Verizon Wireless says it won’t rush on building a 5G cellular network despite a Federal Communications Commission decision that eliminated a $2 billion charge for the purpose of faster 5G deployment.
The FCC’s controversial decision last month has angered communities both large and small because it limits how much they can charge for carrying wireless equipment such as small cells over public rights-of-way. The FCC decision also limits the types of regulatory requirements cities and towns can impose on carrier deployments and forces cities and towns to act on carrier applications within 60 or 90 days.
FCC Chairman Ajit Pai justified the decision by saying it would speed up 5G deployment, and criticized local governments for “extracting as much money as possible in fees from the private sector and forcing companies to go navigate the maze of regulatory hurdles in order to deploy wireless networks. infrastructure.”
But in an earnings call last week, Verizon CFO Matt Ellis told investors that the FCC’s decision won’t have any impact on the pace of its 5G deployment. Verizon also says it is reduction total capital expenditures—excluding several FCC decisions, including net neutrality repeal, that the FCC says will increase broadband investment. (Verizon published the transcript of the earnings call here.)
Verizon is already building as fast as it can
One analyst asked Ellis if the FCC order would “change the kind of internal goals that you have for the rollout of small cell and 5G infrastructure and maybe allow you to accelerate a little bit as you look out into 2019 and 2020 .”
Ellis responded that the FCC’s decision “doesn’t necessarily increase the speed we’re seeing.” Verizon is “going as fast as we can” already, he said.
Our teams have partnered with communities across the country on getting permits to deploy small cells, either for 4G or 5G. (We) certainly like the fact that they’re providing more guidance for how quickly that should happen, but I don’t see it having a material impact on our production plans. We are going as fast as we can. And while federal-level laws help, it’s still very much a local area of activity. So much good work going on there.
Ellis also said that Verizon’s “expenses for the full year (will) be between $16.6 billion and $17.0 billion.” That’s down from $17.2 billion in 2017 and well below the low end of Verizon’s original 2018 forecast. In JanuaryVerizon predicts that its 2018 capital expenditures will be “in the range of $17.0 billion to $17.8 billion, including the commercial launch of 5G.”
There is no guarantee of more broadband
Before last month’s 5G pre-election vote, Pai said that “big city taxes on 5G” slow down deployment in big cities and “jeopardize the construction of 5G networks in rural and urban America.”
However Pai offers no evidence that enforcement decisions in rural areas are influenced by permit prices in large cities. Essentially, Pai’s plan doesn’t require carriers to deploy any more broadband than they otherwise would have—in fact, carriers have already promised nationwide 5G networks.
In other words, Pai’s order provides financial benefits to carriers, reduces state revenue, and reduces local control over telecommunications infrastructure on public property—all without guaranteeing any additional broadband deployment for Americans. .
Former New York City CIO Samir Saini accusation The FCC has “given tax incentives to multi-billion dollar telecommunications companies, and encouraged them to run wild on the public’s rights of way.” Los Angeles, Seattle, and 22 other cities snake FCC to block the order.
Verizon’s comments confirm what opponents of the FCC’s preemption say—that the FCC’s action does not provide a reason for carriers to invest more in rural areas. The FCC decision “represents a process in which the company receives all the benefits (reduced costs to access local and regional property) without obligations to reinvest the resulting profits in rural broadcasting- even though the price tag for the reduced prices is that they will lead. to new investment,” former FCC Chief of Staff Blair Levin wrote in a paper blog post before the FCC election. “At the same time, the states and regions will be forced by the government to bear all the costs and receive the guaranteed benefits.”
“They’re moving as fast as they can without precedent,” Levin told Ars, in response to Verizon’s recent comments. “The FCC’s action will have no material impact. In other words, everything the FCC says about how the new rules will speed things up is true.”
The FCC said its decision would “remove around $2 billion in unnecessary costs” from the $275 billion expected moves to invest in next-generation wireless infrastructure over the next decade.
FCC Commissioner Jessica Rosenworcel, the FCC’s only Democrat, said the level of savings will not increase enforcement, “because the hard economics of rural mobility will not change with this decision.”
Verizon’s complaints helped the FCC justify the vote
Despite now saying the order won’t affect its 5G plans, Verizon already does flexible FCC to preempt local charges and rules. The FCC justified its decision in part by referring to comments from Verizon, while rejecting objections from communities.
The FCC beginning said:
Verizon said a Minnesota city has proposed banning the construction of new poles in rights-of-way and that a Midwestern region where it has been trying to get approval for small cells since 2014 has no established procedures for small cell approvals. Verizon said counties in New York and Washington already require special use permits that involve multiple approval levels to locate small cells in some or all zoning areas. While some communities dispute some of these characteristics, their submissions do not change our view that there is no basis or need for the actions taken here.
We asked Pai’s office today to explain why the FCC’s decision does not affect the speed of Verizon’s 5G deployment and will update this story if we receive a response.