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November 2015

AT&T predicted to dominate 600 MHz incentive auction with $10B in bids, outshining T-Mobile's $8B spend

The financial analysts at Wells Fargo predicted that AT&T will outspend its rivals on licenses during the Federal Communications Commission's incentive auction in 2016 of TV broadcasters' 600 MHz spectrum, dropping up to $10 billion on a 2x10 MHz block of spectrum with nationwide capability. The analysts predict T-Mobile will come in second with bids of up to $8 billion, while Verizon will clock in last among the nation's largest wireless carriers with a total of $5 billion in bids.

As the Wells Fargo analysts point out in their latest report on the incentive auction, AT&T initially pledged to bid at least $9 billion in the incentive auction, but when the carrier made that pledge it was still in the process of acquiring DirecTV. The Wells Fargo analysts said that, since the close of its DirecTV acquisition earlier this year, AT&T has backtracked from that pledge. Nonetheless, the analysts point to recent statements on the auction from AT&T CFO John Stephens that "We would expect to participate. … Certainly, getting nationwide opportunities is what we've talked about in the past. The 2x10 nationwide capability is something that works very well with our network planning and our network team, but we will see how this develops."

AT&T continues to push Lifeline proposal, wants FCC to include Internet services in program

In a new, lengthy filing with the Federal Communications Commission, AT&T reiterated its proposed changes to the agency's Lifeline program. Specifically, AT&T urged the FCC to offload most of the management functions of the program to the Universal Service Administrative Company, and to also allow Lifeline recipients to use the program to pay for their Internet access, whether that's wireless or wireline. AT&T's filing detailed a meeting between a handful of company executives and various FCC officials, where AT&T said that it "strongly supports Lifeline reform that is designed to give eligible users greater autonomy and remove service providers from all program administration duties, including enrollment and eligibility verification, delivering benefits to Lifeline consumers, performing annual recertification and de-enrolling consumers from the program."

Tentative Agenda for December 2015 Open Meeting

The following items are tentatively on the agenda for the December Open Commission Meeting scheduled for Thursday, December 17, 2015:

US Telecom Petition for Forbearance: The Federal Communications Commission will consider a a Memorandum Opinion and Order addressing a petition from USTelecom that seeks forbearance from various categories of statutory and Commission requirements applicable to incumbent local exchange carriers. (WC Docket No. 14-192)

Part 25 Rules for Space Stations and Earth Stations: The Commission will consider a Second Report and Order that streamlines, eliminates or updates numerous provisions of Part 25 of the Commission’s rules governing licensing and operation of space stations and earth stations for the provision of satellite communication services. (IB Docket No. 12-267)

Streamlining Rules and Processes: New Steps Forward

Over the course of my career I have witnessed many instances where regulatory delay and burdensome red tape slowed the pace of innovation and hampered investment in the communications sector, which plays such a vital role in our country's economic growth. One area of focus had been modernizing Part 25 of the Federal Communciations Commission's rules, which governs licensing and operation of space stations and earth stations for the provision of satellite communications services. Led by our International Bureau, the Commission has already revised or eliminated numerous Part 25 rule provisions.

Last week, I circulated to my colleagues an Order making further changes to our Part 25 rules. This proposal would make the regulatory approval process for satellite licenses easier and more efficient, significantly reducing regulatory burdens and costs. The Second Report and Order streamlines, clarifies, eliminates, or amends rules to allow for more operational flexibility and better accommodate evolving technology while easing administrative burdens on licensees and Commission staff. While the Commission is committed to eliminating outdated, unnecessary rules to let the marketplace work, we must also preserve rules needed to protect consumers and competition. A second item to be considered at the Commission's next open meeting strikes that balance. The Commission will vote on an order partially granting a petition for forbearance filed by United States Telecom Association from various rules governing incumbent local phone companies, particularly the three remaining "Baby Bells"

FCC Clarifies Procedure for Disbursing Reverse Auction Incentive Payments

In response to a number of comments and inquiries, the Wireless Telecommunications Bureau clarifies the circumstances under which the Commission will accept payment instructions to make incentive payments to an entity other than a winning reverse auction bidder. The Commission has stated that incentive payments will be disbursed “to the licensee that is the reverse auction applicant” and that, in making such disbursements, it will “follow winning reverse auction bidders’ payment instructions as set forth on their respective standardized incentive payment forms to the extent permitted by law.” We clarify that the winning reverse auction bidder need not be the owner of the account to which disbursement is made. Winning bidders may instruct that their payments be disbursed to a third party, such as a “qualified intermediary,” a “qualified trust,” an escrow account, or an account jointly owned by parties to a channel sharing agreement (CSA) who are named as owners of that account. The flexibility to instruct that payments be disbursed to a third party will facilitate channel sharing and thereby promote voluntary broadcaster participation in the reverse auction.

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