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Spectrum Bill and Broadband Breakfast Pre Holiday Wrap Up

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WASHINGTON December 14, 2011 – The FCC, the Hill and the Telecom industry has been busy over the last couple of weeks. Here is a wrap-up of the most important events.

House Passes Spectrum Auction Incentive Bill

After a 234-193 vote, the House Payroll Tax Extension Bill incorporated the full version of the Republican Incentive Auction bill. Last week the House Communications Sub Committee headed by Rep Greg Walden (R-OR) voted 17-6 to approve the Jumpstarting Opportunity with Broadband Spectrum (JOBS) Act of 2011. This spectrum incentive auction bill would give the FCC authority to pay broadcasters for the voluntary release of their spectrum that could then be used for broadband build out.

The bill would set aside up to $3 billion in revenue that would go to the broadcasters from the predicted $15 billion that the auction will bring in. Walden noted that the bill has the potential to create up to 100,000 jobs.

The the bill would require the FCC to preserve the spectrum and coverage areas of the broadcasters that do not volunteer to give up spectrum, compensate cable operators for cost of re configuring broadcast signals and prevent UHF channels from having to move to VHF which is not as ideal for DTV.

An amendment that was added to the Bill by Rep Marsha Blackburn (R-TN) has been labeled a “poison pill” by Ranking Member of the House Energy and Commerce Committee Henry Waxman (D-CA). The Blackburn amendment would prohibit the FCC from imposing Net Neutrality conditions on wireless companies that purchase the new spectrum.

FCC Chairman Genachowski addressed the passage of the incentive auction bill by remarking,

“Over the last weeks and months, we have conveyed to Members of Congress and their staff concerns about provisions that would reduce FCC flexibility to maximize the overall value of freed-up spectrum, enhance spectrum efficiency, and promote robust innovation and investment. Several provisions of the House bill would tie the agency’s hands in ways that could be counterproductive, reducing economic value and hindering innovation and investment. One important example is the legislation’s seeming limitation on the Commission’s ability to accommodate new technologies, including those that use unlicensed spectrum, like super WiFi or machine-to-machine Internet connected devices. I encourage Congress to leave no doubt that the FCC can continue its policies to promote unlicensed spectrum use alongside licensed uses.”

The Democrats have announced that aside from the net neutrality provision they do not support the current legislation for a number of reasons. The bill 1) “establishes an overly bureaucratic, costly and cumbersome governance model that places significant authority in a private for-profit entity that lacks meaningful oversight” for public safety broadband networks, 2) impedes the FCC from allocating future spectrum reclaimed from incentive auctions for unlicensed use, 3) restricts the Commission’s ability to craft auction rules that ensure communications markets remain competitive, 4) does not provide enough funds to build public safety network sand does not fund research and development in public safety communication 5) provides broadcasters with 3 times the amount of compensation for relocation expenses than the Democratic proposal and 6) could put state and local investment in public safety 700MHz narrow band at risk by forcing premature return of this spectrum.

Telecom Companies Challenge the FCC on USF and ICC Reform

Following up on our POST from last week, AT&T and National Telecommunications Cooperative Association (NTCA) joined suit against the FCC’s overhaul of the Universal Service Fund and Intercarrier Compensation Systems.

AT&T’s challenge comes on the grounds that the FCC overstepped their authority. An AT&T spokesman said they appealed on a very narrow inter-carrier compensation issue.

The NTCA also filed suit against the Commission’s Order and FNPRM stating:

“There are several specific provisions of the order, however, that we are concerned fail to comport with the fundamental mandates of the Communications Act and the core principles of universal service. These provisions threaten to undermine the carefully constructed regulatory balance that has proven successful thus far in bringing telecommunications and advanced services to ruralAmerica. They put at risk the ability of small, rural, community-based providers to access capital and invest in broadband-capable networks in their hometowns and the surrounding countryside. Provisions mandating an ultimate price of zero for all switched access and reciprocal compensation services, imposing retroactive and dynamically changing caps on USF-supported costs and blurring the lines between regulated and nonregulated operations are inconsistent with law. These provisions will harm rural communities, and will not help to advance the availability and affordability of services for all rural consumers.”

Verizon Finds Better Way to Get More Spectrum

BroadbandBreakfast.com and others have been paying attention to the problems AT&T is experiencing with its T-Mobile proposed merger.

Verizon made its own move last week to scoop up an additional $3.6 billion worth of spectrum from the cable industry. The coalition of cable companies, SpectrumCo, made up of Comcast, Time Warner and Bright House Networks are selling 122 of their Advanced Wireless Services (AWS) licenses which cover much of the cable companies’ territory in the 48 states. Verizon Wireless is paying 1.2 billion over what the cable companies paid for the licenses in 2006.

The deal apparently stipulates that the cable companies will be able to use Verizon’s sales channels to promote their products and Verizon will be able to sell content owned by the cable companies thought it’s own channels. Furthermore the companies have also agreed to focus on developing technologies that will better integrate wireless and wireline products and services.

The deal will have to be approved by the FCC and the DOJ but with the FCC slated to apparently approve AT&T’s acquisition of Qualcomm’s 700 MHz spectrum it does not seem likely that this deal will face anything harsher than some possible conditions.

LightSquared Interference Leaks

Last week an NTIA proposed government test was leaked to the public showing that LightSquared Inc’s wireless services caused interference in 75% of GPS receivers examined. LightSquared Inc plans to develop a wholesale 4G LTE wireless broadband communications network integrated with satellite coverage across the United States.

The tests conducted between Oct. 31 and Nov. 4 apparently show that “LightSquared signals cause harmful interference to majority of GPS receiver tested.” National Space-Based Positioning, Navigation, and Timing (PNT) Systems Engineering Forum conducted the testing on devices which include those used for automobile and boat navigation.

Martin Harriman, Executive Vice President of LightSquared Inc. was outraged at the leak of what he considers incomplete government data. Harriman noted that LightSquared is proposing to operate at a power level much lower than those used in the test and believes that operations would only affect about 10% of devices.

“It is important for the public to understand the purposeful manipulation at hand here: The NTIA, not the leakers of this raw data, will make the final determination about how many devices passed or failed. And that assessment has not yet been made. The government must launch a full investigation of the premature disclosure of this raw data to ensure the credibility of the process is not damaged, and question the motives of those who have leaked this incomplete information,” said Harriman.

FCC Gets Tough on Waste Fraud and Abuse in Lifeline Program

The FCC has sent out an Enforcement Advisory to state eligible telecommunications carriers (ETCs) who provide Lifeline services, reminding them of their obligation to properly confirm consumer’s eligibility and assure that consumers are not receiving Lifeline support from another provider. The FCC warns that violators of these Lifeline rules face stiff penalties and even possible revocation of their ETC designation.

Chairman Genachowski has made it clear that he wants the state Public Utility Commissions to take a more active role in policing the program. In a letter to the state commissions earlier this week the Chairman wrote, “I encourage all of you to join the FCC in our efforts to reform the Lifeline program by closely scrutinizing the requests for ETC designation pending before you, to be on guard for abuse by ETCs designated to provide Lifeline service in your states, and to take swift and strong action when necessary to protect the program.”

Broadband's Impact

Reason 5 to Attend Broadband Mapping Masterclass: Understanding Public Challenges

The 5th of 5 reasons to attend the Broadband Mapping Masterclass with Drew Clark on 9/27 at 12 Noon ET

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WASHINGTON, September 27, 2022 – The fifth and final reason to attend the Broadband Mapping Masterclass with Drew Clark TODAY, on September 27, 2022, is to understand how your community can challenge the results of the Federal Communications Commission’s, and your state’s, broadband map.

You’ll be able to ask questions of Drew Clark in this Masterclass that takes place from 12 Noon ET to 2 p.m. ET.

TODAY, September 27, 2022, is the last chance to watch the Masterclass LIVE and to ask questions during the webinar. However, those who register after 2 p.m. ET will be able to enroll and watch the recording. Other registrants will have lifetime access to the program, too.

Broadband Breakfast is hosting the 2-hour Broadband Mapping Masterclass to help Internet Service Providers, mapping and GIS consultants, and people in everyday communities concerned about broadband mapping.

This 2-hour Masterclass, available for only $99, will help you navigate the treacherous waters around broadband mapping. The live Broadband Mapping Masterclass is being recorded, and those who make a one-time $99 payment will obtain a guaranteed place during the live session.

ENROLL TODAY for our Zoom Webinar through PayPal.

Registrants will also receive unlimited on-demand access to the Masterclass recording. And they will receive Broadband Breakfast’s premium research report on broadband mapping.

Learn More about Why You Should Participate in the Broadband Mapping Masterclass

We’re presenting five additional reasons to attend the Broadband Mapping Masterclass.

Additional reason number 5 to attend the Masterclass

The public challenge process is a crucial element of the FCC’s improved broadband maps. There are two challenges to the FCC’s maps: Challenging the broadband service location fabric. That is going on right now. And, once the data on the FCC’s map is published in November, challenges to the initial versions of the FCC’s broadband map.

State broadband officers are expected to conduct their own challenges to broadband information in their states. The Masterclass will consider how these challenges will unfold across multiple states at the National Telecommunications and Information Administration implements its Broadband Equity, Access and Deployment program.

By attending the Broadband Mapping Masterclass, you’ll get the best knowledge that you can about where the challenge process, and the role your ISP or community can play in challenging, or defending against challenges.

ENROLL TODAY  to find out what happens next.

Learn More about Why You Should Participate in the Broadband Mapping Masterclass

Read more about the reasons to attend the Broadband Mapping Masterclass

ENROLL TODAY

 

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Broadband's Impact

Reason 4 to Attend Broadband Mapping Masterclass: Measuring Actual Speeds

The 4th of 5 reasons to attend the Broadband Mapping Masterclass with Drew Clark on 9/27 at 12 Noon ET

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WASHINGTON, September 26, 2022 – The fourth reason to attend the Broadband Mapping Masterclass with Drew Clark on September 27, 2022, is to understand the role that speed tests are playing in the discussion about actual speeds versus available speeds – and its importance for federal and state efforts to distribute broadband infrastructure funds.

Broadband Breakfast is hosting the 2-hour Broadband Mapping Masterclass to help Internet Service Providers, mapping and GIS consultants, and people in everyday communities concerned about broadband mapping.

This 2-hour Masterclass, available for only $99, will help you navigate the treacherous waters around broadband mapping. The live Broadband Mapping Masterclass is being recorded, and those who make a one-time $99 payment will obtain a guaranteed place during the live session.

ENROLL TODAY for our Zoom Webinar through PayPal.

Registrants will also receive unlimited on-demand access to the Masterclass recording. And they will receive Broadband Breakfast’s premium research report on broadband mapping.

Learn More about Why You Should Participate in the Broadband Mapping Masterclass

We’re presenting five additional reasons to attend the Broadband Mapping Masterclass.

Additional reason number 4 to attend the Masterclass

The last time that the federal government initiated a significant effort to fund broadband, in 2009, the United States lacked a basic map of what we at Broadband Breakfast have for years called the Broadband SPARC: Measuring Speeds, Prices, Availability, Reliability and Competition by high-speed internet access providers.

The National Broadband Map was a first effort to measure availability and competition by displaying the individual providers that offered broadband on a Census block level. But it lacked any measure of broadband speeds, prices or the reliability of such information.

Over the past 13 years, we now have a great variety of robust sources of speed test data – as well as significant datasets with information about pricing and reliability of broadband. The Broadband Mapping Masterclass will explore ways in which actual speed data has and can be used to crosscheck the quality of broadband availability data released by the Federal Communications Commission.

By attending the Broadband Mapping Masterclass, you’ll learn what you need to know in order assess the quality of broadband data as made availability by federal and state agencies, and private companies and organizations.

ENROLL TODAY  to find out what happens next.

Learn More about Why You Should Participate in the Broadband Mapping Masterclass

Read more about the reasons to attend the Broadband Mapping Masterclass

ENROLL TODAY

 

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Broadband's Impact

Dianne Crocker: Recession Fears Have Real Estate Market Forecasters Hitting the Reset Button

Growing fears of recession trigger pullback on previous rosy forecasts.

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The author of this Expert Opinion is Dianne Crocker, Principal Analyst for LightBox

The lyrics to “Same As It Ever Was” by the Talking Heads certainly don’t apply to how 2022 is playing out in the commercial real estate market. Two quarters of negative economic growth has put a damper on market sentiment and triggered fears that the U.S. economy is heading for a recession. By midyear, market analysts were taking a good, hard look at their rosy forecasts from the start of the New Year and redrawing the lines.

Once upon a time…

At the start of 2022, forecasters were bullishly predicting that commercial real estate investment and lending levels would be nearly as good as 2021. This was significant, considering that 2021 set new records for deal-making and lending volume as the debt and equity capital amassed during the pandemic while looking for a home in U.S. commercial real estate.

What a difference a few quarters have made. Virtually, all the predictions that started the New Year were obsolete by mid-summer. The abrupt shift in market conditions is palpable and surprised just about everyone. Now, markets are reaching an inflection point that is in sharp contrast with the strong rebound of last year.

The two I’s: Inflation and interest rates

At the core of the recent upset in market sentiment is the persistence of high inflation, which seems to be ignoring all attempts by the Federal Reserve to raise interest rates and bring prices down. Higher inflation is having a ripple effect throughout the economy, pushing up the costs of construction materials, energy, and consumer goods. Among the notable economic indicators showing stress at mid-year was the GDP, which fell for the second consecutive quarter, and the Consumer Price Index, which jumped 9.1% year-over-year in June – the highest increase in about four decades.

In July, the CPI fell to 8.5%, an encouraging sign that inflation was beginning to stabilize. By the latest August report from LightBox, however, hopes were dashed when the CPI showed little improvement, holding firm at a still high of 8.3%.

The market is responding to a higher cost of capital as lenders tap the brakes. As the cost of capital rises with each interest rate hike and concerns of a recession intensify, many large U.S. financial institutions are pulling back on their loan originations for the rest of 2022 and into 2023. This change in tenor is a significant shift, given that 2021 was a record-breaking year for commercial real estate lending. Many lenders have already shifted to a more defensive underwriting position as they look to mitigate risks.

The Mortgage Bankers Association, which had previously predicted that lending levels in 2022 would break the $1 trillion mark for the first time revised their forecast downward in mid-July. By year-end, the MBA now expects volume to be a significant 18% below 2021 levels—and one-third lower than the bullish forecast made in February. Now, investment activity is cooling as higher borrowing costs drive some buyers from the market.

In the investment world, transactions were down by 29% at midyear due to a thinning buyer pool as higher rates impact access to debt capital. Market volatility is causing investors, lenders, and owners to rethink strategies, reconsider assumptions, and prepare for possible disruption.

Looking ahead to year-end and 2023

The rapid and diverse shifts in the market make for an uncertain forecast and certainly a more cautious investment environment. The battle between inflation and interest rates will continue over the near term. As LightBox’s investor, lender, valuation, and environmental due diligence clients move toward the 4th quarter—typically the busiest quarter of the year–unprecedented volatility is driving them to recalibrate and reforecast given recent market developments.

Continued softness in transaction volume is likely to continue as rates and valuations establish a new equilibrium. If property prices begin to level out, there will be more pressure on buyers to consider how to improve a property to get their return on investment. The next chapter of the commercial real estate market will be defined by how long inflation sticks around, how high interest rates go, and whether the economy slips into a recession (and how deeply). The greatest areas of opportunity will be found in asset classes like office and retail that are evolving away from traditional uses and morphing to meet the needs of today’s market. Until barometers stabilize, it’s important to rethink assumptions, watch developments, and recalibrate as necessary.

Dianne Crocker is the Principal Analyst for LightBox, delivering strategic analytics, best practices in risk management, market intelligence reports, educational seminars, and customized research for stakeholders in commercial real estate deals. She is a highly respected expert on commercial real estate market trends. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views reflected in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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