Wireless Internet

On July 19, 2017, the Senate Commerce Committee held a hearing to examine the nominations of Ajit Pai, Jessica Rosenworcel, and Brendan Carr for seats on the Federal Communications Commission.

On March 7, President Donald Trump nominated Pai, the FCC’s current chairman, for a second five-year term ending June 30, 2021. Rosenworcel is nominated for a term that would end June 30, 2020. Carr, the current general counsel at the FCC, has actually been nominated for two terms, one expiring June 30, 2018 and the second ending June 30, 2023. Carr served as legal adviser to then-FCC Commissioner Pai for three years before Pai was named chairman and appointed Carr as general counsel.

Committee Chairman John Thune (R-SD) characterized the hearing as both an examination of the nominees and a FCC oversight hearing, “fulfilling a commitment I’ve made to hold regular, biannual oversight hearings of the Commission.” His opinions of the nominees: “In my view, the FCC will be in very good hands when all three of these nominees are confirmed.” He noted Chairman Pai’s efforts around transparency and FCC processes, network neutrality, and robocall prevention.

Sen Bill Nelson (D-FL), the committee’s ranking member, raised issues around all three nominations. Concerning Rosenworcel, he noted that she should not have been forced to step down from the FCC at the end of 2016 when the Senate failed to reconfirm her.

Sen. Nelson identified two concerns about Brendon Carr: 1) “two consecutive terms to which the Senate is being asked to confirm you would provide you with the longest single, initial period of service of any nominee to the FCC” and 2) “it is hard to recall a similar situation where someone was nominated to serve at the commission alongside, rather than to follow, their current boss.” He stressed that it is important to have commissioners who have independent voices and “ones who will fight for consumers and the public interest.” He later asked Carr to cite an issue that he and Chairman Pai disagree on – Carr failed to answer on more than one occasion. “Going forward, I’ll make my own decisions; I’ll call it the way I see it,” Carr said. “I think my record shows that I’m not a shrinking violet.” Sen. Nelson called that response “not confidence-building.”

Finally, Sen. Nelson congratulated Chairman Pai on some recent pro-consumer actions, but said, “[M]any view these most recent consumer protection actions as mere icing on what is otherwise an unpalatable cake. A cake constructed out of actions that eliminate competitive protections, that threaten dangerous industry consolidation, that make the Internet less free and less open, and that weaken critical consumer protections for those most vulnerable.”

Net Neutrality

Network neutrality and the FCC’s 2015 decision to classify broadband internet access service providers as telecommunications providers under Title II of the Communications Act were key issues for the hearing. In his opening remarks, Chairman Thune said,

“I am pleased that Chairman Pai has sought to hit the reset button on the 2015 Title II Order, because, as I have previously said, the FCC should do what is necessary to rebalance the agency’s regulatory posture under current law. I continue to believe, however, that the best way to provide long-term protections for the Internet is for Congress to pass bipartisan legislation. Two and a half years ago I put forward legislative principles and a draft bill to begin the conversation, and I stand ready and willing today to work toward finding a lasting legislative solution that will resolve the dispute over net neutrality once and for all.”

Two senators questioned the nominees about the impact of the Title II decision on broadband investment in the US. Sen. Mike Lee (R-UT) cited stats, offered by broadband providers, that investment has gone down. He took issue with a New York Times story that said investment had gone up since the 2015 order. He said that increase included foreign investment, some of which he said was spurred by the Title II disincentive to invest in the US, and that there was evidence that US infrastructure investment had declined precipitously.

On the other side was Sen. Ed Markey (D-MA) who said that almost half of the venture capital funds, or about $25 billion, invested since 2015 was in Internet-related businesses, with broadband providers investing $87 billion, the highest rate in a decade. Sen Markey said investment and job creation are high, so there is no problem that rolling back Title II or reviewing net neutrality rules would fix.

Both senators asked Chairman Pai for his take on their respective views, but the chairman's answer was cautious given that he has an open proceeding before him and comments on his proposal to roll back Title II and review the rules are still coming in. He said that evidence of decreased investment was one of his concerns, but that the FCC was testing that theory, as well as the opposite, as part of its due diligence.

E-Rate

While Rosenworcel, Carr and Chairman Pai all generally agreed on the importance of the FCC's E-rate program -- which makes broadband services more affordable for schools and libraries -- they initially refrained from an outright promise not to cut its funding. Sen. Ed Markey (D-Mass.) had to ask Rosenworcel a second time before she explicitly said she would not reduce the funding for E-rate. Neither Pai nor Carr would make that commitment.

Broadband Deployment

The three nominees were largely unanimous on measures to expedite rural broadband like “dig once” policies, which require installation of conduits for fiber-optic cable when preparing infrastructure such as roads. The policies aim to reduce cost and limit wait times for installing fiber in different municipalities.

“I think it would be helpful for ‘dig once’ policies and similar policies to be the law of the land,” Chairman Pai told Sen. Amy Klobuchar (D-MN).

“The agency, working with local jurisdictions, should try to come up with a model code — one that includes policies like ‘dig once,’” Rosenworcel said. She added that there should be incentives built in for local communities to adopt the model.

Senators also pressed the three on the need for accurate coverage maps so that subsidies issued to companies to build out their infrastructure are actually targeted to the right places.

“I would hope to get your commitment that the commission will work to ensure that mapping data used at the FCC accurately accounts for on-the-ground mobile coverage,” said Sen. Cory Gardner (R-CO). The nominees affirmed they are committed to working toward ensuring accurate data coverage moving forward.

First Amendment

Sen. Tom Udall (D-NM) pressed all of the nominees on their commitment to the First Amendment in light of the many statements President Trump has made disparaging outlets covering his Administration. Sen. Udall pointed to a story that the White House could use AT&T’s proposed acquisition of Time Warner as a way to punish CNN for its stories and suggested the Administration might want to reward Sinclair by approving Sinclair’s purchase of Tribune television stations. Each of the nominees pledged to speak out against violence or intimidation against journalists. Chairman Pai reiterated that the White House had not contacted him about retaliating against negative news stories and said he would not do so if asked. And he promised that the FCC would not be used to punish media companies or reward others and would be troubled by any attempt to pressure it to do so.

"I have not directly had any conversations with anyone in the administration with respect to media regulatory proceedings," Chairman Pai said. "To the best of my knowledge, no one on my staff or in the FCC has indirectly had any such conversations as well."

“I have consistently stated that I believe … that First Amendment freedoms, including the freedom of the press, are critical,” Pai added. “If I were ever asked by anyone in the administration to take retaliatory action, for instance, in a media regulatory proceeding, I would not do so.”

Conclusion

If all of the hearing’s nominees are confirmed by the full Senate, the FCC would have a 3-2 Republican majority. Senators on the committee have until July 21 to submit additional questions for the nominees who will be given time to reply in writing.

Microsoft will harness the unused channels between television broadcasts, known as white spaces, to help get more of rural America online.

In an event at the Willard Hotel in Washington, where Alexander Graham Bell demonstrated a coast-to-coast telephone call a century ago, Microsoft plans to say that it will soon start a white-spaces broadband service in 12 states including Arizona, Kansas, New York and Virginia to connect two million rural Americans in the next five years who have limited or no access to high-speed internet. Microsoft’s president, Brad Smith, said white spaces were “the best solution for reaching over 80 percent of people in rural America who lack broadband today.” To support the white-spaces plan, Microsoft is appealing to federal and state regulators to guarantee the use of unused television channels and investments in promoting the technology in rural areas. But the company faces many hurdles with the technology.

Microsoft said its goal was not to become a telecom provider. It will work with local internet service providers like Mid-Atlantic Broadband Communities in Virginia and Axiom Technologies in Maine by investing in some of the capital costs and then sharing in revenue. It has also opened its patents on the technology and teamed with chip makers to make devices that work with white spaces cheaper.

[Commentary] Telecommunications companies are preparing to roll out the next generation of wireless networks, dubbed “5G,” which promise an enormous increase in capacity and connectivity. These networks not only will increase competition in broadband, they are a key enabling technology for a host of advanced products and services. They also represent a gateway to better economic opportunities in inner-city areas that are underserved by broadband today.

But these new networks are different in structure and appearance too. Instead of high-powered antennas on tall towers, they rely on an array of lower-power transmitters closer to the ground that serve much smaller “cells.” That’s why mobile phone companies are concerned that cities and counties will throw up bureaucratic or financial roadblocks to 5G in their communities. It’s not a groundless worry; wireless companies already have encountered local resistance in places where they have introduced the new technology. It’s the look and the intrusiveness of the small cell networks that seems to spark the controversy. People are upset about the deployment of thousands of pieces of equipment the size of small appliances being placed strategically and liberally on publicly owned “vertical infrastructure” (that’s bureaucratese for municipal utility poles, street lights and even traffic lights). That means a lot of equipment in full view and in proximity — really close in some cases — to houses and people. The wireless industry has a solution to this potentially huge NIMBY headache: A bill in the California legislature (SB 649) that would “streamline” the approval process for putting small cell networking gear on public poles and lights. If it’s on property the government controls, approval would be automatic in most cases, so local governments couldn’t drag out the permitting process with public hearings and studies. The bill also would limit how much rent locals can charge the companies for space on their poles and lights.

The telecommunication industry has been pushing this “streamlining” strategy in other states, with various degrees of success. Eleven have adopted some sort of laws to limit the local permitting process and pole fees. Legislators in other states, like Washington, have been more skeptical. California’s lawmakers ought to be wary as well and show more interest in protecting the rights of communities to govern the use of their infrastructure, rather than letting telecommunication companies make those decisions for them.

Rivada Networks said it received the top score among three bidders to build Michigan’s statewide public safety broadband network. But that doesn’t at all mean it will beat out FirstNet for its first statewide win.

Michigan’s Department of Technology, Management and Budget recommended that the state analyze Rivada’s bid alongside FirstNet’s proposal “to determine the best value bid for the state,” the company said this morning in a release. Michigan is the second state to select a vendor for a potential alternative to FirstNet, Rivada said, following the lead of New Hampshire, which is also considering Rivada’s offering. “We are honored that our alternative plan for public safety broadband in Michigan will have the chance to be placed side-by-side with the federal government’s offering,” said Declan Ganley, Rivada’s co-CEO, in the announcement. “By putting out this RFP (request for proposal), Michigan has given its governor a real choice, as envisioned in the legislation that created FirstNet.”

Reports of a potential wireless partnership between Sprint, Charter and Comcast have quieted speculation about a merger between Sprint and T-Mobile. But analysts say T-Mobile could play a role in any such arrangement.

Sprint Chairman Masayoshi Son struck a exclusive two-month deal to hold discussions with Charter and Comcast through July focusing on potential partnership arrangements. One such deal could include the cable companies taking an equity stake in Sprint and investing in the carrier’s network, through which they could presumably launch a branded service. But T-Mobile could join such an effort, Jonathan Chaplin of New Street Research wrote in a note to investors. A model that complex would be difficult to pull off, but it could benefit all stakeholders. “Actually, the best-case scenario (for T-Mobile) would be a four-way deal; however that seems tough to get across the goal line,” Chaplin wrote. “The worst-case scenario would see a Sprint/cable deal that leaves T-Mobile out in the cold entirely; we don’t think this is the most likely outcome either. And then there are a host of scenarios in between, where T-Mobile would benefit, potentially greatly, but without the negotiating leverage that many have assumed.”

[Commentary] Comcast and Charter are negotiating with Sprint to offer wireless services to their cable and high-speed internet customers. The real disruption may be how Sprint’s negotiations with the cable companies put a potential merger with T-Mobile USA in limbo. The parent companies of Sprint and T-Mobile, SoftBank of Japan and Deutsche Telekom of Germany, have been in negotiations to merge their American wireless companies. If Comcast and Charter are bidding for a stake in Sprint, then those Sprint and T-Mobile negotiations will be affected.

[Commentary] Sprint needs a deal. With a market value roughly equal to its $33 billion in net debt, a tie up may be the only way for Sprint to get the resources to invest enough in its network to remain competitive. A deal with cable would be bad for Sprint’s wireless competitors because it would reduce the likelihood of industry consolidation through the hoped-for merger of Sprint and T-Mobile . It also would lower the cost of offering wireless service for the two cable companies, further exacerbating wireless competition. The optimistic view is that Sprint is talking to the cable guys to get T-Mobile and its majority owner Deutsche Telekom to agree to a deal on more favorable terms.

The Citizens Broadband Radio Service (CBRS) has not even been born yet, but already major industry players want to change its basic character. CBRS, as its name implies, was conceived and approved by the Federal Communications Commission a couple of years ago as a broadband service for locally-focused businesses. The regulatory paradigm included both a large swathe of generally authorized access (also termed “licensed by rule”) channels that would be made available opportunistically to any entity and licensed channels made available on a census-tract basis for generally non-renewable three year terms. This generated quite a bit of opposition from larger carriers who insisted that the small license areas and short, non-renewable terms would make the band unsuitable for significant investment.

Yet the FCC stuck to its vision for this “citizen”-oriented service and adopted rules which are now effective, though users cannot be up and operating until the spectrum managers begin administering access to the spectrum.

The Federal Communications Commission approved a request by WorldVu Satellites Limited, which does business as OneWeb, to access the United States satellite market. The action paves the way for OneWeb to provide broadband services using satellite technology that holds unique promise to expand Internet access in remote and rural areas across the country.

This approval is the first of its kind for a new generation of large, non-geostationary-satellite orbit (NGSO), fixed-satellite service (FSS) systems. OneWeb proposes to access the U.S. market for its global network of 720 low-Earth orbit satellites using the Ka (20/30 GHz) and Ku (11/14 GHz) frequency bands to provide global Internet connectivity. The satellite system will be authorized by the United Kingdom, but needs FCC approval to provide service in the US. In order for large broadband network constellations to deliver services in the US, the FCC must approve their operations to ensure the satellite constellation does not cause interference to other users of the same spectrum and will operate in a way that manages the risk of collisions. The Order and Declaratory Ruling outlines the conditions under which OneWeb will be permitted to provide service using its proposed NGSO FSS satellite constellation in the United States. As such, this FCC action provides a blueprint for the earth station licenses that OneWeb, or its partners, will need to obtain before providing OneWeb’s proposed service in the United States.

The Federal Communications Commission took action to support the deployment of a nationwide network for use by first responders. The decision, consistent with duties entrusted to the FCC by Congress, will help ensure that state-built portions of the network are interoperable with the core network so that public safety officials can communicate seamlessly with each other during emergencies.

The FCC established the standards and procedures it will use to review state plans. The decision addresses:

• The timeline for states to provide notification of their opt-out decisions and file plans with the FCC;
• Information states should include in their plans to demonstrate compliance with the statutory criteria for interoperability with FirstNet’s network;
• Some of the technical criteria and standards that the FCC will use in evaluating state plans;
• The FCC’s review process, including participation by interested parties, treatment of confidential information, and the timing of FCC action; and
• The FCC’s process for documenting its decisions to approve or disapprove state plans.

In addition, in light of recent filings by FirstNet in the docket, the Report and Order directs the FCC’s Public Safety and Homeland Security Bureau to issue a Public Notice seeking comment on one remaining element of the FCC’s review standard, after which the FCC will issue an order on that element.