The FCC on Wednesday in a 3-1 party-line vote approved a new rule that would limit what fees local authorities can charge wireless providers as the industry builds out its next-generation networks, known as 5G.
Companies like Verizon and AT&T are competing to bring new 5G service in the years to come, an endeavor that will require a massive deployment of hardware across the country. Unlike 4G signals, which can be transmitted for miles by large cell towers, the next generation’s waves can only travel short distances and will require small cell stations every few city blocks.
In order to install these refrigerator-size stations, wireless providers will need to negotiate access to utility poles and other public assets. The order approved on Wednesday would cap what municipalities can charge for rights of way and limit the amount of time that local authorities can take to review businesses proposal for deploying wireless infrastructure.
Republicans on the commission say that limiting what they see as exorbitant fees in major cities will free up capital for companies like Verizon and AT&T to invest in building out their networks in underserved rural areas. The commission estimated that the rule will save wireless providers $2 billion.
“Cutting these costs changes the prospect for communities that will otherwise get left behind,” said Commissioner Brendan Carr, adding that eliminating the fees will speed up deployment and help “close the gap” with China, which is also racing to deploy 5G.
The Federal Communications Commission’s three Republican commissioners voted in favor, with Democratic commissioner Jessica Rosenworcel who opposed part of the proposal.
The proposal generated significant opposition from mayors and other local officials around the country, who accused the FCC of overriding their authority to regulate the rollout of the new technology.
“This is extraordinary federal overreach,” Rosenworcel said. “I do not believe the law permits Washington to run roughshod over state and local authority like this and I worry the litigation that follows will only slow our 5G future.”
Critics also say that there’s nothing in the order that incentivizes companies to reinvest the money they save on local fees to expand internet access and that they’re just as likely to spend the money on share buybacks or paying dividends to stockholders.