Wireless Telecommunications

On July 19, 2017, the Senate Commerce Committee held a hearing to examine the nominations of Ajit Pai, Jessica Rosenworcel, and Brendan Carr for seats on the Federal Communications Commission.

On March 7, President Donald Trump nominated Pai, the FCC’s current chairman, for a second five-year term ending June 30, 2021. Rosenworcel is nominated for a term that would end June 30, 2020. Carr, the current general counsel at the FCC, has actually been nominated for two terms, one expiring June 30, 2018 and the second ending June 30, 2023. Carr served as legal adviser to then-FCC Commissioner Pai for three years before Pai was named chairman and appointed Carr as general counsel.

Committee Chairman John Thune (R-SD) characterized the hearing as both an examination of the nominees and a FCC oversight hearing, “fulfilling a commitment I’ve made to hold regular, biannual oversight hearings of the Commission.” His opinions of the nominees: “In my view, the FCC will be in very good hands when all three of these nominees are confirmed.” He noted Chairman Pai’s efforts around transparency and FCC processes, network neutrality, and robocall prevention.

Sen Bill Nelson (D-FL), the committee’s ranking member, raised issues around all three nominations. Concerning Rosenworcel, he noted that she should not have been forced to step down from the FCC at the end of 2016 when the Senate failed to reconfirm her.

Sen. Nelson identified two concerns about Brendon Carr: 1) “two consecutive terms to which the Senate is being asked to confirm you would provide you with the longest single, initial period of service of any nominee to the FCC” and 2) “it is hard to recall a similar situation where someone was nominated to serve at the commission alongside, rather than to follow, their current boss.” He stressed that it is important to have commissioners who have independent voices and “ones who will fight for consumers and the public interest.” He later asked Carr to cite an issue that he and Chairman Pai disagree on – Carr failed to answer on more than one occasion. “Going forward, I’ll make my own decisions; I’ll call it the way I see it,” Carr said. “I think my record shows that I’m not a shrinking violet.” Sen. Nelson called that response “not confidence-building.”

Finally, Sen. Nelson congratulated Chairman Pai on some recent pro-consumer actions, but said, “[M]any view these most recent consumer protection actions as mere icing on what is otherwise an unpalatable cake. A cake constructed out of actions that eliminate competitive protections, that threaten dangerous industry consolidation, that make the Internet less free and less open, and that weaken critical consumer protections for those most vulnerable.”

Net Neutrality

Network neutrality and the FCC’s 2015 decision to classify broadband internet access service providers as telecommunications providers under Title II of the Communications Act were key issues for the hearing. In his opening remarks, Chairman Thune said,

“I am pleased that Chairman Pai has sought to hit the reset button on the 2015 Title II Order, because, as I have previously said, the FCC should do what is necessary to rebalance the agency’s regulatory posture under current law. I continue to believe, however, that the best way to provide long-term protections for the Internet is for Congress to pass bipartisan legislation. Two and a half years ago I put forward legislative principles and a draft bill to begin the conversation, and I stand ready and willing today to work toward finding a lasting legislative solution that will resolve the dispute over net neutrality once and for all.”

Two senators questioned the nominees about the impact of the Title II decision on broadband investment in the US. Sen. Mike Lee (R-UT) cited stats, offered by broadband providers, that investment has gone down. He took issue with a New York Times story that said investment had gone up since the 2015 order. He said that increase included foreign investment, some of which he said was spurred by the Title II disincentive to invest in the US, and that there was evidence that US infrastructure investment had declined precipitously.

On the other side was Sen. Ed Markey (D-MA) who said that almost half of the venture capital funds, or about $25 billion, invested since 2015 was in Internet-related businesses, with broadband providers investing $87 billion, the highest rate in a decade. Sen Markey said investment and job creation are high, so there is no problem that rolling back Title II or reviewing net neutrality rules would fix.

Both senators asked Chairman Pai for his take on their respective views, but the chairman's answer was cautious given that he has an open proceeding before him and comments on his proposal to roll back Title II and review the rules are still coming in. He said that evidence of decreased investment was one of his concerns, but that the FCC was testing that theory, as well as the opposite, as part of its due diligence.

E-Rate

While Rosenworcel, Carr and Chairman Pai all generally agreed on the importance of the FCC's E-rate program -- which makes broadband services more affordable for schools and libraries -- they initially refrained from an outright promise not to cut its funding. Sen. Ed Markey (D-Mass.) had to ask Rosenworcel a second time before she explicitly said she would not reduce the funding for E-rate. Neither Pai nor Carr would make that commitment.

Broadband Deployment

The three nominees were largely unanimous on measures to expedite rural broadband like “dig once” policies, which require installation of conduits for fiber-optic cable when preparing infrastructure such as roads. The policies aim to reduce cost and limit wait times for installing fiber in different municipalities.

“I think it would be helpful for ‘dig once’ policies and similar policies to be the law of the land,” Chairman Pai told Sen. Amy Klobuchar (D-MN).

“The agency, working with local jurisdictions, should try to come up with a model code — one that includes policies like ‘dig once,’” Rosenworcel said. She added that there should be incentives built in for local communities to adopt the model.

Senators also pressed the three on the need for accurate coverage maps so that subsidies issued to companies to build out their infrastructure are actually targeted to the right places.

“I would hope to get your commitment that the commission will work to ensure that mapping data used at the FCC accurately accounts for on-the-ground mobile coverage,” said Sen. Cory Gardner (R-CO). The nominees affirmed they are committed to working toward ensuring accurate data coverage moving forward.

First Amendment

Sen. Tom Udall (D-NM) pressed all of the nominees on their commitment to the First Amendment in light of the many statements President Trump has made disparaging outlets covering his Administration. Sen. Udall pointed to a story that the White House could use AT&T’s proposed acquisition of Time Warner as a way to punish CNN for its stories and suggested the Administration might want to reward Sinclair by approving Sinclair’s purchase of Tribune television stations. Each of the nominees pledged to speak out against violence or intimidation against journalists. Chairman Pai reiterated that the White House had not contacted him about retaliating against negative news stories and said he would not do so if asked. And he promised that the FCC would not be used to punish media companies or reward others and would be troubled by any attempt to pressure it to do so.

"I have not directly had any conversations with anyone in the administration with respect to media regulatory proceedings," Chairman Pai said. "To the best of my knowledge, no one on my staff or in the FCC has indirectly had any such conversations as well."

“I have consistently stated that I believe … that First Amendment freedoms, including the freedom of the press, are critical,” Pai added. “If I were ever asked by anyone in the administration to take retaliatory action, for instance, in a media regulatory proceeding, I would not do so.”

Conclusion

If all of the hearing’s nominees are confirmed by the full Senate, the FCC would have a 3-2 Republican majority. Senators on the committee have until July 21 to submit additional questions for the nominees who will be given time to reply in writing.

Apparently, wireless communications lobby group CTIA took issue with an in-depth report by the Department of Homeland Security on mobile device security, including flaws with the SS7 network.

In a white paper sent to members of Congress and the Department of Homeland Security, CTIA, a telecom lobbying group that represents Verizon, AT&T, and other wireless carriers, argued that "Congress and the Administration should reject the [DHS] Report's call for greater regulation" while downplaying "theoretical" security vulnerabilities in a mobile data network that hackers may be able to use to monitor phones across the globe. However, experts strongly disagree about the threat these vulnerabilities pose, saying the flaws should be taken seriously before criminals exploit them.

Apple has patented a process that would allow users to secretly call 911 using only their fingerprint. In a patent published by the United States Patent and Trademark Office, the tech giant outlined a feature that would allow users to call emergency services "when a conventional method may not be practical." Although it's already possible to call 911 through the lockscreen on iOS devices, this would allow users to reach out for help when an attacker or assailant is watching, the patent said. The company suggests the technology would look for a sequence of fingerprints or applied pressure to trigger a 911 call.

T-Mobile said a new report from Ookla indicates its LTE network continues to provide the fastest average download speeds among major US wireless carriers. And the carrier made a point of noting that Verizon's and AT&T's networks have slowed since the bigger carriers have jumped aboard the unlimited bandwagon. T-Mobile CTO Neville Ray claimed in a blog post that fresh Ookla data “based on millions of real-world customer experiences” using the Speedtest app shows that T-Mobile’s network ranked first in speed and LTE availability.

An Ookla representative said that the data has yet to be published but that Ookla reviewed T-Mobile’s claim before Ray’s post was published. “The real news is how dramatically both AT&T and Verizon’s networks have caved since making unlimited available to their customers—all while T-Mobile’s network has continued to soar,” Ray wrote before referring to a chart T-Mobile created based on the data. “That chart? That’s what it looks like when carriers jump into unlimited without doing the hard work to make sure their networks are ready. In that chart, you can see that Verizon has plunged all the way down to third place behind AT&T on network speed. That’s just in the first full quarter since offering unlimited.”

According to our preliminary research, there is some form of zero-rating in 20 out of 28 European nations. Zero-rating spans European Union economies of all sizes, from the United Kingdom to Romania, Germany, and Spain. This finding is consistent with Digital Fuel Monitor’s reports: in 2014, European Internet Service Providers offered at least 75 zero-rated apps; in 2015, they offered at least 35 zero-rated apps; and in 2016, they offered at least 62 zero-rated apps. Our preliminary research has found that today, in 2017, there exists at least 73 zero-rated apps across the continent.

This week, TV stations and multichannel video programming distributors (MVPDs) eligible for reimbursement of costs associated with new channel assignments resulting from the incentive auction submitted their initial cost estimates. Jean Kiddoo, Chair of the FCC’s Incentive Auction Task Force, issued the following statement: “Based on information we have received as of 7:00 a.m. today, the aggregate amount of the estimated costs reported by reimbursement-eligible entities is $2,115,328,744.33. We expect to receive additional estimates from MVPDs and a small number of stations. In addition, the initial estimates that comprise this amount will be subject to a careful review by the Commission and our fund administrator. The aggregate cost estimate provided today will therefore change for purposes of the initial allocation of reimbursement funds.”

Federal Communications Commission Chairman Ajit Pai announced that the following items are tentatively on the agenda for the August Open Commission Meeting scheduled for Thursday, August 3, 2017:

1. Connect America Fund Phase II Auction (Auction 903) – The Commission will consider a Public Notice to initiate the pre-auction process for the Connect America Fund Phase II auction which will award up to $198 million annually for 10 years to service providers that commit to offer voice and broadband services to fixed locations in unserved high-cost areas. (AU Docket No. 17-182)
2. Mobility Fund Phase II Challenge Process – The Commission will consider an Order on Reconsideration and Second Report and Order that lays out a robust challenge process that will enable the Commission to direct Mobility Fund Phase II support to primarily rural areas that lack unsubsidized 4G Long Term Evolution (LTE) service. (WC Docket No. 10-90; WT Docket No.10-208)
3. Form 477 - The Commission will consider a Further Notice of Proposed Rulemaking that takes a focused look at the Commission’s Form 477 to improve the value of the data we continue to collect. (WC Docket No. 11-10)
4. Expanding Flexible Use in Mid-Band Spectrum Between 3.7 GHz and 24 GHz – The Commission will consider a Notice of Inquiry that explores opportunities for next generation services – particularly for wireless broadband – in the 3.7 GHz to 24 GHz spectrum range and asks about how we can increase efficient and effective use of this spectrum for the benefit of all services and users. (GN Docket No. 17-183)
5. Wireless License Renewal and Service Continuity Reform – The Commission will consider a Second Report and Order and Further Notice of Proposed Rulemaking that would adopt unified construction, renewal, and service continuity rules for the Wireless Radio Services, while seeking comment on a range of additional possible actions to increase the number of Americans with access to wireless communications services. (WTB Docket No. 10-112)
6. Transmitter Identification Requirements for Satellite Digital Video Uplink Transmissions – The Commission will consider a Memorandum Opinion and Order that waives the requirement that satellite news trucks, and other temporary-fixed satellite earth stations transmitting digital video, comply with the Digital Video Broadcasting-Carrier Identification (DVB-CID) standard if the earth station uses a modulator that cannot meet the DVB-CID standard through a software upgrade. (IB Docket No. 12-267)
7. Hearing Designation Order – The Commission will consider a Hearing Designation Order.
8. Enforcement Bureau Action – The Commission will consider an enforcement action.

The Federal Communications Commission streamlined and modernized the authorization requirements for most radiofrequency devices, such as cell phones or TV receivers, that are imported, marketed, or operated within the United States.

This decision continues the FCC’s ongoing efforts to provide greater flexibility and reduce the burdens associated with certain equipment authorization rules. The FCC’s action allows required labeling information to be provided to the consumer via the device’s electronic display. This provides an alternative to the requirement for etching or permanent labels on the exterior of devices, and manufacturers expect the use of electronic labelling rather than permanent physical labels to result in a measurable reduction in costs. This action is consistent with the objectives of the Enhance Labeling, Accessing, and Branding of Electronic Licenses Act of 2014 or the E-LABEL Act. The FCC also eliminates the requirement to file with US Customs and Border Protection (CBP) the FCC Form 740 – the FCC’s unique import declaration for RF devices brought into the United States.

Microsoft introduced an initiative, the Microsoft Rural Airband project. Microsoft will invest an unspecified amount of money with existing rural broadband carriers to bring broadband to 2 million people in rural America by 2022. Microsoft will help fund projects that use TV white spaces spectrum for wireless broadband. It’s a technology they believe in and have deployed in 20 projects across the globe, serving about 185K subscribers.

TV white spaces spectrum is in the 600 MHz band and offers good propagation and distance characteristics. Microsoft is also calling on federal, state, and local governments to play a role. They are advocating appropriate spectrum use policies with the FCC to ensure nationwide unlicensed use of three channels below the 700 MHz band. They are calling on matching funds from any federal and state infrastructure spending to include TV white spaces technology options.

Anyone who has spent half a minute working on wireless communications issues knows that America’s wireless providers need additional spectrum to expand existing network capacity and/or deploy new technologies (e.g., 5G). Such constraints apply to both licensed and unlicensed spectrum users. While spectrum isn’t necessarily finite, current technical limitations make it so. This means that there is constant and appropriate pressure on the Federal Communications Commission to identify underutilized spectrum bands and reallocate them for new commercial purposes. Next generation wireless networks will require high, mid and low band spectrum.

While the Commission has taken steps to provide high and low band resources, more attention needs to be paid to the mid bands. So, when presented with a viable proposal that would free spectrum for licensed and unlicensed purposes while protecting or accommodating incumbent licensees, the Commission should grab it with both hands and rejoice. That exact scenario presents itself in the 3.7 to 4.2 GHz and 6 GHz bands. The Commission has the chance to reallocate key bands in a way that would provide needed spectrum for both licensed and unlicensed networks without harming incumbent users. Accordingly, we should tee up the private sector idea outlined above in a quick manner -- whether as part of a longer Notice of Inquiry or a separate, more targeted proceeding -- in the very near future. I, for one, believe doing otherwise would put U.S. spectrum leadership in question and threaten the longevity and viability of America’s broad wireless community.