Federal Communications Commission (FCC)

ORLANDO -- One theme that emerged at CTIA Wireless 2002 here this week was need for more flexible federal spectrum policy, although govt. and industry officials pointed to new crop of questions raised by regulatory changes in that direction. “It’s an important concept and I congratulate the FCC for introducing it,” said Brian Fontes, vp-federal relations, Cingular Wireless. “However, I express a great deal of caution as you address the issue of flexibility that it doesn’t have the effect of reallocation,” he said on panel discussion. Flexible allocation issues have involved secondary markets proceeding at FCC, Spectrum Policy Task Force recently created by Commission and pending proceedings such as New ICO petition to deploy terrestrial services in mobile satellite service spectrum.

ORLANDO -- FCC and NTIA officials at CTIA Wireless 2002 show here Sun. cautioned that tough spectrum policy choices lay ahead in light of new homeland security considerations, including re-evaluation of how well current priority access service (PAS) rules are working. Panelists on homeland security roundtable repeatedly stressed importance of making sure public safety community had adequate spectrum and that existing allocations were being used efficiently. Several officials also pointed to complicated govt. jurisdictional issues raised by factors such as PAS, particularly as some states contemplate legislation on their own version of wireless priority access. While Administration hasn’t formulated stance on what should be done with priority access service, “the concern that we would [do so] is against classification of network where you could have displacement of emergency calls from individuals because of priority access calls coming from government,” said NTIA Deputy Asst. Dir. Michael Gallagher.

FCC declared Thurs. that cable modem service interstate was “information service” and said Internet delivered over cable wasn’t subject to common carrier regulation that required unbundling or -- in cable parlance -- “open” or “forced” access. Ruling marked critical turn for cable, which has become country’s No. 1 provider of high-speed Internet access and feared that it would become subject to access requirements and vulnerable to new fees and taxes imposed by states and municipalities. In addition to declaratory ruling, which was passed in 3-1 vote, Commission issued Notice of Proposed Rulemaking (NPRM) to measure regulatory treatment of cable modem service against that of DSL. FCC last month made tentative conclusion that wireline- delivered broadband, too, was information service (CD Feb 15 p1). NPRM will examine which govt. agencies, if any -- FCC, state or local franchising authorities (LFAs) -- have power to regulate cable modem service and invited comment on whether, “in light of marketplace developments, it is necessary or appropriate at this time” to require multiple ISP access. Marjorie Green, assoc. chief of Cable Bureau, said in her presentation that some cable companies had begun offering multiple ISPs to customers on their own.

Following FCC approval last month of ultra-wideband (UWB) order, some industry attention is turning to question of how govt. agencies that use technology will be covered under what Commission and NTIA officials call “conservative” limits. One school of thought, industry source said, is that FCC could set similar limits for govt. operators in commercial bands as commercial users of UWB devices face in commercial and govt. bands. However, source said there also was provision in Communications Act that stated that FCC approval of radio frequency devices didn’t apply to those used by govt. Until commercial deployments of UWB enabled by order ramp up later this year, govt. agencies now constitute largest group of UWB users. Some of most serious concerns expressed to NTIA and FCC over potential for UWB to interfere with GPS and other safety-of-life systems came from agencies such as Pentagon and Transportation Dept. Following FCC release of order, which is now undergoing final editing and is expected out soon, NTIA still could update part of its manual addressing unlicensed devices. Process wouldn’t necessarily have to reflect same level of restrictions imposed by FCC’s Part 15 rules for UWB. How FCC addresses govt. users of UWB devices in final order is being watched closely by both industry and Capitol Hill.

FCC’s likely classification of cable modem as information service not only “misconstrues” Congress’s intent in Telecom Act but also threatens to create “regulatory black hole” for high-speed services, public interest groups said. Such classification would encumber both local and federal govts. from protecting public interest concerns in increasingly centralized industry, said Consumer Federation of America (CFA) and Center for Digital Democracy (CDD). Designation as information service would absolve broadband cable from obligations typically applied to telecom services, they said. “The [projected] FCC decision is fatally flawed and will not provide a workable framework for promoting the deployment of advanced telecommunications capabilities,” CFA Research Dir. Mark Cooper said. Agency’s policy would “undermine” open communications environment that applications developers and content suppliers needed to drive innovation, he said. FCC’s proposed decision betrays “dangerous imbalance” in agency approach to broadband policymaking, said Mark Wahl, CDD broadband project dir. “By pandering to the interests of network owners alone, the Commission is abandoning the public interest safeguards that make the Internet a valuable communications medium,” he said.

U.S. Supreme Court agreed Mon. to hear oral argument in FCC’s appeal of D.C. Circuit’s NextWave ruling, creating another layer of uncertainty for spectrum on which carriers and govt. had failed to reach settlement late last year. Some industry observers said high court’s grant of certiorari in NextWave case could heighten incentives to reopen settlement talks over licenses that fetched $15.8 billion in Jan. 2001 re-auction. But several analysts and industry sources pointed out that FCC had strong legal interest in having Supreme Court uphold what it viewed as integrity of auction process under Communications Act compared with limitations of U.S. Bankruptcy Code. Valuations of licenses also are widely seen as lower than they were even several months ago as carriers’ stocks have been battered on Wall St. Grant of certiorari marks victory for FCC, which sought review of June decision by U.S. Appeals Court, D.C. D.C. Circuit had reversed agency’s decision to cancel NextWave’s licenses for missed payment, throwing results of $17 billion re-auction of those licenses into disarray. With high court’s decision to review that ruling, “the mess just got messier,” said Legg Mason analyst David Kaut: “There’s a new round of legal uncertainty.”

In Further Notice of Proposed Rulemaking released Wed., FCC requested comment on issues such as who should be eligible to use 50 MHz of spectrum recently allocated at 4.9 GHz to public safety operations. At Feb. 14 agenda meeting, FCC approved order that allocated band to public safety uses such as high-speed digital technologies. Further NPRM seeks comment on: (1) Licensing and service rules for band. (2) Segmentation or channeling plans. (3) Impact of adjacent U.S. Navy operations. (4) Suggestions on how to use band in way that wouldn’t interfere with adjacent radio astronomy operations. Commission’s earlier tentative conclusions about band had been that additional spectrum exclusively for public safety didn’t need to be set aside at 4.9 GHz. Order approved by Commission reflected altered thinking, particularly given spectrum needs of public safety following Sept. 11 terrorist attacks. “The acts of terrorism committed against the United States on Sept. 11, 2001, reinforce the critical nature of the public safety community’s responsibilities to our nation’s safety and well-being,” FCC said. Among issues on which it seeks comment are whether eligibility standards for 4.9 GHz should be limited to state and local emergency workers and nongovt. public safety providers who work with govt. agencies. Item said there was no statutory language that required FCC to limit users to such operators. Commission seeks comment on whether broader description of public safety radio services should define eligibility in that band. That would broaden users beyond traditional public safety entities such as police and fire to others “whose facilities may be directly involved in an emergency and who provide essential services to the public at large,” FCC said. “We recognize that expanding the universe of users on this spectrum may result in congestion of the band, hindering the communications of emergency workers and causing the traditional public safety users to compete for valuable spectrum.” Commission said it was exploring “nontraditional means” of carrying out public safety use in band. One example would be allowing commercial licensees to use band to serve public safety agencies. NPRM seeks comment on how such arrangements could work. Another possibility, FCC said, would be to let commercial users be licensed on secondary basis. It also is exploring whether to allow federal govt. entities to use that spectrum.

House 273-157 passed modified version of Tauzin-Dingell data deregulation bill (HR-1542) Wed. after unsuccessful move by congressional CLEC supporters to block what had been touted as competition-friendly amendment. One of most contentious issues of day stemmed from Rules Committee proposal Tues. night to allow floor debate on line-sharing amendment by Reps. Towns (D-N.Y.) and Buyer (R-Ind.), which industry opponents said was falsely presented as CLEC- friendly measure. Debate also was allowed on CLEC-backed amendment by Reps. Cannon (R-La.), Conyers (D-Mich.) and several other Tauzin-Dingell opponents including Telecom Subcommittee ranking minority member Markey (D-Mass.). However, rules approved by House Wed. morning allowed Towns- Buyer to be introduced as substitute to Cannon-Conyers, thereby removing any chance of movement on CLEC-supported measure.

Bipartisan group of House members is considering legislative remedy to hasten transition to digital TV conversion, House Commerce Committee Chmn. Tauzin (R-La.) said Mon. in keynote at NAB State Leadership Conference in Washington. He said committee was planning one more hearing to assess whether progress had been made in private sector negotiations among broadcasters, cable operators and consumer electronics manufacturers to develop best approach to broadly deliver DTV across America. If progress hasn’t been made on private sector solution on stalled issues such as cable carriage of DTV and provision of digital tuners by electronics manufacturers, “Democrats and Republicans will come to the table and offer legislation to speed up the proceedings,” Tauzin said.

Capitol Hill was awash with lobbyists Mon. as supporters and opponents of data deregulation Tauzin-Dingell (HR-1542) bill prepared for House floor debate beginning Wed. Along with visits to House members and staff, advocacy groups flooded Hill with letters and released still more reports arguing why bill would either boost competition in broadband or cripple it. Despite flurry of lobbying, most observers viewed bill’s passage in House as foregone conclusion, in part because wavering members felt safe in voting for it knowing that Senate Commerce Committee Chmn. Hollings (D- S.C.) had no intention of letting it advance in Senate. At NAB conference Mon., bill’s chief sponsor, House Commerce Committee Chmn. Tauzin (R-La.), predicted victory in House, “then a fight in the Senate, as you know” (see separate story).