OPINION: Want to Spur 5G Investment? Reduce Small Cell Fees

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Steve Pociask President, American Consumer Institute
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This Wednesday, the Federal Communications Commission (FCC) will consider a regulatory ruling that will speed the deployment of next-generation networks and arrival of 5G services by — among other things — setting shot clocks on the approval process for deploying small cell infrastructure.

This development could not come at a better time.

As the global race to deploy 5G continues to heat up, it’s clear that the United States needs to make more changes if it wants to take the lead. According to a recent study, the United States ranks third globally in readiness for 5G behind China and South Korea.

5G will be a game-changer in the realm of wireless communication, and we can’t afford to be behind. A hundred times faster, more reliable, and more responsive than their 4G predecessors, 5G networks will bring huge social and economic benefits to the American people.

Unprecedented speeds on 5G networks will open up vast new technological possibilities, including immersive virtual reality platforms, self-driving cars, improved medical devices, smart cities and grids, and much more.

A report by the American Consumer Institute found that the economic effects of building 5G networks include a $533 billion boost to the country’s GDP and $1.2 trillion in long-run consumer benefits from 5Gbroadband wireless services.

To realize these benefits and the competitive advantage of being first to 5G, policymakers need to act quickly to adopt regulations to spur investment in their wireless future.

The impediments to rapid 5G deployment in the United States aren’t mysterious. A recent article by the Brookings Institution summed it up: “our 5G deployment process is slowed by outdated regulatory processes, spectrum scarcity, and local bureaucracy related to building local towers and other infrastructure.”

Additionally, a new study illustrates just how stifling state and local fees have been to the effort to deploy 5G in the United States. A reversal of these harmful policies could unleash substantial investment that would help bring 5G services to countless rural and suburban neighborhoods that currently lack access to broadband.

High government fees, which aren’t rooted in actual costs incurred by government agencies, add to the costs that investors face to install the millions of small cells needed to build nationwide 5G networks. Wide disparities in these fees between states and localities create a tangled and uncertain landscape that discourages private sector investment.

To calculate the role these fees play in deterring investment in 5G small cells, one study postulated a nationwide cap on attachment and application fees set at the national median for both — $150 and $100, respectively.

By lowering application and attachment fees, the study predicts an additional $2.6 billion would be spent (over a five-year period) to install small cells in areas that otherwise would not be economically viable. The vast majority of these new investments in 5G would be targeted to rural or suburban areas; specifically, 63 percent ($1.6 billion) of new capital expenditures would flow to rural areas and 34 percent ($900 million) would be directed to suburban areas.

Ultimately, 1.9 million additional homes and businesses would receive next-generation coverage that otherwise would be beyond their reach. Lowering these fees would have a dramatically positive impact across the United States, particularly in areas currently underserved by broadband.

If accelerating the deployment of 5G is a priority for state and local policymakers, as it should be, they should carefully consider how the fees they impose create obstacles to 5G in their communities.

Kudos to the FCC for taking another positive step toward accelerating infrastructure deployment that will speed 5G and benefits to all American consumers.

Steve Pociask is president of the American Consumer Institute, a nonprofit educational and research organization. For more information about the Institute, visit www.TheAmericanConsumer.Org or follow us on Twitter @ConsumerPal.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.