[Davisgig] Fwd: Blair Levin: FCC Small Cell Draft Order Would Exacerbate the Digital Divide
Robert Nickerson
rob at omsoft.com
Wed Sep 19 09:28:57 PDT 2018
Governor Brown vetoed a bill last year that would do exactly this,
eliminate local jurisdiction over rights of way and light poles for more
cell phone small cells.
This order would set mandatory inexpensive rates for light pole leases
for huge cell phone companies, and remove the local jurisdiction from
the decision making process.
Yuck.
RAN.
-------- Forwarded Message --------
Subject: Blair Levin: FCC Small Cell Draft Order Would Exacerbate the
Digital Divide
Date: Wed, 19 Sep 2018 12:39:29 +0000
From: Coalition for Local Internet Choice <Catharine at localnetchoice.org>
Reply-To: Coalition for Local Internet Choice
<Catharine at localnetchoice.org>
To: Robert <rob at omsoft.com>
Blair Levin: FCC Small Cell Draft Order Would Exacerbate the Digital Divide
Blair Levin: FCC Small Cell Draft Order Would Exacerbate the Digital Divide
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Earlier this week, CLIC advisor Blair Levin sent CLIC and NATOA
leadership a letter detailing his concerns with the FCC’s draft small
cell order, an order that preempts local authority while purporting to
advance broadband deployment. Blair’s letter describes why the draft
order will have the opposite impact and is likely to exacerbate the
digital divide while tying the hands of local governments to build
collaboration with the private sector. Excerpts of Blair’s analysis are
below, and the full letter is here
<https://localnetchoice.us8.list-manage.com/track/click?u=09c6fc743c87e862042edd5d5&id=1cb3c3505e&e=d1bb241e3d>.
*/Blair Levin:/*
This is in response to your request for my view of the FCC’s pending
order, proposing to cap the fees that state and local governments may
charge for small cell attachments. According to the FCC’s draft order,
these// price-caps will save the industry $2B in costs to operate in
metropolitan areas—which will translate into $2.5B in new wireless
investment, primarily in rural areas. This letter summarizes my thoughts
on aspects of the draft order.
[On Wall Street and in Washington, DC], I’ve interacted with numerous
investors, carriers, and localities, and that experience leads to my
concerns with the FCC’s argument:
*First, focusing on state and local government fees and process is a
distraction from the real obstacles to accelerated and ubiquitous
deployment of next generation mobile services, *which are that broadband
deployment economics are very challenging and have to be addressed at
all levels of government and through creative collaboration with the
private sector. Fees for access to public property represent only one of
many, many costs of doing business a carrier will encounter. A focus on
reducing or eliminating one (relatively marginal) cost of doing business
does not solve the challenging economics of broadband deployment and
serves only to obscure the true challenges….
*Second, local governments have a strong recent track record of
endeavoring to enable and facilitate broadband deployment, *as the
Google Fiber experience conclusively demonstrated. Vilifying them based
on fees for use of public property is not only a distraction, but also
unfair. Indeed, rather than acknowledging that carriers have a proven
ability to negotiate advantageous fees with localities, the FCC’s draft
order infantilizes carriers by preempting state and local government,
presumably on the theory that carriers cannot protect themselves in
negotiations with states and localities. This is absurd….. Tying the
hands of localities and states is self-defeating – it stops them from
using creative partnering strategies (as they have successfully done in
cities like San Jose, CA and Lincoln, NE) to find ways to improve
broadband outcomes…. Thus, despite the FCC’s rhetoric, the proposal will
likely exacerbate, rather than alleviate, the digital divide.
*Third, the FCC’s draft order is based on a fallacy that no credible
investor would adopt and no credible economist endorse: *that reducing
or eliminating costs for small cell mounting on public property in
lucrative areas of the country (thus reducing carriers’ operating
costs), will lead to increased capital expenditures in less lucrative
areas– thus supposedly making investment more attractive in rural areas.
That simply is not how investment decisions are made…. My experience on
Wall Street is that neither analysts nor investors regard this FCC
action as likely to lead to increased deployment in non-economically
attractive areas, which most on Wall Street would consider an irrational
act… In short, while the FCC may ignore reality, the carriers and Wall
Street understand that increasing profitability in Market A will not
make Market B more attractive for investment. Market B will still be an
area that is unprofitable or otherwise unattractive for investment, and
the new requirement that Market A subsidize carriers by reducing fees
will not benefit Market B under these circumstances….
*Finally, let me note something I discuss at length in the attached
speeches: the draft order presents a framework in which industry gets
all the benefits (reduced fees to access state and local property) with
no obligations to reinvest the resulting profits in rural
broadband*—even though the purported rationale for the reduced fees is
that they will lead to new investment. At the same time, states and
localities will be forced by federal mandate to bear all the costs and
receive no guaranteed benefits.
In short, my response to your request is that I am deeply troubled by
the FCC’s draft order, the options it ignored, and the fallacious logic
on which it rests. And I’m particularly concerned about the prospect of
unelected federal officials in Washington DC mandating how, and at what
price, state and local elected officials can manage their own
property—all for the benefit of a select group of companies that are
under no obligations to reinvest these mandated public subsidies in new
deployment.
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