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Cities to federal government: Don't tell us how to build our internet

San Jose, California, is the largest city in Silicon Valley, where pioneering tech companies are testing self-driving cars on the streets. Still, about 95,000 of the city's residents don't have internet access — an inequity found in many American cities, and one that politicians at every level of government say they want to solve.

But there are sharp disagreements about how exactly to do that.

At the end of January, San Jose's mayor, Sam Liccardo, brought this fight into the open, publicly resigning from a Federal Communications Commission committee tasked with recommending ways to speed up broadband deployment.

"I concluded that there is no will from this FCC or from this committee to put the lip service about bridging the digital divide into action," Liccardo told CNNMoney. "And I decided it was time to stop participating in this charade that there was a legitimate voice for local communities at this table."

The debate centers on how much authority cities should have to regulate the broadband providers that want to string up lines and install wireless communications equipment on telephone poles and underground. Companies say that municipalities are slowing them down through permits and fees, which mayors argue are necessary to help fund access for their poorest citizens.

For years, cities have struggled to maintain control over the internet's infrastructure in their jurisdictions. At least 19 states have passed laws limiting cities' ability to launch publicly-owned broadband networks, which companies like AT&T and Comcast say represent undue government interference in the marketplace. Mayors have turned to the courts to win back their rights, with some success.

But only recently have cities faced a threat from the federal government. Last spring, President Trump's newly appointed FCC chair Ajit Pai convened the Broadband Deployment Advisory Committee to work on a set of recommended standards that states and municipalities can adopt to govern the build out of their local internet infrastructure.

In January, the BDAC published draft ordinances that proposed limiting the fees that local governments can charge, and to impose "shot clocks" that would cap the amount of time cities can take to review permits. The state code also expresses a preference for rural broadband networks to be built by the private sector, rather than a public entity.

Liccardo and other mayors found the proposals unacceptable.

"We need to be able to charge fees that enable us to be able to build out broadband infrastructure and to invest in promoting digital equity," said Liccardo. "And we are instead facing an industry that is pushing for rights that are sub-market."

Although the codes are voluntary, Liccardo worries they would spread quickly once they are implemented, since legislative bodies are likely to adopt proposals that have received the FCC's blessing.

Cities also charge that the BDAC's membership is heavily weighted toward companies and their trade associations, with only a smattering of consumer groups, academics, Native American tribes, and local government officials. There are no municipal representatives on the state code working group, for example.

San Jose's mayor isn't the only one upset about it. In November, the National League of Cities, U.S. Conference of Mayors, and National Association of Counties sent a letter to the FCC protesting the BDAC's composition and asking it to protect local authority over public rights of way (e.g. roads, ditches, utility corridors, etc). A group of 79 cities reiterated the message in January.

In a response provided to CNNMoney, the FCC was unapologetic. "The BDAC has worked hard to develop consensus on removing needless regulatory barriers to broadband deployment, and its recommendations will help extend digital opportunity to all Americans," it said.

Elizabeth Bowles, the BDAC's chair and the president of an Arkansas-based wireless provider called Aristotle, said she was "disappointed" by Liccardo's resignation and is committed to reaching an equitable outcome, even though it's possible the BDAC could proceed without the cities' support.

"I believe it is critical that we reach common ground," Bowles said. "I do not want to see a result where everybody but the municipalities endorse the recommendations."

The finalized codes and reports will likely be sent to the FCC sometime in the next year. The agency is also considering passing a separate set of rules that would limit local authority over broadband infrastructure.

The BDAC's few representatives from local government, including New York City and McAllen, Texas, published a report in January disputing the FCC's authority to dictate the fees that cities may charge and the limits they may place on broadband providers.

"The recommendations stemming from this body today, unfortunately, seem destined to place a greater emphasis on the convenience and profits of providers than the needs of communities and average Americans," the cities wrote.

A similar effort is underway in Congress. Last week, the House Energy and Commerce Committee reviewed several bills that would exempt broadband providers from historic preservation and environmental reviews in a host of circumstances, such as following a natural disaster.

In response, consumer groups argued that cities need regulations for all sorts of legitimate reasons, such as avoiding undue construction hassles and shoddy work that has to be redone later. Sweeping away local restrictions won't further incentivize companies to invest in areas where they can't turn a profit, they said.

"These model codes are based on this idea that if we are just nice enough to these companies, they will come and deploy," said Harold Feld, senior vice president at the nonprofit tech policy group Public Knowledge. "You do all of this, and there's no showing this that actually gets broadband where there isn't broadband right now. This isn't the biggest driver of cost."

More than regulations and fees, broadband infrastructure is expensive on account of labor, technology, and materials. Feld said that other policies, like making sure roads are built with a conduit that allows fiber to be easily laid down in the future, would help lower the cost of broadband without trampling local authority.

But in less-populated areas that private companies haven't already served, Democrats emphasize that public subsidies are the only thing that will make a difference. "Absent funding, there is no broadband," said Vermont Representative Peter Welch at last week's hearing. "It's as simple as that."

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