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Seven Legacies of the Genachowski Era: Part Two of Two

Aaron George

01 March 2013
FCC logoIn Part One, we discussed four achievements that may come to define current Chairman of the Federal Communications Commission Julius Genachowski’s legacy. Those achievements include Genachowski’s efforts to modernize the creaky $8 billion Universal Service Fund, his close scrutiny of competition-related transactions, including his decision to take the rare step of blocking the AT&T-T-Mobile transaction, his landmark net neutrality rules, and his multi-faceted initiatives to free up broad swaths of spectrum for mobile broadband. In Part Two, we continue that list, beginning with one of Genachowski’s first major accomplishments, the National Broadband Plan.

(5)  The National Broadband Plan. Following Congress’ directive, Chairman Genachowski’s FCC conducted extensive public proceedings and issued 31 public notices that generated 23,000 sets of comments. The Commission hosted dozens of public workshops, and held nine public hearings throughout the country in order to develop the unprecedented National Broadband Plan. Released in December 2010, the Plan set ambitious goals over the next decade, including affordable access to broadband for every American, affordable access to download speeds of 100 megabits per second (Mbps) for 100 million U.S. homes, establishing the U.S. as the leader in mobile innovation, creating a nationwide, wireless, interoperable broadband public safety network, and others.

The Plan recommends a multi-faceted strategy for meeting these goals and bringing the benefits of broadband to all Americans, including measures to:

  • encourage competition in all aspects of the broadband ecosystem, including network services, devices, applications, and content;
  • allocate and use government-owned and government-influenced assets efficiently by making 500 megahertz (MHz) of spectrum available for broadband within 10 years (including 300 MHz for mobile use within five years), and by facilitating access to rights of way for broadband infrastructure via low and uniform rates and timelines for permitting by utilities and local governments;
  • create incentives for deploying broadband and encouraging its adoption, including by reforming the Universal Service Fund to support broadband while retiring outdated legacy components, and by launching efforts to improve digital literacy and narrow the digital divide; and
  • maximize the use, investment, and innovation in broadband to meet national priorities related to health care, energy and the environment, education, government, public safety, and economic growth.

The Genachowski FCC has taken steps to implement many of the Plan’s recommendations.  While meeting the long-term goals of the Plan partly depends on the policies developed by future FCC administrations, the effects of Chairman Genachowski’s first steps may be lasting. For example, will he be remembered for successfully kicking off a plan that made the U.S. the broadband leader in the 21st century, or will he be remembered for stifling the broadband ecosystem and preventing it from reaching the Plan’s lofty goals by promoting a raft of public subsidies that chilled private investment and innovation?  As for the Plan itself, will it “adjust[] to new developments in technologies and markets, reflect[] new realities, and evolv[e] to realize the unforeseen opportunities of a particular time,” as it has promised to do, or will those technological advancements and corresponding shifts in regulatory priorities quickly render it a relic? 

(6)  Incentive Auctions. No matter how history ultimately views the Chairman’s other efforts to free up spectrum for mobile broadband, his efforts to implement the world’s first-ever incentive auction for wireless broadband spectrum will almost certainly deserve mention. In the National Broadband Plan, the Commission envisioned incentive auctions as a market-based tool by which licensees could voluntarily relinquish their spectrum rights in exchange for a share of the proceeds of the auction of new licenses to use that spectrum. In February 2012, as part of the Middle Class Tax Relief and Job Creation Act of 2012, Congress authorized the Commission to develop and conduct incentive auctions, specifically directing it to use that authority to conduct an incentive auction of broadcast television spectrum in the 600 MHz band.

In October 2012, the Commission released its Incentive Auction Notice of Proposed Rulemaking to develop a record and rules to address the three phases of the auction. The first phase will consist of a “reverse auction” whereby broadcast television licensees will be able to submit bids (voluntarily) to relinquish their spectrum usage rights in exchange for a portion of the auction proceeds. During the second phase, the FCC would repack or reorganize the remaining television licensees in the broadcast television bands left over from the reverse auction. In the third phase, the FCC would “forward auction” the new initial licenses for “flexible use” of the newly reclaimed spectrum. The FCC hopes to hold the incentive auction in 2014.

The success of the incentive auction is rife with uncertainty. The Commission must resolve a host of issues, including repacking the television band, addressing the transition period for the existing television band, and developing a band plan approach for the newly reclaimed spectrum, just to name a few. What is more, the FCC will not know until it is very far down the path how many broadcast television licensees will participate in the reverse auction, how many megahertz will free up (and where), and what will be the demand for the spectrum that is put up for bid in the forward auction. 

If the auction is successful, the Chairman may be remembered for putting into motion a sophisticated and innovative market-based auction mechanism that can be used in the future for efficiently reallocating spectrum to serve the public interest. If it is not, the Chairman may at least get credit for trying something completely different. 

(7)  Broadband Infrastructure. Genachowski has taken several steps to deliver on the National Broadband Plan’s goal of facilitating access to rights of way for broadband infrastructure through low and uniform rates and timelines for permitting by utilities and local governments. While the Chairman’s efforts to improve access to broadband infrastructure have not always won the same publicity as his spectrum and consumer-interest initiatives, those measures affect the allocation of millions of dollars of investment and, as a result, have sparked some controversies likely to have lasting influence for broadband and the FCC.

In April 2011, for example, the FCC released an Order amending its “pole attachment rules to improve the efficiency and reduce the potentially excessive costs of deploying telecommunications, cable, and broadband networks, in order to accelerate broadband buildout.” The FCC’s order (1) established a timeline for access to pole attachments, (2) implemented a revised formula for calculating the so-called telecommunications rate to bring it closer to the lower cable rate, (3) held that ILECs qualify as “attachers” under the rules, and (4) modified the process for enforcement actions related to pole attachment rates, terms, and conditions. A coalition of utility companies challenged the order, but in a decision released this week, the U.S. Court of Appeals for the District of Columbia Circuit unanimously – and resoundingly – upheld the FCC’s rules.

While the FCC’s new pole attachment rates should promote more affordable access to poles for broadband infrastructure, it remains unclear how the Commission’s timelines will work in practice, and whether those timelines will make a meaningful difference for access, given that simple permits could still take many months to process. In addition, the FCC declined to extend the rules to cooperatively organized utilities, many of which control critical broadband infrastructure in rural and other underserved areas, which may undercut the Commission’s goal of promoting broadband deployment in these areas. 

As for wireless infrastructure, the validity of the FCC’s November 2009 tower siting Order remains in question, as the U.S. Supreme Court decided in October 2012 to review the Fifth Circuit’s decision affirming those rules, particularly its decision to accord Chevron deference to the FCC’s interpretation of its own jurisdiction. No matter how the Supreme Court resolves this issue of administrative law, it will have significant implications for the Commission and all other administrative agencies.

If the Court upholds the Fifth Circuit’s decision, it would not only affirm the process by which the Chairman promulgated the tower siting rules, it would also confirm the legitimacy of those rules, including the FCC’s “shot clock” requiring state and local authorities to act on applications that seek to collocate personal wireless facilities on existing structures in 90 days, and to act on all other applications within 150 days. If the Court reverses the Fifth Circuit, then the authority to issue its shot clock rules, and potentially other rules to promote broadband deployment, would remain in doubt.

These seven areas – universal service, competition, net neutrality, spectrum, the National Broadband Plan, incentive auctions, and broadband infrastructure – each contribute to the Genachowski legacy. The courts or Congressional action may yet undo some of these efforts, and others may diminish in importance as technology and the telecommunications market changes.  But, for now, Genachowski can claim credit for wrestling with a series of complex and, at times, vexing issues in ways that promise to leave a lasting mark on the industry. 

Aaron George

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