Entries in FCC Filings (20)

Wednesday
Jun222011

Rural Telcos Illustrate Impact of USF Reform

Three RLECs Provide Evidence of Financial and Community Harm in Ex Parte Filings

Over the last few weeks, representatives from three RLECs have held ex parte meetings with the FCC on the topic of Universal Service Fund reform. Randy Fletcher and Tom Bowden from Lennon Telephone Company (Lennon, MI); Jeff Leslie from ITS Telecommunications Systems, Inc. (Indiantown, FL); and Jan Lovell, Tom Lovell and Doug Klein from Clear Lake Independent Telephone Company (Clear Lake, IA) each met with members of the Wireline Competition Bureau. Each company was represented by John Staurulakis, Inc., and each company illustrated the significant financial harms and negative community impacts that could come as a result of the FCC’s proposed USF reforms.

In their June 15 ex parte meeting, representatives from Lennon Telephone Company (“Lennon”) argued that the company is “heavily dependent on universal service support.” Lennon is a family-owned business with 15 employees, and the company provides service to 392 broadband customers and 981 voice customers. Lennon is concerned that reforming USF will hinder the company’s ability to repay loans, noting that they currently have two outstanding loans (one is for a softswitch). Lennon argued that “the near-term proposals in the FCC’s Notice of Proposed Rulemaking on universal service reform would significantly reduce the amount of universal service support that the company receives,” and the company currently receives 53% of its regulated revenues and 28% of its total revenues from USF support.

ITS Telecommunications Systems, Inc. (“ITS”) representatives held their ex parte meeting on June 9, where they stressed their company’s importance to the local community in Martin County, FL, noting that they are a top employer, a leader in economic development in an economically depressed area, and they support schools, community organizations and help attract new business to the area. ITS has 1,011 broadband and 2,973 access lines. ITS has utilized RUS loans and made significant investments in infrastructure to provide broadband at speeds of 10-100 Mbps based on the current USF support system, but unfortunately, “ITS would default on Rural Utilities Services loan commitments under the proposed reforms.” ITS illustrated that under a USF scenario based on the FCC’s NPRM, the company would fail the Times Interest Earned Ratio (TIER) test, with a TIER of less than 1.0000 for each of the next 3 years. As a result, ITS would default on its RUS loans and be unable to secure any additional capital investment opportunities.

Both Lennon and ITS provided “impact statements” showing probable financial losses to the companies as a result of reducing High Cost Loop Support, Local Switching Support, Interstate Common Line Support, and Safety Net Additive Support. As you can see in the chart below, these two companies stand to lose approximately 30-45% of their annual total universal service support if the FCC’s NPRM proposals are implemented:

The financial loss is only one side of the story. Clear Lake Independent Telephone Company (“CL Tel”) provided testimonials from members of their community to illustrate that RLECs are more than just telecommunications service providers in many rural areas. CL Tel has a total of 2,423 broadband and 5,299 voice access lines, and the company’s role in the Clear Lake, IA community should not be overlooked. CL Tel’s ex parte filing notes that “the company is a major contributor to the local communities both financially and with managers lending their expertise to community organizations and the area community college which recruits new industry and supports existing ones.” CL Tel also provides backhaul to four major wireless companies, and their fiber network helps bring new businesses to their rural Northern Iowa service area. CL Tel argues that rate-of-return regulation has facilitated long-term investments and has allowed the company to secure RUS and RFTC loans. According to CL Tel, these sources of capital will be at risk if the FCC’s USF reforms are implemented.

I found the testimonial letters from the Clear Lake community to be especially critical evidence to support first how important RLECs are to rural communities, and second how detrimental the FCC’s reforms may be to many rural Americans—not just RLECs alone. The superintendent of the Clear Lake Community School wrote, “CL Tel has always worked with the Clear Lake Community School District to improve telecommunications and to expand broadband to enable students, teachers, administrators and parents to keep up in the rapidly evolving world of technology.” I remember FCC Chairman Julius Genachowski’s opening remarks when the USF Reform NPRM was introduced back in February. He told an emotionally-charged story about a young student who had to spend the night in a parking lot of a library in order to complete a class project—the student did not have broadband at home and had to resort to using the library’s Wi-Fi network. Does the FCC really want to eliminate support for a company like CL Tel, which provides a 100Mbps WAN connection to all of the Clear Lake Community School buildings? CL Tel apparently provides free and reduced services to the school that amount to an annual savings of $25,856.20. The superintendent noted that this is particularly crucial as the school faces increasing budget cuts and layoffs. I believe that if funding is reduced for RLECs who strive to support their community schools, the FCC will have many more sad stories to tell about students going to great troubles to complete their homework.

In addition to the school, the Clear Lake Public Library, Clear Lake Arts Center, Clear Lake Police Department and the Mayor of Clear Lake all provided letters in support of CL Tel’s admirable community involvement. Each of these organizations receives free or discounted broadband services. CL Tel has also contributed to library and arts center renovations, and they are helping the police department install a fiber network for security cameras. The Mayor of Clear Lake commended the company’s support, adding that CL Tel “has been a major contributor in all our public/private capital campaigns such as: the Public Library, swimming pool, Central Gardens, lake restoration and Arts Center projects.” In total, Clear Lake public institutions save thousands of dollars per year on telecommunications services as a result of CL Tel’s community-oriented corporate philosophy. I am particularly impressed by CL Tel, because I imagine that offering free and reduced-cost services to community institutions probably hurts the company’s bottom line, yet the company clearly cares about the community enough to continue these programs despite the constant onslaught of financial, regulatory and technological challenges that most RLECs face these days. 

CL Tel is by far not the only RLEC that goes to great extents to support its rural community. I think it is very important for the FCC to realize just exactly how much rural America stands to lose if USF support is drastically reduced or eliminated for RLECs. I don’t argue with the FCC that in some cases, the RLEC might not be the proverbial “most efficient” broadband provider, but I do argue that it is absolutely critical for the FCC to acknowledge the goodwill contributions of RLECs to their communities in addition to the financial data. Should there be some type of goodwill or community support weighting factor in the new USF methodology, and if so, how would that work? I have to wonder if an investor-owned large price cap carrier would provide tens of thousands of dollars each year to ensure the survival of small-town schools, libraries and public safety departments—what would their stockholders and Wall Street brokers say?

You can read Lennon Telephone Company’s ex parte filing here, ITS’s filing here, and CL Tel’s filing here.

Monday
Jun202011

RLECs to FCC: Please Investigate Call Termination Problems

Rural Telecom Associations Alert FCC about Troubling Call Termination Complaints

You have probably seen the commercials for magicJack: $20 per year for unlimited calling through an easy-to-use device that plugs a traditional telephone right into your PC. Surely, this is a tempting offer for many budget telecom consumers, but it comes with a major caveat—calls intended for high-cost rural areas may not be completed. Last week, NTCA, NECA, OPASTCO and WTA (the “Rural Representatives”) filed a letter with the FCC pleading for an investigation into the dirty business of call termination problems, likely caused by magicJack and other “least cost routing” originating and intermediary carriers. Although specific information about the potentially guilty parties was redacted in the public version of the letter, the Rural Representatives included a screenshot from a magicJack FAQ website stating that “some restrictions in cost prohibitive areas may apply.” In other words, buyer beware, because magicJack customers may not be able to place calls to friends, family and business associates served by an RLEC. The letter describes that when call termination problems arise and are actually reported, it is often the RLEC who is erroneously blamed.

The letter, which was a follow-up to an earlier meeting with the FCC on the topic of call termination problems, outlined several specific problems that RLECs have been experiencing at a dramatically increasing rate over the last few months. The first problem is that calls ring on the calling party end, but they are delayed or nonexistent for the called party. Second, the calling party receives a message that the call cannot be completed, but the call never actually reaches the RLEC’s switch. Third, calls “appear to ‘loop’ between routing providers, but never reach the RLEC or tandem it subtends;” and finally, the called party sees incorrect or garbled caller ID information which may make the called party ignore the call completely. All of these problems are serious—the Rural Representatives argue that “the problems currently faced by customers in rural America fly in the face of every reasonable expectation of what the PSTN should be,” and “small businesses [lose] tens of thousands of dollars in sales because their customers cannot reach them.” Furthermore, the Rural Associations point out that these problems present a serious public safety risk, with “families being unable to communicate and check on the safety and well-being of their loved ones.”

The Rural Representatives provided considerable and telling statistics about these problems. Apparently, 80% of 200 RLECs surveyed had experienced problems of this nature; and between 2008 and April 2011, 10,163 customer complaints about these problems had been documented. Unfortunately, the Rural Representatives note that this number is just the “tip of the iceberg” because many of these problems are never reported. The statistic that I found most shocking was that call termination complaints have increased 2000% over a one-year period from April 2010 through March 2011. The following chart illustrates the dramatic increase in call termination complaints since 2008:

The Rural Representatives discuss how difficult it is for RLECs to identify the source of the problem, because there is often more than one “Underlying Provider” (wholesale IXCs, IP transport and “least cost routing” providers) utilized between the calling party at point A and the called party at point X. To add to the trouble of pinpointing the source of the problem, the “Retail Provider” (the source of the call—usually retail IXCs, wireless or VoIP providers) is often unwilling to work with RLECs for any number of reasons. The Rural Representatives included comments from RLECs illustrating the hoops that RLECs must jump through to cooperate with the Retail Provider and resolve the call termination issues:

  • “We leave messages with the originating caller, but often they don’t return our calls. When we are able to make contact with the originating party, they are not always cooperative, they just see it as our problem, and we should be able to fix it without wasting their time.”
  • “Most carriers will not talk to us because we are not the Customer of Record. CPNI rules prevent them from working with us unless their customer initiates the trouble ticket. So we must convince somebody that has never heard of us to call their long distance company and open a trouble ticket and give us permission to talk with them, and we must also request this person call us long distance to troubleshoot.”

The Rural Representatives asked the FCC to open an investigation and provide assistance to “get to the bottom” of these issues, because “RLECs are powerless to correct this issue on their own.” The Rural Representatives cite Section 201 and Section 251(a) of the Communications Act, previous declaratory rulings, and even the Net Neutrality rules as support for the argument that Retail and/or Underlying Providers cannot continue to play foul with traffic headed for RLEC customers. According to the Rural Representatives, a 2007 FCC declaratory ruling deemed that “no carrier, including interexchange carriers, may block, choke, reduce or restrict traffic in any way;” and the fundamental No Blocking rule in the Net Neutrality Order states that fixed and wireless broadband providers cannot block lawful applications, services or devices.  The Rural Representatives argue that Retail Providers are largely responsible for the problems, because they are the provider that “[sets] into motion the chain of events that caused the call to fail.” 

I believe that if these problems remain unresolved, there will be profound negative implications for the reputation of RLECs. With all the regulatory uncertainty and impending USF changes, RLECs cannot risk “looking bad” to consumers or the FCC. The average customer of magicJack or a similar VoIP service probably does not know about the roles of routing tables or call signaling, or what happens to a call in the split second it takes to reach the called party (that is, if it reaches the called party). When a call to an RLEC customer is not complete, the first response from calling and called parties is probably to blame the RLEC, which could ultimately threaten an RLEC’s very existence if customers drop their service as a result of these problems.

I also see a direct connection between these particular problems and “phantom traffic” problems outlined in comments filed on April 1, 2011 for the Intercarrier Compensation portion of the USF Reform proceeding. RLECs and other voice carriers are concerned that VoIP providers are masking or failing to include critical call signaling information as part of an access rate avoidance scheme. If the FCC were to impose strict call signaling information requirements, would some of these call termination problems—like the problem of called parties receiving garbled caller ID information—be mitigated? I certainly hope that the FCC takes the Rural Representatives’ letter seriously and opens an official investigation into these matters before more RLECs waste time, resources and personnel to troubleshoot problems that they clearly are not liable for. Meanwhile, I hope magicJack customers realize that they may be getting what they pay for, so to speak, with their $20 per year service—at half the cost per year of what most contract-service providers charge per month, some restrictions are bound to apply.

You can download the letter from OPASTCO’s Press Center here. 

Thursday
Jun162011

USF Reform - Their Two Cents: Hargray Telephone Company

Hargray Proposes Broadband Incentive Plan as an Alternative to FCC’s NPRM

On June 9 and 10, 2011, representatives of Hargray Telephone Company (“Hargray”) met with members of the FCC to discuss their alternative plan for USF Reform, the Broadband Incentive Plan (“BIP”). Hargray outlined the BIP in an ex parte filing and in reply comments filed on May 23 in the USF Reform proceeding. The BIP proposes to consolidate high-cost USF support and freeze per-line subsidies at 2011 levels, then tie future support to the number of telephone and broadband lines with a weighting factor based on broadband speeds. I find that this proposal is simple, forward-looking, and market-driven; and it does not discount the accomplishments that RLECs have made thus far in broadband deployment, nor does it leave traditional telephone subscribers in the dark.

Hargray’s ex parte filing describes how the BIP could provide a reasonable transition to a completely broadband-centric USF methodology.  Support distributed under the BIP would be contingent upon the number of broadband and voice access lines per carrier, not how much money the carrier spends. According to Hargray, “due to declining trends in voice access lines, only those carriers that are aggressively building out infrastructure and delivering affordable broadband to their residents and businesses will be able to sustain levels of support at or near their current levels.” Hargray believes this will act as an incentive for RLECs to invest in broadband facilities and keep consumer prices low in order to stimulate demand and adoption.  With per-line support frozen at 2011 levels, a carrier would lose support for each cord-cutter, but then have an opportunity to reclaim a slightly higher level of support for each new high-speed broadband customer.

Hargray’s reply comments outline the possible benefits of the BIP: it could “promote broadband investment, economic stimulus and job growth;” “allow consumer choice to direct what services the fund supports;” and “manage the size and burden associated with the fund.” As for the mechanics of the BIP, Interstate Common Line Settlement support (ICLS), Interstate Access Support (IAS), High Cost Loop Support (HCLS), Local Switching Support (LSS) and Safety Net Additive support (SNA) would be combined, and per-line support would be frozen at 2011 levels. Each recipient of support would become a Carrier of Last Resort (COLR) in their study area. I believe the most interesting aspect of the BIP is the weighting factor for broadband lines. Hargray proposes that a broadband line between 768 kbps and 1.5 Mbps would receive support equal to one telephone line, but as speeds increase so would the support level. For example, broadband lines between 1.5 and 3 Mbps would be equal to 1.2 telephone lines, and broadband lines exceeding 25 Mbps would be equal to 2 telephone lines. The weighting factors could be easily adjusted in the future as the market dictates. Hargray illustrates how support administered under the BIP would reduce over time, assuming providers continue to lose landline customers. The following data was included in Hargray’s ex parte filing:

I believe the broadband speed weighting factor is an excellent alternative to the FCC’s proposed broadband support speed limit of 4 Mbps download, 1 Mbps upload (“4/1”). Although 4/1 may be a sufficient definition of broadband in the very near term, customer demands will rapidly outgrow this definition. I also think it would be very unfortunate if RLECs failed to upgrade broadband infrastructure because they could not receive support for speeds higher than 4/1, but the BIP may effectively solve this dilemma by encouraging RLECs to upgrade networks based on demand and likely customer take rates.

Another benefit of the BIP is that it will not undermine the still-relevant landline business in rural areas. According to Hargray, the BIP does not compromise the progress and investments that RLECs have made in both voice and broadband so far, and it “leverages the benefits provided by the existing [High Cost Support] program by establishing a mechanism that enables recipients to make additional investment in reliable and robust broadband services throughout America.”  Instead of abruptly ending support for landlines, RLECs would continue to receive support based solely on the number of landline subscribers. As customers continue to migrate away from landlines, “the amount of support associated with voice-only services would drop over time consistent with the industry trend of declining voice lines.” Hargray proposes that BIP would act as a bridge to the Connect America Fund and potentially eliminate some of the risks associated with implementing a sweeping reform that could potentially leave RLECs without any USF support—or private investment opportunities. Hargray argues that the FCC “should adopt a structure that does not represent a risky start over.”

I agree with Hargray that the BIP might incentivize some RLECs who have been slow to invest in broadband infrastructure to finally step up their game. Although RLECs have traditionally been leaders in broadband deployment in rural areas, not every RLEC has modernized—this has been a significant source of criticism from the FCC and others, who claim that many rural providers are inefficiently utilizing USF. I think it is very unfortunate that the inefficiencies of a very small number of RLECs have been projected onto the collective RLEC community, and I think Hargray’s BIP could help overcome some of the negative sentiments about RLECs. Hargray shows their concern about this situation, and they argue that the BIP could “encourage companies to not only build broadband networks, but also to build them where customers want them and to price services on those networks so as to spur adoption.”

I applaud Hargray for submitting an alternative proposal because the FCC said from the very beginning of the USF Reform proceeding that they wanted to see solid models and data from the industry. I am particularly impressed with the BIP because it is forward-looking, practical, and logical. Hargray also argues that the BIP will reduce administrative burdens on the FCC, USAC and NECA because support would be based on estimated line counts rather than complex cost recovery calculations. I encourage RLECs to utilize the model illustrated above to calculate how much support they may receive in the future based on frozen 2011 per-line levels and a weighted broadband speed factor. Would your overall support decrease under the BIP, and would the BIP serve as an incentive to invest in broadband facilities capable of higher speeds?

Hargray Telephone Company is an RLEC serving Jasper and Beufort Counties in South Carolina with 41,000 telephone access lines and 16,400 broadband lines. Hargray’s reply comments are available here, and their ex parte filing is available here.

Wednesday
Jun082011

USF Reform - Their Two Cents: FTTH Council 

Fiber-to-the-Home Council Recommends 25 Mbps for Rural Broadband

On May 23, 2011, The Fiber-to-the-Home Council (“FTTH Council”) filed reply comments in the Universal Service Fund Reform proceeding, where they expressed concern about the FCC’s proposal for a broadband speed target of 4 Mbps download, 1 Mbps upload (“4/1”) in rural and unserved areas. Although the FTTH Council agrees that a relatively low speed target may be sufficient in the immediate near term, it would ultimately “deprive rural residents and businesses of broadband performance comparable to that found in urban areas.” The FTTH Council recommends 25 Mbps (in both directions) by 2015, and argues that FTTH is the most efficient and financially prudent broadband technology for high-cost areas—therefore, the revamped High Cost Fund should ensure support for rural FTTH deployment.

The FTTH Council points to the rapidly growing demand for Internet content and applications, such as distance learning, enhanced video conferencing, and HD telemedicine, as evidence that high-performance broadband networks need to be supported by USF.  I believe that in rural and remote areas, high-bandwidth applications can literally mean the difference between life and death, business or no business, and education or no education. The FTTH Council clearly understands the importance of high speed broadband to rural residents, businesses and communities as broadband users increasingly require “Next-Generation Access” (NGA) broadband service.  The FTTH Council cites a report by consulting firm CSMG on consumer adoption of NGA broadband applications, which supports “the conclusion that consumer demand for symmetrical bandwidth is likely to exceed 25 Mbps by 2015.”

In addition to thinking about future demands for high-performance broadband, I believe it is also important to look to the past for examples of why broadband speeds must be forward-looking and well beyond the minimum requirement. Advocates of the 4/1 Mbps target claim that most broadband consumers do not actually need higher speeds because they primarily use broadband to check e-mail and browse the Web. However, this assumption does not consider the adoption and use of future broadband-enabled applications, and according to the FTTH Council, “it is highly likely that innovative applications development will lead to as-yet undefined applications with significant public benefit.” Now-common applications like YouTube, Netflix streaming video, Google maps, Skype and Apple iTunes skyrocketed in popularity as a result of increased broadband speeds over the last 10 years, but continued investment in high performance broadband is necessary so that consumers can continue to benefit from new applications. The FTTH Council provides an interesting infographic on page 14 of the reply comments to illustrate the relationship over time between broadband speeds and “killer apps.” Clearly, as the FCC moves towards reforming the Universal Service Fund to support broadband, the power of innovation must not be underestimated.

In the USF Reform docket, there is prevailing criticism that FTTH is not a financially viable solution for broadband deployment in rural and unserved areas, but the FTTH Council argues that rural FTTH is well worth the private and federal investment in the long term. The FTTH Council urges the FCC to “encourage the rapid deployment of FTTH because it will enable rural telephone companies to more expeditiously meet consumer needs and thereby receive higher revenues and lower operating costs, which then translates into an eventual reduction in universal service support.”  Not only does fiber enable “virtually unlimited throughput capabilities,” FTTH networks also offer “lifetime operating expenditure savings” of $100-$250, which makes the actual cost of FTTH on par with other technologies, savings included. 

The FTTH Council calculates the cost of deploying FTTH to the “last 5%” of rural households as $44b, nearly half of the total $94b cost to deploy FTTH to the last 20%. However, the cost to deploy fiber in the eightieth to ninetieth percentile is roughly $29b, and the FTTH Council urges rural telephone companies serving the that percentile of unserved households to upgrade to FTTH.

The financial aspects of FTTH are definitely attractive from an RLEC perspective, but will the FCC agree that FTTH is the best broadband technology for rural areas? Comments in the USF proceeding show that RLECs are extremely concerned about access to private capital right now, as regulatory uncertainty over USF hovers over lenders like a dark cloud. Private lenders have reservations about lending to companies that may not be able to repay loans if USF support is reduced or eliminated completely in some cases. The FTTH Council argues that the current High-Cost Support program significantly reduces the risks associated with private lending for broadband deployment in rural areas. If the FCC’s USF Reform proposals are adopted, the risk of investing in RLECs will increase, and “investors will demand a higher premium or higher interest rate on debt or loan,” and some investors may refuse capital to RLECs altogether. As a result, the “hurdle rate” for determining if an investment is viable will increase significantly, and some planned FTTH projects may not “get over the hurdle.”  The FTTH Council compares the stability of the current High-Cost USF system to a low-risk structured settlement, but the future CAF support model makes investing in RLEC FTTH projects more akin to a risky startup venture. 

Private lending and USF support go hand-in-hand for RLECs, and are clearly representing a double-edged sword as the USF Reform rulemaking nears decision time. Without continued USF support, private lenders may shy away from RLECs. Without private lending for broadband and FTTH deployment, rural communities will either continue to fall behind in broadband development, or they will lose their broadband provider altogether. The FTTH Council recommends that the FCC combine the current High-Cost Fund with the proposed Connect America Fund to achieve ubiquitous broadband. According to the FTTH Council, the FCC should “preserve and build upon the success of the High-Cost fund and meld the aim of this fund with CAF’s new objective to reach unserved areas.”

The FTTH Council’s reply comments are available to read here.

Friday
May132011

Channel 51 Interference Potential Prompts RCA Comments to FCC

RCA Continues Campaign to Level the 700 MHz Playing Field

New comments filed by the Rural Cellular Association (RCA) were posted to the FCC’s web site today regarding the issue of interference of broadcast television channel 51 with lower 700 MHz A-block licenses. 

RCA submitted the reply comments in response to the Media Bureau’s request for comment on RCA’s previously filed Petition for Rulemaking and Request for Licensing Freezes, which was filed back in March.  In that submission, RCA and CTIA argued that the FCC should implement an immediate freeze “on the acceptance, processing or grant of applications for new or modified broadcast facilities seeking to operate on Channel 51.”  The advocacy groups also asked that the FCC prohibit future licensing of television stations on Channel 51 and that it accelerate clearance of the channel where incumbent broadcasters have agreed to relocate.  RCA says that its requests “recognize the impending change that may occur in the character, use and services of spectrum below 700 MHz as a result of the Commission’s pursuit of incentive auction authority.”  It added that the requests will increase the value of future spectrum that may be assigned to mobile broadband uses, by encouraging private sector solutions for Channel 51 interference issues as well as more data roaming arrangements for 4G technologies across the 700 MHz band.

Commenters argue that the very “intent for the 700 MHz band’s role in mobile broadband is at stake” and cite the National Broadband Plan’s recognition of the band’s importance as support:  “Even as Lower A Block licensees prepare aggressive buildout plans for those next-generation platforms, the looming uncertainty surrounding the spectrum ecosystem of the Lower A Block impedes their ability to act on those plans.” 

The filers also rebut arguments made on the topic by the National Association of Broadcasters (NAB) and the Association for Maximum Service Television (MSTV), which say that “the Commission fully anticipated, considered and correctly resolved all of the claims and concerns therein prior to the auction of the 700 MHz A-Block,” and which required Lower A licensees to “design systems that would accommodate potential interference from Channel 51 TV stations.”

RCA paraphrases:  “In essence, they [NAB/MSTV] insist that Lower A licensees knew what they were getting themselves into and therefore have no basis to seek interference protection,” and goes on to differentiate between “current” and “future” operators. Effectively, RCA believes that the uncertainty of the situation is the problem for A-block licensees and goes on to ask, “Will [the FCC act with an eye to maintaining the status quo, or to innovation and progress?”  RCA acknowledges the Commission’s recent ruling on automatic data ruling and concludes that resolving the Channel 51 interference issue along with band-interoperability are “the logical next steps.”  The group suggests that licensees risk a default on buildout requirements or even financial peril if the freeze on further Channel 51 applications does not go through. 

The RCA comments also dispute the NAB/MSTV’s claims that the real problem for A-block 700 MHz licensees is the lack of availability of devices for the band—it describes the two issues as separate but equally problematic.  And in response to broadcasters’ claims that free over-the-air television is a vital public service, RCA counters that “there is abundant spectrum available for over the air television use outside of Channel 51.”

The filing concludes, “RCA respectfully urges the Commission to foreclose future licensing of Channel 51 TV broadcasters, freeze further processing of any outstanding applications for new or modified Channel 51 broadcast facilities, clear Channel 51 incumbents by way of voluntary agreements, mandate interoperability across the 700 MHz band, and harmonize power levels in the Lower D and E Blocks. 

The RCA’s points are all valid, although I can’t say that the incumbent broadcasters' points are all wrong.  But what does seem clear is that the Channel 51 interference issue is being used by some carriers (think the big ones) as a defensive line to delay mandated equipment interoperability.  In other words, AT&T (just as an example) doesn’t support interoperability at this time, and it cites potential interference as the reason.  But in fact, neither Verizon nor AT&T have significant A-block license holdings (see chart).  The longer it takes for other A-block licensees to sort out 1) interference and incumbency issues, 2) acquire equipment that is interoperable with other blocks and then 3) finance and  build out the service, the more the big boys benefit in terms of market share power.  Sound familiar? 

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