The alarm industry is asking the FCC to halt 5G deployment and force AT&T to operate outdated 3G networks through the end of 2022. The Commission should at once dismiss the alarm industry's self-serving petition, which seeks government intervention to push off its own business costs onto an adjacent market provider. The agency should take a forward-looking approach and promote the 3G-to-5G transition, not needlessly stall it.
The FCC lacks legal authority to mandate 3G network delivery of private mobile IoT services. Those service offerings are individually negotiated with alarm companies, and they are not subject to common carriage rules. Also, any attempt to mandate 3G enterprise services beyond February 2022 effectively would rewrite existing contracts between AT&T and alarm companies. And it would be a grave mistake for the Commission to choke the much-needed supply of spectrum for capacious and fast-speed 5G. Prompt repurposing of spectrum from 3G to 5G is mission critical to achieving the full technological and economic benefits of next-generation wireless networks.
The retirement of single digit megabytes-per-second speed 3G networks has been widely anticipated for a decade. And AT&T provided three years advance notice of plans to retire its 3G Universal Mobile Telecommunications Service (UMTS) network in February 2022. It currently dedicates 10 MHz of its licensed spectrum in the 850 MHz band to a small and dwindling number of 3G device users whose activities use only about 4% of its 3G network capacity. AT&T plans to repurpose that valuable spectrum by using it to provide uplink communications in connection with $23 billion worth of C-Band spectrum and thereby cover 200 million Americans with 5G by year-end 2023.
But the alarm industry is seeking to avoid or delay its costs in upgrading to next-generation mobile technologies by having government push back 3G UMTS network retirement to the end of 2022. I wrote about this matter in my September 2021 Perspectives from FSF Scholars: "AT&T's 3G Sunset Will Make Way for Speedy 5G Services: Technology Transitions Shouldn't Be Delayed by Special Pleading."
As explained in my Perspectives, the Commission has no legal authority under Title II of the Communications Act to mandate 3G network continuation. The private mobile IoT services that AT&T offers to alarm companies do not meet the definition of common carriage services. AT&T's dealings with those sophisticated business enterprises are on customized terms arrived at through arms-length negotiations. These private carriage mobile services are not mass market retail services and they are not public offerings of communications to all endpoints through the public switched telephone network.
According to an October 28 ex parte filing with the FCC, AT&T's contracts with major alarm companies apparently require operation of 3G network operations only "until December 31, 2021" and thereafter expressly reserve AT&T's right to "terminate 3G … at any time in its sole discretion." The Commission has no legal authority to override those contractual terms. In fact, Supreme Court and D.C. Circuit precedents appear to bar the Commission from using its Article III power over spectrum licenses to prolong 3G network operations. For instance, the D.C. Circuit's 2012 decision in Cellco Partnership v. FCC recognized that "the Commission lacks authority to invalidate licensees' contracts with third parties," and also that "Title III gives the Commission no authority to make 'fundamental changes' to the terms of existing licenses." Any Commission mandate for forced operation of AT&T's 3G network would invalidate key contract terms and it also would amount to a fundamental change in terms for AT&T's 850 MHz spectrum licenses.
Two decades ago, the alarm industry tried unsuccessfully to delay the retirement of analog wireless networks. The Commission rightly rejected any forced delay in the analog-to-digital transition. Now the agency ought to reject any forced delay in 3G-to-5G transition.
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