Spectrum Bill and Broadband Breakfast Pre Holiday Wrap Up

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.”