“Radical agreement” that small cell rates should be set at market rates was voiced on a panel at the AGL Local Summit in Kansas City last week, according to moderator Bryan Tramont, managing partner, Wilkinson Barker Knauer.
The FCC’s Declaratory Ruling made the case that small cell fees must represent a municipalities’ “reasonable costs” or they could be construed as an “effective prohibition” of the wireless service.
Not surprisingly, the panelist representing the government side, Jonathan Kramer, principal attorney, Telecom Law Firm, voiced his beliefs that the FCC had erred last week in its fee ruling. He said municipalities serve two different roles when it comes to charging fees. Charging an application fee reflects its government role, which covers the cost of granting the right to build. It is not a profit center. However, fees related to its proprietary role in the ownership of facilities in the right-of-way are set at a market-based rate.
“The FCC has created an unlevel playing field,” Kramer said. “One that is tilted so local governments are economically cast out of the system by setting artificially low application rates, far below the internal costs to process and attachment rates that are a giveaway to the industry. It subsidizes the shareholders not the salaries of the police and firefighters, which depend on this proprietary income.”
Robert Stapleton, CEO, National Wireless Ventures, said an article that ran in the Philadelphia Enquirer claims that the FCC is forcing cities and municipalities to subsidize 5G. “That is going to be part of the argument,” he said.
Dan Marinberg, senior VP and general counsel, Vertical Bridge, said that the right of way is a municipality’s largest asset and it would normally charge market rates for access to enterprises. He also didn’t seem to buy the “prohibition of service” claim by the FCC.
“I can understand the need to streamline and the need for municipalities to be reasonable,” he said. “At the same time, there is always the option of going somewhere else. There is private land, rooftops. You don’t have to be in the rights of way.”
In the interview between Tramont and Jason Caliento, Mobilitie, which occurred before this panel, Caliento noted with pride that the FCC adopted what Mobilitie proposed in its petition back in 2016 in terms of the fees and the clock. But he favored compromise over litigation as the process moves forward.
“I think the compromises they make around the fees make perfect sense,” Caliento said. “We need to stay engaged with the cities and continue to compromise so that no one feels that it went too far one way or the other.”
Panelists were also unified that the Declaratory Ruling on fees and the 3rdR&O on shot clocks would end up in court.
“We are in for a pretty big battle between municipalities and the federal government,” said Marinberg. “No one is going to be an outright winner. There is going to be a compromise. Definitely going to be litigation over rates charged for small cells.
Stapleton said there is precedent for the FCC’s actions. He compared them to the Railroad Act of 1862 when the government granted right of way for the first transcontinental railroad. But he noted that the City of Chicago, which is getting $1,900 a pole, has already bowed out of state legislation (HB 1461) that would have limited fees to $275 a month.
“There will be litigation from local municipalities and from states,” Stapleton said. “A lot of people believe that this ruling is really stepping on the health, safety and welfare of citizens, the municipalities’ ability to zone and the ability to control what is going into the community.”
Kramer noted that the FCC separated its fee decision in a Declaratory Ruling from the rest of the small cell streamlining 3rdR&O, because it is more “fragile in terms of court review.”
That fragility Kramer mentions may lie in the fact that several appellate courts have disagreed on the limits that Congress imposed on state and local governments through Sections 253 and 332 of the Communications Act.
“The Commission will be hard-pressed to show that they actually have legitimate independent expertise to essentially counter congressional intent and over two decades of real world experience,” he told AGL eDigest in an interview after the session.
Tony Peduto, CEO, CTI Towers, said the carriers’ small cell cause is harmed by a lack of transparency on their deployment plans. “What do the carriers actually want? None of them have come together and said we want small cells. We want the same design and same technology, and, therefore, we can make it work,” Peduto said. “When you are relying on third party providers, which they would rather not, you get aesthetically pleasing light poles in the downtown areas and antennas on top of telephone poles everywhere else. What does everyone want?”
Kramer agreed, saying that the municipalities are looking for the carriers to provide a clear plan on their small cell rollouts.
“We don’t want 100,000 ‘on pox-on a pole’ for sites, and that’s what we are seeing. We are seeing irrational designs. Locations that are problematic. Mid-block sites, sites especially are problematic, he said. “With a million new sites coming in the next few years, it gives up pause. The key for municipalities is taking advantage of existing verticality, whether it is a utility pole, a light standard or a traffic signal.”