FCC Reopens; Issues Guidance on Revised Filing Deadlines

Now that this month's Federal Government shutdown is over, and after a 16-day suspension in normal operations, the Federal Communications Commission has issued a Public Notice announcing revised deadlines for submitting certain FCC filings. The changes were needed because many of the agency's regular electronic filing systems and web pages were inaccessible during the shutdown. As a result, licensees, applicants, participants in rulemaking proceedings and other interested parties will want to carefully review the Public Notice to help ensure that their FCC filings are made in a timely manner. 

A Role for WISPs in FirstNet

In recent months, WISPs have been sharing their ideas and concerns about FirstNet and its effect on the WISP industry.  As you may know, Congress gave FirstNet $2 billion dollars and an IOU for $5 billion more to establish a nationwide wireless LTE first-responders’ network. The FCC gave FirstNet 20 MHz of 700 MHz spectrum to use for free. Only in America can a company be so well funded without a management team, business or technical plan. But that is all changing, very fast.


A Role for WISPs in FirstNet


FirstNet turned out to be a big topic of conversation during the recent WISPAmerica conference in Covington, KY. FirstNet board member Ed Reynolds, a former wireless executive widely credited with successfully merging AT&T with BellSouth, spoke to WISPs about FirstNet. He saw that WISPs are in a good position to help stand up this new network, particularly in rural areas where the big carriers have not already built LTE networks.


This much is clear: WISPs have an opportunity to work with FirstNet. Existing wireless, tower, and backhaul infrastructure can be leveraged in return for financial consideration and, potentially, to access 700 MHz spectrum for commercial use in return for building the LTE first-responders network.


Technical parameters are being developed.


WISPs most often ask us about the technical parameters and capabilities of the proposed network. Technical specifications remain to be determined, and because so much remains to be decided, this is not an opportunity that every WISP can get their arms around. At this early stage, some of the unanswered questions are set to be resolved in this FCC Notice of Proposed Rulemaking:



The FCC is considering initial rules to implement a statutory framework for deploying and operating the nationwide public safety broadband network. The main topic areas in the NPRM include 1) technical service rules, such as power limits, emission limits, field strength limits and interference coordination, 2) comment on the FCC’s exercise of the FCC’s statutory responsibilities relative to the oversight of FirstNet and 3) addressing how to treat different classes of incumbents in the FirstNet spectrum, which will use both the existing broadband public safety spectrum (763-769/793-799 MHz) and the D Block spectrum (758-763/788-793 MHz).


Interested WISPs are taking action.

 With the support of  WISPA’s Emergency Communications Action Team (WECAT), and as its counsel, we have organized a group of motivated WISPs seeking to impose rural construction milestones on FirstNet (to encourage partnering with WISPs to help ensure that this spectrum is utilized).  The FCC notice is here:


Our hope is that this group of WISPs will pave the way for broader participation by WISPs in FirstNet. In the meantime, we are working to raise awareness of the many contributions WISPs can make to the success of FirstNet.

Regional workshops and state-level coordination

For now, FirstNet is holding six regional consultation workshops in May and June of 2013.  These meetings represent the formal kick-off of FirstNet’s consultation and engagement with state, regional, tribal, and local jurisdictions and public safety entities.  During these meetings, FirstNet is providing a project update and is gathering input from attendees about their state’s specific, and often unique, requirements and priorities. What FirstNet members learn in each regional workshop will help FirstNet design the network and conduct an effective vendor RFI/RFP process. This will in turn drive the timeline for delivering the state-level build-out plans needed so each state can evaluate its participation in FirstNet.

States have the right to opt-out of participating in FirstNet. WISPs are well advised to stay connected to learn who each State appoints to coordinate with FirstNet, and to introduce yourself and your company’s capabilities. WECAT has been working successfully to raise awareness of WISPs generally within FirstNet and at NTIA. Our progress was clear when FirstNet agreed to send Ed Reynolds to WISPAmerica.

A copy of the presentation of FirstNet Board members from the first regional workshop is posted on FirstNet’s page on the NTIA website (http://www.ntia.doc.gov/category/firstnet). The NTIA website is one of the best sources for information about FirstNet and to find requests for proposals from FirstNet.

Controversy in the Capitol


Of course, FirstNet is not without drama. What would life be like in Washington, DC without drama?


Sheriff Fitzgerald of Store County, Iowa, a FirstNet Board member, dropped a bombshell at the last Board meeting when he accused other Board members of improper conduct in awarding consulting agreements and in failing to share information and to conduct open meetings. Some in the public safety community say that the Board is dominated by large wireless companies that wish to commercialize the spectrum, a feeling some WISPs have conveyed to me.


It doesn’t help dispel this perception that its new CEO, Bill D’Agostino, Jr., just left Verizon to join FirstNet.  I have said before that there will be Congressional hearings long before there is a network and for now, lawyers are left to look into the charges. We haven’t heard the last on this issue.


Nor have we heard the last about FirstNet. Despite the skepticism I share with many about FirstNet and about the role of government in standing up a wireless network, there are opportunities to work with FirstNet to do good in your communities, to monetize the spectrum and leverage the build-out in ways that cannot be ignored.


Leonard Bernstein reportedly said that to achieve great things, two things are needed: a plan, and not quite enough time.

In that vein, the U.S. Supreme Court, by a 6-3 vote, has upheld the Federal Communications Commission’s interpretation of provisions of the Communications Act of 1934 that require state and local zoning authorities to act on certain wireless service providers’ antenna-siting applications within a “reasonable period of time.” More broadly, the Court’s decision addresses the degree of deference that reviewing courts must give a federal agency’s interpretation of statutory provisions that define the agency’s legal authority.

City of Arlington v. FCC involves a petition brought by certain state and local governments.  In 2009, the FCC issued a Declaratory Ruling establishing its interpretation of what constitutes a “reasonable period of time” for state and local governments to process antenna-siting applications under Section 332(c)(7)(B)(ii) of the Communications Act. The Declaratory Ruling acted on a petition filed by CTIA – The Wireless Association on behalf of certain wireless service providers. While state and local governments have legal authority to regulate the location, construction and modification of certain defined “personal wireless facilities,” the Communications Act places specific limits on this authority, such as the requirement to process wireless-siting applications within “a reasonable period of time.”

The FCC stated in the Declaratory Ruling that “unreasonable delays” in the siting process had “obstructed the provision of personal wireless services.” The FCC determined that a “reasonable period of time” is presumptively 90 days to process a collocation application and 150 days to process all other applications. 

The Petitioners challenged the FCC’s authority to interpret “ambiguous provisions” of the statute; here, relating to judicial review of wireless-siting decisions and a savings clause that provided that only those provisions in Section 332(c)(7)(B) “shall limit or affect the authority of a State or local government” over siting decisions. While the law requires reviewing courts to afford an agency a measure of discretion in the agency’s interpretation of ambiguous statutes, the Petitioners characterized the FCC’s action as that agency’s effort to interpret “its own jurisdiction.”

Generally, a reviewing court considers a federal agency’s construction of the statute it administers based on two principles: whether Congress has spoken directly to the precise question at issue, and if not, whether the agency has addressed the issue with a permissible construction of the statute. Justice Scalia, writing for the majority, rejected the Petitioners’ objection to the FCC’s interpretation of its jurisdiction. He stated that “judges should not waste their time in the mental acrobatics needed to decide whether an agency’s interpretation of a statutory provision is ‘jurisdictional’ or ‘nonjurisdictional.’ Once those labels are sheared away, it becomes clear that the question in every case is, simply, whether the statutory text forecloses the agency’s assertion of authority, or not.” Justices Thomas, Ginsburg, Sotomayor and Kagan joined in the opinion, and Justice Breyer filed an opinion concurring in part and concurring in the judgment. Justices Roberts, Kennedy and Alito dissented. 

The City of Arlington decision could shape other pending cases where the scope of the FCC’s regulatory authority is at issue.  For example, Verizon has a case before the U.S. Court of Appeals for the D.C. Circuit that challenges the FCC’s authority to regulate Internet Service Providers via the “Open Internet” rules.  Elsewhere, a separate pending case in the U.S. Court of Appeals for the 10th Circuit involves petitions for review of the FCC’s “USF/ICC Transformation Order” establishing the Connect America Fund for federal broadband subsidies.  While these cases involve different facts and may lead to different results, there’s good reason to think that the City of Arlington precedent will be reflected in these and other future cases.  In the meantime, the decision confirms that providers whose services are covered by the statute now have additional legal support in seeking timely approvals for sites for towers and antennas.

Will the FCC and the FAA Allow Expanded Use of Wireless Devices on Airplanes?

Here’s an important announcement for gadget-laden air travelers: Federal Communications Commission Chairman Julius Genachowski reportedly has asked the Federal Aviation Administration to “enable greater use of tablets, e-readers, and other portable devices during flights.”  As travelers know well, the FCC and the FAA place significant legal restrictions on passenger use of portable electronic devices during air travel, particularly during takeoff and landing. The Chairman’s letter may open the aircraft door to a policy that releases public pressure and enables increased wireless gadget use during flights.

The FCC and the FAA have limited in-flight use of portable electronic devices due to concerns about potential wireless interference to aircraft systems used for navigation and communication. FAA rules largely prohibit the use of such devices in flights, with limited exceptions. In August, the FAA announced plans to review these regulations, and the agency has requested public comment. Reportedly, the FAA does not intend to expand the rules to include voice calls. Chairman Genachowski issued a statement in support of the FAA’s review last August, saying that “[d]ramatic changes in technology and society make it both appropriate and timely for the FAA to review whether updates to their rules are needed.”

Current FCC rules prohibit passengers from using cellular phones and other wireless devices on airborne aircraft. Several years ago, the FCC launched a proceeding to consider lifting this restriction, but the agency terminated the proceeding in March 2007, citing “insufficient technical information” on potential interference.  The FCC also coordinates closely with the FAA on air-safety matters, such as for towers near airports that require registration with the FCC and for certain wireless devices operating near Terminal Doppler Weather Radar systems. Safety issues are among the FCC’s highest enforcement priorities, which makes the news of the Chairman’s letter, and his apparent willingness to revisit these issues, particularly noteworthy.

As our travels and our productivity depend on increasing gadget use, it is a sign of the times that the FCC and the FAA are taking a fresh look at their regulations. Loosening the rules would require tackling some challenging safety and technical issues. As a result, air passengers awaiting rule changes should anticipate potentially long delays because the timing and scope of any new rules remain, at present, largely up in the air.

Attorney Rebecca Rini to be presenter at WISPAPALOOZA 2012.

Communications attorney Rebecca Rini will attend WISPAPALOOZA in Las Vegas from October 23rd through October 26th. WISPA, the Wireless Internet Service Providers Association, is bringing together wireless infrastructure manufacturers, software companies, service providers and others for WISPAPALOOZA. Join her on Wednesday morning Oct. 24th from 9 am to 11 am on a panel as she and other experts discuss opportunities to acquire 2.5 GHz spectrum to provide licensed wireless Internet. Later the next day on Thursday starting at 2:45 pm, unlock the secrets of effective tower lease negotiations as she moderates a dialogue with representatives of American Tower, Crown Castle and Global Tower Partners.

Attorney Jon Allen to be Presenter at WISPAPALOOZA 2012

Jonathan Allen will be a presenter at the WISPAPALOOZA 2012 conference in Las Vegas, NV during the week of October 22 – October 26, 2012. WISPA, the Wireless Internet Service Providers Association, is bringing together wireless infrastructure manufacturers, software companies, service providers and others for WISPAPALOOZA. Jonathan will be speaking about legal and regulatory issues related to Voice over Internet Protocol (VoIP) services.



FCC Authorizes Channel Sharing for TV Stations in Advance of Incentive Auctions

At its open meeting last Friday, the Federal Communications Commission adopted rules that will enable TV stations to share channels of broadcast spectrum.  As the first step in the process to make TV band spectrum available for new uses, the new rules will allow TV stations to voluntarily share a single six megahertz channel as part of the incentive auction process approved by Congress in February.  This process will involve providing broadcasters with financial incentives to submit their licenses for cancellation in exchange for a share of proceeds of reauctioning the spectrum for new service providers.  The channel-sharing rules apply only to those TV stations that participate in the incentive auction process.  The rules will be effective 30 days following publication in the Federal Register. 

Under the new rules, TV stations must continue to transmit at least one standard definition stream over-the-air at no charge. These stations will still be licensed separately and thus subject to all of the associated regulatory obligations.  Only full power and Class A commercial and non-commercial TV stations are eligible; LPTV and TV translator stations cannot participate.  The Commission stated that each TV station would be required to continue to cover its community of license, but deferred to a separate proceeding issues related to loss of coverage (e.g., relocation of transmit site, propagation changes resulting from channel change).  Within these parameters, TV stations may enter into agreements to determine how the spectrum will be shared.

The Commission also concluded that, as required by the spectrum legislation, each separately licensed TV station sharing a single six megahertz channel will have one primary stream of programming that is subject to “must carry” rights.  In this regard, the new rules are intended to have no effect on cable or satellite carriage of TV stations, so long as the stations meet existing technical requirements such as providing a “good quality signal” of at least -61 dBm to the cable or satellite provider. 

Expect much more to come as the Commission attempts to clear TV stations and repack the remaining spectrum for use by TV stations, wireless carriers and unlicensed devices. For starters, the FCC will hold a channel sharing workshop on May 22. 

Congress Makes Sweeping Changes to Spectrum Policy; Authorizes TV Band Incentive Auctions

On Friday, overwhelming majorities of both the House and the Senate passed a payroll extension bill that includes important changes to spectrum policy.  The legislation is expected to raise $15 billion for the Federal Treasury and to create hundreds of thousands of jobs. The details of the legislation are now delegated to the NTIA, the FCC and other agencies to develop reports and to adopt rules to implement Congress' objectives. 

Below is our take on some of the main provisions of the legislation as it applies to spectrum policy and wireless broadband services. 

Incentive Auctions and Band Clearing

Aside from public safety, the main driver of spectrum legislation was the need to address the spectrum crunch (real or imagined) for mobile wireless interests. To do this, Congress decided to offer TV broadcasters compensation to voluntarily relinquish their spectrum for repurposing by the FCC for broadband uses. Congress granted specific authority for a two-phase voluntary "incentive auction" that would clear a portion of the TV band (Channels 2-51) for mobile interests and, as part of that process, change the TV "white space" landscape. Because Channel 51 is adjacent to the Lower 700 MHz A Block (formerly Channel 52), the FCC is expected to attempt to "re-pack" the TV stations into the lower portion of the UHF band (beginning with Channel 14). The auction process is expected to take several years.

Under the legislation's language, "relinquishment" of a TV station means (1) relinquishing all usage rights to a channel, (2) relinquishing a UHF channel for a VHF channel, or (3) sharing a channel with another TV station. In lieu of relocation reimbursement, TV stations can obtain, as appropriate, a waiver of FCC rules to make flexible use of their spectrum so long as the TV broadcaster provides at least one programming stream at no charge. Depending on how the FCC ultimately interprets this provision, TV broadcasters could obtain a limited right to offer broadband on their spectrum alongside video service, but only if they forego relocation reimbursement.

Significantly, the FCC is required to reallocate and auction the T-Band (470-512 MHz, i.e., Channels 14-20) used by public safety in 11 major markets, with the spectrum sale used to cover relocation costs. Although not stated in the legislation, the FCC can also clear other users -- land mobile, for instance -- out of the TV bands. The FCC also can relocate radioastronomy users on Channel 37 at a cost of up to $300 million. The ability to relocate Channel 37 users could be a significant band-clearing opportunity because that channel operates as a nationwide encumbrance in the heart of the TV band.

TV White Spaces

Early House Majority versions of the bill would have required the FCC to auction all unlicensed spectrum (though it was unclear whether this included white space spectrum that had previously been allocated). The version of the legislation that passed essentially creates two flavors of white space.

  • First, the existing TV white space and the TV white space remaining after the re-packing -- remember, that's several years away -- will be available for fixed and mobile wireless use. There will no doubt be a loss of TV white space in many markets as a result of the incentive auction, but Congress and FCC staff expect that there will vacant TV channels will remain in many rural areas after the re-packing. The re-allocation of Channels 14-20 will create additional spectrum in major markets for TV stations to relocate, and the possible relocation of Channel 37 radioastronomy users will also clear spectrum.
  • Second, the FCC has the discretion to use relinquished spectrum or other spectrum to implement guard bands that would, in practice, create a nationwide unlicensed allocation as recommended in the National Broadband Plan. The FCC may "permit" the use of guard band for unlicensed use, but is not required to, and the guard bands must "be no larger than is technically reasonable to prevent harmful interference between licensed services outside the guard bands." (Reports were that earlier versions of the bill used the phrase "technically necessary.") Based on our discussions with the FCC, they see a guard band acting as a "duplex gap" band between LTE-Advanced uplink/downlink spectrum allocations, though this thinking is only preliminary and the ultimate band plan, channel sizes and technical rules will be determined through an FCC rulemaking proceeding. The limits of the FCC's discretion on guard bands appear to be subject to interpretation.

3550-3650 MHz

Earlier versions of both the Senate and House bills would have required the FCC to auction the 3550-3650 MHz band (with certain exceptions). The band is not allocated for commercial use; rather, the Department of Defense uses it at present. The final version removed the auction mandate, but requires NTIA to give priority to options involving exclusive non-Federal use and to choose sharing only if NTIA and OMB determine that relocation of a Federal user is not feasible because of technical or cost constraints. Thus, the 3550-3650 MHz band could be subject to auction ("exclusive use") unless it is not feasible to relocate Federal users.  If that's the case, commercial and Federal users could share the band under technical rules the FCC would adopt. The radar uses in the 3550-3650 MHz band may be difficult to relocate, which would make the case for shared unlicensed use easier.

Other Unlicensed Bands

The spectrum legislation identifies two additional bands for possible unlicensed use. First, NTIA, the Department of Defense and other agencies will study spectrum-sharing and risks to incumbent Federal users if unlicensed U-NII devices were allowed to operate in the 5350-5470 MHz and 5850-5925 MHz bands – a total of 195 MHz of spectrum. The agencies will issue reports on their findings. The report for the 5350-5470 MHz band is due in eight months, and the report on the 5850-5925 MHz band is due in 18 months.

Wireless Facilities Deployment

An under-appreciated section of the bill provides significant benefits to wireless companies, fixed and mobile, that want access to towers owned by state and local governments. Under the legislation, a local government must approve an "eligible facilities request" to modify an existing wireless tower or base station that does not "substantially change" the physical dimensions of the tower or base station. An "eligible facilities request" is a request to collocate new transmission equipment, remove transmission equipment or replace transmission equipment. The FCC will decide how to interpret "substantial change" pursuant to a rulemaking proceeding. In addition, GSA is required to develop master contracts for wireless antenna structures on property owned by the Federal government.


The new spectrum legislation is a beginning, not an end. Many details have yet to be determined, but many interests – including broadband providers, whether fixed or mobile, broadcasters, public safety users and others -- can find something to like in the new legislation.

Rini Coran, PC Co-Sponsors WCAI DC Social Networking Event

Rini Coran, PC, the Wireless Communications Association International, Select Spectrum, AT&T, Altius Communications, Tessco and Telecom Hub are co-sponsoring a networking event today in Northern Virginia geared toward professionals in the wireless industry.  Join Robert Rini (on Twitter, @rrini), Stephen Coran (@stevecoran) and Jonathan Allen (@JonathanEAllen) for this event from 6 p.m. to 8 p.m.  More information is available here.

Of Databases and Legislation: TV White Spaces on Trial

This week, the Federal Communications Commission took another important step toward bringing fixed wireless broadband service to rural Americans by announcing the first TV white space database trial.  For a 45-day period beginning September 19, Spectrum Bridge, Inc. (a Rini Coran, PC client) will make publicly available its database, which identifies available TV channels for unlicensed broadband operations.  Separately, FCC Chairman Julius Genachowski issued a supporting statement trumpeting the benefits of white spaces.  This is welcome news in the face of an U.S. white space ecosystem that is threatened by pending Congressional legislation.

In the trial, participants will have access to elements of the database that are designed to protect TV stations, cable headends and broadcast auxiliary stations and registered wireless microphones.  Once the trial concludes – and the FCC can extend the trial beyond the November 2 end date – Spectrum Bridge is required to give the FCC a report that notes any problems and changes to the channel availability calculator. 

Chairman Genachowski took the rather unusual step of issuing a News Release announcing the Spectrum Bridge trial, stating that “[u]nleashing white spaces spectrum will enable a new wave of wireless innovation.  It has the potential to exceed billions of dollars in economic benefit from wi-fi, the last significant release of unlicensed spectrum, and drive private investment and job creation.”  The Wireless Innovation Alliance (WIA) and Public Knowledge were quick to hail the FCC’s initiation of the first database trial.

Meanwhile, at the Super WiFi Summit in Austin this week, attendees got a full slate of information about white space technology, databases and legislation.  On the latter point, Michael Calabrese of New America Foundation reiterated many of the points made in his recent House testimony and discussed the potential for spectrum reform legislation to sharply reduce, if not eliminate, the amount of white space available in many markets.  He detailed WIA‘s efforts to ensure that unlicensed white space is preserved and that Congress does not mandate auctions for future unlicensed bands.  I provided insight into the perspective of wireless Internet service providers (WISPs) that could be harmed by the proposed legislation and noted the “boots on the ground” efforts of the Wireless Internet Service Providers Association (WISPA) to better educate Congress on the consumer benefits of unlicensed spectrum.  To that end, and as just one example, WISPA member Brian Webster created a map using data from the NTIA’s mapping program showing the census blocks in Illinois that are uniquely served by WISPs in both licensed and unlicensed spectrum (not including coverage offered by the cellular technologies or satellite internet).  From the map below, one can see the obvious benefits that WISPs, and only WISPs, provide to consumers.  As Congress pushes forward to consider legislation in the next few weeks, these will be important messages to convey.

(click map below to enlarge)

Fixed wireless unique served areas.png

The Uncertainty of Unlicensed: New Threat Posed by House Draft Legislation

Yesterday, Steve Coran presented a webinar to members of the Wireless Internet Service Providers Association (WISPA) on spectrum reform legislation that is being considered by the U.S. House of Representatives.  The presentation focused on provisions addressing the future of unlicensed spectrum allocation, with discussion on a novel and untested auction concept that would require bidders wanting non-exclusive rules to bid against licensees wanting licensed rules for the same spectrum.  Steve commented that this is "untried and untested, and unlikely to raise significant revenues in light of the uncertainty the rules would raise."  Steve urged the WISPA members to participate in the advocacy effort by communicating with their representatives.

FCC Seeks to Improve Compliance with its Broadband Data Collection Rules

“It is a capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts.” (Sherlock Holmes, “A Scandal in Bohemia”) 

Broadband deployment data are critical to spectrum and broadband policy, both in Congress and at the Federal Communications Commission. Incomplete or incorrect data about infrastructure can hinder FCC initiatives, such as efforts to promote competition, to implement the National Broadband Map or proposals to direct Universal Service funding to underserved areas. Nevertheless, the FCC has determined that many service providers have not complied with mandatory reporting requirements designed to drive the FCC’s data collection, even as an open FCC proceeding considers possible reforms to the program. 

To encourage participation and to improve compliance, earlier today, the FCC hosted a webinar to review the basics of the rules and procedures for filing FCC Form 477 – the FCC’s primary data collection tool for broadband, voice and other services. The filing requirement applies to several categories of service providers, including facilities-based providers of broadband connections to end users, providers of wired or fixed wireless local exchange telephone service, providers of Interconnected VoIP and facilities-based providers of mobile telephony. As a result, the rules apply to companies such as telcos (fixed or mobile), cable operators, satellite companies, Wireless ISPs, managed ISPs, and VoIP providers (including “over-the-top” providers). The filing deadlines for Form 477 occur twice per year: March 1st (providers must file data as of December 31 of the previous year) and September 1st (providers must file data as of June 30 of the same year). 

In the webinar, Wireline Competition Bureau Chief Sharon Gillett emphasized two points for service providers. First, the requirement to file Form 477 is mandatory, and providers are expected to comply. Second, data submitted in Form 477 are afforded confidential treatment, meaning that no provider-specific information is shared with outside parties.  

The Bureau’s chief data officer Steve Rosenberg described how data collection or Form 477 submission problems often fall into three categories: 

  • Nonfilers: According to Rosenberg, several hundred providers don’t file with the FCC, so their data aren’t counted.
  • Improper certifications: Rosenberg indicated that sometimes outside consultants gather and submit the data, but he said that such certifications may make data more difficult to correct and may raise questions of reliability of the data.
  • Repeated mistakes: Rosenberg pointed out that some filers simply file incorrect data, for example, by putting too many subscribers into one census block in a county or build upon incorrect data from prior filings, even after working with FCC staff to correct prior filings. 

Yes, the Form 477 instructions are a bit dense, and gathering data at a granular level can be time-consuming for many providers. The key takeaway from the FCC’s webinar is that the FCC is prioritizing education and compliance efforts for broadband data collection – a move that is often a precursor to stepped-up enforcement efforts.

Don't Change that Channel: FCC Takes Steps to Transition TV Stations ... Again

Effective immediately, the Federal Communications Commission will no longer accept rulemaking petitions for TV stations to change their licensed channels. This is unfortunate news for stations who are still studying ways to improve free local over-the-air DTV service. 

Today’s announcement comes after the FCC staff’s completion of nearly 100 channel changes since lifting its filing freeze on May 30, 2008. FCC staff apparently believes that licensees have had sufficient time to evaluate engineering options and presumes there is no pent-up demand for channel changes. Such speculation might have been avoided if instead of an immediate freeze, a short filing window was established to permit filings for channel changes before the freeze became effective. 

FCC staff indicates that the freeze is necessary to facilitate the re-packing and reallocation of portions of the TV Band for broadband services, as recommended in the National Broadband Plan. While the FCC lacks authority to conduct incentive auctions, it may re-pack the TV band to create more spectrum for wireless broadband. FCC Chairman Julius Genachowski signaled his interest in repacking the TV band in his April 12, 2011 remarks at the NAB Show. FCC staff has been doing a road show around the country promoting the benefits of incentive auctions, so this action comes as no great surprise. 

What is becoming clear is that TV stations should begin contemplating a second DTV transition and the possibility of changing channels yet again. In the meantime, FCC staff has taken a step toward minimizing the number of moving parts in this transition by making sure that TV stations stay put, for now. 

For more information, don’t change that channel …

AT&T/T-Mobile Merger: Pushing the Edge of the Envelope

Obviously, Sprint must have been valuing T-Mobile for much less than the reported $39 billion price that AT&T has agreed to pay.  Given the high antitrust hurdles to approval of an AT&T/T-Mobile combination (this would give two carriers, AT&T and Verizon, a combined market share of almost 80 percent), we have to think that if Sprint had offered anything in the low $30s, Deutsche Telekom would have opted for a Sprint deal.  A combination of Sprint and T-Mobile would have had smooth sailing at the FCC and DOJ.

Notwithstanding, this is probably a good deal for T-Mobile.  First, if it goes through, this is a great price.  Second, if it doesn’t go through, T-Mobile gets a $3 billion break-up fee, which is equivalent to a whole year’s capital budget!

There is another important point to make.  Although I just threw out the 80 percent market share figure, as have many others, neither the FCC nor the DOJ looks at the USA as a single “market” for wireless services.  Traditionally, the regulators have looked at each metro area as a separate “market,” likening wireless service to local phone service.  Although there may be some individual metro areas where AT&T and T-Mobile combined have such a large market share that the regulators will balk, the likelihood is that this deal gets granted with “conditions,” as opposed to an outright denial from regulators.  To the extent that AT&T’s CEO says the FCC has to look at this merger on a market-by-market basis, he is just accurately summarizing what the FCC has done in the past.

At least in the short term, this deal is not good for Sprint or for other carriers whose main asset is ample spectrum, because T-Mobile gives AT&T additional spectrum, especially where AT&T needs it most, in the major metro areas.  That means AT&T has less need to go out and quickly acquire more spectrum somewhere else.

I say “in the short term,” because the flip side is this.  If and when this transaction is approved, it will then be very difficult for the regulators to say that Verizon can’t acquire Sprint, or for that matter, Clearwire.  So maybe, in a perfect world, this deal will turn out to be a big win for all these companies’ shareholders.  The impact is still unclear for consumers, who are bracing for higher prices; broadcasters, who are hoping that this transaction sheds new light on demand for spectrum; and wireless ISPs, who are concerned about preserving competition for spectrum and customers.  Keep your seat belts on, because this deal may take a year to 18 months to get done, if at all.


Earlier today, the FCC granted a six month extension of time to November 1, 2011 for Educational Broadband Service (EBS) licensees to comply with the substantial service test. The filing itself will now be due on or before November 15th. The substantial service test requires licensees to demonstrate how they are using each licensed channel at least 20 hours per week to fulfill their educational mission.  The substantial service deadline for Broadband Radio Service (BRS) licensees is not affected by today's action, and that deadline remains May 1, 2011.

In this video, I discuss the FCC's decision and its ramifications for EBS licensees and others. 

Video Blog-EBS.mov

FCC Provides Guidance on Compliance with BRS and EBS "Substantial Service" Requirement

All broadband radio service (BRS) and educational broadband service (EBS) licensees are required to make a showing to the Federal Communications Commission that they have provided a “service which is sound, favorable and substantially above the level of mediocre service which just might minimally warrant renewal” of their BRS or EBS license. To help provide limited clarity for this vague mandate, the FCC released a public notice on Friday to give guidance on what it expects licensees to submit and when. The notice made clear that the deadline for EBS licensees and BRS Basic Trading Area (BTA) licensees to file their notifications is Monday, May 16, 2011 and for BRS incumbent licensees that expire on May 1, 2011, the deadline is May 2, 2011, the same deadline as for the filing of their renewal application.  The public notice comes as the FCC is accepting public comment on a proposal filed by the National EBS Association (NEBSA) and others – with the support of numerous licensees and commercial operators – requesting that the FCC grant a blanket extension of six months.   

The main point for all licensees and operators: facilities need to be built and actual service needs to be provided to pass the substantial service test with flying colors.

Here is what you need to know:

First, until May 16, 2011, EBS licensees and BRS BTA licensees can electronically file "substantial service" showings via the Universal Licensing System (ULS).  BRS "incumbent" licensees must file their "substantial service" showings as part of license renewal applications on or before May 2, 2011.  "Substantial service" notifications are filed on Form 601 as "NT" filings with an appropriate exhibit (discussed below).  Though the filing process has already begun, the FCC would not guarantee when it might begin to take action on individual "substantial service" showings.  The FCC did say, however, that it doesn't plan to wait for all notifications to be filed before taking action.  In cases where a "substantial service" showing is lacking, FCC staff said it will afford the licensee an opportunity to provide clarity or further information.  In these cases, the FCC indicated that it would return the notification to the applicant and would provide the licensee with a deadline to submit additional information. The FCC may also informally contact a licensee or its counsel for follow-up, so having accurate contact information in ULS is a must. 

Second, the FCC plans to "accept" many "substantial service" notifications only by providing notice in ULS – in other words, there will be no public notice of filing or of acceptance.  In some cases -- presumably the more tricky ones or cases where the FCC concludes a licensee has failed to pass the "substantial service" test – the FCC will issue written decisions.  FCC staff also confirmed to me that there is no right in the rules for parties to file petitions to deny against "substantial service" notifications or against requests for extension of time to comply. It is hoped that this will deter frivolous filings made only to obstruct or cause delay and mischief. 

Third, the public notice also makes clear that the FCC will not review any "substantial service" showing filed by a licensee that has transitioned but has not filed its post-transition modification application to change to the "new" frequencies.  In response to my suggestion, FCC staff also indicated that "acceptance" in ULS of compliant "substantial service" showings would be the only FCC action -- this would put investors on notice that they should not wait for a public notice announcing "acceptance." 

Fourth, any licensee that does not file a "substantial service" showing (by the May 16 filing deadline) or an extension request (by May 1) will have its license automatically terminated.  This statement presumes, of course, that the Commission does not grant the pending request for a six-month extension for EBS.  

FCC staff offered some guidance on what it will be looking for in "substantial service" notifications.  In all cases, the licensee must demonstrate "substantial service" within its geographic service area ("GSA") – service in white spaces or adjacent areas will not count.  For BRS and EBS point-to-multipoint and mobile operations relying on the 30% coverage "safe harbor," licensees should include a map showing where they provide a "reasonably reliable" signal using generally acceptable engineering practices.  Clearwire is developing a methodology for calculating coverage percentages, so perhaps all licensees can get behind a single method.  Licensees are required to use the most recent official Census data.  Licensees also need to indicate the type of service they are providing.  For BRS and EBS licensees relying on the point-to-point "safe harbor" of six permanent links per million pops, the FCC will not require the submission of maps but will want a list of the endpoint coordinates and a description of the spectrum use.  In addition, licensees relying on the rural service “safe harbor” (i.e., for mobile services, coverage to at least 75% of the geographic area of at least 30% of the rural areas within the service area and for fixed services, construction of at least one end of a permanent link in at least 30% of the rural areas within its licensed area) must provide in addition to the other information applicable to their type of service the area and population for counties that the licensee considers “rural” and must indicate which rural counties are receiving service. 

For EBS, the FCC will be looking for a more detailed demonstration for licensees that are relying solely on their educational usage “safe harbor” and do not meet other "safe harbors” (including the 30% coverage, permanent links or the rural safe harbors).  At a minimum, EBS licensees should submit a brief description of (1) the services they are providing in the GSA, and (2) how they are meeting the educational programming and minimum usage requirements. I note the use of the word “and” is in the Public Notice despite the fact that the version of the rule in the Code of Federal Regulations (p.330), in the associated Federal Register publication (p. 35190) and in the attachment to the FCC Order adopting the rule (p.165) uses the word “or.” This may be largely academic because the FCC has wide latitude to interpret its rules and it has repeatedly warned EBS licensees that actual service and use of 20 hours per channel per week is required. Merely transmitting signals is not enough. 

There are some surprises relating to the amount of detail that is to be provided in the substantial service showing, based on the FCC's Public Notice:

  • Licensees relying on the "permanent links" safe harbor must provide, in addition to the coordinates of each end of each link, the population within the geographic service area, an indication of the uses for the links and the bandwidth of the links;
  • Licensees relying on the "30 percent coverage" safe harbor must indicate the signal level that they believe indicates coverage and the percentage of time such a signal is available within the service area; and
  • Licensees relying on the "EBS" safe harbor must provide, in addition to specific descriptions of the service being provided, the names and addresses of any accredited institutions to which the licensee is providing service.

The FCC is sensitive to the workload (ours and theirs) and will not require detailed showings of things like programming schedules, though it will require addresses where service is being provided if it is not being provided to the licensee itself.  Licensees that have channel-loaded or channel-shifted should mention this in their exhibits. 

Finally, a few words about extensions.  The FCC will look at extension requests on a case-by-case basis, and such requests should be filed at least 30 days before May 1.  Though the FCC did not offer a lot of guidance, we expect that a licensee would need to demonstrate that financial difficulties or events beyond its control require additional time and that it is reasonable for the licensee to meet "substantial service" in the near future.  Extensions also will be filed on Form 601 with the "EX" application code. 

Given the lack of any objections in Comments filed last week and the FCC staff’s “receptiveness” to the needs of educators, prospects are excellent that the FCC will grant the blanket extension some time after March 1 when Reply Comments are due. My view is that the blanket extension will be granted this week by March 4th (this is the week of the national NEBSA conference) by circulation to the FCC Commissioners. After all, it would be unfair to leave licensees twisting in the wind not knowing if more time will be provided. 

There is some concern that a government shutdown this week could throw a monkey wrench in the whole process. The reason is that ULS will automatically cancel the EBS license if a substantial service showing is not timely made, and of course if the government is shut down, so is the FCC – and ULS. While it seems unlikely that a government shutdown would extend beyond the applicable deadlines, no one wants to risk losing operating authority, so some licensees may rush to file their showing before Friday’s possible shutdown. If not, having lived through the last shutdown, I believe that there is little risk licenses will be lost during the FCC closure – if it even happens. 

The main point for all licensees and operators: facilities need to be built and actual service needs to be provided to pass the substantial service test with flying colors.

FCC Brings "Super Wi-Fi" Closer to Reality in TV White Spaces

While many of us in the Washington, DC area were dealing with white spaces of a different kind, the Federal Communications Commission was taking two important actions to bring closer to reality the use of TV white spaces for wireless broadband service. First, four months after releasing its new rules, the FCC finally adopted an order "conditionally selecting" nine companies to be administrators for the geolocation database that will be used to identify available and unused TV channels. Second, the FCC granted an experimental license to Rini Coran, PC client Carlson Wireless Technologies Inc. (CWT) to deploy a broadband network on white space channels within the Yurok Reservation along the scenic Klamath River in Northern California.

In the database order, the FCC approved these companies to act as database administrators:

All of these companies had submitted requests to be selected for the administrator role. Each entity will have until February 28, 2011 to amend its proposal to comply with the new rules adopted in September. The selected companies also will need to attend mandatory workshops -- the first of which will be March 10, 2011 -- and to work closely with the FCC "to ensure competency, consistency and compliance" with the rules. Each administrator must trial its database for at least 45 days before it can make its database available for actual use by TV bands devices. The administrators will be subject to a five-year term running from the date on which the FCC announces that a particular database is publicly available.

The FCC intends to exercise careful supervision over the databases. In addition to technical compliance, the administrators are subject to privacy and security rules and may not engage in discriminatory or anti-competitive behavior.

Under the experimental license granted to CWT, the Yurok Tribe will be the first Native American tribe in the nation to take advantage of white spaces. Notably, the FCC's National Broadband Plan identified white spaces as presenting a significant opportunity for provision of broadband service to Tribal lands. With this experimental license, CWT joins the white space ecosystem and signals plans to become a major player.

Not that anyone here in the Washington area is wishing for more snow, but if a large dose of the white stuff is what it takes to get the FCC to act on white spaces, let it snow, let it snow, let it snow!

FCC's New Net Neutrality Rules Face First Judicial Challenge

The wait is over, net neutrality watchers – the first legal challenge to the Federal Communications Commission’s new rules has been filed, so those who have waited with baited breath can feel free to exhale. 

Yesterday, Verizon and Verizon Wireless filed a notice of appeal with the U.S. Court of Appeals for the D.C. Circuit seeking to strike the rules adopted in the FCC’s December 23, 2010 Report and Order (the R&O).  The fact that Verizon lobbed the first volley in this near-inevitable litigation is unsurprising, and Verizon’s efforts will have a ripple effect on how and where the appeal is heard. As we've blogged about before, these rules – transparency, no blocking and no unreasonable discrimination, as set forth in 194 pages – have stirred debate in DC among service providers, lawmakers, lawyers, lobbyists, policy influencers and the just plain interested.  The rules have not even taken effect – that will happen 60 days after the date of a Federal Register notice announcing that the Office of Management and Budget has approved the information collection requirements contained in certain of the new rules.  The text of the R&O itself has not yet been published in the Federal Register – and that’s where things get interesting.

Verizon’s filings make clear that Verizon believes that the D.C. Circuit would provide a receptive audience to Verizon’s concerns – one with exclusive jurisdiction to review the matter at this stage. Here’s where the Federal Register comes into play.  There are two permissible tracks for appellate review of final FCC decisions, and Verizon is attempting to rely upon the track that requires review by the D.C. Circuit and does not require that the FCC decision be published in the Federal Register. 

  • For Track #1, the D.C. Circuit Court of Appeals has exclusive authority to review certain statutorily defined FCC decisions – generally dealing with FCC licensing matters.  Verizon claims that the R&O modifies Verizon’s licenses, thus triggering the exclusive jurisdiction of the D.C. Circuit.  Verizon’s argument relies on the FCC’s assertions in the R&O that it has authority to impose net neutrality rules because the FCC has statutory authority to change license terms and to propose new requirements on existing licenses, provided that it complies with statutory procedures.
  • Track #2 is available for review of all FCC decisions except those that are governed by Track #1.  In track #2, review of certain decisions can be obtained by any U.S. Court of Appeals in any judicial circuit once that decision is published in the Federal Register. As noted above, this triggering event has not yet happened with respect to the R&O. At least one court has found that a Track #2 appeal filed prior to Federal Register publication must be dismissed as incurably premature (the Council Tree case).  Under the Track #2 approach, if appeals are filed by multiple parties in multiple circuits, there is a process for consolidating appeals in one court.

When a single FCC document contains elements of both a rulemaking (i.e., establishing rules of general applicability) and an adjudication (i.e., resolving a specific dispute among parties before the FCC), things are more complicated.  Under FCC rules, the deadlines for the adjudicatory portions are calculated based on the release date of the FCC’s decision, while the deadlines for the rulemaking portions are calculated from the date of Federal Register publication.  Verizon has acknowledged that the R&O has elements of both a rulemaking and an adjudicatory decision and has stated an intention to file a separate appeal with the D.C. Circuit upon Federal Register publication.  Clearly, Verizon is trying to cover both bases with a “belt and suspenders” approach.

The receptive-audience hypothesis finds more support in Verizon’s unusual request to have the same three-judge panel that heard the Comcast case hear Verizon’s appeal.  In Comcast v. FCC, decided last April, the D.C. Circuit struck the FCC’s efforts to enforce certain of its net neutrality policies (prior to their codification last December) in a complaint against Comcast regarding alleged interference with peer-to-peer networking applications.  The Court found that the FCC failed to link its assertion of authority to any statutorily mandated responsibility and thus lacked authority to regulate an Internet Service Provider’s network management practices.  Verizon essentially is asking the D.C. Circuit to consider the R&O to be a response to the Comcast case and to have the same three-judge panel handle this appeal.

Will Verizon succeed in having the case heard in the D.C. Circuit?  We certainly can expect challenges to Verizon’s filings in addition to challenges to the R&O filed by other parties.  Public Knowledge quickly expressed its displeasure with Verizon’s efforts, and supporters of the FCC’s R&O undoubtedly will follow.  Expect arguments over whether the court lacks jurisdiction because it is incurably premature a la the Council Tree decision  Some may challenge whether the R&O actually amounts to a license modification because the R&O states that it does not take effect until some future date or because the R&O cites numerous statutory grounds for authority other than the bases cited by Verizon.  Expect appeals in other judicial districts, although these will have to develop some creative arguments to avoid dismissal on Council Tree grounds if Federal Register publication is not complete at the time.

Action at the FCC also will play a role.  The FCC handles the process of submitting the R&O for Federal Register publication.  If Federal Register publication happens in the near future, expect Verizon to make additional appellate filings with D.C. Circuit on that basis as well and to ask either for consolidation of its appeals or for the court to select the appropriate docket.  In addition, some parties may exercise their rights to seek reconsideration of the R&O by the FCC and/or may seek a stay at the D.C. Circuit pending such reconsideration.

The upshot here is that the FCC’s new net neutrality rules will be shaped by the appellate process, and Verizon’s filings represent simply the first attempt to leverage appellate procedures to influence the outcome of that process.    

TV White Spaces: Finishing Touches Near as FCC Reconsiders Rules that Preclude Rural Deployment

            Finishing the TV white spaces proceeding has proved to be a bit of a challenge for the Federal Communications Commission.  After more than two years from its adoption of initial rules, the FCC released the second TV white spaces order on September 23, 2010.  The rules recently took effect on January 5, 2011, raising hope that new services would soon follow.  Unfortunately, the FCC still needs to add a few coats of paint to its white spaces rules before we see wide-scale commercial broadband deployments, although the number of action items has dwindled.

      "[T]he rules effectively preclude fixed white space operations in large portions of the country."

     At the top of the list: a few rules are subject to reconsideration.  Most prominently, a consortium of trade associations, database administrator applicants and equipment manufacturers led by the Wireless Internet Service Providers Association (“WISPA”), a Rini Coran, PC client, asked the FCC to relax its tower height and out-of-band emission rules for fixed white space devices.  In the September 2010 order, the FCC limited the maximum height of tower sites to 76 meters above average terrain (HAAT).  Together with the 30-meter tower height limit adopted in November 2008, the rules effectively preclude fixed white space operations in large portions of the country.  As shown in the maps provided by Comsearch at Appendices B and D in WISPA's FCC filing, the areas affected by the height restrictions are, not surprisingly, rural, hilly and mountainous areas of the country where white space spectrum could otherwise be used to provide much-needed broadband service – indeed, the intended targets of white space services.

            The petitioners asked the FCC to adopt a 250-meter HAAT limit while also increasing the keep-out zones for co-channel and adjacent-channel TV stations to ensure that there would be no increase in harmful interference to broadcasters.       

            The September order also tightened the spectral mask for adjacent channels, limiting the amount of usable spectrum and adding cost to equipment and deployment.  Led by Motorola, petitioners asked the FCC to relax the emission mask to reduce costs and promote spectral efficiency, while increasing the adjacent-channel keep-out zones to protect incumbent TV stations. 

             Also on the white spaces wish list: the FCC still has not released its long-awaited order designating geo-location database administrators and establishing final database governance rules.  Long anticipated since the release of the second TV white spaces order, the would-be administrators still have no marching orders.  No doubt, the FCC’s Office of Engineering and Technology has been pre-occupied with net neutrality and a spate of other important orders. The reality is that the FCC can only authorize experimental operations until the database administrators are selected and ready.  The good news is that OET is expected to issue its order any day now, so hopefully that roadblock soon will be in the rear-view mirror.

             Not far behind is the certification of TV white space equipment.  Because of the need for equipment to have geo-location capabilities that are linked to the databases, the FCC cannot certify equipment until the databases are established and certification procedures finalized.  No word on how long the certification process will take, but hopefully that can be measured in days and weeks and not months.

             Fortunately, the FCC only has a few issues to address in the reconsideration phase, so the proposed changes to the height and emission mask rules likely can be implemented soon.  Even so, once the database administration process is set and equipment is certified, white space deployments can begin right away in those parts of the country where the HAAT and mask issues are not impediments. 

Hidden in Plain View: The Threat Within the FCC's Enforcement of its Net Neutrality Rules

Now that the Sturm und Drang over the FCC’s new Net Neutrality Rules is in full throat, some lurking concerns warrant more attention – namely, concerns about the FCC’s enforcement of its new rules and the administration of its complaint process.  The FCC states that it seeks “prompt and effective” enforcement of its new rules, but eyebrows are arching regarding whether the current structure will effectively promote this goal. 

"The FCC states that it seeks 'prompt and effective' enforcement of its new rules, but eyebrows are arching regarding whether the current structure will effectively promote this goal."

First, some context.  Assume for the moment that you provide fixed or mobile broadband service and that the new rules survive unscathed after the administrative, judicial and legislative battles that are almost certainly on the way.  Someone believes that you have violated these rules – for example, your subscriber believes that you have failed to adequately disclose your network management practices, or an edge provider believes that you have blocked its lawful content (if you are a fixed provider) or an end user complains that you have unreasonably discriminated in transmitting their lawful network traffic over your network.  How can this aggrieved party seek legal relief, and what relief is available? 

The FCC has retained independent enforcement authority for the net neutrality rules, but as noted in Matthew Lasar’s overview at Ars Technica, the FCC's enforcement process is overwhelmingly complaint-driven.  The new rules give the aggrieved party two “backstop mechanisms” at the FCC in the event that the interested parties cannot resolve their dispute privately: a formal complaint process and an informal complaint process. 

  • The formal complaint process imposes procedural obligations on the complainant and launches an adjudicatory proceeding.  Formal complaints will be addressed through “accelerated docket” procedures.  Before filing a formal complaint, the complainant must notify the respondent in writing that the complainant intends to file the complaint.  The complaint must comply with FCC processes, and the complainant must pay a filing fee (which may be the FCC Enforcement Bureau’s version of “paid prioritization”).  The complainant must “plead fully and with specificity the basis of its claims and to provide facts, supported when possible by documentation or affidavit, sufficient to establish a prima facie case of an open Internet violation.”  The rules set forth a timetable for answers and replies, and the FCC will issue an order “determining the lawfulness of the challenged practice.” 
  • The informal complaint process, by contrast, is more akin to tossing “paper grenades.”  Anyone with a computer may submit informal complaints (for example, via the FCC’s website or to the agency’s Consumer and Government Affairs division) in an effort to draw the FCC’s attention to challenged practices and perhaps spark an investigation.  There are no “accelerated docket” procedures.  The FCC has stated that individual informal complaints will not typically result in written Commission orders, and the potential remedies and sanctions are unclear.

As Larry Downes describes in his essay regarding the costs of enforcement of net neutrality rules, allowing “any person” to launch net neutrality complaints triggers inefficiencies and transaction costs because the filer can shift enforcement costs to the FCC or to ISPs.  Its not hard to imagine a disgruntled group campaigning and recruiting others to file loosely worded complaints that tie up the resources of broadband providers as they respond to paper grenades launched via the FCC’s electronic transom.  What is hard is running a small business or getting financing while buried in paper when an FCC decision on a complaint – even in a frivolous case – may be months away. 

"Given the FCC's lack of resources (and authority?) to police the entire Internet and its long-standing enforcement track record, we should expect the process to remain complaint-driven..."

Given the FCC’s lack of resources (and authority?) to police the entire Internet and its long-standing enforcement track record, we should expect the process to remain complaint-driven; however, reliance on a formal complaint process alone would reduce the incentive for “any person” to file complaints in bad faith.  The FCC’s decision to make available the “informal” process in addition to the “formal” process may turn out to be costly for broadband providers.  Here’s why:  

  • While the FCC has stated that “any person” may file a complaint, the formal complaint process has more mechanisms in place to deter the filing of non bona fide complaints – for example, there’s a $200 filing fee, procedural requirements and an “abuse of process” sanction against parties who file “unlawful” frivolous pleadings.  These mechanisms should make it much harder for competitors, disgruntled employees or others who suffer no actual harm to game the process. 
  • The availability of informal processes may encourage the filing of “cookie cutter” complaints, where persons or groups may seek to launch a barrage of nearly identical complaints in an effort to get the FCC staff’s attention for political purposes. 
  • The FCC does not set forth any particular remedy for an informal complaint other than saying that the FCC would “take appropriate enforcement action, including the issuance of forfeitures” for any net neutrality violation. 
  • The FCC did not adopt any specific forfeiture amounts for violations, so the penalty would likely be set on a case-by-case basis. 

Also, if what is past is prologue, broadband providers should have concerns that the mere filing of an informal complaint, even a frivolous one, would have other consequences.  Consider the case of those broadcasters who have found that meritless indecency complaints have hindered their ability to conduct legitimate business.  The reason is the “enforcement hold” that the Enforcement Bureau imposes against broadcasters’ FCC applications (e.g., license renewals, approvals for transactions) when one or more complaints are filed against their broadcast station(s).  Under FCC policy, the presence of this “red flag” can force the broadcaster to become involved in potentially protracted negotiations to get FCC clearance for their proposed transaction or license renewal.  This pressure has resulted in some broadcasters giving up legal rights by entering into consent decrees (whereby the station pays a penalty to resolve the complaint but does not admit liability for the conduct) or tolling agreements (where the broadcaster agrees to forego its rights to challenge an FCC action that takes place outside of the statute of limitations; i.e., their “shot clock” for reaching a decision) with the FCC.  Essentially, licensees often face intense pressure to agree to “voluntary” concessions and to raise the white flag in an effort to get the FCC to drop their red one.

One way for broadband providers to minimize liability is to be sure that they are complying with the FCC’s transparency requirements.  Providers that make adequate disclosure of their network management practices, performance characteristics and commercial terms of service will enjoy greater latitude in negotiating with the FCC.  And, so long as those practices are followed, a complaining party will find its burden a bit more difficult to meet. 

Nevertheless, with the broadcast indecency lesson in mind, broadband providers should be concerned.  It is reasonable to expect significant litigation over the rules, just as the FCC’s indecency policies have been heavily litigated. The FCC may hold up informal complaints for a protracted period as the legal challenges continue – recall that there is no “accelerated docket” for informal complaints and even if there was, the FCC may claim authority to waive any its internal timetables for “good cause.”  Such a litigation tangle may result in stalled FCC enforcement and delays in application processing – delays that could apply differently to different categories of service providers because some are more dependent on FCC licensing than others. 

In short, enforcing the FCC’s net neutrality rules represents a regulatory thicket for broadband providers and others – one that is worth the effort to navigate around given the uncertainty and the legal challenges to come. 

U.S. Appeals Court: Antitrust Case May Proceed Against Wireless Carriers

Despite the apparent lack of a “smoking gun,” a federal appeals court is allowing a class action lawsuit to proceed against several major wireless carriers in a decision that calls to mind the maxim: “if it quacks like a duck…”

On December 29, 2010, the U.S. Court of Appeals for the 7th Circuit rejected efforts by these carriers to seek dismissal of a class action lawsuit alleging that the carriers’ text messaging services violated antitrust laws.  In Text Messaging Antitrust Litigation, Case No. 10-8037, the three-judge panel upheld the trial court’s decision that the plaintiffs had sufficiently alleged a violation of the antitrust laws (in particular, the Sherman Act).  Defendants, Verizon Wireless, et al., had argued that plaintiffs’ allegations, even if true, did not constitute price-fixing or any other violation.  Circuit Judge Posner, however, wrote that the plaintiffs had adequately alleged a violation of law, and therefore the case should go forward to discovery.

The case revolved around the plaintiffs’ efforts to file an amended complaint stating that the major wireless carriers have conspired to fix prices and not compete against each other in the provision of text messaging services.  The defendants argued that the complaint “only” alleged that the wireless carriers do not compete with each other vis-à-vis text messaging, and the law does not prohibit companies from individually deciding not to compete.  The defendants argued that the law requires a plaintiff to allege specific actions of collusion among the defendants, in addition to the absence of competition among them.

The court agreed that the Sherman Act does not prohibit wireless carriers from each making the same decision, by coincidence, not to compete with respect to text messaging service.  However, the court disagreed that the law requires a plaintiff to allege a specific “smoking gun” at the complaint stage.  The court summarized the allegations that were in the complaint, including “a mixture of parallel behaviors, details of industry structure and industry practices, that facilitate collusion.”  As the court went on to explain:

Parallel behavior of a sort anomalous in a competitive market is thus a symptom of price fixing; though standing alone it is not proof of it; and an industry structure that facilitates collusion constitutes supporting evidence of collusion.  *  *  *  [T]he complaint in this case alleges that the four defendants sell 90 percent of U.S. text messaging services, and it would not be difficult for such a small group to agree on prices and to be able to detect “cheating” (underselling the agreed price by a member of the group) without having to create elaborate mechanisms . . .

The court went on to note that, according to the complaint, the defendants exchanged text pricing information via their trade association; defendants were all on a “leadership council” within the trade association, a leadership council whose stated mission was to “substitute ‘co-opetition’ for competition;” in the face of steeply falling costs, each defendant chose to raise prices; and finally, “all at once the defendants changed their pricing structures, which [had been] heterogeneous and complex, to a uniform pricing structure, and then simultaneously jacked up prices by a third.”

In other words, the complaint alleged that the defendants walked like a duck, swam like a duck, and quacked like a duck, and therefore must be a duck, even if there is, as yet, no photograph of the defendants to prove they are a duck.

The court held that, when taken together, the allegations in the complaint pass the laugh test for whether there might be a price-fixing violation going on.  (The court said “plausibility standard,” the legalese version of “laugh test”).  The court said the complaint does not have to allege that on a particular day, the vice president of one defendant met with/telephoned the vice president of another defendant to go over the details the price fixing, or any similar “smoking gun.”  The complaint has alleged enough detail and enough anomalous behavior on defendants’ part to make the defendants respond to discovery.

If you are a smaller wireless carrier having roaming agreements with the defendants, the rates those major carriers charge their subscribers for texting will directly affect how much those carriers will pay you to perform text services for their incoming roamers.  If you are a wireless subscriber, you are probably a co-plaintiff in this case, since it is a class action covering 90% of all domestic text messaging.  Either way, it will be interesting to see where this case goes from here.

Net Neutrality: FCC Declares Open Internet

It seems fitting that the Federal Communications Commission took advantage of yesterday’s winter solstice to shine new light on its plans to regulate the “Open Internet.”  By a 3-2 vote along party lines, the FCC adopted “net neutrality” rules that will govern how fixed and mobile broadband providers do business with their subscribers and others that use the Internet.  Only Chairman Julius Genachowski seemed happy about the rules, calling them a “strong and balanced” approach to Internet governance that avoided the extremes of his colleagues.

At first blush, the rules appear to strike a balance between two extremes – intrusive government micromanagement and toothless requirements that have little practical effect. There are, however, open issues that give rise to concern.

Once it became clear that net neutrality rules would be adopted and the government would be involving itself in Internet access, some fixed wireless broadband providers (WISPs) feared that their small, capacity-constrained networks would buckle under the strain of the same rules that would apply to Comcast, Verizon and other large ISPs operating on high-capacity wired platforms.  As a general matter, broadband providers will not be permitted to block consumers’ access to lawful content, applications and devices and cannot engage in “unreasonable discrimination.”  These rules are subject to “reasonable network management,” a key phrase for any ISP and small WISPs in particular.

As with any regulation, words matter.  And in this case, how the FCC defines “reasonable network management” is especially crucial.  Providers will be given “meaningful flexibility” to manage network issues such as congestion and security.  “Reasonable” is defined generally along the lines of what is appropriate and tailored to achieving a legitimate network management purpose, taking into account such factors as network architecture and technology.  Examples of legitimate network management purposes include ensuring network security and reducing the effects of network congestion.  In this regard, the rules may be interpreted to recognize the unique challenges that WISPs face in operating small businesses in small communities with small networks.      

Not only do words matter, but how the FCC will enforce its rules and applies its definitions will be important to watch.  Given the FCC’s decision to allow consumers to file informal complaints, broadband providers hopefully will not be required to respond to ongoing, time-consuming complaints that may force ISPs to be overly cautious in the way they manage legitimate network issues.  It would not be surprising to see consumer groups spearheading enforcement efforts that create uncertainty in network management.

This is not the last we will hear of net neutrality and the Open Internet. Some have raised serious questions about the legality of the new rules and about whether the FCC has sufficient authority to adopt them.  Republican Commissioners Robert McDowell and Meredith Attwell Baker issued strenuous oppositions in line with their recent statements in the press.  Calling the FCC's failure to learn from the past as “regulatory hubris,” McDowell sharply criticized the majority's reliance on Section 706 of the Communications Act as a legal authority and essentially laid out an analytical roadmap to overturn the rules in court.  Baker also stated that unelected officials should not be making decisions with such far-reaching consequences.  Echoing concerns from House Republicans, McDowell and Baker accused the majority of acting where no competitive harm is present--a position set forth by AT&T. One Republican Senator has already introduced an amendment to an appropriations bill that would strip the FCC of funding for anything related to implementing and enforcing the net neutrality rules.

It will likely be a long time before the full impact of the FCC’s rules can be assessed.  In the meantime, Internet businesses of all kinds will need to account for the potential new costs and the regulatory burdens that may follow.

Let Me In, Innovation Man: FCC Revisits Experimental Licensing

The FCC has announced new proposals to promote investment and create jobs in wireless broadband. On November 30, the FCC announced at its open meeting that it sought to boost innovation in the telecommunications marketplace and to help restore the country’s prominence in research and development through two new proceedings.

In the first proceeding, citing past achievements such as Wi-Fi and PCS that grew out of experimental licensing, the FCC is proposing to overhaul its experimental licensing rules to streamline the process by which new devices and technologies can move from R&D to deployment. Utilizing a new license called a “program license,” the FCC will establish “innovation zones” -- specifying areas where experiments can be conducted without command and control licensing. The FCC also will make it easier for universities and labs to conduct experiments and will enable health care institutions to obtain program licenses for telemedicine research. The FCC also signaled that it would ease some of the restrictions surrounding market trials to allow consumers to have more access to new products. Interestingly, Commissioner Baker suggested that improved experimental licensing rules could provide some answers to improve spectrum efficiency in the TV bands.

For the second item, the FCC adopted a Notice of Inquiry on “dynamic spectrum access” and “opportunistic” uses of spectrum to promote more efficient spectrum use. “Dynamic” access refers to the availability of spectrum in certain locations for brief intervals and whether radio technologies can evolve to take advantage of these dynamic spectrum opportunities and thus promote wireless broadband. The NOI also invites public comment on the benefits of mandating a database model – such as the white space geo-location database – to promote efficiency. The NOI will also look at ways the FCC’s secondary markets rules could be enhanced by allowing opportunistic or “spot” use of spectrum.

Taken together, these items demonstrate the FCC’s ongoing push to increase broadband opportunities and to boost availability and efficient use of spectrum resources. These proceedings may offer new opportunities particularly for colleges and universities to move the state of the art forward.