Regulation - What is it Good For?

FCC Small Cell Order – Preemption

On September 27 the FCC adopted new rules that apply to the deployment of small cells on utility poles, light poles, buildings and other infrastructure. The order largely preempts state and local authority and today’s blog will focus on the preemption issue.

The orders are in WT Docket No. 17-79; WC Docket No. 17-84 and comes in two parts. First is a Declaratory Ruling where the FCC examines and then claims authority to override local and state regulations on small cell deployment issues. The second portion of the order is a Third Report and Order that sets a new ‘shot clock’ for processing small cell applications and which sets caps on local fees for connecting small cell sites.

FCC orders often conflict with state and local regulations and the FCC always has to decide the extent to which they are willing to override state and local regulations. This is a particularly touchy topic for anything to do with pole attachments and rights-of-ways because the Telecommunications Act of 1996 explicitly gave states the right to establish their own rules governing pole attachments. Since that order 22 states have elected to establish their own rules for connecting to poles while the remaining states follow the FCC pole attachment rules. However, it’s never been clear to what extent the 1996 Act gave any rights to cities.

With that said, states are generally not allowed to establish rules that conflict with the intent of FCC rules. For example, the 1996 Act gave the rights for carriers to gain access to poles, ducts and conduits, but state regulation can’t get rid of that right. State pole attachment rules generally clarify the specific application of the FCC rules and in some cases are more stringent than the FCC rules. For examples, there are states that have shorter time lines for attaching fiber to poles than the FCC rules.

This particular order has more than the usual share of legalese, but my interpretation of this order is that it applies everywhere and that the FCC has largely preempted all state and local regulations related to small cells. For example, the order presumes that any local regulation that would cause a delay in new FCC’s expected timelines would constitute an ‘effective prohibition of service”. The FCC says explicitly that delays cause by any “state or local regulation of wireless infrastructure deployment constitutes an effective prohibition of service prohibited by Sections 253 or 332(c)(7) of the Communications Act.

In regulatory terms that’s strong language – for example, the order says that states can have rules covering issues like aesthetics or the undergrounding of utilities, but any such rules cannot delay the FCC timelines. That’s important because it provides a way for carriers to get a court injunction against any city that delays the small cell deployment process for any reason. I’ve read the order several times and my interpretation is that it’s nearly impossible for a municipality to say no to a small cell request. It looks like cities must meet the FCC timelines without exception or delay.

There was a concern by many cities that the FCC was going to end the municipal exemption for pole attachments that has excused municipally-owned poles from FCC pole attachment rules. The order doesn’t address that issue, so it doesn’t appear that these new rules would apply to utility poles owned by a municipal utility. It’s less clear to me if this order applies to light poles or other structures that don’t connect to wires. (See the first comment below – the FCC took the position in a footnote that the order applies to all municipally-owned assets in the public ROW, but is not so clear on assets outside the ROW).

There is also a practical issue that I don’t see addressed in the order. Not all parts of a small cell deployments are in the air and there can be cabinets and other devices at street level used to power the small cells. Since cities are not allowed to cause the delay of small cell deployment, that logically would preclude local that slow the ground-based part of such deployments. That is an expansion of FCC jurisdiction – they’ve never exerted jurisdiction over the placement of cabinets since those rules consider numerous local issues like safety, handicapped access and aesthetics.

This order is clearly tilted in favor of small cell carriers. The wording of the order reads like the industry wish list and even has some language suggested by the wireless carriers. The carriers want to be able to deploy small cells anywhere quickly, at a low cost, and this order grants them that right. I’ve seen articles that claim this is a billion-dollar giveaway to the carriers.

Since this order preempts local and state pole attachment authority I would expect a flood of lawsuits challenging the order. In this industry the best regulations have always been the ones that balance the needs of all parties. There are clearly local concerns about the proliferation of small cell devices and this ruling is deaf to local concerns. Interestingly the cellular carriers and a number of big cities have already negotiated solutions to deploying small cells – and in every case this ruling is more severe than arrangements the carriers have willingly agreed to. That is the best evidence that this order has gone too far in the favor of the carriers.

Categories
Regulation - What is it Good For?

Are There Any Level Playing Fields?

If you follow regulatory filings, one of the most common arguments you will encounter from the big ISPs is the concept of a level playing field. The idea behind the level playing field is that every competitor in the industry should be working from the same set of rules and nobody should have a market advantage due to regulatory rules. AT&T and Verizon have both rolled out the argument many times when arguing to tighten rules against potential competitors.

There are several good examples of the level playing field argument anywhere that the big ISPs fight to keep municipal entities from building fiber networks. They argue, for example, that municipal entities have an unfair market advantage because they don’t pay state and federal income taxes. But this argument falls apart quickly under examination. First, many municipal ventures such as electric or broadband entities pay in lieu of taxes. This is a tax-like fee that the local government charge to a municipal business. While it’s not really a tax, the fees ac like taxes and can be substantial.

Even more importantly, I can remember many years when AT&T or Verizon made the news due to paying no federal income taxes. Big corporations have numerous tax shelters that allow them to shield income from taxes, and the telcos have gotten numerous favorable rules into the tax code to allow them to walk away from most of their expected tax obligations. You can’t really fault a big corporation for legally avoiding taxes (unless you fault them for the lobbying that slanted the tax codes in their favor to begin with). It’s dishonest for these big ISPs to claim that a municipality has an advantage due to their tax-free status when they pay little or no taxes themselves. Under deeper examination, a municipal fiber venture paying 5% of revenues for in lieu of taxes is often paying a larger percentage of taxes than the big ISPs.

The big ISPs also claim that municipalities have an unfair advantage due to being able to finance fiber networks with municipal bonds. While it’s true that bonds often have a lower interest rate, I have compared bond and bank financing side-by-side many times and for various reasons that are too long to discuss in a blog, bond financing is usually more expensive than commercial loans. It’s also incredibly difficult for a municipality to walk away from a bond obligation while we have numerous examples, such as the Charter bankruptcy a few years back that let a big ISP walk away from repaying the debt used to build their networks.

The big ISPs don’t only use this argument against municipal competitors. AT&T is using the argument as a way to justify hanging 5G wireless devices on poles everywhere. They think there should be a level playing field for pole access, although at this early stage they are one of the few companies looking to deploy 5G small cells. Interestingly, while AT&T wants the right to easy and cheap pole access everywhere, in those places where they own the poles they fight vigorously to keep competitors from getting access. They effectively stopped Google Fiber plans to build in Silicon Valley by denying them access to AT&T poles.

Every time I hear the level playing field argument my first thought is that I would love it if we really had a level playing field. I look at the way that the current FCC is handing the big ISPs their wish list of regulatory rule changes and wish that my clients could get the same kind of favorable regulatory treatment.

A good case in point is again the 5G small cell deployment issue. The FCC has already said that they are in favor of making it cheap and easy for wireless carriers to deploy 5G cell sites. It seems likely that the FCC is going to pass rules to promote 5G deployments unless Congress beats them to the punch. Yet these regulatory efforts to make it easier to deploy 5G conveniently are not asking to make it easier to deploy fiber. If things go in favor of the big ISPs they will have a market advantage where it’s easier to deploy last mile 5G instead of last mile fiber. This will give them a speed-to-market advantage that will let them try to squash anybody trying to compete against them with a FTTP network.

The FCC is supposedly pro-competition, and so if we really had a level playing field they would be passing rules to make it easier to deploy all broadband technologies. They have had decades to fix the pole attachment issues for fiber deployment and have not done so. But now they are in a rush to allow for 5G deployments, giving 5G ISPs a market advantage over other technologies. The consequences for this will be less competition, not more, because we’ve already seen how AT&T and Verizon don’t really compete with the cable companies. In markets where we have both Verizon FiOS and Comcast cable networks both companies charge high prices and are happy with high-margin duopoly competition. There is no reason to think these big ISPs won’t do the same with 5G.

I look around and I don’t see any level playing fields – particularly not any that give small competitors any advantages over the big ISPs. I do, however, so scads of regulatory rules that provide unequal protection for the big ISPs, and with the current FCC that list of advantages is expanding quickly. The big ISPs don’t really want a level playing field because they don’t want actual competition. There are many reasons why other countries have far more last-mile fiber deployed than the US – but one of the biggest reasons are regulatory rules here that protect the big ISPs.

Categories
The Industry

The Vision of Next Century Cities

Next Century Cities is an organization comprised of 166 mayors of cities that have the mission statement to make sure that all of their citizens have access to fast, affordable and reliable Internet access. The members range from small towns to NFL cities. They recently published their 2017 Policy Agenda that highlights the issues that they think are the biggest impediments to meeting their broadband goals. These goals are worth some thought since they differ from the wish list of most other stakeholders in the industry.

Restore Local Authority. Cities want to have a hand in finding their own broadband solutions and they don’t want to be restricted by state or federal law from doing so. I would note that the vast majority of cities do not want to be a retail ISP, but they still want to have the ability to make the investments needed to meet their broadband goals. They want to be able to form meaningful public-private partnerships. And more than anything else they want the legal authority to find broadband solutions.

Competition in Multi-Dwelling Units (MDUs). Cities with any significant percentage of citizens living in MDUs are concerned that those citizens are often not getting the same quality broadband products or having the same array of choice as single family homes. For example, even where fiber has been built, overbuilders often skip MDUs that present construction or operational issues. Cities are also still concerned about the proliferation of exclusive contracts between MDU owners and ISPs.

Anti-Monopoly and Competition. Mayors are concerned by what they see as shrinking competition. In many cities the cable companies have won the broadband battle against the telco. Where there are no significant third-party fiber overbuilders the mayors see broadband becoming a monopoly product. The cities generally are against the mergers of gigantic ISPs.

High-Quality Low-Income Internet Access. Cities are still looking for ways to solve the digital divide. They understand that there is a significant percentage of the population that doesn’t have broadband because they can’t afford it. They are currently dismayed by what they perceive as the FCC walking away from the Lifeline program that can subsidize broadband service in low income households.

Small Cell/5G/DAS. Cities are grappling with how to best foster and physically accommodate the coming proliferation of wireless transmitters that will be spread through the community to distribute 5G and millimeter wave spectrum. They are anticipating a host of new wireless broadband products, but they have concerns about how to deal with numerous wireless providers wanting to utilize the same key locations.

One Touch Make Ready. Cities are in favor of regulatory changes that make it easier for fiber overbuilders to get onto poles or into existing conduits. The ‘one touch make ready’ concept would greatly speed up the process and reduce the costs of the pole attachment process. It would give a new fiber builder the ability to more easily move wires of existing carriers to speed up the construction process. In cities with numerous existing carriers on pole lines the cost and time involved in gaining approval and of implementing the changes needed to accommodate a new carrier can be numbingly slow.

Infrastructure Investment. Cities want to be included in broadband infrastructure spending that might come from any federal infrastructure plan. They fear that any broadband money will be aimed only at rural areas and the FCC still estimates that there are more than 10 million people in large urban areas that can’t buy bandwidth that meets the FCC’s 25/3 Mbps threshold. And while smaller rural towns and cities might have broadband that meets that test, they often have older networks that are far below the standards of metropolitan areas.

Summary. Of all of the various stakeholder groups involved in broadband infrastructure deployment, cities the most focus on getting quality broadband to everybody. That focus puts them into opposition with incumbent ISPs on some issues. Experience shows us that cities are often more aligned with new overbuilders, at least to the extent that those ISPs don’t want to only cherry-pick the most lucrative customers in the city. Because of various state restrictions, cities vary widely in how much influence they have over broadband. But cities everywhere are the ones that determine some of the key processes in broadband deployment such as permitting and local construction practices. And that means that their goals must be recognized by anybody wanting to deploy new broadband in cities.

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