CommLaw Monitor https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor News and analysis from Kelley Drye’s communications practice group Wed, 03 Jul 2024 05:40:19 -0400 60 hourly 1 FCC Creates Framework to Fund 5G Deployments in Rural Areas https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-creates-framework-to-fund-5g-deployments-in-rural-areas https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-creates-framework-to-fund-5g-deployments-in-rural-areas Mon, 30 Nov 2020 14:57:40 -0500 The FCC recently took a major step in promoting deployment of 5G networks in rural and hard-to-serve areas by adopting a Report and Order establishing the 5G Fund for Rural America (5G Fund) support program. The program, which is effectively the wireless counterpart to the wireline-focused Rural Digital Opportunity Fund (RDOF), will offer up to $9 billion over ten years to support the deployment of mobile voice and 5G broadband in these areas. It replaces Phase II of the Mobility Fund, which the FCC mothballed in 2018 after questions arose about the accuracy of wireless coverage data reported by carriers, which was meant to determine which areas are eligible for funding. Half of the 5G Fund budget also comes from repurposing the $4.53 billion that the Commission had originally allotted for 4G LTE deployments under Mobility Fund Phase II. The 5G Fund auction may not occur until 2023 because the Commission opted to wait until it can collect new data on existing deployments to identify areas eligible for support. In the meantime, recipients of legacy mobile high-cost support will be required to start using those funds for 5G networks beginning in 2021.

When the FCC proposed the 5G Fund last May, the biggest sticking point concerned when the Commission would aim to start the auction, which hinged on a decision about what data the FCC would use to identify the areas eligible for support. In the 5G Fund NPRM, the Commission set forth two options. Under the first option, the FCC would initiate Phase I of the auction in 2021 using 10-year old data – primarily census information – to determine rural areas eligible for funding by population (i.e., less than 2,500 people), and then prioritize support to those areas “unlikely” to see 5G deployment absent such investment. Under the second option, the FCC would postpone Phase I until at least 2023 so that it could develop the Digital Opportunity Data Collection (DODC) to collect more granular deployment data. Option 1 had the potential to be both over and under inclusive of eligible areas while option 2 would significantly delay the auction start date. During the proceeding, some commenters urged the Commission to use new Form 477 self-reported data from carriers, as it had tried to do for Mobility Fund Phase II. Ultimately, the Commission selected option 2, prioritizing accuracy and efficient use of funds over speed and declining to use new Form 477 data because the Commission was not convinced it could ensure the data was reliable in a shorter timeframe than using the DODC information.

The Report and Order also places a few other conditions on the selection of eligible areas. First, an area will only be eligible for Phase I of the auction if the DODC shows that there is not already at least one service provider offering unsubsidized 4G LTE or 5G broadband service. Given existing market competition, the Commission thinks that providing support to areas with unsubsidized 4G LTE service could preempt near-term 5G deployments that would already be expected in those areas. Second, the 5G Fund will exclude areas covered by the T-Mobile/Sprint merger. Since new T-Mobile committed to serve 90% of rural Americans within six years as part of the merger agreement, the Commission said providing support to those same areas would be a waste of the limited funds. As a related limitation, while T-Mobile can participate in the auction, it cannot use any 5G Fund awards to support 5G buildouts in areas where it has already committed to deploy under the merger agreement.

Other key elements of the Report and Order include:

Auction Procedures – The FCC will award the funds using a two-phase reverse auction, where the provider offering to serve an area for the least amount of funding is the winner. Phase I would provide up to $8 billion in support, with $680 million reserved for deployments on Tribal lands. Phase II would provide up to $1 billion, plus any funding remaining after Phase I, for deployments for precision agriculture and particularly hard-to-serve areas like farms and ranches. Geographic bidding areas will range from census block groups to census tracts, with the exact grouping of eligible areas to be determined during the pre-auction process. The FCC also adopted an “adjustment factor” that will assign weights and increase support for geographic areas with difficult terrain and other characteristics that make them more costly or less profitable to serve. The exact application of the adjustment factor will also be decided during the pre-auction process.

Performance Requirements – 5G Fund recipients will be required to deploy networks that meet 5G-NR (New Radio) technology standards and provide median speeds of at least 35/3 Mbps. Minimum cell edge speeds must be at least 7/1 Mbps. Round-trip latency on supported services cannot exceed 100 milliseconds. In addition, support recipients would be required to offer at least one service plan with a monthly data allowance equaling the average U.S. subscriber’s data usage. As with prior high-cost programs, support recipients will be required to offer their services at rates “reasonably comparable” to those offered in urban areas and be subject to collocation and roaming obligations.

Deployment Milestones – The FCC adopting escalating deployment milestones for 5G Fund support recipients. Specifically, support recipients will need to offer service meeting the performance requirements to 40% of their service area by the end of the third full calendar year of funding, 60% by year four, 80% by year five, and a final milestone of 85% by year six. To avoid a repeat of the Mobility Fund Phase II coverage data issues, the FCC has imposed strict reporting requirements on 5G Fund support recipients that include on-the-ground testing for each milestone.

ETC Designation and Application Requirements – Like the RDOF, service providers will be able to participate in the 5G Fund auction without first being designated as an eligible telecommunications carrier (ETC), but winning bidders will need to secure such designations in their supported service areas with 180 days to receive funding. The 5G Fund application process also mirrors the RDOF procedures, with service providers initially required to submit a short-form application that includes basic business, financial, and technical information followed by a long-form application for winning bidders with detailed network information and deployment timeframes. Winning bidders also will have to meet letter of credit requirements that are eased as providers hit deployment milestones.

Transitioning Legacy Support – All competitive ETCs receiving legacy high-cost support for 4G LTE mobile wireless service will be required to use an increasing percentage of their support toward the deployment, maintenance, and operation of 5G networks that meet 5G-NR standards. The change will be phased in, with one-third of the support required for 5G in 2021 and two-thirds in 2022. These competitive ETCs will also be required to meet the same speed, latency, data allowance, and “reasonably comparable” rate requirements as 5G Fund recipients.

While the Report and Order solidifies many aspects of the 5G Fund, the Commission will seek additional input on specific auction procedures and eligible area determinations once it starts collecting mapping data through the DODC. That could happen sooner following the change in Administration ­– the two Democratic commissioners have long advocated that the Commission make a bigger effort to get more precise deployment data and could push harder to get funding from Congress for the DODC or for reallocating existing funds toward the effort.

]]>
Spectrum Sharing and Caller ID Authentication Top Jam-Packed FCC September Meeting Agenda https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/spectrum-sharing-and-caller-id-authentication-top-jam-packed-fcc-september-meeting-agenda https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/spectrum-sharing-and-caller-id-authentication-top-jam-packed-fcc-september-meeting-agenda Thu, 24 Sep 2020 17:16:46 -0400 The FCC announced a jam-packed agenda for its penultimate meeting before the 2020 general election, with a focus on long-awaited spectrum sharing and caller ID authentication actions. At its meeting scheduled for September 30, 2020, the FCC plans to clear the way for eventual sharing of 3 GHz spectrum between commercial wireless providers and federal incumbents. The FCC announced earlier this year its intention to auction flexible use licenses in the 3.45-3.55 GHz band in December 2021. The Department of Defense, as a primary user of the band, has already devised a sharing framework for the spectrum. The FCC also plans to allow commercial wireless providers to lease spectrum in the 4.9 GHz band, which currently is allocated to public safety operations. The agency claims the band remains underutilized and that leasing arrangements could free up to 50 megahertz of mid-band spectrum to support commercial 5G services. In addition, the FCC plans to hold firm on its June 30, 2021 deadline for most voice providers to implement the STIR/SHAKEN caller ID authentication framework for IP networks and to extend such requirements to intermediate providers that neither originate nor terminate calls. Rounding out the major agenda items, the FCC plans to streamline executive branch foreign ownership reviews of certain applications formerly handled by “Team Telecom,” adopt a phase down in IP Captioned Telephone Service ("IP CTS") compensation and impose IP CTS service standards, and launch an inquiry into state diversion of 911 fees.

FCC regulatory activity likely will slow in the immediate lead-up to and aftermath of the 2020 general election. As a result, the September agenda may represent the FCC’s last big push on major reforms for the year. You will find more details on the significant September meeting items after the break:

Repurposing 3 GHz Band Spectrum: The draft Report and Order and Further Notice of Proposed Rulemaking would eliminate the non-federal radiolocation and amateur allocations from the 3.30-3.55 GHz band as a first step toward future sharing of the spectrum between federal incumbents and commercial wireless providers. However, the FCC would allow incumbent non-federal licensees to continue in-band operations until it finalizes its plans to reallocate the spectrum operations to below 3.0 GHz. The FCC would propose making 100 megahertz of spectrum in the 3.45-3.55 GHz band available for flexible use wireless service throughout the contiguous United States. To facilitate such wireless operations, the FCC would propose adding a co-primary, non-federal fixed and mobile (except aeronautical mobile) allocation to the band. It would also seek input on the appropriate licensing, auction, spectrum sharing, and technical rules for the band, and on relocation procedures for the non-federal relocation operators.

Commercial Access to the 4.9 GHz Band: The draft Sixth Report and Order and Seventh Further Notice of Proposed Rulemaking would allow one statewide 4.9 GHz band licensee per state to lease some or all of its spectrum rights to third parties, including commercial users. Lessees would be required to comply with the same spectrum coordination procedures as public safety licensees in the band. In addition, the FCC would seek comment on establishing a Band Manager in each state to coordinate and authorize new operations in the 4.9 GHz band. The agency also would request input on how to ensure robust use of the 4.9 GHz band, including through dynamic spectrum sharing technologies and cross-state collaborations.

Implementing STIR/SHAKEN Framework: The draft Second Report and Order would require voice service providers to either upgrade their non-IP networks to IP and implement the STIR/SHAKEN framework or develop a non-IP caller ID authentication solution by June 30, 2021. The FCC would adopt extensions of the June 30, 2021 deadline for: (1) small providers (two-year extension); (2) providers that currently cannot get a digital certificate necessary to implement STIR/SHAKEN because they do not obtain direct access to telephone numbers or other technical issues (indefinite extension); (3) services scheduled for discontinuance (one-year extension); and (4) non-IP network services (indefinite extension). The Commission would require all providers subject to an extension to implement a robocall mitigation plan for the parts of their networks where STIR/SHAKEN is not implemented and certify that they implemented such mitigation measures with the FCC. Moreover, the FCC would require intermediate providers to either pass along caller ID authentication information for authenticated calls or authenticate the caller ID information for unauthenticated calls they receive by June 30, 2021. Intermediate providers would be relieved of the independent authentication requirement if they register with the industry traceback consortium or respond to all traceback consortium information requests. Finally, the FCC would prohibit providers from adding line item charges to subscribers for providing caller ID authentication.

Streamlining Foreign Ownership Reviews: The draft Report and Order would establish rules and timeframes for the Committee for the Assessment of Foreign Participation in the United States Telecommunications Service Sector (Committee) to complete its review of certain applications posing potential foreign ownership concerns (i.e., the applicant has a 10% or greater direct or indirect foreign investor). Specifically, the Committee would be required to complete its initial application review within 120 days and, if necessary, its supplemental application review within 90 days. Affected applicants would be required to provide responses to a standardized set of national security and law enforcement questions regarding: (1) corporate structure and shareholder information; (2) relationships with foreign entities; (3) financial condition; (4) compliance with applicable laws and regulations; and (5) business and operational information. The standardized questions would be developed in a subsequent proceeding following public notice and comment. The new rules would apply to applications: (1) for international Section 214 authorizations or to assign/transfer control of such authorizations; (2) for submarine cable landing licenses or to assign/transfer control of such licenses; and (3) to exceed the foreign ownership limits under Section 310(b) of the Communications Act.

Reforming IP CTS Rates and Standards: The draft Report and Order, Order on Reconsideration, and Further Notice of Proposed Rulemaking would establish a compensation rate of $1.30/minute for IP CTS providers through a two-step transition process. The first step would transition from the current $1.58/minute rate to a $1.42/minute rate for the remainder of fund year 2020-21 (effective December 1, 2020), while the second step would transition the rate to $1.30/minute for fund year 2021-22. The FCC would also propose to adopt service standards for IP CTS captioning delay and accuracy, and seek comment on appropriate metrics. The Commission would request input on appropriate IP CTS service standard testing procedures, including sample size and call methodology. In addition, the FCC would ask whether it or a third-party organization should be responsible for such testing.

Reviewing 911 Fee Diversion: The draft Notice of Inquiry would request input on the effects of 911 fee diversion, specifically from states, on the provision of 911 services and the transition to next-generation 911 services. The FCC also would seek comment on how it can use its regulatory authority to discourage 911 fee diversion, including by conditioning state eligibility for FCC licenses, programs, or other benefits on the absence of fee diversion. The FCC would further ask about measures it can take to discourage fee diversion under the Commission’s authority, and how it can encourage states to pass legislation or adopt rules that would prohibit 911 fee diversion.

]]>
FCC Plans to Finalize Phase I RDOF Auction Procedures and Explore 5G Use of High-Band Frequencies at June Meeting https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-plans-to-finalize-phase-i-rdof-auction-procedures-and-explore-5g-use-of-high-band-frequencies-at-june-meeting https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-plans-to-finalize-phase-i-rdof-auction-procedures-and-explore-5g-use-of-high-band-frequencies-at-june-meeting Wed, 27 May 2020 20:31:32 -0400 The FCC plans to focus on “bread and butter” issues of broadband deployment and expanding commercial spectrum use at its next meeting, scheduled for June 9, 2020. Specifically, the FCC anticipates adopting final auction procedures for Phase I of the Rural Digital Opportunity Fund (“RDOF”), which will provide up to $16 billion over 10 years to support broadband deployment in rural and other hard-to-serve areas. Rejecting calls for delay during the ongoing COVID-19 pandemic, the FCC would commence the auction on October 29, 2020. The FCC also would address bidding area, performance requirement, and letter of credit issues that drew heated debate at the rulemaking stage. In addition, the FCC anticipates seeking comment on rule changes to expand use of high-band spectrum in the 71-76 GHz, 81-86 GHz, 92-94 GHz, and 94.1-95 GHz bands (“70/80/90 GHz Bands”) to support wireless 5G backhaul and other services. The 70/80/90 GHz Bands proposal is just the latest in a slew of FCC actions designed to open up more spectrum for commercial use, and would seek input on technical and operational rules to avoid interference to incumbent operations. Rounding out the major June items, the FCC plans to clarify key timeframes and criteria for state and local reviews of requests to modify existing wireless infrastructure to remove purported barriers to network improvements.

Covering the gamut of network funding, spectrum resources, and construction, the June meeting items will impact nearly all providers of 5G and other next-generation technologies and deserve close attention. You will find more information on the significant June meeting items after the break:

RDOF Phase I Auction Procedures: The FCC’s draft Public Notice would establish RDOF Phase I auction procedures that largely mirror the agency’s initial proposals for the program. In particular, the FCC would require auction participants to bid by census block group and establish an auction weighting mechanism that favors higher-speed, lower-latency services when awarding support. Auction winners would be required to offer service at the bid-upon performance level to 40% of the supported locations by the end of the third full calendar year following funding authorization and to an additional 20% of locations each year thereafter. As expected, service providers would be required to file a short-form application including basic ownership, technical, and financial information to participate in the auction, followed by a long-form application from auction winners providing detailed network descriptions and deployment plans. Auction winners would be obligated to obtain a letter of credit that would increase in value until the service providers begin to satisfy their deployment milestones. Service providers would not be required to receive designation as an eligible telecommunications carrier by the FCC or state authority to participate in the RDOF Phase I auction, but they would need to receive such designation before receiving any funding under the program.

Expanding High-Band Frequency Access: The FCC’s Notice of Proposed Rulemaking and Order would seek comment on proposed changes to the rules governing the use of the 70/80/90 GHz Bands to support wireless 5G backhaul and broadband services onboard aircrafts and ships. First, the FCC would propose changes to antenna standards for the 70 and 80 GHz Bands to permit the use of smaller antennas and ask whether it should make similar changes to the standards for the 90 GHz Band. Second, the FCC would seek input on authorizing point-to-point links to endpoints in motion in the 70 and 80 GHz Bands and classifying those links as “mobile” services to support new offerings. Third, the FCC would request comment on whether it should change its link registration process for the 70/80/90 GHz Bands to eliminate never-constructed links from third-party registration databases, thereby opening the spectrum for new registrations. Finally, the FCC would propose power limits and other technical and operational rules to prevent harmful interference to incumbent operations in the 70/80/90 GHz Bands. As the 70/80/90 GHz Bands are currently allocated to co-primary Federal and non-Federal use, the FCC would coordinate any rule changes with affected federal agency incumbents through the National Telecommunications and Information Administration.

Clarifying State/Local Wireless Review: The FCC’s Declaratory Ruling and Notice of Proposed Rulemaking would clarify agency rules implementing Section 6409(a) of the Spectrum Act of 2012, which streamlines state and local reviews of requests to modify existing wireless infrastructure. Section 6409(a) and associated FCC rules require state and local governments to approve modification requests for existing wireless towers and base stations within 60 days as long as the modification does not “substantially change” the physical dimensions of the tower or base station. However, confusion exists among service providers and government authorities on when this 60-day shot clock begins. The FCC would clarify that the 60-day shot clock begins to run when a requester takes the first procedural step in a locality’s application process and submits written documentation showing that a proposed modification is eligible for streamlined treatment under Section 6409(a). The FCC would find that this approach would prevent localities from effectively postponing wireless network modifications through multiple interim procedural hurdles. The FCC also would clarify what types of infrastructure modifications represent a “substantial change” that would not qualify for streamlined treatment under Section 6409(a).

]]>
FCC Proposes 5G Fund for Rural Wireless Networks, But Timing Remains Uncertain https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-proposes-5g-fund-for-rural-wireless-networks-but-timing-remains-uncertain https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-proposes-5g-fund-for-rural-wireless-networks-but-timing-remains-uncertain Sun, 03 May 2020 12:09:20 -0400 The FCC plans to create a new “5G Fund” offering up to $9 billion over ten years to support the deployment of wireless broadband and voice services in rural and other hard-to-serve areas. Under a Notice of Proposed Rulemaking ("NPRM") adopted at the FCC’s April meeting, the 5G Fund would operate as the wireless counterpart to the wireline-focused Rural Digital Opportunity Fund ("RDOF") approved earlier this year and replace Phase II of the Mobility Fund, which the FCC mothballed in 2018 after questions arose about reported coverage data. The NPRM proposes awarding funding through auction in two phases. Phase I would provide up to $8 billion in support, with $680 million reserved for deployments on Tribal lands. Phase II would provide up to $1 billion (plus any funding remaining after Phase I) for deployments for precision agriculture and particularly hard-to-serve areas like farms and ranches. The 5G Fund would exclude areas covered by the recently-approved T-Mobile/Sprint merger, which included a commitment to serve 90% of rural Americans within six years. The NPRM is just the first step towards launching the 5G Fund and presents an opportunity for all stakeholders to provide their input on the fundamental policies and procedures the will govern the new program.

The main sticking point among the Commissioners is over when Phase I should begin, and on what basis. The NPRM seeks comment on two options. Under the first option, the FCC would initiate Phase I in 2021 and use existing data sources – primarily census information – to determine rural areas eligible for funding by population (i.e., less than 2,500 people), and then prioritize support to those areas “unlikely” to see 5G deployment on their own. The FCC seeks comment on whether alternative data sources exist and whether a population density threshold may be more appropriate. The FCC plans to prioritize support to areas historically lacking 4G LTE (or even 3G) service. However, recognizing the deficiencies in existing wireless coverage data, the FCC asks for input on relevant information sources to make this historical determination. Under the second option, the FCC would postpone Phase I until at least 2023 in order to use more granular deployment data developed through its upcoming Digital Opportunity Data Collection. The NPRM asserts that the delay stems from a lack of appropriations under the recent Broadband DATA Act, which requires the FCC to significantly improve its broadband coverage maps. Without such appropriations, the FCC contends that it would need time to reallocate existing resources to broadband mapping that it would eventually use to determine rural areas lacking 5G service eligible for funding. Both options have their detractors, with critics of the first option noting that available census data already are almost ten years old as well as the importance of ensuring funding goes to areas actually lacking 5G service, and with detractors of the second option warning that funding delays would only widen the urban/rural digital divide. At the April Open Meeting, the two Democratic Commissioners dissented in part, suggesting that the NPRM presents a false choice between speed and accuracy.

Other key elements of the FCC’s 5G Fund proposal include:

  • Auction Procedures: As with the RDOF, the FCC plans to award 5G Fund support through a “reverse” auction, where the provider offering to serve an area for the least amount of funding is the winner. Auction participants would bid by census tract (or a potentially larger area) and the FCC’s proposes applying an “adjustment” factor to increase the funding available for tracts with difficult terrain and other characteristics increasing service costs. The FCC plans to issue proposed adjustment factor criteria and seek comment on such criteria at a later date.
  • Performance Requirements: The FCC proposes requiring 5G Fund support recipients to provide speeds of at least 35/3 Mbps, with potential increases over time to reflect service advancements. Support recipients would be required to provide a minimum cell-edge download speed of 7/1 Mbps, with a 90% coverage probability and 50% cell loading factor. The FCC also would cap supported service latency at 100 milliseconds per round trip. In addition, support recipients would be required to offer at least one service plan with a data allowance equaling the average U.S. subscriber’s data usage. As with prior high-cost programs, support recipients would be required to offer their services at rates “reasonably comparable” to those offered in urban areas and be subject to collocation and roaming obligations.
  • Deployment Milestones: The FCC anticipates adopting escalating deployment milestones for 5G Fund support recipients. Specifically, support recipients would be required to offer service meeting the performance requirements to 40% of their service area by the end of the third full calendar year of funding, with the deployment requirement increasing to 60% by year four, 80% by year five, and 85% by year six as the final milestone. To avoid a repeat of the Mobility Fund Phase II coverage data issues, the FCC plans to impose strict reporting requirements on 5G Fund support recipients that include significant on-the-ground testing and standardized propagation modeling.
  • Transitioning Legacy Support: The FCC seeks comment on how best to transition existing high-cost support to 5G Fund auction winners. In particular, the FCC proposes phasing down all legacy high-cost support over no more than five years, with legacy support recipients required to meet the same performance requirements as 5G Fund auction winners on an accelerated schedule to receive transition funding.
  • ETC Designation and Application Requirements: Like the RDOF, the FCC plans to permit service providers to participate in the 5G Fund auction without first being designated as an eligible telecommunications carrier ("ETC"). However, winning bidders would be required to obtain an ETC designation in their supported service areas before receiving any funding. The 5G Fund application process also would mirror RDOF procedures, with service providers initially submitting a short-form application including basic information on their identity, ownership, and financial/technical qualifications followed by a long-form application for winning bidders providing detailed network information and deployment timeframes. Winning bidders also would be required to meet letter of credit requirements, which could be eased as the providers hit deployment milestones.
As with the RDOF, the FCC’s 5G Fund proceeding is sure to generate significant comment, with stakeholders already divided over the appropriate timeframes, performance requirements, and legacy transition procedures. With its 10-year budget term, the 5G Fund has the potential to significantly reshape the rural wireless competitive landscape and warrants close attention. Even at this early stage, the FCC’s 5G Fund proposals are complex and contain potential pitfalls for the unwary. As a result, advance preparation and sound counsel will be critical to the success of 5G Fund applicants.

]]>
COVID-19: What Communications Service Providers Need to Know – April 13, 2020 https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/covid-19-what-communications-service-providers-need-to-know-april-13-2020 https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/covid-19-what-communications-service-providers-need-to-know-april-13-2020 Mon, 13 Apr 2020 18:24:41 -0400 As the COVID-19 pandemic rapidly unfolds, the Federal Communications Commission (“FCC”) has been active to keep communications services available through various waivers, extensions, and other regulatory relief. Kelley Drye’s Communications Practice Group is tracking these actions and what they mean for communications service providers and their customers. CommLaw Monitor will provide regular updates to its analysis of the latest regulatory and legislative actions impacting your business and the communications industry. Click on the “COVID-19” blog category for previous updates.

If you have any urgent questions, please contact your usual Kelley Drye attorney or any member of the Communications Practice Group. For more information on other aspects of the federal and state response to the COVID-19 pandemic, as well as labor and employment and other issues, please visit Kelley Drye’s COVID-19 Response Resource Center.

FCC Establishes the COVID-19 Telehealth Program

On April 2, 2020, the FCC issued a Report and Order (FCC-20-44) establishing the COVID-19 Telehealth Program. The COVID-19 Telehealth Program will provide $200 million in funding, appropriated by Congress as part of the CARES Act, to help health care providers provide connected care services to patients at their homes or mobile locations. The COVID-19 Telehealth Program will provide immediate support to eligible health care providers responding to the COVID-19 pandemic by fully funding telecommunications services, information services, and devices purchased on or after March 13, 2020 until the program’s funds have been expended or the COVID-19 pandemic has ended. The COVID-19 Telehealth Program represents the FCC’s most significant action yet to ensure telehealth services remain affordable and available during the crisis.

On April 8, 2020, the Wireline Competition Bureau (“WCB”) released guidance on the COVID-19 Telehealth applications process. The barriers to funding are relatively low. There are three steps interested providers should take immediately to prepare to apply for the COVID-19 Telehealth Program: (1) obtain an eligibility determination from the Universal Service Administrative Company (“USAC”); (2) obtain an FCC Registration Number (“FRN”); and (3) register with the System for Award Management. The WCB recommends that potential applicants undertake these steps now to apply for the early stages of funding.

On April 10, 2020, the WCB announced via Public Notice (DA 20-403) that it will begin to accept applications for the COVID-19 Telehealth Program beginning today, April 13, 2020 at 12:00 PM ET. Applications for the program may be filed through a dedicated application portal, available on the COVID-19 Telehealth Program page: www.fcc.gov/covid19telehealth. The WCB will accept applications on a rolling basis. To assist applicants in preparing their applications, the WCB will hold a webinar today, April 13, 2020 at 11:00 AM ET, which also will be available on the COVID-19 Telehealth Program page: www.fcc.gov/covid19telehealth. The presentation will assist interested parties in navigating the application portal and provide answers to frequently asked questions regarding the COVID-19 Telehealth Program’s application process. The webinar will remain publicly available for viewing.

FCC Adopts Connected Care Pilot Program

On April 2, 2020, in the same Report and Order (FCC 20-44) establishing the COVID-19 Telehealth program, the FCC adopted the Connected Care Pilot program. This three-year Pilot Program will provide universal service support to help defray certain health care provider costs incurred in delivering connected care services, with a primary focus on services aimed at low-income or veteran patients. The FCC will support selected pilot projects to help health care providers improve health outcomes and reduce health care costs, thereby supporting efforts to advance connected care initiatives. The Pilot Program also would study how connected care could become a permanent part of the Universal Service Fund. All eligible nonprofit and public health care providers that fall within the statutory categories under section 254(h)(7)(B) of the Communications Act, regardless of whether they are non-rural or rural, can apply for funding under the Pilot Program.

FCC Extends E-Rate Program Deadlines

On April 1, 2020, the WCB granted extensions of key deadlines for participants in the Schools and Libraries (or E-Rate) program (DA 20-364). Specifically, the Bureau waived the service implementation deadline for special construction projects for all funding year 2019 applicants and extended the deadline for funding year 2020 applicants by one year (from June 30, 2020 to June 30, 2021). Under the FCC’s rules, applicants normally must complete special construction projects and the network must be in use by June 30th of the applicable funding year. With schools and libraries closed for lengthy periods of time, the Bureau recognized that service providers may not be allowed on the premises and may experience significant challenges in meeting this construction deadline. The Bureau also (1) extended the service delivery deadline for nonrecurring services for funding year 2019 by one year (from September 30, 2020 to September 30, 2021); (2) granted schools and libraries an automatic 60-day extension to file requests for review or waiver of decisions by USAC; (3) provided applicants and service providers an automatic 120-day extension of the invoice filing deadline; and (4) gave all program participants an additional 30-day extension to respond to certain information requests from USAC.

FCC, FTC Demand Gateway Providers Cut Off Robocallers

On April 3, 2020, the FCC and the Federal Trade Commission (“FTC”) demanded that service providers take action to stop coronavirus-related scam robocalls from bombarding American consumers. They specifically warned three gateway communications providers allegedly facilitating COVID-19-related scam robocalls originating overseas that they must take action to stop carrying these calls or face serious consequences. Specifically, if the providers do not take action to address the scam robocalls, the FCC will allow other providers to block all traffic from these gateway providers’ networks. The FCC and FTC have been working closely with the Department of Justice (“DOJ”) on this first-of-its-kind effort to stop scammers from reaching American consumers. The warning shows that the FCC, FTC, and other agencies plan to aggressively address consumer protection-related issues during the crisis. Click here to read more about the FCC and FTC actions.

Chairman Pai Announces More Keep Americans Connected Signatories

On March 25, 2020, Chairman Pai announced that additional service providers have signed the Keep Americans Connected Pledge (see our coverage of the pledge here). Under the pledge, service providers agree to forgo service terminations due to inability to pay, waive late fees, and open Wi-Fi hotspots for those who need them for a 60-day period. There are now 626 service providers and 14 trade associations that have signed the Chairman’s pledge.

FCC Enables Rural Broadband Providers to Waive Certain Consumer Fees

On April 1, 2020, the WCB approved waiver requests from the National Exchange Carrier Association (“NECA”) and John Staurulakis, Inc. (“JSI”) to allow the two organizations to quickly implement tariff changes to ensure that NECA and JSI participant companies have the flexibility to meet the Keep Americans Connected pledge during the COVID-19 pandemic. The WCB’s action immediately permitted waivers of late payment penalties as well as installation and early cancellation fees that the providers normally would be required to assess in accordance with their tariffs. The WCB’s waiver deserves close attention by tariffed service providers and signals the agency’s openness to regulatory relief benefitting consumers.

FCC Waives Restrictions on Hiring Contractors for ASL Interpretation Services

On April 3, 2020, the Consumer and Government Affairs Bureau granted a temporary, limited waiver of the Commission’s rule restricting providers of video relay service (“VRS”) from contracting for video interpretation services with an entity that is not itself an eligible provider (DA 20-378). With increased VRS traffic levels and employee absences due to health concerns, school closures, and other restrictions imposed by state and local authorities, VRS providers continue to face a shortage of interpreters able to work as communications assistants. By allowing VRS providers additional flexibility to contract for qualified American Sign Language (“ASL”) interpreting from other entities, such as providers of video remote interpreting, the FCC hopes to alleviate this shortage.

FCC Postponing 3.5 GHz Auction on Account of COVID-19

On March 25, 2020, the FCC announced a one-month postponement of the 3.5 GHz auction (3550-3650 GHz) in the Citizen’s Broadband Radio Service (“CBRS”), a.k.a. Auction 105 (DA 20-330). The Commission cited the need to protect the health and safety of Commission staff during the auction and the ancillary benefit that parties would have additional time to prepare to participate. FCC Chairman Ajit Pai reiterated the agency’s commitment to hold the auction this summer. The auction is the first in the so-called mid-band, a range of spectrum seen as critical to the rollout of 5G wireless applications. Commissioner Michael O’Rielly tweeted that a further delay would be unlikely absent absolutely compelling circumstances. The start of the auction has been postponed to July 23, 2020 (from June 25, 2020), and the new short-form application filing window is April 23 through May 7, 2020. For more information on the postponement and the auction, please see our blog post.

Wireline Competition Bureau Extends Mozilla Remand Comment Cycle

On March 25, 2020, in response to a March 11, 2020, petition asking for a 30-day extension, the WCB issued a Public Notice (DA 20-331) granting a 21-day extension of the comment and reply comment cycle for the proceeding in the wake of the D.C. Circuit’s remand in Mozilla v. FCC (2018). Comments are due on April 20, 2020 (from March 30, 2020), and reply comments are due on May 20, 2020 (from April 29, 2020).

In issuing the extension, the WCB agreed with the petitioners’ argument that individuals, organizations, and state and local governments whose work is dedicated to public safety are increasingly focused on managing the COVID-19 pandemic and may be unable to submit comments on the public safety issues discussed in the remand proceeding. However, the FCC cited the need for expediency in remand proceedings as the reason for granting a 21-day extension instead of the petition’s request for a 30-day extension.

In addition, the FCC took the following actions in response to the pandemic:

  • On March 25, 2020, the Office of Engineering and Technology issued a Public Notice (DA 20-334) granting a 21-day extension of the reply comment deadline in the 5.9 GHz proceeding. Reply comments are now due on April 27, 2020 (from April 6, 2020). Initial comments were due on March 9, 2020. The entire 75 megahertz of the 5.850-5.925 GHz Band is allocated for connected car intelligent transportation systems using dedicated short-range communications ("DSRC") technology. Under pressure to allocate more spectrum for Wi-Fi operations and dissatisfied with the pace of DSRC development and deployment, the Commission has proposed reallocating 45 megahertz of the Band for unlicensed use and 20 megahertz to cellular vehicle-to-everything intelligent transportation system technology, while preserving only 10 megahertz for DSRC.
  • On April 10, 2020, the FCC’s Office of Economics and Analytics (“OEA”) extended via Public Notice (DA 20-401) the comment and reply comment deadlines for its Public Notice, released on February 27, 2020, which sought input on the state of the communications marketplace to inform the Commission’s required assessment of competition within the communications industry in its second Communications Marketplace Report to Congress. The Report provides an opportunity for stakeholders to evaluate competitive barriers to wireless and fixed broadband deployment, as well as international services. With this extension, comments are now due April 27, 2020 and reply comments are due May 28, 2020.
  • On April 1, 2020, the Wireless Telecommunications Bureau (“WTB”) announced (DA 20-365) a compilation of instructions for filing Special Temporary Authority (“STA”) and waiver requests in response to the declaration of national emergency due to COVID-19 issued on March 13, 2020. The WTB STA and Wavier Filing Guide can be found online here. On April 10, 2020, the Public Safety and Homeland Security Bureau provided guidance to public safety entities on requesting STA and waivers (DA 20-404). All providers should consider whether an STA is appropriate to provide additional flexibility and improve service.
  • ​On March 27, 2020, the FCC granted​ STA for 33 wireless Internet service providers (“WISPs”) to use the lower 45 megahertz in the 5.850-5.925 GHz Band for 60 days to address the increase in consumer demand because of the COVID-19 pandemic. Participating WISPs are required to file FCC Form 601 (application for an STA) within 10 days to access the full 60-day STA, and are required to operate in the band on a secondary, non-interference basis so as not to interrupt existing DSRC and federal radiolocation operations.
  • ​On March 26, 2020, the FCC's WTB granted AT&T Special Temporary Authority (“STA”) to utilize additional spectrum in Puerto Rico and the U.S. Virgin Islands for 60 days to handle increased network traffic as a result of the COVID-19 pandemic. On March 30, 2020, the WTB granted A:shiwi College & Career Readiness Center an STA to utilize unassigned Educational Broadband Service(“EBS”) spectrum for 60 days in the eligible rural tribal land on the Zuni Reservation in New Mexico for similar reasons. These STAs are in addition to the ones previously granted by the Commission. ​
  • On April 10, 2020, the FCC’s WTB enabled AT&T to deploy two cell sites in Wisconsin to support wireless service for a critical medical facility. That facility is being constructed by the U.S. Army Corps of Engineers at the Wisconsin State Fair Park in Milwaukee, Wisconsin to care for COVID-19 patients. The WTB granted AT&T’s request to expedite environmental review of the two proposed wireless tower sites, which will also serve first responders as part of AT&T’s FirstNet public safety broadband network. It is likely that the FCC will grant similar requests to expand communications infrastructure during the crisis.
  • On April 2, 2020, the Public Safety and Homeland Security Bureau released a Public Notice (DA 20-367) reminding authorized alert originators, including state and local governments, that the Wireless Emergency Alert (“WEA”) system is available as a tool to provide life-saving information to the public during the coronavirus COVID-19 pandemic. In recent years, the FCC, together with the Federal Emergency Management Agency (“FEMA”) and participating wireless service providers, have taken important measures to promote the effectiveness of WEA, and to make such messages more accessible, including the capability to send more detailed alerts of up to 360 characters for 4G-LTE networks, the option to convey recommended actions for saving lives or property for use in connection with Imminent Threat Messages, and the ability to send alerts in Spanish.
  • On March 26, 2020, the WCB waived a number of rules in its Rural Healthcare Program affecting existing users of the support programs. Most importantly, the Bureau’s order (DA 20-345) permits RHC applicants to extend existing evergreen arrangements with service providers by one year, without conducting an additional competitive bidding process, thereby ensuring continuity of service during the crisis. This builds on the Commission's previous waiver of rules for both the Rural Healthcare Program and the E-Rate program.
  • On March 30, 2020, the FCC's WCB issued an order (DA 20-354) waiving certain rules requiring involuntary de-enrollment of Lifeline subscribers, including for non-usage of the service, until May 29, 2020. The Bureau also extended the previous waivers​ of the annual recertification and National Verifier reverification process de-enrollments to May 29 so that all of the waivers will expire at the same time.

]]>
Podcast: C-Band Reform https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/podcast-c-band-reform https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/podcast-c-band-reform Thu, 13 Feb 2020 16:22:11 -0500 Following a recent episode on the FCC’s C-Band Proceeding addressing use of the 3.7-4.2 GHz spectrum range, Partner Chip Yorkgitis is back to discuss the recently released draft Report and Order, which is expected to be adopted at the FCC's February 28th meeting. The Order would transition the use of the C-Band to make the 280 megahertz from 3.7 – 3.98 GHz available for flexible use through an auction to be held this year.

Click here to listen to the episode, and here for more in our “Tuning into Spectrum” series and other updates from Kelley Drye’s Full Spectrum podcast.

]]>
FCC Modifies CAF Broadband Performance Testing Requirements https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-modifies-caf-broadband-performance-testing-requirements https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-modifies-caf-broadband-performance-testing-requirements Fri, 01 Nov 2019 09:34:35 -0400 The FCC adopted an Order on Reconsideration at its October 25, 2019 meeting modifying the broadband performance testing requirements for service providers receiving Connect America Fund (“CAF”) high-cost support. Under the Order, the FCC will delay the start of testing for many CAF recipients to better align with network deployment deadlines. The FCC also will create a “pre-testing” period to allow CAF support recipients time to assess how their networks and testing equipment perform without penalty before official testing begins. In addition, the FCC will provide more flexibility for certain testing procedures to reduce the burden on smaller service providers. The Order impacts every CAF program and deserves a close look, not only by service providers that currently receive CAF support but also by those that plan to seek such support through future programs like the Rural Digital Opportunity Fund. The Order is just the latest in a long line of reforms to the CAF since its creation nearly a decade ago and shows that the FCC still is willing to tinker with its high-cost programs to meet its broadband deployment goals.

The CAF provides support to broadband service providers to deploy networks in rural and other high-cost service areas. In addition to meeting their deployment obligations, CAF recipients must show that they provide broadband services meeting certain performance requirements that vary by CAF program. Last year, the FCC established uniform testing procedures for CAF recipients to demonstrate that they meet the relevant performance requirements. The testing requires CAF recipients to measure the speed and latency of their broadband services to see if they meet the applicable program benchmarks. Service providers unable to meet their performance requirements lose funding on a sliding scale based on how far they miss the benchmarks. The FCC initially established a July 1, 2020 deadline for CAF recipients to report their broadband performance testing results. However, many service providers raised concerns regarding both the timing and procedures for testing. In particular, these stakeholders noted that the July 1, 2020 reporting deadline would come before many CAF recipients are required to deploy most of their networks. These service providers also took issue with the current cost and availability of testing equipment and requested more time to become familiar with the CAF broadband performance testing process.

The Order attempts to address CAF recipients’ concerns in two ways. First, the FCC will delay the start of testing reporting for many CAF recipients to better align with the deployment deadlines for the different CAF programs. For example, the FCC is in the process of authorizing funding for winning bidders at the CAF Phase II auction that closed last year. These newly-authorized service providers would have at least until 2022 to deploy 40% of their broadband networks. As a result, the FCC will delay the start of testing reporting for CAF Phase II auction winners until January 1, 2023, to ensure a sufficient sample size. Second, the FCC will create mandatory pre-testing periods for CAF recipients to see how their networks and testing equipment perform without risk of losing support for missing the applicable speed and latency program benchmarks. The pre-testing period also will provide time for the cost of testing equipment to decrease and the availability of such equipment to increase. Note that the FCC will not delay the July 1, 2020 broadband performance testing start date for recipients of CAF Phase II model-based support. CAF Phase II model-based support recipients generally are large price-cap carriers that must deploy 80% of their networks by the end of 2020 and that have prior broadband testing experience. A summary of the new pre-testing and testing start dates for the major CAF programs is below:
CAF Program Pre-Testing Start Date Testing Start Date
CAF Phase II (model-based) January 1, 2020 July 1, 2020
Rural Broadband Experiments January 1, 2021 January 1, 2022
Alternative Cost-Model I January 1, 2021 January 1, 2022
Alternative Cost-Model II January 1, 2022 January 1, 2023
CAF Phase II (auction) January 1, 2022 January 1, 2023
The Order also provides more flexibility in CAF broadband performance testing by, among other things, expanding the number and types of locations that can be used as testing endpoints, clarifying that the same location can be used for both speed and latency testing, and making the speed and latency testing timeframes less rigid. These changes should help lower the compliance burdens on smaller providers.

]]>
FCC Previews Summer Blockbuster Meeting, With USF Reform, Smallsat Licensing, and Anti-Spoofing Measures on Tap for August https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-previews-summer-blockbuster-meeting-with-usf-reform-smallsat-licensing-and-anti-spoofing-measures-on-tap-for-august https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-previews-summer-blockbuster-meeting-with-usf-reform-smallsat-licensing-and-anti-spoofing-measures-on-tap-for-august Mon, 22 Jul 2019 15:46:20 -0400 Even with the dog days of summer upon us, the FCC shows no signs of slowing down on its policymaking priorities in a jam-packed agenda for its next open meeting on August 1, 2019. Headlining the agenda is a proposal to establish a Rural Digital Opportunity Fund (“RDOF”) offering $20.4 billion over a decade to support high-speed broadband deployment to unserved areas. The RDOF would eventually replace the FCC’s Connect America Fund (“CAF”) as the agency’s primary universal service program for high-cost areas. The areas receiving RDOF support would be determined by a new agency-led information collection, requiring more granular service data from broadband providers. As with the CAF, the RDOF proceeding is sure to engender debate in the broadband industry about the appropriate performance benchmarks, auction bidding rules, and data collection mechanisms. In addition to the RDOF, the FCC also plans to adopt items at the August meeting to reform how it allocates Rural Health Care Program funding; streamline licensing procedures for small satellite systems (otherwise known as “smallsats”); establish procedures for the auction of new toll free numbers; implement 911 direct dial and location information requirements on multi-line telephone systems (“MLTS”) often found in offices, hotels, and college campuses; expand the agency’s anti-spoofing rules; and limit the franchise fees placed on cable operators.

The August agenda items impact all corners of the telecommunications industry. You will find more details on some of the most significant August meeting items after the break:

RDOF Funding and Procedures: The draft Notice of Proposed Rulemaking (“NPRM”) seeks comment on the budget, auction procedures, application processes, and deployment obligations for the RDOF. The FCC plans to target $20.4 billion in support to areas that lack access to 25/3 Mbps broadband service, which represents the agency’s current benchmark for fixed advanced communications services and an increase over the 10/1 Mbps minimum performance tier under the CAF. The FCC would award RDOF support through an auction in two phases, with the first phase targeting wholly-unserved census blocks and the second phase focusing on partially-unserved census blocks. Like the CAF auction, the FCC anticipates weighing RDOF auction bids based on performance, with higher-speed, lower-latency services preferred. RDOF bidders would be subject to similar application procedures, deployment milestones, and reporting obligations as CAF auction participants.

RDOF Data Collection: The draft Report and Order and Further NPRM would require all fixed broadband providers to submit coverage polygons depicting the areas where they provide service as well as information on the speed and technology used in providing such service. Service provider coverage claims would be subject to challenge by government entities and the public, with the FCC seeking comment in the further NPRM on how it should gather and apply this “crowdsourced” information. For now, the RDOF data collection would be in addition to the deployment data already collected by the FCC from service providers through the Form 477. The new data collection would only apply to fixed broadband providers at first, but the FCC would seek comment on the parameters for incorporating mobile broadband coverage data into the RDOF in the future. In addition, the FCC would seek input on whether to require even more precise deployment data based on user location and who should bear the burden of such data collection.

Rural Health Care Program (“RHCP”) Reform: The draft Report and Order would adopt reforms to the FCC’s RHCP, which provides financial support to rural health care providers to obtain broadband and other communications offerings at discounted rates to facilitate telehealth services. The FCC plans to revamp the RHCP’s Telecom Program that subsidizes the difference between urban and rural service rates by, among other things, requiring the RHCP Administrator to create a database of rates that health care providers would use to determine the amount of support they can receive. The FCC would prioritize RHCP funding in the event support requests exceed the cap (which was $581 million in 2018) based on the rurality of the area and whether the area faces a shortage of medical personnel. The FCC would caution that it intends to enforce limits on RHCP spending consistent with its current review of overall universal service budgets. In addition, the FCC anticipates tightening up its RHCP competitive bidding and consultant rules following a number of high-profile enforcement actions.

Streamlining Smallsat Licensing: The draft Report and Order would revise the FCC’s current one-size-fits-all satellite licensing regime and create a tailor-made path for licensing smallsats. Smallsat applicants would be subject to lower application fees, easier application processes, and quicker agency reviews, including an exemption from the agency’s processing round procedure that often delays approvals as competing satellite systems file challenges. To qualify for streamlined processing, smallsat applications must meet certain requirements, including: (1) a maximum mass of 180 kg for any single satellite; (2) no more than 10 satellites under a single authorization; (3) total on-orbit satellite lifetime of five years or less; (4) propulsion capabilities or deployment below 400 km altitude; (5) ability to share frequencies with current operations without precluding future entrants; and (6) relatively low risk from orbital debris.

Toll-Free Number Auction: The draft Public Notice would establish procedures for the auction of over 17,000 toll-free numbers in the “833” code, with applications due by October 18, 2019 and bidding set to begin on December 17, 2019. The auction would be the first time the FCC has used competitive bidding to distribute numbering resources. The auction would be run by Somos, which currently is the designated administrator of the toll free database. Parties may apply to participate in the auction individually or through a Responsible Organization, which can bid on behalf of multiple parties as long as the parties do not want the same numbers. Parties would be subject to application, anti-collusion, and default provisions similar to those used in the FCC’s recent spectrum auctions. Winning bidders would be allowed to sell the toll-free numbers obtained through the auction on the secondary market and would report such secondary market transactions to Somos.

MLTS 911 Requirements: The draft Report and Order would implement recent legislation by prohibiting the manufacture, import, sale, or lease of an MLTS unless it is pre-configured so that a user may initiate an emergency call by dialing 911 without first having to dial “9” or take other action to access an outside line. Similarly, anyone installing, managing, or operating an MLTS would not be allowed to do so unless the MLTS is pre-configured to allow 911 direct dialing. If possible, MLTS managers also must configure the MLTS to provide a notification when a 911 call is made to a central location (e.g., front desk, security office) in order to facilitate emergency response efforts. The FCC plans to adopt an assumption that an MLTS manager is responsible for any failure to comply with the 911 direct dialing or notification rules. The new rules would apply to any MLTS manufactured, imported, sold, leased, or installed after February 16, 2020. In addition, the FCC would impose “dispatchable location” requirements on MLTS and other 911-capable services, which would require the transmission of a caller’s street address and additional information such as room number, floor number, or other data to help identify the caller’s location.

Anti-Spoofing Expansion: The draft Report and Order would expand the reach of FCC enforcement against the manipulation of caller ID information for malicious purposes (otherwise known as “spoofing”) under new authority granted by legislation adopted last year. Specifically, the FCC would extend its authority to punish spoofing violations for communications originating from foreign points to recipients within the United States. The FCC also would expand the scope of communications covered by its anti-spoofing rules to include some of the most widely-used forms of text messaging as well as alternative voice services, such as one-way VoIP services. The draft item follows in the wake of numerous enforcement actions imposing large fines for malicious spoofing in 2018.

Cable Franchise Fee Restrictions: The draft Report and Order would address concerns raised by a federal appeals court regarding the fees imposed by local franchising authorities (“LFAs”) on cable operators. The Communications Act places a five percent cap on such fees, but cable operators allege that LFAs frequently seek additional benefits as part of the franchise process. The draft item would treat most in-kind contributions required by LFAs from cable operators as fees subject to the five percent cap. Moreover, the FCC would prohibit LFAs from using their franchising authority to regulate most non-cable services, including broadband services offered over cable systems. LFAs also would be prohibited from requiring cable operators to secure additional franchises or other authorizations to provide non-cable services through their cable systems.

]]>
FCC Set to Commercialize Educational Broadband Service Portion of 2.5 GHz Band to Enable 5G https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-set-to-commercialize-educational-broadband-service-portion-of-2-5-ghz-band-to-enable-5g https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-set-to-commercialize-educational-broadband-service-portion-of-2-5-ghz-band-to-enable-5g Thu, 11 Jul 2019 22:32:00 -0400 At Wednesday’s July Open Meeting, the FCC approved a Report and Order (“Order”) to modify the regulatory framework and allocation plan for the 2496 – 2690 MHz (“2.5 GHz”) band—at 194 megahertz, the largest band of contiguous spectrum below 3 GHz. The objective of the Order is to make more mid-band spectrum available for commercial use and facilitate the development of 5G services—a key spectrum policy priority for this FCC and the Trump Administration. The Order will allocate unused spectrum in the band and remove educational use requirements to free it up for non-educational commercial entities.

The 2.5 GHz band is currently allocated to entities that hold licenses for Educational Broadband Service (“EBS”), Broadband Radio Service, and guard band channel use. For EBS, only entities that are “(1) accredited public and private educational institutions, (2) governmental organizations engaged in the formal education of enrolled students, and (3) nonprofit organizations whose purpose is educational” are permitted to hold licenses. The rules do, however, allow EBS licensees to lease excess capacity to non-educational organizations. Most licensees do so and Sprint has used such secondary market transactions to gain substantial spectrum holdings in the band. The rules place a number of special conditions on the use of the excess capacity lease option. In the Order, the FCC notes that EBS licenses only exist for half of the United States and the spectrum is largely unassigned in rural areas.

More countries are adopting band plans with a preference for mid-band allocation to commercial wireless due to better network coverage and capacity capabilities. In recent years, mid-band spectrum has received increased interest from U.S. wireless providers because of a desire to harmonize the U.S. band plan with key international counterparts. The Order will allocate the unused portions of the 2.5 GHz band for high-speed broadband wireless use with a priority window for Tribal entities to seek access to the band. Specifically, the FCC will designate a priority window for Tribal nations (available to educational entities as well as communications providers) to express interest in obtaining 2.5 GHz licenses for the purpose of providing service on rural Tribal lands. The priority window would grant an overlay license and a Tribal applicant would receive a geographic area license subject to protections for incumbent operations.

Following the Tribal priority window, other entities could participate in an auction for access to geographic overlay licenses in the remaining white spaces. Bidding credits will be available for entities that satisfy the definitions of small business and rural provider established in the Order. EBS licenses awarded through the auction will be subject to specific performance requirements depending on the specific service being offered.

The Order also amends the existing EBS license regulatory regime to allow for more flexible use to include the following measures:

  • elimination of restrictions for non-education use of EBS licenses for existing and new licensees to make the spectrum more appealing to commercial entities;
  • elimination of requirements that EBS licenses be used for an educational purpose; and
  • elimination of restrictions on leases for EBS licenses in section 27.1214 (except subsection (d)) and the cross-reference in section 1.9047 of the FCC’s rules.
Prior to the meeting, Commissioner Carr sent letters to some EBS licensees inquiring about whether they were fully complying with the license requirements, such as reserving at least 5% of capacity for specified educational uses, and expressed concern that a significant portion of the nonprofit revenues are being used for improper purposes like leadership salary and political donations. The Order includes a footnote reminding EBS licensees about their obligations under the current rules and directs the Wireless Telecommunications Bureau (“WTB”) and Enforcement Bureau to investigate the alleged violations and take appropriate action as necessary. In his separate statement, Commissioner Carr noted that his preference for higher buildout standards for existing licensees was not adopted but that higher standards could be adopted in a later pending proceeding related to adoption of wireless license standards for renewal beyond the initial term. Additionally, Commissioner O’Rielly, while supportive of the Order, emphasized the necessity of the performance requirements and put Tribal entities in particular on notice that any license received will be cancelled if the licensee doesn’t meet build-out requirements.

EBS licensees raised concerns about the direction of the Order, favoring commercial entities, and that the FCC was discounting the value presented by educational and nonprofit groups. Democratic Commissioners Rosenworcel and Starks both approved in part and dissented in part to the Order. Commissioner Rosenworcel expressed her preference for the unused licenses to be allocated by incentive auction with additional funds being used to address the homework gap, and Commissioner Starks expressed his concern over the Order’s impact on incumbent licensees and the future viability of the EBS program.

The effective date for the Order is as follows:

  • The Tribal priority window will open before unassigned EBS spectrum is made available more broadly for competitive bidding. The FCC directs WTB to establish procedures for the priority window through future Public Notices.
  • The effective date of the other rule changes in the Order will be six months from the date of publication in the Federal Register.

]]>
FCC Adopts Procedures to Set the Stage for Second-Ever Incentive Auction in Late 2019 https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-adopts-procedures-to-set-the-stage-for-second-ever-incentive-auction-in-late-2019 https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-adopts-procedures-to-set-the-stage-for-second-ever-incentive-auction-in-late-2019 Thu, 18 Apr 2019 22:19:48 -0400 The Federal Communications Commission (“FCC”), at its April 12, 2019 Open Meeting, voted to adopt a Public Notice that proposes application and bidding procedures for the single, simultaneous auction of three mmW spectrum bands—37 GHz (37.6-38.6 GHz), 39 GHz (38.6 GHz-40 GHz), and 47 GHz (47.2-48.2 GHz)—as we previously reported. The Public Notice lays the groundwork for the second-ever incentive auction (in the 37 and 39 GHz Bands) and continues the FCC’s intent to make more mmW band spectrum available for auction. The auction is scheduled to begin on December 10, 2019. Comments on the Public Notice are due by May 15, 2019 and reply comments are due by May 30, 2019.

The Public Notice addresses the pre-bidding procedures for Auction 103, which will allocate upper microwave flexible use service (“UMFUS”) licenses in the bands referenced above. The spectrum in each of the three bands will offer 100 megahertz blocks of spectrum to be licensed in 416 Partial Economic Area (“PEA”) service area nationwide. The number of licenses that will be available for auction in the upper 37 and 39 GHz blocks in any given PEA will depend on commitments made by incumbent licensees in an initial phase to accept a reconfigured assignment or relinquish their license altogether in exchange for a portion of the auction proceeds.

The FCC seeks input on its proposal for Auction 103 to use an ascending clock auction format in both auction phases for licenses held by the FCC as well as those given up by incumbent licensees. The first phase will involve successive clock bidding rounds in which bidders request categories of generic license blocks in specific PEAs while in the subsequent round, bidders will bid on frequency-specific license assignments. During the clock phase, the FCC auction bidding system will announce prices for blocks in each category in each PEA, and qualified bidders will submit quantity bids for the number of blocks they seek. Simultaneously with the Public Notice, the FCC also published a technical guide with mathematical details about the proposed auction procedure and algorithms for the clock and assignment phases.

In addition, the auction procedures would include an aggregate net revenue requirement that must be met to ensure that the auction’s proceeds will be able to cover the cost of payments to incumbents that relinquish their spectrum. Bidders will be provided with an estimate of the shortfall to meeting the net revenue requirement after each round of bidding until the requirement has been met. If the revenue requirement has been met by the end of the clock phase bidding, the system will determine the winning bidders of generic blocks, and the auction will proceed to the assignment phase. If the net revenue requirement has not been satisfied at the time bidding stops in the clock phase, the auction will end, no new licenses will be assigned, and incumbents will retain their licenses while the FCC reassesses the matter.

After the winning bidders for the generic blocks have been determined, the FCC also proposes to conduct separate assignment rounds for each of the top 20 PEAs. The PEAs will be assigned sequentially, beginning with the largest PEAs. Assigning the PEAs sequentially will make it easier for bidders to incorporate frequency assignments from previously assigned areas into their bid preferences for other areas and acquire contiguous blocks of spectrum within PEAs and common spectrum among contiguous PEAs. Of note, the FCC proposes to implement a cap on bidding credits for winning bidders in the amounts of $25 million for small businesses and a $10 million for rural service providers.

]]>
Spectrum Takes Center Stage Again at FCC October Meeting https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/spectrum-takes-center-stage-again-at-fcc-october-meeting https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/spectrum-takes-center-stage-again-at-fcc-october-meeting Fri, 05 Oct 2018 21:27:26 -0400 At last week’s 5G summit at the White House, FCC Chairman Ajit Pai announced his Facilitate America’s Superiority in 5G Technology (“5G FAST Plan”). The first of the three components of the Chairman’s announced strategy is making more spectrum available for 5G services by expanding licensed and unlicensed opportunities. To those ends, the FCC announced this week that the Commissioners will vote at its next meeting on October 23, 2018, on three items that would launch a proceeding to consider more unlicensed operations, make rule changes designed to increase the value of mid-band spectrum, and expand channels for land mobile radios primarily used by government agencies and businesses. Specifically, the FCC proposes allowing unlicensed devices to operate in the 5.925-7.125 GHz band (the “6 GHz Band”) to support next-generation unlicensed technologies, including Wi-Fi. The agency also anticipates recrafting the licensing rules related to the Citizens Broadband Radio Service in the 3.550-3.700 GHz band (the “3.5 GHz Band”), with an emphasis on the Priority Access Licenses (“PALs”) it will auction. In addition, the FCC expects to increase, through various methods, the number of channels available for private land mobile radio (“PLMR”) operations in the 806-824 MHz and 851-869 MHz bands (the “the 800 MHz Band”).

Rounding out the major actions that will be voted on later this month at the Open Meeting, the FCC released a draft item that would offer regulatory relief to rate-of-return carriers providing Business Data Services (“BDS”). The proposed items are sure to impact every sector of the communications industry, from the largest wireless carriers to the smallest broadband providers and device manufacturers to business, industrial, and public safety radio users, while potentially transforming large-scale data transport services.

Enabling Unlicensed Use of the 6 GHz Band: The FCC has long been pressed to expand unlicensed use of the 6 GHz Band. It now seems poised to commence a rulemaking to consider just that, while ensuring incumbent licensees are protected. The draft proposed rulemaking would allow unlicensed devices to operate in the 6 GHz Band, subject to certain restrictions that vary depending on the specific frequencies used. The FCC proposes that devices using the 5.925-6.425 GHz and 6.525-6.875 GHz sub-bands would only be allowed to transmit if an automated frequency control (“AFC”) system determines that such use will not cause harmful interference. The FCC noted that these sub-bands currently are occupied by licensees operating point-to-point microwave links and some satellite systems. Meanwhile, devices using the 6.425-6.525 GHz and 6.875-7.125 GHz sub-bands would only be allowed to operate indoors and at lower power levels, but use of these frequencies would not depend on an AFC system. The FCC asserted that these sub-bands are used for mobile and satellite services whose itinerant operations make the use of an AFC system impracticable, while the proposed operating restrictions would seem to offer sufficient protection to incumbents.

Reforming the 3.5 GHz Band Rules: Major wireless carriers have peppered the FCC for almost two years with proposed changes to the geographic license areas for PALs, favoring auctions over larger geographic areas, with longer license periods and expectations of renewal. Smaller providers have supported retaining the smaller census tract licenses adopted in the original PAL framework several years ago. The FCC draft order contains a compromise approach that would issue PALs across the country at the county level. The FCC also would increase the license term for PALs from three years to ten years and make PALs renewable in order to foster long-term investment. Moreover, the FCC would seek to promote greater spectrum utilization through the enhancement of secondary markets in PALs by permitting partitioning and disaggregation of the licenses.

Expanding PLMR Operations in the 800 MHz Band: The FCC has worked for years to increase the efficiency of PLMR operations in the 800 MHz Band. A draft order would, among other things, add 318 new “interstitial” PLMR channels in the 800 MHz Band and terminate a freeze put in place in 1995 that prevented PLMR licensees from gaining access to other license category pool frequencies the 800 MHz Band without a waiver. The FCC also would extend conditional licensing authority above 470 MHz to PLMR stations that operate in the 800 MHz Band and the 700 MHz narrowband, allowing entities to operate for up to 180 days while their applications remain pending. In addition, other changes included in the draft include making new channels available in the 450-470 MHz band for industrial/business radio use in gaps located between PLMR spectrum and other services.

Restructuring Rate-of-Return BDS: The FCC took action in 2017 to deregulate most BDS, which provide dedicated point-to-point transmissions at guaranteed speeds over high-capacity data connections for major businesses, governments, and other large institutions. Under the draft order and proposed rulemaking, certain small rural carriers would be allowed to move from longstanding rate-of-return regulation to “incentive” price cap regulation for some of their BDS offerings. Critically, the FCC would not require these carriers to comply with tariffing, cost assignment, and jurisdictional separations requirements. The draft item would also seek comment on the appropriate regulatory treatment for these carriers’ other transport services, including the need for price controls.

]]>
FCC Plans Major Wireless Deployment and 911 Actions at September Meeting https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-plans-major-wireless-deployment-and-911-actions-at-september-meeting https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-plans-major-wireless-deployment-and-911-actions-at-september-meeting Sun, 09 Sep 2018 12:44:56 -0400 Continuing its focus on broadband infrastructure deployment for 5G technologies, the FCC announced that it plans to eliminate regulatory impediments that delay and increase the cost of wireless deployments at its next meeting, scheduled for September 26, 2018. The item would alter the balance of power between wireless broadband providers and state/local governments concerning control over rights of way and deployment fees. The FCC also anticipates initiating a rulemaking aimed at improving 911 dialing and location accuracy for multi-line telephone systems (“MLTS”), potentially imposing new compliance obligations on office building, hotel, and other large facility managers. Rounding out the major actions, the FCC released draft items that would: (1) permit toll free numbers to be auctioned and sold on the secondary market and (2) consolidate rules and expand the spectrum available for so-called Earth Stations in Motion (“ESIMs”) that provide high-speed broadband service to vehicles, aircraft, and vessels. The proposed items will generate input from all corners of the communications industry as well as real estate interests. You will find more details on the significant September FCC items after the jump:

Wireless Infrastructure Deployment: The FCC issued a draft Declaratory Ruling and Order finding that state/local fees for accessing rights of way and other charges associated with deployments may prohibit the provision of wireless service in violation of the Communications Act. The FCC therefore plans to allow such fees and charges only to the extent they are nondiscriminatory and represent a “reasonable” approximation of the state/local governments’ costs related to the deployment. The draft item would further clarify that state/local consideration of aesthetic concerns with deployments are not necessarily unlawful, so long as any aesthetic requirements are: (1) reasonable; (2) no more burdensome than those applied to other deployments; and (3) published in advance. In addition, the FCC will establish two new shot clocks for small wireless facility deployments (60 days for collocation on preexisting structures and 90 days for new constructions) and codify existing shot clocks for larger wireless facility deployments.

911 Dialing and Location Accuracy: A draft Notice of Proposed Rulemaking seeks comment on requiring MLTS to enable users to dial 911 directly, without having to dial a prefix to reach an outside line (e.g., requiring callers to first dial 9). The FCC proposes requiring MLTS to provide a notification that a 911 call has been made to a front desk, security office, or other centralized location. The proposed rulemaking asks whether MLTS, VoIP, and other telecommunications service providers should be responsible for ensuring that “dispatchable location” information is transmitted with 911 calls, such as the calling party’s street address as well as room number, floor number, or similar data necessary to help first responders reach the called party quickly.

Auctioning Toll Free Numbers: The FCC plans to adopt a draft Report and Order that would enable it to auction off toll free numbers. Generally, the FCC has allocated toll free numbers on a first-come, first-served basis at no cost. The FCC claims this process leads to stockpiling and other inefficient uses of toll free numbers, while rewarding parties that “game” the system through computer-assisted number reservation tools. The FCC proposes that its first auction will cover 17,000 numbers recently made available in the 833 toll free code. Importantly, the FCC intends to eliminate the prohibition on secondary market sales of toll free numbers to allow successful auction participants to sell numbers to others, potentially creating a “gold rush” for prime toll free numbers.

ESIM Expansion: Under a draft Report and Order and Further Notice of Proposed Rulemaking, the FCC would consolidate the rules that apply to earth stations on aircraft, vessels, and vehicles, eliminating duplicative regulations and streamlining the application process. It would also expand the frequencies available for ESIMs to include conventional Ka-band spectrum. Operation of ESIMs is currently confined to the conventional C-band spectrum and parts of the Ku-band spectrum. The FCC argues that any potential interference issues involving incumbent satellite operators in the Ka-band can be resolved through prior coordination and industry best practices. The FCC seeks comment on whether ESIMs should be allowed to operate in additional spectrum bands, on both a protected and unprotected basis, to provide even more flexibility.

]]>
FCC Poised to Adopt Procedures for First Set of Spectrum Frontiers Auctions (24 and 28 GHz) and Tee up Another (37, 39, and 47 GHz) https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-poised-to-adopt-procedures-for-first-set-of-spectrum-frontiers-auctions-24-and-28-ghz-and-tee-up-another-37-39-and-47-ghz https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-poised-to-adopt-procedures-for-first-set-of-spectrum-frontiers-auctions-24-and-28-ghz-and-tee-up-another-37-39-and-47-ghz Thu, 19 Jul 2018 20:06:14 -0400 Two years after the first Spectrum Frontiers report and order, the Federal Communications Commission (“FCC” or “Commission”) is completing the final set of preliminaries before commencing the first mmW auction. With the release of a draft Public Notice (“Notice”) on July 12, 2018, the Commission gave a sneak preview of the application and bidding procedures for upper microwave flexible use service (“UMFUS”) licenses in the 28 GHz and 24 GHz band. The Commission will vote on these procedures at its next Open Meeting, scheduled for August 2, 2018. The auction will be an important milestone in the Commission’s efforts to make high band spectrum available for next-generation applications, including 5G wireless connectivity.

In the Notice, the FCC sets out its plan to operate two separate and consecutive auctions, with different application and bidding processes, for licenses of available spectrum in the 28 GHz (27.5 – 28.35 GHz) band – which was designated for UMFUS in July 2016 – and 24 GHz (24.25-24.45 and 24.75-25.25 GHz) band – which was a subject of the Second Report and Order in Spectrum Frontiers in November 2017. The window during which individuals can apply to bid in each auction, as outlined in the draft Notice, will run concurrently. Since both auctions involve UMFUS licenses, applicants will be subject to the same application requirements, certifications, prohibited communications rule, and procedures regarding information available during the auction process. The 28 GHz band auction is set to start on November 14, 2018 and the 24 GHz band one will commence after bidding in the 28 GHz closes.

It remains to be seen what the level of interest in the auctions will be because portions of both spectrum bands are already encumbered. Thanks to relatively recent secondary market acquisitions of Nextlink and StraightPath, Verizon already has significant portions of the 28 GHz band in some key markets. Under the Spectrum Frontiers 2016 decision, the existing licenses will be converted to UMFUS licenses without competitive bidding. For the 24 GHz band, AT&T was initially set to acquire a large set of licenses in that band through its purchase transaction with FiberTower which would have resulted in significant encumbrances there as well. However, as part of a settlement agreement with the FCC to get the transaction approved, AT&T was required to return the 24 GHz licenses to the Commission. The 24 GHz band still has some active licenses but the encumbrance is less and the current licensee has filed applications seeking to reconfigure its licenses in a way the FCC has indicated would increase the number of unencumbered blocks available for auction.

At the August Commission Meeting, the FCC is also set to take vote on a Fourth Further Notice of Proposed Rulemaking (“FNPRM”) in the Spectrum Frontiers proceeding that would consider rules to set the stage for a separate, single auction of three other mmW bands, 37 GHz (37.6-38.6 GHz), 39 GHz (38.6 GHz-40 GHz), and 47 GHz (47.2-48.2 GHz). The Commission hopes that the auction will occur in the second half of 2019, after rules are adopted to tweak the current band structure. To facilitate the auctioning of these bands, the FCC proposes changes to the current service rules for the 39 GHz band. Specifically, the FCC seeks comment on the following changes which would be designed to make the bands more attractive to potential high-stakes bidders, the large carriers and providers, and maximize auction revenues:

  • Create fourteen 100 MHz channels instead of seven 200 MHz ones in the 39 GHz block to facilitate repacking of incumbent licensees;
  • Modify upper 37 GHz band channels to also have 100 MHz instead of 200 MHz to align the licensing scheme with the adjacent 39 GHz; and
  • Modify the plan for the portion of the 47 GHz band licensed under UMFUS rules to also have 100 MHz channels.
The FNPRM also puts forward a plan to reconfigure and hold an incentive auction for contiguous blocks of spectrum in the 39 GHz and upper 37 GHz bands. The auction, which would be only the Commission’s second incentive auction – the first being the 600 MHz broadcast incentive spectrum auction that completed in March 2017 – is intended to try to clear out some of the encumbrances in these bands by offering incumbent licensees the option to relinquish their license rights in these bands in exchange for payment. The incumbents, under the Spectrum Frontiers June 2016 Report and Order, would be converted to UMFUS licenses. The FCC also proposes to mandate repacking for any remaining licensees that forego participation in the auction. The FNPRM, though it still needs to be voted on, has preset response deadlines of September 17, 2018 for comments; and October 8, 2018 for reply comments.

]]>
5G and Broadband Infrastructure in the Spotlight at August FCC Meeting https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/5g-and-broadband-infrastructure-in-the-spotlight-at-august-fcc-meeting https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/5g-and-broadband-infrastructure-in-the-spotlight-at-august-fcc-meeting Mon, 16 Jul 2018 18:50:54 -0400 The FCC will focus on 5G spectrum and the infrastructure supporting next-generation broadband services at its meeting planned for August 2, 2018. Continuing its push to make more spectrum available for flexible wireless use to support 5G technologies, the FCC teed up two major spectrum-related items for its August Open Meeting, which comes hot on the heels of its July 12 meeting. The items would open up 1.55 GHz of spectrum for commercial use through two auctions, with the first auction set to begin later this year. The FCC also plans to take a major step forward in supporting broadband deployment by adopting a long-anticipated “one-touch make-ready” regime for pole attachments, while taking aim at deployment moratoria. Rounding out the major items, the FCC will seek comment on launching a $100 million Connected Care Pilot Program. The proposed items maintain the trend of jam-packed Summer FCC meetings (which will then take a break until September 26) and will be sure to generate input from all communications industry sectors. You will find more details on the significant August FCC items after the jump:

Spectrum Frontiers Auctions: The FCC issued a draft Public Notice in its ongoing Spectrum Frontiers proceeding establishing application and bidding procedures to auction 850 MHz of spectrum in the 28 GHz band and 700 MHz of spectrum in the 24 GHz band. The spectrum would be made available for flexible wireless use to support 5G technologies. The FCC plans to start the 28 GHz band auction by mid-November 2018, with the 24 GHz band auction following soon afterward. The agency would apply its standard auction rules to each proceeding to facilitate participation in both auctions. In addition, the FCC released a draft proposed rulemaking seeking comment on service rule changes for the 39 GHz band, which along with the upper 37 GHz band, represents the largest amount of contiguous spectrum available for flexible use in the millimeter wave bands. The FCC anticipates freeing up this spectrum through an incentive auction tentatively planned for 2019. Comments will be due September 17, 2018 and replies on October 8, 2018.

One-Touch Make-Ready: A draft Order and Declaratory Ruling would allow the “vast majority” of pole attachments to follow a one-touch make-ready process, in which new attachers may elect to perform all of the work to prepare a pole to hold new facilities without relying on the pole owner. The FCC also plans to codify its existing precedent regarding the “overlashing” of new facilities to current attachments, while eliminating disparities between the pole attachment rates paid by incumbent telecommunications carriers versus cable and other telecommunications attachers. In addition, the draft would clarify that state and local moratoria on telecommunications services and facilities deployments are preempted under federal law.

$100 Million Connected Care Pilot Program: The FCC plans to adopt a Notice of Inquiry (“NOI”) seeking input on a proposed $100 million “Connected Care Pilot Program” to support telehealth services delivered to low-income Americans. The proposed program would draw money from the Universal Service Fund, potentially lowering the funds available to other programs (it notes the reduced spending on the Lifeline Program), and the FCC is looking for comments on the appropriate application procedures, supported services and equipment, support amounts, eligibility criteria, and duration for the pilot program. The NOI asks a lot of open questions, but also seeks comment on restricting the pilot program to projects that would involve new or upgraded deployments or upgrades to existing facilities and whether to only partner with facilities-based eligible telecommunications carriers (“ETCs”), which would be consistent with the agency’s proposal in late 2017 to limit the Lifeline Program to facilities-based ETCs. Comments will be due 30 days after the NOI is released and reply comments are due 60 days after release.

]]>
FCC Sets Stage for $4.5 Billion Auction by Resolving Mobility Fund Phase II Challenges https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-sets-stage-for-4-5-billion-auction-by-resolving-mobility-fund-phase-ii-challenges https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-sets-stage-for-4-5-billion-auction-by-resolving-mobility-fund-phase-ii-challenges Tue, 27 Feb 2018 17:27:22 -0500 The Federal Communications Commission (“FCC”) took a major step forward on closing the “digital divide” in mobile broadband at its February meeting by unanimously adopting an Order resolving the remaining challenges to the Mobility Fund Phase II (“MF-II”) auction. The order eases the letter of credit requirements and clarifies the collocation obligations for funding recipients, but generally preserves the MF-II auction budget, disbursement, and performance rules announced last year. After clearing away these challenges, the FCC will focus on identifying the areas eligible for funding and conducting the auction later this year.

The Mobility Fund provides financial support to wireless service providers to maintain and extend mobile broadband and voice services in unserved and underserved areas. The FCC plans to give out over $4.5 billion in support through the MF-II auction to expand 4G LTE coverage in places lacking such service. The Order addresses four key issues:

1) Relaxing Letter of Credit Requirement: The FCC requires a MF-II auction winner to obtain a letter of credit covering the support received, which allows the FCC to recover funding in the event the service provider fails to meet its performance milestones. Recognizing the significant costs of obtaining a letter of credit, the FCC will allow a service provider to significantly reduce the letter of credit’s value (and simultaneously reduce the letter of credit’s cost) once the service provider meets its 80 percent service milestone. The FCC also stated that a service provider can cancel the letter of credit once it meets its final performance milestone. With these changes, the letter of credit obligations for the MF-II auction match the letter of credit obligations imposed in the Connect America Fund Phase II (“CAF-II”) auction, which covers fixed broadband deployment.

2) Clarifying Collocation Obligation: The FCC initially indicated that funding recipients would be required to provide reasonable collocation by other service providers on “all” towers that the recipients owned or managed. A number of service providers asked the FCC to reconsider this requirement, pointing out that a similar collocation requirement applicable to earlier auction winners only covered “newly constructed” towers. The FCC resolved this discrepancy by clarifying that the collocation requirement only applies to newly constructed towers in the areas where the service provider receives MF-II support.

3) Maintaining Budget and Disbursement Schedule: The FCC refused to increase the budget for the MF-II auction in response to wireless industry claims that it did not provide enough money to achieve full 4G LTE coverage in all eligible areas. The FCC affirmed its budget calculation methodology and stated that it would re-evaluate if more funding is necessary in the future. The FCC denied requests to base the budget on wireless carriers’ projected costs, expressing concern that such a system would encourage inflated claims and waste. The FCC also affirmed its monthly disbursement schedule after carriers asked it to allow larger support payments early in the network construction process. While the FCC recognized that carriers would likely incur most costs early in the network construction process, it found that trying to match each carriers’ costs during the deployment process would strain the MF-II budget. The FCC also noted that CAF-II will operate on a monthly disbursement schedule.

4) Preserving Performance Requirements: The FCC rejected calls to lower the minimum level of service required from MF-II auction winners from the current 10/1Mbps median data speed and 100 ms latency benchmarks. The FCC found such benchmarks necessary to ensure that rural offerings keep pace with their urban counterparts and do not become a “second-class” service.

The FCC also declined to extend bidding preferences to small businesses in the MF-II auction, which Commissioner Clyburn supported, or adopt new limitations on winning carriers entering into equipment exclusivity arrangements. In addition, the FCC retained the role played by the Universal Service Administrative Company in verifying the data wireless providers submit to demonstrate compliance with their MF-II auction buildout requirements.

With the last MF-II auction reconsideration petitions resolved, the FCC can move on to finalizing the set of areas eligible for funding. The FCC recently issued an initial map of areas presumptively eligible for funding. The FCC’s eligibility determinations will be subject to a challenge process, which is scheduled to begin on March 29, 2018. However, it remains unclear when the challenge process will conclude and the FCC will announce the final list of areas eligible for support through the MF-II auction. Whenever it occurs, the MF-II auction will have transformative impacts on rural wireless broadband deployment, so stakeholders should assess whether funding opportunities exist in their service areas and consider participating in the auction process.

]]>
FCC Proposes to Auction Desirable 833-prefix Numbers, Allow the Sale of Toll Free Numbers https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-proposes-to-auction-desirable-833-prefix-numbers-allow-the-sale-of-toll-free-numbers https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-proposes-to-auction-desirable-833-prefix-numbers-allow-the-sale-of-toll-free-numbers Wed, 04 Oct 2017 15:33:03 -0400 The Federal Communications Commission (“FCC” or the “Commission”) adopted a Notice of Proposed Rulemaking (“NPRM”) at its September Open Meeting that proposes significant changes to not only the methodology for assigning toll-free numbers but also the management of the toll free number assignment process. The principal proposal in the NPRM is to use an auction process to assign certain highly valued (e.g., vanity and repeater) toll free numbers “to better promote the equitable and efficient use of numbers.” The Commission also proposes to eliminate its prohibition on the brokering of toll free numbers, which would open the marketplace for sales of valuable toll free numbers. Comments will be due 30 days after publication of the NPRM in the Federal Register and reply comments will be due 60 days after publication.

In the NPRM, the FCC proposes the use of a toll free number assignment approach that allows for the assignment of numbers in different manners including “by auction, on a first-come, first-served basis, an alternative assignment methodology, or by a combination of the forgoing as circumstances require.” Beginning with the introduction of 888 area code toll free numbers in 1998, the FCC has employed a first-come, first-served approach to assignment of toll free numbers. However, the FCC has regularly struggled with the best way to ensure fair distribution when dealing with the following types of numbers, which tend to be highly valued: a) vanity – numbers that spell a name or word; and b) repeater – numbers that are easy to remember (e.g., 1-800-222-2222). As a result, the FCC now proposes the use of an auction process to fairly and efficiently assign these types of numbers.

Proposed Auction Method. The FCC specifically proposes the use of an auction to distribute the approximately 17,000 numbers that were subject to mutually exclusive requests resulting from the 2017 Order opening 833 as another toll free area code. Mutually exclusive numbers are defined as those numbers that received at least two requests for assignment in the 833 process. The NPRM contemplates using a single round, sealed-bid Vickrey auction under which Responsible Organizations (“RespOrgs”) would bid for the numbers most valuable to them. In a sealed bid auction, a bidder submits bids for individual numbers privately to the auctioneer. A Vickrey auction means the highest bidder for a number wins and pays the second-highest bid for the number. A reserve price would not be set since the purpose is to increase the efficiency of the assignment process not necessarily raise money and other toll free numbers will continue to be assigned at no cost. Auction participants would be required to simultaneously submit separate bids for each number they want, with the winning bid being determined independently for each separate number. The FCC does not intend to allow package bids, bidding on a combination of numbers at one time, in this process. If the auction approach is adopted, the FCC intends to evaluate the ultimate process and outcome to assess how to address future toll free number assignments.

Alternative Auction Methods - The FCC also seeks comment on any other auction methods including:

  • Pay-your-bid auction, instead of a Vickrey auction, wherein the highest bidder wins and pays the value of his or her own bid. The NPRM notes that while this approach is simpler it could be less efficient because people are less incentivized to bid their true value for the good.
  • Open auction, which allow the bidder the opportunity for price discovery and better understanding how other bidders value the good. In an open auction, the bidder generally is aware of what other participants are bidding and how much they are willing to spend but the FCC notes it may be more costly to implement.
Eligibility to Participate in Auction. The Commission seeks to allow only RespOrgs to bid in a toll free number auction therefore any entity interested in subscribing to a mutually exclusive number would need to approach a RespOrg to bid on their behalf. Alternatively, the FCC seeks input on whether subscribers should be allowed to participate directly and whether there would be any legal challenges to such an approach. Additionally, the NPRM considers whether the current definition of mutually exclusive numbers is the most appropriate or if it should consider whether the number is being sought by more than two RespOrgs rather more than two subscribers. Currently, the toll free numbering administrator (“TFNA”), Somos, can notify only RespOrgs about auctions and the FCC proposes to include subscriber information in the TFNA database to allow for subscribers to be notified, allowing for larger participation if auction methods are adopted.

Use of Auction Funds. The Commission proposes to use any net proceeds from any toll free number auction to assist with the costs of toll free number administration by the TFNA including the costs of implementing numbering auctions in the event the FCC assigns the TFNA that responsibility.

Brokering and the Sale of Toll Free Numbers. The NPRM also proposes a significant change to the assignment of toll-free numbers. It has long been recognized that no one “owns” toll free numbers: like spectrum, they are a public resource that are allocated for temporary use. Toll free numbers have heretofore been assigned on a first-come, first-served basis. The FCC rules contain strict prohibitions on the brokering (sale) of numbers and related prohibitions on warehousing and hoarding of numbers. The FCC has taken enforcement action against companies found to be brokering numbers. This NPRM explores doing away with these prohibitions as follows:

  • Secondary markets - The FCC proposes to revise its rules to promote a secondary market for toll free numbers whereby subscribers would be allowed reassign their toll free numbers to other subscribers for a fee (or other compensation) as negotiated by the parties. The NPRM discusses ways to allow a subscriber to reassign the right to use the number despite the lack of ownership.
  • Brokering Rule – Under current rules, RespOrgs and subscribers are prohibited from selling a toll free number for a fee. The FCC proposes to eliminate the brokering rule since it directly prohibits secondary markets.
  • Warehousing and Hoarding Rules – The FCC prohibits warehousing which is the practice where a RespOrg reserves a toll free number even though no end user subscriber has requested the number for use. Hoarding, the acquisition of more toll free numbers from a RespOrg than the toll free subscriber intends to use, is also banned by the FCC. The NPRM now seeks comment on whether these rules effectively achieve their purpose of preventing number exhaust and ensuring effective use of numbering resources. If the Commission removes these rules, what additional restrictions or mechanisms would be needed to prevent RespOrgs or subscribers from holding numbers they no longer need?
Public Interest Numbers and Other Proposals. The Commission is also considering setting aside for no cost certain toll free numbers that may be desired by organizations with public interest goals. Additionally, the NPRM raises the possibility of making changes to the overall toll free number management by Somos. Specifically, the Commission seeks input on the use of a mechanism other than a tariff for toll free administration and alternative regulatory treatment for the TFNA database services provided by Somos. The FCC also proposes to adopt new requirements to make Somos’ operations and budget more transparent to ensure it is only recovering its operating costs as is allowed by the rules.

This NPRM is the first foray into toll free number assignment and administration in over a decade. Users of toll free numbers – especially those who use or desire vanity numbers – should follow this proceeding very carefully.

]]>
August 2017 FCC Meeting Recap: Commission Sets Reverse Auction Procedures for CAF Phase II Auction https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/august-2017-fcc-meeting-recap-commission-sets-reverse-auction-procedures-for-caf-phase-ii-auction https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/august-2017-fcc-meeting-recap-commission-sets-reverse-auction-procedures-for-caf-phase-ii-auction Wed, 09 Aug 2017 10:33:11 -0400 At its August Open Meeting, the Federal Communications Commission (FCC) approved a Public Notice (“Notice”) that addresses the procedures for its upcoming Connect America Fund (“CAF”) Phase II auction (“Auction” or “Auction 903”), scheduled to begin in 2018. Auction 903 will be a competitive reverse auction wherein service providers will compete for up to $1.98 billion in financial support as part of an ongoing effort by the FCC to revise the high cost universal service support program. The Notice seeks comment on the FCC’s proposed process for how an applicant can become qualified to participate in the Auction, how bidders will submit bids, and how bids will be processed to determine winners and assign support amounts. Comments are due by September 18, 2017 and reply comments are due by October 18, 2017.

The Auction is the second part of CAF Phase II. The initial part of CAF Phase II occurred in 2015, when ten price cap carriers accepted offers of support calculated by a cost model in exchange for the providers’ commitment to deploy and maintain voice and broadband service in high cost areas. Service providers that seek to participate in the Auction will bid on providing service to eligible high cost areas including those areas where incumbent price cap carriers declined the support calculated by the cost-model. In 2016, the FCC adopted the Phase II Auction Order, which established the rules for the Auction’s bidding process including the bidder performance obligations, application mechanism, bidder eligibility criteria, eligible areas, and post-auction obligations. More recently, in March 2017, the FCC adopted bidding weights for the different performance category tiers for Auction 903 (as previously discussed here). The Notice takes final steps towards executing the Auction by resolving specific details of the mechanics established in these earlier proceedings.

The FCC previously decided that geographic areas eligible for bidding would be designated by census block but reserved the right to require bids be submitted based on census tracts in order to limit the number of discrete biddable units. In the Notice, the FCC proposes to use census block groups containing one or more census blocks as the minimum geographic area that can be bid on during the Auction. This is intended to provide flexibility to providers regarding the scope of the network area since the use of census tracts might require providers to bid on a broader geographic area than they want to cover. The Notice reaffirmed that the Wireline Competition Bureau will release an updated list of eligible census blocks using recently available Form 477 data at least three months prior to the deadline for short-form applications.

APPLICATION REQUIREMENTS

Auction 903 will involve a two-stage application process in which a short-form application will be used pre-auction to establish a bidder’s eligibility to participate while the long-form application will involve a more extensive review of bidder qualifications after bidding is complete. The Notice seeks comment on the type of information an applicant should be required to provide in both its short- and long-form applications. The FCC makes the proposals regarding the following matters in the Notice:

State Selection and Overlapping State Bids

An applicant must identify the states in which it intends to bid for support in the short-form application. The applicant will be restricted to bidding on eligible census blocks in the states identified in its application. Separate applicants that are commonly-controlled or are parties to a joint bidding agreement may not bid in the same states. The Notice provides entities with options to avoid running afoul of the restriction on overlapping bids. A company has the option of submitting a single application to qualify for the Auction then designating the operating company that would receive the support if the bid is successful. If a parent company or a consortium/joint venture is a winning bidder in the Auction, the FCC proposes to allow the entity to designate at least one operating company for each state that will be receiving Phase II support. The winning bidder would not be allowed, however, to apportion a package of eligible census block groups in a winning bid among multiple operating companies.

Alternately, parties that have common control or are part of joint bidding arrangement can bid independently, just not for the same states. To ensure this state overlap provision is abided by, the FCC proposes requiring each applicant to certify that it knows it cannot place bids in the same state as (i) another commonly-controlled entity; (ii) another party to a joint bidding arrangement related to the Auction that it is a party to; or (iii) any entity that controls a party to such an arrangement. Additionally, the FCC propose to require short-form applicants to briefly describe any agreements relating to participation of the applicant in Auction 903 bidding. In the long-form, winning bidders will be required to submit updated information on any such agreements as well as possibly disclosing the specific terms, conditions, and parties involved.

Performance Tier and Latency Combinations

The FCC previously created an auction framework that included four technology-neutral broadband performance tiers with increasing speeds and usage allowances along with commitments to either low or high latency (“public interest obligations”). In the Notice, the FCC outlines its proposals for the information and process to be used in assessing an applicant’s ability to meet the public interest obligations it selected on the short-form application.

  • Operational Information. For each chosen performance tier and latency combination, an applicant must show how it will provide service and that it is reasonably capable of meeting the public interest obligations for each state it selects. Included in an Appendix of the Notice are a list of questions that each applicant would need to provide brief, narrative responses to as a part of its application.
  • Required Information for Applicants Proposing to Use Spectrum. An applicant proposing to use spectrum to provide service will need to (i) identify the spectrum bands it will use for last mile, backhaul, and any other part of the network; (ii) describe the amount of uplink and downlink capacity (in MHz) that it has access to in these bands for last mile; (iii) explain the authorization it has to operate in the spectrum band; and (iv) provide call signs and/or application file number associated with its spectrum authorizations. In addition, for the long-form application, the FCC proposes to require each applicant to provide any updates to the relevant spectrum authorizations and certify that the applicant will have access to the spectrum band it proposes to use for at least ten years from the funding authorization date. The Notice includes a list of spectrum bands the FCC has identified as those likely to be used for last mile connectivity. Comment is sought on the sufficiency of the uplink or downlink bandwidth in these bands. A provider that intends to offer satellite service must also identify any space station licenses that will be used in the areas where it intends to bid.
  • Use of Information Provided to FCC in Other Contexts. The FCC proposes to allow staff to consider any information that a provider has submitted to the FCC in other contexts when assessing whether a provider is reasonably capable of meeting its public interest obligations. To aid with this process, applicants will be required to provide any relevant identifiers in its short-form application including FCC registration number, associated study area codes, and Form 499 filer ID number.
  • Precluding Eligibility of Certain Technologies from Certain Performance Bids. The FCC proposes to exclude applications that propose to use certain technologies from bidding on certain performance tier and latency combinations. For example, satellite providers would be prohibited from selecting low latency in combination with any of the performance tiers.
Financial Qualifications

The FCC also proposes that, in addition to providing audited financial statements, applicants should identify and explain specific information from their most recent financial statements on the short-form application. Earlier rules determined that applicants that are not subject to audits in the ordinary course of business but have provided voice, broadband, or electric transmission services would be permitted to wait until after it is announced as a winner bidder to provided audited financial statements. The FCC seeks comment on whether such providers should be required to submit unaudited information during the pre-auction application process.

Additionally, the FCC intends to use a five point scale, responses to one financial question and status of four financial metrics, to assess financial information. Specifically, the FCC will ask whether an applicant received an unmodified, non-qualified opinion from an auditor of its prior year-end audited financial statement. The four metrics to be considered are (1) latest operating margins, where a margin greater than zero receives one point; (2) time interest earned ratio (TIER), where TIER/interest greater than or equal to 1.25 receives one point; (3) current ratio (i.e., current assets divided by current liabilities), where a ratio greater than or equal to 2 would receive one point; and (4) total equity divided by total capital, where a result greater than or equal to 0.5 would receive one point.

Applicants would also need to certify in the short-form application that they performed due diligence regarding participation in the Auction including evaluating all technical and marketplace factors that may have an impact on the level of support being bid on.

RESERVE PRICES

The FCC previously determined that the reserve price, representing the maximum amount of support the FCC is willing to provide for service to a particular area, will be set using the Connect America cost model (CAM) and bids that exceed the reserve price will not be accepted. In the Notice, the FCC proposes to set the reserve price to be the total of the support amounts calculated for each eligible census block in a census block group, subject to the support cap on extremely high-cost areas. For census blocks with costs that exceed the high-cost threshold, the FCC proposes imposing a funding cap of $146.10 per location per month. The reserve price in those extremely high-cost areas would then be equal to $146.10 multiplied by the number of locations that census block.

BIDDING PROCEDURE

The FCC proposes to use a descending clock auction that will consist of sequential bidding rounds for the Auction. The system would announce a base clock percentage at each round that would be used to delimit the acceptable prices in each round of the Auction. The base clock would begin at a high level, indicating a support amount equal to the full reserve price, and then it would descend in subsequent rounds as bidders indicate the bid percentage (equal to a certain support amount) they are willing to accept to provide service in that area.

The base clock percentage will continue to descend with subsequent rounds until the aggregate amount of support represented by bids in a round is no greater than the support amount budgeted for that round. Once this happens, the system will assign support to bidders in areas where there are no competing bids. If there are still competing bids, the system will continue with subsequent rounds and the clock percentage will continue to descend until there is no competition.

The Notice also seeks comment on the amount of information that should be made available to the public and to bidders during the Auction process. The FCC proposes to withhold from the public information related to the short-form application before the Auction. After the Auction results are announced, the FCC would make available short-form application information and bidding data, except confidential financial information, operational information, and proxy bidding instructions. The FCC will make information available to bidders during the Auction about the status of their bids and the areas in the states in which they are qualified to bid.

]]>