Preemption Battles Continue as Cities Look to Improve Internet Connectivity

The day before the Georgia State Legislature wrapped up its session on March 30, the House passed a controversial bill to assert the state’s power over its local governments in the fraught debate about who should set the terms for deployment of broadband technology. The vote was 143-10. But even though the Senate in February had passed a similar measure by 52-1, the versions could not be reconciled in time to get the bill to the desk of Gov. Nathan Deal.

That represented a victory for the Georgia Municipal Association and its executive director, Larry Hanson, who had fought tooth and nail against the legislation.

The bill, and others like it in many other states, brought strong denunciations from local governments alleging that major telecommunications companies are using preemption to gain low-cost access to public rights of way. Recent times have seen a flood of preemption measures on a variety of issues, as Route Fifty reported last year.

The case against the Georgia legislation was passionately described by Hanson during a panel discussion at last month’s National League of Cities’ annual Congressional Cities Conference in Washington, D.C. He also described his position in a column he published on the GMA website, where he wrote:

“Legislative proposals like ... SB 426 would grant private wireless telecom companies nearly unfettered access to the public rights-of-way with limited ability on the part of the local government to negotiate on size, location or compensation for new infrastructure entering public spaces.”

The GMA represents 521 municipal governments, accounting for more than 99 percent of the state's municipal population. The votes in the House and Senate suggested that its pleas fell on deaf ears. Indeed, telecom companies deployed 40 lobbyists on the bill, Hanson told his NLC audience. But in the end, the GMA position prevailed.

What emerged in the chaotic last night of the session was an innocuous study, to be conducted by a new Senate Advanced Communications Technologies and Use of State and Local Government Right of Way Policy Modernization Study Committee. In a “Gold Dome Update” titled “Cities Succeed in Maintaining Control of Public Rights–of–Way,” the GMA described the 11th-hour maneuvering.

According to Next Century Cities, a nonprofit coalition of cities on broadband issues, 16 states last year enacted legislation limiting local authorities’ ability to control broadband deployment, though one bill was vetoed and two of the laws are held up in the courts. This year, 14 states have been considering similar measures.

A new NLC report released this week puts the current total of states with broadband preemption laws at 20.

The Next Century Cities website describes the municipalities’ concerns:

Most cities are quite concerned about laws being passed or proposed related to limiting local authority to maintain city aesthetics and safety, recovering reasonable permitting costs, and obtaining fair market rates for the use of city assets. Specifically, many have serious reservations about the unsightly nature of some early small cell deployments. At the same time, many cities note that providers are concerned about excessive permitting time, and some city representatives say cities should come to the table more to address those issues.

“Small cell” technology is seen by internet service providers, or ISPs, like AT&T and Verizon as the key to deployment of so-called 5G service, promising much faster download speeds than current 4G systems allow. The devices are not physically small—indeed some are larger than refrigerators—but they transmit over small distances, about 200 yards in urban areas.

Networks of these small cells can wirelessly enhance high-speed internet networks, but they are not effective in rural areas, where distances between buildings makes installation difficult and costly.

Companies involved in building wireless infrastructure, and others that provide broadband services, have lobbied hard for preemption. Verizon, AT&T, T-Mobile and others are represented by the Wireless Infrastructure Association. These companies and many other major firms such as Amazon, Cisco, Intel and Oracle are represented by CTIA.

Providers vs. Municipalities

A key issue in the debate revolves around cost—the amounts ISPs should have to pay to use public rights of way. Many cities have charged the companies $2,000 or $2,500 per year to rent their light poles for 5G antennas. It’s expensive, they say, to maintain all the public services that use the rights of way, and any excess revenue can help subsidize service to low-income and under-served areas. The companies, who say they are providing a public service, propose a fee of $20 to $250 depending on the type of installation.

A recent and thorough article by Thomson Reuters described how the debate is playing out in Lincoln, Nebraska’s capital and second most populous city. City officials reached an understanding with three companies in 2015 to rent their light poles for $2,000 a year. Then, last year, telecom lobbyists came back with a new offer: $20 a pole, which they said was the “new national standard,” according to city official David P. Young. “We have a responsibility to get fair market value for the public asset,” Young told Thomson Reuters. “It costs us $4,000 per location to put a street light up.” But the telecom companies were expecting the state legislature, which is still in session, to mandate a statewide low price.

That is what happened last year in Texas, where enactment of S.B. 1004 set a cap of $250 for installation of a network node. The law set off a firestorm of protest among municipal officials who, led by McAllen City Attorney Kevin Pagan, have filed suit against the state. Nearly three dozen cities have joined in the lawsuit, including Dallas, which ranks third by population in the state.

“The Texas legislation is part of a multi-state push by the wireless industry in conjunction with the American Legislative Exchange Council (ALEC) to achieve a more relaxed regulatory environment and to obtain a public subsidy,” the plaintiffs say in one of their filings. And, in fact, ALEC, a nonprofit dedicated to pushing conservative policies at the state level, has been pushing both state and federal-level policies to reduce regulatory reviews and establish low fees for broadband facilities.

Texas cities will accrue large losses if the law passes judicial muster. At the time it was being considered, the state’s Legislative Budget Board said it “could result in loss of right-of-way and similar fees to municipalities estimated at more than $800 million annually,” said the plaintiffs’ petition. “Nevertheless,” the brief continued, “the legislature passed the bill initiating a significant wealth transfer from Texas cities to private telecommunications companies of as much as hundreds of millions of dollars each year.”

The preemption legislation also limits Texas municipalities’ ability to conduct environmental and zoning and other reviews. It mandates approval of applications for simple 5G installations and imposes “shot clock” deadlines for approval of other applications. The “shot clock,” a basketball-derived term, is a feature of other state preemption laws and of policies under consideration at the Federal Communications Commission that could propose federal preemption of local powers. “Of course, we think it is unreasonable, but many providers and industry folks do not,” said Austin Stevenson, McAllen’s assistant city attorney, in an email.

The Texas case is now awaiting trial on the merits, Austin reported. The court rejected the state’s motion to dismiss the suit. But it then denied the municipalities’ plea for a temporary injunction.

Monopoly, Duopoly or Municipal Competition?

An expert who spoke at the National League of Cities conference was Joanne Hovis, both a broadband services entrepreneur and the chairman of the nonprofit Coalition for Local Internet Choice.

At the conference, and in a later interview, she observed that in many underserved communities there is little incentive for the private providers to extend their networks. In rural communities, the rule of thumb has been that companies won’t run lines with fewer than 20 houses per mile. In urban areas, low-adoption rates in low-income communities retard investment in high-speed internet infrastructure.

The lobbyists for preemption promise 5G capabilities, but Hovis remarked that 5G technology is still nascent—years away from proven. The companies promise what can’t yet be delivered, she said, in order to gain access to public rights of way to enhance their current 4G service. That is a worthy goal, she said in an interview, but not worth giving up local powers and revenues. The small cells work for 4G, but have yet to be proven as a scalable 5G transmission system.

Meantime, the FCC’s leadership has signaled that it does not agree with the arguments for local control of key broadband decisions. Its Broadband Development Advisory Committee has yet to issue a report, but observers believe it will come down in favor of preemption, as Route Fifty reported in January. The committee, dominated by industry players, has only a handful of members—including Hanson—who can speak for municipal interests. FCC Chairman Ajit Pai is more sympathetic to industry than to local governments, according to our report then. The FCC thus may weigh in on the side of preemption later this year.

Local Broadband Progress

While the preemption debate rages, cities all over the country are wrestling with broadband issues, especially the problem of improving service in rural areas and so-called “urban deserts.”

An interesting case, recounted at the NLC conference, is that of Fort Collins, Colorado, a city of 170,000 people that’s home to Intel and other high-tech companies. Last year, the city managed to break free of the state’s preemption law, described by Mayor Wade Troxell as “horrible legislation” that was adopted in 2005. The law prohibits Colorado municipalities from creating their own broadband networks but has a clause allowing localities to conduct referenda to escape the strictures of the law. Since 2005, 86 towns and 30 counties have voted to exempt themselves from the law, and another half dozen were deciding this year whether to follow their example.

Fort Collins already had four municipal utilities, and broadband would be a fifth, Troxell explained. Incumbent broadband providers spent $900,000 fighting the measure, he said, “spreading misinformation, saying we wouldn’t be filling potholes and the like.” The city spent $15,000 to explain the measure, and it passed last November with a 57 percent majority. Fort Collins is now evaluating design proposals and expects to have connections running ot 56,000 premises in about three years.

Meanwhile, Colorado Gov. John Hickenlooper has just signed a new law that will provide more money for rural broadband deployment across the state. In Missouri, legislation has been under considerationto help the state’s rural communities. “We have identified the expansion of broadband as the best way to bring our rural counties into the 21st century,” said one expert there.

Joanne Hovis, in testimony before Congress in January, said: “Broadband is an existential issue for many local governments. No one recognizes this better than an elected local official the importance of broadband to the economic vitality of a community, and its attractiveness for residents, workers and businesses.”

Her testimony included a long list of jurisdictions around the country that have taken action to improve broadband deployment. And she singled out the so-called Google Fiber cities, where officials have worked with Google, using municipal tools to help spread fast internet to all residents. Huntsville, Atlanta, Charlotte, Nashville, Louisville, Salt Lake City, Austin are among 12 jurisdictions now participating. Google Fiber in 2016 paused the program and laid off many its workers, but in 2017, the company revived it and added three new locations. A map on the Google website shows both existing and prospective locations. When Google announced the program a few years ago, it had more than 1,000 applicants, a powerful sign of how badly local officials want faster internet in their communities.

Throughout the land, state legislatures and municipalities and their trade associations are studying how best to give citizens the unquestioned advantages of broadband internet. The Georgia Municipal Association is one good example of a proactive group. Another is the North Carolina League of Municipalities, which on March 18 released a detailed paper, co-authored by its legislative counsel Erin Wynia and by Joanne Hovis and titled “Leaping the Digital Divide: Encouraging Policies and Partnerships to Improve Broadband Access across North Carolina.”

Hovis and others compare the imperative for broadband to the nation’s earlier need for transcontinental railroads and highways. As in those earlier cases, bringing its potential to all Americans will likely require a sizable investment--considerably more than the federal government is currently proposing.