TR Daily Draft Public Notice Details FCC’s Millimeter-Wave Band Auction Proposals
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Friday, March 22, 2019

Draft Public Notice Details FCC’s Millimeter-Wave Band Auction Proposals

The FCC tentatively plans to consider at its April 12 meeting a draft public notice that would propose application and bidding procedures for an incentive auction (Auction 103) of upper microwave flexible use service (UMFUS) licenses in the upper 37 gigahertz (37.6-38.6 GHz), 39 GHz (38.6-40 GHz), and 47 GHz (47.2-48.2 GHz) bands. The FCC plans to commence the sale later this year.

The Commission released its tentative agenda for the meeting today, along with drafts of the six items to be considered (TR Daily, March 21). The meeting is scheduled to start at 10:30 a.m.

The FCC would auction the spectrum via 100 megahertz blocks that would be licensed by partial economic areas (PEAs).

The public notice in AU docket 19-59 would propose bidding procedures for the clock and assignment phases of the sale.

“Auction 103’s clock phase would allow bidding on generic blocks in two categories – one for 37 GHz and 39 GHz and one for 47 GHz – in each PEA in successive clock bidding rounds,” a fact sheet on the item notes. “The clock phase would serve both to assign new flexible use licenses and to determine the amount of incentive payments due to those incumbent licensees in the 39 GHz band that opt to relinquish their spectrum usage rights.”

The sale “would have an aggregate net revenue requirement, whereby the auction would advance to the assignment phase only if at the end of the clock phase, auction proceeds, net of bidding credits, are sufficient to cover incentive payment obligations,” the fact sheet adds. “Auction 103’s assignment phase would allow bidding for frequency-specific license assignments, while ensuring contiguous block assignments.”

The FCC is proposing bidding credits of up to $25 million for small businesses and $10 million for rural service providers.

Last August, the FCC unanimously adopted a fourth further notice of proposed rulemaking, proposing steps to get the 37 GHz, 39 GHz, and 47 GHz bands ready for a planned auction in the second half of this year (TR Daily, Aug. 2, 2018). The agency adopted a fourth report and order in the proceeding last December (TR Daily, Dec. 12, 2018).

Also tentatively scheduled for consideration at the April 12 meeting is a draft fifth report and order in GN docket 14-177 “that would allow Fixed-Satellite Service earth stations to be individually licensed to transmit in the 50 GHz band and would establish a process for the Department of Defense to operate on a shared basis in the Upper 37 GHz band in limited circumstances,” the tentative agenda notes.

A fact sheet says that the item would “[e]stablish a coordination process that accommodates the military’s potential need for additional sites in the Upper 37 GHz band (37.6-38.6) where the Lower 37 GHz band (37.0–37.6 GHz) is not sufficient, while protecting the interests of non-Federal licensees in the Upper 37 GHz band. FCC staff would review the military’s request to assess any potential impact on non-Federal licensees, contacting the potentially affected licensees and facilitating direct coordination with DoD. … Resolving this issue would be an integral step toward the auction of the Upper 37 GHz, 39 GHz (38.6–40 GHz), and 47 GHz (47.2–48.2 GHz) bands slated to begin later this year.”

The order would also permit “Fixed-Satellite Service earth stations to be individually licensed to transmit in the 50 GHz band (50.4-51.4 GHz) in order to provide faster and more advanced services to their customers,” the fact sheet adds. The earth stations would use “criteria identical to those applicable in the 24.75-25.25 GHz band,” according to the draft order. “This action will allow FSS operators to provide additional capacity that can be used to provide faster and more advanced services to their customers.”

The fifth report and order follows up on a third further notice of proposed rulemaking adopted last summer (TR Daily, June 7, 2018).

Also tentatively on tap for the next meeting is a notice of proposed rulemaking in WT docket 19-71 that would propose the modernization of the FCC’s regulations governing over-the-air-reception devices (OTARD) to make it easier to deploy fixed wireless infrastructure.

“The Commission’s rules prohibit State, local, or private laws, regulations, or restrictions that impair the ability of antenna users to use over-the-air-reception devices (OTARD),” a fact sheet notes. “The rule covers antennas used for fixed wireless signals, provided that: (1) the antennas are small (less than one meter in diameter or diagonal measurement); (2) the property on which the antennas are located is within the exclusive use or control of the user (if the user has an ownership or leasehold interest in property); and (3) the antenna transmits and receives fixed wireless signals for the use of those who control the premises on/in which the antenna is located. The OTARD rule does not currently apply to antennas operating primarily as hub or relay antennas used to transmit signals to and/or receive signals from multiple customer locations.

“This rule reflects the infrastructure needs of a previous generation of wireless technologies that relied on larger antennas spread over greater distances to provide service to consumers,” the fact sheet adds. “However, the wireless infrastructure landscape has shifted to the development of 5G networks and technologies that require dense deployment of smaller antennas across provider networks in locations closer to customers. The Commission anticipates that revising the OTARD framework to allow fixed wireless providers to deploy hub and relay antennas more quickly and efficiently will help spur investment in and deployment of needed infrastructure in a manner that is consistent with the public interest.”

The fact sheet says the NPRM would (1) “[p]ropose to eliminate the restriction that currently excludes hub and relay antennas from the scope of the OTARD rule in order to help spur infrastructure deployment, especially in rural areas”; (2) “[s]eek comment on certain implementation issues in order to ensure that the revised rule would apply to hub and relay antennas”; and (3) “[p]ropose to retain an exception to the rule for safety or historic preservation purposes.”

“The Wireless Internet Service Providers Association (WISPA) has asked the Commission to update the OTARD rule to apply to ‘all fixed wireless transmitters and receivers, regardless of whether the equipment is used for reception, transmission, or both, so long as the equipment meets the existing size restrictions for customer-end equipment,’” the draft item notes. “WISPA’s request would extend the OTARD rule to cover the hub and relay antennas that previously were excluded from the OTARD framework.”

“We seek comment on the extent to which extending the OTARD rule to fixed wireless hub and relay antennas would spur infrastructure deployment, including the deployment of mesh networks in urban, suburban, and rural areas. To what extent would extending the rule create more siting opportunities for fixed wireless service providers? What effect would adoption of the proposed rule have on infrastructure deployment in rural, Tribal, and other underserved areas? What effect would it have on infrastructure deployment by small providers?” the draft NPRM asks.

“Do fixed wireless service providers face a competitive disadvantage with respect to the deployment of these network facilities compared with other types of providers, such as carriers whose deployments are subject to the provisions of Section 253 of the Act or mobile operators whose deployments are subject to the provisions of Section 332? What are these competitive disadvantages?” it also asks.

Claude Aiken, president and chief executive officer of WISPA, commended the FCC today for its plan to vote on the NPRM at next month’s meeting. “WISPA hails the FCC's new proposal to liberalize and modernize its OTARD rules. Should the proposal go through, the changes will help broadband providers place new and powerful broadband technology into service, improving innovation and service coverage,” he said. “In particular, the proposed OTARD framework will enable fixed wireless providers to deploy antenna systems more quickly and efficiently, boosting the deployment of that essential transmission infrastructure so that more Americans can access high-speed broadband. We want to thank the Commission for taking many of WISPA's suggestions, and look forward to working with the agency as it moves to update its OTARD rules.”

Also on the tentative agenda is a draft report and order in WC docket 10-90 that would eliminate the voice service “rate floor,” or minimum monthly subscriber charge by carriers that receive universal service high-cost support, which has been frozen at $18 since 2017. The freeze is scheduled to expire July 1, and increases in the rate floor, which is the urban average monthly rate determined by the FCC’s urban rate survey, mean that the rate floor would increase to $26.98 on July 1 absent FCC action (TR Daily, Dec. 21, 2018).

The draft order would also “[e]liminate burdensome reporting and customer notification requirements imposed on carriers in order to comply with the rate floor rule.”

“If a carrier chooses to charge its customers less than the rate floor amount for voice service, the difference between the amount charged and the rate floor is deducted from the amount of support that carrier receives through the Universal Service Fund (Fund). The practical effect of this rule is to increase the telephone rates of rural subscribers, who are often older Americans on fixed incomes, lower-income Americans, and individuals living on Tribal lands. These Americans are some of those least able to afford the needless rate increases caused by the rate floor,” according to the draft report and order.

“After a thorough review of the record evidence, we now eliminate the rate floor and its accompanying reporting obligations. Doing so ends the de facto federal mandate to needlessly increase telephone service rates for many rural Americans above those the market would otherwise produce, and avoids a further increase from $18 to $26.98 on July 1, 2019 — an increase that would have reduced the affordability of telephone service for rural Americans, including the elderly, low-income individuals, veterans, and their families. As a result, we ensure that rural consumers continue to receive quality services at just, reasonable, and affordable rates, while also ensuring that rural carriers continue to receive the predictable and sufficient universal service support needed to serve high-cost areas,” the draft order says.

In its analysis of the issue, the draft order says that “the rate floor is a particularly ineffective means of conserving scarce federal funds. Unlike other mechanisms to control expenditures, such as the cost model for A-CAM carriers (which targets higher spending to higher-cost areas and limits spending available in lower cost areas) or the budget control mechanism for rate-of-return carriers (which limits total spending and creates incentives for carriers to control costs), the rate floor neither targets spending in an efficient manner nor creates incentives for carriers to control costs. Instead, it simply rewards carriers that artificially inflate prices, regardless of whether they invest efficiently or control their costs. And any purported savings from the rate floor have dissipated in recent years with the advent of the rate-of-return budget control mechanism — that’s because savings from the rate floor is redistributed to other rate-of-return carriers through increased headroom in the budget, with no overall savings to the Fund.”

It also says that “changes to the Fund’s support mechanisms for rural carriers since the rate floor’s adoption have largely eliminated any potential impact rates would have on the universal service support mechanisms. For example, the Commission has imposed concrete broadband buildout obligations on all legacy carriers, eliminated the support disparity between voice-only and broadband-only lines, and created incentives for legacy carriers to move from rate-of-return regulation to incentive regulation. Each of these changes reorients our high-cost system from one tied to carriers’ historic costs and revenues from telephone services toward one where funding is tied to the fulfillment of certain broadband deployment obligations. And it is accordingly no surprise that the number of carriers potentially subject to the rate floor has rapidly diminished: Of the 940 study areas that were once potentially subject to the rate floor, only 654 are still subject to it.”

The tentative agenda also includes a draft memorandum opinion and order in WC docket 18-141 that would grant, in part, a petition for forbearance filed by the U.S. Telecom Association last year (TR Daily, May 4, 2018).

Specifically, it would forbear from enforcing “the burdensome requirement that independent rate-of-return carriers maintain a separate affiliate to provide in-region long-distance service”; “unnecessary nondiscriminatory provisioning interval requirements, namely Section 272(e)(1) of the [Communications] Act and related special access performance metric reporting obligations”; and “the requirement in Section 271(c) of the Act that BOCs [Bell operating companies] provide nondiscriminatory access to poles, ducts, conduits, and rights-of-way because this requirement is redundant of the obligations set forth in Section 224 of the Act,” according to a fact sheet released with the draft item.

USTelecom had also sought forbearance from unbundling and resale mandates imposed on incumbent local exchange carriers (LECs) in section 251(c)(3) and 251(c)(4) of the Act and associated obligations in sections 251 and 252, “a request that we do not address at this time,” according to the draft opinion and order.

Section 10 of the Act, which was added by the Telecommunications Act of 1996, grants the FCC forbearance authority, although that authority is limited with respect to section 251(c) and section 271. “Except as provided in section 251(f) [which deals with exemptions from incumbent local exchange carrier unbundling, interconnection, and collocation requirements for rural ILECs], the Commission may not forbear from applying the requirements of section 251(c) or 271 under subsection (a) of this section until it determines that those requirements have been fully implemented,” section 10 says.

In a footnote, the draft order says, “The Commission determined that the checklist portion of section 271(c) was ‘fully implemented’ once a Bell Operating Company obtained section 271 authority in a particular state. Accordingly, because the Bell Operating Companies have obtained section 271 authority in all of their states, the Commission has found that the checklist requirements of section 271(c) are ‘fully implemented’ for purposes of section 10(d) throughout the United States.”

Section 10 also states that if the FCC does not act on a petition for forbearance within one year, it will be deemed granted. The Commission can grant itself one three-month extension for consideration before the deemed-granted provision would take effect. In an order in WC docket 18-141, the FCC’s Wireline Competition Bureau recently granted the three-month extension, until Aug. 2, of the deemed-granted date for the USTelecom petition (TR Daily, Feb. 14).

In a footnote, the draft order says, “This order does not address, and should not be construed as prejudging, USTelecom’s request for forbearance from obligations arising from sections 251(c)(3) and (4) of the Act relating to unbundled network elements and resale.” It notes that the Aug. 2 deemed-granted date applies to those pending aspects of the USTelecom petition.

Finally, the Commission plans to consider a draft report and order in MB dockets 18-92 and 17-105 that would eliminate the requirement that cable TV system operators maintain a paper copy of their channel lineups in their local offices, as well as the requirement that certain cable operators make their channel lineups available through their public inspection files. The latter requirement applies to systems with 1,000 subscribers or more. The item is the latest effort in the modernization of media regulation initiative launched by Chairman Ajit Pai.- Paul Kirby, [email protected]; Lynn Stanton, [email protected]

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