
Cities will sue FCC to stop $2B giveaway to wireless carrier - okket
https://arstechnica.com/tech-policy/2018/10/cities-will-sue-fcc-to-stop-2-billion-giveaway-to-wireless-carriers/
======
ohithereyou
I am stunned that the FCC is not conditioning the receipt of this money with
targets (phased giveaway where completion of one task triggers the next
payment) and agreement by the mobile carriers to have their rate plans
regulated until this money is repaid.

If you're going to use government money paid to private corporations to do
this then the private corporations should pay the government back out of the
regulated rates. After that, the infrastructure is paid for, and so long as
it's available under the same terms to others, go nuts.

~~~
NegativeLatency
Sadly I'm becoming less and less stunned by blatant corruption in the US.

If the cable internet market was more fair (limited providers, high rates in
many areas) I'd have more hope.

------
joshstrange
I went into this expecting to side 100% with the cities but after reading it
I'm divided. I completely understand wanting to cut through some of the
government bureaucracy and impose limits on time and cost of putting up these
devices but at the same time then umber feel rather low.

That said it seems very wasteful that our 2-3 phone carriers are all going to
be putting up new equipment, I'm not sure if there is any law/rule/agreement
about them sharing but it seems stupid to have a 5G modem for T-mobile, AT&T,
Verizon all on the same pole incurring the same maintenance and cost.

~~~
maxsilver
It's not quite as wasteful as it might seem.

Even if there was just one national carrier that owned all of
T-Mobile/AT&T/Verizon, they'd still need close to the current amount of RRUs +
gear + backhaul, to support the same number of total users on all of the
various spectrum bands being used.

There would be some maintenance/cost savings. But not a huge night-and-day
difference.

\--

For what it's worth, Portland charges $250/month for a point of presence (from
the article). I'm no cellular expert, but from my WISP days, that's the
cheapest rate I've ever heard of for a such a thing, short of donations on
farms and windmills and the like. Similar rent on a cell tower would cost
$1,000 to $3,000+/month.

I'm totally open to the idea that cities could be overcharging for utility
pole access -- that a few cities abuse the hell out of this authority and that
this should be corrected. But the FCC's rule forces Portland to drop the rent
from $250/month to _just $22 /month_. At this extremely low price point, I
suspect the city of Portland would actually be _subsidizing_ the majority of
these site costs for cellular providers, at the expense of their city's
budget.

For comparison, it costs something like $2k to $3k just to build or replace a
single pole (in cheap low-CoL suburban areas, using cheap wood non-metal
poles). At $22/month, if a pole was used by Verizon alone, a city wouldn't
break even on the cheapest possible initial pole costs for about _10 years_
(and that's assuming it never needs maintenance or repair or temporary
movement ever).

If cities lose this fight, I would expect them to raise their income taxes
and/or property taxes to cover the money the FCC is making them give cellular
telecoms.

~~~
bluGill
Why are cities owning a pole used just by one company though? The only reason
for a city to own the poles is so "everyone" can use them - electric, cable
tv, telephone... The combined rent from them all should pay for the pole, not
the rent from one.

I don't know what a fair rent is though.

~~~
mooman219
Calling poles public, and accessible to "everyone" is only true on a technical
level. Practically speaking, companies have a financial interest in preventing
others from using the public poles and they succeed in this.

Often, occupants of a pole can delay others from using the public pole for
years at a time. We see this with competing internet providers tying up pole
access for new-comers in court. On top of that, existing users of the pole can
layout their cables such that new-comers would have to invest in re-
positioning, which then also happens on the existing users schedule. This can
also tie up the pole for years at a time. Embedding cabling along the roadside
has similar issues, and depending on the timing, new-comers may have to incur
the cost of repaving the entire section of road they use, not just the routing
area.

------
post_break
I'm kind of torn on this because I can see both sides of it. Some cities
charge an insane amount to license a pole, others charge less. Should a small
town be able to charge a $50,000 per year rent to put up a cell tower? Doesn't
seem right, but in a densely packed city where space is tight maybe it makes
sense to stop companies from dumping infrastructure. Then there are the time
deadlines. Every worked with government that doesn't have a time deadline? For
instance ever applied for a permit that has no final issue deadline? They can
sit on it for a decade and you can't do anything about it. I don't agree with
the FCC, but I also don't think cities should be able to stifle the industry.
I don't think there is a great solution on either side.

~~~
bcgraham
> Should a small town be able to charge a $50,000 per year rent to put up a
> cell tower?

Yes, absolutely!

> I don't think cities should be able to stifle the industry.

Portland, OR couldn't stifle the industry if it wanted to. Besides that, city
governments don't answer to the industry; they answer to their voters.

~~~
Eridrus
> Besides that, city governments don't answer to the industry; they answer to
> their voters.

Do you find your city government to be very responsive to your desires? Maybe
it actually is in small towns, but in larger cities, the government basically
does whatever it wants on niche issues like this, with no real oversight.

~~~
jessaustin
If pole fees were high enough that wireless carriers decided not to serve
particular areas, such a decision would lead the local nightly news, because
wireless company PR is powerful. Voters would be pissed, and the fees would
drop.

------
blaisio
At first I was torn on this issue, but then I realized that really it makes no
sense for the FCC to be telling cities what they're allowed to charge for
this. It is sort of like the federal government preventing a city from
charging taxes. This doesn't seem like an interstate issue so it doesn't seem
like the federal government should be able to regulate it.

------
rayiner
This article is off the reservation. 5G is the best hope for actual
competition in broadband. By dramatically decreasing deployment costs
(compared to wireline), it will enable several competing providers in places
that have _de facto_ monopolies today. Putting up red tape is not the way to
go about fostering competition.

There are differing views on the appropriate level of regulation for
uncompetitive markets and natural monopolies. But almost nobody sane would
prefer a regulated market to an actually competitive one. Deregulation of
industries like trucking, air freight, and airlines, where there are several
competing providers, has proven to be a massively positive thing compared to
how things were in the 1930s-1960s. 5G offers that possibility here--the
possibility to abandon hairy questions about _how_ to regulate because
competitive obviates _the need_ to regulate. Opposing that is madness.

~~~
jessaustin
Which competitors are these? Someone besides the "big 4"? (actually more like
2.75...)

Now that fees may no longer be used to gauge the relative value of pole access
to different firms, what will determine which firms are allowed to use them?

~~~
rayiner
I also strongly suspect Comcast and Google will get into it as well. That
would be consistent with Google’s shift from fiber to wireless, and Comcast’s
dipping its toes into the wifi/mvno waters. Most major industries have less
competition than the “Big 4.” For mobile OSs, there is just two real options.
Same for desktop OSes. For search engines, maybe three. Soft drinks two.

The question isn’t how many does it take for optimal competition, but how many
companies does it take to beat a government-regulated industry? The answer is
probably two, maybe even one. (It’s a good thing the government never
regulated Microsoft.)

Pole access fees were never used to determine the relative value of access to
different firms. The Communications Act requires pole access fees to be non-
discriminatory. Everyone pays rates according to a schedule. Which is a good
thing, because local governments have no competence to pick among providers.
That’s the pre-1994 behavior that led to de facto regional monopolies today.

~~~
jessaustin
Won't these other competitors have to purchase some bandwidth from the
government as well? Would that still be an "unregulated" industry? Could a
firm that just wanted to serve a small local area get into this?

In the soft drink industry, no firm has to do anything but start mixing and
bottling soft drinks. Which explains why there are hundreds of smaller firms,
from the 7up-RC company on down. The moat that Coke and Pepsi have is
maintained purely by marketing. There is no Federal Drinks Commission whose
members expect lifetime sinecures from Pepsico.

You conclude with an astonishingly ahistorical explanation for current telco
monopoly. Ma Bell was protected from competition by FCC for decades, and both
the "divestiture" and the later "unbundling" were carefully choreographed by
FCC and DoJ to arrange for just the reconsolidation we've seen since.

~~~
rayiner
> Won't these other competitors have to purchase some bandwidth from the
> government as well?

There's tons of bandwidth in the millimeter wave spectrum where key 5G
deployments will happen: [https://www.verizon.com/about/our-company/5g/what-
millimeter...](https://www.verizon.com/about/our-company/5g/what-millimeter-
wave-technology). And the government is working to clear more.

Proponents of regulation have this tendency to view things through a moral
lens. "Wireless should be regulated because it uses public spectrum." But the
question isn't whether regulation is morally justified, but whether it is
_economically efficient._ That means the focus is not on whether some public
resource is being used, but how many competitors can be sustained with those
public resources. Even with LTE, there are four nationwide competitors, which
is more competition than exists in many other markets. And 5G can support even
more. Whether or not those competitors need to use public spectrum to provide
their service, there will be enough competition to obviate the need to
regulate.

> The moat that Coke and Pepsi have is maintained purely by marketing.

What you call a "moat" is in economics terms a "barrier to entry." And there's
lots of different ones. _E.g._ anyone seeking to compete with Android and iOS
have to account for the network effect caused by existing app libraries.
Nothing makes the barriers to entry in 5G magically different from network
effects or branding strengths or other barriers to entry that exist in other
industries. The fact that a moat exists doesn't mean regulation is
automatically warranted. Regulation is only warranted when the barriers are so
high that there is no functioning competition. And experience shows that
regulation is very hard, and markets have to get very dysfunctional before a
government-regulated industry becomes preferable.

> You conclude with an astonishingly ahistorical explanation for current telco
> monopoly. Ma Bell was protected from competition by FCC for decades, and
> both the "divestiture" and the later "unbundling" were carefully
> choreographed by FCC and DoJ to arrange for just the reconsolidation we've
> seen since.

That's both irrelevant and proves my point. It's irrelevant because we're
talking about wireless, which was built entirely post-deregulation. (And even
in the context of wired broadband, most people get their broadband today from
cable, and those networks were never regulated under the telephone regime.
Instead, local governments handed out monopolies in return for grab-bag
handouts, which is exactly why they should have minimal authority over
deployment.)

It also proves my point, because the treatment of AT&T is a product of how
folks thought about utility regulation back then. (See: Master Switch). Back
then, regulators thought competition was a bad thing. They thought it was
better to have a tightly regulated monopoly. So the Communications Act of 1934
provides for the FCC to micro-manage telephone companies, telling them when
they can build lines, etc. This was not unique to telecom. It goes back to the
Interstate Commerce Commission and how they regulated railroads (and later
trucking, airlines, etc.). They didn't trust competition, so they put
regulators in charge of infrastructure deployment, pricing, etc.

Starting in the 1960s and 1970s, Congress realized this was all nuts--
antithetical to what we now know about competitive markets. So they
deregulated vast swaths of the economy. In the 1990s, they applied the same
ideas to telecom, prohibited granting regional monopolies, etc. The result was
a massive boom in telecom investment.[1] This was not unique to the U.S., most
of the developed world substantially copied our approach.

To the extent that the 1996 Act has been less successful than intended, the
blame squarely lies with municipal governments. Most cities make it illegal to
build an MVP version of an ISP. You're required to either cover a whole city
or nothing. And they use franchising powers to extort concessions (5% of
_gross revenues_ as franchise fees, free fiber for government buildings,
etc.). Local governments are the ones who have created an environment that
makes it unpalatable for new entrants to compete.

5G offers another bite at the apple. It dramatically lowers the "natural
monopoly" aspect of telecom deployment. Even with very small cells, it
eliminates the "last half mile" (and the massive fan-out that happens in the
last half mile). The only thing that stands in the way is municipalities, who
don't understand regulatory theory, just that they can use whatever permitting
authority they have to extract grab-bag concessions.

[1] If you doubt the success of the 1996 Act, consider this: U.S. broadband
speeds are faster than Germany, the U.K., France, Spain, and Italy. In what
other area of infrastructure does the U.S. outperform these countries? The
answer is none. Our roads suck, our trains suck, our subways suck. But our
broadband is faster! Compared to another highly-competitive industry--CPUs are
maybe 100x faster for single-threaded code than in 1996. Your broadband is
probably 1000-2000x faster. All this makes me wonder if the people who
facilely declare the 1996 deregulation to be a failure are living on the same
planet as me. Or, more cynically, it's such an astounding blow to their ideas
about "enlightened regulators" running the economy that they have deny its
success, regardless of facts.

~~~
jessaustin
C'mon man, I post reliably enough on this topic that you know I'm not a
"proponent of regulation". I'm the one who wants to see FCC shuttered
completely. Let radio device manufacturers regulate themselves like they
already do perfectly well in the wifi bands. ("But, but, long-distance
interference!" Really? You were talking about millimeter wave. That's on the
other side of wifi: why does that need regulation?) Failing that, let's have
the advertised spirit of the 1996 Act, rather than its woeful intent and
implementation.

I would _love_ to believe this vision of 5G you offer, of enough competition
to actually change the character of internet access in USA. I love to imagine
that innovation supported by ever smaller and more numerous connected devices
might someday be possible. I love that on the wired side I can hire e.g. Jive
or one of its many competitors for my business phone system and Netflix or one
of its many competitors for personal entertainment. That services are not tied
to the network is a basic internet design principle. Yet even in wired I still
have to pay more for a data connection alone than for a data connection plus
some stupid local phone or TV connection. (The only exceptions are where a
local municipality has had the vision to defend local interests.) Wireless, of
course, is much worse, e.g. with MNOs overcharging average users so as to
subsidize whoever is using the favored online-service-of-the-month. I know
they're overcharging because if I sign up with M _V_ NO Ting I get the same
service for less than half the price. Marketing is expensive, but so is buying
FCC. Also yes I took Ec 10 and several additional courses; I don't require
reminding that "moat" is a euphemism for "barrier to entry".

It's telling that when speculating about new entrants, you come up with...
Comcast and Google. Well yes these giant oligopolistic firms will continue to
exist as such. That isn't exactly a wave of entrepreneurial investment like
that we saw in the late 1990s. Investors learned from that debacle. When you
pour many billions into a marketplace the regulator of which has been owned by
one actor for six decades, that actor will end up with most of your
investment. It will take a few decades for investors to forget that lesson.
Sure, it's nice for backbone customers that long-distance data is still
overbuilt even now. Somehow that doesn't help the average last-mile consumer.

How do I know? What am I talking about? In a previous stage of my career I
worked for both CLECs and ILECs. I've seen the change orders dropped on the
floor by the hundreds, for no reason that VZN or SBC even cared to lie about.
The entire UNE program, a centerpiece of the 1996 act, was a sham from the
start. The incumbents were never held to any level of service at any level of
interconnection, eventually their competitors just ran out of money, and they
swept up the infrastructure and customer base for pennies on the dollar. ATT
and VZN have used this windfall to dominate spectrum auctions and so
inevitably the wireless market. They compete with each other as hard as e.g.
Mastercard and Visa, about what one would expect from Ma Bell's two daughters.
"Broadband investment" is a bizarre metric to even mention, when discussing a
captured regulator of generations-old monopolistic firms. How did they afford
that buildout? They let investors in victim firms pay for it.

It is _possible_ that the various parties who have been doing the same thing,
in different guises, for 84 years will do something different in the near
future. It is possible that in introducing 5G they are making a mistake on the
order of allowing the microwave oven in the ISM band. Viewed over the long
run, it just doesn't seem very likely. What seems more likely is that they
will continue harvesting monopoly rents and spending some small portion of
those rents on keeping their regulator captured and their customers without
options. There are procedures for sharing pole space, and FCC has just put
municipalities on notice that they will keep their thumb on _that_ scale too.

------
joebubna
Am I the only one concerned that they are rolling this tech out without
further study? To quote the IEEE:

"Millimeter waves are broadcast at frequencies between 30 and 300 gigahertz,
compared to the bands below 6 GHz that were used for mobile devices in the
past."

In 2011 the WHO (World Health Organization) panel of scientists decided to
label Cell Phones as possibly cancer causing after a review of the available
studies:
[http://www.cnn.com/2011/HEALTH/05/31/who.cell.phones/index.h...](http://www.cnn.com/2011/HEALTH/05/31/who.cell.phones/index.html)

This past year the department within the US government responsible for
studying toxic effects released a preliminary report showing an increase in
brain and heart cancer rates within male mice exposed to 2G and 3G wireless
radiation:
[https://ntp.niehs.nih.gov/results/areas/cellphones/index.htm...](https://ntp.niehs.nih.gov/results/areas/cellphones/index.html)

That's not to mention the personal stories of cell-phone induced brain cancers
that have been circulating since the 80s. For instance: my brother-in-law's
dad died of brain cancer, and he was a business man who was on his cell phone
almost 24/7.

Exposing the majority of the US population to higher frequency waves than the
ones already under suspicion of causing cancer seems like a bad call without
further study.

~~~
gshulegaard
I seem to see comments regarding cell phone use / cell frequency and cancer
risks fairly regularly now. So as I usually do, here is an NIH fact sheet with
great references (for you as well as others):

[https://www.cancer.gov/about-cancer/causes-
prevention/risk/r...](https://www.cancer.gov/about-cancer/causes-
prevention/risk/radiation/cell-phones-fact-sheet)

Generally, there does not seem to be strong scientific evidence supporting a
causal relationship between non-ionizing radiation exposure and increased
cancer rates _at ordinary levels_.

I did find your linked study
([https://ntp.niehs.nih.gov/results/areas/cellphones/index.htm...](https://ntp.niehs.nih.gov/results/areas/cellphones/index.html))
interesting but wanted to point out a few things:

1) These mice were subjected to whole body exposure for their entire lives
(from utero to old age) 18.5 hours a day (9 hours of actual sustained
exposure) which seems to be of questionable relevance to real-world human
conditions. From one of the reviewers:

"There may be also several caveats relating to “under the conditions of these
studies”, including how well the conditions recapitulate actual human
exposure: whole body exposure from in utero to old age; 18.5 hours/day (10 min
on/10 min off, for total of 9hr actual exposure); and dose;"

2) Only male mice in the sample demonstrated statistically significant
differences from the control group, female mice did not. This is odd...and the
reviewers take note:

"My concern regarding the control data came from the following two
considerations. First, we need to consider sample variation. The incidence
rates of the current controls for brain gliomas and heart schwannomas were 0.
However, the historical controls were 1.67% for gliomas (range 0-­‐8%) and
1.30% for schwannomas (0-­‐6%). Given that there were substantial variations
among the historical controls and the concurrent control is at the lowest end
of the range, it is important to evaluate how different estimates of control
incidence rates may impact the results of analyses. ... Second, it is puzzling
why the control had short survival rate. Given that most of the gliomas and
heart schwannomas are late-­‐developing tumors, it is possible that if the
controls were living longer some tumors might develop."

That is to say the male control group didn't have any tumors develop but they
also lived for shorter period of time than the the other groups (ostensibly
also the female control). This is odd and explains a possible false-positive
scenario where a short lived control group had a 0% expression of tumors
naturally because they didn't live long enough for the tumors to develop.

Still an interesting result, but also a good illustration of why science
places emphasis on reproducible results.

3) Implied/mentioned by #2, but there were no statistical variations between
the female control group and the radiated female group. Perhaps female mice
are resistant...or perhaps the male control was a non-representative sample.
Either way this difference raises questions and the possibility of a false-
positive.

So at the end of reading, I find this reviewer's summary to be most relatable:

"Looking at the data, I agree with the report’s conclusion: Under the
conditions of these studies, the hyperplastic lesions and neoplasms observed
in male rats are considered likely the result of exposures to GSM- and CDMA-
modulated RFR. The findings in the heart were statistically stronger than the
findings in the brain. But note, it is “considered likely” not “definitely
is”...Results from the companion mouse study will hopefully add some insight."

The keys being "Under the conditions of these studies" which may not be
relatable to real-world human exposure as well as " “considered likely” not
“definitely is” ". So to your point:

> Exposing the majority of the US population to higher frequency waves than
> the ones already under suspicion of causing cancer seems like a bad call
> without further study.

There _is_ ongoing research and study...some dating back to the early-mid
2000's...and so far there hasn't been sufficient evidence to show (or suggest)
a causal link between non-ionizing radiation and cancer risk. At least that is
my layman's understanding.

------
hcurtiss
The headline is terribly misleading. There's a good argument that localities
are preventing competition in the broadband space with these fees. Here's a
good Wired article from back in 2013: [https://www.wired.com/2013/07/we-need-
to-stop-focusing-on-ju...](https://www.wired.com/2013/07/we-need-to-stop-
focusing-on-just-cable-companies-and-blame-local-government-for-dismal-
broadband-competition/)

~~~
specialist
Berin Szóka, Matthew Starr, Jon Henke -- the authors of that opinion piece --
also oppose net neutrality.

Their "think tank" organization TechFreedom is funded by the wireless industry
and the Koch brothers. TechFreedom has also been (still is?) a member of ALEC.

Jon Henke is a Republican political consultant and self-described "neo-
libertarian".
[https://en.wikipedia.org/wiki/Jonathan_Henke](https://en.wikipedia.org/wiki/Jonathan_Henke)

[https://twitter.com/BerinSzoka](https://twitter.com/BerinSzoka)

~~~
hcurtiss
So, do you have any thoughts on the substance?

~~~
stonogo
Sure: the regulation in question removes the cities' ability to oversee the
installation of the hardware. Currently, microcell installation in many places
requires a city engineer to sign off on the mechanical part -- can the pole
support this load, is the mount going to stand up to stormwinds, and so forth.
The FCC edict turns it into a free-for-all: this is irresponsible.

~~~
hcurtiss
Sure they can. They just can’t charge $10,000 for that work. It’s not like
every power pole is a unique snowflake.

~~~
specialist
Who are you to say what to charge, what is fair? What happened to charging
what the market will bare, letting the market decide?

If Verizon continues to pay $10,000 to use a city owned utility pole, then I'm
pretty sure the price is right.

~~~
hcurtiss
I'd refer you to the article. Generally speaking, it's not a market. You can't
place these things on any property (public or private) without a city permit.
And if you place it in a city right of way (e.g., a power pole), they gouge
you even more with franchise fees. It's precisely because the city has
absolute control that FCC involvement is necessary.

------
stefan_
This seems like a perfectly reasonable policy. The fear mongering by the
cities how the power grid will collapse if they can't charge large fees and
delay as they see fit.. not convincing.

Giving cities control over this is just a NIMBY dream.

~~~
devhead
I think it's up to the city, it's their pole. The federal government is coming
in and saying there's a new price per pole and giving that discount to the
ISP's, when will the people get their discount?

how about we barter, we'll give a smaller range (a fixed rate really isn't a
good reality) and then the ISP's have to disband their lobbying efforts for
ten years. Also they need to undo each state and local law they had put in
place to prevent city and states from creating their own local ISP service.
Oh, and Pai has to quit and be banned from working at any ISP for at least two
decades.

i'll be here waiting with my full support to these terms.

------
kevin_b_er
This is how you stand for profit over people.

~~~
jessaustin
That has been FCC policy for 84 years. They have always helped out the
monopolists. Even when the commission temporarily pretended (never for more
than a year or two) to care about the public interest, the agency itself was
still firmly in the pocket of Ma Bell and her daughters. Under Trump they
don't have to pretend.

