FCC Section 706 Inquiry Seen Exploring Mobile Broadband as Possible Fixed Substitute
The FCC inquiry into advanced telecom capability (ATC) deployment signals interest in viewing mobile broadband as a potential substitute for fixed, which would have implications for merger and acquisition reviews and other matters, some parties said. They reacted to a notice of inquiry Tuesday into whether broadband-like ATC is being rolled out to all Americans in a reasonable and timely fashion, pursuant to Section 706 of the Telecom Act (see 1708080070). The prior FCC used negative ATC findings to help justify net neutrality rules and other policy actions under the section's mandate for agency action.
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"There seem to be some significant differences from the past few Section 706 inquiries," said Butzel Long attorney Stephen Goodman, who represents Adtran. "The focus is on whether progress is being made in a reasonable and timely fashion -- it’s not like the kids in the back seat simply asking, 'Are we there yet?' And wireless broadband apparently will be included in the analyses. They will also use this NOI to address steps the FCC can take to accelerate broadband deployment. ... This NOI is more closely aligned with the directives of Section 706."
"What caught our attention is that the FCC is seeking comment on whether 'we should evaluate the development of fixed and mobile broadband as separate and distinct ways to achieve advanced telecommunications capability,'" Bank of America Merrill Lynch analysts wrote. They said the implication is the FCC might find "either fixed OR wireless is adequate to achieve the Act's goal of ATC availability." The agency acknowledges some functional differences, but "a conclusion that there is an inherent degree of capability that elevates wireless to 'functional enough,' could change the historical M&A calculus," they wrote. If "mobile broadband is functionally equivalent with at least a sub-segment of the fixed wireline broadband market, it would arguably make cable/wireless combinations more difficult and horizontal broadband combinations easier." The NOI "signals a willingness to view wireless as more of a substitute than a separate market," said an industry attorney, agreeing there were merger review implications.
CTIA said it's "glad to see the FCC taking a fresh approach" and hopes the agency "will recognize the innovation in our industry that is driving deployment and productivity, and that mobile broadband deployment is occurring at a reasonable and timely pace.”
Commissioner Mignon Clyburn objected to seeking comment "on whether to deem an area 'served' if mobile or fixed service is available." Clyburn is skeptical about that query, but "that seems to be a line of inquiry from both 2014 (para 4) and 2015 (para 3)," emailed Will Rinehart, American Action Forum director-technology and innovation policy. "Until the problems of wireless [Form] 477 [broadband data] collection are dealt with, which the Commission is undertaking, I’m not sure there’s much that could be gleaned from the wireless data anyway." Clyburn also criticized a proposal to keep a 25/3 Mbps benchmark for fixed ATC as selling "consumers short" and voiced concern about a query to tie the speed benchmark to consumer subscriptions.
"Why are critics attacking the FCC for raising important questions on broadband deployment," blogged Daniel Lyons, American Enterprise Institute visiting fellow. "The notice simply solicits information from the public ... [as] required by law." He said the FCC didn't pull a possible 10/1 Mbps mobile benchmark "out of thin air," noting the prior commission set 10/1 as the minimum for USF-supported fixed broadband.
The "proceeding is going to be really important as to whether the FCC issues any rules under its 706 authority," said telecom attorney Jeff Carlisle. "No negative findings, no authority to take action under 706. So I suspect a good number of pro-net neutrality comments will come in seeking to preserve some measure of FCC authority under this section."
Numerous industry parties and others, including public interest advocates, didn't comment. Some said they were too busy with net neutrality replies; the reply deadline was extended Friday (see 1708110053).