How San Jose’s 5G approach blocks broadband
San Jose is one of America’s greatest hubs of online innovation. So why have those living in the capital of Silicon Valley fallen behind when it comes to fast, affordable broadband?
The answer: San Jose’s 5G tax.
5G is the next generation of mobile broadband. It will be a greater upgrade than we experienced 10 years ago when we transitioned from 3G to 4G. It will allow wireless providers to compete against cable companies in home internet access, enable driverless cars and power new telehealth and “internet of things” innovations. In short, 5G is about more choices, more services and more jobs.
Forward-looking leaders have been getting their cities 5G ready. They’ve done so by opening their doors to small cells, which are the building blocks of 5G. Small cells are backpacksized antennas that attach to existing utility or light poles. They add the capacity and speeds we increasingly expect from the mobile internet. Since 2012, wireless providers have added nearly 140,000 small cells in cities across the country.
But not in San Jose. Elected leaders elsewhere embraced this new technology. So in places that don’t have all of the tech advantages of San Jose, cities improved broadband by approving small cell permits promptly and charging reasonable fees. I have seen this in Sioux Falls, South Dakota, Fishers, Indiana, and other cities where small cells have been up and running thanks to their leaders’ commonsense policies.
Instead of embracing 5G, Mayor Sam Liccardo taxed it. Beginning in 2015, the city sought up to $3,500 per year per small cell. Compare that to $100 in Phoenix and $50 in Indianapolis — cities about the size of San Jose that have leapfrogged it in terms of small cell deployment.
If you want less of something, you tax it, and that’s exactly what San Jose got. Here’s the small cell scorecard for the 10th largest city in the United States — 2015: zero; 2016: zero; 2017, zero; and 2018: zero (until a few weeks ago when San Jose approved its very first small cell and now reportedly has 86).
This record of broadband failure sits in stark contrast to cities across the country that saw better coverage while San Jose residents fell behind. And it was not for lack of demand. For years, wireless providers sought San Jose’s approval to bring small cells to the city.
In a memo to the city council released earlier this year, the mayor’s staff recognized that their 5G tax blocked “investment in our broadband infrastructure.” Liccardo now has tried to restructure his tax, pairing a $1 million upfront payment with adjusted annual taxes. This special tax burden on small cells will, once again, result in less broadband than San Jose residents deserve, and it will make it more difficult for smaller broadband providers that can’t afford $1 million upfront to compete against Big Telecom.
Liccardo’s tax doesn’t just hurt San Jose. Excessive taxes charged by big cities deplete the capital needed to build broadband in suburban and rural America. That’s why several dozen mayors, county supervisors, and elected leaders called on the Federal Communications Commission to act.
Two months ago, the FCC listened to those local leaders. We reined in the abusive taxes that have blocked broadband, while guaranteeing that cities are fully compensated for their costs. We voted, on a bipartisan basis, to ensure cities act on small cell applications within reasonable periods of time. And, we affirmed that cities may impose aesthetic requirements so that communities can preserve their look and feel.
In response to these reasonable policies, Liccardo sued. But federal law is clear that local governments may not effectively prohibit the provision of service. And as Liccardo’s years of zero small cells show, his 5G tax operated as a textbook prohibition.
While Liccardo spends San Jose’s resources suing to defend his 5G tax, we at the FCC will continue cutting red tape so that all San Jose residents — and all Americans — have a fair shot at fast, affordable broadband.