Monday, January 25, 2016

FCC Releases Agenda for January Open Meeting

The FCC has released the following agenda for the January Open Meeting, scheduled for Thursday, January 28, 2016 at 10:30 am:
  • Expansion of Online Public File: The Commission will consider a Report and Order which modernizes the public inspection file rules by requiring cable and satellite TV operators and broadcast and satellite radio companies to post public inspection files on the FCC’s online database. 
  • Improving the Nation’s Public Alert and Warning Systems: The Commission will consider an NPRM to strengthen the Emergency Alert System by promoting participation on the state and local levels, supporting greater testing and awareness of EAS, leveraging technological advances, and bolstering EAS security.
  • Broadband Progress Report: The Commission will consider the 2016 Broadband Progress Report examining whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion, pursuant to Section 706 of the Telecommunications Act of 1996.  

As you may recall, In connection with the upcoming meeting, the Chairman has also released a Fact Sheet and Blog Post concerning the Broadband Progress Report, which concludes that advanced telecommunications capability is not being deployed in a reasonable and timely fashion to all Americans as 34 million Americans still lack access to fixed broadband.  The Fact Sheet outlines the key findings in the Report, and most notably, recognizes that “the increasingly dynamic nature of residential and business communications requires both fixed and mobile broadband access,” however, “given the current record, the FCC does not yet set a mobile speed benchmark, so deployment of mobile broadband is not reflected in the current assessment.”  The Chairman expresses hope that this report will “catalyze a discussion on how we can do better.”

The Commission will also consider several items as consent agenda.  The meeting may be streamed at fcc.gov/live.

NRUF Form 502 Due February 1, 2016

The Numbering Resource Utilization/Forecast Report (NRUF) Form 502 is due to be filed by February 1, 2016.  The North American Numbering Plan Administrator (NANPA) is required to collect, store and maintain number resource utilization and forecast data.  Accordingly, the FCC directs that NANPA number assignees holding geographic and/or certain non-geographic telephone numbers must report on their holdings twice each year (February 1 and August 1) using Form 502.  As with prior filings, the Form 502 may be filed online at http://www.nanpa.com/nruf/index.html, where instructions for completing the form also may be found.

If you require our assistance in filing this form, please let us know as soon as possible, and in any event prior to the close of business on Wednesday, January 27, 2016.

Friday, January 22, 2016

FCC Releases Forward Auction Application Instructions

The Commission has released a Public Notice outlining Forward Auction Short-Form Application (FCC Form 175) and the process required to participate in the Forward Auction (Auction 1002).  The FCC provides in depth instructions to address a variety of aspects, such as minimum software requirements, information required in different sections of the form, and how to attach additional supplementary forms or explanations.  If you are planning on participating in the Forward Auction, you should review the Public Notice to become familiar with the Auction System and the Form 175 requirements.  FCC Form 175 must be filed electronically, via the Auction System (auctions.fcc.gov).  The initial application filing window opens at 12:00 pm ET on January 26, 2016 and must be submitted and confirmed by 6:00 pm ET on February 9, 2016

Some, but not all, of Form 175’s requirements are listed below and discussed further in the Public Notice:
  • providing basic applicant information, such as name, location, legal classification (i.e. corporation/partnership), etc.; 
  • indicating whether the applicant is eligible for Designated Entity status through use of rural or small business credits;
  • selecting the license area(s) on which the applicant may wish to bid during the auction;
    • An applicant must select and save at least one license area.  As you may recall, while an applicant is not obligated to bid on any or all of the license areas selected, it will not be able to bid on any license area that has not been selected on its FCC Form 175.  These license area selections cannot be changed after the initial filing window has closed.
  • identifying auction-related license agreements that are subject to disclosure under the FCC Rules;
    • Agreements relating to the licenses being auctioned, including any such agreements relating to the post-auction market structure.
  • providing or confirming information regarding parties with ownership or controlling interests in the applicant; and
    • If available, an applicant’s most current ownership information on file will automatically be entered into the applicant’s forward auction application, if it is in a format that is compatible with the application.
  • certifying that the applicant is in compliance with the foreign ownership provisions of Section 310 or that it has filed a petition for declaratory ruling requesting Commission approval to exceed the statutory foreign ownership limit.

Please contact us if you have any questions or concerns.

Monday, January 18, 2016

FirstNet Releases RFP Seeking Partner for Network Deployment

FirstNet has released its RFP seeking a partner to provide the deployment and provisioning of a “comprehensive network solution” nationwide.  The winning bidder will be responsible for the core network, radio access network services, backhaul, aggregation, and the use of national transport net-works and operation centers, plus the creation of a  device ecosystem.  Questions and capability statements are due February 12, 2016 and March 17, 2016, respectively.  Proposals to the RFP will be due April 29, 2016.  FirstNet anticipates making an award in the fourth quarter of 2016.

Please contact us if you have any questions.

FCC Releases Public Notice Reminding CMRS Providers of E911 Outdoor Location Accuracy Deadline

A Public Notice has been released reminding CMRS providers using network-based location technologies of the upcoming January 18, 2016 Phase II deadline for improved outdoor E911 location accuracy.  Specifically, as of this date, covered providers must meet the following location accuracy standard at either the county or the PSAP level, based on outdoor measurements, for 911 calls:
  • 100 meters for 67 percent of calls, in 100 percent of counties or PSAP service areas covered by the CMRS provider across its entire network.
  • 300 meters for 90 percent of calls, in 70 percent of counties or PSAP service areas, which must cover at least 80 percent of the population covered by the CMRS provider across its entire network.

This benchmark is separate from and in addition to the subsequent indoor-focused location accuracy requirements that were adopted by the Commission in January 2015.

The Public Notice also reminder all CMRS providers that the requirements for filing geographic Exclusion Reports are still in effect, and provides contact information and instructions for filing these reports as well.

Please contact us if you have any questions.

Friday, January 15, 2016

Deadline for the Filing of FCC Form 499-Q

The deadline for filing the FCC Form 499-Q and supporting documentation is quickly approaching.  All telecommunications carriers that provide interstate telecommunications services are required to electronically file an FCC Form 499-Q Telecommunications Reporting Worksheet with the Commission on or before February 1, 2016.  Carriers must provide revenue information for October 1 through December 31 of the prior calendar year and projections for April 1 through June 30.  Additionally, to the extent that interconnected VoIP and CMRS providers rely on a traffic study to report interstate revenues for the February 1 filing of the Form 499-Q, the traffic study relied upon must be included with this filing. 

The form and filing instructions can be found at: http://www.usac.org/cont/tools/forms/.  

If you require our assistance in filing this form with the Commission, please contact us as soon as possible, and in any event prior to the close of business on Monday, January 25, 2016.

Thursday, January 14, 2016

FCC Seeking Comment on its Seventh Annual State 911/E911 Fee Collection

The FCC is seeking comment on its Seventh Annual Report to Congress on State Collection and Distribution of 911 and Enhanced 911 Fees and Charges (“Report”), which covers the 2014 calendar year.  The Report also contains more detailed state-by-state information than prior annual reports on the number and type of 911 calls, the number of Public Safety Answering Points (PSAPs), expenditure of funds for Next Generation 911 (NG911) services, deployment of Emergency Services IP Networks (ESInets) and text-to-911 service, establishment of programs to support PSAP cybersecurity, and the extent of state-level oversight and auditing of collection and use of 911 fees.

Diversion of 911 Fees: Eight states reported diverting a portion of collected 911 fees to non-911 related purposes, the FCC seeks comment on the impact of such diversion as well as the sufficiency and accuracy of this reporting.

NG911 Services:  The FCC asks whether NG911 services and infrastructure are receiving adequate 911 fees.  The FCC also asks whether 911 fees are being effectively used by state, local and tribal jurisdictions to implement cyber security best practices within PSAPs as well as adherence to national standards.

Oversight and Auditing:  The FCC seeks comment on the role of oversight and auditing.  The FCC recognizes that most states lack authority to audit service providers to verify that the collected fees accurately reflect the number of in-state subscribers served by the provider and seeks comment on whether additional efforts are needed to ensure that state and local entities have the authority to monitor/audit 911 fee collectors.   

Comments are due February 8, 2016 and Reply Comments are due March 9, 2016.

Please let us know if you have any questions.

Monday, January 11, 2016

FCC Releases Tentative Agenda for January Open Meeting

The FCC has released the following tentative agenda for the January Open Meeting, scheduled for Thursday, January 28, 2016 at 10:30 am:
  • Expansion of Online Public File: The Commission will consider a Report and Order which modernizes the public inspection file rules by requiring cable and satellite TV operators and broadcast and satellite radio companies to post public inspection files on the FCC’s online database.
  • Improving the Nation’s Public Alert and Warning Systems: The Commission will consider an NPRM to strengthen the Emergency Alert System by promoting participation on the state and local levels, supporting greater testing and awareness of EAS, leveraging technological advances, and bolstering EAS security.
  • Broadband Progress Report: The Commission will consider the 2016 Broadband Progress Report examining whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion, pursuant to Section 706 of the Telecommunications Act of 1996.

In connection with the upcoming meeting, the Chairman has also released a Fact Sheet and Blog Post concerning the Broadband Progress Report, which concludes that advanced telecommunications capability is not being deployed in a reasonable and timely fashion to all Americans as 34 million Americans still lack access to fixed broadband.  The Fact Sheet outlines the key findings in the Report, and most notably, recognizes that “the increasingly dynamic nature of residential and business communications requires both fixed and mobile broadband access,” however, “given the current record, the FCC does not yet set a mobile speed benchmark, so deployment of mobile broadband is not reflected in the current assessment.”  The Chairman expresses hope that this report will “catalyze a discussion on how we can do better.”

Please contact us if you have any questions. 

Friday, January 8, 2016

HAC Fourth Report and Order and NPRM Published in Federal Register

The HAC Fourth Report and Order and NPRM were published in the Federal Register on January 5, 2016.  This publication establishes the effective date of the final rules adopted in the R&O as February 4, 2016.

January 1, 2018 (for Tier I carriers) and April 1, 2018 (for non-Tier 1 carriers) are the deadlines for compliance with the expanded HAC obligations.

Comments and reply comments on the proposals offered in the NPRM remain due on January 14, 2016 and January 29, 2016, respectively.

Please let us know if you have any questions. 

Friday, January 1, 2016

FCC Releases Eighteenth Mobile Competition Report

The Eighteenth Mobile Competition Report (“Eighteenth Report”) has been released by the Wireless Bureau.  “Consistent with the Commission’s first seven Reports, and the Fourteenth and subsequent Reports, this Eighteenth Report does not reach an overall conclusion or formal finding regarding whether or not the CMRS marketplace was effectively competitive, but rather it provides an analysis and description of the CMRS industry’s competitive metrics and trend.” (¶ 5).  We have summarized this report below, focusing on major trends and statistics.  

Competitive Dynamics Within the Industry:  Based on the Numbering Resource Utilization Forecast (“NRUF”) data, the Eighteenth Report estimates that the number of mobile wireless connections grew five percent, from 340 million to 357 million during the 2014 year.  (¶ 14).  CTIA’s data estimates that connections grew six percent, from 336 million to 355 million during this time period.  (¶ 14).   In 2014, AT&T and Verizon Wireless accounted for approximately two-thirds of mobile wireless connections while Sprint and T-Mobile accounted for approximately one third.  (¶ 15).  As of mid-2015, both T-Mobile and Sprint have seen increases from their 2014 connections: T-Mobile’s connections have increased from 55 million to 59 million and Sprint’s connections have increased from 56 million to 58 million.  As of mid-2015, regional providers count for under two percent of mobile wireless connections (as a note, the Seventeenth Report found that regional providers accounted for three percent of these connections).  (¶ 15).  

Net additions totaled approximately 18 million based on NRUF data and approximately 20 million based on CTIA’s estimates.  (¶ 17).  Postpaid net additions showed significant growth during 2014, and in the second quarter of 2015, while prepaid additions have continued to decline as a percentage of total quarterly net additions.  (¶ 18).  While Verizon and AT&T continue to demonstrate growth, “of particular note is T-Mobile, which nearly doubled its net additions between 2013 and 2014, and this trend in net additions has continued strongly into 2015.” (¶ 19).  Furthermore, although Sprint’s net subscriber additions were negative in 2013, its net additions were positive in 2014, and through the first half of 2015, its net subscriber additions jumped sharply. (¶ 19). 

The four nationwide service providers accounted for roughly 98 percent of mobile wireless service revenue nationwide in 2014, an approximate seven percent increase from 2011.  Verizon Wireless and AT&T accounted for approximately 71 percent of total service revenue in 2014.  While the big two continue to maintain the largest market share, T-Mobile had the largest quarterly increases in market share as measured by revenue through 2014.  The same pattern has continued during the first half of 2015.  Sprint, however, remains the third largest mobile service provider in terms of service revenues. (¶ 21).  The data shows that the “[t]op 4 providers have increased their share of overall industry subscribers/connections from around 66 percent in 2003 to around 98.5 percent by year-end 2014, meaning that the share of regional and local providers has declined from around 34 percent to around 1.5 percent during the same time period.” (¶ 22).  In 2014, total wireless service revenue was $187.8 billion, and in contrast to previous years, was a year-over-year drop of less than one percent.  (¶ 26). 

The weighted average of the Herfindahl-Hirschman Index (HHI), a measure of concentration used in competition analysis for the mobile wireless services industry, has increased from 3,027 in 2013 to 3,138 in 2014. (¶ 24).  HHI values above 2,500 are considered “highly concentrated.”  As in previous years, the most recent increases in the weighted average HHI reflect continued industry consolidation, and the Eighteenth Report notes the acquisition by AT&T of Leap Wireless in 2014.

Overall Mobile Wireless Industry Metrics
Generally, as of July 2015: (a) more than 90 percent of the U.S. population lived in census blocks covered by at least four mobile service providers, but coverage of road-miles and of land area was much more limited (¶ 36); (b) approximately 92 percent of the population was covered by three or more service providers offering LTE coverage, while approximately 82 percent of the population was covered by four or more service providers offering LTE coverage (¶ 38).  

Rural vs. Non-Rural: as of July 2015: (a) approximately 96 percent of the non-rural population was covered by four or more service providers and 63 percent of the rural population was covered (¶ 40); (b) almost 98 percent of the non-rural population was covered by at least three service providers offering LTE coverage, approximately 65 percent of the rural population had the same network coverage; (c) with respect to LTE coverage by at least four service providers, approximately 92 percent of non-rural America was covered, only approximately 41 percent of rural America was covered. (¶ 41). 

Input Markets: The Bureau recognizes that “[c]ompetition in the mobile wireless marketplace will be better promoted by multiple service providers having the opportunity to access both low-band spectrum that can provide coverage and in-building penetration, as well as high-band spectrum that can provide the increased throughput for mobile broadband applications.” (¶ 48).  

The Eighteenth Report finds that all four nationwide service providers hold substantial amounts of above-1-GHz spectrum:  Verizon Wireless, AT&T, and T-Mobile each hold a substantial number of PCS and AWS-1 spectrum licenses, while Sprint holds significant amounts of PCS spectrum. (¶ 61).   The Report also finds that AT&T and Verizon Wireless, each hold a significant amount of the available low-band spectrum:  when measured on a licensed MHz-POP basis, AT&T holds approximately 38 percent, while Verizon Wireless holds approximately 35 percent.  In addition, Sprint holds approximately 10 percent, T-Mobile holds approximately five percent, and a number of other smaller licensees, combined, hold the remaining approximately 12 percent.  AT&T and T-Mobile hold relatively more of their low-band spectrum in urban areas, Sprint’s and Verizon Wireless’s low-band spectrum covers both urban and rural areas, and the other smaller licensees hold more low-band spectrum in rural areas than in urban areas.  (¶ 62).

The Eighteenth Report recognizes that the Commission has established policies to make spectrum available to existing mobile service providers and potential new entrants through initial licensing, primarily by competitive bidding, and through secondary market transactions, specifically: the H-Block Auction, the AWS-3 Auction and the upcoming 600 MHz Incentive Auction, as well as the Commission’s updates to the spectrum screen in the Mobile Spectrum Holdings Report and Order.  (¶¶ 49- 56).  Future initiatives involve the 3.5 GHz band and exploring the use of spectrum above 24 GHz (¶¶ 58-59).   The Eighteenth Report finds that from January 2014 through June 2015 the Commission approved approximately 110 applications in total filed by the four nationwide providers to acquire PCS, AWS-1, Cellular, and/or 700 MHz licenses from a non-nationwide licensee or lease additional BRS/EBS spectrum from a non-nationwide licensee  (¶ 57).

Pricing Levels and Trends:  The most considerable developments in mobile pricing during the Report’s period of review are changes to the traditional, prepaid and postpaid pricing models.  In postpaid service specifically, the major developments have involved shared data plans, higher data tiers, device financing (iPhone promotions and handset leasing) and aggressive promotional pricing strategies.  However, the Eighteenth Report recognizes that analysts have recently noted signs of a possible stabilization of pricing.  Sprint and T-Mobile continue to have the most competitively priced plans at all levels and Verizon Wireless remains the most expensive option. (¶ 81). 

Providers also continue to adjust the incentives offered to encourage subscribers to choose equipment installment plans (“EIPs”) and no-contract service plans over the traditional handset subsidy option.  One such example is the introduction of handset leasing programs to encourage subscribers to shift to no-contract plans.  During the period covered by the Seventeenth Report, T-Mobile remained the only nationwide provider that had ceased offering handset subsidies.  However, since then, the remaining nationwide providers have taken steps to limit sales of contract plans and bring an end to handset subsidies or have announced plans to do so. (¶¶ 86-88).

In addition, marketing tactics have increasingly focused on Early Termination Fee (“ETF”) buyouts to encourage customers to switch service providers.  These tactics generally rely on a series of limited-time ETF buyout offers, often timed to coincide with the launch of other types of pricing changes and promotions. (¶¶ 90-91). 

One novel pricing change during this period was the launch of rollover data programs enabling mobile subscribers on usage-based data plans to roll over unused data from their monthly data allowances from month to month.  One of the differentiating features of rival rollover data programs is how long unused data remains available for use, for instance, T-Mobile allows its customers to use unused data for up to a year, while AT&T allows its customers to use unused data for a month. (¶¶ 92-93).

Prepaid:  One noteworthy trend is an increase in prepaid subscribers switching to postpaid service. Analysts believe the option available to postpaid subscribers to purchase a handset on an installment payment plan with no down payment is an added attraction for prepaid subscribers because prepaid subscribers ordinarily do not have access to the device financing options available to postpaid subscribers, but instead have to pay the full price of handsets upfront. (¶ 95).  The migration of former prepaid subscribers to postpaid service in response to postpaid pricing and promotional changes is important background to changes in prepaid plan pricing in the period since the Seventeenth Report. (¶ 96).

Non-Price Rivalry: Mobile service providers also compete for customers through “investment, capacity, network coverage and technology, service quality, and advertising and marketing.” (¶ 105).  Over the past five years, wireless providers in the U.S. have made capital investments of approximately $146 billion.  This type of non-price rivalry can create competitive constraints.  AT&T, Verizon Wireless, Sprint, and T-Mobile spent a combined $13.9 billion in the first half of 2015 and $31.1 billion in 2014, accounting for close to 100 percent of total industry capital investment as tracked in these time periods.

Network Coverage:  In terms of road miles, the Eighteenth Report shows that Verizon Wireless covered around 87 percent, AT&T covered around 90.5 percent, Sprint covered around 47 percent, and T-Mobile covered around 58 percent as of July 2015.  Verizon Wireless and AT&T each covered over 60 percent of the U.S. land area with their respective mobile wireless networks, while T-Mobile and Sprint each covered less than 35 percent of the U.S. land area. (¶ 111). Each of the four nationwide service providers covered a significantly higher percentage of non-rural than rural land area and road miles. (¶ 113).  With respect to LTE coverage, Verizon Wireless covered approximately 308 million people, AT&T covered approximately 320 million people, Sprint covered approximately 280 million people as of October 2015 and T-Mobile expects to cover 300 million by the end of 2015. (¶ 115).

Mobile Wireless Devices:  In addition to offering more devices on prepaid plans, service providers have been promoting cheaper tablets,  in part to generate growth in data traffic and generate a market for future video offerings.  Internet device net adds (including tablets) were 1.97 million in the second quarter of 2015, down from 2.27 million in the second quarter of 2014, marking the first decline in three years. 

Consumers and Trends in the Mobile Wireless Ecosystem:  In the third quarter of 2015, Android’s operating system accounted for approximately 52 percent of the smartphone OS market, while Apple’s iOS accounted for approximately 44 percent. (¶¶ 144 - 45). 

Please contact us if you have any questions.