Selected portions of the BloostonLaw Telecom Update, and/or the BloostonLaw Private Users Update — newsletters from the Law Offices of Blooston, Mordkofsky, Dickens, Duffy & Prendergast, LLP are reproduced in this section with the firm's permission.
| BloostonLaw Telecom Update || Vol. 17, No. 12 || March 26, 2014 |
AWS-3 Auction Rules to be Adopted at March 31 Meeting, Clients Should Begin Planning for Auction
The FCC will vote on the proposed rules for the AWS-3 auction at its March 31 Open Meeting. Therefore, the Commission issued a March 24 public notice placing this matter on the "Sunshine Agenda", triggering restrictions on further communications about the auction rule proposal. With the adoption of the rules at the end of this month, it is expected that the AWS-3 auction will take place in Q3 or Q4 of this year. Clients should begin preparations to participate in the auction, assessing as soon as the rules are public whether they need to consider forming a consortium as a means of maximizing their bidding chances (depending on the size of their licenses of interest, minimum bid amounts and other factors). We will be glad to help clients with structuring their auction participation to best utilize any bidding credits and other relevant rules.
Verizon Proposes Much Larger Auction License Sizes
On March 20, Verizon Wireless filed an ex parte presentation with the FCC in the 600 MHz broadcast incentive auction docket and AWS-3 docket, raising objections to the consensus license map developed by NTCA, CCA, RWA and the Blooston Rural Carriers (the "Consensus Parties"). As part of this filing, Verizon submitted an alternative license service area proposal that is based on the OMB's revised 2013 MSA boundaries.
The Consensus Parties' map divided the country into 416 license areas, using "Partial Economic Areas" (PEAs) that are designed to create to the extent possible licenses that small and rural carriers will be able to realistically bid on in the upcoming 600 MHz auction. Verizon's proposal divides the U.S into a total of 218 license areas, which is hardly an improvement over the 176 Economic Areas that the FCC initially proposed, and in many ways is worse. Many of the "new" MSAs are enlarged (some significantly so), and smaller MSAs are often grouped into larger "clusters," putting them even further out of reach for the possibility of bidding by smaller carriers or rural partnerships/consortia.
BloostonLaw plans on submitting ex parte comments addressing concerns raised by the Verizon Wireless counterproposal. Clients that wish to participate in the comments, or that wish to determine the impact of the proposed Verizon map on their area, should contact us promptly.
White Paper Describes Basis of Jurisdiction for Net Neutrality
A recently released white paper prepared by Jennifer A. Manner of EchoStar and Alejandro Hernandez of the Georgetown University Law Center argues for an "overlooked" basis of jurisdiction for the FCC's recently vacated net neutrality or "Open Internet" principles: the World Trade Organization Basic Agreement on Telecommunications Services.
According to the authors, the Basic Agreement contains certain key principles that are similar to the net neutrality rules: transparency, prevention of anti-competitive practices, and prevention of discrimination. Prohibited practices include (a) engaging in anti-competitive cross-subsidization; (b) using information obtained from competitors with anti-competitive results; and (c) not making available to other service suppliers on a timely basis technical information about essential facilities and commercially relevant information which are necessary for them to provide services. The Basic Agreement also requires that interconnection is available among telecommunications service networks in order to allow the networks of different suppliers to interconnect.
The authors further assert that the United States has a "treaty obligation" under the agreement to "implement many net neutrality principles for broadband services, including transparency, and fair and non-discriminatory interconnection for broadband services." Under section 303(r) of the Telecommunications Act, the argument goes, the FCC has the legal jurisdiction to implement its obligations under the Basic Agreement because it allows the agency to implement treaty commitments without further Congressional authority.
FCC Releases Universal Service Implementation Progress Report; Carriers Encouraged to Review Data
On March 24, 2014 the FCC's Wireline Competition Bureau released a report describing the FCC's progress in implementing the Universal Service reforms of 2011's USF/ICC Reform Order. The 70 page report covers a wide array of reform topics, including Connect America Phase I results; Connect America Phase II; the Safety Net Additive Phase-out; the Benchmarking Rule; the $250 per-line support cap; waiver petitions; study area boundary collection; overall USF support; elimination of local switching support; and much more.
The report also provides summary data on financial data for rate-of-return carriers, study areas affected by the Benchmarking Rule, and the 2013 rate floor report. Some companies are reporting that preliminary review of the report suggests that company data presented in the report may be inaccurate. BloostonLaw encourages carriers to review the data contained in the report to ensure its accuracy. Carriers with questions about the report should contact the firm.
A copy of the full report can be found
here . [link not working]
FCC Increases Application Processing Fees
The FCC has released an Order that the application fees charged to licensees and permittees by the FCC will increase to reflect the change in the Consumer Price Index-Urban (CPI-U). This increase will be effective 30 days after the Order is published in the Federal Register. The increase in the CIP-U over the past two years was 8 percent, which resulted in an increase of 17.369 index points, as calculated from October 2009 through October 2013. It is important to note that for those services where the filing fee includes both the annual regulatory fee and the application filing fee (e.g., microwave, BETRS/Rural Radio, Part 90 private land mobile), the FCC is only increasing the application component of its filing fees and that this fee increase will be effective 30 days following publication in the Federal Register.
Domestic Section 214 Applications increased from $1,050.00 to $1,130.00; International Section 214 Applications increased from $1,050.00 to $1,130.00; Tariff Filings increased from $845.00 to $910.00; and Petition for Waiver fees (Parts 69, 32, 43, 64 & 65) increased from $7,990.00 to $8,635.00.
For typical paging applications, the fee will increase from $395.00 to $430.00 for new facilities, major modifications and license renewals while for BETRS/Rural Radio, the fee will increase from $180.00 to $195.00 for new facilities, major modifications and license renewals. For the Part 90 Private Land Mobile Radio Services (shared use below 470 MHz), aircraft and ship stations, the fee will increase by $5.00 from $60.00 to $65.00. Most applications for marine coast and aviation ground stations will increase from $120.00 to $130.00 while typical microwave fees will increase from $270.00 to $290.00 for facilities based applications. Filing fees for transactional applications such as license assignments and transfers of control will also increase.
Law & Regulation
FCC Proposes $29,250 Monetary Forfeiture For Operation Of Signal Jamming Device
On March 26, 2014, the full five-member FCC released a Notice of Apparent Liability for Forfeiture in the amount of $29,250 against R&N Manufacturing, Ltd. for operating a wireless phone jammer at its manufacturing facility in Houston, Texas. The jammer was installed to prevent R&N employees from using their wireless phones while at work, and operated in both the 800 MHz Cellular Radio Band and the 1900 MHz Broadband PCS Band. The jammer operated for a period of ten days commencing on or around March 23, 2013. The manufacturing facility was inspected by agents from the FCC's Houston, Texas field office in response to an interference complaint submitted by AT&T alleging that a signal originating from the manufacturing facility was interfering with its licensed cellular communications. A company officer surrendered the jamming device to the field agents at the time of the inspection.
The private use of signal jamming devices is prohibited by law. In addition to disrupting the ordinary calls of consumers, the devices can disrupt critical public safety communications placing both first responders (e.g., police officers, firefighters) and the public at risk; and can endanger life and property by preventing individuals from making 911 or other emergency calls or disrupting communications essential to aviation and marine safety. The Communications Act of 1934, as amended, permits a maximum monetary forfeiture for the operation of jamming devices of $16,000 for each day of a continuing violation, up to a maximum forfeiture of $112,500 for any single act or failure to act.
In computing the amount of the forfeiture, the FCC proposed a $32,000 forfeiture for the operation of the jamming equipment and an additional $7,000 forfeiture for causing interference, which would yield a total forfeiture in the amount of $39,000. However, because the company voluntarily surrendered the jamming device to the FCC field agents, the forfeiture was reduced by 25% to 29,250.
Senate Subcommittee Announces FCC Budget Hearing
In a press release dated March 21, 2014, the U.S. Senate Committee on Appropriations issued a press release announcing, among other things, a hearing before the Subcommittee on Financial Services and General Government regarding the budget justification for the Federal Communications Commission. This open session meeting of the subcommittee will be held at 10:00 AM on Thursday, March 27, 2014 in Room SD-138 of the Dirksen Senate Office Building. Witnesses for the hearing are FCC Chairman Tom Wheeler and Commissioner Ajit Pai.
According to Chairman Wheeler's testimony before the U.S. House of Representatives' Subcommittee on Financial Services and General Government on the same subject, the FCC's fiscal year 2015 Budget Request is $375,380,313, including $11,090,000 specifically allocated to the Office of Inspector General, and an auction cap request of $106,200,000. Of the request, Wheeler said:
Adopting this request will allow us to follow through on important priorities identified by your committee and our authorizers: the continued reform of USF programs to combat waste, fraud, and abuse and enhanced enforcement to put teeth into those reforms; as well as internal agency reform designed to make our processes responsive to consumers and the industry in a cost-effective fashion. Importantly, the auctions funds will support spectrum auctions identified in the 2012 Spectrum Act, which will make additional spectrum worth tens of billions of dollars available for commercial licensed services as well as providing nationwide spectrum for unlicensed use; and will support FirstNet.
The hearing will be webcast from the Committee's website.
March FCC Open Meeting Agenda Set; April Meeting Date Revised
At the Monday, March 31 FCC Open Meeting, the FCC will consider the following items:
- A First Report and Order that would revise rules to make 100 megahertz of 5 GHz U-NII-1 band unlicensed spectrum more useful for consumers and businesses, and reduce the potential for harmful interference to certain incumbent operations.
- A Report and Order that would adopt allocation, licensing, service, and technical rules to make available for auction 65 megahertz of AWS-3 spectrum for flexible use services, including mobile broadband (see related story).
- An Order making certain rule revisions and clarifications to facilitate the fair and effective completion of retransmission consent negotiations, and a Further Notice of Proposed Rulemaking seeking comment on whether to eliminate the network non-duplication and syndicated exclusivity rules.
- A Further Notice of Proposed Rulemaking that initiates the 2014 Quadrennial Review of broadcast ownership rules, addresses issues referred to the Commission by the Third Circuit's remand of the 2008 Diversity Order, and a Notice of Proposed Rulemaking to define and require the disclosure of a category of sharing agreements between broadcast television stations. The accompanying Report and Order determines that certain television joint sales agreements are attributable.
The meeting will be webcast live at http://www.fcc.gov/live. The FCC also announced that the date for its April Open Meeting has been rescheduled from April 24, 2014, to April 23, 2014.
Silicon Valley Backs Eshoo for Committee Chair
The Hill has reported that the Silicon Valley high-tech community is strongly backing Rep. Anna Eshoo's (DCA) bid to become the top Democrat (known as the Ranking Member) on the House Energy and Commerce Committee in the next Congress, which will commence in January 2015. The position is currently held by longtime Rep. Henry Waxman (D-CA), who recently announced that he will not seek reelection in 2014. If the lobbying efforts by the tech companies are successful, Rep. Eshoo could be the next Chairman of the Committee, if the Democrats succeed in recapturing the House of Representatives in the upcoming Congressional elections. The Democratic Caucus will likely wait until after the election to make Committee assignments.
Rep. Eshoo represents the Silicon Valley area in the House, the part of California where companies like Apple, Google and Facebook are based, so her ascension to Ranking Member on the Committee could be a coup for the industry. The Silicon Valley Leadership Group, which claims to represent "more than 390 of Silicon Valley's most respected employers," is currently gathering signatures on a letter expressing strong support for Rep. Eshoo. Her office declined to comment on the letter.
Winning the position of Ranking Member on the Committee would give Rep. Eshoo power over the Committee's agenda. The Committee has far-reaching jurisdiction over the economy.
In her bid to become Ranking Member, she has the support of former House Speaker Nancy Pelosi (D-CA). But she also has strengths in her own right because she is a formidable fundraiser for the Democratic Party.
For Rep. Eshoo's bid to be successful, she would have to buck the seniority system which dictates who in the Party gets what position. Under the seniority system, Rep. Frank Pallone, Jr. (D-NJ) would be next in-line for the position in the next Congress. Rep. Pallone has more seniority and leadership positions than does Rep. Eshoo, and giving the position to Rep. Eshoo instead of to Rep. Pallone would be tough those with a vested interest in preserving the seniority system. House Minority Whip Steny Hoyer (D-MD) has indicated support for the seniority system.
The Silicon Valley lobbying effort on Rep. Eshoo's behalf could backfire if opponents mobilize to fight the selection. Not all members of the tech industry, especially in areas outside Silicon Valley, favor her for the position. In addition, the Committee's jurisdiction is wide-ranging, and companies in other industries may feel obligated to oppose a nominee so seemingly "wedded" to the Silicon Valley tech industry.
AT&T Strikes Deals to Purchase 700 MHz and AWS Spectrum from Rural License Holders
Despite the approach of the AWS-3 and 600 MHz auctions expected later this year and in mid-2015, AT&T's appetite for AWS-1 and Lower 700 MHz band spectrum in rural and smaller urban markets continues unabated, with separate deals announced this week involving NTCH and its affiliate WGH Communications (DA 14-375), the Paul Bunyan Rural Telephone Cooperative (DA 14-376) and MilkyWay Broadband (DA 14- 374).
In the NTCH/WGH deal, AT&T's wholly-owned subsidiary AT&T Mobility Spectrum LLC has proposed to acquire 12 megahertz of Lower 700 MHz B-Block spectrum in 18 counties in six CMA markets covering parts of Georgia, Florida, Maryland, Nevada, New Mexico, and Texas. If approved, AT&T would hold anywhere 88 to 175 megahertz of spectrum in these counties in these six CMAs.
With respect to Paul Bunyan, AT&T would acquire 20 megahertz of AWS-1 A-Block spectrum in nine counties in three CMAs in parts of Minnesota and North Dakota. If approved, AT&T would hold a total of 135 to 165 megahertz of spectrum in these counties in these CMAs, including 30 to 50 megahertz of AWS-1 spectrum.
With respect to MilkyWay Broadband, which is the largest of the three deals, AT&T would acquire 12 megahertz of Lower 700 MHz C-Block spectrum in 71 counties in 15 CMAs across parts of Florida, Georgia, New Jersey, South Carolina, Texas, Utah, and Virginia. Post-transaction, AT&T would hold 65 to 165 megahertz of spectrum in these counties in these CMAs.
Mar. 31 – FCC Form 508 (ICLS Projected Annual Common Line Requirement) is due.
Mar. 31 – Comments on FCC Process Reform Report are due.
Mar. 31 – Comments are due on Rural Broadband Experiments and Numbering Research.
Mar. 31 – Comments are due on AT&T Wire Center Trials Proposal.
Apr. 1 – FCC Form 499-A (Telecommunications Reporting Worksheet) is due.
Apr. 1 – Annual Accessibility Certification is due.
Apr. 1 – PRA comments on Form 477 (Local Telephone Competition and Broadband Reporting) are due.
Apr. 7 – Comments on E-Rate modernization are due.
Apr. 10 – Reply comments are due on AT&T Wire Center Trials Proposal.
Apr. 14 – Reply comments are due on Rural Broadband Experiments and Numbering Research.
Apr. 21 – Reply comments on E-Rate modernization are due.