Planning/zoning regulations have been the cause of many delays in deployment of urban small cells in many parts of the US. Activity at state and federal levels is causing strong debate which is leading towards new Federal legislation.
Californian Small Cell legislation vetoed in the final stage
A few weeks ago, Californian Governor Jerry Brown vetoed a bill that would have streamlined planning consent for urban small cells. The bill, SB-649, would have given similar rights to wireless companies as those for public utilities. In many other countries, this is already the case with “de-minimus” rules permitting installation of less obtrusive/smaller equipment and antenna.
There was strong opposition to the bill including from more than 300 cities and 47 counties. This local newspaper editorial argued that telecoms companies are “rolling in money” unlike nearly all California cities. Senator Ben Hueso who proposed the bill argues strongly for approval in the Sacramento Bee, citing high rental fees for utility poles being sought by some jurisdictions.
Senator Hueso might have singled out San Jose Mayor Sam Liccardo, labelled as “The Mayor From Hell” by analyst John Strand. In a brutal and scathing article, John contrasts the deal with Facebook to deploy Terragraph network on city poles for free with the exorbitant rates to mount small cells in similar locations. Despite a median house price of $1 million and average income of $77,000, the city ranks #131 in the world list of Smart Cities alongside Costa Rica. John argues the policy will affect the disadvantaged more because they are more reliant on wireless only communication. Mayor Liccardo indicates in the New York Times that revenues would be used to fund better broadband access for low income neighbourhoods.
There are some justified concerns. Earlier this year, we reported how one Californian city planner has highlighted abuse of the existing rules, sharing photos of some pretty ugly and inappropriate installations.
Small Cells can be interpreted to mean anything from a street-side cabinet and antenna pole to a much more discrete remote antenna served by hidden equipment. They can also be mounted in canisters hung from existing utility wiring above the streets.
Amongst all the noise and angry debate, the specific constraints aren’t being clearly highlighted.
Sorting out the mess at national level
The FCC’s newest commissioner, Brendan Carr, has been appointed to take the lead on wireless infrastructure including small cells. Commenting at the CCA trade show, he wants to speed up the deployment timeline and cost of regulatory approval. He views the California Governor’s decision as increased justification for the FCC to take direct action.
His boss, FCC Chairman Amjit Pai, speaking at MWC Americas in September said he wanted the regulatory burden to be proportional to the equipment size. He clearly wants to encourage small cell rollout to help prioritise US leadership in 5G which would require quite a lot of them. He notes that 12 states already have small cells legislation.
Not only for existing cellular networks
Cable TV companies such as Charter Communications are also looking to roll out small cells. Craig Cowden, SVP of wireless technology at Charter explained how they are already trialling eight vendors in two cities using the new CBRS 3.5GHz band. With street assets of their own, they may be quite well positioned to exploit the situation.
How these rules will apply for Wi-Fi municipal networks, or FaceBook’s Terragraph mentioned above, remain to be seen. It would seem churlish to have one rule for one RF technology and another for a different modulation technique.
Tower companies have diverse views and strategies
Crown Castle, a major cell tower owner, with around 40,000 of the nation’s 150,000 footprint is already operating 50,000 small cells. Their latest earnings call included a bright prediction for 2018, boosting small cell leasing revenue from $40 million to $55 million accompanied by further increases in fibre backhaul revenues.
American Tower seems to be much less bullish in the opportunity, not expecting small cells to displace existing towers despite growing pressure on tower rental prices. Vertix Consulting reported last year that the company sees more potential for in-building and in opportunities overseas.
SBA, the third major tower company, actively walked away by divesting their stake in ExteNet Systems in 2015 – the second largest small cell and DAS operator with over 10,000 nodes deployed or under construction. Perhaps the high price offered (giving them 300% return on investment) might have been a factor. Nonetheless, SBA’s President and CEO stated that his view of small cells was improving, and that small cells are going to be a permanent part of the network architecture going forward.
Other organisations getting involved
The Small Cell Forum, 5G Americas and TIA issued a joint press release denigrating the Californian Governor's veto.
While the CTIA doesn't appear to have publicly commented, their SVP for Government Affairs Kelly Cole did applaud the publication of a draft bill in the US Senate introduced by John Thune and Brian Shatz intended to streamline the infrastructure permits process nationwide. The proposal is still a discussion draft and has yet to be formally introduced for discussion, with no timeline for completion. The CTIA believe that "By modernizing how wireless networks are deployed, this draft bill would help enable the wireless industry to invest hundreds of billions of dollars to win the global race to 5G."
Conference organiser Avren is also targetting the controversy, hosting topical debate at the upcoming SCWS Americas event in San Jose including several speakers from Californian cities.
Heady political activity in the US around planning rules should be resolved within the next few quarters, probably through by intervention from the FCC.
The “shot clock” by which planning applications are automatically approved if not dealt with fully within the set time has already accelerated deployment in many cities. Further regulatory relaxation can only help, provided there is still some semblance of protection against the more ugly and inappropriate deployments.
Pricing for site rental will be a more contentious issue, with city budgets keen to maximise extra revenue.
The outcome will be viewed with interest from other countries, where a wide range of restrictive vs open practices prevail. Given that many of urban small cells would be deployed in the busier and wealthier city locations, I can see these won’t be easy or straightforward regulations to agree.