Carr Prepared to Refer Any EBS Wrongdoing to Enforcement Bureau

The EBS order is a “real win-win” both for 5G and education, Carr said in an interview. “The first win is unencumbering basically 200 MHz of prime mid-band spectrum for 5G,” he said: “We can notch a pretty solid win on that front.” By holding nonprofits “to their intended purpose … this goes to providing educational materials to kids,” he said.

Carr said it "has been good to see the support that people have for getting to the bottom of what appear to be some significant red flags in how licensees have been using this spectrum.” The program was expanded to include nonprofits but only those with an educational focus, he said.

“What my review has found is that at least some of these nonprofits are using the lion’s share of this money not for educational purposes … but putting millions of dollars in the bank and also using the money to advocate for ballot reforms, everything from campaign finance reform to the death penalty,” Carr said. “I want to make sure that these entities have properly maintained their status as qualifying nonprofits.”

Any nonprofits found to have violated FCC rules shouldn’t be able to “just sell” their spectrum “free and clear,” Carr said. That revenue should pay for “educational materials for kids,” he said. Carr said he's asking for edits to the EBS item to reflect his proposals on the nonprofits. “This doesn’t end Wednesday with the vote,” he said: “My inquiry is going to continue.”

Carr sent a letter Wednesday to Rockne Educational TV President George Bott asking for details on its use of funds. Earlier in the week, Carr sent a similar letter to Voqal (see 1907020072). “It’s just a matter of the holiday and people being in different places,” but more letters will be sent, he said. “A review of your organization’s publicly available material raises questions about your compliance with the Commission’s rules: whether you properly qualify to hold an EBS license, whether your use of EBS licenses and associated revenues comply with our regulations, and whether your corporate governance practices are consistent with applicable law,” Carr writes. The Hamlin, New York, based-nonprofit didn’t comment.

The letter noted Rockne took in $118,427 in 2017 and paid Bott $52,017. “What work did you perform in exchange for that compensation?” Carr asked. “Describe specific projects and functions you performed in 2017 and the average hours spent per week in bona fide work for Rockne. Provide supporting documentation.” A check of Rockne's Form 990 filing confirmed the numbers.

What Carr is sending aren’t form letters “by any stretch of the imagination,” David Williams, president of the Taxpayers Protection Alliance, told us. “He suspects something and the letters detail some of that.” Williams said the violations could be serious and the IRS and DOJ also might get involved.

The FCC has been looking to other agencies like the Education and Transportation departments to coordinate the pursuit of additional spectrum for 5G, Williams said. “They’re really trying to get as much spectrum as possible to get 5G deployed,” he said: “It’s going to be fascinating to see the answers … and what the next step is.”

“EBS and its predecessor were intended to guarantee that education was furthered by some spectrum reservations,” said Kristian Stout, associate director of the International Center for Law and Economics. “The digital divide remains an important issue in the U.S., and seeing how some groups are using this program to potentially line their pockets and also engage in distinctly non-education oriented activities is disappointing.” “It does seem like a very suspicious situation,” said Tom Struble, technology policy manager at the R Street Institute. “If what those nonprofits are doing doesn't violate the letter of the law or FCC rules, it at least violates the spirit.”

Others continue to warn about the problems posed by the draft order. “The misperception of EBS being underutilized continues to proliferate,” said Lee Solonche, executive director of the National EBS Association. “Somehow the fact that EBS white space, which covers 50 percent of the U.S., but only 15 percent of the population, has become conflated with the idea that EBS is underutilized. It is not. In areas where EBS is licensed, which covers 85 percent of the U.S. population, the record shows that the spectrum is widely deployed supporting both educational and commercial services, including 5G.”

FCC Filings

Voqal, the first recipient of a Carr letter, the North American Catholic Educational Programming Foundation and Mobile Beacon complained about the FCC's direction.

The draft order “unreasonably dismisses the robust record documenting the significant benefits of the Educational Broadband Service’s unique educational focus, forecloses any opportunity for rural educational institutions to have the same opportunity as their urban peers to obtain licensed spectrum to serve their communities, and threatens the long-term viability of existing educational programs dependent on the EBS leasing model,” they said. The FCC also “is poised to ignore or unreasonably reject” arguments by the Education Department and education groups, said a filing posted Friday in docket 18-120. Mobile Beacon is also expected to be targeted by a Carr letter.

Tribal interests asked for more time for groups to seek new EBS licenses. Under the draft order, only tribal groups are eligible to apply. “While this is a great opportunity, we feel that the 90-day window for education and outreach followed by a 60-day application window is too narrow a timeframe,” said MuralNet, the Southern California Tribal Chairmen's Association Tribal Digital Village and the Office of Native American Initiatives at Northern Arizona University. “Consider a year-long tribal priority window that includes rolling automatic application approval with permission for immediate buildout for Native nations applying for spectrum.”

Wireless ISP Countrymen Communications told the FCC WISPs should be eligible for new licenses. “I want to emphasize that the crux of my issue is not what we hold and are at risk of losing, but what we have never been offered in West Virginia by the FCC that other states already have access to,” said CEO Carrie Scott. EBS spectrum is “the current best solution for broadband in West Virginia,” she said.