Wednesday, December 12, 2012

Q1 USF Contribution Factor

The FCC released a Public Notice setting the proposed universal service contribution factor for Q1 of 2013 at 0.161, or 16.1 percent. 

The rate is calculated based on a ratio of (a) the total projected quarterly costs of universal service support mechanisms to (b) the contributors’ total projected collected end-user interstate and international telecommunications revenues.  The projected cost of universal service support is $2,258,560,000.  The projected industry revenue is adjusted to $14.036528 billion.  If the Commission fails to act within 14 days following the release of the Public Notice, then the calculation is deemed to be approved.
 
If you have any questions regarding the Public Notice, please feel free to contact the TLP Team.

FCC Approves AWS-4 Order and H Block NPRM

The FCC has unanimously approved two items that it was scheduled to consider at today’s Open Meeting.  The Commission approved a Report and Order and Order of Proposed Modification to free up 40 megahertz of underutilized satellite spectrum for land-based mobile broadband.  DISH had requested the change so that it could launch a new wireless broadband service.   DISH has since commented, “Following a more thorough review of the order and its technical details, DISH will consider its strategic options and the optimal approach to put this spectrum to use for the benefit of consumers.”

The Commission also approved a Notice of Proposed Rulemaking to grant new licenses for the H Block through an auction in 2013.  Auction revenues will help fund a nationwide Public Safety Network and be used to reduce the federal deficit. 

The Commission has not yet released either document, but here is a News Release announcing the votes.  Once they are released, we will circulate more detailed summaries of the items.  If you have any questions regarding the above, please feel free to contact the TLP Team.

Thursday, December 6, 2012

FCC December Open Meeting

The FCC released the agenda for its Open Meeting on December 12.  The meeting will include considerations of:

  • Developing the capability for Americans to contact 911 via text message, and providing Americans with automatic notifications when text to 911 is not supported;
  • A Report and Order (“R&O”) and Order of Proposed Modification that would adopt service rules for 40 megahertz of spectrum in the 2 GHz band in order to increase the supply of mobile broadband spectrum;
  • A Notice of Proposed Rulemaking (“NPRM”) that would grant new licenses for the H Block through competitive bidding;
  • A NPRM that would create a shared access broadband service in the 3550-3650 MHz band for small cell use; and
  • A R&O that would reform the Rural Health Care Support Mechanism for broadband access.
The meeting will begin at 1 PM in Room TW-C305, at 445 12th Street, SW in Washington, D.C.  The meeting will also be shown live at www.fcc.gov/live.  Should you have any questions regarding the meeting, please feel free to contact us

Tuesday, December 4, 2012

TLP Represents MetroPCS in Successful Defense of FCC’s Data Roaming Order

Today, the DC Circuit Court of Appeals issued an opinion in Cellco Partnership v. FCC upholding the FCC’s Data Roaming Order.  TLP represented MetroPCS on the joint intervenors’ brief, as well as on a separate MetroPCS intervenor brief that encouraged the adoption of a narrow ruling using 47 C.F.R. § 303(b) as a the sole basis for upholding the Data Roaming Order, a view that the Court largely adopted.

The Data Roaming Order required mobile data providers to offer roaming agreements on commercially reasonable terms and conditions.  Verizon challenged the Order, arguing that the Commission lacks statutory authority to issue the rule, that the rule unlawfully treats mobile-internet providers as common carriers, that the rule effects an unconstitutional taking, and that the rule is arbitrary and capricious.  The DC Circuit rejected each of these arguments.

The DC Circuit ruled that Title III of the Communications Act “clearly affords the Commission the ability to promulgate the data roaming rule.”  It held that the Commission rightly relied on its broad Title III authority to manage spectrum “in the public interest” because it grounded its action in “particular delegations of authority in Title III, such as section 303(b)” and 303(r).  The DC Circuit found that 303(b) authorizes the Commission’s rule because the rule “merely defines the form mobile-internet service must take for those who seek a license to offer it,” and that, “[l]ike any other entity, Verizon may choose not to provide” mobile data services.  In response to Verizon’s argument that Title III does not give the Commission authority to make fundamental changes to the terms of existing licenses, the Court reasoned that “imposing a limited obligation to offer data-roaming agreements to other mobile-data providers” can reasonably be considered a modification of existing licenses and “cannot be said to have wrought such a ‘fundamental change.’”

The Court further found that the data roaming rule does not treat mobile-internet providers as common carriers.  Although the FCC had previously found a voice roaming rule to impose a common carrier obligation, the Court said that “automatic-roaming requirements [do not] necessarily entail common carriage.”  The Court recognized that even though the data roaming rule “plainly bears some marks of common carriage,” those marks did not “so predominate as to” relegate mobile-internet providers to common-carrier status.  Instead, this is a case where determining whether a service is a common carrier or a private carrier service falls into a “grey area” between “per se” categories.  Therefore, “the Commission’s interpretation and application of the term ‘common carriage’ warrants Chevron deference,” and the Commission reasonably concluded that “the data roaming rule imposes obligations that differ materially from the kind of requirements that necessarily amount to common carriage.”  Specifically, the data roaming rule’s commercially reasonable standard “leaves substantial room for individualized bargaining and discrimination in terms” and does “not amount to a duty to hold out facilities indifferently for public use.”  The Court cautions, however, that the rule’s “more permissive language could, as applied, turn out to be no more than ‘smoke and mirrors.’”  In that case, Verizon could bring an “as applied” challenge if the Commission’s rule treats it, in practice, as a common carrier. 

The DC Circuit also rejected Verizon’s argument that the data roaming rule results in an unconstitutional taking because “as required by the rule,” Verizon would “be compensated by a ‘commercially reasonable’ payment.”  The Court also found that regulating voice-roaming but not data-roaming as a common carrier service was not an arbitrary and capricious decision because the distinctions in the rules “more than suffice to justify the Commission’s different classifications of the two rules.”  The Court also points out that “every commenter besides Verizon and AT&T” thought a data-roaming rule was necessary, so the Commission had a sufficient basis to promulgate one.  Lastly, the Court held that the “Commission performed a thoughtful and nuanced balance of the costs and benefits of the data roaming rule.”  For all of these reasons, the Court rejected Verizon’s challenge and upheld the Data Roaming Order