Charter Petition Approved, but Not Happily by Democratic Commissioners

Democratic FCC members joined the majority Friday, begrudgingly approving Charter Communications’ effective competition petition based on the existence of vMVPD AT&T TV Now (formerly DirecTV Now). Both they and the Republican majority said the Cable Act clearly justifies grant of Charter’s petition. Democrats concurred in their votes, citing the near-certitude customers in parts of Massachusetts and Hawaii will face big jumps in the cost of basic cable.

Other items on the agenda, including wrapping up part of the lengthy 800 MHz rebanding process and testing procedures and performance measures for carriers receiving support from the USF Connect America Fund (CAF) program for broadband deployment to high-cost areas, also got 5-0 approval.

Commissioner Mike O'Rielly said he was "slightly surprised" by the Charter proceeding pushback given the statute and record clearly showing effective competition. "The desire by some to regulate and overregulate never subsides, regardless of the facts," he said. Chairman Ajit Pai said the idea cable operators aren't subject to effective competition nationwide "strains credulity" given how many households subscribe to a streaming service.

But Commissioners Jessica Rosenworcel and Geoffrey Starks said the effect on consumers wasn't being taken into account, with the effective competition finding meaning an end to local basic cable rate regulation. They said they requested additional fact finding or economic analysis with the order but were rebuffed. Starks said the few who subscribe to basic cable are "often our most underprivileged consumers."

Asked whether pricing should be something Congress has the FCC consider, Pai said the agency “always want[s] to ensure a competitive marketplace,” but the decision was legally correct under the LEC test, and meeting that was its focus. Commissioner Brendan Carr said the minority Democrats wanted a different Cable Act with different priorities. "We apply the law Congress passes," he said.

The effective competition decision “recognizes that today’s video marketplace is vibrant and competitive with a multitude of choices and services for consumers to enjoy," NCTA said. Free State Foundation's Seth Cooper, who backed the petition, said the agency "deserves credit for adopting its effective competition order ending the last vestiges of local cable rate regulation. It's pretty ridiculous that 90s-era local rate controls on cable services have stayed around so long, when consumers today have choices among direct broadcast satellite and now online video services too." Hawaii didn’t comment. Massachusetts said it's reviewing the order.

Sen. Ed Markey, D-Mass, who urged the FCC to reject Charter's petition (see 1910240072), said the commission decision "paved the way for a powerful cable company to increase its prices without regard to the impact on consumers." He'll "closely monitor whether Charter uses this decision to dramatically hike price for Charter cable consumers in Massachusetts." He urged congressional adoption of his Truth-in-Billing, Remedies and User Empowerment over Fees (True Fees) Act. S-510/HR-1220 which would require telecom, cable and broadband providers include all charges in advertised prices.

CAF Tests

Trade groups welcomed the FCC's clarification of its rules on how ISPs taking federal money for high-cost USF broadband programs in rural areas must perform speed and latency testing. Approval includes several revisions made to address last-minute industry concerns (see 1910220007).

Wireline Bureau staff said the order gives ISPs more flexibility in selecting the subscribers they will test so they'll be less likely to have to upgrade customers from a lower tier service to a higher tier merely for the purposes of performance testing. Changes include some credits against noncompliance penalties if carriers demonstrate specific measurement standards.

"We recognize that carriers of different sizes and technical and financial capabilities have different needs," Pai said. That's why the FCC reviewed its testing methodologies to "provide flexibility and eliminate unnecessary burdens on carriers while still ensuring that carriers are accountable to consumers, taxpayers and the commission."

Carr clarified that under the rules, ISPs wouldn't be required to put white boxes in residences as part of the testing regime. He acknowledged that many rural homeowners wouldn't like being told the government wanted to give them a device to monitor their internet usage.

The Wireless ISP Association and USTelecom said the order will give members greater clarity. WTA supports the accountability measures in the testing program but wants to "make sure that testing is tailored to the size of the carrier and the USF-supported network."

Fee Diversion

Rosenworcel said her vote to confirm a declaratory ruling clarifying that state, local and tribal governments may not impose higher 911 fees for VoIP than traditional telecom voice services that have the same outbound 911 calling capacity was a close call because the interpretation superseded "language from a 2005 FCC decision that invited 911 authorities 'to explore other means of collecting' 911 fee assessments when it comes to IP-enabled voice services, just as state authorities in Alabama had done."

"Americans who use VoIP shouldn't pay more for 911 services," Carr said before the vote.

The 2008 New and Emerging Technologies 911 Improvement Act doesn't allow such disparate treatment, Pai said. "The 'same class of subscribers' cannot be forced to pay more in total 911 charges for VoIP services than for comparable non-VoIP services. This is the only plausible reading of the law." Pai said the order will provide examples of discriminatory 911 fee structures to assist the referring court "and other courts overseeing similar litigation around the country."

O'Rielly and Rosenworcel said the FCC must continue to fight 911 fee diversion in states. The "FCC must play a larger role" and seek new authority from Congress to do so if needed, O'Rielly said. Rosenworcel agreed "we have a real challenge before us with 911 fee diversion."

Rosenworcel raised other concerns over 911. "We have a real challenge before us to make sure that 911 is fully funded and functional nationwide," Rosenworcel said. She cited estimates that a next-generation 911 service could cost $9.5 billion-$12.7 billion to deploy nationwide but would be "worth every penny." She wants NG-911 funding as a "core feature of any infrastructure package Washington takes up in the future."

Industry supported the declaratory ruling. AT&T Executive Vice President-Regulatory and State External Affairs Joan Marsh said the company supports the FCC's action to protect VoIP services "from discriminatory treatment." NCTA said it appreciates the commission's decision clarifying that "VoIP customers should not be required to pay more in 911 fees than customers of legacy voice services." CenturyLink emailed us it supports the declaratory ruling that "makes clear that federal law prohibits" the unfair treatment.

Meeting Notebook

Release of an FCC order on T-Mobile’s buy of Sprint was delayed by “internal processes that are regular and being worked through,” Pai said during a news conference. Starks urged additional focus on an FCC investigation of Sprint after the agency found the company claimed monthly subsidies for 885,000 Lifeline subscribers who weren't using the service (see 1909240023). “That is an investigation that folks should be paying attention to,” Starks said: “It is something the chairman's office should be focused on pursuing.” O’Rielly and Carr said they were finishing their statements. There's nothing unusual in how the agency handled the deal after it was circulated by Pai, Carr said. Commissioners approved the order 3-2 nearly two weeks ago, with dissents by Rosenworcel and Starks (see 1910170028).

Pai said he's headed to Egypt for part of the World Radiocommunication Conference, which starts this week. “The issues being decided at WRC-19 are critical to our and the rest of the world's efforts to close the digital divide and promote next generation innovations,” Pai said. “We need to create a flexible regulatory framework that allows continued growth of a multi-trillion dollar global [information and communications technology] industry that will benefit consumers around the world,” he said: “We need to enable regional and global spectrum harmonization opportunities for all services, including broadcasting, Wi-Fi, mobile technologies and satellites.” The world needs “international economies of scale, roaming and interoperability, which would lower prices for manufacturers and consumers alike,” while ensuring “reasonable protections” for incumbents, Pai said. He stressed the importance of the WRC's adopting the position of the Americas on the use of the 24 GHz band for 5G. Pai will be in Egypt for a week and be part of the U.S. delegation, an FCC spokesperson said. O'Rielly may attend.

Commissioners had no real quibbles and few remarks in their approval of streamlined rules and procedures for the final stage of the 800 MHz band rebanding. Approval was expected (see 1910230020). The rebanding was supposed to take three years but has taken more than 14. “This item signifies the dubious reality that fourteen years later we are still trying to conclude the 800 MHz rebanding project,” O’Rielly wrote: “There are 14 licensees located by the Mexican border that still have not been reconfigured, highlighting that cross-border coordination can be extremely tricky. Currently, the Commission and others are dealing with a similar problem involving the channelization and cross-border interference issues between some of our largest wireless providers.” The transition is “nearly complete,” with more than 2,000 licensees relocated to new channels in the band, with "only 19 licensees yet to be relocated,” the FCC said.

Commissioners deleted two rules, each more than 75 years old, on tariff filing requirements. One change allows a carrier to cross-reference its own tariffs with those of affiliates. “Although such cross-references were difficult to follow when these often-massive tariffs were filed in paper form, they can now be easily accessed by clicking on a hyperlink,” said a news release. Also cut: a requirement providers file a “short form tariff review plan,” 90 days before the effective date of their annual access charge tariffs. “Electronic filings and regulatory developments have made early submission of this information unnecessary,” the FCC said. O’Rielly sought further changes. “Not a single soul raised an objection to [the item] in the record and put me down as someone who is open to broader reforms and comprehensive detariffing,” he said: “The whole concept of tariffing is antiquated, inefficient and generally irrelevant. It helps preserve outdated communication networks at the expense of modern architecture and deployment.”

Approval of the NPRM about eliminating rules banning grant of an FM or TV license if the applicant controls a uniquely situated antenna site (see here), as expected (see 1910230064), was almost perfunctory, with multiple commissioners not issuing statements. O'Rielly, pointing to the rules rarely ever being invoked, said the NPRM is "truly clearing out the underbrush."