San Jose mayor leads municipal opposition of FCC mandate

WASHINGTON, D.C. — San Jose is among nearly two dozen cities that have opposed the Federal Communications Commission for orders it issued under the premise of facilitating the launch of 5G communication technology.

In a call with reporters last week, officials from around the country said the FCC’s orders on small-cell deployment amount to federal overreach and have created a land grab by telecommunications companies.

In San Jose, 95,000 residents have no high-speed internet access at home. The digital inclusion fund, which San Jose Mayor Sam Liccardo announced in September 2018, aims to use funds collected from telecommunications companies to increase connectivity and access to services. San Jose has since entered agreements with Verizon, AT&T and Mobilitie to charge companies infrastructure fees in exchange for deploying 4,000 5G small-cell units in the city.

“We have negotiated in good faith, at arm’s length, with the large telecommunications companies to create this digital inclusion fund with fees that they would pay because we know that the companies themselves are under no mandate by the FCC to actually provide public service to everyone in a city,” Liccardo said.

Officials across the U.S. argue that the FCC order will eliminate their power to negotiate such agreements. At the crux of the issue are rules issued by the FCC in 2018 that specify price limits, time tables and other details which cities and companies must abide by in order to install equipment on city streetlights, poles and rooftops. The FCC stated that certain municipalities, including Oakland, have demanded fees so expensive that it forced companies like AT&T to downsize expansion plans.

“They would like to continue extracting as much money as possible in fees from the private sector and forcing companies to navigate a maze of regulatory hurdles in order to deploy wireless infrastructure,” FCC Chairman Ajit Pai said in a statement.

Oral arguments on two consolidated cases were heard on Monday in Pasadena. The city of San Jose joined a lawsuit filed by the city of Portland challenging two of the FCC’s orders.

“The orders are difficult to interpret,” said Nancy Werner, general counsel for the National Association of Telecommunications Officers and Advisors. “It all goes back to the FCC’s interpretation of the term ‘effective prohibition’.”

The FCC argues that the holdup from municipalities waiting too long to process applications for cell deployment, requesting aesthetic parameters that are burdensome for companies to comply with, or charging above cost rates for upgrades would essentially prohibit telecommunications companies from launching 5G. Liccardo said the FCC rule would force municipalities to lease public infrastructure at below-market rates, in a sense subsidizing access to telecommunications companies.

Verizon is almost entirely in agreement with the FCC’s order. Tamara Preiss, vice president of Verizon’s federal regulatory and legal affairs, told San José Spotlight that the company joined an appeal alongside Sprint requesting the FCC include a “deemed granted” remedy. That means if a municipality does not respond to a telecommunications company’s request for small-cell deployment within a certain time frame, the order would be deemed as granted.

Liccardo has been a vocal opponent against FCC municipal mandates. Months before the orders were released in 2018, he resigned from an FCC broadband advisory committee. “The apparent goal is to create a set of rules that will provide industry with easy access to publicly-funded infrastructure at taxpayer-subsidized rates, without any obligation to provide broadband access to underserved residents,” he wrote in a letter to the chairman.

Last week, Liccardo told reporters that barriers to internet access and connectivity, considering modern economic and educational demands, are a civil rights issue.

“We’ve got 12-year-olds who are doing their homework in Burger King parking lots at 10 p.m. because they cannot do it at home,” he said.

The first round of grants from the digital inclusion fund are scheduled to be voted on by the City Council next month. Liccardo said they include $1 million for community organizations.

In Washington, San Jose Congresswoman Anna Eshoo introduced a bill last January that would nullify the FCC orders. It has not progressed to a full vote in the House.

Contact Elizabeth Mendez at [email protected] or follow @izziemae on Twitter