FCC Giving Little Ground on 2.5 GHz Licenses Won in 2022 Auction

In its analysis of T-Mobile’s claims, the FCC continues to lean heavily on its reading of Section 309 of the Communications Act, which says, “The authority of the Commission to grant a license or permit under this subsection shall expire March 9, 2023,” other than spectrum under the Spectrum Pipeline Act or the Infrastructure Investment and Jobs Act, industry and agency officials said.

The FCC hasn’t wavered from this position, despite arguments by T-Mobile and four former FCC general counsels (see 2304060062).

Rep. Anna Eshoo, D-Calif., pressed Chairwoman Jessica Rosenworcel on the issue, and on whether the FCC would consider issuing a STA, during a June hearing by the House Communications Subcommittee (see 2306210076).

Rosenworcel said she told T-Mobile CEO Mike Sievert “this situation is totally unfair” but also unprecedented. This is an area “where the law is extremely clear -- it says our authority to issue licenses shall expire on March 9,” Rosenworcel said: “This is not ambiguous language. Special temporary authority only exists to the extent that underlying authority is there.”

The FCC is studying the law to make sure it doesn’t violate the Anti-Deficiency Act, Rosenworcel said. The last time it was alleged the FCC violated that law on its spectrum authority, the GAO investigated and the FCC staffers had to hire their own counsel to defend themselves, she said: “I don’t want any of that nonsense. That’s why we’re going to be exceptionally careful.”

A T-Mobile spokesperson said Friday the carrier continues to disagree with the FCC’s stance on the licenses. "The STA would allow T-Mobile to enhance 5G to tens of millions of Americans, many in rural areas without reliable connectivity, within just a few days," the spokesperson said.

T-Mobile filed a letter in the FCC’s universal licensing system last week addressing commission questions. “The plain meaning of the statutory language and longstanding judicial and Commission precedent make clear that sections 307(a) and 309(a) of the Communications Act empower the FCC to grant the Applications -- and indeed require the FCC to grant the Applications if it finds that doing so is in the public interest,” T-Mobile said. The letter also disagreed with Rosenworcel’s House testimony: “Even if the Commission were to construe section 309(j) of the Act to prevent it from granting T-Mobile’s Auction 108 application, it could still permit T-Mobile’s temporary use of 2.5 GHz spectrum by issuing STAs because the Commission has separate authority to permit temporary use of spectrum when, as here, it would be in the public interest.”

Congressional negotiations on a spectrum legislative package that would restore the FCC’s auction authority haven’t progressed significantly since Capitol Hill began a two-week recess that ends this week, lobbyists told us. House leaders aren’t expected to seek a floor vote this week on the Commerce Committee-cleared Spectrum Auction Reauthorization Act (HR-3565) despite an intertwined push (see 2306120058) for Congress to fully fund the FCC’s Secure and Trusted Communications Networks Reimbursement Program before a July 15 deadline for the commission to start pro-rating paybacks to participants absent additional appropriations, lobbyists said. HR-3565 would give the FCC an additional $3.08 billion for the rip-and-replace program upfront and use some proceeds from future spectrum auctions to pay that loan off (see 2305240069).

'Broad and General'

“Congress designed the FCC’s STA authority to be broad and general in nature,” said Cooley’s Robert McDowell, a former FCC member. “STA authority deliberately does not flow from any other enumerated authority,” he said: “As the name says, that authority is ‘special’ and ‘temporary.’ It stands independent from other sections of the [Communications Act] precisely to give the commission the ability and flexibility to make efficient use of spectrum as needed in special circumstances.” STA authority isn’t linked to auction authority, he said. McDowell does work for T-Mobile, but said he wasn’t speaking on the company’s behalf.

“It is unfortunate that the FCC has taken such a conservative view of the statute -- although it is to some degree understandable given the risk to agency staff associated with potential violations of the Anti-Deficiency Act,” emailed Harold Feld, senior vice president at Public Knowledge. Feld cited the concerns raised by Rosenworcel at the House hearing: “At the same time, it is important to balance the risk with the impact of failing to grant these licenses for an indefinite period. T-Mobile is stalled for an indefinite period in rolling out 5G networks in rural areas and small markets where these licenses would fill major coverage holes."

PK asked the FCC to issue a public notice and seek comment on its reasoning, Feld said. “Legal minds may differ with regard to the proper interpretation of the statute, and having this debate and ruling in a public manner will both enhance transparency and improve the outcome overall,” he said. If the Office of General Counsel believes this is the only proper reading of the Communications Act, “the FCC should issue a declaratory ruling saying so, which would give T-Mobile an appealable order.” The U.S. Court of Appeals for the D.C. Circuit can then “decide on the matter without putting FCC staff at risk,” he said.

The commission is also split.

FCC Commissioner Brendan Carr said during a recent Senate Commerce Committee confirmation hearing the agency had the right to award the licenses despite the lapse of its auction authority (see 2306220045). The FCC’s authority to hold an auction under Section 309(j) of the Communications Act expired, but its authority under Section 309(a) to award licenses remains, Carr said: “When we issue licenses bought at auction, we always cite 309(a), not 309(j), as source of authority.”

The FCC’s legal theory on its own authority is “hypertechnical” and Carr is right, said TechFreedom General Counsel Jim Dunstan. There's a difference between "grant" of a license and the "issuance," he said: “The former is the formal review process for qualifications which I believe the FCC concluded vis-a-vis T-Mobile and the 2.5 GHz spectrum before the March expiration. The ‘issuance’ of the license is a ministerial act that can be concluded using 309(a) authority.”

Dunstan said the FCC’s position begs the question of whether, with the expiration of its Section 309(j) authority, “the FCC must now go back and revoke all prior licenses granted pursuant to auctions, or at least not grant any renewals for any licenses that were originally granted pursuant to an auction,” he said. “The slippery slope to absurdity in this position should be pretty obvious,” he said.

A Competitive Carriers Association spokesperson emailed: “The more time that passes without Congress acting to restore spectrum auction authority or FCC action, the longer needed 2.5 GHz services aren’t deployed in rural areas, the longer T-Mobile isn’t getting the benefit of its bargain in Auction 108, and the longer spectrum policy is largely stalled while demands for wireless services only grow,”

Recon Analytics’ Roger Entner said he's surprised by the FCC’s stance on the licenses. The licenses are Rosenworcel’s “only cudgel to compel Congress to act and extend the auction authority,” he said.