How Will Small Cell Regulations Impact 5G Deployment?

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Cell phones have come a long way over the past 35 years. America’s first commercial mobile phone, the 1983 Motorola DynaTAC 8000X, was over a foot long, cost $4,000, and only made calls over first-generation (1G) analog wireless networks.

Today, consumers can use their phones to access the internet, stream TV shows, connect Bluetooth accessories, and download mobile applications. These advancements rely on more recent generations of wireless networks like 3G and 4G, which replaced analog radio signals with digital radio and have a higher capacity to transmit data.

The next wireless generation, 5G, is projected to enable record-high mobile speeds and integrate even more objects with the internet. 5G could affect virtually every industry because emerging technologies such as Internet of Things (IoT) devices, virtual reality, and autonomous vehicles will depend on 5G networks. Some analysts even say that the potential for these technologies to transform human lives and global economies could result in the “Fourth Industrial Revolution.” The 5G transition will require a major investment in network infrastructure, as the networks will use new “small cells” mounted on poles or buildings every 300 to 500 feet. This is because 5G networks will utilize high frequency cell signals (between 24 and 71 GHz), which can only travel short distances. In comparison, contemporary 3G and 4G networks use signals on low- and mid-band spectrum (around 600 MHz to 6 GHz). These signals can travel up to several miles and use large cell towers, or “macro cells.”

Despite the possibilities of 5G, deployment of the new small cell infrastructure is a point of contention among federal and local officials. Historically, wireless carriers needed to submit local applications to install small cells, and local officials could choose when to respond to applications, how much to charge providers per small cell, and what, if any, aesthetic requirements to impose. For example, San Francisco recently charged wireless carriers approximately $4,000 annually per small cell. Therefore, to deploy enough small cells to cover the 0.6 square mile neighborhood of South of Market, a company might have paid over $1 million per year.

All this changed last September, however, when the Federal Communications Commission (FCC) voted to enact the Accelerating Wireless and Wireline Broadband Deployment Order. The declaratory ruling, which came into effect today, now requires cities to respond to applications within 60 to 90 days and charge no more than $270 per small cell per year (excluding one-time fees). All five commissioners voted in support, although Commissioner Jessica Rosenworcel dissented in part. In her part-dissent, Commissioner Rosenworcel stated that the ruling was “federal overreach” and a “federal invasion of local authority.” Arguing in favor of passage, however, Chairman Ajit Pai wrote that the United States “will never realize the 5G future” if it did not update regulations.

Like Chairman Pai, some federal lawmakers have supported similar efforts to spur 5G deployment. In June 2018, Senators John Thune (R-SD) and Brian Schatz (D-HI) introduced legislation to address the length of application review periods, which can average 18 to 24 months, and to limit the size of small cell fees. Their bipartisan bill, the STREAMLINE Small Cell Deployment Act, would have only authorized local governments to set fees “based on actual and direct costs” of small cell deployment. Additionally, their bill would have required local governments to respond to applications within a “reasonable period of time” and have automatically granted applications that did not receive a response within 91 to 181 days. While their bill did not move in the 115th Congress, the senators are likely to reintroduce it in the new Congress.

Like Commissioner Rosenworcel, some local government officials have opposed federal oversight of small cell regulations. For example, Los Angeles Mayor Eric Garcetti said that the FCC’s order would affect cities’ abilities to negotiate deals with wireless carriers and jeopardize any agreements already in place. Los Angeles joined 19 other municipalities in a petition to the Ninth Circuit Court of Appeals. While the FCC’s declaratory order came into effect today, the Ninth Circuit is set to review their appeal, as well as several other affiliated lawsuits, in the near future.

Although the outcome of the Ninth Circuit’s decision remains to be seen, two things are certain: multiple players are making 5G plans in 2019, and understanding small cell regulations will become essential.

To learn more about 5G and telecommunications policy, download our 5G primer.

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