Big ISPs once again at odds with local governments over universal service demands

FCC says small cells will close the digital divide. Most say they won't | Center for Public Integrity: The FCC’s claim doesn’t convince officials in Lincoln, Nebraska, which experienced the same reluctance as Montgomery County did by wireless companies willing to deploy small cells to rural areas, said David Young, manager of fiber infrastructure and rights of way for the city. In 2015, when Lincoln officials were negotiating with Verizon Communications Inc. over how much the city would charge the company to attach small cells to municipal property, the city said it would charge the carrier an annual $95 fee — if the carriers would commit to deploying broadband in rural areas in Nebraska. Over the next two years, Lincoln offered the same deal to other carriers and builders. Young said the companies said they couldn’t commit to anything. So, Lincoln went ahead with an agreement that have the companies paying $1,995 a year to attach small cells to city poles, more than 20 times as much. If Pai is serious about 5G closing the digital divide, Young said, “then I’ll make that deal: You cannot deploy any small cells in an urban environment until all the rural markets are covered. Until we can make that deal, I'm calling foul” on the assertion 5G will help close the digital divide.

The deal here is the essentially the same one local governments proffered to cable companies that wanted a franchise. Serve all premises within our jurisdiction or no deal. No cherry picking and neighborhood redlining. Cable companies didn't want to have to meet universal service demands in franchise negotiations and went over their heads to state governments in the mid 2000s and lobbied them to preempt the localities and take sole authority over so-called "video franchises." That preempted local government leverage.

Now local governments are pressing big telcos for universal service such as Lincoln is here. The telcos don't like the demands for universal service and are once again seeking preemptive relief from federal and state governments. Large telephone and cable companies also successfully lobbied the U.S. Federal Communications Commission to scuttle its 2015 Open Internet rulemaking classifying Internet service providers as common carrier telecommunications utilities, subjecting them to universal service and anti-redlining requirements.

Playing the preemption card again to avoid universal service obligations and continuing to leave many homes, schools and small businesses without connecting infrastructure to advanced telecommunications services will likely backfire on big telcos (and cablecos looking to get into mobile wireless services). Angry voters who have gone more than a decade with limited or no service options are increasingly likely hold elected policymakers who side with them in this fight accountable at the polls.