CommLawBlog : Broadcast & Communications Lawyers & Attorneys : Fletcher Heald & Hildreth Law Firm : Telecommunications, FCC Regulation, Communications Act

Sure enough, that fin de siècle panacea is going to be the go-to device again in the 21st Century.  As described by the Chairman, the NBP will propose a “Mobile Future Auction” – unclear whether the “mobile” there modifies “future” or “auction” – which will “permit[ ] existing spectrum licensees, such as television broadcasters in spectrum-starved markets, to voluntarily relinquish spectrum in exchange for a share of auction proceeds”. 

Precisely how such an auction would work has yet to be disclosed – indeed, it may not even have been determined yet.  But it is apparent that the Commission has thoroughly embraced the notion that television spectrum is a resource that can and should be re-purposed for mobile broadband use.  While Genachowski’s speech shed no light on the anticipated auction mechanism, it did offer something in the nature of a rationale as to why TV spectrum is being singled out.

For openers, there is a “massive amount of unlocked value” in TV spectrum – maybe even $50 billion, according to “one study” – and from this, the Commission has ineluctably concluded that there are “inefficiencies in the current allocation”.  Who says there’s $50B, give or take, in “unlocked value” there?  Why, “a broad range of analysts, companies and trade associations participating” in the FCC’s nearly infinite range of broadband-related inquiries.  Which analysts, companies and associations?  Well, the Chairman didn’t say.  How might the inherent “value” get “unlocked” (and how did it get “locked” in the first place)?  That’s another explanation which is left for a later day.

Another reason for grabbing TV spectrum: according to the Chairman, TV “spectrum is not being used efficiently – indeed, much is not being used at all”.  In support of this claim Genachowski cited some vague and general claims along the lines of “Even in our very largest cities, at most only about 150 megahertz out of 300 megahertz [of TV spectrum] are used.”

While a speech is probably not the forum in which to lay all one’s cards out on the table, the Chairman might still have offered just a tad more support for the decision to go after TV spectrum.  After all, estimates of “unlocked value” are not really something you can take to the bank, particularly if those estimates were propounded by folks who might be in a position to rake in some of that “unlocked value” if things go the right way.  And it’s difficult to credit claims of efficiency of spectrum use when the TV industry, and the viewing public, are less than nine months into the DTV era.  Certainly there may be substantial spectrum potential yet to be tapped, but why must we assume that the best (maybe even the only) way to tap it is through mobile broadband services to be provided by somebody other than broadcasters? (In fact, FHH has a client who has a technology that will allow TV stations to use any digital bits they don’t need for television programming to provide broadband – something they can do today under present rules and so can do a lot faster than navigating through the political reallocation and auction thickets.)

Perhaps recognizing that his rationale was not all that compelling, Genachowski shifted gears into huckster mode:  “the Mobile Future Auction is a win-win proposal: for broadcasters, who win more flexibility to pursue business models to serve their local communities; and for the public, which wins more innovation in mobile broadband services, continued free, over-the-air television, and the benefits of the proceeds of new and substantial auction revenues.”  Often when you hear the term “win-win”, it’s a safe bet that somebody’s trying to sell you something that you might neither want nor need. In this case, for example, we don’t know what “flexibility” broadcasters might gain that they don’t have now.

The Chairman did emphasize that the “Mobile Future Auction” is currently envisioned as a voluntary program. Voluntary?  Perhaps, but maybe only in the same way that a businessman “voluntarily” decides to buy insurance from the guy who says “nice little business you got here – it’d be a shame if something happened to it.”

In any event, while we may not know all the details, we at least know the direction in which the Commission’s heading.  Ideally more details will be available on March 16, the day on which the NBP is currently set to be revealed.  But even that will mark, at most, the starting point of what is likely to be a difficult struggle.

Interestingly, it’s not at all clear what difference (if any) the FCC’s views will make.   The statute requiring the NBP doesn’t say who is in charge of adopting it, or whether it even needs to be adopted by the Commissioners as the formal recommendation of the agency to Congress. The law simply directs the FCC to do its due diligence to come up with a plan, then tell Congress about it.  Other than that, the FCC appears to have no independent authority to jumpstart or otherwise implement the NBP; the only entity explicitly granted authority by Congress to adopt regulations related to the broadband initiative is the Assistant Secretary of Commerce in charge of NTIA, not the FCC.  Moreover, the FCC’s statutory auction authority doesn’t say anything about turning over any proceeds to incumbent licensees or anyone else but the U.S. Treasury.

Given the uncertainty about the follow-through, we are cautiously advising broadcasters to view the NBP as the FCC’s recommendation to Congress, and not a final decree.  It is also appropriate to bear in mind that the folks in Congress may be reluctant to turn their backs on broadcasters, particularly if broadcasters increase the intensity of use of their spectrum by introducing more multi-channel broadcast or non-broadcast services.  Notwithstanding social media and Internet advertising campaigns, etc., candidates continue to flock to broadcasters at election time to reach for voters.  And broadcasters’ ability to deliver voters’ eyes and ears may constitute an “unlocked value” of its own.

We will, of course, have to wait and see.

Taking that hint, the Commission has posed a series of questions about (a) how generally to assess the use of spectrum, and (b) what approaches might be available to “increase spectrum availability and efficiency”. We won’t bother to reproduce all the questions here – you can find them in the FCC’s notice. The notice does ask how the relative merits of broadcast and wireless broadband services should be evaluated. But it then tips its hand ever so slightly by asking the following:

What would be the impact to the U.S. economy if insufficient additional spectrum were made available for wireless broadband deployment, in terms of investments, jobs, consumer welfare, innovation, and other indicators of global leadership?

From the way that question is framed, our guess is that the Commission already has its answer, and that answer is “a really, really big bad impact”. In a display of ostensible fairness, the Commission also poses an “impact” question about broadcasting: 

What would be the impact to the U.S. economy and public welfare if the coverage of free over-the-air broadcast television was diminished to accommodate a repacking of stations to recover spectrum?

Apparently, investments, jobs, consumer welfare, innovation and other “indicators of global leadership” aren’t likely to be factors there. Go figure.

The notice also asks how TV spectrum is currently being used and what plans broadcasters have for its future use. Not unreasonable questions in some circumstances, BUT let’s not forget that the TV industry has just been forced, by the government, to convert itself to digital at a cost of hundreds of millions of dollars. Less than six months after the completion of the DTV transition, it seems a bit premature to expect the industry to have fully settled into its new mode, much less to have fully explored all the possibilities that that new mode entails. Any data on current operations or possible future innovations are likely to be less than compelling simply because it takes more than six months for an industry, and its consumers, to settle into a new technology and identify (and avail oneself of) all its possibilities.

With respect to more efficient use of TV spectrum, the Commission is clearly looking at crowding broadcasters together, spectrally and geographically, in order to free up space for broadband. “Channel-sharing”, greater collocation of antennas, use of to-be-developed transmission technologies, revised transmitter and receiver standards – all are in the possible mix, according to the Commission’s notice. And the FCC is also looking at the possibility that enough viewers get their TV from cable or satellite delivery that it might make sense to “replace over-the-air delivery to MVPDs and consumers with other means”.

Interestingly, the Commission also asks “what are the benefits of free, over-the-air television broadcasting, in particular with respect to public awareness of emergency information, local news, political discourse, and education?” That is interesting because the Commission has, for several years now, been pounding on the importance of localism in broadcasting. To ask now what the public interest benefits of local broadcasting might be seems inconsistent with the urgency with which the Commission has previously pressed its localism proceeding.

Finally, the Commission asks about “market-based or other incentive mechanisms” that might “enable broadcasters to choose whether or not to make any spectrum (excess or otherwise) available” for wireless broadband use. The Commission may be looking for a way to make an offer that broadcasters can’t refuse.

One question the notice does not ask is exactly how much spectrum is needed.  And another is exactly how much spectrum the wireless broadband folks already control but are not yet using -- and how long they may have been sitting on it.  If there is considerable spectrum already sitting unused in the wireless warehouses, wouldn't it make sense to put that to work first before poaching spectrum for other services?  (This leads to the suggestion that, as part of an orderly and logical decision-making process, the Commission might first want to develop an inventory of all spectrum -- including who holds it, how long they have held, and what they are currently using it for.  A bill has been introduced in the Senate that would require a spectrum inventory along those lines, but there's no law that says that the FCC can't develop an inventory on its own, even without Congressional direction.)

Of course, it may turn out that the national expansion of wireless broadband will be of such overriding national benefit that serious disruption of over-the-air television can and should be tolerated to achieve that expansion. These are the types of predictive judgments that administrative agencies get paid the big bucks to make. But the TV industry – and the viewing public – were seriously disrupted just months ago. The repercussions of the DTV transition are still being experienced, and are likely to continue for some time to come. Does it really make sense – and is it really fair – to put over-the-air TV (and its viewers) through the wringer again so soon after the last time?

In that vein, let us not forget that the DTV transition was delayed, at the last minute, because of governmental concern that a significant portion of the audience dependent on over-the-air reception might not be ready for the transition (despite the months of build-up to that moment). Aren’t those same at-risk audience members likely to be equally at risk from some further re-tooling of over-the-air service. And would those at-risk folks be ones who would likely derive any significant benefit from increased availability of wireless broadband?

Such questions – including those the Commission has asked and those which loom, unasked but nonetheless important – are all massively complicated. The Commission can’t be faulted for seeking public input. But the Commission has provided less than three weeks within which to submit responsive comments.  Again, if you missed it above, the deadline for comments is December 21, 2009.  Like we said, if you’ve got a TV license, you’ve got a problem – and very little time in which to make your case. Stay tuned to CommLawBlog.com for updates.

The result of Computer III was a lot of ISPs. Customers in many areas could choose from hundreds. Eager to preserve clientele in such an intensely competitive environment, no ISP would dare tamper with any customer’s content. What we now call network neutrality was such a pervasive fact of life as to not even need a name.

With the advent of broadband, the FCC changed course. Phone-company DSL, in the early days of broadband, still implicitly came under the Computer III rules, and thus had to be shared with competing ISPs. But cable TV companies, which had never been subject to Computer III, had no such obligations. Non-cable ISPs clamored for access; the cable companies fought back. The FCC settled the issue in 2002: cable TV is not like telephone service and need not share its facilities. A cable company could require its broadband subscribers to use the cable company’s ISP.

That decision outraged the phone companies, who still had to share their broadband channels. But in 2005, the FCC extended the same ISP exclusivity to the phone companies. The Commission decided that DSL is a lot like cable after all, and so abolished the DSL sharing rules. If you wanted DSL, you took the local phone company as your ISP.

Now, having let the broadband ISPs lock in their customers with nowhere else to go, the FCC is shocked to learn that some of those same ISPs are blocking or slowing content that might compete with their parent companies’ offerings. How can the Commission protect broadband customers from the undesirable circumstances which the Commission’s own regulatory decisions have unintentionally fostered?

It is too late for the FCC to re-apply Computer III to broadband Internet. That opportunity has passed.  And so the FCC goes to Plan B: duct-tape network neutrality rules over the problem and make discrimination victims run the gauntlet of lengthy and possibly expensive enforcement proceedings.

There may be another way. The ISPs cannot easily be forced into giving access to competing ISPs. But perhaps they might be persuaded to give that access voluntarily.

Here is how it might work.

The FCC lays out a set of detailed, no-nonsense network neutrality rules that specify clearly what ISP behavior is banned. (Not like the newly proposed rules, which are vague and general.) The FCC also sets up a swift and certain enforcement procedure that penalizes violations. But it gives each broadband ISP a choice: (a) the ISP can opt to abide by the network neutrality rules; or (b) it can offer competing ISPs access to the broadband channel, equivalent to its own. If an ISP chooses network neutrality, it keeps the entire customer base for itself, but must be neutral as to content. If it opts to open its network, it can block or favor content as it chooses, although it risks losing customers who dislike the discrimination.

Many details remain be worked out. Could a cable or telephone company use its relationships with subscribers to market ISP services? Could an ISP reject network neutrality, yet still hold in customers with optional long-term contracts and early termination fees? How would the rules operate in a rural area with no competing ISPs?

But the principle is simple enough. A provider that chooses to abide by network neutrality must live up to that commitment, in exchange for its role as the exclusive ISP. Another that chooses to open its network will have to work with competitors as promised, in exchange for the right to play favorites with customer content.

In short, a broadband provider can have all the customers, or it can manipulate their content. It just can’t do both.

Today many people think the Web and the Internet are the same thing, but in fact the Web was a late add-on. Suddenly anyone, with or without technical aptitude, could learn to use the Internet in a few minutes. One needed only to type an address or click a link. Thousands of ISPs sprung up to serve all the new users. In part because the FCC's earlier Computer II and III rules had assured ISPs equal access to the phone lines, competition among them was fierce. ISPs vied to bring the most content possible to their customers. People with obscure interests had a new way to find each other, to form on-line communities, and to trade conspiracy theories or antique car parts, as the case may be.

It is hard to remember now what a big shift this was. Before the Web, to reach a large audience required going through a book publisher, TV network, or some other powerful gatekeeper. But the Web allowed anyone with a computer and a phone line to make his or her views available to millions. Conversations surged around the globe on every conceivable topic, from the conventional to the bizarre, from cookie recipes to outlandish sexual practices. And yet, amid all this vigorous dialogue, there was almost no large-scale commercial content.   Big companies distrusted the Internet because they could not control it. The medium was too open, too accessible, too accommodating of contrary views.

When people talk about the good old days of the Internet, this is often the period they have in mind – roughly the early 1990s. The Internet itself was big, and getting bigger very fast, as new subscribers signed on in droves and new sites appeared by the millions. Amazingly, though, no one was in charge. The only form of control was a simple system for registering domain names. Any user could post any information and visit any site. Even if a company or government had wanted to limit information or access, there was simply no way to do it.

Large companies soon woke up to the fact that all those millions of computer screens were lighting up the faces of millions of consumers. Cautiously at first, companies began to test out the Internet, first as a marketing tool and then as a channel for conducting actual sales. One early use was for brochures promoting new cars and the like. Internet-only retailers such as Amazon appeared. Chains like CompUSA and Lands End began offering Internet sales in parallel with their physical stores and phone operations. And then came the insight that set off the dot-com boom. If you can sell something that need not be physically delivered in a box, like mortgages or insurance or travel services, then you can sell it on the Internet for little more than the cost of electricity.

As more big firms came to rely on the Internet, they took an interest in seeing it run reliably. The casual patchwork that served in the early days was gradually supplanted by a much larger and more expensive infrastructure run by behemoths like MCI. Other companies installed massive facilities around the country that replicated popular sites willing to pay for the service. A click to access Amazon.com would deliver the content quickly, from a server close by, while the site of a small, specialized bookstore across the country might take much longer to reach the screen. The simple domain-name set-up was replaced by a more complicated scheme that gave big companies a leg up over smaller ones. A plumber named Jim McDonald who wanted to use mcdonald.com for his company website was plumb out of luck.

With commercialization, web-page design evolved from a hobby to a profession. Content became richer and more slickly produced, with more graphics and photos and sound and even videos. End users became impatient with the time it took these increasingly sophisticated pages to load. Once modem makers had wrung the last few bits out of ordinary phone lines, the only recourse was broadband. Consumers signed up for it in droves.

The Narrowing Effect of Broadband

Building out a new broadband connection to every home and business was prohibitive. Fortunately there were wires already in place, and ways to upgrade them. Adding components to the phone company's gear made DSL possible over voice lines, while additions to the cable system allowed for two-way Internet along with one-way video. Other providers offer broadband over electric power lines, via satellite, and through fixed wireless connections, but none of these has made much of a dent in the market.

Where a dial-up customer could choose among a great many ISPs, a broadband customer usually had two at most: the phone company and the cable company.  That limited menu worried the FCC, which considered extending the principle of Computer II and III so competing ISPs could connect through the DSL and cable facilities. But the phone and cable companies insisted they would have no incentive to build out the networks if they had to share them with competitors. The FCC bought the argument, with the result that broadband ISP customers in most markets are limited to two providers at most. Only a few consumers live within range of municipal public Wi-Fi. Cell-phone modems are an option for some, although expensive. FIOS fiber-optic service is available here and there, but again is provided by a major phone company.

Protecting the Parent

When thousands of ISPs competed for subscribers, no one cared about network neutrality. Now we do. Why might the cable and telephone ISPs be more likely to discriminate than their predecessors?

The early ISPs were mostly small businesses, many of them literally mom-and-pop operations. Even the bigger players, like Netcom, were primarily ISPs. Today’s broadband ISPs, in contrast, are all in some other business. The ISP offering in each case started out as a sideline. While it has become a growing piece, the parent companies still have other interests to protect. 

That creates incentives for ISPs to discriminate against certain content. One category at risk is anything that directly competes with some other part of the ISP company. There was an outcry when Comcast blocked subscribers' access to BitTorrent videos, possibly to protect Comcast’s own video-on-demand service. (We reported that here.) Also in danger is anything that might expose the ISP parent to even a remotely theoretical chance of criminal investigation. The major ISPs shut down vast segments of Usenet, a widely-used group discussion service, because a minuscule portion might have been used for distributing child pornography. Subscribers needlessly lost access to enormous amounts of fully legal material. Another category to watch is anything the ISP parent company fears might offend someone’s political sensitivities. Verizon once refused to assign a text-messaging short code to a political group solely because it feared the political content of the messages might be controversial.

In the early days, vigorous competition corrected any such inclinations. But today a home or business broadband subscriber who wants access to blocked content has few options. In principle there is more competition for wireless broadband services, because there are more companies in the market. They certainly tout the fact. “The wireless industry is ultra-competitive,” says their trade association website, “and that means you win with a wide variety of service plans, options, and features from which to choose.” In practice, though, the providers’ use of handset tie-ins and early termination fees makes competition largely ineffective. AT&T won’t let iPhone users run VoIP services over its broadband network, and Apple won’t let any other carrier connect to the iPhone, so iPhone users who want VoIP are stuck. For many of the Verizon users outraged by the company’s hindering their political message, changing carriers would mean paying early termination fees and buying new handsets.

Network neutrality rules will help. The ISPs and carriers no doubt will make the same bat-and-ball argument they have in the past: they built the networks, they own them, and they can run them as they please. In fact, though, the broadband networks could be viewed as a semi-monopoly, and we often take measures to ensure that privately owned monopolies treat their customers fairly.

But let’s be realistic. Although network neutrality rules will look good on paper, they will be frustratingly hard to enforce. The Chairman proposes to evaluate alleged violations “as they arise, on a case-by-case basis.” To anyone who has spent time around the FCC, this is the formula for a slow and expensive process. An innovator with novel content who runs afoul of discrimination by the broadband ISPs will not often have the time and money to litigate against a deep-pocket telephone or cable company.

Network neutrality rules may deter some of the worst abuses. But they will not bring back the anything-goes character of the early Internet. Anything went, in those days, because control was physically impossible. Now that a few companies do have control – or at least the capacity for control – all we can do is tell them not to use it. That may not be enough.

First, the IPS acknowledged the need for Internet service providers to engage in “reasonable network management” on their networks to minimize congestion and to limit illegal activities on the Net. Second, the FCC chose to give itself maximum flexibility by announcing only “policies”, rather than rules, in light of the rapidly developing nature of the Internet and the market for Internet services. This choice would come back to haunt the FCC in its first major network neutrality enforcement action. In a 2008 Order, the FCC held that Comcast’s practice of blocking consumers’ use of peer-to-peer applications violated the principles of the IPS. The Commission required Comcast to alter its network management techniques, and make its new techniques known to subscribers. While Comcast claimed to have already complied with those requirements, it nonetheless appealed the FCC’s Order to the D.C. Circuit, arguing that the Commission lacks the authority to regulate Internet traffic generally, and specifically with use of “policies” rather than “rules.” Comcast’s appeal is still pending – the FCC’s brief to the Court was filed today – and no decision is likely until the first part of 2010, at the earliest. (For some history on the Comcast dust-up, read our previous post here.)

One motive for the Chairman’s launch of a new proceeding may be to beef up the FCC’s enforcement abilities by enacting actual rules, in case the Comcast Court holds that “policies” alone just don’t cut it.  And the proposed “Sixth Principle” seems designed to prevent Internet service providers from engaging in discrimination disguised as traffic management, as Comcast may have done. Still, there will be serious debate as to the level of “transparency” that best balances consumer interests with legitimate operator requirements for network security and prevention of harmful or illegal use of the Internet.  

The debate will be even more heated over the proposed rule embodying the “Fifth Principle” of non-discrimination.  As summarized by the Chairman today, “broadband providers cannot discriminate against particular Internet content or applications.This means they cannot block or degrade lawful traffic over their networks, or pick winners by favoring some content or applications over others in the connection to subscribers’ homes. Nor can they disfavor an Internet service just because it competes with a similar service offered by that broadband provider.” But even the Chairman acknowledged that the inquiry will reveal difficult policy issues.  For example, what if a consumer wants to use an application that maximizes the through-put and thus the quality of streaming music or video, but that application reduces the quality of the consumer’s other Internet applications while in use? Should this be prohibited “discrimination,” even if it is openly chosen by the consumer? One could easily answer “no.”

Similarly difficult questions will be triggered regarding the FCC’s legal authority to regulate an “information service” such as broadband Internet. There will be complex technical issues involved in defining “reasonable network management.” And, in light of the core role of the Internet in personal and political speech, First Amendment issues could get a rigorous work-out. But, as Bruce Springsteen has sung, “sooner or later it all comes down to money,” and that’s what the real battle will be fought over.

Some will argue that heavy regulation of Internet operations threatens the current business models under which large ISPs invest the funding necessary to expand and maintain a high-speed network. Large Internet application and content providers, as well, have their own marketing and financial interests in how traffic is transmitted. Many of these parties will argue that innovation in the network requires the government to keep its hands off. But the Chairman has already anticipated these arguments. He argued in his speech that truly transformative innovation has historically come from small entrepreneurs operating on the “edges” of the Internet. Non-discrimination is required, according to the Chairman and his supporters, in order to make possible the next Facebook, eBay or YouTube. 

Things have already begun to move quickly after the Chairman’s speech:  the Republican Commissioners, McDowell and Baker, have already fired back their critique of the Chairman’s approach.  (You can read it here.)  They express concerns that “factual and legal conclusions may have already been drawn” prior to the release of the NPRM.  They also stress their views that rules should not be based merely on “anecdotes” of problems, and that innovation and investment need to be protected in the core of the network, as well as at the edges. It appears that the battle is on!

The Commission is to be commended for opening up the debate, and making it accessible through new media. Check out the FCC’s new web site at www.openinternet.gov, which contains a video blog from the Chairman and space debating the issues. But even the best technology will not, by itself, yield easy answers to complex questions.

Really big, say the amateur radio operators, who have long opposed BPL. Pretty small, said the FCC in adopting rules, although it mandated interference safeguards from BPL operators not required of any other industry.

The amateur radio operators’ association, ARRL, asked the FCC to tighten the rules further, and when the FCC refused, took the agency to court. ARRL raised four issues. In the April 2008 court decision, here, it lost on two: a claim that the Communications Act bars the FCC from authorizing BPL as an unlicensed service, and a request that the FCC limit BPL operations to the 30-50 MHz band, which the amateurs do not use.

But ARRL won on two other counts.

The first was a claim that the FCC had improperly withheld information that would have shown the FCC knew all along of a serious interference threat from BPL. The court ordered the FCC to release the information and to request public comment on it. The FCC has now done so – and, to be on the safe side, also released a lot of other information the court did not ask for.

The second point concerned procedures for measuring the radio-frequency energy emitted from BPL equipment. The FCC specifies the permissible emissions as if they were measured 30 meters from the equipment. The actual measurements can be taken closer in, which naturally gives higher readings. The FCC rules include a formula that adjusts the close-in readings down to what they would be at 30 meters, for comparison with the specified maximum. At certain frequencies, the formula is based on a correction factor of 40 dB/decade. (For what that means, read toward the end of this post.) ARRL thinks the formula should use 20 dB/decade instead. Under typical conditions, the ARRL’s numbers would limit BPL devices to much lower levels of emissions. The dB units are a logarithmic scale, making the difference between the numbers much greater than it might appear. For measurements taken at three meters, for example, the 40 dB/decade value allows emissions to be 100 times higher than does 20 dB/decade.

The court did not exactly call the FCC wrong for specifying 40 dB/decade, but it did question the FCC’s handling of the available data, particularly its brusque treatment of studies offered by ARRL. The court’s ruling ordered the FCC either to do a better job of justifying its number, or else to pick some other number and justify that one.

The FCC has now tried the first and begun the second, in its July 17 “Request for Further Comment and Further Notice of Proposed Rule Making.”

The FCC duly offers a defense of the 40 dB/decade value, but a reader senses the FCC’s heart is not in it. The FCC lists the many variables that can affect experimental results, criticizes the studies cited by ARRL for ignoring most of them, and cites later studies as supporting its own views. Throughout, though, the FCC emphasizes that the truly definitive study, taking all relevant factors into account, has not yet been done. The FCC seems to be saying, “The numbers are all over the map; the right answer is not known; and 40 dB/decade is as good a guess as any other.”

Doubtless sensing this approach might not survive a second pass through the court, the FCC immediately moves to a Further Notice of Proposed Rulemaking. That portion of the document requests the following:

• Information on other studies, if any, that bear on what the distance correction factor should be.
• Comment on the use of “slant range” measurement. The BPL rules figure the measurement distance on an upward slant to the power line. The default FCC approach would take the measurement distance horizontally, to the base of the pole. Compared to the horizontal method, slant range measurement effectively pushes the correction factor well below 40 dB/decade, especially for close-in measurements.
• Comment on an alternative factor of 30 dB/decade, or any other number the commenter wishes to propose and support.
• Comment on a proposed procedure that would compute an individualized correction factor for any particular site, based on multiple measurements at that site.
• Suggestions for other correction procedures, particularly for cases where conditions require working close to the pole. The FCC emphasizes that any such proposals require technical support, and must not unfairly burden BPL manufacturers or users.

Comment due dates have not yet been announced.

With commercial interest in BPL fading, one might reasonably expect to see the controversy dying down as well. But that is not how things work in Washington. Once fired up, a regulatory dispute can stay active long after the underlying issues have ceased to matter. The BPL proceeding, even after six years, still has lots of life in it.

Last week Comcast announced a cap on residential users of 250 gigabytes per month.  This is a lot of usage, attained by under one percent of subscribers.  And even those busy browsers will not be cut off when they reach the cap, or even be charged more.  Comcast will just ask them to slow down.

Comcast thinks it addressed the anticompetitive issue by applying the cap without regard to which applications generate the usage.  But its executives may still be snickering into their coffee.  In reality, the only way to hit 250 gigabytes monthly is to download a lot of video.  Emails and pictures of the kids just won't do it.  It takes a few DVD-quality movies a day, on average, or a long stretch of high-definition video each day.  Somebody watching all those movies and TV over the Internet is probably not also subscribing to cable video service.  So Comcast's usage cap may still be hindering its competition.

Yet Comcast is still not satisfied.  Yesterday it appealed the FCC's order curtailing its previous actions against BitTorrent users.  Its ground for appeal?  The FCC never adopted a rule that specifically prohibits Comcast's admittedly discriminatory practices.  All the FCC has to go on is a broadly-worded policy statement.  Without a rule, Comcast seems to say, the FCC has no authority to take any action whatsoever.

All this is just delaying the inevitable.  Comcast has already complied with the order it is appealing, so presumably it is appealing as a matter of principle.  The FCC can make the principle moot as well, just by adopting a rule.  We should all have better things to do than continuing to litigate a case long after it is over.

And yet, in the end, the FCC did little more than issue a warning.  Comcast is required to do three things:  (1) give the FCC details of its discriminatory practices, (2) explain how it will stop those practices, and (3)  tell its customers and the FCC about any new practices it will use instead.

The FCC took the occasion to announce it would oversee "federal Internet policy" in resolving any other claims of discriminatory network practices.  After seeing the penalties imposed on Comcast (i.e., none), we doubt that other network operators are losing much sleep.

In fairness, though, the decision does plant a flag on the beach.  Since the 1970s, in the pre-Internet days when people began sending large amounts of data over telephone lines, the FCC has consistently forborne from regulating any aspect of transmitted content.  A series of decisions over the past few years explicitly extended that policy to cable, DSL, wireless, and broadband-over-power-line, exempting the providers of each from the traditional forms of regulation that would have blocked Comcast's methods.  Network operators might have thought themselves free to run their systems as they wished.  Today, though, the FCC put an important limit on that freedom:  operators may not discriminate against categories of content.

But another question, equally important, remains unanswered:  can an operator discriminate in favor of certain users?  That is the issue that launched the "network neutrality" debate -- whether an Internet service provider can move some sites to customers faster than others, in exchange for money.  Considering that today's decision went on a 3-2 vote, and that composition of the Commission may well change after the election, we are not making any predictions.

The American Radio Relay League (ARRL) is an association of amateur radio operators dating back to 1914, with a long record of looking out for amateurs' interests before the FCC.  It fought BPL throughout the proceeding with a certain amount of rhetoric, but also with reasoned analysis and empirical data.  ARRL mobilized its individual members, who participated by the thousands, though by and large with a lot less reason and data than their association.  (There were a dozen or so notable exceptions.)  For some amateurs the battle against BPL took on the fervor of a religious crusade.

And indeed, the amateurs won a substantial victory.  Although the FCC authorized BPL in the amateur bands, it required BPL operators to undertake unprecedented measures to cure any interference they cause.  But the amateurs wanted more.  They wanted BPL completely off their frequencies.  When the FCC refused to go along, ARRL went to court.

The Part 15 Problem

BPL devices, both on the power poles and in customers' homes, are treated as "unlicensed devices" under Part 15 of the FCC rules.  The same is true of all other digital products, such as laptops and iPods, and also a host of low-power transmitters such as Wi-Fi, Bluetooth, and cordless phones.  All such unlicensed devices are regulated as to stray radio emissions, among other properties.  Manufacturers and importers must establish compliance before marketing.  Once they pass the required tests, the devices can be purchased and used by anyone without an FCC license.

There has long been some tension between the amateurs and the Part 15 industry.  Most of the higher-powered Part 15 operations occur in bands shared with the amateurs.  In some of these bands, Part 15 power can exceed one Watt -- 10 million times higher than the limit elsewhere in the spectrum.  As Part 15 devices proliferate, the amateurs are exposed to increasing risks of interference.  The amateurs routinely oppose expansion of Part 15 in the shared bands.  Starting about fifteen years ago, those oppositions began including a stock footnote suggesting that Part 15 might be unlawful under Section 301 of the Communications Act.  That section can be read to say that any device emitting radio waves must be licensed by the FCC.  If that were the correct reading, then the statutory language would leave no room for unlicensed devices.

In 2001, the FCC approved one more in a string of Part 15 power increases in shared amateur bands.  ARRL sought reconsideration, and this time argued head-on that the FCC's action violated Section 301.  The FCC's reasoning went something like this:

1.    We think Section 301 requires licensing only for devices that actually cause interference.  Harmless devices like laptops and PDAs and musical greeting cards are exempt -- and would be impossible to license anyway.  (ARRL agreed.)

2.    And we, the FCC, get to decide which devices cause interference.  (ARRL agreed again.)

3.    We now decide those higher-power Part 15 devices you oppose are non-interfering.  That makes them lawful under Section 301.

ARRL promptly filed an appeal.  But it withdrew the appeal shortly afterward, giving no reason for the change of heart.  Observers at the time thought ARRL, to prevail, would need a case having better facts.

From ARRL's point of view, the ideal set-up for a challenge would have the FCC authorizing a Part 15 device that the FCC itself conceded could interfere with amateur radio.  But that seemed unlikely, to say the least.  The FCC had always been careful about limiting Part 15 emissions to make interference to other users a very remote possibility.  But it took only three years for the planets to align.  In the BPL rules, the FCC seemed to give ARRL everything it needed to contest Part 15.

Mobile vs. Fixed

There are two kinds of amateur stations.  Fixed stations are typically installed in a building such as a residence or club; mobile stations are usually in a car.  Fixed stations tend to have better antennas and receivers, and so can receive weaker signals.  That makes the fixed stations more sensitive to very weak levels of interference.

The FCC at first adopted the same BPL rules as to fixed and mobile amateur users.  If an amateur reports interference, the BPL operator must "notch" (turn down) the signal on that frequency by either 90% or 99%, depending on the band.  If that does not resolve the problem, the operator has to completely shut off the offending BPL unit.  In addition, the BPL industry must maintain a publicly accessible database showing the frequencies in use and details on the equipment at every location nationwide, with phone numbers and email addresses to report interference.  All of this added up to a major victory for the amateurs, far beyond anything else in Part 15.

In a reconsideration order, the FCC made a small but significant change.  The rules remained the same for fixed amateur users.  But on a complaint from a mobile amateur, the BPL operator must only effect the 90 or 99% notch; it need not turn off the unit.  The FCC acknowledged that intermittent interference might remain after notching, but it absolved the BPL operator of further obligations.  The mobile user could escape the interference by relocating, the FCC noted, and besides, the public benefits of BPL justified "a small increase in instances of disruptions" to mobile communications.

No party had asked for this particular ruling.  But a look through the 8,000 filed comments turns up a possible motivation.  A few of the more zealous amateurs had said they planned to drive around looking for interference, report it, and thus shut down BPL "one pole at a time."  Eliminating the shut-down requirement as to mobile users ended this threat to BPL.  But it stirred outrage in the amateur community.

ARRL thought it finally had its case.  The FCC had admitted possible interference from a Part 15 device.  ARRL went to the U.S. Court of Appeals for the D.C. Circuit.

Is Part 15 Lawful?

ARRL's central argument turned on the Section 301 licensing requirement.  If a device can cause interference, said ARRL, it must be licensed, according to prior FCC rulings, and therefore is ineligible for authorization under Part 15.  At the very least, ARRL insisted, the FCC should be required to explain its departure from precedent on this point.

The FCC answered by saying, yes, while BPL may cause minor and intermittent interference, that does not constitute harmful interference.  Because Part 15 must protect amateur radio only against harmful interference, BPL is therefore proper under Section 301.

(The FCC could have made a different argument.  Another rule, much older than BPL, requires any Part 15 device to shut down if it causes harmful interference to any licensed user.  If that rule applies to BPL and mobile amateurs -- and there is no reason to think otherwise -- then BPL complies with the long-standing, non-interference interpretation of Section 301.  But the FCC did not raise this point.)

The Part 15 community was concerned about the case.  Any Part 15 device is a potential source of interference -- even harmful interference -- under some conditions.  Wi-Fi, for example, sometimes interferes with amateur radio.  A court ruling that barred the FCC from authorizing arguably interference-causing devices under Part 15 could have thrown the legal status of the industry into doubt.

But the court accepted the views of the FCC that BPL would not cause harmful interference to mobile amateurs.  This means the missing shut-down requirement would never have to be invoked, so its absence from the rules does not run afoul of Section 301.

The FCC must realize that it had a close brush.  Going forward, it is likely to be more careful in framing its rules to ensure that licensed devices are well protected from Part 15 interference.  And yet, as the role of Part 15 in the economy continues to grow, Part 15 becomes increasingly hard to contain.

Other Issues

While affirming the FCC on the Section 301 issue, the court found fault with other two aspects of the BPL decision.

First:  Among the many technical studies that played a part in the proceeding were five carried out by the FCC itself.  The FCC placed these in the public docket, but blacked out some passages it said were "preliminary or partial results or staff opinions."  It claimed not to have relied on those passages in reaching its conclusions.  And ordinarily an agency need not share its internal deliberations with the public.  But the court, having reviewed the missing material, suspected it might contain evidence that could call the rules into question.  For that reason it ordered the FCC to publish the material and to receive public comment on it.

The other ARRL victory (at least for the time being) concerns an "extrapolation factor" that the FCC carried over from earlier Part 15 rules.  At frequencies below 30 MHz, the permissible emissions are specified at a distance of 30 meters, or almost 100 feet.  That requires an inconveniently large test set-up.  The FCC allows measurements at shorter distances, which are then corrected to 30 meters by a factor of 40 dB/decade.  Translating:  for every factor of ten change in distance, the actual measured values are divided by 10,000.  For example, measurements taken at 3 meters can be 10,000 times higher than the published limit at 30 meters, and still comply.

ARRL insisted throughout the proceeding that 40 dB/decade is too high:  that the factor should be 20 dB/decade, or division by 100 for each tenfold increase in distance.  Using ARRL's figure, a BPL device measured at 3 meters would be allowed only 1/100 of the emissions it could have under the FCC's approach.

Ordinarily the courts tend to side with the agency on a complex technical issue.  Here, however, the court found that the mathematical models used to justify the 40 dB/decade value relied on measurements from other, non-BPL technologies that might not accurately reflect BPL.  The court also wondered why the FCC had disregarded British studies, placed in the record by ARRL, showing that 20 dB/decade was closer to the mark.  The court did not invalidate the 40 dB/decade factor, but it ordered the FCC either to justify it in terms of the record, including the British studies, or else to pick a different number and justify that one.

The last issue went to the FCC.  Equipment made by one leading BPL vendor uses only the frequency band 30-50 MHz, where the amateurs have no operations.  If one vendor could do it, ARRL reasoned, so could all of them.  It asked the FCC to limit BPL to just those frequencies, and when the FCC refused, complained to the court that the FCC had brushed off a good idea.  But the court found enough reasoning in the FCC's order to support the rejection.

Back to Work

The next step in the process will be a request for comments from the FCC, certainly on the redacted studies, and probably on the 40 dB/decade issue as well.  Considering the great interest in the original BPL proceeding, the FCC is bracing itself for this new round, which promises to be at least as contentious.  The amateur community is unlikely to pass up another opportunity to express its displeasure with BPL.