Pai Expected to Propose Busy Agenda for April Commissioners' Meeting

FCC Chairman Ajit Pai is expected to propose a full agenda once more for the April commissioners' meeting. In addition to business data service (BDS) (see 1703280050) and UHF ownership limit discount votes (see 1703070055), Pai is expected to tee up items on wireless and wireline infrastructure, plus a spectrum notice of inquiry, industry officials said. Pai had a similarly busy agenda for the March meeting. Meanwhile, he gave a speech touting light-touch regulation and his process moves such as publicizing drafts of all items voted on at members' meetings.

On the spectrum NOI, wireless industry officials said the FCC is expected to propose additional bands for 5G, building on the spectrum frontiers order from July. On infrastructure, former officials said it seems most likely the FCC will launch an NPRM highlighting some of Pai’s infrastructure proposals and possibly announce a broadband deployment advisory committee. The agency already has a record on wireless infrastructure as a result of the comments on the Mobilitie petition (see 1703090013), industry officials noted. An FCC spokesman didn’t comment.

The expected BDS draft likely will be "deregulatory," said an FCC official. The official said it's "possible" there would be an infrastructure item. That could address barriers to pole attachments, rights of way and other matters, said some industry officials.

Another draft item would restore the UHF discount, broadcasters, their attorneys and an FCC official told us. The item had been expected for the March meeting (see 1703010074), but wasn't ready in time, said an FCC official. The item is expected to be a simple restoration of the discount, said numerous industry officials.

“It is interesting that the pro-infrastructure investment items like additional 5G spectrum are on the same agenda as anti-infrastructure investment items like BDS,” said Roger Entner, analyst at Recon Analytics. “The FCC needs to act in a unified fashion to drive investment and create jobs that ultimately accelerate growth in the overall economy.”

BDS

The FCC likely will apply a "competitive market test" to traditional DS1 and DS3 loops (1.5 Mbps and 45 Mbps) that "will reflect its own market analysis" that the presence of facilities-based BDS competitors within half a mile of a building affects provider pricing, said a telco official.

CEO Chip Pickering said Incompas is preparing for a BDS draft. He said he didn't know what the FCC would propose but he criticized the deregulatory proposals of AT&T and of CenturyLink and Frontier Communications. "If you look at what the president and the Republicans in Congress are doing in every sector of the economy, they’re advocating for more competition, not less, whether that’s insurance, pharmaceuticals, energy or education," Pickering said. "The AT&T, CenturyLink, Frontier proposals would go in the exact opposite direction in a market that is badly broken, with 86 percent of businesses in the TDM and below-50-Mbps markets served by only one provider. ... Compare that to the health insurance market that Republicans say is in crisis and about to collapse, where they have monopoly providers in only one-third of the counties."

The BDS market is "significantly more concentrated" and consolidating further, Pickering said. "So competition is extremely limited and what AT&T, CenturyLink, Frontier are asking for is to end all competition rules, to kill competition. The result will be higher prices for every business, school and hospital across the country. Where this has happened, on average businesses have seen their prices increase by 25 percent." Pickering also said BDS deregulation "will slow the chairman’s agenda for faster deployment of 5G and fiber. If you increase the cost of backhaul, you slow the build of 5G and the fiber that supports it.”

UHF

Broadcast attorneys still expect the FCC under Pai to loosen the national ownership cap for TV stations and relax media ownership rules associated with the 2014 quadrennial ownership rule review. Those items won’t be tackled at the April’s commissioners’ meeting, industry officials said. Tackling the ownership cap would be a much more complicated endeavor than restoring the UHF discount, and there may be disagreement within FCC leadership on whether adjusting the cap is within the FCC’s purview, said Fletcher Heald broadcast lawyer Frank Jazzo.

Restoring the UHF discount -- which allows populations covered by UHF stations to count only 50 percent toward the 39 percent national ownership cap -- would allow groups such as Univision and Ion to make mergers and acquisitions, industry lawyers said. Under the current rule, those companies are over the national cap, and though grandfathering rules allow them to continue to operate, they would be unable to buy new stations without divesting some stations, attorneys said. Though it’s mainly large groups that are directly affected by the restoration of the discount, it’s likely to provide selling opportunities to smaller broadcasters, Jazzo said.

The draft item is expected to contain language suggesting future elimination of the UHF discount should only be considered in the context of adjustments to the national ownership cap, said a broadcast official. Public interest groups such as Free Press, and the FCC under former Chairman Tom Wheeler, said since UHF spectrum is no longer considered less valuable than VHF spectrum, the logic behind the original discount no longer applies. Station owners said removing the discount without adjusting the cap is unfair to groups that were assembled under the rule.

Pai Speech

More details could be known Thursday as Pai circulates draft orders for the April 20 open meeting. The FCC released all of the draft items the day they circulated for the March meeting and Pai commented in a blog post. "We have received overwhelmingly positive feedback on this change," he said in the speech.

In that speech Wednesday to the U.S.-India Business Council, Pai underscored the importance of a focus on infrastructure. At the FCC, “consistent with decades of bipartisan tradition … we are pursuing a light-touch regulatory approach,” he said, according to written remarks. “This approach suggests that the Internet should be free from heavy-handed government regulation. It seeks to eliminate unnecessary barriers to infrastructure investment that could stifle broadband deployment. It aims to minimize regulatory uncertainty, which can deter long-term investment decisions.”

Pai said the FCC should favor facilities-based competition in its rules. The rules also should encourage broad competition among cable, telecom, fixed wireless, wireless and satellite operators, he said.