Tag Archives: public policy

Mobile carriers, lobbyists offer half hearted support for FCC’s local pole ownership preemption

by Steve Blum • , , , ,

Two mobile carriers – Verizon and Sprint – and a group of industry lobbyists filed arguments in support of the Federal Communications Commission’s sweeping preemption of state and local ownership of public property with the federal appeals court based in San Francisco. That’s where the long list of challenges to the FCC’s 2018 wireless and wireline decisions are being heard.

The mobile industry’s arguments focus on whether the FCC has the authority to tell states and local governments how to manage and allow access to the public right of way. There’s no doubt the FCC has some role to play, but it’s a largely moot question in California where state law already limits local discretion over street and sidewalk access to short term, technical requirements about how to patch up holes and when to block traffic. Telecoms company have the right to plant poles and boxes in California’s right of way for free, with few restrictions.

What the carriers and lobbyists don’t explain, though, is where the FCC gets the authority to, in effect, confiscate property – light poles and traffic signals – owned by local governments and declare that those are available to private companies on the same free-for-all basis.

The best they can do is to say that even though congress said the FCC couldn’t preempt state and local property rights in similar circumstances, as it did in section 224 of the 1996 communications action, it didn’t say the FCC couldn’t in other circumstances…

Congress’s decision not to grant the FCC authority over government property in one statutory provision does not preclude that authority in an entirely different provision. In fact, the presumption is just the opposite: because Congress explicitly foreclosed regulation of government property in Section 224, its failure to do so indicates that such regulation is not foreclosed in another section…It is entirely reasonable for the FCC to conclude that Congress intended Section 224 to cover privately-owned poles and that public poles fall within the ambit of Section 253, which expressly addresses state and local regulation.

In other words, congress never said the FCC could.

The FCC has run into this problem twice before, and lost twice. The first time, in a case involving state-level municipal broadband regulation, the federal supreme court said the FCC was out of bounds because congress didn’t make it “unmistakably clear” that it was granting the necessary authority. That principal was reaffirmed by a federal appeals court in 2016, when it tossed out the FCC’s claim that states couldn’t limit cities’ ability to offer broadband service.

It’s looking increasingly likely that the FCC’s attempt to walk back its pole ownership preemption attempt to a more defensible perimeter will turn into a full scale defeat.

Picker ends his term as CPUC president

by Steve Blum • , ,

Picker 20may2019

Yesterday was Michael Picker’s last meeting as president of the California Public Utilities Commission. He stepped down at the request of California governor Gavin Newsom, who named Marybel Batjer, his strike team leader, to head the commission. She’ll be able to assume the job while the state senate decides whether to confirm her appointment.

Picker leaves behind positive accomplishments. He took over from Michael Peevey, who was under criminal investigation for backroom dealings. The switch from Peevey’s big man on campus persona to Picker’s soporific style was effective in dampening much of the heated criticism of the CPUC at the time. He brought order to the CPUC’s management and executive decision making processes, and pushed hard for a safety-first culture, both at the commission and at the companies it regulates.

Telecommunications policy in general, and broadband in particular, were not Picker’s forte. His focus was energy, particularly climate change and decarbonisation issues. When it came to telecoms, he typically took the side of monopoly model incumbents, although he tried to spin it differently.

In 2016, when the CPUC ultimately opposed AT&T’s attempt in the California legislature to kill its wireline obligations, Picker dissembled before voting in favor of giving AT&T what it wanted: he worried about preventing fiber upgrades – nonsense, AB 2395 had many faults but that wasn’t one – and talked about creating a technological road map first, something that would have required years to complete while the legislature would be voting in a matter of days.

It was common for Picker to take positions that aligned with the interests of AT&T and other major telecoms companies. He maneuvered a vote to allow telcos to pay fines to themselves when they fail to meet quality standards, he tried to kill an investigation of telco infrastructure and service quality, and he routinely said no to subsidies for independent broadband projects while finding no fault with similar grants to incumbents.

Picker’s most recent recital of AT&T talking points came during a workshop in Sacramento in May, when he questioned whether unserved Californians need wireline “broadband to the home”, because people can use mobile phones instead.

There’s no question that energy issues – near and long term – are the CPUC’s most pressing problems. Devastating wildfires and Pacific Gas and Electric’s bankruptcy can be directly linked to climate change. Picker was correct in putting energy at the top of his agenda. Being the odd man out on telecoms policy wasn’t helpful, but wasn’t a disaster either.

California has fewer worries about local property preemptions as FCC cedes ground in defence of wireless permit ruling

by Steve Blum • , , , ,

Monty python run away

Tactical retreat well describes much of the Federal Communication Commission’s defence of its heretofor sweeping rewrite of rules regarding local government pole rentals and permits for small(ish) cell sites. It goes to great lengths to explain that its bargain basement “safe harbor” price for permits and rental rates “is not a ceiling”.

It also backs down from what appeared to be a total preemption of publicly owned property located in the public right of way, limiting it to cases where “the property in question is controlled by the same government entity that controls the rights-of-way” and there’s a “‘temptation’ for governments to seek to ‘insulate conduct from federal preemption’ by ‘blending’ their regulatory and proprietary roles”.

The key question for Californian cities and counties is whether the FCC’s more tightly worded interpretation of its authority applies here. California law gives telecoms companies broad access to the right of way, and they don’t have to pay annual rent for the space they occupy. Except for upfront permit fees – which already must be cost-based under California law – telecoms companies use the right of way for free, and local governments can’t prevent them from doing so. Local discretion is limited to time, place and manner requirements. Cities do not own the right of way. Californian cities manage the logistics of accessing and sharing the right of way, but do not “control” it. It’s the difference between being a landlord and a traffic cop.

On the other hand, California law allows – arguably requires – local governments to act like a responsible landlord and charge market-based rents for the use of municipal property that they do own.

The worst case scenario for California is looking a lot better. The FCC’s shorter shot clocks for wireless permits do not have a practical effect here: the California legislature was, on the whole, even more generous to mobile carriers. Fees for services of all kinds, including permit processing, are limited to actual costs. Cities have robust processes in place to figure out what those are.

The question is whether the San Francisco-based federal appeals court considering the challenge to the September 2018 wireless ruling buys any of the FCC’s arguments. The FCC’s brief offers scant support for its property rights preemption. It cites a lower court case in New York where that concept was mentioned, and then goes through some awkward legal contortions to falsely imply that the judge specifically endorsed the idea.

Democratic FCC commissioner Jessica Rosenworcel’s observation that “it seems increasingly likely” that the courts will nix at least some elements of recent small cell rulings was prescient. A D.C. appeals court did just that on Friday, saying the FCC’s attempt to kill environmental and historical preservation reviews for small cells was “not logical and rational” and its decision making process was “arbitrary and capricious”.

It’s not going to look any better in San Francisco.

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

FCC small cell decision “not logical and rational” D.C. court rules

by Steve Blum • , , , ,

Spock look

The Federal Communications Commission’s March 2018 decision to scrap federal environmental and historical reviews for small cell sites was “arbitrary and capricious” according to the federal appeals court based in the District of Columbia, aka the D.C. circuit. In an opinion issued this morning, the D.C. circuit judges said “the commission failed to justify its confidence that small cell deployments pose little to no cognizable religious, cultural, or environmental risk”.

Today’s decision does not directly affect appeals of the FCC’s September 2018 wireless or August 2018 wireline rulings – those are being fought out in the ninth circuit federal appeals court in San Francisco. But it’s good news for the local governments that are challenging the FCC’s preemption of local ownership of poles and other infrastructure in the public right of way. They made the same top line argument – that the FCC acted arbitrarily and capriciously – that the D.C. circuit judges accepted today.

There is at least one key difference between the March FCC ruling, which was challenged by Indian tribes, and its August/September rulings. The March ruling directly involved federal environmental and historical preservation law, and the August/September rulings did not. The D.C. judges said “we owe no deference to the FCC’s interpretations of the [National Historic Preservation Act and National Environmental Policy Act]” because those laws are administered by another agency. On the other hand, they allowed as how “the FCC is entitled to deference to its reasonable interpretations of ambiguous provisions of the Communications Act”.

A major similarity between the two cases is the contention that the FCC didn’t do its homework, instead deciding in advance what the new rules should be, and then going through the motions of public review and comment before writing an argumentative ruling to justify what it intended to do in the first place. The D.C. judges agreed…

The Commission failed to justify its determination that it is not in the public interest to require review of small cell deployments. We therefore grant the petitions in part because the Order’s deregulation of small cells is arbitrary and capricious. The Commission did not adequately address the harms of deregulation or justify its portrayal of those harms as negligible. In light of its mischaracterization of small cells’ footprint, the scale of the deployment it anticipates, the many expedients already in place for low-impact wireless construction, and the Commission’s decades-long history of carefully tailored review, the FCC’s characterization of the Order as consistent with its longstanding policy was not “logical and rational.”

The ninth circuit judges in San Francisco will decide the challenge to the August and September decision on their own. It’s worth noting, though, that the D.C. circuit is generally reckoned to be more accepting of agency discretion than the ninth circuit. That was one of the reasons that the FCC colluded with wireless carriers to try to move the case elsewhere. If the D.C. judges didn’t accept the FCC’s sophomoric arguments, there’s even less chance that the San Francisco judges will.

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

Update: FCC limits the extent of its pole ownership preemption, as it tries to defend it against appeals

by Steve Blum • , , , ,

Update, 9 August 2019.

In its brief, the FCC backed down from what appeared to be a blanket assertion that all publicly owned property within the public right of way is the same thing as the public right of way. This preemption of local property rights only applies “when the property in question is controlled by the same government entity that controls the rights-of-way”, the brief said.

By that reasoning, if a city owns a light pole along a road controlled by a state agency such as Caltrans, it can charge a mobile carrier as much as it wants to use it. But the rent for another city pole, located just around the corner on a side street maintained by the city, would be limited to $270 a year. And that’s just a simple example. California has a complex web of jurisdictions, with federal, state, county, city, special district and tribal authority constantly overlapping.

The FCC brief also goes through considerable legal contortions to extend its preemption to publicly-owned electric utilities, even if those utilities don’t control the right of way in question. I’m still trying to unravel that.

Whatever else the FCC thinks it’s doing, it is not making things simpler for cities or mobile carriers.


The Federal Communications Commission defended its sweeping preemption of local government property rights, permitting authority and control of the public right of way in a (not so) brief filed last night with the San Francisco-based ninth circuit federal appeals court. Click here for the full set. At first glance, it appears to restate previous arguments made in its original orders and in subsequent court proceedings. It’s 187 pages, with nearly 700 pages of back up documents. I’ll have a summary on Monday, but if there are hidden gems I’ll post an update.

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

“Hunger games” duels for broadband subsidies proposed by FCC

by Steve Blum • , , , ,

Hunger games

Broadband subsidies from the Federal Communications Commission are paid for out of the Universal Service Fund" (USF) which, in turn, gets its money from taxes on telephone bills. The FCC runs four programs that way: the Rural Digital Opportunity Fund (formerly known as the Connect America Fund), the e-rate program that pays for broadband service to schools and libraries, the rural health care program, which does the same for hospitals, and the Lifeline program, which buys down service costs for low income households.

Altogether, $11.4 billion was collected for the four accounts last year. The FCC’s republican majority believes “capping the Fund overall will strike the appropriate balance between ensuring adequate funding…while minimising the financial burden on ratepayers”. The next step would be “prioritizing the funding among the four universal service programs and…evaluating the tradeoffs associated with these funding decisions”.

Right now, budgets and priorities for the four programs (and the taxes imposed) are set individually. Instead, the FCC wants to lump together all the broadband (and legacy telephone) subsidy programs, set a limit on the total funding and then direct the money according its own priorities. That would provoke mortal combat according to democratic commissioner Jessica Rosenworcel who said it would “unleash[] a fight for support between connecting kids in schools and hooking up hospitals” and called the proposal “the universal service hunger games”.

The FCC is taking reply comments from interested parties about its proposal. On Thursday, the California Public Utilities Commission went on record opposing it. Directly or indirectly, California backstops those programs with money from state taxpayers, and limiting or shifting federal dollars could raise costs here.

Another problem with USF that the CPUC points out is that it’s funded by taxes on old school voice service, but the money mostly goes towards broadband…

The FCC has explicitly declined to assess surcharges on broadband Internet access service even though almost all the USF programs subsidize only broadband services…The FCC should address this discrepancy by expanding the base of services to fund the USF, rather than continuing to rely inequitably on a shrinking number of ratepayers who purchase the assessed services that fund the USF.

On top of that, the FCC claims that broadband is an “information” service, rather than a “telecommunications” service. Continuing to subsidise it with taxes collected via telephone bills could become problematic.

Final reply comments are due on 26 August 2019.

FCC approves new broadband subsidy and data collection programs, but each ignores the other

by Steve Blum • , , ,

The Federal Communications Commission will be asking for comments on its plan to spend, at first, $16 billion and eventually $20 billion on rural broadband subsidies, with a minimum speed requirement of 25 Mbps down and 3 Mbps up. It’s also moving ahead with a new broadband availability data collection process, based on electronic map files, rather than spreadsheets. The two initiatives were approved at yesterday’s FCC meeting.

Both democratic commissioners – Jessica Roseworcel and Geoffrey Starks – objected to the republican majority’s blind acceptance of broadband availability data submitted by Internet service providers as a basis for deciding where subsidies should be spent.

Rosenworcel said in a statement that the new subsidy program relies on the same bad data as the old Connect America Fund program…

There’s something fundamentally wrong here. We do not start with maps. We do not start with data. In fact, take a look at the draft rulemaking before us and it barely mentions the fact that we have a separate proceeding we are voting on today involving maps.

In fact, this rulemaking rushes past that effort and simply proposes a successor to our existing Connected America Fund, distributing $16 billion dollars before any new data comes before this agency. Before any new maps are developed. I understand the impulse to move fast. I know that we should be working at warp speed to get modern communications to too many places that have waited too long for digital opportunity. So let’s do it. But let’s commit to doing it right.

This is putting the cart before the horse.

The new availability data collection process should eventually result in more accurate maps, but there’s no firm timeline for it to get underway. Rosenworcel’s objections are a good example of another big problem with it: collecting the data is one thing, but getting agencies to upgrade their systems and their analytical skills to effectively use it is a problem that’s yet to be solved.

FCC’s San Francisco broadband preemption appealed

by Steve Blum • , , , ,

San Francisco is taking the Federal Communications Commission to court. Again. On Monday, the City and County of San Francisco filed a challenge to the FCC’s preemption of its broadband access ordinance with the ninth circuit federal appeals court, also based in San Francisco.

The ordinance requires building owners to allow tenants to buy broadband service from the provider of their choice. Providers are able, under the ordinance, to use any available wiring inside the building that’s owned by the landlord to deliver such service. The FCC ruled earlier this month that San Francisco can’t tell an ISP that’s already using a given wire to deliver service that it has to share it with another ISP. San Francisco’s initial response amounted to duh.

But the ordinance is still under threat, because the FCC continues it’s look into the matter, and could preempt the whole thing. So filing a federal court challenge could be one way for San Francisco to head off any further FCC action.

At this point, San Francisco isn’t saying why it thinks the FCC is out of bounds, except to say it’s aggrieved and to make the ritual claim that the ruling is “arbitrary and capricious”…

San Francisco was party to and actively participated in the underlying proceeding before the FCC that led to the Order, and is aggrieved by the Declaratory Ruling part of Order within the meaning of [federal law].

San Francisco seeks review of the Declaratory Ruling part of the Order because it: (i) was issued in excess of the FCC’s statutory authority; (ii) is arbitrary and capricious and an abuse of discretion; and (iii) is otherwise contrary to law, including the United States Constitution.

San Francisco respectfully requests that this Court hold unlawful, vacate, enjoin and set aside the Declaratory Ruling part of the Order, and grant such other relief as this Court may deem just and proper.

Another ninth circuit case that San Francisco and a long list of other cities and counties are pursuing is the challenge to last year’s preemption of local pole ownership and public right of way control by the FCC. Yesterday, the FCC ask for month’s delay in the case, which was summarily rejected by the ninth circuit. It’ll have to submit it’s reply to the case against it next month.

Money talks or AT&T broadband walks, CPUC study shows

by Steve Blum • , , , ,

Haas att broadband study

How much money you and your neighbors make determines whether or not you have access to modern broadband service and infrastructure. The network practices study released on Monday by the California Public Utilities Commission cites conclusive evidence of aggressive redlining by AT&T. It is a major – and actionable – report that makes the case against the two companies, but its conclusions come as no surprise.

A study done in 2017 by U.C. Berkeley’s Haas Institute for a Fair and Inclusive Society found that…

The median household income of California communities with access to AT&T’s fiber-to-the-home (FTTH) network is $94,208. This exceeds by $32,297 the $61,911 median household income for all California households in the AT&T wireline footprint.

On the other hand, the median household income of homes served only by AT&T’s 1990s legacy DSL technology is $53,186, according to the Haas Institute. The CPUC study found the same divide between haves and have nots…

Whether deliberate or not, AT&T’s investment policies have tended to favor higher-income communities, and have thus had a disproportionate impact upon the state’s lowest income areas. For example, the weighted average 2010 median annual household income for wire center serving areas that had been upgraded with fiber optic feeder facilities to support broadband services was $72,024, vs. only $60,795 for wire centers without such upgrades Using 2010 US Census data, we find a clear inverse relationship between household income and all of the principal service quality metrics.

The report leaves it up to the reader to decide if AT&T’s income-based redlining is deliberate, but makes it clear that AT&T’s financial strategy is aimed at extracting the maximum dollars possible from communities trapped in legacy monopoly systems…

Persistent disinvestment, extensive affiliate transactions at self-serving transfer prices, extraordinarily large rate increases, and deteriorating service quality all point to “harvesting” as AT&T California’s overarching strategy for its legacy services and customers…The potential gains that AT&T California can realize by raising prices and curtailing investment and maintenance expenditures far exceed any financial penalties it might suffer from persistently poor service quality.

AT&T is not alone. I found a similar pattern in Charter Communications’ investment choices. Until the CPUC forced it to do otherwise, it held low income communities captive in analog-only systems that offered limited television service at exorbitant prices.

When Californians are trapped in monopoly telecom markets, AT&T and Frontier take the money and run

by Steve Blum • , , , ,

Leaning pole

Competition matters. When telephone or cable companies face a competitive threat – either from each other or from an independent Internet service provider, they respond by upgrading infrastructure and service, and by cranking up the volume on promotional discounts. The converse is true: no competition means no infrastructure investment or service upgrades or marketing love.

That’s a lesson I’ve learned time and again with municipal and independent broadband projects. When a city or an independent credibly threatens to enter the market, incumbents respond. Santa Cruz is a good example. When the City of Santa Cruz partnered with Cruzio, a local ISP, to build a muni fiber-to-the-premise system, Comcast upgraded its infrastructure. The deal didn’t come to fruition, but Cruzio’s subsequent solo fiber build out gave AT&T an incentive to upgrade neighborhoods with sufficient revenue potential to FTTP status.

It’s also a major conclusion of a report just released by the California Public Utilities Commission. It shows competition determines to a large degree where AT&T and Frontier Communications invest what money they’re willing or able to spend in California. According to the study, Frontier allows its facilities to decay in communities where it has monopoly control…

Wire centers with the smallest decrease in POTS lines fared far worse in terms of most service quality metrics. The deterioration in service quality in these small wire centers, generally serving communities with the fewest number of competitive providers, suggests that the company has been devoting more of its resources and efforts to those communities most impacted by competition for traditional POTS services.

The study found the same pattern in AT&T’s territory, concluding that it’s pursuing a “harvesting strategy” – a polite way of saying milking the cash cow by relying “upon successive price increases and customer inertia to maintain its declining [legacy telephone] revenue stream”, despite continually worsening service quality.

The study recommends increasing the amount of fines imposed by the CPUC on AT&T and Frontier for substandard service, as a substitute for competition – make the fines match the losses that the two companies would otherwise suffer if competitors were present. That’s difficult because 1. figuring out the proper amount is a fraught exercise, and 2. thanks to cynical maneuvering by outgoing president Michael Picker, the CPUC doesn’t actually fine telcos. It lets them keep the money so long as they claim they’re spending it on “incremental” service improvements.