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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others.  This month’s issue includes:

Headlines:

  • Ownership Questions Lead to Hearing Designation Order for LPFM Licensee
  • NC Man Hit with $40,000 Fine for Unauthorized Transmissions Over Public Safety Radio
  • FCC Issues Notice to Hospital Paging System Licensee for Harmful Interference

FCC Launches Hearing in Response to LPFM’s Undisclosed Foreign Ownership

The FCC has designated for hearing a Low Power FM (“LPFM”) licensee’s modification application after an investigation into whether the licensee misrepresented the makeup and citizenship of its ownership in various Commission filings.

Under Section 309 of the Communications Act (“Act”), the FCC must first determine that the public interest will be served before it can grant a station license or modification application.  If there is a substantial question that prevents the Commission from making that determination, it must designate the application for a hearing before an Administrative Law Judge (“ALJ”).  The FCC can revoke the license if an ALJ determines that the applicant lacks the “requisite qualifications” to be a licensee, taking into consideration the applicant’s record, character, and truthfulness in dealings with the FCC.

The Act also prohibits entities with greater than 20% alien ownership or voting control from holding a broadcast license where the FCC finds such foreign ownership is not in the public interest.  Many FCC filings require the licensee to identify all officers, directors, and entities with attributable ownership interests in the licensee, including their citizenship.

According to the Hearing Designation Order (“HDO”), the Missouri-based licensee initially applied for a construction permit for a new LPFM station in 2013.  In that application, the licensee listed five individuals as board members and identified all of them as U.S. citizens.  In two separate modification applications in January and November 2017, the licensee identified the same board members as U.S. citizens.

The Enforcement Bureau began its investigation after another licensee alleged that four of the five listed board members were not actually U.S. citizens.  The Bureau discovered that one of the board members had, only weeks before the licensee’s January application, lost an appeal before a federal court to reopen his deportation order to Guatemala.  The court decision referred to him as a Guatemalan citizen.  His wife, another board member, had already been deported to Guatemala.  These revelations indicated that foreign ownership and control of the licensee not only exceeded 20 percent, but that the licensee had also falsely certified the U.S. citizenship of the two board members.

In addition to questions of citizenship, the Bureau also found evidence that the licensee may not have even identified all individuals with attributable interests in the licensee.  Specifically, in documents filed with the Missouri Secretary of State, the licensee listed several officers and board members that it had not disclosed to the FCC.

According to the FCC, these discoveries raised a “substantial and material question of fact” as to whether the licensee misrepresented to the Commission both the makeup and the citizenship of its attributable owners.

The FCC sent the licensee two Letters of Inquiry seeking information about the licensee’s board members, but never received any response.  Failure to respond to a Commission inquiry is also a violation of the FCC’s Rules.

As a result, the FCC commenced an administrative hearing to determine whether the licensee: (1) made misrepresentations in its applications; (2) violated the Commission’s foreign ownership rules; (3) failed to maintain the accuracy of its pending application; and (4) failed to respond to the FCC’s inquiries.

In light of these questions, the ALJ must also examine the facts to determine whether granting the licensee’s pending application is in the public interest, and whether the licensee is even qualified to hold an FCC license at all.

FCC Proposes $40,000 Fine for Impersonating a Firefighter

In a Notice of Apparent Liability (“NAL”), the FCC found a North Carolina man apparently liable for transmitting on a frequency licensed to local first responders while impersonating a member of the local Volunteer Fire Department. Continue reading →

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Originally intended as an “innovation band” for the testing of new wireless broadband services, the Citizen Broadband Radio Service (CBRS) was created in 2015 to permit commercial and federal spectrum users to operate in the same spectrum band. By utilizing smaller geographic areas for licenses, and short-term authorizations lacking an expectation of renewal, the CBRS was seen as a test bed for a variety of different wireless broadband services, including those of rural wireless broadband service providers.

To that end, the FCC created two new classes of licenses, Priority Access Licenses (PALs) and General Authorized Access Licenses (GAAs).  GAAs are permitted to operate anywhere within the CBRS band, so long as incumbent licensees and PALs are protected. PALs are required to protect the incumbent licensees, and will receive protection from GAAs. A key component of the CBRS licensing scheme is the implementation of a central database, the Spectrum Access System (SAS) (had enough acronyms yet?), maintained by third parties who will coordinate among licensees to prevent interference.

At its October meeting, the FCC revised its rules for the service with the stated goal of further encouraging the rapid development of 5G technologies.  The revised rules were adopted in response to petitions filed by CTIA and T-Mobile in 2017 which proposed several changes to the original 2015 rules.  The FCC sought comment on those proposals, which suggested several changes to the Priority Access Licenses, including adjusting the size of the geographic license, expanding the initial and renewal terms for licenses, and adopting performance standards. Although the FCC did not fully adopt the proposals, the revised rules make significant changes before the FCC has even issued the first CBRS authorization.

License Area: Under the 2015 rules, PALs were to be issued based on census tracts. The intent was to encourage local broadband development, especially in rural areas that may not receive service by nationwide carriers. By highlighting the difficulty of managing the licensing and build-out of service in 74,000 separate census tracts, CTIA, T-Mobile and several other parties argued that the FCC should expand the PAL geographic area to the more-manageable Partial Economic Areas. Ultimately, the FCC rejected that proposal, but instead expanded the PAL geographic area to county-based authorizations.

License Terms: In 2015, the FCC was concerned about the warehousing of spectrum, so it limited the license term of PALs in a particular geographic area to two sequential three-year periods, with no option for renewal. Several parties filed comments arguing that the three-year limit for licenses would serve as a roadblock to robust investment by wireless companies. The FCC has now agreed and extended the initial term to ten years. The FCC also modified its rules to permit licensees to renew their PAL authorizations.

Performance Standards: In light of its decision to extend the license term and permit renewals, the FCC imposed a “substantial service” performance standard for services operating in the CBRS band. For mobile and point-to-multipoint services, a licensee must demonstrate that it provides service to at least 50 percent of the licensed service area. For point-to-point service, a licensee must demonstrate that it provides at least four links in areas with a service population of 134,000 people or less, and at least one link per 33,500 people in service areas with a population greater than 134,000 people. This showing will be required when the licensee files its license renewal application.

Competitive Bidding: Finally, the FCC decided to grant PALs in accordance with its competitive bidding auction rules, permitting applicants to claim bidding credits as “small” or “very small business” entities, as a rural service provider, and/or if they propose to serve qualifying Tribal lands.

Support for the proposed rule changes was first signaled by then-Commissioner Pai and Commissioner O’Rielly in their concurring statements when the original rules were adopted in 2015. Because the FCC is still working on approval of the various SAS database proposals, and because there was a change in FCC leadership in January 2017, it was possible for the petitioning parties to seek revision of the 2015 rules before the FCC issued its first CBRS authorization. To date, the FCC has not issued authorizations for PALs or GAAs, but it is possible that new authorizations could be issued in 2019. Thus, while the rule changes will not impact any existing PAL or GAA licensees, these changes will have a significant impact on the operation of the CBRS band in the future.

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For nearly 80 years, the FCC’s Rules have required broadcasters to file paper copies of various types of documents relating to the control and operation of their stations.  Section 73.3613 of the FCC’s Rules requires broadcasters to file with the FCC certain contracts and instruments relating to network affiliations, present or future ownership or control, and some personnel agreements, as well as local marketing agreements (“LMAs”) and joint sales agreements (“JSAs”).  Today, the FCC voted unanimously to eliminate this requirement.

The rule was originally created in the 1930s to make these documents more accessible to both FCC staff and the public.  However, the advent of the online public inspection file has effectively rendered this octogenarian obligation obsolete.  By March 1, 2018, all full-power TV, Class A TV, AM and FM broadcasters should have transitioned to the online public inspection file (“OPIF”), where they must either (i) upload all Section 73.3613 documents, or (ii) maintain an up-to-date list of those documents and provide a copy of any listed contract requested by a party within seven days of that request.  Similarly, stations are required to list all Section 73.3613 documents in their Ownership Reports, which are then automatically linked by the FCC to station OPIFs.

In eliminating the requirement to file such documents with the Commission, the FCC reasoned that the paper filing rule not only imposed unnecessary burdens on stations, but was redundant with the OPIF and Ownership Report requirements; as a result, the requirement did little to serve the public.  The FCC also observed that very few people actually visited its Reference Information Center, where all of these paper filings are maintained.  Members of the public will continue to be able to obtain copies of Section 73.3613 agreements directly from stations by requesting them.

For their part, stations must remain diligent and update their OPIF contract lists within 30 days of the execution, termination, or amendment of any Section 73.3613 document.  As we have previously discussed, timely filing is now particularly important because all OPIF uploads are timestamped, and late uploads are easy for FCC staff to spot at license renewal time.

Today’s Order also extends the FCC’s permitted redaction rules applicable to JSAs and LMAs to all Section 73.3613 documents.  Section 73.3613 currently only addresses redaction of confidential or proprietary information in the context of JSAs and LMAs.  In the past, stations have filed redacted copies of other contracts, as Section 0.459 of the FCC’s Rules allows certain materials to be withheld from public inspection.  The amended Part 73 redaction rule will explicitly allow limited redaction of all Section 73.3613 documents.

Though these changes will certainly save broadcasters time and resources in the long run, broadcasters should continue filing Section 73.3613 documents with the FCC for the moment.  Before the full rule change can go into effect, it must be approved by the Office of Management and Budget.  In the past, such approvals have typically taken many months, so this rule change may well not go into effect until sometime next year.

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The FCC will take a number of significant actions in the final months of 2018 to facilitate the development of 5G, the fifth generation of wireless cellular technology. First, at its October meeting tomorrow, it will vote on making a portion of mid-band spectrum (2.5 to 4.2 GHz) available for 5G use.  Second, it will launch in November the first of two high-band 5G spectrum auctions scheduled for 2018.  Now is therefore a good time to take a look at what 5G is, and what impact it promises to have.

Looking back, the primary benefit of the transition from 3G to 4G was a significant speed boost, which allowed users to, among other things, stream YouTube and upload videos to social media platforms like Instagram without much waiting.  Once implemented, 5G is expected to deliver download speeds anywhere from 10-100 times faster than 4G, with speeds of up to 20 gigabits per second.  5G users will also experience significantly less latency, i.e., the time between when you click on a link and when the network responds.  While 4G latency is about 9 milliseconds, mature 5G systems will reduce latency to around 1 millisecond.

Mature 5G networks will use high-band spectrum (24 GHz and above), which is capable of transmitting significantly more data than 4G, but is limited to much shorter distances.  4G towers currently deliver service for up to 10 miles, while high-band 5G towers will only deliver service for up to 1,000 feet (about 3 football fields).

In addition, high-band 5G spectrum has a shorter wavelength than spectrum used for 4G, making it more difficult for these signals to penetrate solid objects such as walls and windows.  To overcome the distance and signal penetration challenges, 5G will require vast networks of small-cell sites located on a diverse array of real estate platforms, with the small-cells anchored by larger cell towers.  To streamline the deployment of small-cells, the FCC in March adopted new rules to reduce regulatory impediments to building out small-cell infrastructure, and in September adopted rules requiring state and local governments to approve or deny small-cell applications within prescribed time periods.  Not surprisingly, the new rules are unpopular with local governments, who object to any federal interference with their local site review processes.

There are numerous potential innovations and business models that can utilize 5G’s faster speeds, lower latency, and increased connection capacity.  Most agree that 5G will deliver seamless 4K video streaming and instant downloads of large files, but it could also dramatically change how users, including machines, access the Internet.  Currently, the primary option for residential and enterprise broadband customers is cable or fiber.  With speeds of up to 20 gigabits per second (and no need for wire infrastructure), 5G could disrupt the delivery of fixed Internet access as we know it.

5G will also allow the Internet of Things to flourish.  Specifically, it will allow vastly more “things” to connect to cell sites and remain connected to the Internet without the need to connect through smartphones or Wi-Fi.  4G can connect about 2,000 devices per square kilometer, while 5G will connect about one million over the same area.  For example, 5G could facilitate thousands of driverless cars in the same city talking to each other to coordinate efficient traffic flow without the need for passengers to open an app on their phone, or even to have a phone.

Another potentially transformative use of 5G is remote medicine.  For example, given the high speed and low latency of 5G, medical procedures could be performed using robot arms controlled by doctors in a different part of the country or world, harnessing almost instantaneous data transmission and lowering geographic barriers to treatment.  Similarly, augmented and virtual reality gaming, shopping, and other experiences should blossom under 5G.

Rollout of 5G will be gradual.  Following pilot programs in 2018 in select cities, wireless carriers are expected to launch the first iterations of widespread 5G networks in the United States in 2019.  5G-enabled smartphones are also expected to be released in 2019.  The first 5G networks will likely use low (600 to 900 MHz) and mid-band (2.5 to 4.2 GHz) spectrum already possessed by wireless carriers, rather than the high-band spectrum that will make up the majority of spectrum auctioned by the FCC for 5G use.  As a result, initial 5G networks will only scratch the surface of 5G’s potential, delivering speeds ranging from 10% faster than 4G to three times as fast.  Mature iterations of 5G networks that use high-band spectrum are expected to arrive in 2-4 years.

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We’ve said it before, and we’ll say it again:  If you wait until the last minute to submit an online FCC filing, be prepared to bang your head against your desk while you struggle to log in to a filing system that often melts down when thousands of filers simultaneously attempt access. Fortunately, the FCC appreciates the limitations of its filing systems, and has frequently granted extensions where the system collapse was sufficiently apparent. And so it was with today’s C-Band earth station registration deadline, which the FCC announced this afternoon would be extended to October 31, 2018.

As many of our readers are aware, the FCC issued a temporary freeze earlier this year on applications for new or modified fixed satellite service (FSS) earth stations and fixed microwave stations in the 3.7-4.2 GHz band (the “C-Band”) and concurrently opened a 90-day window during which entities that own or operate existing FSS earth stations in the C-Band could file to register their earth stations or modify their current registrations.  The purpose of the filing window was to give the FCC a better idea of whether and how to open up the band to other shared uses while giving those with constructed and operational (but currently unregistered or unlicensed) earth stations an opportunity to secure some degree of interference protection as the FCC moves to open the band.  In June, the FCC extended the filing window another 90 days, to today, October 17, 2018.

Then yesterday, things got (predictably) weird as IBFS experienced a “large influx of earth station applications filed near the deadline,” and the filing system “experienced intermittent difficulties that have prevented some applicants from filing for licenses or registrations.”  In response, the International Bureau earlier today extended the filing window for an additional two weeks, to October 31, 2018.

Consider yourself warned. If you’ve got any plans this Halloween, do not wait until the (new) last day to file.  The FCC is unlikely to treat you to any further extensions.