Photo of Wesley Wright

Tomorrow, March 1, 2019, telecommunications carriers and interconnected VOIP providers (“Filers”) will have filed their annual certification confirming they complied with the FCC’s Customer Proprietary Network Information (“CPNI”) rules.

The FCC’s CPNI rules require Filers to establish and maintain systems designed to ensure they adequately protect their subscribers’ CPNI.   Consumer data protected by the CPNI rules includes account information, call detail information (including what numbers are called and when), and other sensitive information.

In addition to safeguarding this information, the FCC’s rules also require Filers to submit an annual certification – due March 1st of each year – documenting their compliance with the rules and detailing any complaints they received against data brokers.  A template of the CPNI filing is available on the FCC’s website (here).

The CPNI deadline filing kicks off the FCC’s “Spring Filing Season.”  On March 8th, facilities-based broadband providers must file data with the Commission on its Form 477 identifying where they offer Internet access service at speeds exceeding 200 kbps in at least one direction, as of December 31, 2018.  The filing deadline typically is March 1st, but this was recently extended for an additional week by the Commission.

The Form 477 requires fixed broadband providers to identify the census blocks in which “a provider does, or could, without an extraordinary commitment of resources, provide service.”  Mobile broadband providers file maps of their coverage areas for each broadband technology.  The Form 477 reporting portal is available here.

On April 1st, the FCC requires service providers and equipment manufacturers that are subject to the Commission’s rules implementing the 21st Century Communications and Video Accessibility Act (“CVAA”) to file annual recordkeeping certifications.  This certification confirms that the filer has taken steps to ensure its services and products are accessible by people with disabilities and that it maintains records detailing these accessibility considerations.  The Commission’s CVAA filing portal is available here.

Also on April 1st, telecommunications providers and many VoIP providers must file their annual FCC Forms 499-A with USAC, summarizing their 2018 revenues and USF contributions and making adjustments to their 2018 contributions based on the estimates in their 2018 quarterly filings.  Some states have established funds for universal service which  require contributions based on revenues from certain services and impose reporting obligations.

It can be challenging to track these deadlines and determine which obligations apply to your company or the specific services it offers.  Please contact us with questions about these – and other – ongoing compliance requirements.

Photo of Timothy Doughty

Last week, the government shutdown ended.  Shuttered government agencies re-opened on Monday morning.  The FCC announced yesterday that it has further extended the deadlines for filings that were due during the shutdown.  This new announcement supersedes all of the FCC’s previous extension announcements.

Accordingly, the FCC has established the following general deadline extensions for filings other than NORS and DIRS filings and filings related to spectrum auction activities:

  • All filings that were due between January 3 and January 7, are due today, January 30, 2019.
  • All filings that were due between January 8 and February 7 are due on February 8, 2019.

ULS Deadlines

The FCC’s Public Notice stated that all Universal Licensing System (ULS) applications and notifications that were originally due on January 3 through and including February 8 are now due on February 8, 2019.

All applications that were filed in ULS during the shutdown will be entered into ULS over the next few weeks with a January 29 receipt date.

Responsive Pleadings

Any reply or responsive pleadings that were due during the shutdown have also been extended and are now due on February 8, 2019.

Special Temporary Authority

Any Special Temporary Authority (STA) licenses that were scheduled to expire from January 3 through January 29 have been extended to February 8, 2019 (with the exception of STA’s related to post-incentive auction transitions).

Fee Payments

The Commission has extended all fee payments originally due between January 3 and February 7 to February 8, 2019.  However, this extension only applies to fee payments that can only be made through the FCC’s Fee Filer System.

Tower Construction Notification System

The Commission’s Tower Construction Notification System (TCNS) became operational this afternoon.  Because the system had been offline while the FCC suspended operations, deadlines and Tribal review timelines for filings in the TCNS system have been tolled between January 3 and January 30.  Therefore, the TCNS review clock for any Form 620 submissions filed prior to the shutdown were stopped on January 3 and resumed on January 30.

Additional Items

In addition to the extensions discussed above, Commission staff will consider requests for further extensions in individual matters on a case-by-case basis.

*       *       *

For more information, please contact Tim Doughty (doughty@khlaw.com; 202.434.4271).

Photo of Michael Fitch

The International Telecommunication Union (ITU) is a specialized organization of the United Nations which addresses international communications and information technology, regulatory, and policy issues.  Its origins date back to the formation of its predecessor in 1865, the International Telegraph Union. It plays a crucial role in promoting efficient sharing of spectrum and compatibility of communications technologies for all types of uses.

The ITU is headed by five full-time elected officials: Secretary General, Deputy Secretary General, and Directors of the Telecommunication Development (D), Radiocommunication (R), and Telecommunication Standardization (S) Bureaus.  These officials are elected roughly every four years at Plenipotentiary Conferences by the nearly 200 member countries of the ITU.  These positions are important to countries as a reflection of their technological expertise and for the opportunity to influence the priorities and work of the ITU.

From 1950 on, U.S. nationals often filled one of the full-time elected positions, with special emphasis on the Radiocommunications activities of the ITU.  U.S. nationals served as the ITU Secretary General from 1960-1965 and as the head of the R sector from 1966-1994.  However, in 1994, a new U.S. candidate to head the R sector was defeated.  From that election loss until 2018, the U.S. did not run a candidate for any of the full-time elected positions at the ITU.

Happily, this extended absence of any U.S. national as a full-time elected official at the ITU has come to an end.  At the Plenipotentiary Conference in November 2018, U.S. national Doreen Bogdan-Martin was elected Director of the Telecommunication Development Sector of the ITU beginning effective January 1 of this year.  She is the first woman ever elected to a full-time elected position at the ITU.

The Telecommunication Development function at the ITU fosters international cooperation in training, technical assistance, and the development and improvement of telecommunication equipment and networks in developing countries.  Its work facilitates understanding of competitive market principles in the sector and promotes confidence in developing countries to select and deploy new communications technologies and equipment.

Doreen Bogdan-Martin is eminently qualified for this position.  She worked from 1989-1994 at NTIA in the Department of Commerce on telecommunications development issues.  From 1994-2018, she worked at the ITU in the D bureau and other offices culminating in ten years as the first woman to head of the Strategic Planning and Membership department, which is the highest-ranking staff position at the ITU.

Congratulations to Doreen Bogdan-Martin and to the U.S. government for her election and an overdue renewal of U.S. participation on the elected leadership team of the ITU!

For more information, please contact Mike Fitch (fitch@khlaw.com; 202.434.4264).

Photo of Douglas Jarrett

This Update is intended for enterprise IT, telecom, procurement staffs, and in-house counsel responsible for telecommunications management and procurements, focusing on strategies to maximize savings and optimize services to meet projected enterprise requirements.

Industry Consolidation

XO Communications is now part of Verizon, CenturyLink has acquired Level 3, and, among the cable operators, Charter has acquired Time Warner Cable.  The environment is more favorable for multinationals that can look to Orange, BT, Tata, or Telefonica to compete for their international and rest-of-world services.  Whether DoJ and the FCC, respectively, approve the T-Mobile and Sprint merger will remain an open question for several months.

Best Practices

Unlike the markets for cars and publicly traded stocks, there are no publicly available resources on pricing trends or terms and conditions for telecommunications service agreements.  The rack rates in carrier service guides do not reflect the best available pricing for any given expenditure level or mix of services.  Timely, well-planned procurements with assistance of experienced consultants remain the baseline for a successful procurement.  Additional background is available on our blog: Telecommunications Services Agreements—The Underlying Business Deal.

Importance of RFPs

Requests for proposals are the starting point for negotiations.  In addition to the essential description of a customer’s current network, desired services, and projected growth in usage, bandwidth and locations, the enterprise’s proposed terms and conditions (both business and legal) should be set out in the RFP.  Even if the carrier declines to accept certain provisions, compromise positions can be negotiated.  If preferred provisions or customer interests are not set out in the RFP, negotiations are more challenging.

Transitioning to New Services

Wireline carriers deploy new services to achieve efficiencies, remain competitive, and deliver innovative offerings and savings to customers. Many enterprises have just concluded or are working through the transition to IP voice services, principally to SIP trunking.  A newer offering is SD-WAN. It enables network flexibility, redundancy, and cost savings as compared to exclusive reliance on MPLS for corporate data communications.  Enterprises should assess the value (or accept the reality) of these services and structure their RFPs accordingly.

Limits of RFPs

In terms of enterprise telecommunications priorities, network security is now on equal footing with service reliability and availability.  The relative efficacy of carriers’ internal network security practices cannot reasonably be reduced to comparisons of responses to RFP questions.  A qualitative assessment, possibly based upon independent third-party investigations or reviews, is required.   RFPs may be structured to compare the elements and pricing of carriers’ network cybersecurity offerings, but in 2019 the relative efficacy of competing carriers’ offerings likely requires independent assessments, as well.

Negotiating Tips

Assuming the incumbent carrier submits the most compelling bid, don’t look to negotiate a new master agreement.  Focus on minimum commitment levels, lowest rates as opposed to incentive pricing schemes, migration strategies to newer, preferred services, customer support, mid-term benchmarking, service levels, and the transition period at contract expiration.  The more recent carrier master agreement templates are progressively more one-sided.  If the incumbent carrier insists on a new master agreement (or a more onerous set of general online terms and conditions), core terms and conditions in the RFP and previously negotiated provisions provide the customer’s baseline for negotiations.

If migrating to a successor carrier, be prepared for the successor’s master services agreement with a compilation of preferred clauses (which should track those included in the RFP) and propose a scope of work for the network transition, striving to limit the period during which services from the incumbent and successor carriers overlap while recognizing the carriers are loathe to negotiate a detailed transition plan as part of contract negotiations. (This intransigence makes little sense as the successful bidder typically acquires a detailed picture of a company’s existing network and locations in the customer’s RFP that, in turn, is central to the service provider’s RFP responses.) 

Dark Fiber.  Bandwidth requirements have a persistent, upward trajectory.  The questions are how fast and to what extent.  For local or regional requirements (such as connectivity to disaster recovery sites or among large, geographically concentrated facilities), an optimum solution may be a dark fiber lease or indefeasible right of use.  Additional background on dark fiber leases and IRUs is available on our blog: Enterprise Customers and Dark Fiber: An Important Connection, Part 2.

The virtue of dark fiber is that over time the enterprise can upgrade the electronics to derive more bandwidth from a given quantity of dark fibers. The challenges are that dark fiber is not ubiquitously available and the major wireline carriers and cable operators do not routinely offer or even negotiate dark fiber arrangements.  Even in markets where dark fiber is available, new construction likely will be required to establish connectivity between or among the enterprise’s locations.

Telecommunications Surcharges and State Taxes

The cost impact of telecommunications regulatory surcharges and taxes on enterprise services varies significantly based on the services being provided and is underappreciated by many enterprise customers.

The aggregate surcharge and tax burden for an interstate private line or a special access circuit can exceed 30% of the monthly charge.  Conversely, no surcharges or taxes are imposed on the charges for high speed Internet access service, but up to 65.8% of the revenues from VoIP (SIP) services are “USF-assessable.”

This disparity is driven by three considerations.  First, state and local jurisdictions need revenue and have targeted telecommunications services (wireline and wireless) as a prime revenue source.  Second, the Internet Tax Freedom Act prohibits the imposition of state taxes on charges for Internet access services.  Third, the FCC’s Universal Service Fund rules require USF contributions from service provider’s revenues from interstate and international telecommunications services and VoIP services, but excludes revenues from information services such as Internet access service.  The FCC allows services providers to recover their USF contributions via pass-throughs to customers.

The USF contribution factor (% of assessable revenues) is adjusted quarterly.  For the first quarter of 2019, the contribution factor is 20%.  Local state and sales taxes range from 3.5% to 6.0% of telecommunications services and VoIP (SIP) revenues. The major carriers also recover property taxes, gross receipts taxes, and costs of regulatory compliance, as set out in their service guides.  Adding insult to injury, these tax and cost recovery charges are added to the carrier’s USF-assessable revenues.

Questions/Follow-Up Discussion.  Keller and Heckman is pleased to offer a no-fee ½ hour follow-up conversation to discuss these topics in greater detail or respond to questions on telecom procurements.  To schedule a conversation, please contact Doug Jarrett: jarrett@khlaw.com; 202.434.4180.

Photo of Kathleen Slattery

Funding for a portion of the federal government expired on December 21, 2018, beginning a partial federal government shutdown.  The agencies affected by the lapse in funding include the FCC.  While the FCC managed to hang on longer than some of the other agencies affected, the Commission suspended operations starting mid-day on January 3, 2019.

During the suspension, some of the FCC’s filing databases remain available, but FCC staff is not working and will not be processing applications during the shutdown.  According to an FCC Public Notice regarding Commission operations during the shutdown, no support will be provided for the Commission’s website, including the databases that remain available.

The relevant FCC databases and services that remain available are:

  • Electronic Comment Filing System (ECFS)
  • Universal Licensing System (ULS)
  • Electronic Document Management System (EDOCS)
  • Auctions Public Reporting System (PRS)
  • Auction Application System, the Auction Bidding System
  • Daily Digest
  • Commission Online Registration System (CORES).

The relevant databases that will be unavailable are:

  • Electronic Tariff Filing System (ETFS)
  • Experimental Licensing System (ELS)
  • International Bureau Filing System (IBFS/MyIBFS)
  • FCC Form 477 Online Filing System
  • Tower Construction Notification System (TCNS)
  • Antenna Structure Registration System (ASR)
  • Electronic Section-106 System (E-106)
  • Fee Filer
  • 911 Reliability Certification System.

All spectrum auction activities authorized by Section 309(j) will continue and spectrum auction filing deadlines remain the same.  Other filing deadlines will be extended so that any submission due on January 3, during the suspension, or on the first day of normal operations will be due on the second day of normal operations.  Deadlines for Responsive Pleadings are extended in the same way.  Responsive Pleadings filed on January 2 will be treated as if filed on the date normal operations resume.

Any Special Temporary Authorizations (STAs) that would expire during the suspension are extended to the day after operations resume.  Emergency STA requests will be processed through the FCC Operations Center during the suspension.

The FCC’s Fee Filer System will not be available during the suspension.  Deadlines for payments are not extended, except for those that can only be paid through Fee Filer.  Those deadlines are extended in the same way as the filing deadlines.  The Wireless Telecommunications Bureau’s Fee Filing Guide states that “the application must remit payment within 10 calendar days of submitting the application, or the application will be dismissed [emphasis added].”  The status of applications filed during the shutdown is listed as “submitted.”  Because of this, applicants may need to mail in the Remittance Form with a check for the filing fee.

Prior to the suspension, the Commission was already facing an application processing backlog of a few months.  As the suspension continues, application processing times will extend further.  When operations resume, FCC staff will face an even more significant backlog.  Because applications will be processed in the order in which they are received, we recommend applicants continue to file applications as early as possible during the suspension.

There is no clear end in sight for the partial federal government shutdown.  The House of Representatives plans to consider four smaller spending bills to reopen parts of the government.  Funding for the FCC and FTC is included in the Financial Services appropriation bill, which is likely to be the first considered.  While these bills will likely pass the House and Senate Republicans are growing impatient with the shutdown, it is unlikely they will gain the support of President Trump.  Until the shutdown ends or the FCC is funded, the Commission must continue to operate in a very limited capacity.

For more information, please contact Kathleen Slattery (slattery@khlaw.com; 202.434.4244).

Photo of Wesley Wright

The year of 2018 at the FCC could be considered the year of déjà vu.  Sure, the Commission broke new ground in some areas, but many of the headline-grabbing items rehashed old proceedings.  For instance:

Net Neutrality

The ink was barely dry on the FCC’s net neutrality rules when, in January, the agency released a Declaratory Ruling that largely revoked those rules (see, Vol. XV, Issue 2).  The January Order – which took effect on June 11th – effectively terminated the bright line rules that were central to the FCC’s 2015 rules: no blocking lawful content, no throttling lawful content, and no paid prioritization.

To say this was a hotly-contested proceeding is an understatement: the issue caused a 3,000% spike in the FCC’s web traffic and the agency received about 22 million comments.  In August 2018, the FCC’s Inspector General concluded that the bulk of this was caused by a segment on John Oliver’s TV show.

Citizens Broadband Radio Service

The agency also revisited its rules for the Citizens Broadband Radio Service (CBRS) band (3.55-3.70 GHz).  The proposed rules essentially reopened the CBRS proceeding to make the spectrum allocation more palatable to large wireless carriers (see, Vol. XV, Issue 33).  The Public Notice seeking comment on proposed rule revisions was issued in August 2018 and the agency finalized its revised (again) rules in October 2018 (see, Vol. XV, Issue 44).  This most recent revision clears the way for CBRS networks to begin operating in 2019.  We expect the General Access tier to be available for use in the first four months of 2019 and the auction for the Priority Access tier of licenses likely will be held in late 2019 or early 2020.

FCC Enforcement

The FCC’s Enforcement Bureau made an example of a private land mobile licensee in August of 2018.  Marriott entered into a Consent Decree with the agency – agreeing to pay more than $500,000 and implement a Compliance Plan – for failing to secure the agency’s prior consent to acquire Starwood Hotels and Resorts Worldwide (and Starwood’s 65 wireless FCC licenses) (see, Vol. XV, Issue 36).

*       *       *

But 2018 wasn’t all the same old, same old at the FCC.  The agency broke new ground in a few areas, including:

5G Deployment and Pole Attachments

The Commission’s top priority in 2018 was promoting 5G wireless deployments.  In that spirit, the FCC focused on infrastructure and spectrum to support 5G networks.  The agency took a number of steps to streamline the process by which: (i) new communications towers can be built (see, Vol. XV, Issue 19); and (ii) carriers can install new small cells to expand network coverage (see, Vol. XV, Issue 43).  These changes benefit the large national carriers, but many of the rule revisions – including onerous changes to Pole Attachment regulations and the Small Cell rules – were aggressively opposed by utilities and municipalities alike (see, Vol. XV, Issue 30).

On the spectrum front, the FCC also took steps to make additional mid-band spectrum available by proposing rules to rework the 2.5 GHz band, starting the process of cleaning up the 4 GHz band by requiring users to certify the accuracy of their operational information, and proposing to allow unlicensed devices to operate in the 6 GHz band (see, Vol. XV, Issue 41).

Connect America Fund Auction

The FCC also completed its Connect America Fund Phase II Auction, allocating nearly $1.5 Billion in federal funding over the next decade to support broadband deployments in unserved areas of 45 different states (see, Vol. XV, Issue 36).

For more information, please contact Wes Wright (wright@khlaw.com; 202.434.4239).

Photo of Douglas Jarrett

In late September, MissionCritical Communications posted several online articles about network-based and wireless handset-based emergency location technologies that will provide local public-safety answering points (PSAPs) the physical location of wireless callers dialing 9-1-1. These articles coincided with the FCC’s implementation of Kari’s Law, which Congress enacted this year.

Kari’s Law was enacted in response to an unfortunate incident where a young girl in a hotel room repeatedly dialed 9-1-1 but failed to reach the PSAP because the hotel’s phone system required a “9” be dialed as a prefix to secure an outside line. The legislation targets wireline voice technology, which increasingly, is limited to relatively large commercial locations. Operators of small businesses and individuals, including persons who lease their residences in multifamily dwelling units, are abandoning use of landline service.

In early October, MissionCritical Communications highlighted the public-safety community’s concerns over wireless carriers promoting Z-axis location accuracy of 5 meters or more as the dispatchable location standard. It was noted that this tech­nology could report a caller’s location either one floor below or above the calling party’s actual location, across the street or in a different building. Also noted was that substantially more accurate standards of 3 to about 1.8 meters are achievable.

Unfortunately, even assuming network-based or handset-based technologies will perform flawlessly, wireless emergency calling from in-building locations remains problematic. The efficacy of in-building wireless communications requires that RF signals be transmitted from and received by wireless callers within the buildings. Energy-efficient building materials impede RF signals, and persons above the 20th floor often do not receive a reliable signal from wireless carriers’ networks, particularly in dense urban areas or other high-density cluster environments.

Distributed Antenna Systems

The principal solution is an in-building distributed antenna system (DAS) built using off-the-shelf technologies and leveraging proven RF engineering practices. DAS enables in-building connectivity for multiple wireless technologies — Wi-Fi, public safety and commercial mobile radio service (CMRS). Whether a home, hotel or venue, a property’s owner or operator largely determines Wi-Fi connectivity. A public-safety DAS is often required by statute.

With the rollout of the First Responder Network Authority (First-Net), AT&T’s participation in DAS arrangements should increase. Whether in-building voice and broadband CMRS is available requires a wireless carrier’s participation and financial commitments from building owners. DAS supporting CMRS may be carrier specific or capable of supporting multiple service providers, referred to as a neutral-host DAS.

In-building DAS configurations require wireless carriers to extend their networks to a venue or building, typically installing baseband and RF equipment in a basement vault or equipment room. The wireless carrier operates this equipment. The RF signal is transmitted via in-building wiring — increasingly, fiber-optic cable — to antennas on one or more locations on each floor or every other floor to maximize coverage through an in-building distribution network. In a neutral-host DAS, multiple wireless carriers’ terminal equipment first connects to the owner’s neutral-host equipment, which in turn connects to the in-building distribution network.

The ecosystem of consultants, equipment, technologies and firms providing turnkey in-building DAS solutions is reasonably mature. Fiber-optic cable is the preferred wiring because of its extended useful life and substantial capacity. Major tower management companies that operate outdoor DAS networks are among the leading DAS providers in major venues. These entities may lease access to their in-building networks to the wireless carriers.

Business Models

Whether a DAS is deployed in a given building or venue turns on a series of business decisions. For­most, a wireless carrier determines whether its network would benefit from an in-building DAS by offloading or minimizing traffic on a carrier’s macrocell/outdoor network or if competitive pressures dictate that its service be available within the venue or building. Whether to extend its network into a major sports and entertainment venue is an easy decision for a wireless carrier.

Beyond these venues, wireless carrier participation is inconsistent, at best. In countless wireless infrastructure forums and conferences, wireless carriers emphasize their resources are limited and acknowledge they cannot extend their networks into every building requiring in-building coverage. Because of wishful thinking or a lack of due diligence by a systems integrator or property developer or owner, more than a handful of well-designed, fully constructed in-building distribution networks are not active because wireless carriers did not commit to extend service to the buildings.

The decision to make the investment for an in-building distribution system belongs to a property developer or owner. Wireless carriers rarely provide financial support for in-building distribution systems. Even if a property owner is willing to make this investment, the question remains whether the wireless carriers will extend their networks into the building and install their equipment to provide service. Many buildings don’t make the cut.

A Combination Solution

A combination equipment and financing solution that may improve carrier engagement in supporting in-building wireless communications exists. Cheytec Telecommunications established a relationship with the principal wireless equipment vendors to acquire the same baseband and RF equipment deployed by the carriers in their networks. Cheytec “takes the investment” in, retains title to and assumes the maintenance for the in-building wireless network equipment, charging the property owner a monthly licensing fee. Further, wireless carriers are authorized to operate and control this installed equipment as part of their networks.

The solution lowers a wireless carrier’s cost of extending its network into a building but still obligates the owner to fund the in-building distribution system and pay the monthly equipment-licensing fee.

Whether an owner takes this step depends on the owner’s economic analysis of providing wireless connectivity for its tenants or residents. Some property owners now view indoor wireless as an essential utility for their tenants. These decisions are made on a case-by-case basis. Wireless carriers could better support property owners by entering into DAS agreements with terms beyond five years, allowing the property owner to recover the cost of the in-building distribution system over a longer period.

Conclusions

Without question, dispatchable location standards must fully support public-safety emergency response activities. Equally important, policy-makers and legislators must recognize that wireless carriers largely determine the underlying availability and reliability of their services within many high-rise residential and commercial properties.

There are no easy solutions because substantial financial commitments are involved, but the challenges associated with in-building wireless communications should be acknowledged by the wireless carriers and recognized by regulators. Without open dialogue, an underlying issue in emergency wireless communications will persist indefinitely.

For more information, please contact Doug Jarrett (jarrett@khlaw.com; 202.434.4180).

This article originally appeared in the November/December 2018 issue of Mission Critical Magazine, and is reproduced with their permission. Visit MissionCritical Communications here

Photo of Gregory Kunkle

On October 23, 2018, the FCC adopted a Report and Order in its 3550-3700 MHz Citizens Broadband Radio Service (CBRS) proceeding.  The Report and Order makes several modifications to rules governing the band, including extending license terms to 10 years, adding license renewability, and increasing the size of Priority Access License (PAL) areas from census tracts to counties.  Most notably, these items are the last substantial rule tweaks the Commission needed to resolve to move forward with its plans for CBRS deployment.

CBRS is somewhat of an experiment in spectrum management by the FCC.  It will entail third party Spectrum Access System (SAS) managers that will coordinate three tiers of users – General (unlicensed), Priority (auctioned licensees), and Incumbent (largely earth stations and federal users).   The goal is for each SAS to provide advanced, highly automated frequency management that will assign spectrum in nearly real time.  If it works, it will provide more intensive use of the band than manual coordination, while mitigating interference between the three tiers of users.

Way back on December 21, 2016, the FCC conditionally certified seven entities seeking to provide SAS services.  That conditional certification allowed further testing and pilot programs to commence, but did not authorize full commercial SAS deployment.  Full SAS certification is expected in early 2019, at which point users will be able to begin operating under the General Access tier.  Auction of the Priority Access tier licenses has not been announced, but likely will not occur until at least late-2019, given the Commission’s typical auction timelines.

The question now has become whether the Commission has taken so much time that additional relief is required.  This process started in 2015 when the FCC first adopted its initial CBRS rules.  At that time, the FCC gave incumbent users in the 3.65-3.7 GHz band a deadline to move out of the band or transition to CBRS service.  That deadline expires for many licensees as early as April 17, 2020.  That means some current users must transition their systems in the next 18-months even though the CBRS service is not even commercially authorized, yet.

Two entities representing wireless ISPs and utilities have filed a request asking the FCC to extend the transition period for 3.65-3.7 GHz band users until January 8, 2023.  This would allow time for SAS providers to become fully certified, the CBRS service to fully commence, and 3.65-3.7 GHz band users the time necessary to transition their service in a considered manner.  There seems to be little, if any, downside to granting the request.  The 3.65-3.7 GHz portion of the band has been successfully used for more than 10 years to provide applications such as rural wireless Internet access and critical infrastructure data communications.  There’s an argument it was not necessary for the FCC to require users in this portion of the band to migrate from their legacy systems at all.  An unnecessarily condensed migration timeframe will not allow users to evaluate the CBRS and may encourage users to move to other bands, such as 5 GHz.  This isn’t good for the viability of CBRS.  In light of the length of time it has taken to bring the CBRS to reality, it certainly seems like a good decision not to rush the final remaining steps.

The FCC currently is seeking comment on the extension.  Comments are due December 12, 2018 and Reply Comments are due December 24, 2018.

For more information, please contact Greg Kunkle (kunkle@khlaw.com; 202.434.4178).

Photo of Kathleen Slattery

As the new Majority Party in the House of Representatives, Democrats will take the gavels as Chairmen of House Committees and Subcommittees as the 116th Congress convenes in January.  The House Energy and Commerce Committee and its Subcommittee on Communications and Technology have jurisdiction over the FCC and telecommunications issues, including broadband.  The current Ranking Member, Representative Frank Pallone (D-NJ), is expected to become the Committee Chair. Based on recent statements, the House Energy and Commerce Committee is expected to take a more active role in FCC oversight under the new Chairman.

The current Chairman of the House Subcommittee on Communications and Technology, Representative Marsha Blackburn (R-TN), was elected to the Senate, replacing retiring Senator Bob Corker (R-TN).  As Chairman, Representative Blackburn was a strong supporter of recent FCC decisions, including the Restoring Internet Freedom Order (Vol. XV, Issue 24), the recent 3.5 GHz Order (Vol. XV, Issue 44), and other policies promoting 5G.  By contrast, the Ranking Member on the Subcommittee, Representative Mike Doyle (D-PA) who ran unopposed in the Pennsylvania’s new District 18 (Pittsburgh and surrounding areas), introduced a Joint Resolution under the Congressional Review Act to overturn the FCC’s Restoring Internet Freedom Order.  In order to bring the resolution to the House floor for a vote, the discharge petition must have 218 signatures; the discharge petition for this item currently has 177.  If the discharge petition does not receive the required signatures by the end of the year, then this item will fail.  In the next Congress, Democrats may attempt to reverse the policies in the Restoring Internet Freedom Order through regular order since the CRA will no longer be an option.

While we expect the House to increase oversight over the FCC, the Senate will continue to support the Republican-led FCC’s agenda.  The Republicans have maintained their majority in the Senate, the size of which depends on a few close races still being counted. One item of unfinished business is a Senate vote on the President’s nominee for the second Democratic Commissioner Geoffrey Starks.  Reportedly, the Senators from Alaska have placed a “hold” on his nomination in order to secure FCC action on telemedicine issues impacting their state.  A Senate vote on the nomination is expected before year-end.

Photo of Al Catalano

The FCC’s small cells order (Declaratory Ruling and Third Report and Order, WT Dk. No. 17-79 and WC Dk. No 17-84, released September 27, 2018) is a big win for the wireless industry.  The FCC largely adopted the industry’s vision that deployment of 5G technology will require hundreds of thousands of so-called “small cell” sites in commercial and residential areas throughout the country and that longstanding state and local wireless siting rules and practices irrevocably impair that vision. To “win the 5G war with China,” the FCC interpreted key provisions of the Communications Act to extend unprecedented federal authority for carrier deployment of small cell sites in the public rights-of-way (ROW), at the expense of state and local governments’ historic land-use authority to manage the ROW.

Broad Interpretation of State and Local Prohibitions – The Commission broadly interpreted Sections 332(c)(7)(B)(i)(II) and Section 253(a) of the Communications Act that limit state or local laws, regulations and other legal requirements that “prohibit or have the effect of prohibiting” the provision of wireless service. In so doing, the Commission emphasized that a state or local legal requirement constitutes an effective prohibition if it “materially limits or inhibits the ability of any competitor or potential competitor to compete in a fair and balanced legal and regulatory environment.” The standard adopted in this order allows that a “requirement can constitute an effective prohibition of services even if it is not an insurmountable barrier.”

Longstanding local prerogatives over managing access to public rights of way were largely swept away. In its carrier-centric interpretations, the Commission significantly limited “the authority of a State or local government to manage the public rights-of-way” and “to require fair and reasonable compensation from telecommunications providers” under Section 253 (c) of the Act.

Cost-Based Fees –A significant wireless industry victory pertains to the FCC’s determinations on allowable compensation for carrier use of the ROW. The FCC ruled that under Sections 253(c) and 332(c)(7) state and local governments are limited to charging fees that are no greater than “a reasonable approximation” of their costs for processing applications and for managing deployments in the rights-of-way. This ruling applies to fees for access to public rights-of-way and for attachments to government-owned property in the rights-of-way including “light poles, traffic lights, utility poles, and other similar property.” While the decision expressly excludes access or attachments to government-owned property located outside the public rights-of-way, the order requires that application or review fees for facilities outside the ROW must be cost-based.

Many local communities had argued that the “fair and reasonable compensation” clause contained in Section 253(c) of the Act embodied the intent of Congress that telecommunications providers could be charged market-based fees for use of public rights-of-way. In rejecting this approach, the Commission found that “although there is precedent that ‘fair and reasonable’ compensation could mean … market-based charges in certain instances, the statutory context persuades us to adopt a cost-based interpretation here.”

The FCC found that Section 253(c) “should be understood as focused on protecting the interest of providers.” This finding contrasts with countless court decisions that hold Section 253(c) is intended to preserve the state and local interests in managing the public right of way; that is, as a counterweight to Section 253(a) that prohibits state or local government action otherwise inimical to the interests of telecommunications carriers.  Relying on its novel view of Section 253(c), the Commission concluded “while it might well be fair for providers to bear basic, reasonable costs of entry, the record does not reveal why it would be fair or reasonable from the standpoint of protecting providers to require them to bear costs beyond that level, particularly in the context of the deployment of Small Wireless Facilities.” (emphasis added)

Under the order, fees violate the Act unless: “(1) the fees are a reasonable approximation of the state or local government’s costs, (2) only objectively reasonable costs are factored into those fees, and (3) the fees are no higher than the fees charged to similarly-situated competitors in similar situations.”

The FCC provided further guidance, setting a presumptively lawful, nationwide fee schedule for small cell applications:  “(a) $500 for a single up-front application that includes up to five Small Wireless Facilities, with an additional $100 for each Small Wireless Facility beyond five, or $1,000 for non-recurring fees for a new pole (i.e., not a colocation) intended to support one or more Small Wireless Facilities; and (b) $270 per Small Wireless Facility per year for all recurring fees, including any possible ROW access fee or fee for attachment to municipally-owned structures in the ROW.”

State and Local Land-Use or Zoning Requirements – In addition to fees, the Commission noted there are other state and “local land-use or zoning requirements” that could restrict small cell deployments such that they “have the effect of prohibiting service in violation of Sections 253 and 332.” In its order, the Commission provides “guidance” on local zoning considerations typically assessed in wireless siting requests.

Aesthetics requirements are not preempted if they are (1) reasonable, (2) no more burdensome than those applied to other types of infrastructure deployments, and (3) published in advance.

The Commission explained that aesthetic requirements that are “reasonably directed to avoiding or remedying the intangible public harm of unsightly or out-of-character deployments” are permissible.  However, if these aesthetic requirements are more burdensome than those applied to “similar infrastructure deployments” they are not permissible because the “discriminatory application evidences the requirements are not” reasonable or “directed at remedying any wireless infrastructure deployment.” Finally, to establish they are reasonably directed to aesthetic harms these requirements “must be published in advance.”

Minimum spacing requirements. – While some spacing requirements (i.e. mandating facilities be sited at some minimum distance apart from certain facilities or locations) “may violate Section 253(a), others may be reasonable aesthetic requirements.”  Therefore, the Commission determined that spacing requirements should be evaluated under the same standards as other aesthetic requirements.

Underground requirements – The Commission ruled that a “requirement that all wireless facilities be deployed underground would amount to an effective prohibition given the propagation characteristics of wireless signals.”  The FCC emphasized that although “undergrounding requirements may well be permissible under state law as a general matter, any local authority to impose undergrounding requirements under state law does not remove the imposition of such undergrounding requirements from the provisions of Section 253.”

Quid pro quo – “in-kind service” – The Commission  found “[a]nother type of restriction that imposes substantial burdens on providers, but does not meaningfully advance any recognized public-interest objective, is an explicit or implicit quid pro quo in which a municipality makes clear that it will approve a proposed deployment only on condition that the provider supply an “in-kind” service or benefit to the municipality, such as installing a communications network dedicated to the municipality’s exclusive use.” According to the FCC, “[s]uch requirements impose costs, but rarely, if ever, yield benefits directly related to the deployment. Additionally, where such restrictions are not cost-based, they inherently have ‘the effect of prohibiting’ service, and thus are preempted by Section 253(a).”

Shot Clocks For Expedited Review – The order seeks to speed approval of small cell wireless facility applications by establishing “shot clocks” applicable to state and local review, building upon the Commission’s 2009 Declaratory Ruling that established shot clocks for co-located (90-days) and new (150 days) macro-cell facilities.  Under the newly established rules applicable to small cells, there is a 60-day shot clock for collocation on preexisting structures, and a 90-day shot clock for new sites. The Commission clarified that for purposes of these Section 332 shot clocks, “attachment of facilities to existing structures constitutes collocation, regardless of whether the structure or the location had previously been zoned for wireless facilities.”

The FCC believes that the adoption of the shot clocks balances the authority states and localities have over review of wireless siting applications with the requirement of Section 332(c)(7)(B)(ii) to exercise this authority “within a reasonable period of time” taking into account the nature and scope of the request.

Shot Clocks and Batch Filings – The Commission also determined that when applications to deploy small cell facilities are filed in batches, “the shot clock that applies to the batch is the same one that would apply had the applicant submitted individual applications.”  In cases where an applicant files a single batch application including “both collocated and new construction of small wireless facilities, the longer 90-day shot clock will apply.” In an “extraordinary” case, a siting authority “can rebut the presumption of reasonableness of the shot clock period where a batch application causes legitimate overload on the siting authority’s resources.”

Violation of the Shot ClocksState or local inaction by the end of the applicable shot clock will function as a “failure to act” under Section 332(c)(7)(B)(v) thereby allowing a carrier to file a court action. Such failure to act will also be considered a “presumptive prohibition” of the provision of personal wireless services in violation of Section 332(c)(7)(B)(i)(II). In such cases, the FCC “expects the state or local government to issue all necessary permits without further delay.” In cases where permits are not issued, the FCC believes “the applicant would have a straightforward case for obtaining expedited relief in court.”

If a case does go to court, the FCC acknowledges the siting authority “will have an opportunity to rebut the presumption of effective prohibition by demonstrating that the failure to act was reasonable under the circumstances and, therefore, did not materially limit or inhibit the applicant from introducing new services or improving existing services.”

In fashioning this regulatory framework, the Commission declined to adopt the “deemed granted” approach strongly advocated by the wireless industry for applications not ruled on within the shot clock period.

Starting of Shot Clock and Incomplete ApplicationsThe Commission ruled thata shot clock begins to run when an application is first submitted, not when the application is deemed complete.” For small cell applications, “the siting authority has 10 days from the submission of the application to determine whether the application is incomplete.”  Once an applicant submits the supplemental information requested by the siting authority the shot clock then resets – effectively giving the siting authority an additional 60 days for review.  For subsequent findings of incompleteness, “the shot clock would toll if the siting authority provides written notice within 10 days that the supplemental submission did not provide the information identified in the original notice delineating missing information.”

Voluntary Tolling of Shot Clock –The order allows the parties to mutually agree to toll the running of a shot clock period, allowing disagreements to be resolved in a collaborative setting if possible.

Shot Clock – Broad ApplicationIn another major victory for the wireless industry the Commission adopted a broad interpretation of 332(c)(7)(B)(ii) requirements that will be applicable to the shot clocks. Under the Commission’s reasoning, “deployment will be kept on track by ensuring that the entire approval process necessary for deployment is completed within a reasonable period of time, as defined by the shot clocks.”

Turning aside arguments by local jurisdictions that this section of the Act – and any associated  shot clocks – should apply only to zoning requirements, the Commission agreed with the wireless industry and found the shot clocks should apply to “all authorizations a locality may require, and to all aspects of and steps in the siting process, including license or franchise agreements to access ROW, building permits, public notices and meetings, lease negotiations, electric permits, road closure permits, aesthetic approvals, and other authorizations needed for deployment.”

Existing Agreements – One key question left unanswered by the Commission’s order relates to existing small cell agreements between localities and wireless carries. As Commissioner Rosenworcel noted following adoption of the order, this decision “interferes with existing agreements and ongoing deployment across the country.”  She emphasizes there are “thousands of cities and towns” with agreements for infrastructure deployment – including 5G wireless facilities – and “many of them could be torn apart” as a result of the Commission’s order.

The next move is up to state and local jurisdictions around the nation. If substantial litigation follows as a result of this order, the “race” to 5G may be slowed to a “crawl” in many parts of the country. Perhaps, the Commission will soon learn that a true consensus-based regulatory scheme that accommodates the interests of not just the wireless carriers but also those of state and local governments – and the citizens they represent – is the best approach to winning the 5G war with China.