The stakes for a prompt and successful rollout of the 5G network, the fifth generation wireless broadband network, are high. This next generation will require a substantial amount of infrastructure in order to be deployed but will require a dense network of many small cells rather than the 100-foot tall towers that previously supported wireless networks.
Despite these differences in the types of infrastructure, until recently, small cell deployments were subject to the same environmental and historical review processes as the massive towers. These requirements imposed substantial delays and additional costs that slowed the 5G rollout, with a range of adverse spillover effects.
The Federal Communications Commission (FCC) voted to update its rules on March 22nd so these small cells should no longer be required to go through the old regulatory framework, which will accelerate deployment of the 5G network.
The number of small cells deployed throughout the country is already growing rapidly as more are required to support the next generation network, an estimated 550 percent increase in the number in place in 2018 alone. Over a longer period, the number of small cells is projected to increase from about 138,000 in 2018 to more than 820,000 by 2026.
The towers and antennas that supported previous generations sometimes rose hundreds of feet higher, and their large scale meant that they were often unsightly, spoiling the view of scenery and historical monuments. The new small cells, which will account for an increasing share of wireless infrastructure, are smaller than a suitcase and can be attached to existing buildings.
Despite these differences, until this new order the deployment of small cells were still subject to the review requirements established under the National Environmental Policy Act (NEPA) and the National Historic Preservation Act (NHPA). According to one estimate from Accenture, the 28 percent of small cells requiring review in 2017 incurred a weighted average cost of $9,370. On average, these review-related costs accounted for 29 percent of the total cost of small cell deployment.
In the vast majority of these cases, the required review did not find that the small cell would have a major effect on the environment, people, or surrounding historical resources. For one company, out of about 250 small cell deployments requiring a NEPA review, no review found a major effect. Similarly, more than 99 percent of the reviews analyzed under the NHPA resulted in a finding of no significant adverse effect.
In recognition of the developments in the characteristics of the underlying infrastructure, the Federal Communications Commission recently approved an order that would update the rules affecting 5G wireless infrastructure. Small cell wireless facilities on non-Tribal lands are no longer subject to NHPA or NEPA review, because the FCC is reclassifying them so they are no longer “undertakings” or “major federal actions.”
This change only affects federal requirements, and does not equate to a greenlighting of deployments, which are still subject to state and local review requirements. However, it does remove one additional layer of regulation that was delaying rollout and making it more expensive, while at the same time virtually all reviews failed to find any significant adverse effects. Those states aiming for faster growth will pass legislation to follow the federal model.
This one change could reduce costs associated with reviews for small cell deployments by almost $1.6 billion through 2026. These related cost savings would be sufficient to pay for 55,000 additional small cell facilities. In addition, the related Environmental Assessments often take about two months to complete, although about a quarter take longer. Exempting small cell facilities from these review requirements would significantly reduce project delivery times.
While small cells will account for an estimated 80 percent of new wireless infrastructure deployments in the years to come, some larger structures more akin to the towers of years past will still be needed. These facilities will continue to be required to undergo review, but the FCC establishes new timeframes for the process.
For the majority of these applications where the Environmental Assessment does not require supplemental materials and supports a Finding of No Significant Impact, the order directs staff to complete review and issue the finding within 60 days from the placement of notice. FCC staff is directed to determine whether those two conditions are met, completeness and adequate for a Finding of No Significant Impact, within 20 days. These new timeframes will give more clarity and certainty to carriers, and will reduce review times so that larger deployments can be put in-service more quickly.
These new rules should reduce the time to deploy small cells by months and lower associated costs for carriers. This would incentivize a more comprehensive and swift rollout of the infrastructure needed to support the 5G network. Small cells, which will become increasingly important and prevalent in the coming years, will no longer be required to undergo these reviews, and larger facilities will complete the process more quickly under improved timeframes.
Getting the necessary infrastructure in place is crucial to realizing the potential benefits from the next generation wireless network in the form of job creation, economic growth, and more possibilities. Now it is up to the states to follow the FCC’s example.
Charles Hughes is a policy analyst at the Manhattan Institute. Follow him on Twitter @CharlesHHughes.
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