The FCC Makes Some Moves: Robbie's Round-Up (10/19-23)

Submitted on October 23, 2015

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The FCC Makes Some Moves
Robbie's Round-Up (October 19-23, 2015)

Incentive Spectrum Auction: "A Watershed Moment"
America faces a major challenge to ensure our wireless networks have the capacity to keep pace with growing demand so they can support the critical economic, public safety, healthcare and other activities that increasingly rely on them. The 2010 National Broadband Plan introduced the idea of incentive auctions as a voluntary, market-based means of repurposing spectrum now used by local television stations. The auctions are meant to give the stations a financial incentive to voluntarily relinquish spectrum usage rights. For more information on the incentive auction, see Andy Schwartzman’s article “The Sale of the Century? How the FCC Plans to Sell Off Part of the TV Band” [Also see a 3 minute explainer video from CPB.]

On October 16, the Federal Communications Commission released two critical incentive auction items: The Application Procedures Public Notice and the final opening bid prices for broadcast stations: The Application Procedures Public Notice and the final opening bid prices for broadcast stations. Broadcasters now have in their hands all of the information they will need to decide whether to participate in the auction. The Incentive Auction Task Force setDecember 18, 2015 as the date by which interested broadcasters must file their applications. Auction bidders must file by January 28, 2016. In a statement, FCC Chairman Tom Wheeler said, “For potential incentive auction participants, today is a watershed moment. For all practical purposes, we’ve fired the starting gun.”

Why Does This Matter?
The incentive auction is an incredibly ambitious and complicated project, which will hopefully end with 1) wireless carriers having the spectrum needed to expand and improve their networks (meaning more affordable broadband access for consumers), 2) more efficient use of spectrum by television stations, and 3) billions of dollars in the US Treasury.

What’s Next?
On March 29, 2016, broadcasters will make their initial bid commitments and the auction will begin. In the intervening months, the Incentive Auction Task Force and FCC staff stand ready to assist potential bidders as they prepare to participate in this historic auction.

Special Access -- FCC Announces Probe into ‘Business Broadband’
The FCC launched an investigation into the pricing practices of AT&T and Verizon for special access service. What is special access? Business-class broadband networks that power high-speed data connections for things like ATMs, credit card readers, businesses, universities, and libraries. It is a $40 billion per year market.

The FCC is responding to accusations by Sprint, Level 3 and others that large Internet providers -- chiefly AT&T and Verizon -- have tried to lock up that market. Among the practices the FCC will look into:

Contracts that last as long as 7 to 10 years, which critics say suppresses competition by making it impossible for would-be challengers to lure those customers away.
High termination fees that allegedly deter business customers from switching providers or canceling service, because it would be more expensive to do so than to continue paying for service.

Some argue the deals the FCC will study are too complex for regulatory control, and the result will be an increased assessment of risk by investors, leading to less competition and investment. Others claim the FCC should be de-regulating special access pricing, and express dismay that “every participant in the Internet ecosystem will feel the hot gaze of the FCC.”

Why Does This Matter?
The complaints from some of America’s biggest companies against AT&T and Verizon are similar to those of consumers that feel tied to their cellular provider by lengthy contracts and early termination fees. If the FCC investigation determines that the practices by AT&T and Verizon are “unjust” and “unreasonable” under the 1996 Communications Act, it could result in significant changes to the market for business broadband, similar to the way eliminating contracts and early termination fees affected the consumer market for cellular service.

FCC Takes Next Big Steps In Reducing Inmate Calling Rates
The FCC acted again this week to rein in the excessive rates and egregious fees on phone calls paid by some of society’s most vulnerable: people trying to stay in touch with loved ones serving time in jail or prison. With the cost of a call to or from a prison sometimes reaching $14 per minute, the FCC capped rates for local and in-state long-distance calls, and cut its existing cap on interstate long-distance calls by up to 50 percent. At the same time, the FCC closed loopholes by barring most add-on fees imposed by inmate calling service (ICS) providers, and set strict limits on the few fees that remain.

Several civil rights, media justice, and labor groups praised the action, saying, “Preserving the most reliable way for inmates to keep relationships that matter is one of the best ways to ensure our communities are safer and to decrease re-offenses and reentry into the criminal justice system." “The civil rights, media justice, and labor community stands behind [Chairman] Wheeler and [Commissioner] Clyburn because all families deserve the right to stay connected at reasonable and fair rates, as mandated by the Communications Act. We look forward to rapid completion of this next phase of the FCC’s work.”

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