Playing by the FCC Small Cell Rules: Fees and Restrictions

The goal of the FCC’s Third Report and Order on small cell wireless deployment, issued in September 2018, is to remove any blocks that could prevent or hinder the continued rollout of 5G. 

A major obstacle the FCC identified is the cost of deployment. The commission said its order is prohibiting excessive fees previously charged by some local governments, and sets rules to make small cell deployment a more uniform process across the country. 

High-speed 5G has been the first giant leap in wireless broadband service in about a decade, since 4G enabled the rise of the $950 billion app economy. “We have the strongest wireless economy in the world because we won the race to 4G…5G is about our leadership for the next decade,” according to FCC Commissioner Brendan Carr. 

The order also targets another obstacle: local restrictions. Some cities have practically banned small cell attachments in the public right of way. The FCC affirmed cities’ rights to impose restrictions for aesthetic and safety reasons, but its order requires those restrictions to be reasonable. 

Let’s examine how the FCC order has been addressing cost of deployment and local restrictions. 

Reigning in Fees 

Fees charged to providers by local governments for installing small cell equipment on streetlights or other public property can effectively prohibit deployment if they’re not controlled, the FCC said. They commonly include fees for application review, right-of-way access, and attachment to public property. 

The FCC rules require that any fees a state or local government charges for installing small cell equipment must meet these criteria: 

• The fees must reasonably approximate the government’s actual, demonstrable costs incurred by deployment. 
  
  
• Only costs that are reasonable themselves may be included in the fees. If the government hired a consultant at an exorbitant rate, it cannot pass those costs on to the wireless provider. 
  
  
• The fees must not exceed those charged to competitors in similar situations. 

Cap or No Cap? 

To clarify further, the FCC has listed fee amounts it considers reasonable: 

• One-time fees: $500 for an application covering up to five small cell attachments to existing public property; $100 for each additional attachment; and $1,000 for a new pole containing small cell equipment. 
  
  
• Recurring fees: an annual fee of $270 per unit to cover costs, such as right-of-way maintenance. 

Some reporting on the FCC’s order has described these amounts as caps on fees, but the FCC’s report clearly states that they are not. The FCC does say it believes cities will be able to justify charging higher amounts only in very limited circumstances, and that providers are unlikely to take a city to court if its fees do not exceed these amounts. 

The FCC has stated, however, that the standards set for fees (not the specific amounts mentioned in the report) will govern whether a particular fee is allowed. 

Limiting City Restrictions 

Cities have a wide range of right of way restrictions designed to protect traffic safety, property values, and quality of life. These often include aesthetic requirements to prevent public eyesores, especially in districts with historical, cultural, or scenic significance. 

The FCC order confirmed that state and local governments have authority to regulate rights of way, but it also said restrictions must be technically feasible and reasonably directed to avoid public harm from unsafe, unsightly or out-of-character deployments. 

The FCC has offered a few examples of how authorities can regulate their own rights of way. For instance, it may be reasonable for a city to require some wireless infrastructure be placed underground, but it cannot require that all of it be underground. And while it may regulate wireless deployment in the public right of way, it cannot ban such deployments. 

Update: The City of Portland, joined by other litigants, quickly filed a legal challenge to the FCC’s order. In August 2020, a three-judge panel of the Ninth Circuit upheld all contested portions of the order except for two requirements the FCC had placed on cities’ aesthetic and safety restrictions, as summarized in a post by the firm Davis Wright Tremaine LLP. 

The FCC had specified that a city’s restrictions on small cell must be objective and no more burdensome than those applied to other types of infrastructure. The judges struck down these requirements, ruling that the Communications Act explicitly permits some discrimination among different technologies. They also rejected the FCC’s objectivity requirement, since determining that a piece of equipment is too ugly or out of character with a neighborhood is necessarily subjective. 

Streamlining the Process 

The FCC’s small cell rules took effect in 2019. Municipal departments, communications companies, engineering firms and contractors across the country are working together on small cell deployment under the terms set down by the FCC. The promises of new technology are exciting, but effectively maintaining the infrastructure is a big job. 

There’s a lot to keep up with – applications submitted, proposed locations, number of existing attachments per pole, review deadlines, approval status, companies involved, site preparation, fees assessed and paid, installation schedule, inspection status, and much more. 

Alden One, the nation’s leading asset management platform for the joint use community, eliminates chaos that comes with new processes. Joint use departments around the country are sharing asset data in our centralized, automated web-based platform, giving them the clarity and control they need to make informed decisions about their business.

Download our guide today to learn how to meet the challenges associated with small cell technology.  For questions about our products or services, book a meeting here.

Editor's Note: This post was originally published in July 2019 and has been updated for accuracy.