Cell Tower Case Shows Wireless Siting Rules Remain a Must for 5G Buildout

On September 26, Verizon Wireless voluntarily dismissed a lawsuit against the City of Fresno, California, as the parties reached an agreement on Verizon's construction of a 5G cell tower. The resolution of the case removes a series of roadblocks to construction of next-generation wireless infrastructure, and it stands as a reminder of the importance of infrastructure siting policies such as "shot clocks" that prohibit unreasonable permit process delays. 

Back in July 2021, Verizon filed a permit application to build an 80-foot tower in the back of a parking lot in the downtown area of Fresno, east of a highway, in order to meet wireless traffic capacity demands. The 150-day "shot clock" in which the city was required to make a decision on the permit application, the shot clock expired on February 28, 2022 without the city having reached any such decision. This despite two separate agreements between Verizon and the city of Fresno to toll the 150-day "shot clock" and thereby extend it for the city's benefit. The city made the Verizon's application the subject of four public hearings without having made any final decision when the wireless carrier finally filed its lawsuit in the U.S. District Court for the Eastern District of California on June 30, 2022. 

 

Under Section 332(c)(7)(B)(ii) of the Telecommunications Act of 1996, a local government must "act on any request for authorization to place, construct, or modify personal wireless facilities within a reasonable period of time." In its 2009 Wireless Infrastructure Order (or Shot Clock Ruling), the FCC used its discretionary authority to interpret that statutory provision by establishing a rebuttable presumption that a "reasonable period of time" is 90 days to process a "collocation" application and 150 days to process all other applications – including the construction of new cell towers like the one Verizon is now going to build in Fresno.
 

On its face, it seems quite unlikely that Fresno would have been able to overcome the presumption that its lengthy and ongoing delay in making any decision about whether to approve or deny Verizon's cell tower permit application was justified. The city almost surely would have taken a loss in court, and Verizon would have obtained judicial relief necessary to build the tower. Now that the matter has been resolved, Verizon will build the tower and expand its 5G network coverage and capacity for residents in Fresno.

 

The lawsuit in Fresno MSA Partnership Limited (Verizon) v. City of Fresno and its result bespeak the continued need for wireless infrastructure citing rules that prohibit unreasonable permit processing delays and other unreasonable local regulatory obstacles to building next-generation wireless infrastructure. If there had been no "shot clock," who knows how long the administrative delay in Fresno would have continued? 

 

My Free State Foundation former colleague Andrew Magloughlin and I made this same basic point in a June 2020 Perspectives from FSF Scholars titled "The FCC Should Preserve and Expand Its Broadband Infrastructure Reforms." In that Perspectives, we wrote: "Local regulatory barriers to broadband infrastructure deployment have come in the forms of moratoria on construction permit approval, lengthy administrative processing periods for permit applications, high fees for filing permits that bear no relation to the costs of reviewing applications, and high recurring fees for providing service." Our Perspectives focused on the infrastructure policy reforms adopted by FCC between 2018 and 2021. As we explained in that paper: 

The Commission's important recently-adopted infrastructure policy reforms preempt such barriers to broadband facilities construction and upgrades. By reducing unnecessary local regulatory costs, the Commission's reforms help preserve provider resources for investment in additional broadband infrastructure, including in harder-to-serve areas. And the elimination or reduction of excessive local administrative delays allows consumers timelier access to 5G, fiber, and gigabit-speed cable broadband services. 

The federal government has allocated $42.45 billion in funds through the Broadband, Equity, Access, and Deployment (BEAD) Program as well as billions more through other programs to subsidize buildout of broadband network facilities to unserved Americans. Having infrastructure siting policies like shot clocks in place will help ensure that those billions achieve their purpose in connecting more Americans and closing the digital divide. 

Accenture: Repurposing Three Bands Will Solve Spectrum Deficit for Wireless

In an insightful report released today and titled "Spectrum Allocation in the United States," Accenture examined current use and future demands for spectrum. Accenture called attention to the small amount of mid-band spectrum dedicated to commercial wireless use compared to the amount being used by the federal government. As 5G networks grow and mobile data usage continues to sharply increase, a larger stock of spectrum will be needed for licensed commercial wireless use. Notably, Accenture identifies three band candidates for spectrum repurposing – the lower 3 GHz band, the 4 GHz band, and the 7/8 GHz band – that could supply needed for licensed use by 5G wireless services.  

Among the most eye-opening aspects of Accenture's report is massive amount of spectrum that currently under the control of the federal government and the comparatively small amount that is available for licensed commercia wireless use. Accenture found that 61% of all lower mid-band spectrum – located between 3 GHz and 8.4 GHz – or 3,300 MHz is dedicated to government use. By comparison, 1,910 MHz is available for unlicensed use and just 270 MHz (about 5% at present) is available for licensed commercial wireless use. In its report, Accenture found that the federal government has access to about 12 times more lower mid-band spectrum than commercial wireless services. 

Spectrum in the 3-to-8.4 GHz range is particularly ideal for 5G services. Yet the supply of that spectrum for licensed commercial wireless use is lagging. Accenture rightly calls it a "deficit" in spectrum allocation for commercial wireless services, as GSMA has projected that mobile data traffic per smartphone user will increase 3.6 times in North America by 2027. That is an increase from about 15GB per smartphone user per month in 2021 to 52GB per user in 2027. Significantly increased spectrum supply is needed to accommodate 5G services, including Fixed wireless access (FWA) services that can help close up the digital divide and industrial connections. 

 

Accenture's report hones in on three promising bands that can be repurposed to furnish spectrum resources that will enable Americans to realize the full potential of 5G: the 3.1-3.45 GHz band, the 4.4 to 4.49 GHz band, and the 7.125 to 8.46 GHz band. When combined with about 180 MHz of C-band spectrum that is expected to go into commercial wireless services at the end of 2023, those bands could yield upwards of 1,600 MHz of spectrum for licensed commercial wireless services. 

 

Be sure to check out Accenture's report on U.S. spectrum allocation. 

Data Shows 5G Network Connections Surge Continues in 2022

A September 21 press release by 5G Americas announced that "Global 5G Connections are Doubling Every Year." Data from Omdia and 5G Americas apparently indicates that global wireless 5G connections rose to 813 million by the end of the second quarter of this year. They forecast that global 5G connections will reach 1.1 billion by the end of 2022.

The 5G Americas press release does not offer any statistical breakdowns specific to the U.S. But it does describe the march of 5G adoption in a combined "North America" category that consists of the U.S. and Canada: 

By region, North America had a total of 99 million 5G and 502 million LTE connections by the end of Q2 2022. This translates into an addition of 17 million 5G connections for the quarter – a gain of 20.7 percent over Q1 2022. Additionally, CTIA notes fast growth in 5G uptake in the United States, which now identifies 315 million Americans covered by 5G and one-third of American adults having an active 5G device. Overall, a total of 137 million 5G connections is projected to come from North America by the end of 2022.

The lion's share of 5G connections growth in North America belongs to the U.S. A January 7 blog post called attention to an Ookla report that ranked the U.S. #1 in terms of 5G network availability. This growth in 5G in the U.S. critically depends on strong private sector capital investment – a factor highlighted in a September 15 blog post by Free State Foundation Senior Fellow Andrew Long. And a replenished supply of new spectrum for licensed and unlicensed wireless use will also be needed in order to maximize the value of 5G networks for Americans. On the pressing need for more mid-band spectrum for commercial wireless use, see Mr. Long's September 22 blog post. 

Report on Mid-Band Spectrum: U.S. Must Act to Compete Globally

On Tuesday, CTIA issued a Press Release highlighting a new report that compares the amount of licensed mid-band spectrum available for 5G in the United States and other countries. Currently near the bottom of the list of 15 countries studied, America's relative position will not improve significantly over the next five years absent timely action by policymakers to free up more spectrum between 3 and 7 GHz.

Entitled "Comparison of total mobile spectrum in different markets," the report was prepared by Analysys Mason. As it happens, Free State Foundation President Randolph May blogged about a previous Analysys Mason report on spectrum availability in March 2020.

The report finds that, with a current total mid-band licensed spectrum allocation of 270 MHz, the U.S. lags the leading three countries – Japan (1100 MHz), the U.K. (790 MHz), and France (510 MHz) – by an average of 530 MHz.

Factoring in allocations already planned, the landscape in five years is not forecast to look much better: the amount of mid-band spectrum in the U.S. should increase to 450 MHz, but that total will fall short, on average by nearly half (415 MHz), of the expected allocations in Japan (1100 MHz), the U.K. (790 MHz), and South Korea (700 MHz).

The image below helpfully presents this information in graphic form.

As Meredith Attwell Baker, CTIA President and CEO, is quoted in the Press Release, "[t]he FCC made great progress with recent mid-band spectrum auctions, but this study shows there is more work to be done. We need Congress, the Commission and the Administration to develop a meaningful pipeline plan to build upon our recent success."

To be sure, efforts to make more mid-band spectrum available for 5G are ongoing. As Free State Foundation Director of Policy Studies and Senior Fellow Seth Cooper noted in a contemporaneous post to the FSF Blog, the House in July passed the Spectrum Innovation Act of 2022, the intent of which is to make 200 MHz of lower 3 GHz band spectrum available for commercial ("non-Federal") use.

And on September 12, 2022, Senators Mike Lee (R – UT) and Marsha Blackburn (R – TN) introduced related legislation in the Senate with an even more ambitious goal: 350 MHz of spectrum between 3.1 and 3.45 GHz.

FCC Inspector General Warns Against Fraud in Broadband Spending Program

On September 8, the FCC's Office of Inspector General issued an advisory regarding the presence of ongoing fraud and threats the integrity of the Affordable Connectivity Program (ACP). That $14.2 billion program was established Infrastructure Investment and Jobs Act of 2021, in order to help qualifying low-income households be able to afford broadband Internet connections. But the Inspector General has called attention to a deceptive tactic being used whereby "a number of providers and their agents have enrolled many households into the ACP based on the eligibility of a single BQP [Benefit Qualifying Person]. A single BQP cannot be used to qualify multiple households for ACP support simultaneously."  

The Inspector General's advisory offered some examples of fraudulent enrollment through multiple uses of the same BQP, including more than 1,000 Oklahoma households being enrolled based on the eligibility of a single BQP. Although it deemed improper payment amounts low relative to the overall program size, the Inspector General wrote that "the data show use of this flagrant technique is steady to increasing, particularly for certain providers." The Inspector General issued the advisory in order to put providers on notice regarding that fraudulent tactic.

Additionally, the Inspector General's advisory noted that "[f]raud, waste, and abuse remains a serious problem for Commission programs." Indeed, it is important that the Commission continue to ensure that program dollars are spent as intended and benefitting the proper recipients. (Commissioner Brendan Carr issued a September 9 statement responding to the Inspector General's advisory and again raising his concerns about the need to take action to avoid future misuse of FCC program dollars.) 

 

Moreover, in public comments filed in February 2022, Free State Foundation President Randolph May and Senior Fellow Andrew Long called attention to the need for the NTIA to curb fraud, waste, and abuse in another program that was established through the Infrastructure Act, known as the Broadband Equity, Access, and Deployment (BEAD) Program. The BEAD Program will disburse $42 billion to the states for distribution for broadband infrastructure construction grants, to connect primarily unserved locations. According to the comments filed by President May and Mr. Long: 

In this unprecedented expenditure of taxpayer funds, the exercise of great care and discipline is necessary to ensure that waste, fraud, and abuse are prevented, or at least minimized. NTIA has the affirmative responsibility and duty to ensure that its oversight in conjunction with the states' implementation, stays focused on geographic areas that truly and objectively are unserved.

It is to be hoped that the BEAD Program spending will be safeguarded by NTIA as well as participating states and that program implementation will not necessitate concerns such as those raised by the FCC's Inspector General's advisory about the ACP Program.

Reaction of FSF President Randolph May to Fifth Circuit’s Decision in NetChoice v. Paxton

Free State Foundation President Randolph May released the following statement regarding the Fifth Circuit’s decision in NetChoice v. Paxton regarding the Texas law prohibiting Big Tech social media censorship:

 

“I think the Fifth Circuit decision means that it is now more likely than not that the Supreme Court, if asked, will avail itself of the opportunity to consider whether the Texas law, and similar ones, violate the First Amendment. I’m not confident of which way the Court would rule in such a case, but I am confident that the Fifth Circuit’s opinion would not — and should not — be lightly dismissed. The Fifth Circuit’s treatment of the First Amendment jurisprudence was thorough. And it was pretty persuasive in explaining why Section 230, which provides that an online platform shall not be treated as a ‘publisher or speaker’ of any content provided by a user, undermines the platforms’ arguments for holding their censorship actions are the platforms' own protected speech. I think if and when the Texas law or a similar one gets to the Supreme Court, the immunity from liability enjoyed by the platforms under Section 230 is likely to play a determinative role — one not likely to be helpful to sustaining the platforms’ First Amendment arguments."

 

Report Identifies Dangers to Internet Users from Malvertising and Piracy

On September 15, the Digital Citizens Alliance released a report titled "Unholy Triangle: From Piracy to Ads to Ransomware: How Illicit Actors Use Digital Ads on Piracy Sites to Profit by Harming Internet Users." The report, which the Digital Citizens Alliance prepared jointly with White Bullet and Unit 221B, spotlights the phenomena of online pirates working with "malvertisers" and with the effective assistance of online ad intermediaries to exploit Internet users. 

As the report explains, operators of piracy websites lure Internet users by offering them access to "free" content – including copyrighted movies, TV shows, music sound recordings, and ebooks. But many piracy sites feature a barrage of malicious ads intended to confuse, deceive, or scare Internet users into clicking them. The clicked ads then infect Internet users' computers with malware that can steal their financial and personal information as well as with spyware that can track all of their online activities. The report identifies the creators of these harmful ads as "malvertisers" and it calls their tactics "malvertising."

One particularly pernicious malware-related activity is known as "ransomware." In a ransomware attack, an Internet user's computer files are encrypted and the user is locked out. Cybercriminals then demand payment from the Internet user in order to unlock the files. A source cited by the report estimated that global losses due to ransomware totaled $20 billion in 2021.

 

The report authors investigated many online piracy sites and found ransomware and other malware schemes in operation. According to the report, in just a one-month period, visitors to piracy sites were barraged with an estimated 321 million ads designed to harm them. Indeed, the report found that malvertising accounts for 12% of total ads on piracy sites and generates an estimated minimum of $121 million annually, with more than $68 million coming from U.S. Internet user visits to such sites. 

 

Significantly, these piracy website-hosted malvertising schemes would not be operating without ad intermediaries. In their investigation, the report's authors found that some foreign owned and operated ad intermediaries were willing to place deceptive ads and thereby effectively facilitate malvertising campaigns. The report found that the ad industry has made progress in reducing ads for legitimate companies on piracy sites, and it credits the creation of the Trustworthy Accountability Group (TAG) by U.S. ad associations for helping bring about those reductions. 

 

Copyright piracy is wrong in itself and commercial traffickers in infringing content ought to be the target of federal law enforcement efforts. Free State Foundation President Randolph May and I have written about the harms from online piracy – including the role of online ads in facilitating piracy – which undermines copyright owners' ability to seek financial returns and devalues their intellectual property. But the harms of online piracy don't end there. The "Unholy Triangle" report rightly calls attention to the dangers to unsuspecting Internet users from malware on piracy websites that host infringing content. More Internet users should become aware of those dangers. Hopefully, further efforts will be made by responsible U.S. ad associations and by others to curb the high volumes of malicious ads and the illicit revenue streams that they generate.