Tag Archives: FCC

Using Unlicensed Spectrum for D2D

The FCC recently adopted a Notice of Proposed Rulemaking that asks if it makes sense to give satellite providers access to unlicensed WiFi spectrum to support Direct-to-Device cellular service. The NPRM specifically looks at the use of 2.4 GHz and 5.8 GHz. The NPRM specifically rejected the idea of using 900 MHz for satellite service.

The FCC seems all-in on the idea of satellite cellular service and has taken a number of steps recently that favor this budding industry. However, Commissioner Anna Gomez, the only Democratic commissioner, voiced concern about how using this spectrum might affect the many devices that rely on WiFi spectrum today.

It seems like a valid concern. WiFi has turned out to be the most important and valuable spectrum we have. The whole broadband world seems to run off WiFi modems in homes and businesses. We have outdoor WiFi hotspots to provide outdoor broadband access. WISPs largely rely on WiFi spectrum to deliver fixed wireless broadband to rural homes.

It’s easy to understand why the FCC would consider this. The agency is facing huge demand for spectrum from multiple industries. Cellular carriers want more spectrum to get ready for the upcoming introduction of 6G. Cellular carriers also need to feed the rapidly growing FWA home broadband industry. Satellite companies have an insatiable demand for spectrum since they envision eventually launching hundreds of thousands of broadband satellites. And now, the satellite cellular companies want to blanket the Earth with competing networks to deliver outdoor cellular service, and the Direct-to-Device (D2D) carriers have already requested approval to launch tens of thousands of satellites to provide outdoor cellular service. There are more requests for spectrum than what is available, so the FCC seems willing to raid the public WiFi bands to support a new industry.

This is not the first time that the FCC has allowed others to share WiFi spectrum. A number of years ago, the FCC allowed cellular carriers to use WiFi spectrum in busy markets. I recall a report from university students in Chicago who had documented that cellular usage of WiFi had killed outdoor WiFi on their campus. I don’t know if cellular companies are still dipping into WiFi now that they have been able to get more spectrum, but this was a failed effort that favored the carriers over the normal users of WiFi.

What seems to be different today is that the FCC is unabashedly pro-satellite. They seem to be giving satellite companies everything they ask for. It’s not unusual for regulators to make it easy for new technologies – the FCC took a hands-off approach to the creation of the Internet. But there seems to be a lot of risk in allowing satellite companies to broadcast WiFi from space. This idea is clearly favoring satellite carriers over WISPs.

I talked to several wireless engineers about the proposed use of WiFi spectrum, and they all voiced concerns. The satellites would blanket the countryside with new WiFi spectrum. The engineers told me that it is impossible for this to be completely neutral for a WISP. Every outdoor receiver will perceive the new use of the spectrum as interference. They said there was no way to tell how bad this might be without trying it, and that sounds like a scary experiment if it turns out that the impact is severe. It’s easy for the FCC to allow a new use of spectrum, but it’s unlikely that it would be undone quickly if there is a problem.

This is out of character for the historically slow and cautious approach that the FCC has always taken with spectrum ideas. And that’s even more the case when we’re talking about WiFi spectrum, which has proven its value many times over.

FCC to Examine USAC

In its August meeting, the FCC adopted a Notice of Proposed Rulemaking titled Maximizing Efficiencies in Universal Service Administration Company (USAC) that looks at changing the rules governing USAC, the Universal Service Administration.

USAC is a non-profit corporation that was formed by the FCC after passage of the Telecommunications Act of 1996, which created the Universal Service Fund. The FCC decided to create USAC to administer the fund in order to shield the day-to-day operations of the USF from politics and the changes that always come after a change in administration. USAC has a single purpose, which is to operate the Universal Service Fund under guidelines established by the FCC and approved by the FCC.

The Universal Service Fund has been somewhat controversial since its formation. However, most of the controversy comes from the direction that the FCC gives to USAC. For example, USF is funded by fees levied against interstate revenues for voice services. Over the years, as the amount of voice services has dropped, the percentage of the fee levied against voice has increased. But this can’t be blamed on USAC since the FCC determines who should pay into the fund. There are many critics who don’t like the programs funded by the USF. But again, these programs were established by the FCC and not by USAC.

Chairman Brendan Carr issued a separate statement that said, “It has been nearly three decades since the FCC designated USAC—the Universal Service Administrative Company . . . In all of that time, there has never been a comprehensive review of USAC’s functions or organization.”

That’s not entirely true. In May 2023, Senator Ted Cruz asked the General Accountability Office (GAO) to examine USAC to see if the company is properly administering the USF. The GAO audit gave high grades to USAC.

The NPRM is a comprehensive review of USAC. The NPRM considers the following:

  • It asks for public comments on ways the agency can be more efficient.
  • The NPRM asks if there should be changes in the USAC appeal process when USAC accepts or denies challenges from USF recipients.
  • It asks if USAC should have a shot clock for some processes to force a decision to be made within a set amount of time.
  • Probably the most important part of the NPRM, and the likely reason for this docket, is a lot of questions to the public and proposed changes in the way that USAC audits USF recipients, and how the company handles fraud. Over the years, USAC and the FCC’s Enforcement Bureau have uncovered instances of fraud in the E-Rate, Rural Health, High-Cost, and Lifeline programs.
  • The NPRM asks if there should be an operational cost cap. It cites the company’s operating budget for 2025 at more than $266 million.
  • USAC uses subcontractors, and the NPRM asks for public comment on whether the subcontractors are knowledgeable.
  • The NPRM asks if there are better ways for USAC to report its annual results to the FCC.
  • The NPRM asks if the number of USAC board members should be reduced from the current size of 20 members, and if meetings must be held in Washington, DC rather than virtually.

The USAC audit is part of the FCC’s overall examination of the Universal Service Fund. The agency is separately examining individual components of USF like E-Rate, the High Cost Fund, and Lifeline.

Senate Passes Bill for Broadband Mapping

Before the Senate paused for recess, it passed a bill introduced by Senator Deb Fisher of Nebraska that would require the FCC to undertake a major review of its broadband mapping system. The bill is labeled the Modernization, Accountability, and Planning (MAP) for Broadband Funding Act.

It’s not hard to understand why there are folks who lobbied Congress to ask the FCC to pay more attention to the maps. Anybody who has ever used the current BDC broadband mapping can describe problems and errors in the map. However, I can’t be the only one who thinks that making this request to the FCC now, as States are in the process of awarding BEAD grants to ISPs, is too little, too late. I’m highly skeptical that the maps can ever be made anywhere close to perfect.

There are two separate parts of the broadband mapping system that work together to create the maps – the fabric, which is created by Cost Quest, which is supposed to show the location of every location that might be a broadband customer. The second big component is broadband coverage data as reported by ISPs, which shows the locations they can serve and the broadband speeds they can provide.

I have a lot of sympathy for Cost Quest for ever getting an accurate fabric. If nothing else, this is a dynamic country with houses constantly being built, torn down, burned out, or abandoned. Cost Quest is forced to rely on local housing data that is often inaccurate – counties don’t really care if a property is abandoned or unused as long as somebody pays the taxes on the property. Cost Quest also seems to use satellite data to spot locations. But satellite data misses buildings (and entire roads) that are under heavy tree cover. And satellite can’t tell the difference between a house, a shed, or a burned-out abandoned building.

About the only thing that could improve the fabric is local feedback on inaccuracies. There is zero motivation for local governments to spend time and money on this if they think their areas already have good broadband or are going to be covered by broadband grants. Many local governments are fed up with the FCC map challenge after they spend big efforts trying to fix the maps during the BEAD map challenges, only to see huge numbers of their suggested changes rejected. I really can’t think of any constituency that is ever going to be motivated to try to fix the fabric in the future. It’s going to be laughable if the FCC makes map challenges easier now that nobody is likely to bother with the process.

The part of the map with the biggest problems is completely due to FCC rules. ISPs are supposed to define where they can provide service within ten days of a customer request. Many ISPs are conscientious about this while others either file ridiculously exaggerated coverage areas, or else don’t bother to update changes in their networks. But the biggest area of mapping problems comes from ISPs being able to declare marketing speed capabilities instead of something close to what they can actually deliver. Even somebody who has never looked at a broadband map can imagine ways that ISPs can abuse this rule. Some ISPs exaggerate speeds and consider the FCC maps to be a cheap source of advertisement. Others claim 100/20 Mbps or faster to stop federal and state grants being used to compete with them.

The most important change that is not in the legislation is giving the public access to the data underlying the broadband maps. It’s outrageous that there are expensive licenses required to see data that belongs to the American people. If the FCC mapping data was open and free, then I can imagine a lot of folks who would work to fix the map in their neighborhood out of altruism.

I am worried that any changes to the map are going to rebound and hurt ISPs that have already won BEAD awards. NTIA has shown an eagerness to remove locations from the map as a way to reduce the amount of BEAD grant funding, while not being equally open to adding locations to grants that were missed by the FCC maps. The only saving grace is that nothing will happen quickly. This may not be passed in the House, and if it is, the House could pass a different version that would require reconciliation. Even if enacted, this would instruct the FCC to take a fresh look at the maps, and that process could take several years. As I said at the start of the blog, this is too little too late. This would have been a wonderful bill in 2021, and now it just seems like a way for Congress to say it is doing something about broadband without actually doing anything.

The 2026 FCC Broadband Report

The FCC released its annual Section 706 report on August 14 that describes the U.S. broadband industry as of June 30, 2025. This report is created to fulfill a mandate that the FCC should update Congress once a year on the state of broadband. As seems to be the norm for these reports, they seem to take over a year to compile and publish.  The data supporting this report comes from the Broadband Data Collection (BDC) process where ISPs  and carriers report speed and location data to the FCC twice each year.

One of the findings of the report is that broadband coverage is growing. That’s not hard to believe. I’ve been following and reading reports of broadband projects all over the country, much of the rural builds supported by various state and federal grants and urban builds being funded by carriers and venture capital money. I’m a bit dubious of the statement that 96.9% of Americans have access to a terrestrial ISP that can deliver speeds of at least 100/20 Mbps. I’ve written many times about the exaggerations and inaccuracies in ISP reporting in the data collection process. I still think there are ISPs reporting exactly 100/20 Mbps speed capability to the FCC while delivering something slower.

Another major finding is that the digital divide is rapidly shrinking in rural America. The report says that the number of rural locations without access to 100/20 Mbps shrank by 23% from 2024 to 2025. It adds that 100/20 Mbps satellite broadband is available to almost everybody. I take exception to this claim. This is really another way of reporting on broadband coverage. Looking at the digital divide means looking at who is buying broadband, not who has the opportunity to buy. The big question that the FCC constantly ducks is affordability. There was a recent hearing in the Pennsylvania House where witnesses told the legislators that the OBBB and affordability could mean a loss of 233,000 broadband customers in Pennsylvania in 2027 due to affordability issues.

Another big claim is that there is widely available 5G. The report claims that 95% of Americans are covered with 5G that can deliver speeds of 35/3 Mbps. It says that the number of households without 5G access decreased by 30% over a two-year period. To be fair to the FCC, it is only reporting what the carriers report to it, but these claims are hard to accept. Anybody who has spent time studying the cellular coverage maps will quickly see a lot of exaggerated coverage outside of cities. Another issue with looking at June 30, 2025 data is that there were a lot of locations in the FCC database where the only fast provider was EchoStar, which shut down the cellular business earlier this year.

The other major claim is that Americans have more competitive options than ever before. The report says that 77% of households have access to at least three ISPs that can deliver speeds of at least 100/20 Mbps when including satellite in that measurement. The problem with this is that Starlink is not able or willing to serve many folks in urban areas, so while this claim is probably true based on reporting, it’s not true in the real world. A more realistic statistic is that 43.4% of households have access to three or more ISPs that can deliver 100/10 Mbps. That would mean broadband from a fiber ISP, a cable company, a FWA provider, or a WISP. While I’m positive the number is a bit inflated, a lot of people in cities have access to three ISPs out of that list.

There were other topics reported to Congress in the report. For example, the report says that cellular data speeds are increasing. The report talks about the phase-out of copper technology. The FCC touted successes in the marketplace due to its spectrum policies.

There was an interesting change in the report. The FCC dropped the long-term goal that the country should be striving to reach a future speed of at least 1 gig upload and 500 Mbps download. That goal was adopted by the FCC under Chairperson Jessica Rosenworcel. ISPs other than fiber providers hated that goal, although cable companies are on an upgrade path to largely meet that goal. But that goal was anathema to the satellite, cellular, and fixed wireless ISPs.

Updating the FCC Definition of Broadband

There has been a lot of talk about how AI is putting stress on broadband networks, and many analysts are claiming that we need faster broadband speeds to accommodate growing AI traffic. I was particularly struck by a comment from NTCA – the Rural Broadband Association in a filing at the FCC earlier this year in the FCC docket looking at USF reform. NTCA wrote, “The burgeoning growth of [artificial intelligence] demands modern networks with upload speeds much closer to symmetrical to support the applications and devices that it supports.” The National Rural Electric Cooperative Association (NRECA) told the FCC in 2025 that the 20 Mbps upstream standard is far too low and should be increased to 100 Mbps.

The FCC definition of broadband of 100/25 Mbps was adopted in March 2024. However, Commissioner Rosenworcel had been pushing for the increase to 100/20 Mbps for several years before that. It had been clear to everybody but the Ajit Pai FCC that the 25/3 Mbps definition of broadband was obsolete when the FCC’s mapping in 2022 showed that 90% of homes already had access to 100 Mbps download speed.

All of this leads me to ask if the 100/20 Mbps definition is already obsolete. Recent data from OpenVault says that 43% of U.S. households now subscribe to speeds faster than 500 Mbps download and 70% of homes subscribe to speeds of 200 Mbps or faster. It’s hard to look at these statistics and think that 100/20 Mbps should be the standard.

Unfortunately, the definition of broadband has political and financial overtones. A higher definition of broadband would declare that certain technologies are not really acceptable broadband. If we buy the arguments from NTCA and NRECA, then satellite broadband and FWA cellular would no longer be considered broadband. A huge percentage of cable company networks still have upload speeds far below 100 Mbps, even though there are numerous technology fixes for them to upgrade to faster, and even symmetrical speeds.

In a perfect world, the definition of broadband would be increased regularly to reflect that reality of the marketplace. But that’s not going to happen with this FCC, and in fact, in 2025, Commission Carr asked if the 100/20 Mbps definition is too high.

What is the right definition of broadband?. The easiest starting point for looking at download speeds is to look at the historical evolution of the definition of broadband from 4/1 Mbps, to 25/3 Mbps, to 100/20 Mbps. I’ve shown the following chart before that just trends forward that historic growth trend. If the definition of download speed continues on the same growth curve as from 1996 to 2022 (when the definition should have been 100 Mbps), the following definition of broadband is projected.This suggests the minimum definition of download broadband for 2027 would be 250 Mbps. That doesn’t seem at all out of line considering the OpenVault numbers that say that 70% of U.S. homes already subscribe to speeds faster than 200 Mbps.

Setting a definition for upload speeds is harder. The traditional definition of upload was low because there wasn’t really any use for it in most homes. But that has all changed in the last decade, particularly after the pandemic. People need upload bandwidth for a lot of uses. Most of us now work in the cloud all day. Video calls are the norm – I haven’t been on a voice conference call in ages. People game online and create content. We connect to portals for education that need significant and steady upload bandwidth.

The recent OpenVault report for the end of the second quarter of 2026 says that the average U.S. home uploaded 58 gigabytes of data per month, with upload usage growing at a rate of 20% per year. I always have to remind myself that the average means there are a lot of homes that upload a lot more than 58 gigabytes per month. That usage is two-and-a-half times the upload usage at the end of the pandemic and is way higher than usage a decade ago. I don’t know if the definition of upload should be 100 Mbps, as NRECA suggests, but I know it should be significantly higher than 20 Mbps, particularly if the AI folks are right.

In that same filing in the USF docket, NTCA also reminded the FCC that it is required to meet Section 254 of the Communications Act, which requires rural areas to have “reasonable comparability” to broadband service in urban areas. There are few urban and suburban areas where people can’t buy gigabit and faster download speeds, with an increasing percentage of homes that can buy gigabit upload. To be realistic, any definition of broadband that is set is strictly relevant only to rural areas, because urban speeds already far exceed any speed definition the FCC could ever consider.

Retiring AT&T Copper in California

Regulatory fights between state and federal regulators sometimes get messy, and it’s been a while since we’ve seen anything as messy as AT&T’s attempt to retire and walk away from copper facilities in California.

AT&T asked the California Public Service Commission (CPUC) for the ability to start retiring copper telephone networks in March 2023. It wasn’t an unusual request since AT&T is in the process of retiring copper in every other state where it owns last-mile copper networks. The CPUC finally ruled on that petition in June 2024 and unanimously rejected AT&T’s request. The state said that AT&T couldn’t retire copper unless the company had a functional equivalent product available for every customer who loses a copper connection.

That’s something AT&T can’t promise. The only two possible replacements for copper are fiber or FWA broadband delivered using cellular spectrum. AT&T has an alternative for customers in most urban and suburban markets. The company has built a lot of fiber and announced in May 2026 that it was planning to invest $19 billion more on fiber construction in the state. Most urban customers should also be able to use FWA cellular broadband if they lose copper, with the caveat that too many customers on FWA in a neighborhood could overwhelm the cellular network.

AT&T’s big problem comes in rural areas, where there are large areas where AT&T doesn’t have enough cellular coverage to reach homes with cellular broadband. It’s not unusual in most rural counties for a cellular carrier to serve only half of the area in a county, or less. There have been reports all around the country about customers who have been stranded after losing copper with no affordable voice option. AT&T has argued at the FCC that they can walk away from copper as long as customers can buy voice from somebody else. It feels extreme to have to replace an AT&T telephone line, that range from $25 to $63 per month with Starlink satellite broadband priced at $130 per month.

In May of this year, AT&T tried again. The company sued California and asked the federal courts to allow it to ignore the CPUC ruling. At the same time, AT&T asked the FCC to allow the company to walk away from carrier of last resort obligations (COLR) in California. The COLR request is a slightly different question than asking to be able to tear down copper. COLR are rules that require AT&T to still connect copper to new customers, even if that means building new copper facilities.

AT&T also filed a separate petition with the FCC asking for permission to discontinue 60% of its wire centers in California, or about 360 wire centers. AT&T argued that these wire centers were not compliant with the FCC’s rules requiring AT&T to support Phone-Advanced, which is a digital home phone service that runs on AT&T’s cellular network and broadband internet instead of traditional copper landline wires. Phone-Advanced lets customers keep their home number and connect up to six devices—including standard phones, fax machines, and medical monitors.

This is where it starts to become a messy jurisdictional battle. As was expected, the CPUC and California Attorney General Rob Bonta quickly challenged and asked the courts to dismiss AT&T’s federal lawsuit, while also asking the FCC to override rulings from the CPUC. In June, the FCC approved AT&T’s petition to close 360 wire centers and to cut copper to roughly 184,000 residential and 15,000 business locations across the state, but it seems like that should be ineffective while the State is saying the opposite and the issues are in court.

It’s getting hard to understand who has the final say about retiring copper in California, and it’s starting to feel probable that there might be conflicting rulings between the CPUC and the FCC. This doesn’t seem like something that is going to easily resolve, which could mean that copper will stay alive in California longer than anywhere else.

Who Should Regulate Space?

Earlier this year, two ranking members of the House Science Committee sent a letter to the FCC that reminded the agency that it didn’t have any clear authority from Congress to regulate space safety, space traffic management, or other non-communication space issues. This letter was sent when it became clear that the FCC was considering sweeping changes to the regulation of satellite constellations.

Those same two members, Republican Brian Babin and Democrat Zoe Lofgren, sent another letter in July, asking the FCC to delay a vote on new satellite regulations. The FCC Commissioners went ahead and approved the new satellite rules in its July meeting.

The FCC has been addressing space issues for years. I’ve read the applications that SpaceX filed when it originally asked the FCC for the authority to launch its current satellite constellation. Those filings are full of specifications and descriptions of how Starlink can direct satellites to avoid collisions, and how the company will deorbit satellites when they are no longer needed. The new FCC regulations cover these same issues.

The letter from Congress raises an interesting question. If the FCC doesn’t regulate these issues, then what federal agency does? The answer to that question is unclear, and it looks like various agencies have some role in regulating satellites:

  • The Department of Commerce has developed the Traffic Coordination System for Space (TraCSS) that issues satellite collision warnings.
  • The Department of Defense and Space Command also tracks space objects.
  • The FAA coordinates with airplanes to avoid areas near rocket launches.
  • The FCC is clearly in charge of the spectrum issues used to communicate between satellites and Earth.

Congress hasn’t specifically given any agency the authority to regulate orbital debris mitigation and deorbiting rules. This is a relatively new issue due to the large number of satellites in orbit, and the much larger number of planned satellites coming over the next decade. When the FCC took on this role with early communication satellites, it didn’t have any Congressional mandate to do so, because Congress hadn’t given that specific authority to anybody. But nobody was very concerned about this issue a decade ago, when there were 4,200 objects in orbit, including only 1,400 operational satellites.

It appears that the FCC has taken on this role in the regulatory vacuum. The House Science Committee had sent letters to the FCC making the same points to Chairman Ajit Pai in 2020 and Chairwoman Jessica Rosenworcel in 2022. That means that Congress has had years to debate the issue and decide who should regulate space safety. There have been discussions in Congress about assigning this role to the Department of Commerce, but no votes have been taken to do so.

Clearly somebody needs to regulate space safety. Scientists and space experts have been warning about the disaster that would ensue if there are major collisions of satellites that result in a cloud of debris. The satellite industry is growing to be a significant piece of the economy, and a major collision event could quickly cripple communications satellites for years.

I have to wonder if the FCC is the right place in the government to be tackling these issues today. Does the agency have enough space experts on staff to fully evaluate if satellite companies are taking the right precautions? Does any federal agency? There will be a lot of finger-pointing if a collision disaster happens, but it seems like the only place to point the finger would be Congress.

Slaughter and the FCC

Today’s blog muses a bit on the impact of the Supreme Court ruling in Trump vs Slaughter. The case arose when President Trump fired Rebecca Slaughter and Alvaro Bedoya, the two Democratic Commissioners at the Federal Trade Commission, soon after he took office. The Congressional legislation that established the FTC said that Commissioners serve seven-year terms, and that a president can only fire a Commissioner “for inefficiency, neglect of duty, or malfeasance in office”. Slaughter sued, and won in District Court, and that ruling was upheld by a split decision at the Court of Appeals. However, when the split decision was appealed to the Supreme Court, the Court ruled that a president has the authority to fire regulators in independent agencies.

As soon as this was announced, there was press speculation that the President might also fire Commissioner Anna Gomez, the sole Democratic Commissioner at the FCC. It’s unlikely that the administration would currently fire Gomez. Firing Gomez would mean that the FCC wouldn’t have a quorum, which requires three Commissioners be present before the FCC can vote on any actions. The FCC currently only has three Commissioners – Chairman Carr, Republican Commissioner Olivia Trusty, and Commissioner Gomez. We know what it looks like to not have a quorum since this happened a number of times in the past. The most recent time was last year when Commissioners Geoffrey Starks and Nathan Simington both resigned from the FCC in June 2025. That left only Chairman Carr and Commissioner Gomez, and the FCC was unable to conduct business until Commissioner Trusty was approved by the Senate.

The FCC doesn’t shut down without a quorum. The agency continues with all of its normal functions, like reviewing and approving new communications devices or granting simple wireless licenses for things like microwave connections. But nothing can be done that requires a vote of the Commissioners, including starting new proceedings. The Congressional mandate that established the FCC also requires the composition of a full Commission must be bipartisan, with no more than two of the four Commissioners from a given party (not counting the party of the Chairman).

But the speculation about firing Commissioner Gomez ramped up last week when President Trump nominated a third Republican Commissioner. He chose Republican Danielle Thumann Severs, who is currently a senior counsel to Commission Carr, to fill one of the two open seats on the commission. The nomination was immediately sent to the Senate to start the confirmation process. If confirmed, she would serve the remaining three years on a seat with a 5-year term that began on July 1, 2024.

Thumann Severs currently advises Carr on matters before the Wireline Bureau, the Public Safety and Homeland Security Bureau, and the Consumer and Governmental Affairs Bureau. She had been an advisor to Carr’s office from March 2021 to July 2023 and worked at Crown Castle before rejoining the FCC in August 2024.

It will raise questions about the future of the FCC and other independent agencies if Commissioner Gomez is fired after Thumann Severs is seated. Will future Presidents immediately terminate Commissioners of the opposing party in all independent agencies upon taking office? I’ve been watching the FCC for decades. My observation has been that a new Commissioner to the FCC is rarely fully effective until they’ve been in the position for a year or two and get to know staff and get deep into the issues at the agency. Having a constantly revolving door in the future would not be efficient for getting anything done.

It’s also worth noting that FCC Commissioners have regularly reached bipartisan agreement on many issues. There is no policy reason to fire Commissioner Gomez, other than to eliminate her opposing opinions that are posted after votes. I suspect that if every new president routinely fires Commissioners of the opposing party, then every decision at future FCCs will become highly partisan. As much as the big ISPs love it when they get a Commission that sides with them on issues, they also put a high value on regulatory consistency, and the big players regulated by the FCC don’t want to see rules that yoyo with every change of administration.

The Spectrum Auction Winners

After a four-year hiatus, the FCC recently held a spectrum auction of 200 licenses for AWS-3 spectrum in the 1695-1710 MHz, 1755-1780 MHz, and 2155-2180 MHz bands. The last FCC auction was in 2022 for 2.5 GHz spectrum. The FCC lost the ability to hold spectrum auctions when its Congressional authority lapsed and was not renewed. This spectrum was touted by the FCC as being 5G-grade. The license areas included in the auction covered over 100 million people across 48 states and two US territories, and included major markets like New York, Chicago, Boston, Tampa, and Charlotte. The FCC announced before the auction that much of the proceeds will be used to continue to fund the rip-and-replace of Chinese electronics from Huawei and ZTE.

The winning bidders collectively bid more than $3.57 billion. The winners are as follows, from largest to smallest:

  • Verizon Wireless: $3,162,445,000 for 82 licenses in 82 markets
  • T-Mobile: $277,787,000 for 102 licenses in 102 markets
  • AT&T: $120,774,000 for 10 licenses in 10 markets
  • SpaceX: $8,490,200 for two licenses in two markets
  • Blue Ridge Wireless II LLC: $2,090,000 for one license in one market
  • Conundrum Wireless, LLC: $1,228,000 for two licenses in one market
  • Citizens Band License Company, LLC: $75,000 for one license in one market

Not surprisingly, 99.7% of the spectrum was claimed by the three big cellular carriers, with Verizon snagging 88.5% of the awards. Folks might be surprised to see SpaceX as the fourth-largest winner. The company is looking for spectrum to enhance its direct-to-cell mobile services. Analysts speculated that this auction was a trial run for the company to learn about the auction process since the company has already agreed to buy $2.6 billion in spectrum in the AWS-3, AWS-4, and H-blocks from EchoStar.

Verizon was using the auction to fill holes in its spectrum portfolio and spent almost $2 billion of its winning bids in New York, Chicago, and Boston. AT&T’s biggest focus was for Charlotte. T-Mobile dropped out of all of the expensive markets, but still won the most licenses spread across small metropolitan areas.

ike many actions by the federal government these days, there is also an interesting backstory to this auction. The spectrum that was included in this auction originally came from EchoStar (originally Dish Networks). Two companies, SNR Wireless and Northstar Wireless, originally purchased the spectrum in the 2014 AWS-3 auction for $3.3 billion. When the FCC learned that Dish was the secret backer of the two companies, the FCC voided the awards. The FCC ruled that when this spectrum was eventually reauctioned, that Dish would owe the FCC any shortfall if the new auction raises anything less than $2.9 billion.

Roger Entner of Recon Analytics says that EchoStar bid up the current auction to save itself from having to pay for any shortfall in the auction. EchoStar entered the recent auction with almost as many bid credits as Verizon. Entner claims that EchoStar was in the auction for no other purpose than bidding up the price, and in doing so, increased the proceeds of the auction from $2 billion to the final $3.57 billion. He says that EchoStar stayed in the auction until the auction reached the threshold where the company was off the hook for paying for the shortfall. In the next two rounds, the company dropped out of every market except for two licenses it got stuck with in Guam. The company is no longer in the cellular business, and Entner expects it will sell this spectrum at a discount to a local cellular provider or just ride out the build-out shot clock until the FCC is forced to reclaim the spectrum.

It’s going to be interesting to see if the three big carriers take any action against EchoStar for driving up the prices. I don’t have the slightest idea if EchoStar did anything illegal, but its bidding actions were certainly shady.

FCC Proposes New Permitting Rules

The FCC issued a Notice of Proposed Rulemaking titled Build America: Eliminating Barriers to Wireline Deployments. The stated purpose of the proposed new rules is “to cut red tape and excessive fees imposed by some state and local governments in the public rights-of-way for wireline deployments”. There are several important provisions in the new rules.

First, the FCC proposes a 120-day shot clock for local governments to approve a request for rights-of-way. If the local government doesn’t respond in that time frame, then the application is presumed to be approved. That may seem like a reasonable time frame when you first hear about. It doesn’t seem unreasonable to ask a local government to approve or reject a right-of-way request to build fiber on a single street or a small neighborhood. But consider if a fiber overbuilder requests rights-of-way for an entire city. Such requests are complicated. Such a request would include residential neighborhoods and business districts. A city would have to consider a lot of factors, like planned road relocations or rebuilds, other construction activity that is already occurring, and issues related to the condition of existing rights-of-ways that might already be overcrowded with other utilities.

The docket also proposes to limit fees to a reasonable approximation of the government’s actual, direct costs of managing the rights-of-way with respect to a particular application. This implies the FCC will only allow fees associated with establishing the original right-of-way and will not allow fees to cover some of the costs for managing the right-of-way over future years.

The FCC plans to establish safe harbor fees for rights-of-way. For those not familiar with that term, a safe harbor fee generally means a standard rate or affordable guideline. The problem with safe harbor rates is that they don’t recognize the difference between a right-of-way fee in a small rural town and one for the biggest metropolitan areas of a state.

The new rules will count in-kind compensation as part of any fee. Local governments often negotiate in-kind contributions with fiber builders. For example, they might grant a right-of-way and ask the fiber builder to provide a few free fibers to connect between government buildings. The FCC new rules will mandate that any such in-kind contribution be counted as part of the fee. That would mean putting a dollar value on the in-kind contribution and subtracting it from the fees. That may sound reasonable, but this is being done in the context where the local government has to prove its fees are cost-based while a fiber builder will not. I have many clients who have been handed inflated estimates from cable companies for providing short fiber routes.

Finally, the new rules will prohibit a local government from charging higher fees when the proposed infrastructure will support multiple purposes. An example would be a fiber route that is being built to bring fiber to a neighborhood and also serve a cell tower.

The most interesting thing about the docket to me is that FCC Chairman Carr said when he took the job that his philosophy was “light touch regulation”, meaning he didn’t foresee the FCC implementing a lot of new regulations. Instead, this and other FCC proceedings are adding a lot of new federal regulations. Many of the other FCC proceedings are similar to this one in that the FCC wants to wrest away any regulatory authority from states and localities and regulate everything at the federal level.

I’m sure that industry comments will include some horror stories from fiber builders about cities that have stonewalled new fiber construction or that charge a lot of fees. My guess is that these are the exception rather than the rule since most communities want more fiber and are willing to work with anybody willing to invest in their market.