Matt Daneman

Satellite operators are at odds on whether/how to change milestone rules for nongeostationary orbit (NGSO) fixed satellite service (FSS) constellations and how the FCC should deal with pending V-band constellation applications, as the agency looks to potentially update Part 2 and 25 satellite rules (see 1612150066). Tuesday was the deadline for replies on an NPRM, with many satellite operators agreeing on one issue -- opening up more spectrum to NGSO.

The FCC and allies and NATOA are at odds over the significance of a federal appellate court overturning the agency's solicited fax rule and what it means for a challenge of the commission finding of effective competition in the U.S. cable market. FCC intervenor NCTA in a letter (in Pacer) Friday to the U.S. Court of Appeals for the D.C. Circuit, and the FCC in a letter (in Pacer) Thursday, said Congress expressly gave the agency authority to make effective competition determinations in franchise areas. The FCC said the fight over the agency terminating franchising authorities' certifications to regulate cable rates in areas where there's effective competition is "plainly distinguishable" from the D.C. Circuit's ruling last month that the agency's solicited fax rule is illegal (see 1703310018). The regulator said its December 2015 conclusion of effective competition in most franchise areas nationwide was consistent with the Communications Act's text and legislative history. In its letter (in Pacer) Wednesday to the D.C. Circuit, NATOA -- which along with NAB and Minnesota's Northern Dakota County Cable Communications Commission is challenging the effective competition finding (see 1508280033) -- said the D.C. Circuit junk faxing ruling "definitively rejected" FCC rationale that its solicited fax rule was lawful as long as Congress didn't prohibit it, and that since Congress didn't authorize "mass sua sponte terminations of franchising authority certifications," the court should set aside the FCC effective competition order. NCTA rejected NATOA assertions that the D.C. Circuit decision means the only way for the agency to terminate franchising authorities' certifications is after a petition, as laid out in Section 623(a)(5) of the Communications Act, saying that section of code is about seeking relief from a franchising authority that exercises its rate regulation in violation of FCC standards, and is silent about effective competition determinations.

FCC bureau staff still is going through satellite industry arguments and opponent counterarguments for revisiting spectrum frontiers rules and likely will have a list of options to present to Chairman Ajit Pai within a couple of weeks, agency staff and proceeding insiders told us.

Wireless industry watcher responses were mixed after Comcast unveiled further details Thursday about its Xfinity Mobile wireless service. This "could be [Comcast's] next growth driver," Wells Fargo analyst Marci Ryvicker wrote investors. The offering "highlights cable's optionality and introduces another potential negative to the wireless industry," Macquarie's Amy Yong said.

Various parts of Ligado's LTE plans face spectrum-related opposition, which raises the risk of financial challenges for the company, said satellite consultant Tim Farrar in a blog post Wednesday. Farrar said there are indications the Federal Aviation Administration will heavily limit power levels in the 1527-1537 MHz downlink band, and the Department of Transportation may put even tighter limits; and there are efforts by the earth science community to prohibit an auction of the 1675-1680 MHz spectrum used by the National Oceanic and Atmospheric Administration. Iridium is trying to block use of the 1627.5-1637.5 MHz uplink band, and the 1647-1657 MHz uplink band likely can be paired only with 1527-1537 MHz low-powered downlinks. He also cited a column Tuesday in The Hill by Robert McDowell of Cooley in which the former FCC commissioner said Ligado's LTE plan, like the one proposed in 2010 by its predecessor LightSquared, "still causes harmful interference to already-licensed neighbors such as satellite services providers, NOAA’s weather service and the aviation industry" and should be rejected by the FCC. Farrar said Ligado has the finances to last into next year and continue lobbying, but the FCC may come to a decision this month given Chairman Ajit Pai's indication the agency plans to answer petitions within one year and Ligado's application and petition were put on public notice April 22, 2016. The agency didn't comment. Ligado in a statement Wednesday said McDowell -- whose firm represents Iridium -- made an "outdated and inaccurate characterization" of its satellite/terrestrial network and noted that McDowell, when testifying in 2014 as an expert witness in LightSquared's Chapter 11 bankruptcy, indicated GPS coexistence with Ligado's LTE network was technically feasible. McDowell told us Wednesday his 2014 testimony was about FCC process and timing issues, not about out-of-band emissions concerns in the 1627.5-1637.5 MHz band, and that Ligado's LTE plans still haven't resolved those. Ligado outside counsel Gerard Waldron of Covington & Burling said DOD indicated at a DOT workshop last month on adjacent band compatibility that it was comfortable with Ligado's LTE plans. A final DOT report is due later this month, Waldron said.

Liberty Interactive's proposed $1.12 billion buy of Alaska-based General Communication Inc. likely faces few regulatory approval challenges, because of assets of the parties and the current regulatory climate, experts told us. Cable consultant Steve Effros said there likely won't be any major issue for the deal under this administration.

An FCC revamp of broadband network overbuild terms it had put on Charter Communications' buys of Time Warner Cable and Bright House Networks likely points to the agency under Chairman Ajit Pai being far less likely to try to impose nontransaction-specific conditions in other cable ISP takeovers, experts told us. Overbuild conditions themselves might be somewhat unlikely, at least in cases when the fact pattern matches Charter/TWC, consultant and economist Hal Singer said.

The 2005 Junk Fax Prevention Act doesn't authorize the FCC to require businesses have an opt-out notice on fax advertisements that were solicited by the receivers, so the 2006 solicited fax rule order is in violation of that, a U.S. Court of Appeals for the D.C. Circuit panel ruled Friday, with one judge dissenting. In the opinion, written by Judge Brett Kavanaugh, the court said the act requires an opt-out notice on unsolicited fax ads, but it doesn't do the same for solicited ones, with Congress clearly demarcating between the two. It said the FCC defense "has it backwards" in suggesting an agency can take an action as long as it's not prohibited by Congress: "Congress has not authorized the FCC to require opt-out notices on solicited fax advertisements. And that is all we need to know to resolve this case." The D.C. Circuit ruled the order vacated and remanded to the agency and dismissed petitions challenging FCC waivers given to fax ads sent before April 30, 2015, as moot. Raymond Randolph also joining in the majority decision. Numerous businesses challenged the rule (see 1408040030). In a dissent, Judge Cornelia Pillard said the FCC was reasonable in deciding opt-out notices are needed on all fax ads and that the court's opinion will put extra burdens on recipients trying to control their fax traffic, "precisely the sort of anti-consumer harm Congress intended to prevent." In a statement, Chairman Ajit Pai said the ruling "highlights the importance of the FCC adhering to the rule of law." He said he dissented from the 2014 order reaffirming the notice requirement (see 1410300047) "because, as I stated at the time, the agency’s approach to interpreting the law reflected ‘convoluted gymnastics.’ The court has now agreed that the FCC acted unlawfully. Going forward, the Commission will strive to follow the law and exercise only the authority that has been granted to us by Congress.” With the ruling, the D.C. Circuit "has shown that it is willing to take a hard look at the FCC’s [Telephone Consumer Protection Act] decisions, especially when they are difficult to square with the statute’s text or the practical realities that businesses face," said telecom lawyer Mark Brennan of Hogan Lovells, adding that there now will be increased attention on ACA v. FCC, "another TCPA case pending before the D.C. Circuit that involves the FCC’s interpretation of the term ‘automatic telephone dialing system’ and framework for calls to reassigned wireless numbers.” Friday's decision "reconfirms the proper and appropriate reading of the law," Commissioner Mike O'Rielly said in a statement. "It also signals that the court is willing to call the Commission to task for inappropriately creating authority not provided by Congress. I can only hope this view will be applied elsewhere, such as in the court's other case involving TCPA overreach.”

With space primed to get more crowded with non-geostationary orbit (NGSO) satellite traffic, satellite operators and regulators increasingly will contend with collision and spectrum interference issues, experts said in interviews. A chief problem is that conjunction warnings to operators about possible collisions will go up exponentially due to that traffic, making it tougher to determine which possible collisions are the most likely and need addressing, said Secure World Foundation Program Planning Director Brian Weeden.

Creation of gigabit opportunity zones got tentative bipartisan support from some lawmakers, FCC Chairman Ajit Pai said at American Cable Association event Thursday, adding he hopes to see such zones incorporated into any national infrastructure spending plan or as a stand-alone. He has pushed the idea for these zones -- featuring tax breaks to encourage private-sector gigabit broadband deployment -- for months (see 1609130061). Pai said that with infrastructure investment being a top national priority, the agency is particularly focused on looking at rules to see what can be eliminated or revised so as to encourage infrastructure-related investments. He said the agency is reviewing options for how to revisit Communications Act Title II classification of broadband. "We want every consumer … to have that open internet experience," Pai said. "But networks need incentive to invest and innovate." He said he had no idea of the status of the draft order on circulation removing the network overbuild condition on Charter Communications (see 1702240029). Pai said he hasn't talked with other commissioners about it, though he supports the revamping because the overbuild requirement "accentuates the digital divide." The cable industry crowd repeatedly applauded Pai, a marked contrast from the frost between the industry and previous Chairman Tom Wheeler (see 1605200037). "We don't view you as an enemy," Pai said, because Washington “recognizes this is the challenge of our time -- building a digital infrastructure across this country" -- and cable ISPs need incentives to make those investments. The FCC now has more focus on cable industry economic freedom, Macquarie analyst Amy Yong wrote investors Thursday. Commissioner Mike O'Rielly, speaking before the ACA this week, was clear that some previous FCC rulings could be reopened and amended, such as the Title II ban on paid prioritization by ISPs (see 1703290026), Macquarie said. With net neutrality rules likely to be rolled back, providers will have more options for favoring or prioritizing content, but removing such barriers benefits consumers by letting providers enhance their services, Macquarie said. Asked about future video regulation issues, Pai said the current independent programming NPRM has keyed up some of these issues and will "hopefully ... give us a better sense of what's going on in the marketplace." He said the commission is "trying to figure out the appropriate role for the FCC ... in this space."