Tag Archives: fcc

AT&T, Verizon, Sprint, PRTC plead their pain of not getting everything they want from Santa the FCC

by Steve Blum • , , , ,

The opening arguments submitted by AT&T, Verizon, Sprint and the Puerto Rico Telephone Company in their appeal of last year’s Federal Communications Commission’s pole ownership preemption decision do little more than lend credence to the allegation that their challenges were launched in collusion with their friends at the FCC in a vain judge shopping attempt.

The 2018 FCC wireless order was a gigabuck early Christmas present to mobile carriers. It gave them the right to use city-owned property in the public right of way, such as street light poles, at below market rates, sharply restricted fees that local government could charge for permits to do so, and limited local discretion over street management and aesthetic standards. And it tightened shot clocks for processing permit applications for (not so) small wireless facilities.

About the only gift the FCC didn’t give mobile carriers was “deemed granted” privileges. Those would have allowed companies to start construction without permission, after shot clocks run out. California has a similar rule, enacted by the legislature, but with more generous time limits.

The FCC has declined to create deemed granted remedies for big, macro cell sites in the past, and the U.S. congress never told them to do it. In a special case created by congress, the FCC did impose a deemed granted remedy, but there’s never been any question that must do so in all cases. If there’s any question, it’s whether the FCC has the general authority to overrule state legislatures in that regard. Nonetheless, the four mobile companies filed an appeal claiming the FCC’s failure to do so was “arbitrary and capricious”.

In their first attempt to justify that claim, the mobile carriers offer page after page of boilerplate 5G hype, and then argued that the FCC’s decision to not give them everything they want had “no rational connection” to the glorious future promised by their eloquent marketing materials.

What the carrier’s intervention did earn them is four tickets in the judicial lottery that determined which appeals court would hear all the challenges, particularly those filed by cities and counties that objected to the substance of the FCC’s preemption order. It worked at first. Sprint’s ticket was pulled and a Denver-based court with a more friendly reputation caught the case. But a legal maneuver by the City of San Jose got it transferred to the ninth circuit federal appeals court in San Francisco, exactly the place AT&T, Verizon and Sprint – and the FCC – were trying to avoid.

California attorney general joins lawsuit to block T-Mobile-Sprint deal, likely delays it indefinitely

by Steve Blum • , , , ,

Tmobile san francisco 18may2019

T-Mobile’s proposed merger with Sprint is “presumptively anticompetitive” according to California attorney general Xavier Becerra and eight other state attorneys general (plus their counterpart in the District of Columbia). On Tuesday, they sued the companies in a New York-based federal court with the goal of blocking the deal. The ten – all democrats – say there would be substantial damage to the market for mobile telecoms services if it goes through…

Sprint and T-Mobile are close competitors. Direct competition between Sprint and T-Mobile has led to lower prices, higher quality service, and more features for consumers. If consummated, the merger will eliminate the competition between Sprint and T-Mobile and will increase the ability of the three remaining MNOs to coordinate on pricing. The new combined company will also have reduced incentives to engage in innovative strategies to attract and retain customers compared to Sprint and T-Mobile today…The cumulative effect of this merger, therefore, will be to decrease competition in the retail mobile wireless telecommunications services market and increase prices that consumers pay for mobile wireless telecommunications services.

According to several news reports, the move is unusual because state AGs usually coordinate with the federal justice department. Staff attorneys there reportedly want to block it, but the republican-appointed head of the anti-trust unit is on the fence. The lawsuit could delay the merger for months or even years.

One likely side effect is that the California Public Utilities Commission’s review of the merger will be further delayed, perhaps indefinitely. Under some circumstances, when reviewing mergers California law requires the CPUC to “request an advisory opinion from the attorney general regarding whether competition will be adversely affected and what mitigation measures could be adopted to avoid this result”. Since the lawsuit asks that T-Mobile and Sprint “be permanently enjoined from and restrained from carrying out the merger”, Becerra won’t be suggesting mitigation measures until the case is either decided by the court, or a settlement is negotiated. T-Mobile has argued that the particular circumstance involved – annual California revenue of half a billion dollars or more – doesn’t apply in this case, but so far hasn’t prevailed.

FCC’s local pole preemption order based on speculation, ignores substantial evidence, cities tell appeals court

by Steve Blum • , , , ,

The Federal Communications Commission’s preemptions of local property rights – particularly city-owned street light poles – and local rules regulating the use of public right of ways are contrary to federal law and violate the federal constitution, according to arguments submitted to a San Francisco appeals court by dozens of cities, counties and local government associations. In their opening brief submitted on Monday, they made their case for overturning last year’s FCC rulings that swept away state and local land use, road maintenance, property leasing practices and other policies that mobile carriers find bothersome.

The two FCC rulings affect wireless and, to a more limited extent, wireline telecoms providers. All the challenges that resulted were consolidated into a single case that’s now in front of the ninth circuit federal court of appeals.

The local governments’ argument that the FCC’s wireless and wireline rulings are “arbitrary, capricious and counter to the evidence in the record” boil down to two key points:

  • Federal law says state and local governments can’t “prohibit or effectively prohibit” deployment of telecommunications services. Courts – including the ninth circuit – have previously ruled that “an ‘effective prohibition’ may not be based upon the mere possibility of prohibition – an actual prohibition is required”. Local regulations and fees that might make a particular small cell site less convenient or less profitable for a carrier are not a prohibition.
  • “Nothing in the Communications Act gives the Commission authority over non-carrier government property merely because it is convenient to communications providers, or requires a locality to take affirmative action to assist in deployment, either through making its property available, or making it available cheaply”.

The FCC’s claim that it is helping rural communities by preempting urban property rights is equally bogus, according to the local governments’ brief

If a provider obtains reaps greater profits in San Francisco, Eugene or New York City as a result of preemption of those cities’ current right-of-way or infrastructure attachment fees, those increased profits do not make it more attractive or profitable for the provider to invest in deploying infrastructure in rural Mississippi. The Commission’s order does not require any amount of additional profits resulting from the preemption of San Francisco’s or Eugene’s fees to go towards providing service in other areas. Providers are free to use such additional profits to engage in corporate acquisitions, increase shareholder dividends, or repurchase stocks, which the record shows they have done rather than invest in deployment.

The joint arguments filed by local governments, as well as opening briefs filed by mobile carriers and municipal electric utilities, are just the first round in what will what will be months of litigation.

Petitioner Local Governments’ joint opening brief, 10 June 2019
Brief of petitioner the American Public Power Association, 10 June 2019
Petitioner Montgomery County, Maryland’s opening brief, 10 June 2019
Joint opening brief for Petitioners Sprint Corporation; Verizon Communications Inc.; Puerto Rico Telephone Company, Inc.; and At&T Services, Inc., 10 June 2019

Links to petitions, court documents and background material are here.

My clients are mostly California cities, including some that are directly involved in this case. I’m not a disinterested commentator. Take it for what it’s worth.

“Epic livestream” to reinstate net neutrality marks anniversary of its demise

by Steve Blum • , , , ,

Open internet dont tread on me 2

It’s been a year since the Federal Communications Commission’s decision to scrap network neutrality rules took effect. So far, there’s no indication that wireline broadband providers have taken advantage of their new freedom to control the Internet, although mobile carriers apparently haven’t been as restrained.

To mark the day, an open Internet advocacy group, Fight for the Future, is doing a nine hour “epic livestream” to encourage the U.S. senate to pass a stalled net neutrality bill, and to generally make the case for freedom of access to the Internet. Shameless Plug Alert: I was invited to join the webcast, and I jumped at the chance.

In April, democrats in the U.S. house of representatives approved HR 1644, aka the Save the Internet Act, that would nullify the 2017 rollback, and reinstate network neutrality rules established in 2015 when the FCC also had a democratic majority. So far, the republican majority in the U.S. senate hasn’t done anything with it. There’s been talk that a symbolic effort to force a senate vote will be made today, and that’ll be the focus of Fight for the Future’s livestream event:

Watch widget screenshot 625

The FCC’s net neutrality rollback was also challenged in court. The federal appeals court based in Washington, D.C. – aka the D.C. circuit – heard oral arguments in February. There’s no way of knowing when the three judge panel will issue a decision, or what it will be. The FCC’s defence met with scepticism from one of the judges, but that’s poor basis for trying to make predictions. Whichever way it goes, the losing side has the option of asking the U.S. supreme court to take up the case.

That federal legal battle matters particularly in California, where a law reinstating net neutrality rules is in legal limbo. Senate bill 822 was passed by the legislature and immediately challenged in a Sacramento-based federal court by the federal justice department. Calfornia attorney general Xavier Becerra cut a deal with the Trump administration: enforcement of the new law and the Sacramento court challenge are both on hold until the challenge to the FCC ruling is resolved by the courts.

Opening briefs challenging FCC pole and right of way preemptions filed in ninth circuit

by Steve Blum • , , , ,

Tmobile small cell riverside

Dozens of local governments from across the U.S. filed joint arguments yesterday with the ninth circuit federal appeals court in San Francisco, as challenges to two 2018 Federal Communications Commission decisions move ahead. Mobile carriers and municipal electric utilities also filed opening briefs. I’ll dive deeper into the arguments in the next few days, but you can read them here now:

Petitioner Local Governments’ joint opening brief, 10 June 2019
Brief of petitioner the American Public Power Association, 10 June 2019
Petitioner Montgomery County, Maryland’s opening brief, 10 June 2019
Joint opening brief for Petitioners Sprint Corporation; Verizon Communications Inc.; Puerto Rico Telephone Company, Inc.; and At&T Services, Inc., 10 June 2019

Links to petitions, court documents and background material are here.

My clients are mostly California cities, including some that are directly involved in this case. I’m not a disinterested commentator. Take it for what it’s worth.

FCC puts political agenda ahead of regulatory relevance

by Steve Blum • , , ,

Self licking ice cream cone

The Federal Communications Commission is in danger of becoming just another one of Washington, D.C.’s self licking ice cream cones. Some would argue that it has already achieved that exalted status, but until pending court challenges to recent, major decisions – net neutrality and local property rights preemption, particularly – are decided, there’s still hope.

The latest example of hype-over-substance from the FCC’s current republican majority is the annual broadband deployment report that, at times, reads like an update from the old Soviet Union about its latest five year plan for increasing tractor production. Glorious.

Democrats on the commission can be just as political, particularly when they hold the majority, but they aren’t always so (nor, to be fair, are republicans, at least not historically). Jessica Rosenworcel, the FCC’s senior democrat, dissented from the report because it 1. relies on bad data, and 2. its standards are set too low…

This report deserves a failing grade…

The claim in this report that there are only 21 million people in the United States without broadband is fundamentally flawed. Consider that another recent analysis concluded that as many as 162 million people across the country do not use internet service at broadband speeds. Adding insult to injury, the same flawed data we rely on here is used to populate FCC broadband maps. For those keeping track, one cabinet official has described those maps as “fake news” and one Senator has suggested they be shredded and thrown into a lake…

It’s time for the FCC to adopt a 100 Megabits per second standard and set Gigabit speeds in our sight.

The FCC’s 2019 broadband deployment report sets a low standard – 25 Mbps download/3 Mbps upload speeds – and inflates service providers’ availability reports by assuming that if one person in a census block has access to a given speed level – the FCC’s standard for such reports – then everyone does. Rosenworcel is correct: the 2019 report doesn’t quantify the reality of broadband deployment in the U.S. And it certainly doesn’t justify the FCC’s self congratulatory hype.

CPUC approval of T-Mobile-Sprint deal slipping to August, if then

by Steve Blum • , , , ,

Caltrans slow 2

Even if the federal justice department has an Ajit Pai-like epiphany about T-Mobile’s proposed takeover of Sprint and approves the deal today – not likely – there’s diminishing hope that California’s review of the merger will wrap up before August. And the possibility of a mid-September decision is growing.

There are three structural reasons for the delay. First, the CPUC only has one voting meeting scheduled for July, on the 11th, and there’s a four week gap between the commission’s last August meeting and its first one in September. Second, there’s a statutory minimum 30-day public review period between the publication of a draft decision and a vote by commissioners.

To make the 11 July 2019 meeting agenda, the CPUC administrative law judge managing the case, Karl Bemesderfer, would have to publish his proposed decision by next Tuesday. He could do that, but the third structural problem – the commission’s slow moving, adversarial and quasi-judicial decision making process – argues against it.

Two weeks ago, T-Mobile filed a motion to “advise” the CPUC about the deal it reached with the Federal Communications Commission. That set a two-week clock ticking for opponents to weigh in. Yesterday, the CPUC’s public advocates office (PAO) argued that commission decisions have to based on what’s in the official record, and not on news bulletins from Washington, D.C. The PAO’s response pointed out that T-Mobile took exactly that position earlier this year…

Joint Applicants’ [i.e. T-Mobile’s and Sprint’s] request to “advise” the Commission of their FCC filings is essentially the same as DISH Network’s January 29, 2019, Motion to Take Official Notice of Supplemental Authority, which requested that DISH’s FCC filings be considered in this proceeding. In response to DISH’s Motion, Joint Applicants argued that it “would cause prejudice to the Joint Applicants by enabling DISH to belatedly introduce arguments long after the relevant deadlines have passed, to which the Joint Applicants could have responded had the arguments been timely made.” On February 5, 2019, [Bemesderfer] denied DISH’s request, stating “…introducing what amounts to a legal pleading at this [point] is simply prejudicial to the applicants and so that motion is denied.” The arguments regarding prejudice and timeliness are equally applicable now.

A significant change in the way the merger is put together, such as divesting Boost Mobile or spinning off enough assets to create a new national mobile carrier, is something the CPUC ought to consider. Bemesderfer has allowed new information to be introduced, but has also given opponents a few extra weeks to respond to it. Add in the 30-day public comment period, and a decision might not land on the CPUC’s agenda until it meets on 12 September 2019.

Collected documents from the CPUC’s review of the proposed merger of Sprint and T-Mobile are here.

Another bipartisan bill preempting local ownership of streetlight poles lands in U.S. senate

by Steve Blum • , , , ,

Despite promises to work with local government representatives to develop less onerous language, a bill to preempt local ownership of streetlight poles and other municipal property that is 1. located in the public right of way and 2. coveted by wireless broadband providers was re-introduced in the U.S. senate with no significant changes. S.1699 is sponsored by the same bipartisan team of John Thune (R – South Dakota) and Brian Schatz (D – Hawaii) that pushed it last year.

It’s still called the Streamline small cell deployment act. It would use the same formulas to calculate rental rates for poles owned by cities and counties that are used to allocate costs between telecoms and electric companies that share utility poles. In California, that rate is generally in the range of $25 – plus or minus several bucks – per foot of occupied pole space per year. It would apply to “a facility in a right-of-way owned or managed by the State or local government for the placement, construction, or modification of a small personal wireless facility”.

The bill also sets shot clocks ranging from 60 days to 150 days for small cell permit processing, whether or not a proposed facility is in the public right of way. The shot clocks would have “deemed granted” teeth…

If a State or local government or instrumentality thereof has neither granted nor denied a request within the applicable timeframe…including any temporary waiver granted under [the terms of this bill], the request shall be deemed granted on the date that is 31 days after the date on which the government instrumentality receives a written of the failure from the applicant.

Along with federal courts, the Federal Communications Commission would get the job of enforcing shot clocks and arbitrating rental rate and fee disputes. In many ways, the bill tracks with last year’s FCC order that similarly seeks to override local ownership of streetlight poles and such, with two major differences: by comparison with S.1699 (but not with the market) the FCC was more generous with rental rates, setting a “safe harbor” figure of $270 per pole per year, and the U.S. congress has the unambiguous power to preempt ownership of municipal assets within certain limits, while the FCC does not.

The first stop for S.1699 is the U.S. senate’s commerce, science and transportation committee. Thune chairs that committee and Schatz is ranking democrat. That was the case with last year’s bill too.

FCC’s broadband deployment report is good news, but not as good as it says it is

by Steve Blum • , , ,

“Advanced telecommunications capability is being deployed on a reasonable and timely basis” in the U.S., according to the Federal Communications Commission. In a self congratulatory report, the FCC issued what has become its annual declaration of victory in its congressionally mandated battle to encourage “the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans”.

The report concludes that “the number of Americans lacking a connection of at least 25 Mbps/3 Mbps (the Commission’s current benchmark) has dropped from 26.1 million Americans at the end of 2016 to 21.3 million Americans at the end of 2017, a decrease of more than 18%”.

Those numbers shouldn’t be taken literally. The FCC accepts the availability reports filed by Internet service providers on face value, and makes the false assumption that if a given level of service is available to one customer in a census block – which is how ISPs are told to report their coverage – then everyone in that census block can get it. The FCC admits in a buried footnote that the report “likely overstates the coverage experienced by some consumers, especially in large or irregularly shaped census blocks”, but that, ironically, is an understatement at best.

Even so, the general conclusion that more people in U.S. have access to service at 25Mbps down/3 Mbps up now than they did last year is correct. The data I’ve seen – and scrubbed – supports the same trend, if not the same glorious triumphalism.

The FCC’s definition of “advanced telecommunications capability” remains at 25 Mbps download and 3 Mbps upload speeds for fixed – wireline and wireless – broadband service. Other research, particularly that conducted by the Monterey Bay Economic Partnership and the Central Coast Broadband Consortium last year, shows that the market has moved on and 100 Mbps down/20 Mbps up is the working minimum for today’s online needs. The FCC pushed back on advice to raise its minimum, citing, in part, lobbying on behalf of wireless Internet service providers who often can’t even come close to the 25/3 standard. To its credit, though, the FCC published a bit of data about broadband availability at higher speeds, albeit on the national or state level, and not with the more granular county-level analysis it applied to the slower 25/3 benchmark.

The report also affirms last year’s conclusion that mobile broadband is not a substitute for fixed service, although it edges a bit closer in that direction with the qualification that they are not “full substitutes in all cases”.

I was a member of the team that produced the MBEP/CCBC study and its conclusions. Take it for what it’s worth.

Federal anti-trust staff want to block T-Mobile-Sprint merger, report says

by Steve Blum • , , , ,

Despite Monday’s raucous cheerleading from republican members of the Federal Communications Commission, the federal justice department is moving toward blocking T-Mobile’s proposed takeover of Sprint. According to a Reuters report, a staff review has concluded that allowing the two companies to combine, thereby reducing the competitive landscape from four nationwide mobile carriers to three, would do too much damage to the telecoms marketplace…

The U.S. Justice Department’s antitrust division staff has recommended the agency block T-Mobile US Inc’s $26 billion acquisition of smaller rival Sprint Corp, according to two sources familiar with the matter…

The final decision on whether to allow two of the four nationwide wireless carriers to merge now lies with political appointees at the department, headed by antitrust division chief Makan Delrahim…

One critic of the deal, Gene Kimmelman, president of Public Knowledge, the nonprofit public interest group, said top brass in the Justice Department’s antitrust division do not generally overrule the staff but they occasionally do.

“I’d be extremely surprised if the front office overruled this,” added Kimmelman, a veteran of the Obama Justice Department.

The federal justice department’s opinion will matter in California, too. The substantive objection to the deal made during the ongoing California Public Utilities Commission review is, likewise, that it’s anti-competitive. The economic analysis done by the CPUC’s public advocates office reaches that conclusion using the DOJ’s methodology. T-Mobile’s rebuttal relies on novel techniques developed by the “world renowned” economists it hired to make its case. Assuming the Reuters report is correct, they did not impress federal anti-trust enforcers.

A final decision by the DOJ is expected to come within a month or so. The CPUC’s review will probably run longer, for a lot of reasons, including that it might not be a bad idea to wait until a decision is made at the federal level. That could mean a CPUC vote won’t come until August, at the earliest.