FCC's Proposed Update to Over-the-Air Device Rule Would Boost 5G

The FCC is taking public comments on its proposal to facilitate 5G fixed wireless infrastructure by updating its rules for over-the-air-reception devices (OTARD). If adopted, the Commission's OTARD modernization proposal could clear away obstacles to placement of small fixed wireless infrastructure that is vital to deploying next-generation services. 

Based on Section 207 of the Telecommunications Act of 1996, the Commission's OTARD rule prohibits State and local governments as well as private entities such as neighborhood and condo associations from imposing restrictions on installation, maintenance, or use of over-the-air reception devices. The rule applies antennas installed "on property within the user's exclusive use or control" or on property where the user has an ownership or leasehold interest. 

A 2000 order by the Commission applied the OTARD rule to antennas used for fixed wireless signals, but it expressly excluded "hub or relay antennas." The Commission's proposal would "extend the OTARD rule to cover the hub and relay antennas that previously were excluded from the OTARD framework."

Correctly, the Commission's proposed rulemaking recognizes: "The wireless infrastructure landscape has since shifted toward the development of 5G networks and technologies that require dense deployment of smaller antennas across provider networks in locations closer to customers." Sensibly, the Commission anticipates that its proposal, if adopted, would "allow fixed wireless providers to deploy hub and relay antennas more quickly and efficiently" and "help spur investment in and deployment of needed infrastructure."

The Commission's OTARD modernization proposal constitutes an important step in ensuring rapid deployment of 5G to all Americans and in furthering the U.S. position in the global race to 5G. The Commission should proceed full speed ahead on its worthy OTARD proposal. 

Memorial Day 2019

This Memorial Day message marks my thirteenth consecutive one – and it's no coincidence that the Free State Foundation is now in its thirteenth year. I suppose that's another way of saying, as I said last year, that this tradition continues to exert its pull on me as I ponder the true meaning of Memorial Day.

In little more than a week – on June 6 – America will commemorate the 75^th anniversary of D-Day, the day when some 156,000 American, British, and Canadian forces landed on five beaches along a 50-mile stretch of the heavily fortified coast of France’s Normandy region. The invasion, one of the largest amphibious military assaults in history, was the beginning of the end of World War II. In April 1945, Germany was defeated and the war in Europe was over.

Here is Supreme Allied Commander General Dwight David Eisenhower's message upon the commencement of the invasion:

"Soldiers, Sailors and Airmen of the Allied Expeditionary Force: You are about to embark upon the Great Crusade, toward which we have striven these many months. The eyes of the world are upon you. The hope and prayers of liberty-loving people everywhere march with you.

Your task will not be an easy one. Your enemy is well trained, well equipped and battle-hardened. He will fight savagely. But this is the year 1944! The tide has turned! The free men of the world are marching together to victory!

I have full confidence in your courage, devotion to duty and skill in battle. We will accept nothing less than full victory!

Good luck! And let us all beseech the blessing of Almighty God upon this great and noble undertaking."

About 2500 Americans died in the invasion on June 6 alone.

During World War II, the United States lost over 400,000 soldiers, and, of course, many thousands more men and women suffered grievous injuries.

We shouldn't need "special" anniversaries to recall – and to embed deep in our common memory – all those American soldiers who have given their lives defending freedom and liberty here at home and abroad.

In his Farewell Address, speaking of D-Day, Ronald Reagan said this: "If we forget what we did, we won't know who we are. I am warning of an eradication of that - of the American memory that could result, ultimately, in an erosion of the American spirit."

So, on this Memorial Day of this 75^th anniversary of D-Day, all Americans, regardless of race, creed, sex, or political affiliation, should pause to remember those who paid the ultimate price to preserve our freedom to speak freely and pray – or not – as we wish.

And, on this Memorial Day, if we do remember, perhaps we will be more likely to appreciate, even embrace, those ideals that we share in common as Americans and that should bind us together. And be less likely to cast stones on the day after.

As Cicero put it over two thousand years ago: “The life of the dead is placed in the memory of the living.”

I wish you and your family the best for a safe, happy, and meaningful Memorial Day!

PS – My past Memorial Day messages are here: 2018, 2017, 2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, 2007

Ericsson Report Touts Consumer Realities About the 5G

Ericsson has released a report titled "5G Consumer Potential: Busting the Myths Around the Value of 5G for Consumers." Based on research that included over 35,000 online interviews worldwide, 6 focus groups, and 22 expert interviews, the report counters myths about 5G mobile network technologies with information indicating strong consumer awareness, interest, and expectations regarding 5G performance capabilities, future uses, and value. 

Jim Tozzi and "Regulation of Social Media"

Jim Tozzi, one of the nation's foremost experts on regulation, and a "founder" of the notion of centralized executive branch regulatory review, has started a new site to track developments relating to regulation of social media. His new page is here.

This is part of Jim's long-standing efforts at the Center for Regulatory Effectiveness to track key developments in the administrative state and to foster regulatory reform.

As I say, Jim is one of the "founders" of the modern regulatory reform movement, so whatever he is doing at any time bears watching - and certainly, now, no one denies that potential regulation of social media bear watching.

FCC to Hold Summit on Implementation of anti-Robocall and anti-Spoofing Tech

 On July 11, FCC Chairman Ajit Pai will convene a summit on the voice services industry's implementation of SHAKEN/STIR, a new technology designed to authenticate caller ID and so prevent illegal robocalls and spoofed caller ID calls. Information about the summit is provided in the FCC's Public Notice and press release.

David Redl: A Dedicated Public Servant

Like many in Washington and elsewhere, I was caught by surprise by David Redl's resignation yesterday from his position as Administrator of the National Telecommunications and Information Administration. I am very sorry to see him go. David is a long-time dedicated public servant, with extensive experience and expertise in the communications law and policy field.

From where I sit, David did an excellent job as NTIA Administrator. One of his jobs was to "manage" the government's use of its spectrum. Especially now, with ever-increasing demands for spectrum by the private sector in connection with the deployment of 5G, and competing demands from government users, his job was not an easy one. But David did not seek out easy jobs, but rather ones in which he could make a difference.

The nation owes him a debt of gratitude.

And, speaking of gratitude, I was personally grateful that David delivered keynote addresses at the Free State Foundation's last two annual telecom policy conferences. You can find his keynote addresses for the 2019 conference here and for the 2018 conference here.

A quick perusal of either, or both, will reveal the important work in which David was engaged, and the relish with which approached serving the country.  

Considering Sprint's Decline and the T-Mobile/Sprint Merger

Did you see Sprint's latest financial reports? Here is the Wall Street Journal's May 7 story, "Sprint Reports Steepest Decline of Cellphone Customers in Years," which contains the gory details.

In short, Sprint lost far more postpaid customers than anticipated. As the WSJ lead put it: "Sprint lost 189,000 of its most lucrative phone connections in the first three months of the year, the steepest such decline since at least 2015." The net loss attributable to Sprint was $2.17 billion for the quarter. You can peruse the entire report for more facts and figures.

I'm willing to stipulate, of course, that in an ideal world – or more to the point here, in an ideal market – the existence of more viable competitors is preferable to the existence of fewer viable competitors. I understand that.

But, unlike the proverbial wheat market used to explain supply and demand in an Econ 101 course, the telecommunication marketplace, of which wireless is a segment, is not a textbook teaching ideal. It is a real-world marketplace with a market structure that necessarily is influenced by – if not dictated by – the tremendous investment and financial resources required to build-out and expand ubiquitous network facilities.

So, Sprint's ongoing financial difficulties have real-world financial and marketplace implications. Sprint's chief executive said, in the aftermath of the latest earnings report, that absent approval of the T-Mobile/Sprint merger, Sprint may have to narrow its coverage.

I take no pleasure in the travails of any person – or any company.

Nevertheless, it would be blinking reality for the Department of Justice and the FCC not to take account of Sprint's financial difficulties in the context of considering the T-Mobile/Sprint merger. In initial comments filed in August 2018 in the FCC's proceeding to review the proposed merger, I (along with my Free State Foundation colleague, Seth Cooper) said this: "It appears unlikely that T-Mobile and Sprint separately would have the capital resources necessary to invest in and timely deploy nationwide 5G networks that could compete effectively with AT&T and Verizon."

And in the September 2018 reply comments this: "Sprint’s recent financial history and analysts’ projections reveal that a standalone Sprint would likely be less competitive and perhaps not even viable in the 5G era."

Sprint's financial condition hasn't improved since those FCC comments were filed. Nor have its prospects as a sustainable wireless competitor in the broadband marketplace.

With all the focus, rightly, on enhancing the U.S.'s prospects for 5G leadership, and aside from all the other reasons, it would be foolish for U.S. authorities to rely on formulaic shibboleths, such as "no 4 to 3 mergers," when the sustainability of one of the four increasingly is in doubt.

FCC Commissioner O'Rielly: Government Wholesale 5G Network Would Be 'Preposterous'

FCC Commissioner Michael O'Rielly has been an articulate advocate in explaining why a government-sponsored 5G network doesn't make sense. The claim by those pushing such a notion seems to be that the government network would make available capacity on a "wholesale" basis to private networks.

In his just-released blog, "Substantive Objections to a Government 5G Wholesale Network," Commissioner O'Rielly explains, once again, why in his view, "the entire effort is jam-packed with insurmountable problems."

That's my view too.

If you haven't already read Commissioner O'Rielly's blog, it's worthwhile doing so.

Regional Sports Networks, the DOJ, and the First Amendment

Sinclair Broadcasting Group has agreed to buy 21 regional sports networks and Fox College Sports from Disney.

As predictably as a proverbial knee-jerk, some competitors in the video marketplace quickly announced their opposition to the deal. Matt Polka, CEO of America's Communications Association, a trade group representing smaller cable operators and telecommunications providers, has already called on the Department of Justice to reject the transaction.

I'll say right up front that I have questions regarding whether the DOJ's Antitrust Division, at least when it comes to the communications, information services, and video markets, appreciates the extent to which ongoing transformations and convergences are altering the competitive landscape so that traditional legacy product and market definitions no longer hold.

I certainly don't doubt that those at the Antitrust Division are acting in good faith. But I hope the Department will not lightly dismiss the judicial rebuke it received when U. S. District Court Judge Richard Leon refused its request to block the AT&T/Time Warner merger. The trial court's decision, affirmed by the D.C. Circuit's recent opinion in United States v. AT&T, Inc., repeatedly faulted DOJ for refusing to credit the "real-world evidence" of the "tectonic" changes occurring in the video marketplace. Foremost among these changes is the quick rise of major online video streaming services like those offered by Netflix, Amazon, Hulu, and the like. And the court also took into account the extent to which digital web giants like Google and Facebook increasingly are cutting into advertising revenues heretofore garnered by traditional video distributors such as cable operators and broadcasters.

Regarding a current FCC proceeding to determine whether, pursuant to Section 623 of the Communications Act, "effective competition" exists in particular local video markets so as to relieve Charter from rate regulation, just last week I said this in "The Metaphysics of Video Competition":

"This one 'effective competition' determination proceeding demonstrates yet again why Congress needs to update the Communications Act. Whatever Congress may have been thinking when it adopted the "effective competition" provision in 1992, it certainly didn’t have in mind today's myriad – and still proliferating – Internet video streaming services. I need not name them all here or say more here about their competitive impact."

I understand that the FCC, in the "effective competition" proceeding, is acting in the context of the Communications Act's provisions which, aside from the outcome of any particular proceeding, are in need of updating when it comes to regulations applicable to the video marketplace. That's why I said:

"A good place at least to start considering an update of the Communications Act video provisions is Rep. Steve Scalise's deregulatory 'Next Generation Television Marketplace Act,' first introduced in 2011. The bill made sense then and it makes even more sense now, when the video marketplace is much more competitive today than it was eight years ago."

But now back to the Sinclair-Disney transaction and Sinclair's acquisition of the regional sports networks. I hope DOJ will be cognizant of the extent to which consumers already have – and increasingly so – choices available with regard to both video distributors and video programs.

It's no surprise that there will be claims of potential foreclosure, or diminishment of competition, by those seeking to prevent consummation of a merger or acquisition of assets, or at least to have conditions imposed. That's as sure a bet as wagering that the sun will rise in the East tomorrow. Most often these claims come from competitors, or those purporting to represent consumers, who forget that the antitrust laws are intended to enhance consumer welfare, not protect competitors.

One final note: It is likely that the Antitrust Division will be importuned to interfere with the Sinclair-Disney transaction based on the claim that the regional sports network programming somehow is "must have" programming – presumably meaning, in this age of media abundance, that a platform that doesn't offer the very same sports programming at the very same time, and in the very same format, ipso facto is rendered non-competitive. No matter that there is more sports programming available on more platforms than ever before.

In the context of commenting over the years on the FCC's program access regulations, in essence a form of compelled speech that in and of themselves raise First Amendment concerns, I have said that FCC enforcement actions relying on agency-defined "must-have" categories of programming, such as sports networks, amount to content-based speech controls.

Were the Department of Justice to base its actions on judgments regarding whether particular programming is or is not "must have" content, the First Amendment concerns are not materially different than they are cross-town when the FCC engages in such content-based determinations. Absent a video marketplace in which consumers' choices of viewing platforms and programming are demonstrably shrinking, rather than expanding, I'd prefer to leave the choice of what programs consumers "must have" to the marketplace, rather than the government.

Such an approach would be better for consumers – and for respecting the First Amendment as well.

The FCC Should Curb Cap-Busting Fees Levied on Cable Operators

The FCC is considering a proposal to clarify the legal limits on the amount of local franchising fees that can be charged to cable operators. Some local governments have evaded the limits by charging fees for access to public rights-of-way on top of the five percent franchise fee they are permitted to charge cable operators.

The Commission should stop such wrongful duplication of fees – which ultimately redound to the detriment of residential and business consumers in the locality.

The Commission should declare that rights-of-way fees are within the scope of the Cable Act's five percent cap on franchising fees that may be imposed on cable operators. This is important because cable operators are also broadband Internet service providers. Limiting excessive cable franchise fees will free up financial resources for investment in deployment of next-generation networks. 

Section 621 of the Cable Act recognizes state or local franchising authorities (LFAs) may charge cable operators a franchising fee for constructing and operating a cable system. But Section 621 also includes limits that state and LFAs must follow. The statute caps the franchising fee at five percent of the cable operator's annual gross revenue. (Prior blog posts as well as the Free State Foundation's reply comments in the cable LFA reform proceeding explain why the Commission should adopt its proposed "mixed-use" and "in-kind" contribution rules.) 

In addition to adopting its proposed rules clarifying Section 621, the Commission should ensure that LFAs do not stack public rights-of-way fees on top of five percent franchising fees, thereby evading the statutory cap. Inherent in the concept of cable franchises is the authority to access public rights-of-way for distributing video content to subscribers within franchise territories. This is evident from the text of Section 621(a)(2): "Any franchise shall be construed to authorize the construction of a cable system over public rights-of-way, and through easements, which is within the area to be served by the cable system and which have been dedicated for compatible uses" (emphasis added). 

To be sure, states and local governments possess authority to charge fees or taxes on service providers that access public rights-of-ways. And the Cable Act Section 622(g)(2)(A) excludes from the definition of a "franchise fee" "any tax, fee, or assessment of general applicability." But the Cable Act recognizes broad franchising authority and the exceptions should be construed narrowly – particularly when it would avoid an absurd result such as duplications of fees. There is an overlap between cable franchise fees and public rights-of-way fees. An April 19 ex parte filing by NCTA, for example, cites California's simultaneous taxing of cable operators right to access public rights-of-way and imposing of five percent franchise fees for that same right. States and LFAs ought to be prohibited from imposing two or more sets of fees, however they denominate the ways, as a means of evading the franchise fee limits set by Congress. 

The Commission should declare that fees or taxes for public rights-of-way access by cable operators must be included within the scope of the total franchise fee amount – and therefore subject to the five percent statutory cap. This commonsense interpretation of Section 621 would prevent the statutory cap on franchise fees from being undermined. 

The Commission previously has highlighted its actions "reducing regulatory barriers to the deployment of wireline and wireless infrastructure." Fees that exceed the statutory cap constitute a regulatory barrier to broadband infrastructure deployment. If the Commission curbs duplicate fee charges, this will allow cable operators to use the freed-up funds for deployment of next-generation broadband networks. 

Small Claims Court for Copyright

Rep. Doug Collins, Ranking Member of the House Judiciary Committee, and Rep. Hakeem Jeffries, Chairman of the House Democratic Caucus, introduced the Copyright Alternative in Small-Claims Enforcement (CASE) Act. This bipartisan legislation establishes the Copyright Claims Board at the Copyright Office to make it easier and less expensive for independent creators, such as photographers, songwriters and graphic artists, to better defend their intellectual property from theft.

Read more about the bill here.