Carriers Awkwardly Embrace San Jose's Small Cell Success

Phil Harvey
The Philter
Phil Harvey, US Bureau Chief
7/6/2018



In Texas, a good politician is defined as someone who can keep many balls in the air at the same time, while protecting his own. If we're really going to bring 5G to US cities, we need some awfully talented politicians.

Why? Good politicians can deal with telcos and help them get a win for their shareholders without screwing over a city's taxpayers.

File that away as we remind you that telcos recently scoffed at an FCC Commissioner for pointing the way to a successful small cell agreement -- an agreement that just days earlier the telcos were celebrating and bragging about.

In San Jose, city officials negotiated small cell deployment agreements with AT&T, Verizon and Sprint to allow those easier access to the city's light poles and other infrastructure ("street furniture") as they move to deploy 5G services. Newer 5G networks run on higher frequency spectrum that can't penetrate buildings as well, so cities need a robust small cell infrastructure to get ready for 5G.

Under San Jose's deal, these carriers are going to blanket Silicon Valley's capital with super-fast cellular coverage and some of the fees collected by the city will go into a fund that will eventually help its 95,000 citizens that have no Internet access gain some kind of connectivity -- and better city services.

When the ink was dry, the carriers seemed happy.

"We've been in talks with them for quite some time so this is a culmination of a lot of work and good leadership in the city of San Jose with Mayor Sam Liccardo and Smart City Lead Dolan Beckel," Mike Zeto, VP of AT&T IoT told Light Reading. (See AT&T to Deploy Small Cells, Smart City Infrastructure in San Jose.)

Here's Verizon extoling the virtues of its small cell deal with San Jose. Lauren Love-Wright, VP of network engineering at Verizon, notes that the San Jose deal provides "a model for forward-looking mayors and cities to make investments now to improve the service now, but also lay the foundation for new technologies that are coming in the future."

FCC Commissioner Jessica Rosenworcel, in what was deemed an "unofficial announcement of Commission action," released anonymized versions of the City of San Jose's landmark agreements, as soon as they were approved by the San Jose city council. Why? Because nearly everyone, everywhere agrees that for carriers to build out the kind of small cell infrastructure needed to facilitate 5G rollouts nationwide, there must be, as Rosenworcel put it, "more streamlined and uniform practices can help speed deployment."

All of the sudden, the carriers weren't happy.

Verizon balked at the very idea it promoted days before Rosenworcel's comments. The deal Verizon agreed to with San Jose was now suddenly not a model for forward-looking mayors at all. Will Johnson, Verizonís SVP for federal regulatory and legal affairs, wrote that "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."

What happened in San Jose -- and why won't it stay in San Jose?

The short version is that the carriers, it seems, would prefer it if the states and the FCC pre-empted cities from having to negotiate things like timing of how long it takes localities to review applications, the fees that could be charged, and what types of infrastructure could be used in the process, and so on. That's why, I think, Verizon and AT&T clapped back at Commissioner Rosenworcel.

One vehicle that Rosenworcel's comments bypassed is the FCC's Broadband Deployment Advisory Committee (BDAC) -- an august body formed to help bring broadband to American cities by "reducing and removing regulatory barriers to infrastructure investment." By all accounts, the BDAC is all kinds of jacked up.

Two of the original municipal representatives on the BDAC, San Jose Mayor Sam Liccardo and New York City CTO Miguel Gamino, both resigned from the group earlier this year. Other appointments have been made to backfill their spots. But both Liccardo and Gamino, when they left, noted that the FCC and the telecom industry were being too heavy-handed.

"The FCC has struggled since the inception of the BDAC to address the issue of why they didn't put more municipal interest on the voting committee. They had a hard time defending it, for sure," Angela Stacy, VP of marketing and communications at SmartWorks Partners, told Light Reading.

"Frankly, municipal interest is always going to be outvoted on that committee," Stacy, a BDAC member said. "That's just the bottom line."

As Light Reading and others have reported, several states, with the helpful lobbying of the nation's largest telecom carriers, have been stacking the deck against cities and municipalities. I don't think the telcos want other cities to do what San Jose did because it took a while, helped square the circle with San Jose's digital divide and ultimately left the city in a good place to prosper once the services are turned on. (See Battle Begins for Small Cells, Smart Cities and Cities to FCC: Stop Undermining Us.)

When you listen to the stories of telco negotiations with city officials, some have been toxic. In an interview with Light Reading, San Jose Deputy City Manager Kip Harkness described San Jose's earliest negotiations with carriers over small cell deployments as a "pole by pole knife fight." Harkness, who was not juggling at the time, added that the carriers and the City worked out their differences, made a deal that worked for everyone and all parties seem happy with the result.

"In my opinion, good business means it's good for both parties on both sides of the table," said Stacy, who called San Jose's small cell deal a model of success. "I think the win with San Jose getting that digital inclusion fund was huge because it proves that if we all sit down at the table, everybody can come together and form a reasonable agreement that helps truly bridge the digital divide, which was part of the [BDAC's original] mission."

Let's get real: The carriers aren't confused about whether the San Jose small cell deal was a good one. It was and they said so.

Also, even though they're being demonized in the hallowed halls of the FCC, by way of the BDAC's flawed processes, most city managers and mayors aren't out to rip anyone off -- they need 5G to happen in a big way.

I think both sides can keep their heads up and their overhead down if they work together. But the cities and municipalities need to do some next level politicking if they want to avoid being marginalized by the telecom industry.

Indeed, at least one FCC Commissioner is telling US mayors and city managers to have a long look at what's going on in San Jose. It's a common thing for cities to learn from one another and small cell deployment is no different. Even if the carriers would prefer that you avert your eyes, San Jose's deployment model is not a bad place to start.

Keep those balls in the air, folks. The road to 5G is going to be another political stress test.

— Phil Harvey, US News Editor, Light Reading

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