Feds Get Involved In Broadband Rollout Rules

This week’s Courier Herald column:

When the gavel fell in March on this year’s session of the Georgia General Assembly, the focus was on the list of accomplishments that had been completed. Income tax cuts, a transit governance bill, and a major overhaul of Georgia’s adoption laws headlined the achievements. Left on the desks of legislators, however, was a bill to standardize and streamline the local permitting process for broadband deployments across the state.

The resistance was from local governments and the organizations that represent cities and counties at the state capitol. They remain conflicted over the clear need to upgrade broadband and wireless infrastructure and last century’s municipal financing model where cable franchise fees and permits for infrastructure projects finance a material portion of local government operations. Thus, the “local control” argument effectively killed the measure for the year.

As is often the case, when a problem is known but ignored, the federal government gets involved. Last week, the Federal Communications Commission proposed a rule that would cover much of the same ground that the legislature considered earlier in the year with respect to “small cell” wireless infrastructure.

The proposed order would cap the amount of time local governments to consider permits to 90 days for new deployments, or 60 days if the small cell is attached to existing infrastructure. It caps the permit fees to $500 for up to five sites, and $100 for each additional site. It mandates that recurring fees for “use of right of way” be similar to other uses (i.e, that of the electric grid which is significantly lower in most areas than current cable or broadband operators pay). It further restricts the burdens local governments can establish for aesthetic reasons.

According to the FCC’s press release upon proposing the order, the new regulations would save $2 Billion in “unnecessary costs” and stimulate $2.4 Billion in additional broadband investment. Local governments, the largest beneficiary of those “unnecessary” costs, are likely to sue to stop the measure should it receive approval at the FCC’s September 26th meeting.

The availability and reliability of broadband is a major factor in economic development decisions. The state continues to grapple with ways to incentivize additional infrastructure investment while avoiding a TVA style state-owned monopoly that would likely end up suppressing cutting edge technological deployments over the long run.

Small Cells are integral to broadband providers’ planned rollout of fifth generation or 5G wireless. 5G is expected to deliver the speed and reliability of current wired broadband services over a wireless network. While initially expected in more urban and suburban deployments, the technology has the potential to aid in the delivery of broadband in more rural areas where population density doesn’t allow for comprehensive wired broadband infrastructure.

Georgia doesn’t have to wait for the federal government to act or to guess how a court may eventually rule on these measures. 21 states have already adopted similar measures, which the FCC used to pattern the proposed rule after.

Georgia consumers weighing the measure need to understand that broadband services are not regulated monopolies that operate like electric companies. They are competitive for-profit companies that must deliver a return to shareholders for capital investments they choose to make.

Capital flows to projects where there is the most certainty and the investors know the likely return on their investment. To this end, Georgia is already behind 21 other states that have brought certainty to the Small Cell rollout for 5G.

As a state that has already become the “Silicon Valley of the South” and yet also contains significant broadband deserts, Georgia cannot afford to fall behind on the rollout of the next generation of broadband. Our urban areas need to remain at the cutting edge, and we need to ensure that our rural areas catch up – quickly.

One of the easiest ways to move in the right direction is to adopt measures similar to the states that have already done so. Yes, there will be a financial consequence to local governments – one that will happen eventually as legacy cable systems become obsolete.

A much greater cost, however, is in not having current generation internet connectivity. The state, and the local governments that are blocking the upgrades, need to decide if they want to pay a small price now, or a much greater one if Georgia allows itself to be left behind.