FCC Issues 2.5 GHz Spectrum Licenses, But Agency Still Needs Auction Authority

On February 29, 27, and 1, the FCC granted long-form applications to wireless providers, including T-Mobile, for several thousand spectrum licenses in the 2.5 GHz band won in Auction 108.  

The results of Auction 108 were announced way back in September 2022. Yet the Commission's authority to conduct spectrum license auctions lapsed in March 2023, and Chairman Jessica Rosenworcel has determined that the lapse of that authority prevented the agency from issuing those licenses. At the end of last year, Congress passed the 5G Sale Act, conferring on the FCC a 90-day window to grant licenses won in Auction 108. The Commission's February orders granting the 2.5 GHz band licenses were based on the Act.

 

It is welcome news that parties who successfully bid on spectrum licenses at auction receive the licenses they won and paid for. Also welcome is the news that more mid-band licensed spectrum finally will be put into use for commercial wireless services as a result of Auction 108. However, the lapse in FCC spectrum license auction authority remains, and there also remains a shortage of licensed spectrum for supplying growing wireless data demands on 5G and future 6G networks. Spectrum allocation and harmonization by the NTIA, FCC, and other agencies is a priority. But it also is necessary that Congress spectrum license auction authority to the Commission. 

 

For more on what Congress needs to do, see Senior Fellow Andrew Long's July 2023 blog post, "Congress Should Reinstate the FCC's Spectrum Auction Authority," as well as his August 2023 blog post, "Commissioner Carr to Congress: Renew FCC's Auction Authority."

Smaller Networks Marshall the Evidence for Broadband Market's Competitiveness

A report by ACA Connects – included in a February 22 ex parte filing with the FCC – provides a window into the competitiveness of the broadband market from the vantage point of medium and smaller providers. Members of ACA Connects collectively serve nearly 32 million households – or about 25% of all U.S. households – including 7.3 million households in rural communities – or about 29%.

Insightful data points about communities served by ACA members include the following:

• "Members reached 31% more households via FTTH over the last year, a rate far higher than their overall increase in coverage."
• "96% of households have two or more fixed broadband options—and 85% have three or more options."
• "Over a third of all households (37%) in areas served by ACA Connects Members have access to gigabit broadband service."
• "The ACA Connects Members increased gigabit service availability in [] rural communities from 24% in 2022 to 33% in 2023." 

The ACA Connects report also includes figures about trends in the wider broadband market. This includes a breakdown of the share of U.S. households with competitive presence by technological capabilities of 100/20+ Mbps. According to FCC and Cartesian data for 2022-2023, almost 95% of households are in census blocks where there is an actual or potential presence of a cable, fiber, or licensed fixed wireless access (FWA) broadband provider offering speeds of 100/20+ Mbps. For 89.1% of households, a cable provider offering those speeds has a competitive presence, for 49.7% a fiber provider has a competitive presence, and for 39.6% a licensed FWA has a competitive presence. While those figures are higher than actual access figures for households, there are strong pro-deployment and pro-competitive trends. Back in 2017, only 69% of households had access to a provider offering 100/20+ Mbps, with a cable/fiber/licensed FWA competitive presence breakdown in 2017 of 59.3%/19.4%/1.7%.

 

The ACA Connects report was filed with an ex parte regarding the FCC's proposal to reclassify broadband Internet services as Title II telecommunications services and subject them to public utility regulation, including conduct-based restrictions that could eliminate consumer choice for reduced pricing options such as usage-based billing or free-data mobile offerings.

 

In December 2023, the Free State Foundation filed comments opposing the FCC's Title II reclassification proposal. And in January of this year, FSF filed reply comments. If the Commission adopts its proposal, the harm to private market investments and the ability to generate returns on future investments would come to all broadband providers, with small and medium providers almost certainly being hit the hardest. 

Three Weeks from Today! FSF's Premier Policy Conference - Register Now!

REGISTER NOW!

The Free State Foundation will hold its Sixteenth Annual Policy Conference on March 12, 2024, at the National Press Club in Washington, DC. This annual conference is widely acknowledged to be one of the nation's premier law and policy events.

 

As always, a truly outstanding lineup of senior officials and prominent experts from the FCC, other government agencies, industry, academia, and think tanks will discuss and debate the most important communications and Internet policy issues of the day. Topics will include net neutrality, broadband subsidies, ACP extension, USF reform, spectrum reform, the First Amendment and free speech, and more!

 

Confirmed Speakers Include:

 

Robert Branson – President and CEO, Multicultural Media, Telecom and Internet Council (MMTC)

 

Brendan Carr – Commissioner, Federal Communications Commission

 

Michelle Connolly - Professor of the Practice, Economics Department, Duke University, and member of the Board of Academic Advisors of the Free State Foundation

 

Seth Cooper – Director of Policy Studies and Senior Fellow, Free State Foundation

 

David Chorzempa - Vice President & Associate General Counsel, AT&T

 

Mignon Clyburn - Former Commissioner, Federal Communications Commission, and Principal, MLC Strategies, LLC

 

David Don - Senior Vice President, Public Policy, Comcast Corporation

 

Scott Harris – Senior Spectrum Advisor, National Telecommunications and Information Administration (NTIA)

 

Blair Levin – Non-Resident Senior Fellow, Brookings Metro, and Policy Analyst, New Street Research

 

Andrew Long – Senior Fellow, Free State Foundation

 

Randolph May – President, Free State Foundation

 

Michael O’Rielly – Former Commissioner, Federal Communications Commission, and Adjunct Senior Fellow, Free State Foundation

 

Jeffrey Rosen - Former Acting Attorney General and Deputy Attorney General of the United States, and former General Counsel and Senior Policy Advisor at the White House Office of Management and Budget 

 

Nathan Simington – Commissioner, Federal Communications Commission

 

Registration is complimentary, including continental breakfast and lunch. But space is always limited. You must register to attend!

Register Now!

 

#FSFConf16

Free State Lawmakers Debate Data Privacy Legislation

Maryland soon could join the not-so-exclusive club for states that have forged divergent data privacy regulatory paths. Last month, New Jersey became the fourteenth state (and the first this year) to enact a comprehensive data privacy law, a development that I highlighted in a January 2024 post to the Free State Foundation's blog. Yet another bill awaits the signature of New Hampshire Governor Chris Sununu.

As I detailed most recently in "More States Compound the Dreaded Privacy 'Patchwork' Problem," a July 2023 Perspectives from FSF Scholars, the longstanding lack of a federal data privacy regime – specifically, one that preempts inconsistent state-specific approaches – has fostered an unworkable situation that creates compliance headaches for companies and confusion for consumers.

Hearings on the Maryland Online Data Privacy Act of 2024 (the Act) were held on February 13, 2024, by the House Economic Matters Committee (House Bill 567) and on February 14, 2024 by the Senate Finance Committee (Senate Bill 541).

The Act establishes a familiar set of consumer rights: to know that personal data is being collected; to access, correct, delete, and receive a copy of personal data; to obtain a list of the categories of third parties to which personal data is disclosed; to opt out of the processing of personal data for targeted advertising and automated profiling; and to opt out of its sale.

Perhaps most notably, the Act goes further than other state laws in limiting the personal data that companies may collect – that is, "data minimization" ("A controller shall … [l]imit the collection of personal data to what is reasonably necessary and proportionate to provide or maintain a specific product or service requested by the consumer to whom the data pertains.")

On its face, the Act does not create a private right of action. As was the case with the New Jersey law reference above, however, the Act's draft language has prompted concerns that it "do[es] not explicitly provide for exclusive Attorney General enforcement" (emphasis added). Specifically, Section 14-4613, which defines a violation of the Act as "[a]n unfair, abusive, or deceptive trade practice … [s]ubject to the enforcement and penalty provisions contained in Title 13 of this article," also ambiguously asserts that it "does not prevent a consumer from pursuing any other remedy provided by law."

Breaking from the approach embraced by other states, and thus further complicating compliance for companies, the Act does not provide businesses with an opportunity to cure alleged violations.

If enacted, the Act would go into effect on October 1, 2024.

Court Selected to Hear Legal Challenges to FCC's Digital Discrimination Order

According to a February 9 order by the U.S. Judicial Panel on Multidistrict Litigation, several legal challenges against the FCC's November 2023 Digital Discrimination Order will be consolidated and heard before the 8th Circuit Court of Appeals. Although all acknowledge that Section 60506 of the Infrastructure Investment and Jobs Act of 2021 authorizes the Commission to adopt rules prohibiting intentional digital discrimination of access to broadband Internet services based on one's membership in a protected class, the Commission's Order exceeds the agency's statutory authority by imposing unintentional disparate impact liability on broadband Internet service providers.

In March 2023, the Free State Foundation filed public comments in the Commission's digital discrimination proceeding addressing the legal authority conferred on the Commission:

The text of the Infrastructure Act requires an intent-based definitional standard for digital discrimination. Section 60506(b) authorizes the Commission to adopt rules that prevent digital discrimination "based on" the specific categories of income level, race, ethnicity, religion, or

natural origin. The Infrastructure Act's inclusion of the words "based on" in connection with suspect or prohibited classifications and – most significantly for purposes of statutory interpretation – the absence of any broader catchall terms such as "results in" or "otherwise

adversely [a]ffects" indicates that proof of intent is a necessary element of any successful claim of "digital discrimination." 

Congress undoubtedly also was aware of Supreme Court precedents regarding the use of catchall terms to express intent when it enacted the Infrastructure Act and declined to include in the statute any such catchall terminology. As a result, Section 60506 should be understood as conferring no authority on the Commission to adopt an unintentional disparate impact standard for digital discrimination in broadband deployment.

 

Given recent developments in Supreme Court jurisprudence, particularly the emergence of the major questions doctrine, the Commission may not be able to rely on Chevron deference to prop up the agency's imposition of unintentional disparate impact liability. The Free State Foundation's April 2023 reply comments addressed this point:

We agree with comments that the Commission's interpretation of Section 60506 is limited by the major questions doctrine. As explained by the Supreme Court in West Virginia v. EPA (2023), the doctrine holds that there are certain "extraordinary cases" involving decisions of such "political and economic significance" that a "clear congressional authorization" by Congress is required for the agency to exercise the powers it claims. Section 60506 does not contain clear congressional authorization for redrawing the regulatory landscape of broadband Internet services under the Communications Act… The broader the extent to which the Commission's rules impose liability on ISPs and the more onerous the restrictions and obligations they impose on the details of deployment undertakings, the more likely it is that such rules would be of vast political and economic significance. 

FSF's reply comments concluded if the Commission imposed disparate impact liability that the agency's new regulatory apparatus would more likely be considered an extraordinary case that would be unlawful under the major questions doctrine.

Cable Wireless MVNOs Set for Further Growth in 2024

Cable wireless mobile virtual network operators (MVNOs) are important component of the effectively competitive wireless communications market. The two largest cable MVNO services – Comcast's Xfinity Mobile and Charter's Spectrum Mobile – have been in operation only a handful of years. Although their subscribership is far below the three major mobile wireless providers T-Mobile, Verizon, and AT&T, cable MVNOs have made modest but steady gains ever since they entered into the wireless market. According to recent reports, Xfinity Mobile finished 2023 with 6.58 million subscribers and Spectrum Mobile finished with 7.8 million.  

There remains plenty of room for growth in 2024, as cable MVNOs continue to explore using their own licensed CBRS spectrum to carry mobile wireless traffic and reduce reliance on leased spectrum. According to an article published on January 10 of this year in LightReading, Cox Mobile also is looking to expand its wireless offerings in 2024, and it is now conducting tests on licensed CBRS spectrum for fixed wireless access (FWA) applications. As noted in a February 2023 article in FierceWireless, Cox paid $200 million for CBRS spectrum licensees auctioned by the FCC. Cox Communications is not publicly traded and doesn't publish subscriber numbers. 

FCC Commissioners Carr and Simington Keynoters at #FSFConf16 - March 12

FREE STATE FOUNDATION Sixteenth Annual Policy Conference

REGISTER NOW! Keynote Speakers Include:   FCC Commissioner Brendan Carr FCC Commissioner Nathan Simington WHAT: FSF's Sixteenth Annual Policy Conference   WHERE: National Press Club, Washington, DC   WHEN: March 12, 2024 – 9:00 AM - 2:30 PM   The Free State Foundation will hold its Sixteenth Annual Policy Conference on March 12, 2024, at the National Press Club in Washington, DC. This annual conference is widely acknowledged to be one of the nation's premier law and policy events.   As always, a truly outstanding lineup of senior officials and prominent experts from the FCC, other government agencies, industry, academia, and think tanks will discuss and debate the most important communications and Internet policy issues of the day. Topics will include net neutrality, broadband subsidies, ACP extension, USF reform, spectrum reform, the First Amendment and free speech, and more!   Confirmed Speakers Include:   Robert Branson – President and CEO, Multicultural Media, Telecom and Internet Council (MMTC)   Brendan Carr – Commissioner, Federal Communications Commission   Michelle Connolly - Professor of the Practice, Economics Department, Duke University, and member of the Board of Academic Advisors of the Free State Foundation   Seth Cooper – Director of Policy Studies and Senior Fellow, Free State Foundation   David Don - Senior Vice President, Public Policy, Comcast Corporation   Scott Harris – Senior Spectrum Advisor, National Telecommunications and Information Administration (NTIA)   Blair Levin – Non-Resident Senior Fellow, Brookings Metro, and Policy Analyst, New Street Research   Andrew Long – Senior Fellow, Free State Foundation   Randolph May – President, Free State Foundation   Michael O’Rielly – Former Commissioner, Federal Communications Commission, and Adjunct Senior Fellow, Free State Foundation   Jeffrey Rosen - Former Acting Attorney General and Deputy Attorney General of the United States, and former General Counsel and Senior Policy Advisor at the White House Office of Management and Budget    Nathan Simington – Commissioner, Federal Communications Commission   Registration is complimentary, including continental breakfast and lunch. But space is always limited. You must register to attend!   Register Now!   #FSFConf16

Report Shows U.S. Needs to Allocate and Harmonize More Mid-Spectrum for Wireless Use

On February 7, CTIA released a report by Accenture titled "Advancing U.S. Wireless Excellence – The Case for Global Spectrum Harmonization." The report itself is excellent in describing both the economic benefits of allocating mid-band spectrum for commercial wireless use and the benefits of harmonizing U.S. spectrum allocations in the mid-band range with other nations. 

But to reap those benefits, the U.S. needs to maintain its leading role by making more mid-band spectrum available. In its report, Accenture found that, as of 2023, the five leading countries in mid-band spectrum availability dedicated an average of 652 MHz to commercial wireless use. But the U.S. faced a 202 MHz mid-band spectrum deficit compared to those nations. Accenture projects that in the year 2027, the five leading nations will dedicate an average of 970 MHz of mid-band spectrum to commercial wireless use. But due to the lack of spectrum in the pipeline in the U.S., our nation's spectrum deficit will grow to 520 MHz in 2027.

 

Accenture identifies the 3.3-3.45 GHz band, the 4.4-4.94 GHz band, and the 7.125-8.5 GHz band as ideal for commercial use and global spectrum harmonization. As explained in the report, spectrum harmonization could benefit U.S. consumers and businesses to the tune of tens of billions of dollars: 

Spectrum harmonization can standardize network equipment and wireless device production, resulting in less market variation in radio requirements for these technologies. With more harmonization, fewer variations of network radios and wireless devices must be produced, and complex devices that support a wide range of frequencies can be simplified. These efficiencies result in cost savings for end users and drive additional downstream benefits (e.g., accelerated network deployment, earlier adoption of industry use cases, etc.) unlocking approximately $23B-$44B in value for industry and consumers over the next 10 years. Additionally, harmonization will improve network performance through minimized downtime, reduced interference, and better roaming.

And the Accenture report estimates that the overall economic benefits of industry expansion, innovation, and job creation from future U.S. leadership in a more harmonized wireless ecosystem total between $125 billion and $155 billion over a decade. 

But the U.S. will miss out if it fails to promptly replenish the spectrum pipeline with mid-band spectrum for licensed commercial wireless use. On January 2 of this year, Free State Foundation Randolph May and Senior Fellow Andrew Long submitted public comments to the NTIA regarding the agency's implementation of the National Spectrum Strategy. As explained in FSF's comments, although the NTIA's November 13, 2023 Strategy identifies 2,786 MHz of spectrum for study, that is no guarantee that a single megahertz actually will be dedicated for commercial wireless use and the Strategy "fails to tackle the difficult work necessary to rationally balance government and commercial demands for this high-value, limited resource." FSF's comments conclude: "The reality… is that NTIA must embrace the challenging work required to identify – and in fact repurpose – government-held spectrum that would better serve our nation's interests were it put to commercial use, whether on a licensed or unlicensed basis. And do so in a timely manner." 

For more, see my November 2023 blog post, "NTIA Releases National Spectrum Strategy, But Pipeline Remains Empty."

Joint Resolution in Congress Would Repeal FCC's Digital Discrimination Rule

On January 30, Representatives Earl L. "Buddy" Carter and Andrew Clyde introduced a Congressional Review Act (CRA) joint resolution of disapproval to overturn the FCC's "digital discrimination" regulation. The Commission's November 15, 2023 Order adopted the rule on a 3-2 vote. The joint resolution is worthy of support because the Commission's imposition of unintentional disparate impact liability on broadband Internet service providers (ISPs) is unlawful and bad policy.

The CRA provides a fast-track mechanism for Congress to repeal new agency regulations that it is opposed to. But a CRA joint resolution passed by Congress is still subject to the signature or veto of the President. For further background on the CRA, see FSF Board of Academic Advisors’ Member Daniel Lyons' June 2018 Perspectives from FSF Scholars, "The Congressional Review Act and the Toxic Politics of Net Neutrality."

 

As explained in further detail in the Free State Foundation’s February 2023 public comments and March 2023 and April 2023 reply comments filed in the FCC's proceeding on digital discrimination, Section 60506 of the Infrastructure Investment and Jobs Act authorizes the Commission to facilitate equal access to broadband insofar as it is technically and economically feasible. And the Act directs the Commission to adopt rules prohibiting intentional digital discrimination of access against individuals of protected classes such as race, religion, ethnicity, and income level. But the Act does not contain language authorizing liability based on unintentional disparate impact. 

 

Moreover, there is zero evidence of digital discrimination of access taking place and it's contrary to the financial interests of ISPs to deny would-be subscribers access to engage in for. The Commission's rule will not expand or speed up deployment to more Americans. And if allowed to stand, the agency's rule will subject nearly every broadband ISP business and network decision to scrutiny under the agency's rule. This will most likely deter investment in the infrastructure buildout to harder-to-reach areas. 

 

In short, the FCC's digital discrimination rule is well suited for the CRA joint resolution of disapproval. The House should pass it. 

PRESS RELEASE: The FCC's "Cable Operator and DBS Provider Billing Practices" Proposal Will Harm Consumers

 

Today Free State Foundation President Randolph May and Senior Fellow Andrew Long filed comments opposing the FCC’s proposal to prohibit cable and DBS service providers from imposing early termination fees and to require these providers to grant a prorated credit for the remaining days in a monthly or periodic billing cycle after the cancellation of service.

A complete copy of the comments, with the footnotes, is attached. Here is an excerpt from the Introduction and Summary:

 *     *     *

The Billing Practices NPRM proposes (1) "to prohibit cable and DBS service providers from imposing a fee for the early termination of a cable or DBS video service contract" – that is, to deny traditional MVPDs the benefit of their open-eyes bargains with consumers in a manner that certainly will result in higher prices – and (2) "to require cable and DBS service providers to grant subscribers a prorated credit or rebate for the remaining whole days in a monthly or periodic billing cycle after the cancellation of service" – that is, to require that traditional MVPDs establish a daily price for their service despite a statutory prohibition against rate regulation. In short, the Commission's proposal would reduce consumers' options and lead to higher prices, while contravening Congress's bar on rate regulation of cable services. This misguided effort to implement an ill-conceived instance of "Regulatory Bidenomics" should be abandoned.

Forty years ago, in the 1984 Cable Act, Congress articulated a clear intent to leverage competition, rather than regulation, to generate efficiencies – lower prices, greater options, enhanced innovation – for consumers of video content. Today that competition undeniably exists, and the variety of billing arrangements offered to consumers – including those vilified and proposed to be prohibited in this proceeding – is evidence, not of consumer harm, but of competition-fueled consumer choice. Nevertheless, employing some linguistic legerdemain that would make George Orwell blush 75 years after publication of his masterpiece, the coincidentally titled 1984, the Commission proposes to not just regulate rates, but to dictate – and, for existing relationships, disregard – the specific terms of the informed voluntary agreement between (1) empowered purchasers of video programming, and (2) the shrinking subset of providers over which it has some regulatory authority: traditional, facilities-based MVPDs. If adopted, these proposals would diminish consumer welfare directly, through higher monthly prices and fewer billing options, and indirectly, by further hindering the ability of subscriber-shedding cable operators and DBS providers to compete with ascendent streaming alternatives.

 

 

FirstNet's Public Safety Communications Network Continues to Grow

On January 24, AT&T released its report for the fourth quarter of 2023. AT&T announced that the FirstNet nationwide public safety broadband network it constructed has increased its total connections to more than 5.5 million across 27,500 law enforcement and first responder agencies. FirstNet is overseen by FirstNet Authority, an agency within the NTIA.

The widespread adoption by law enforcement and first responder agencies of FirstNet and other enterprise networks is significant because it undermines the FCC's attempted partial rebranding of public utility regulation of residential mass-market retail broadband Internet access services as a vital public safety measure. The Commission's Notice proposing to reclassify broadband Internet access services as a public utility under Title II of the Communications Act even acknowledges that "much of the communications between public safety entities and first responders take advantage of enterprise-level dedicated public safety broadband services." Indeed, enterprise-level dedicated networks with quality-of-service guarantees are more ideally suited for government agencies such as emergency first responders. 

 

On December 14, 2023, the Free State Foundation filed public comments opposing Title II reclassification and imposition of public utility regulation on broadband Internet access services. FSF's comments called attention to the glaring disconnect between imposing public utility regulation on commercial broadband Internet access services in the name of national security and public safety when the military, law enforcement, and emergency responders rely heavily on dedicated networks. 

 

Also, in the Free State Foundation's reply comments, filed on January 17, 2024, we observed that "it is a weighty matter to impose government controls over private services and property catering to civilians in the name of national security and public safety." And thus, "[i]t is unlikely that Congress intended to alter the balance between public power and private rights through such an expansive reading of Title II." Our reply comments voiced agreement with the proposition that national security and public safety have never before been relied upon by the Commission as a justification for common carrier regulation of broadband.

 

For more on the empty national security and public safety rationale for regulating residential commercial broadband Internet services as public utilities, see FSF’s comments and reply comments. See also my October 2023 Perspectives from FSF Scholars, "Net Neutrality Regulation Is Not a Public Safety Measure."