Special Access Questions Likely at House Hearing Next Week

Genachowski circulated an order June 5 proposing the rejection of two pricing flexibility petitions by AT&T and one by Windstream. Republican Commissioners Robert McDowell and Ajit Pai objected, questioning whether the move was justified based on the data that has been collected to date (CD June 7 p1). Both also questioned whether it was fundamentally fair to change at the last minute the rules under which the petitions were going to be evaluated, arguing that the petitions clearly met the standards that were in place at the time they were filed, so they should be granted.

At one point, aides to Genachowski contemplated calling a special FCC meeting to force a vote, agency and industry officials said. In the end, Genachowski decided to let the petitions take effect, avoiding a showdown (CD June 26 p4). How special access was handled by Genachowski and his aides is still expected to be the subject of questions from Republicans at next week’s oversight hearing, government and industry officials said.

A senior FCC official stressed Tuesday that Genachowski allowed the petitions to expire following discussions with the other commissioners. Special access “rules are not working as intended, and pursuant to ongoing discussions we expect the commission will soon vote on an order setting out a path to reform them,” the official said. “As part of this path forward, we expect the commission will also soon issue a mandatory, comprehensive data request, to collect the necessary data from incumbent and competitive providers."

"I think [members] are going to want to talk about special access, in part on the substance and also in part on the process,” said a former FCC official Tuesday. “I think there’s going to be talk about the timing, how resource intensive, how lengthy, etc.” USF and intercarrier comp will also come up, the source predicted. “The rural telcos are very unhappy. That’s not news. The deadline on waivers deadlines are coming up this month and given the election year that’s going to be a topic of discussion.” Genachowski will also face questions about the incentive auction, he predicted: “What’s your repacking plan? How come it’s not public? Where are you in the process? How much spectrum is there going to be? All those questions are going to be teed up.”

Rep. John Shimkus, R-Ill., will likely focus on FCC reform, and ask the commissioners about ways to modernize the agency, his spokesman said. Expanding broadband to rural areas will be a priority Shimkus plans to highlight with the commissioners, his spokesman said. Shimkus also plans to ask new commissioners Jessica Rosenworcel and Pai about their general thoughts on some of the broader topics the FCC is facing. Pai’s wireless and public safety adviser, Courtney Reinhard, was a former Shimkus adviser.

Rep. Cliff Stearns, R-Fla., said he'll generally press the commissioners to create a regulatory environment that encourages telcos to invest in their businesses. “I have long urged the FCC to clean up its backlog at the commission,” he said in an emailed statement. “On a weekly basis companies reach out to me noting the types of investments they could make and the jobs they would create if the FCC would bring a resolution to a matter they have pending at the agency. I will be interested to learn the commission’s plans in addressing these items, as well as how it plans to improve the climate for investment in the telecom sector.”

Stearns said he’s also interested to learn more about the FCC’s progress in “implementing its reforms to the Universal Service Fund and when the agency plans to conclude contribution reform to the fund.” He believes “congressional oversight of our recently passed spectrum legislation is vital and will ask the FCC its plans for the upcoming incentive auctions,” Stearns said. He’s long been interested in releasing more spectrum for the private sector and is an author of the Efficient Use of Government Spectrum Act (HR-4817).

Rep. Joe Barton, R-Texas, plans to ask commissioners about net neutrality, USF reform and the high cost support program, a spokesman said. He said Barton also plans to talk about revamping the federal laws that govern the commission and FCC process reform. Rep. Mary Bono Mack, R-Calif., is still developing her line of questioning, her spokesman said, and she'll “definitely” raise the issue of online privacy at the hearing. She plans to ask commissioners whether it makes more sense to have just one agency, such as the FTC, taking the lead on privacy matters. “For businesses, dealing with multiple regulatory regimes can be costly, confusing and ultimately ineffective,” her spokesman said. “It’s hard to point to any real value for consumers, as well.” Bono Mack has been skeptical of the need for privacy legislation and denounced the White House consumer privacy bill of rights as “another big government” rule (CD March 30 p8).

Del. Donna Christensen, D-V.I.’s constituents are most interested in the expansion of rural broadband to underserved areas and intercarrier comp reform, her spokeswoman said. Christensen is a member of the subcommittee’s bipartisan federal spectrum working group. A spokesman for House Energy and Power Subcommittee Ranking Member Bobby Rush, D-Ill., said he'll try to attend the hearing but must preside over a subcommittee hearing scheduled for the same time.

The future of Dish Network and LightSquared spectrum is also likely to come up in some form, as will the global Internet governance debate, said Jeff Silva, analyst at Medley Global Advisors. “Seems to me House Republicans, judging from interplay with the FCC to date, will be every bit as fixated on regulatory process as on any given policy matter,” he said. “The process theme is big with House Commerce Republicans, and I would be surprised if the subject does not surface in some manner at the hearing.”

"There isn’t a lot of high-profile stuff going on right now. Democrats may bring up Verizon/SpectrumCo, but they do not want to embarrass the chairman, whereas Republicans are likely to want to keep it low profile,” predicted Public Knowledge Senior Vice President Harold Feld. “I expect some questions on spectrum sharing with federal users and how the FCC is planning on moving forward with NTIA. Republicans may emphasize the need to clear the 1750-1785 band, but there isn’t a lot Genachowski can do about that and they know it. I expect Democrats will focus spectrum questions on unlicensed, which gives Genachowski a chance to point to recent developments as proof that the FCC is promoting new technologies. Someone is likely to ask about the promised spectrum inventory. Republicans may push back on interoperability as unnecessary regulation, although a Democrat or even a rural Republican may ask a pro-interoperability question. In light of recent events here in D.C., and emergencies elsewhere, I would expect questions about E911 implementation and about FirstNet.”

A question is whether Democrats will try to tie down Pai and Rosenworcel on a few key issues, Feld said. “This is [members'] first chance, and probably their only chance this year, to apply direct pressure on pet issues.” Feld also predicted “ritual breast-beating by Republicans about the evils of net neutrality and over-regulating the Internet. … Alternatively, we may see a variation of the question [subcommittee Chairman Greg Walden, R-Ore.] asked last time with regard to the ITU, and how efforts to regulate data roaming or net neutrality are consistent with our position at the ITU that the ITU should stay out of regulating the Internet.”

Rural Cellular Association President Steve Berry expects lots of questions on USF. “The chairman will have to answer why RLECs got a 6 percent reduction, wireless got a 60 percent reduction and price cap carriers ILECs got a 64 percent increase,” Berry said. “The largest, best financed carriers got increases -- this includes AT&T and Verizon. This does not promote bringing broadband to rural America. It stifles build out. The chairman has to answer the question of why they came to this conclusion and how this promotes broadband in rural America.” But Berry also predicted that “the majority” of questions will focus on “regulatory certainty, review process, timely decisions and spectrum” as well as net neutrality. “I hope the members hit on the need for more cleared spectrum -- like 1755-1810 [MHz]. A discussion of spectrum sharing doesn’t provide immediate help to the industry,” he said. “I would hope someone starts addressing the immediate need for interoperability. Competitive carriers need an ecosystem and consumers need choices in the 4G world.”

"I would like to hear more about the special access order too, but hope there won’t be too much time spent on AT&T’s wounded feelings,” said Free Press Policy Director Matt Wood. “Every time an order could conceivably adopt a position advanced by somebody other than the most dominant incumbents, we hear cries that the agency is biased and out of control. From what little I know about the item that circulated, it was designed to promote competition, help businesses large and small, and protect consumers. I also hope there will be questions about the newly announced Verizon/T-Mobile deal as it relates to earlier Verizon acquisitions. Whatever the potential benefit of getting some more spectrum in T-Mobile’s hands, Verizon would come out of this string of deals with a massive increase in its already sizable spectrum holdings.”

Wood also hopes members will ask what the FCC is doing to promote broadband competition. “On the media and content side, members should ask about the Commission’s approach to shared services agreements and other forms of covert consolidation,” he said by email. “These broadcaster arrangements result in carbon copy newscasts -- decreasing the amount of news coverage, the number of journalists, and the diversity of viewpoints in a market, while they skew the competitive marketplace for carriage negotiations. We'd also like to hear about the commission’s plans to promote video competition, both by maintaining the successful program access rules and by taking a hard look at unjustified and discriminatory data caps.”