Federal Communications Commission (FCC)

The U.S. Supreme Court ruled Telecom Act Sec. 253 didn’t affect states’ power to restrict cities from offering telecom services. The section provides authority to preempt state and local laws that bar entry into telecom. The court Wed. reversed an 8th U.S. Appeals Court, St. Louis, decision in 2002 that the term “any entity” in Sec. 253(a) included municipalities and municipally owned utilities. The Appeals Court had ruled on a petition by the Mo. Municipal League challenging an FCC decision not to preempt a state statute that barred municipalities from providing commercial telecom services.

FCC 8th-floor wireless advisers stressed the complexity of the pending 800 MHz proposals at the FCC, at a CTIA panel, although several noted they were heartened by the level of economic analysis in data submitted to the FCC in the proceeding. “The FCC needs data to do its job,” said Paul Margie, aide to FCC Comr. Copps: “The reason this has taken so long is because we had to figure out is there interference, how much interference is there, where is the interference, what is the delta between the interference we have now versus the two different plans, how much is it going to cost. And all of this took a certain amount of time because we didn’t know it beforehand.” Asked by CTIA Asst. Vp-Regulatory Policy Christopher Guttman-McCabe how spectrum overlays could be “policed,” Margie said most of the time it’s good to have additional flexibility. “But the more flexibility you give to somebody to operate in different ways, the more chance you have that those ways are going to conflict with one another. Across the band we've been adding more flexibility to people’s licenses. May we -- by doing that -- be creating other 800 [MHz-type] issues at other places around the spectrum? There’s a possibility we might be doing that.” Among the concerns that have surfaced repeatedly at the CTIA show here this week is the possibility of a patchwork of new state regulations to address issues such as service quality. Asked by Guttman-McCabe what role the FCC could play in this area, Jennifer Manner, adviser to Comr. Abernathy, said “unfortunately, we don’t have preemption authority, which is a problem.” The industry’s voluntary code of best practices, addressing issues such as trial periods for new service and billing, has been a “good response.” Manner said: “Your success should guide the states. You have to do a lot of education and be responsive. That’s not really something the Commission could step in and do.” Asked about the extent to which the FCC does cost- benefit analysis of the financial impact of rulemakings it considers, Sheryl Wilkerson, Chmn. Powell’s wireless aide, said it’s “one of the first things we look at when an item does come up to us.” Industry has been helpful in providing data on the costs of proposals such as those under consideration to mitigate public safety interference at 800 MHz and a recent International Bureau item on orbital debris, Wilkerson said. Barry Ohlson, aide to Comr. Adelstein, said the record assembled at the FCC on the 800 MHz proceeding has been among the better ones before the agency “in terms of economic analysis.” While there has been different information submitted by competing sides in the 800 MHz proceeding, Ohlson said the data submitted still has been helpful. Separately, FCC Chief of Staff Bryan Tramont asked what the regulatory implications were of wireline company ownership of wireless companies. “The wireless industry is incredibly competitive,” said Cingular Wireless Vp-Federal Regulatory Affairs Brian Fontes. “With respect to any wireline affiliation that any wireless carrier would have, if there’s any opportunities to behave irrationally in the marketplace, I think that would be remedied very quickly just by the competitive nature of the marketplace.” -- MG

Groups ranging from citizens advocates to wireless companies told NTIA they would like more-efficient spectrum management, but many drew the line at consolidating that function in one place, such as the White House. Reflecting the controversial nature of the Bush Administration’s inquiry into spectrum management improvements, a think tank defended a report it presented last fall against critics who argued the report would place all spectrum regulation under one person. Meanwhile, several other commenters said they were as concerned about improved management as they were about who was responsible for it.

ATLANTA -- Top FCC officials at the CTIA Wireless 2004 show here Mon. held up the agency’s relatively hands-off wireless regulatory regime as an example that could be followed in the VoIP arena. Citing the benefits of a “light regulatory touch” on VoIP, Chmn. Powell also told a standing- room-only opening session: “This industry has to wake up to the fact that it [VoIP] can be an incredible innovation to the wireless side.” He noted that by some estimates there’s more VoIP running over wireless networks than on wireline.

FCC Chmn. Powell told Rep. Fossella (R-N.Y.) whether Nextel benefits from contiguous spectrum at the upper end of 800 MHz “depends on a number of variables.” Fossella joined 22 other House members who wrote to Powell recently urging him not to give Nextel spectrum outside the 800 MHz band without an auction under Sec. 309(j) of the Communications Act (CD March 5 p1). Since then, a staff draft item has begun circulating on the 8th floor proposing a plan that would reconfigure spectrum at 800 MHz and give Nextel 10 MHz at 1.9 GHz, but at a price (CD March 11 p1). The point of the plan is to mitigate interference public safety users encounter at 800 MHz. Fossella’s letter had posed questions to Powell about how to mitigate public safety interference, raising concerns about Nextel getting spectrum outside an auction. Powell’s response, sent this week, said Nextel’s iDEN technology “would not benefit by operating in contiguous spectrum: it is a system designed specifically to operate in noncontiguous spectrum.” Powell said that “were Nextel to elect to abandon this technology and change to a technology that requires contiguous spectrum, we would need to assess the cost of the conversion against the benefit gained thereby.” On fitting an auction into a plan to fix interference at 800 MHz, Powell told Fossella that the obligation to auction spectrum comes up in the context of mutually exclusive applications: “The Commission, when the public interest so dictates, may employ ‘engineering solutions, negotiation, threshold qualifications, service regulations and other means to avoid mutual exclusivity.'” The FCC will weigh this and “issue a decision within the bounds of its statutory authority,” he said. Because of public safety implications, the FCC plans to “resolve this matter as expeditiously as possible,” he said. Meanwhile, wireless companies and the United Telecom Council (UTC) ratcheted up pressure on Capitol Hill Wed., voicing concerns at a briefing about the item under consideration on the 8th floor. Fossella said he stood “shoulder-to-shoulder with public safety in my support of rebanding the 800 MHz spectrum and enhancing the communications systems of law enforcement, fire departments and others.” While he said he supported that part of the consensus plan, he shared concerns with some states that the plan has “major flaws.” Fossella said his big concern was that the plan backed by Nextel, the Assn. of Public Safety Communications Officials and others, didn’t provide enough money for public safety retuning at 800 MHz. In an FCC filing this week CTIA criticized parts of recent Nextel presentations before the FCC, charging the numbers don’t “add up.” Nextel has said that under the consensus plan it would receive spectrum at 1.9 GHz worth $3.33 billion, but that it would make $5.4 billion in spectrum and cash contributions to make the plan work. CTIA argued, “Nextel’s encumbered, non-contiguous non-nationwide spectrum (on a per MHz-pop basis) is worth over 60% more” than “relatively unencumbered spectrum” at 1.9 GHz. At the briefing, Cingular Vp-Federal Relations Brian Fontes cited language in a 1990 waiver the FCC granted to Nextel’s predecessor company that made the company responsible for any interference experienced by public safety systems. The FCC has an obligation to resolve such interference cases, he said: “In large part, where has the FCC been? I think quite frankly they have failed to remedy the problem early on.” Among concerns raised at the briefing by Fontes and others was how the value of spectrum that would be part of a rebanding plan could be determined outside an auction. Meanwhile, UTC, CTIA, the American Gas Assn., the National Rural Electric Cooperative Assn. and 3 other groups wrote President Bush Wed. raising concerns about the consensus plan. They told Bush the plan would allow Nextel “to ’swap’ its patchwork set of channels, enabling it to gain clear and contiguous spectrum nationwide in the 800 MHz band plus 10 MHz of bonus spectrum at 1.9 GHz.” They asked Bush to back an alternative to the consensus plan that “will better serve our nation’s interests.”

Sen. Appropriations Chmn. Stevens (R-Alaska) appears supportive of the FCC’s current model for competitive entry into the telecom marketplace, as he and a few other influential senators are urging the Justice Dept. to appeal the U.S. Appeals Court, D.C., ruling that vacated parts of the FCC’s Triennial Review Order. Meanwhile, nearly 130 House members are writing directly to the President urging the Administration not to appeal the decision (CD March 16 p9). And sources said other letters may be coming in an effort by members and industry to influence the decision of Solicitor Gen. Theodore Olson, who has about 2 months to request a stay of the order and 3 months to decide whether to appeal.

Several telecom carriers urged the FCC to reduce the current discount matrix available to schools and libraries participating in the E-rate subsidy program. In comments to the Commission, they said the current discounts of 20-90% for services should be adjusted. They said participating schools and libraries would still get enough support, and the program would become more economical and effective.

RALEIGH, N.C. -- Frustrated by unfavorable court rulings, FCC Chmn. Powell renewed his call for a complete rewrite of the 1996 Telecom Act, in a talk with N.C. business leaders here Fri. The 2nd day of a technology tour of Wilmington and Raleigh, Powell said the Telecom Act, while “wonderful as a paradigm shift,” is now “stuck in infinite churn as a legal document.” He noted that 8 years after the passage of the act, designed principally to spur local phone competition, the FCC still doesn’t have “validated rules” for making that happen. Powell’s comments came 3 days after the U.S. Appeals Court, D.C., threw out most of the Commission’s Triennial Review Order, including its controversial decision to delegate UNE review rulings to state commissions (CD March 3 p1).

The FCC could still include an item on a national programmatic agreement (NPA) for tower siting on its agenda for the Thurs. open meeting, though it wasn’t on the sunshine notice (CD March 5 p7). Several sources said Comr. Abernathy had sought additional time for discussion of the proposed tower siting pact. Once an item is in the public notice for an agenda meeting, ex parte communications with the FCC initiated by outside parties must stop. This way, more time is allowed for communication on outstanding issues, sources said. Several industry sources said they viewed the opening as a positive development after thorny NPA issues prompted a flurry of ex parte filings last week. The pending NPA aims to streamline tower siting reviews under Sec. 106 of the National Historic Preservation Act. Sec. 106 requires federal agencies to consider the effects of an “undertaking,” including tower construction, on historic properties. Last month, wireless carriers and historic preservation officials failed to bridge an impasse on several issues connected to the proposed agreement (CD Feb 20 p3). The Commission had given stakeholders until Feb. 19 to work out remaining differences, delaying a vote on the item from Feb. to the March agenda meeting. The agreement has been expected to be teed up for FCC approval as a report and order. The agreement was designed to become a pact signed by the FCC, Advisory Council for Historic Preservation and the National Conference of State Historic Preservation Officers. Meanwhile, Kris Monteith, deputy chief of the FCC’s Consumer & Governmental Affairs Bureau (CGB), told industry stakeholders the agency had made changes to a draft best practices document in response to concerns raised in discussions last week. The FCC has been working with the United South & Eastern Tribes (USET) on voluntary best practices for tower siting that could affect sites of cultural and religious significance on tribal land. Among concerns raised by industry over the earlier draft was the extent to which a non-response by a tribe on a tower siting request would lead to the potentially time-consuming step of FCC intergovernmental consultation with tribes (CD March 5 p9). “We will be making some changes to the draft document that we believe will be viewed positively from industry standpoint,” Monteith said, noting the changes stemmed from a discussion the Wireless Bureau and CGB had last week with USET officials. The agency also said it would release the draft best practices document in full to solicit industry feedback. Earlier in the week, the agency had circulated a summary, which Monteith said in the e-mail had created uncertainty in industry about what the rest of the document looked like. She said the full document was similar to the extensive summary released earlier. The FCC asked for industry feedback by the end of the day Thurs. “This is a good thing,” said one industry source of the additional time the FCC gave before the NPA is placed on an agenda for an open meeting. Meanwhile, a coalition of wireless companies told the FCC that negotiations in the last few weeks with the ACHP and others on the NPA had advanced in some areas. They cited progress on the issue of properties whose eligibility for the National Register of Historic Places is eligible but not yet determined. The coalition, which includes Cingular, Verizon Wireless, PCIA and T-Mobile, said compromise had been reached on the issue of potentially eligible properties. The agreement was that a requirement could be removed from the NPA concerning identification surveys for potentially eligible properties for visual effects. Other areas of agreement were that the NPA not mandate the use of qualified professionals for identification of eligible properties readily ascertainable from the office of a state historic preservation officer. In a separate filing last week, CTIA said U.S. Cellular has stressed the importance of the practical implications of the NPA as it relates to mid-size carriers and their quests for status as eligible telecom carriers. CTIA raised concerns that the NPA not dramatically increase costs and create more delays for the review process.

The U.S. Appeals Court, D.C., Tues. vacated much of the FCC’s Triennial Review Order, including the FCC’s decision to delegate UNE review decisions to state commissions. The court cut a broad swath through the portion of the FCC’s order dealing with the elements that make up the UNE platform, and left the other half, the broadband deregulation portion, unscathed. Shortly after release of the court decision, the FCC said it planned to seek a stay of the court’s order and an appeal to the U.S. Supreme Court. The announcement came from Comrs. Copps, Martin and Adelstein, who made up the majority in the split decision last year. NARUC said it “expects to seek review” as well.