FCC SCRAPS ANALOG SERVICE REQUIREMENT, WITH 5-YEAR TRANSITION

Among highest profile of changes is potential jettisoning of requirement that cellular carriers provide service compatible with AMPS-type (Advanced Mobile Phone Service) if they have analog customers or roamers that use service on their networks. Because devices such as hearing aids now often aren’t compatible with digital networks, some members of Congress and NTIA urged Commission not to do away with analog network requirement without transition period (CD Aug 8 p6). Eliminating rule immediately “would be extremely disruptive to certain consumers,” FCC said, citing those with hearing disabilities and people who used emergency-only phones that used analog networks. Order mandated that certain commercial mobile radio service operators file reports at agency no later than 3 years after revised rules take effect and again in 4th year. Reports will be used to monitor progress industry makes in developing solutions and to ensure that people with hearing disabilities continue to have access to wireless services, agency said. During 5-year sunset period, “it is anticipated that problems regarding access will likely be resolved” for customers with hearing disabilities, FCC said. Cellular carriers have argued that analog service requirements should be lifted because rules had required them to continue to maintain older, less efficient networks, which aren’t as efficient as newer, digital networks. “Not only does the Commission determine that the current rule is no longer necessary to achieve its purposes, the FCC concludes that it imposes costs and impedes spectral efficiency,” Commission said.

Martin said caveat that analog requirement wouldn’t expire if hearing-aid-compatible digital devices weren’t available in 5 years was “fundamental to my support of the item.” But Copps raised concerns that decision might undermine services to persons with disabilities. Saying that order stemmed from 1998 proceeding and involved regulations that were more than decade old, Comr. Abernathy said of biennial review process to cull outdated regulations: “It’s something we have to do and we have to do it better.” She stressed that if hearing aid compatibility wasn’t achieved at end of 5 years, “I will oppose a sunset of the rules.” Abernathy said: “Hearing aid compatibility is not a luxury, it’s an obligation.”

FCC Chmn. Powell said concerns about hearing aid compatibility with digital networks were “very real and important… But the overwhelming number of Americans in this country subscribe to digital services and increasingly have service and quality disruption problems as a consequence of spectrum shortages.” He said “one of the huge consumers of spectrum” stems from continued requirement of analog services, “much of which goes underutilized.” He said he didn’t think Commission had trivialized importance “of an important segment of the hearing disabled community.” He said order had precautions built in so analog service requirement didn’t automatically expire if movement hadn’t been made toward technology compatible with hearing assistance devices.

Copps said there were “numerous” requirements in report and order that he supported eliminating, but he dissented from: (1) Eliminating analog standard. (2) Eliminating requirement that cellular applicants demonstrate their financial ability to operate their system “at a time when bankruptcies are threatening consumers.” (3) Eliminating cellular antitrafficking rules. (4) Decision to let cellular licensees claim they served rural areas “by merely serving roaming in those areas.” (5) “Mischaracterization of our biennial review responsibilities.” On hearing aid issue, he said FCC had pending proceeding on rules on hearing-aid- compatible phones. Copps said he was willing to eliminate analog service requirements, “but not until the actual availability of accessible devices. Additionally, I think that setting elimination in process now takes away the best incentive manufacturers have to produce this equipment in volume… Make no mistake, the analog standard has been eliminated even if hearing-aid-compatible devices are not available 5 years from now -- unless the Commission starts another proceeding and decides to reestablish the rule.” Eliminating analog requirement before compatible devices are available “could leave millions of Americans without service in the near future,” he said.

Among rule changes to which Copps took exception was elimination of requirement that company show it had financial commitments to construct and operate cellular system for one year. “The majority today decides to eliminate this financial safeguard at a time when we can least afford to do so, and at a time, I might add, when financial safeguards seem to be at a premium,” Copps said. Decision also allows carrier to not serve local residents of rural area, “but only people roaming while driving through,” he said. “In many areas around the country only the major highways are covered, leaving communities off these highways unserved.”

Copps and Martin took issue with different aspects of how FCC undertook its biennial review responsibility in proceeding, with Copps saying that was among reasons for his partial dissent and Martin saying he concurred with that part of decision. In Fox TV Stations v. FCC decision, U.S. Appeals Court, D.C., recently backed off from earlier ruling and said it was better to leave unresolved interpretation of “necessary in the public interest” under Sec. 11 biennial review requirements of Communications Act. In its petition for rehearing at D.C. Circuit, Commission argued that “necessary” should be interpreted as meaning useful or appropriate. While Martin favored definition that was closer to “essential,” he said: “At the very least, I think the Commission should clarify that the term means something more than merely ‘useful’ or ‘appropriate.'” Sec. 11 requires FCC to review its regulations every 2 years to ascertain whether any regulation is “no longer necessary in the public interest.” Copps, on other hand, said majority used interpretation of FCC’s biennial review standard that was “contrary to law.” FCC faces 2-step process when reviewing regulations under those requirements: (1) Determining whether there is “meaningful competition” in relevant market. (2) Then determining whether existence of such competition means that regulation under scrutiny no longer is necessary “in the public interest.” He said majority, “in explaining the Section 11 standard, fails to recognize that a competition analysis is only part of its responsibility.” Copps said: “Throughout the order, it makes decisions based solely on competitiveness findings, ignoring the duty to protect the larger public interest.”

CTIA lauded decision to phase out analog requirements, saying that 85% of wireless subscribers already used digital technology. “Wireless users generally replace their phones every 18 months, so the 5-year transition period allows analog subscribers and their service providers more than 3 product cycles to upgrade to digital technology,” CTIA Pres. Tom Wheeler said. He said digital technology increased cell site capacity and allowed better security.

AT&T Wireless applauded order, but said it could have gone further. “We believe a more aggressive transition period is warranted,” said Doug Brandon, vp-federal affairs. “Public policy aims would be better satisfied through immediate elimination of the analog requirement.” While FCC concerns about hearing aid compatibility are legitimate, Brandon said there were “other regulatory requirements that ensure wireless services remain accessible… Unfortunately, the approach adopted by the FCC today will instead result in market distortions, with the 5-year phase-out plan serving as a mandate for the inefficient use of spectrum for another half decade.” Cingular Wireless, AT&T Wireless and Ericsson had called on FCC to order immediate repeal of analog service requirements.

NTIA Dir. Nancy Victory said that as result of FCC decision, “spectrum will be managed more efficiently and carriers will have more flexibility to create innovative new services for consumers.” Commission met needs of consumers with hearing disabilities and telematics industry by creating “reasonable transition period,” she said.