Current Telecom Developments

March 18, 2016

House Energy & Commerce Committee Approves Internet Rate Regulation Bill

Members of the House Energy & Commerce Committee have approved the No Rate Regulation of Broadband Internet Access Act (H.R. 2666), which would limit the effects of the FCC’s 2015 Open Internet order by barring FCC regulation of broadband Internet access services (BIAS) rates “without regard to any other provision of law.” Like a similar action undertaken last month by the House Communications & Technology Subcommittee, Tuesday’s 29-19 vote was marked by partisan disagreement. Introduced by Rep. Adam Kinzinger (R-IL), H.R. 2666 would codify assurances by FCC Chairman Tom Wheeler that the FCC—in classifying BIAS as a Title II telecommunications service—would use its forbearance authority to refrain from imposing on fixed and wireless ISPs pricing and other restrictions that apply to wireline common carrier phone networks. Although both political parties agree that the FCC should not regulate broadband access rates, Democrats believe the H.R. 2666 is too broad and would impact the FCC’s ability to protect consumers against unfair billing practices. Republicans, meanwhile, believe passage of H.R. 2666 is needed to prevent future FCC chairmen from backtracking on Wheeler’s forbearance pledge. In hopes of assuaging some of the Democrats’ concerns, committee members approved an amendment, offered by House Communications Subcommittee Chairman Greg Walden (R-OR), specifying that the FCC can continue to enforce truth-in-billing requirements and the Open Internet order’s ban on paid prioritization. Democrats on the panel, however, were not satisfied. Countering Republican claims that the bill does not target “bright line” FCC rules against paid prioritization, throttling, and the blockage of lawful web content, ranking committee member Frank Pallone (D-NJ) quoted a letter from Wheeler voicing concern that the measure “would introduce significant uncertainty into the Commission’s ability” to enforce these rules. Notwithstanding Tuesday’s vote, House Energy & Commerce Committee Chairman Fred Upton (R-MI) acknowledged that further negotiations could take place before the bill moves to the House floor.

Court Orders Provisional Participation of LPTV Licensee in Incentive Auction

Latina Broadcasters—the licensee of low power television (LPTV) station WDYB in Daytona Beach, Florida—celebrated a legal victory yesterday, as the D.C.

In This Issue:

House Energy & Commerce Committee Approves Internet Rate Regulation Bill more

Court Orders Provisional Participation of LPTV Licensee in Incentive Auction more

FCC Chairman Questioned by House Panel on JSAs, Navigation Devices more

Wheeler Defends FCC Reports on Broadband and Wireless Competition more

NYC To Equip Public Bus Fleet With Free Wi-Fi more

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Circuit Court of Appeals ordered the FCC to allow Latina to participate provisionally in the March 29 incentive auction. Filed on February 26, Latina’s emergency motion sought a stay of the auction start date or Latina’s provisional reinstatement as an auction participant, pending court action on Latina’s related appeal of the FCC’s February 12 decision to deny reconsideration of the company’s auction eligibility. Despite having included WDYB on its initial list of auction-eligible stations, the FCC declared last month that Latina was not entitled to repacking protection and was therefore ineligible to participate in the incentive auction. In a March 4 filing, the FCC told the court that WDYB had been included on the agency’s list of auction eligible stations on a provisional basis and that the FCC later withdrew WDYB from the list when the station’s eligibility for discretionary protection “was called into question.” Nevertheless, based on its review of the FCC’s incentive auction website, which revealed “the agency’s auction data files and other projections are based on the assumption that the petitioner’s station would be eligible to participate” in the incentive auction, the court proclaimed that Latina “has satisfied the stringent requirements for this injunctive relief.” Meanwhile, on the eve of the Latina decision, the D.C. Circuit rejected similar motions for stay of the incentive auction start date filed by Mako Communications, Free Access & Broadcast Telemedia, and Word of God Fellowship, Inc. Each of these entities have appeals pending before the court seeking reversal of the FCC’s decision in the incentive auction order to deny secondary-status LPTV stations protection during the channel repacking process. (The court has yet to rule on one other request for stay of the incentive auction filed by another LPTV entity, The Videohouse.) Although the FCC declined comment on the Latina ruling, a Latina spokesman told reporters: “we’re very excited . . . [and] we believe that we should prevail consistent with our filings.”

FCC Chairman Questioned by House Panel on JSAs, Navigation Devices

The FCC’s policy of excluding assignments or transfers of control of TV station licenses with joint sales agreements (JSAs) from statutory grandfathering requirements, and the agency’s recent proposal to make cable set-top box data available to third-party programmers and app developers emerged as prime topics of discussion during an FCC budget hearing conducted Tuesday before the House Appropriations Committee. FCC Chairman Tom Wheeler testified at Tuesday’s hearing alongside FCC Commissioner Ajit Pai, who complained to lawmakers that one of the top issues impacting the national market for cable set-top boxes and navigation devices is the notion that the FCC has had “a highly intrusive set of regulations to create the marketplace it wanted.” Hinting agreement with Pai, Rep. Kevin Yoder (R-KS) related his lack of understanding about how the FCC’s plan to impose a new technological mandate on cable operators could benefit the cable industry or their subscribers. In reply, Wheeler explained that Congress had provided the FCC with a “clear cut, black letter mandate” two decades ago to require open access to cable set-top box technology that, in turn, could spur a competitive market in navigation devices. Wheeler also lamented that 99% of today’s cable consumers have no choice in set-top boxes or apps and that the information sent upstream by multichannel video program distributors (MVPDs) “only talks to a device that they control.” The FCC Chairman thus concluded that: “we’re saying open that up so they can talk to other devices just like your smart TV talks to Netflix or Hulu and allow for that kind of openness so the consumer has a choice.” As he emphasized that the FCC has yet to vote on the proposed rules, Wheeler added that, if any stakeholders are concerned about “holes in the proposal,” then “we would want to hear from them.”

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With respect to JSAs, Wheeler advised the panel that a rider attached to the Consolidated Appropriations Act of 2016 (CCA), which grandfathered JSAs in existence prior to the FCC’s March 2014 decision to classify JSAs as attributable ownership interests, could not be applied to assignments and transfers of broadcast television licenses. Charging that the FCC’s policy violates the CCA, twelve Senate members, including Democrats Chuck Schumer (NY) and Barbara Mikulksi (MD), and Republican Cory Gardner (CO), urged Wheeler in a letter last Friday to “eliminate any conditions imposed on previously-approved license transfers that require the termination of JSAs in existence before March 31, 2014” and “respect the statutory grandfather of JSAs when evaluating any assignments and license transfers in the future.” Referring to the Senate letter, Yoder asserted that, in enacting the JSA policy to address concerns about “bad actors” gaming the FCC’s ownership rules, the agency had “thrown the baby out with the bath water.” Wheeler maintained, however, that JSAs could not be conveyed during license assignments or transfers because the FCC deems such transactions to be the end of the existing license and the start of a new license. As such, Wheeler stressed: “the terms and conditions that were once ascribed to the previous license and the previous owner do not transfer.” As Wheeler noted that the FCC has applied this policy “across a vast array of cases” over the past 30 years, Pai recommended that Congress “be much more specific” in voicing its intent during the legislative process “to make sure this doesn’t happen again.”

Wheeler Defends FCC Reports on Broadband and Wireless Competition

Responding to a recent House inquiry, FCC Chairman Tom Wheeler defended the FCC’s findings in recent Congressional reports that the U.S. broadband market is not effectively competitive and that a definitive conclusion regarding the competitive state of the U.S. wireless market cannot be reached. In a February 26 letter that was released to the public last Friday, Wheeler addressed recent correspondence by House Energy & Commerce Committee Chairman Fred Upton (R-MI) and House Communications & Technology Subcommittee Chairman Greg Walden (R-OR) raising questions concerning the FCC’s procedures for assessing the state of competition in the broadband, wireless and multichannel video program distribution (MVPD) sectors. Writing to Wheeler on February 5, Upton and Walden claimed that, over the past five years, the FCC “has applied inconsistent definitions and analyses” in determining the competitive state of the broadband, wireless and MVPD sectors. The lawmakers also asked Wheeler to (1) address changes in the FCC’s definition of broadband services since 2010, (2) why the FCC “continues to fail to make a competitive finding for the wireless market,” and (3) why the agency “does not have a definition of competition that it applies consistently.” On the subject of broadband, Wheeler informed Upton and Walden that “different statutory directives and contexts . . . may call for different metrics” in measuring minimum broadband speed thresholds. He also emphasized that “the Commission has a responsibility within the context of its various efforts to maximize the availability and adoption of broadband to establish appropriate broadband service measurements.” Wheeler also highlighted FCC efforts to promote broadband deployment and investment, including: among others, (1) the launch of the Broadband Acceleration Initiative in 2011, (2) the award of Mobility Fund support, and (3) the adoption of rules in 2014 to modernize the Universal Service E-Rate program. Furthermore, Wheeler noted that the FCC had cited recent industry accomplishments as part of its 2016 broadband progress report that included the expansion of AT&T’s wireline IP broadband network to 57 million customer locations and tests of next-generation broadband services at speeds in excess of 10 Gbps across the Verizon FiOS network. Meanwhile, Wheeler acknowledged that, within the context of mobile wireless broadband, “there is no definition of the general term ‘effective competition’ that is widely accepted by economists or competition authorities.” As such, and citing

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“the complexity of inter-related segments and services within the mobile wireless ecosystem,” Wheeler told Upton and Walden that the FCC’s market analyses in recent reports to Congress “led to a determination that any single conclusion regarding the effectiveness of competition would be incomplete and potentially misleading.”

NYC To Equip Public Bus Fleet with Free Wi-Fi

This week, the City of New York took further steps to build its reputation nationally as a top destination for free municipal Wi-Fi in confirming plans to add 2,000 new vehicles to its public bus fleet that will be equipped with free Wi-Fi connections and USB charging ports for passengers. The initiative, which also calls for retrofits of approximately 1,000 express buses operated by the New York City Metropolitan Transportation Authority (MTA), follows on the city’s plan to convert its aging and largely defunct network of public pay phones into free Wi-Fi hotspots through the “LinkNYC” project announced in November 2014. An MTA spokesman told reporters that the new, Wi-Fi-enabled buses will replace about 40% of the current MTA bus fleet. As part of a new pilot program, the MTA is also slated to equip at least 200 of the new buses with LCD screens that will provide passengers with data on upcoming stops, available transfers, news, weather, advertising and other information. Officials expect the first new buses will enter service next month with the remaining buses to begin operation by 2018. The express bus retrofits are scheduled for completion by 2017. More than $1.3 billion is being invested in the project. Although most of the funds are being sourced by the MTA capital budget, the State of New York is contributing money as well. As New York City Mayor Bill de Blasio promised that the new MTA bus fleet “will provide critical tech services that New Yorkers depend on every day,” New York Governor Andrew Cuomo applauded the upgrade as one that “will create a stronger, more convenient and more connected mass transit system for years to come.”

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