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Spectrum, open Internet and FCC process remain hot in 2016

By Bob Deegan, Senior Government Relations Counsel

Issues of major importance to RLECs are certainly high on the agenda for early 2016 (see 2015 comes and goes with many important issues left to resolve ). However, the issues likely to attract the most attention in the overall telecom space this year are related to spectrum policy to satisfy the growing desire for more bandwidth for mobile broadband. This will be evident at the FCC, with the broadcast incentive auction scheduled to begin in March, and in Congress as both chambers work on bills in a largely bipartisan effort to implement a practical policy to make more spectrum available.

Another high profile issue for 2016 is the never ending battle over net neutrality as the DC Circuit Court crafts its decision on the Petitions for Review of the Open Internet Order. In particular, the inclusion of mobile broadband under the Title II telecommunications service umbrella received considerable attention during the December oral arguments. Additionally, Congress is expected to continue its work on net neutrality legislation at both the partisan and bipartisan levels. 

Finally, it is pretty clear there is a serious issue of trust on a party line basis at the FCC as a result of the Open Internet Order, spectrum policy and other issues such as the municipal broadband debate. In 2016, we can expect Republican commissioners to continue to push for FCC process reform and for Congress to keep up the pressure for reform legislation.

More detail on each of these hot issues can be found below.

Spectrum policy 

The need for additional spectrum has been an issue for a while, but the matter certainly picked up with the successful AWS-3 auction ending in January 2015 that generated approximately $45 billion. However, certain operational aspects of the auction were criticized, such as the abuse of the designated entity credits designed to allow small and/or minority businesses the opportunity to successfully bid on spectrum. The FCC modified those rules to address some concerns, but Republican commissioners do not feel the new rules are comprehensive enough. 

In addition to the designated entity issue, some Commissioners, various potential bidders, and broadcasters have all expressed concerns on how the upcoming broadcast incentive auction will be administered. Addressing these concerns is important as the auction is scheduled to begin in March and will potentially be the last opportunity to acquire significant amounts of spectrum for several years. Regardless of politics, it is clear that all understand the importance of having a successful auction and are working hard to ensure it goes off without a hitch. More information about the amount of spectrum up for bid may become available as interested broadcasters were required to apply to include their spectrum by January 12. 

Congress also recognized the importance of spectrum in 2015. There were several hearings as well as bipartisan legislation on the issue, including H.R. 1641, the Federal Spectrum Incentive Act, which urges government agencies to free up their own unused spectrum. Congress continues to express interest in spectrum in 2016 as Senator Thune (R-S.D.) hopes to finally introduce the Mobile Now Act, which is also geared to freeing up unused federal spectrum. Rep. Frank Pallone (D-N.J.) also introduced the Viewer Protection Act, to seamlessly transition the auctioned spectrum for wireless use as quickly as possible while also ensuring broadcasters are protected upon conclusion of the auction.

Open Internet and reclassification of mobile broadband

It has almost been a year since the FCC decided to reclassify broadband Internet access services, including mobile services, as a Title II telecommunications service via the Open Internet Order. Not surprisingly, the controversy hasn't died down. Republican commissioners and large service providers have expressed their many problems with the Order. Congress introduced bills and/or riders to the Appropriations package in attempts to thwart the implementation of the Order. And most significantly, numerous Petitions for Review of the Order were filed in the DC Circuit Court. 

With 2016 underway, there have been no indications that the issue or partisanship at the FCC is expected to change much. Likewise, Congressional Republicans will continue their efforts to challenge the Open Internet Order with new legislation. In fact the first two such bills, H.R. 2666, the No Rate Regulation of Broadband Internet Access Act introduced by Rep. Adam Kinzinger (R-Ill.), and the Small Business Broadband Deployment Act put forth by Rep. Greg Walden (R-Ore.), have already been introduced and were the subject of a January hearing. 

On a bipartisan note, reports keep appearing that Sens. John Thune (R-S.D.) and Bill Nelson (D-Fla.) are working on legislation that would implement the principles of the Open Internet Order rather than leaving it to the FCC. However, it is unknown where that process stands and, if it does move forward, whether it could garner the support of the respective parties and the President. 

Barring any such action, all eyes will remain on the DC Circuit Court as it prepares to decide the fate of the Open Internet Order for the third time over the last several years. While difficult to predict judicial outcomes, a number of experts have attempted to read the tea leaves on the biggest issues following the December 4, 2015 oral arguments. The general consensus is the FCC has strong arguments on its decision to reclassify BIAS, but the decision to apply the reclassification to mobile broadband is more suspect and open to reversal. Regardless, it is expected that whatever side the judges come out on, the decision will be appealed further up the ladder of the judicial system to the U.S. Supreme Court.

FCC process reform

When dealing with hot button issues like spectrum policy and net neutrality, it is perhaps understandable that the partisan discord in the communications sector is so heightened right now. Some of the blame for this tension lies in the communications breakdown between the various offices at the FCC and the repeated calls for improved process at the FCC. 

By all accounts, Commissioner O'Rielly has been the champion of these process reform efforts and based on FCC Open Meeting testimony by both O'Rielly and Chairman Wheeler there has been some progress made on these grounds. There is even bipartisan legislation that passed through the full House, H.R.2583 - Federal Communications Commission Process Reform Act of 2015, which aims to improve process and make the FCC more efficient and transparent. 

Despite this progress, Republican commissioners and members of Congress still have major changes they would like to see happen, such as: the release of draft orders when they go on circulation; publication of orders promptly after passage; and limitations on the authority delegated to Commission bureaus. We can expect to see these items, among others, pushed once again in 2016. 

What does this mean for RLECs?

RLECs will likely have interest in the above issues on some level or another, such as the potential expansion of wireless networks due to increased spectrum availability, whether an Internet service provider affiliate will be permanently exempted from the enhanced transparency rules of the Open Internet Order, or the possibility of increased transparency at the FCC due to process reform. However, aside from rate-of-return high cost funding reform, it may be difficult to gain traction on other issues of importance to RLECs due to these issues, Lifeline reform, and 2016 being an election year, which always seems to slow things down.

Filed under January 2016, Tagged with FCC, Open internet


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