New Rules for CBRS Band Get FCC OK Over Rosenworcel Dissent

The FCC approved revised rules for the 3.5 GHz citizens broadband radio service band, as expected (see 1810160068), over a dissent by Commissioner Jessica Rosenworcel. Commissioner Mike O’Rielly, who crafted the revised rules, said changes were necessary to spark interest in the priority access licenses that will be sold as one tier of the band.

The order changes the size of PAL areas from census tracts to counties, extends license terms to 10 years and makes them renewable, puts in place end-of-term performance requirements and allows partitioning and disaggregation of PALs. Wireless Bureau Chief Donald Stockdale told reporters the draft item saw no major changes, only a few clarifications.

“No one will count today’s decision as a shining example of our daring,” Rosenworcel said Tuesday. “Our innovative spirit is in retreat.” The 2015 rules for the band sparked huge interest, she said. Millions of dollars were invested and more than 200 experimental authorizations granted, she said.

The revised rules are “a hollow version of our initial proposal,” Rosenworcel said. “Instead of doing something new, we are reverting to the old. We take what was most innovative about our 3.5 GHz band model and cast it aside in favor of existing business models. … This is like being at the dawn of the Uber age and doubling down on taxi medallions.”

O’Rielly said the FCC needed to change rules for the PALs to make them more usable in a 5G world. “Imagine being at the dawn of the Uber age and having the government declare only Toyota Priuses can be Ubers,” he said. “As many opponents of this order admitted, the rules in place favored small-scale fixed networks by making [the band] unattractive for any other kind of deployment.” The rules were designed to provide licenses for some players “on the cheap,” he said. "We right the ship today by fixing the CBRS band so that there are opportunities for all ... in fixed or mobile, 5G or another technology."

After more than a year of discussions, it was clear no solution could be reached that would please everyone, O’Rielly said. “Contrary to what some are asserting, we did not just throw our hands up in the air, throw a dart at the dartboard, succumb to political solutions or draw straws,” he said. “Such claims are pure gibberish.”

Middle Course

The order “charts a middle course,” said Chairman Ajit Pai. It decides census tracts are too small and partial economic areas (PEAs), as proposed by carriers, too large, he said. New York City alone has more than 2,000 census tracts, he said, “which would make it incredibly difficult to acquire the necessary licenses to deploy 5G at scale.” PEAs would “significantly limit the range of potential licensees interested in making this band work.”

The FCC makes the right policy cuts, said Commissioner Brendan Carr. “Some larger providers want bigger license areas,” Carr said. “Some smaller ones want census tracts. In the end, we adopt an approach that is not tailored to any particular technology or business model.”

Carriers and cable operators praised the order. “Mid-band spectrum is essential to spurring the innovative 5G services of tomorrow, and the FCC’s approach represents a better balance that will make this first-to-market mid-band spectrum more investment friendly for a wide array of users,” said CTIA President Meredith Baker.

“County-sized licenses strike the right balance to incent investment in 3.5 GHz licenses by a wide variety of existing network operators and new entrants in both urban and rural markets,” NCTA said.

"These targeted changes strike the right balance between fostering innovation and encouraging sustainable investment in the band,” said Will Johnson, Verizon senior vice president-federal regulatory affairs. “We appreciate that the FCC recognizes the critical role of mid-band spectrum in delivering the promise of 5G."

“The FCC majority’s vote today is a blow to rural America and to consumers who could have greatly benefited from high-capacity broadband deployed locally by a wide variety of small internet providers and thousands of individual businesses,” said Michael Calabrese, director of the Wireless Future Program at New America. “America’s emerging 5G wireless ecosystem will be less robust and innovative as a result.”

The rule changes will do nothing to help close the digital divide, said Phillip Berenbroick, senior policy counsel at Public Knowledge. “The commission’s buildout requirements for the CBRS licenses will not promote deployment to rural communities,” he said. “Instead, large wireless carriers and cable operators are more likely to acquire these licenses and serve densely populated cities and towns to comply with the license performance requirements, while leaving outer-lying, more sparsely populated areas without any service.”

At their meeting Tuesday: commissioners approved an NPRM to open 6 GHz band spectrum for Wi-Fi and other unlicensed use: 1810230038; and a rural-oriented business data service order and Further NPRMs 1810230032.

Meeting Notebook

Pai and O’Rielly are interested in wholesale review of cable regulations, they said as the commissioners voted 4-0 on a further NPRM and order on basic tier rate regulation by local franchise authorities. “Regulations should match today’s marketplace,” Pai said. Noting a video market that includes over-the-top providers, O'Rielly said cable operators need to be "substantially deregulate[d]." He said the FCC should consider "limit[ing] the shenanigans of LFAs during franchise transfers and renewals," "prevent mandated new broadband network builds for use by LFA" and allow generally accepted accounting principles for determination of franchise fees. He said cable operators should be allowed to modify franchises "so that they can better respond to market conditions," and operators should be allowed to offer skinny programming bundles. Media Bureau Chief Michelle Carey said the approved item contains clarifying language not in the draft that makes clear it doesn't change the effective competition presumption. Neither Carr nor Rosenworcel gave a statement when approving the item. Only Hawaii and Massachusetts still have LFAs that regulate the basic tier, Pai said. The Hawaii Department of Commerce and Consumer Affairs and the Massachusetts Department of Telecommunications and Cable didn’t comment. NCTA said the TV market "is significantly different than it was when the Commission first established its benchmark rate rules decades ago, and today’s vote is an important step to remove antiquated regulations and find better solutions.”

There should be a “complete re-evaluation” of the resiliency framework for wireless carriers, announced Chairman Ajit Pai after Tuesday’s commissioner’s meeting. Pai said his call for a review of what he characterized as “the last administration’s” framework was motivated by difficulties re-establishing wireless connectivity in parts of Florida hard-hit by Hurricane Michael. Pai recently complained that efforts to restore service in Florida hadn't been sufficient (see 1810160056). Pai declined to say what form that re-evaluation should take, but listed carriers’ use of the framework, inclusion of backhaul providers, and communication issues between carriers and power companies as matters that should examined. The question of whether the FCC has sufficient authority to oversee restoration efforts or if it needs congressional assistance should also be considered, Pai said. Pai said he would be “focused” on the issue until necessary improvements are made. Wireless carriers have argued in the past that the resiliency efforts should be voluntary (see 1808030036). A GAO report in January was critical of the approach (see 1801100060). An August Public Safety Bureau report on the storms in Puerto Rico and the U.S. Virgin Islands said backhaul providers should be included in the framework and Pai said in a letter to Nevada’s senators released in August that changes to the resiliency framework were being examined (see 1808210059). “We know already that Chairman Pai is a coward & hypocrite, calling for welcome accountability measures in the wake of this storm when he curiously -- or perhaps not so curiously -- utterly failed to take such steps after the Trump administration-ignored devastation in Puerto Rico,” tweeted Free Press Policy Director Matt Wood, who also characterized Pai’s concern about Hurricane Michael as “effectively campaigning for Republican candidates for Senate and Governor in Florida.” The FCC didn’t comment.

The FCC proposed to fine American Broadband and Telecommunications $63.7 million for apparent "repeated, systematic and large-scale" violations of its Lifeline USF rules. The forfeiture against the wireless reseller in a unanimously approved notice of apparent liability would be the largest in USF history, the commission said. American Broadband apparently engaged in improper enrollment of subscribers and failed to de-enroll ineligible subscribers, including some who were dead, the agency said. Included were 42,309 apparently improper Lifeline claims in August 2016, after the company told the FCC it had fixed its systems to ensure compliance. "We will take swift and aggressive enforcement action against unscrupulous companies that abuse the Lifeline program," said Pai, stressing the fine would be above any refunds the company might owe to USF. "American taxpayers who contribute this funding and the low-income Americans who rely on it deserve nothing less." Asked afterward if he wished to clarify that taxpayers don't fund USF, Pai responded, "No, it is a tax from a consumer perspective." Carr called American Broadband's apparent violations "particularly egregious," and said CEO/owner Jeffrey Ansted diverted Lifeline funding to personal use, including a yacht and a condo. O'Rielly said some of the enforcement decisions targeted conduct that wasn't prohibited by rules and suggested the FCC make changes. Calling the allegations "ugly," Rosenworcel said the company "knew its agents were signing up bogus accounts to bilk" USF and "harm" Lifeline, and said Ansted used the funds to "purchase a Ferrari, a jet, country club memberships" and landscaping services. But she also criticized FCC "plans to gut Lifeline service in a manner that could cut 70 percent of its current subscribers" by barring resellers. American Broadband "self-disclosed" the issues and "produced a corrective plan to establish compliance and to reimburse [USF] for disbursements received in error," said an Ansted statement. "Over the past 27 months, we have worked tirelessly with FCC staff to be sure that the disclosure was complete and correct, providing an independent auditor’s assessment and enormous amounts of data. We also have nearly completed repayment of every penny due plus interest." The NAL thus "comes as a surprise," he said. "While the FCC has yet to provide a copy of its allegations to us, we will review them carefully and defend ourselves vigorously. When we made our self-disclosure to the FCC, American Broadband committed to get it right. We stand by that commitment today." National Lifeline Association Chairman David Dorwart said in a statement the allegations, if proven true, "require nothing short of our absolute condemnation."

The FCC unanimously approved an order Tuesday eliminating a requirement that broadcasters file hard copies of some contracts and corporate documents with the agency (see 1810190048). Broadcasters will be required to either upload the documents to their public file or upload an inventory of them and make the actual documents available to anyone within 30 days, said Media Bureau staff. “There’s this thing called the internet,” said Pai, noting the repealed rule is close to 80 years old. “Anyone who cares to access these documents -- and virtually nobody does -- can easily do so.” Pai was the only commissioner who commented substantively on the order during the meeting. Carr made a joke about singer Bon Jovi, and Rosenworcel and O’Rielly refrained from commenting. Rosenworcel tweeted that the FCC having to generate paperwork to eliminate paperwork requirements is “perverse.” Though the American Cable Association and some anti-consolidation groups commented against the proposal at the NPRM stage, none lobbied the commission on the matter in the lead-up to the order. Eliminating the paper copy requirement “is a common-sense update to broadcast regulations,” said an NAB spokesperson. “These changes will certainly save broadcasters time and resources in the long run,” blogged Pillsbury Winthrop broadcast attorney Warren Kessler.