Towns Hate Big Ugly Cell Towers--But May Say Yes for a Price

(Bloomberg) -- The people of Papillion, Nebraska like the idea of faster, more powerful wireless service in their town of 19,000 -- but not if it means they have to agree to an 11-story tower looming over a church. City officials rejected that proposal and three others from Mobilitie LLC, a California company that installs the infrastructure needed for next generation 5G wireless service.

“They didn’t give us any reason why they chose a place,” said Papillion spokesman Trenton Albers. “It just seemed like they put a pin on a map somewhere.”

The Omaha suburb is among places where Mobilitie’s demands to use public land for antennas and towers have raised hackles with local officials, in disputes that seem likely to grow in number as ever more towers and antennas are erected to feed the mobile boom.

Mobilitie says some localities obstruct its work, and it wants the U.S. Federal Communications Commission to impose restrictions on how much towns and cities can charge for allowing it attach antennas to streetlight poles, or for installing towers up to 120 feet tall in downtowns and neighborhoods. Fees can range from several hundred to several thousand dollars a year, depending on size and location.

The FCC on Thursday agreed to study the issue.

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Some towns say Mobilitie, which works with Sprint Corp. and others, files poorly drafted applications and falsely claims connection rights as a utility on par with electricity and phone companies. Papillion, for instance, told the FCC that Mobilitie’s applications were “completely illogical” and ignored local circumstances.

Mobilitie Chief Executive Officer Gary Jabara says the company gets good cooperation from most towns and cities, and needs help to surmount problems in mainly smaller places that unreasonably hike fees to take advantage of deep-pocketed mobile carriers.

“They’re just greedy,” Jabara said in an interview April 17. “They just put their hands out and say, ‘Hey, AT&T, Verizon, T-Mobile, we want thousands’" of dollars in fees to attach antennas to utility poles.

As for the criticism about Mobilitie claiming rights as a utility, Jabara said, “We haven’t misrepresented ourselves anywhere.”

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The conflict pits communities anxious to preserve streetscapes against mobile companies eager to build 5G networks for a coming era of web-connected cars, houses and appliances. The extra-fast service will ride on frequencies that carry a lot of information but don’t travel very far. Networks will use antennas numbering in the hundreds of thousands, perhaps millions. They’ll be closer together, and closer to shops and homes than today’s arrays atop cell towers.

Mobilitie has asked the FCC to limit fees municipalities can charge for attaching suitcase-sized antennas to structures such as light poles, or for accepting new towers.

The agency on Thursday asked for comments on Mobilitie’s request as it advanced rules to remove barriers to wireless broadband deployment. Commissioner Michael O’Rielly, a member of the agency’s Republican majority, said many localities act in good faith, “but bad actors are ruining it for everyone.”

The biggest wireless providers have embraced Mobilitie’s position. They say high fees threaten progress toward the new networks. They’ve also asked for tighter deadlines for local authorities to consider applications.

Cities including New York and San Francisco have pushed back, arguing that existing procedures are working just fine, and that local governments shouldn’t be required to make municipal assets available for use by wireless carriers.

The disputes could grow as the U.S. prepares for a fifth generation of wireless technology. Proponents sketch a world of ubiquitous mobile broadband connections. “5G will instantly connect hospitals with ambulances, help manage water and energy consumption, and alert first-responders in real time,” according to the CTIA wireless trade group that represents the top four U.S. carriers: AT&T Inc., Verizon Communications Inc., T-Mobile US Inc. and Sprint.

Federal regulators have signaled impatience with local authorities.

“Unreasonably high costs and excessive delays to access poles and costly and cumbersome permitting processes can make it extremely difficult to deploy infrastructure,” FCC Chairman Ajit Pai said Thursday. Last year he said the agency “must aggressively use its legal authority to make sure that local governments don’t stand in the way.”

Kentucky Derby

Closely-held Mobilitie was founded in 2004 by Jabara, a former partner at Deloitte, where he oversaw negotiations for wireless infrastructure on behalf of major wireless carriers, according to the company’s website. Mobilitie describes itself as a real estate company in filings with regulators in its home state of California.

The company also installs wireless networks for sporting venues such as stadiums and Churchill Downs, home of the Kentucky Derby. Mobilitie, based in Newport Beach, California has attracted investment from CIT Group Inc. and TD Securities USA LLC, and raised $1.1 billion in 2012 from a sale of towers and other assets to SBA Communications Corp. The company doesn’t disclose its revenue or number of employees, Jabara said. It works with all four major wireless carriers, he said.

Along the way Mobilitie has attracted criticism from several communities:

  • In Denison, Texas, officials said Mobilitie workers without proper authorization erected two 80-foot towers on public land, including a spot right across from the city hall; the town forced Mobilitie to take the towers down. "Very dark of night, stealthy" deployment, said city manager Jud Rex. Mobilitie said it received authorization from a utility coordinator identified by the city.
  • In Michigan and Minnesota, state utility regulators got so many inquiries and complaints about Mobilitie that each posted a notice on an official website, making clear the company didn’t have automatic rights to plant poles on public land. “Certainly, like investor-owned utilities, we have rights,” Jabara said.
  • Mobilitie has falsely claimed it has legal rights to use public property, and has sought to bolster that impression by filing under at least 17 names that use “Utility Pole Authority,” such as Alaska Utility Pole Authority or Florida Utility Pole Authority, municipalities including Los Angeles, Boston and Portland, Oregon, said in an FCC filing.

“Frankly, not everybody can pronounce our name,” Jabara said. “Sometimes it’s just easier to work with the cities that way.”

Jabara said traditional permitting practices that include intensive review of each site pose “an impossible hurdle” in cost and time. He likened mobile connectivity to water and electricity supplies.

“We’re not asking for anything different from how other essential services are treated by cities,” Jabara said. “Nobody wants to force the cities to do something other than what they have done for essential services for years.”

Cities that overcharge include San Jose, California, which assesses an annual fee of $7,210, or roughly 10 times the average national price of $730 per site, according to information compiled by Mobilitie.

San Jose

San Jose officials disputed that figure, saying the cost is typically $314. Fees range from $4,200 to $8,000 for a large new pole, although in most districts costs are $2,500 to $3,000 and smaller poles are used, said Martina Davis, a supervising planner for the city. “San Jose is keenly interested in expanding broadband,” said Cheryl Wessling, a city spokeswoman.

CTIA, the trade group, said in a filing that some places have simply prohibited new wireless installations in rights-of-way. It asked for an end to moratoria, and said the FCC should shorten the time for decisions on applications to 60-to-90 days, compared with the current deadlines of 90-to-150 days.

No. 4 U.S. wireless carrier Sprint, too, told the FCC it supports Mobilitie’s petition. The Overland Park, Kansas-based company is attaching small-cell antennas to rooftops, street lamps and utility poles to saturate areas with signal coverage. It told the FCC that it “actively partners” with Mobilitie and didn’t provide details of the arrangement.

‘Work Closely’

Adrienne Norton, a Sprint spokeswoman, said the company doesn’t disclose deployment figures. “We work closely with every city to understand and address their unique issues,” Norton said in an email. “We expect all of our business partners to do the same.”

Critics say Mobilitie is simply leveraging a public resource for private gain.

“They’re looking for the low-hanging fruit” in small towns with part-time code officers, said Dick Comi, a founder of the Center for Municipal Solutions that advises localities in their dealings with telecommunications service providers. “It’s very disconcerting to the communities.”

“If you can go out onto public land it’s much easier because you’re dealing with one entity,” said Steve Traylor, executive director of the National Association of Telecommunications Officers and Advisors, a group for local government officials that opposes Mobilitie’s request. “Now they want to say, ‘We want it really, really cheap.’ "

Proponents of easing permit processes have said the antennas for 5G, often called small cells, are far less intrusive than cell towers --“literally the size of a pizza box," a CTIA official told Congress in April -- and can go on existing structures.

That argument doesn’t wash with Traylor. He noted that Mobilitie installs poles. “Is Mobilitie’s 120-foot tower a small cell?,” he asked. “Is a 50-foot tower? That is one big pizza box.”