Sprint, Mobilitie to pay $11.6M fine for noncompliant small cell installations

The FCC today announced that Sprint and Mobilitie agreed to jointly pay an $11.6 million fine because the companies did not obtain the proper permits to build small cells. Specifically, Sprint said it will pay $10 million and Mobilitie, one of the company’s small cell vendors, said it will pay $1.6 million.

The companies also agreed to “enhancing their environmental and historic preservation review compliance procedures going forward.”

In its order on the topic (the full order for both companies is available below) the FCC explained that, in 2014, Sprint embarked on a major small cell deployment strategy as part of the carrier’s effort to improve its LTE network and pave the way toward 5G. The FCC said Sprint contracted with Mobilite to build out small cells in locations across the country.

However, the FCC said it opened an investigation into Sprint’s build-out “in response to a report that Sprint allowed the third-party vendor [Mobilitie] to construct certain wireless facilities without securing pre-build pre-requisites, in an apparent attempt to expedite deployment,” the FCC said.

The agency added that, starting a year ago, it began discussions with Sprint and Mobilitie on the topic.

RELATED: Sprint faces questions on Mobilitie's small cell rollout efforts, handset write-off costs

“Our Investigation revealed that the parties’ agreement made the third party responsible for all regulatory compliance regarding its poles and attachment rights, including compliance with the Environmental Rules,” the FCC said. “Our Investigation also found that for certain installations, all required environmental and historic preservation reviews were not completed prior to starting construction.”

As part of their settlement in the matter, Sprint in part agreed to “enhance its environmental and historic property review compliance procedures by reviewing and updating, as necessary, its existing compliance guidelines, by training all current and new Covered Employees on the current requirements, by requiring Covered Employees to report to management instances of noncompliance with the Environmental Rules, and by self-reporting any apparent violations to the Bureau until the end of the compliance period.”

A Sprint representative confirmed to FierceWireless that Sprint currently works with many small cell vendors including Mobilitie. "We agreed to settle an investigation into a Sprint trial designed to speed small cell deployment," Sprint's Lisa Belot wrote. "During the trial period, some small cells were constructed before all reviews were completed. Sprint and its vendor, however, did obtain required permits from local authorities and paid all fees associated with environmental and historic reviews. We take compliance obligations seriously and will ensure that facilities are constructed only after appropriate permitting and review are completed. Toward this end, we appreciate the FCC’s most recent orders which clarify and streamline the complex small cell siting process."

For its part, Mobilitie said it will work to comply with the FCC's rules. "Mobilitie has been, and always will be, dedicated to regulatory compliance. Our agreement with the FCC demonstrates our continuing commitment to regulatory compliance, and we look forward to continuing our strong relationships with the Commission, municipalities, and other stakeholders as we bring much needed next-generation networks to the U.S.," Christos Karmis, CEO of Mobilitie, said in a statement from the company.

RELATED: Sprint executive acknowledges small cell ‘misunderstandings,’ promises expanded rollout in 2017

Today’s news is a noteworthy development considering the FCC just last month voted to relax some of the very rules that Sprint and Mobilitie sought to bypass. Passed 3-2 along party lines, the FCC voted to clarify the treatment of small cells so they’re not treated the same as macro cells.

The order also excludes small wireless facilities deployed on non-Tribal lands from National Historic Preservation Act (NHPA) and National Environmental Policy Act (NEPA) review, concluding that these facilities are not “undertakings” or “major federal actions.”

The small cell issue is key to wireless carriers in general considering that the FCC estimated that up to 80% of future wireless network deployments—whether it’s 5G or densification for 4G—are going to be small cells.

Mobilitie continues to build out small cells for various carriers. For example, the company was recently tied to a small cell installation in Sacramento.