Verizon, AT&T to other cities: Don’t use San Jose’s small cell deployment model

Verizon and AT&T quickly rejected a proposal by FCC Commissioner Jessica Rosenworcel to use San Jose’s approach to small cells as a template for similar deployments in other cities.

Hovering over the issue is a continued push by the nation’s wireless network operators to get the FCC to issue guidelines for how cities and states should smooth the rollout of small cells—including how much local regulators can charge carriers for small cell deployments.

“While Verizon is pleased to have reached a path forward with San Jose and a few other cities, the process for getting there was not quick or easy—for Verizon or for the cities—and confirms that reform is still essential. The costs associated with some of these arrangements also are high, far exceeding the costs incurred by cities, and it would be a mistake to assume that they would be economical in many other locations,” Verizon’s Will Johnson wrote on the telecom company’s public policy blog. “And it would also be a mistake to take such an arrangement—negotiated by a locality with significant leverage and particular unrelated needs and challenges—and treat it as a model nationwide. Indeed, these arrangements leverage private sector investment, not public dollars, and the practical reality is that capital budgets are limited, and expense budgets have to be managed.”

AT&T, in a filing with the FCC, took a similar position: "We agree that figuring out how to deploy 5G infrastructure is a big task and that cities are important partners in the endeavor, but AT&T respectfully disagrees that the arrangements in San Jose, including the agreements released Wednesday, represent 'model agreements' for other cities."

Indeed, AT&T argued that its new agreement with San Jose "cannot be economically exported to other cities and towns throughout the country."

Added the carrier: "For example, AT&T has proposed cost-based recurring fees to place small cells on city structures at less than $50. The rate structure in the San Jose agreement runs up to $2,500 per site. If conservative industry projections accurately estimate small cell deployments at 800,000 by 2026, San Jose’s rate structure when applied to cities nationwide would cost approximately $2 billion incrementally, leading by necessity to less expansive small cell deployment in communities across the nation."

The statements by Verizon and AT&T came just hours after FCC Commissioner Rosenworcel released the model agreements for small cell and 5G deployments negotiated by the City of San Jose.

“We have a legal tradition of local control in this country but also recognizing that more streamlined and uniform practices can help speed deployment,” she wrote in a statement announcing the move, which included links to lengthy documents that she said other cities can use as they work to ink comprehensive agreements with wireless network operators for small cells deployments.

“We hope our lease agreements—now posted on the @FCC’s website—can serve as a model for other U.S. cities,” Tweeted San Jose Mayor Sam Liccardo.

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However, Verizon said that city regulations around small cells continue to hinder its ability to deploy 5G and faster services.

“It takes too long, costs too much, and gives outsized leverage to the localities that control the rights-of-way and have gatekeeping control to much of the infrastructure. The existing process impedes the roll out of services that customers want and imperils our country’s ability to remain in the lead internationally with the transition to 5G,” Johnson wrote, noting that the FCC continues to move toward potentially wading into the issue by considering rules for how much cities and states can charge carriers to deploy small cells, among other guidelines aimed at speeding up the rollout of 5G.

“The FCC has recognized this challenge, and is well underway in considering much-needed reforms to encourage small cell deployment,” Johnson added.

Hanging over the issue is the fact that Liccardo left the FCC’s Broadband Development Advisory Committee (BDAC) in January. At the time, he charged that the organization was giving large service providers like AT&T and Verizon free rein to install network facilities at the expense of communities' best interests.

Article updated June 29 with comment from AT&T.