FCC Meeting This Month: What's In Store For 5G?

Federal Communications Commission (FCC), is planning to modify the small-cell deployment rules and update the entire wireless infrastructure in the United States. This move comes as an attempt to maintain U.S. leadership in the wireless field with an eye on the global race to 5G. FCC is trying to ease deployment rules of small cells for LTE and 5G, primarily by reducing fees that local governments and other entities charge against those buildouts.

Per current regulations, companies have to comply with several requirements under the National Environmental Policy Act (NEPA) and the National Historic Preservation Act (NHPA) prior to small cell installations and deployments. These federal, historic and environmental procedures were designed for larger macrocell deployments and the costs and fees associated with the same worked feasibly with 3G and 4G deployments.

However, these rules are no more compatible with next-generation 5G technology, which requires small cells spaced about 500 feet apart to deliver 5G signals. The costs associated are also too high.

In fact, the exorbitant small cell deployment fees are expected to be discussed at length in the FCC meeting scheduled on Mar 22.

Per a FierceWireless report, wireless players across the industry have unveiled deployment costs in the respective filings to FCC, in a bid to encourage the commission to lower the fees regarding small cell buildouts. Let's take a look.

Notably, 17% of AT&T's T deployment costs for each small cell node is due to NEPA and NHPA compliance. In fact, in 2018, AT&T expects to spend around $45 million on NEPA and NHPA compliance, which is likely to increase in the future with growing number of small cell projects.

Verizon VZ estimated to have spent 26% of its total small cell deployment costs in 2017 on NEPA, NHPA and Tribal consultation process. Sprint S has recently reported that its total costs incurred for Tribal review of small cells over the last two years exceeded $23 million. Sprint's tribal fees totaled $173,305 for the deployment of 23 cell sites around NRG Stadium in Houston.

The Cellular Telecommunications and Internet Association (CTIA) - a wireless communications trade association - along with member companies as well as others in the wireless industry have put forward to FCC various examples of the costs currently borne by them.

Carr's Support to 5G

Last week, at the Consumer Technology Association's 5G Day, FCC Commissioner Brendan Carr proposed a plan to streamline the federal, historic and environmental review procedures to update wireless infrastructure deployments and reduce regulatory financial burdens on wireless providers deploying 5G.

Carr claims that 5G deployments will introduce 3 million jobs, provide $275 billion for private sector network investment and contribute $500 billion to U.S. Gross Domestic Product. Further, revamping the existing rules will decrease regulatory costs of small cell deployment by 80% and cut down deployment time by half.

The resulting cost savings and resources can further be redirected to increase small cell deployments geographically, thus bringing in more Americans under the 5G coverage. In fact, it is also estimated that 300,000-400,000 small cells will be deployed in the next 3-4 years to support 5G services. The figure is likely to rise up to 800,000 by 2026.

To achieve these goals and the ensuing benefits, it is essential to streamline the applicable regulations. Theoutdated infrastructure regulatory rules are holding back 5G investments and deployments.

Bottom Line

The wireless industry for years has argued that small cell deployments are necessary to improve wireless networks, thus paving the way for 5G networks. Notably, small cells can be used to augment the existing 4G LTE and the upcoming 5G network. Both primarily concentrate on high traffic locations like a business district or a shopping mall.

Small cells also help increase the voice capacity and data speeds and complements the current LTE infrastructure. However, providing an emergency power backup remains a major headwind for small cells.

Carr's plan has been aided by many industry bodies. The Telecommunications Industry Association and the Internet Innovation Alliance have applauded Carr's plan to advance 5G deployment in the United States. 

In view of the above write-up, we expect investor focus to remain on the outcome of the meeting later this month, which will decide the nation's fate in the race to 5G.

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