New report reveals the shortcomings of San Diego's 5G partnership with Verizon

CWA released a report analyzing the public-private partnership between the City of San Diego and Verizon, finding that the partnership was executed as a backroom deal that stands to benefit the company instead of centering the connectivity needs of all San Diegans. 

On April 3, 2019, Mayor Kevin Faulconer signed a public-private partnership with Verizon allowing the company to deploy hundreds of small cell wireless sites across the city. While the mayor touted the agreement as a way to make the city more digitally inclusive, an analysis of public records from January 2018 to April 2019 reveals that the deal was overwhelmingly shaped by Verizon, lacked public input, bypassed City Council review, and even feedback from city staff was ignored in the final version of the deal to meet Verizon’s demands.  

“The launch of Verizon’s 5G network and the city’s public-private partnership with the company were called a ‘win-win’ for all San Diegans. Pulling back the PR curtain shows this was a backroom deal that looks much more like a corporate giveaway than a genuine partnership,” said Orlando Gonzalez, CWA Local 9509 Secretary-Treasurer. “With a massive  budget shortfall expected next year, these types of corporate handouts are just unacceptable. Despite the hype, the Verizon deal does nothing to address the city’s digital divide and homework gap, which COVID-19 has shown is a critical issue. All San Diegans deserve to benefit from the city’s digital initiatives. Holding a public hearing on this deal is the first step to making our community whole.”

Under the deal, Verizon receives deeply discounted leases on public property and expedited permitting approval windows for the entire ten year term of the agreement. In exchange, the company promised limited community benefits, which are only unlocked if the agreement’s unrealistic benchmarks are met. Public records show that early commitments by Verizon to fund additional staff positions to process permits were struck from the final agreement. The deal appears even more concerning in light of the COVID-19 pandemic, in that it does not require Verizon build the network in under-connected neighborhoods, and does not require Verizon to contribute any other resources to address the digital divide. In contrast, the City of San Jose won agreements from wireless companies to contribute to a digital inclusion fund as a condition of the wireless infrastructure build-out. 

“Verizon’s 5G mmWave network in San Diego is limited,” said Earl Lum, President of EJL Wireless Research. “A review of City small cell permitting data indicates that Verizon only has around 150 street and signal light poles permitted as of last month, providing small areas of coverage in just four, almost entirely commercial neighborhoods. To provide full 5G coverage, Verizon would need to deploy a total of 3,000-5,000 5G small cell sites across the city.”

In addition to leaving behind most San Diegans, the report finds that the agreement also fails San Diego workers. Extensive records requests revealed that the city does not seem to collect information about the contractors and subcontractors working in its public rights-of-way. This lack of transparency and reporting makes it nearly impossible to determine whether San Diegans are benefiting from this major construction project or if Verizon is subcontracting this dangerous and critical infrastructure work to irresponsible, out-of-state subcontractors with questionable employment records, as was found to be the case in Verizon’s small cell deployment in Sacramento. Furthermore the city’s failure to exercise adequate accountability over its rights-of-way is an issue of public safety. In San Francisco, an unlicensed Verizon subcontractor from New Jersey hit a gas line while laying fiber, causing an explosion with 50 foot flames that burned for hours and resulted in substantial property damage.

“The buildout and maintenance of telecom networks is critical and dangerous work. The Verizon deal raises serious questions about whether worker and public safety will be protected, given the lack of transparency and accountability. It is particularly troubling that the City of San Diego does not track which subcontracted companies are working in its rights-of-way,” said Keith Maddox, Executive Secretary-Treasurer of the San Diego and Imperial Counties Labor Council. “Subcontracted workers often earn lower wages and are subject to more dangerous working conditions. The City must take immediate action to incorporate transparency and accountability requirements into its permitting process to protect worker and public safety.”  

The report outlines three recommendations to help ensure San Diegans get a fair deal that benefits all residents: 

• Assess costs and improve transparency -- The City of San Diego should assess the full budgetary impact of the Verizon deal, perform a cost study and hold a public hearing. The City should get a clear picture of the real cost to taxpayers - from staff time to lost fee revenue - and hold a public hearing to ensure that residents are fully informed and have the opportunity to weigh in. 

• Consult with community stakeholders and create digital equity demands -- The City should work with community stakeholders to clarify digital equity needs. Verizon should be open to revising the deal and including needed community benefits that are commensurate with the financial benefit Verizon is receiving. 

• Protect public and worker safety -- The City should change permitting procedures so residents know who is working in their streets and strengthen labor protections so that 5G network buildout doesn’t come at the expense of basic safety requirements. The City should modify its permitting procedure to require Verizon and all providers to state what entity will actually perform permitted work.

Links:

5G built wrong, corporate giveaways to Verizon leave San Diegans worse off (Fair 5G, June 2020)