Verizon plans to deploy hundreds of so-called small cell sites over the next three years in Clark County, a significant investment to build out its next-generation wireless network.
But in the race to set up 5G service across the U.S., wireless carriers such as Verizon say there already is a drag on the infrastructure needed to deliver the new technology that might prevent full coverage for customers: exorbitant fees.
Now the wireless telecommunications industry is wrestling with Clark County and other municipalities throughout the country over the costs of small cell sites in a battle pitting local control against federal authority.
“It kind of goes back to who’s really our partner and who’s really here as a cash cow, right?” Clark County Commission Chairwoman Marilyn Kirkpatrick told the Review-Journal.
The facilities are unlike the hulking, 200-foot towers used for older wireless networks. Instead equipment is attached to street poles or other public infrastructure, generally with a box radio near the bottom and an antenna no bigger than a small backpack at the top.
Experts say 5G service will exponentially increase data capacity and download speeds, although it won’t be instantly accessible for most consumers because the majority of phones cannot currently handle it.
Verizon is trying through the Federal Communications Commission to block the county’s small cell site license fees that went into effect July 1, federal documents show. The company says fees are unreasonably high and “will threaten Verizon’s ability to continue to deploy wireless facilities and provide service to the community.” The effort has garnered support from other telecommunication corporations, such as T-Mobile, and industry trade groups.
But county officials have warned of taxpayers potentially subsidizing tens of millions of dollars in private industry costs over the next two decades if they are forced to lower fees they say simply reflect the costs of managing the public rights of way. And they point to Verizon’s nearly 100 small cell sites already operating in the county as proof the company’s ability to provide service is not at risk.
The ongoing disagreement has not prevented Verizon from continuing to apply for permits to install equipment supporting both 4G-capacity sites and lay the groundwork for 5G, Verizon spokeswoman Heidi Flato said in a statement.
Flato said the company maintains a “long, positive working relationship” with the county and is engaged in positive and productive dialogue over the fees as well as a wide-ranging county policy that established them.
Fees might defy FCC order
Wireless service providers and infrastructure companies were unified in opposition to the fees before the county adopted a policy last year that set the rates for the small wireless facilities within public rights of way, including county-owned “smart poles” that will come wireless-ready on the Las Vegas Strip.
The industry criticized county officials for setting fees as much as 14 times higher than the yearly $270-per-site standard announced by the FCC in a late 2018 order intended to remove regulatory hurdles and accelerate 5G deployment in the U.S. The agency reviewed legislation in nearly two dozen states and presumed $270 would not violate federal regulations prohibiting local governments from denying rights of way access to telecommunication carriers.
The county is among dozens of municipalities, including the cities of Atlanta, Boston and Chicago, to challenge that order in federal court, arguing it substantially restricts the ability of local governments to regulate the installation of the networks while forcing them to subsidize private investment.
Kirkpatrick expressed optimism in early January that wireless carriers were “more at the table” than they were six months ago. And Chris Wener, owner of Spectrum Services Inc., a Las Vegas-based wireless infrastructure company, said he believed the dispute was “nothing detrimental” to the long-term outlook for 5G.
Yet the feud over the fees has shown no signs of slowing: The next hearing in the case testing the FCC order is scheduled Feb. 10 in the 9th U.S. Circuit Court of Appeals, court records show.
Policy addresses 5G in county
When county commissioners unanimously adopted the 5G rollout policy in January 2019, it marked the culmination of more than two years of conversations with industry stakeholders and several months of legal reviews to reach a uniform standard for the new technology, officials said.
Commissioners worked with consultant Smart Works Partners to settle on a fee structure ranging from $700 to $3,960 per site per year, depending on the district. The costs are the highest in the resort corridor, where county officials say they are making multimillion-dollar capital investments to streamline 5G deployment. Fees are lowest in underserved areas, where the county wants to encourage companies to provide service.
The FCC noted that local governments could exceed $270 only under “very limited circumstances” such as for reasonable cost recovery and as long as those established fees were nondiscriminatory.
The ordinance satisfied that caveat, county officials said, while also permitting equal and reasonable access to rights of way with requirements for aesthetics, construction, distance separation and more. And it created end-of-year deadlines in 2021 and 2023 to fix up existing facilities, depending on the district where they are located.
In addition to opposing fees, Verizon officials have argued to the county commission that the broader policy was excessive, requiring too much separation between poles that need to be densely packed to make 5G work and conflicting with an existing contract.
Other carriers and industry members had similar concerns over the business and technical implications of the new rules.
Small cell sites growing quickly
There are hundreds of small cell sites already in the Las Vegas Valley, a figure that is only going to increase to accommodate the full 5G build-out for several wireless carriers.
The proliferation of sites is driven by the fact that 5G requires small cell sites, with roughly a maximum 800-foot coverage radius, be much closer to the end user than earlier technology, and it precludes any more than two carriers from attaching equipment to the same pole, Wener said.
In one filing to the FCC, the county said it is anticipating receiving thousands of site requests. There are already more than 500 operational or approved sites in the unincorporated county among several wireless licensees, county spokesman Dan Kulin said.
There are even more in Las Vegas city limits, where about 650 sites are either active or in development, city spokesman Jace Radke said.
The City Council adopted a $1,372 cost-based construction fee for sites in December 2018 and later moved to intervene in the challenge to the FCC order in court.
Flato said that Verizon was reviewing the city’s fee structure and implementation.
T-Mobile and AT&T launched 5G coverage in Las Vegas in December, with others soon expected to follow suit in the high-visibility market. Verizon kicked off the technology in 31 other cities last year.
“At some point there’s going to be 5G all over the country,” Wener said. “It’s going to get everywhere.”
But deployment has been happening faster in this region than in most other places in the U.S., and county officials have been proactive in addressing the technology, he added.
“In the spirit of collaboration, they’ve been very much available to have those conversations with us,” said Omar Saucedo, a spokesman for AT&T in Southern Nevada, but he added it was difficult to speak about concerns over policy with a federal lawsuit ongoing.
Even though the 5G rollout has been marred by angst over costs, an issue not unique in the unincorporated county, Kirkpatrick said she was hopeful for resolution by March, preferring to be partners and not adversaries with the industry.
Margaret Cefalu, president of the Nevada Wireless Association, said operating within the public rights of way remains a complicated task. She acknowledged that in general the new sites haven’t been easier to roll out than earlier towers despite being significantly smaller.
“Small cell,” she said, “doesn’t mean small problem.”