Rosenworcel Seeking Foreign Broadcast Ownership Fresh Look, Favors IP Transition Trials

To Rosenworcel, one of the “underappreciated things” was the effect the shutdown had on the device and equipment approval process (CD Oct 9 p2). “Spectrum policy gets all the glory, but the truth is we process a lot through our labs, and working with third party labs,” she said. Sixteen thousand devices were approved last year, a 400 percent increase over a decade ago, she said. “It doesn’t always get the attention or the resources that it deserves,” she said of the program. FCC engineers will work through that backlog “like everything else” that has a backlog, she said: “People are working hard” to process approvals in a timely way.

Rosenworcel is in favor of reinterpreting the foreign ownership rules, she said. “Media markets are changing and broadcasters are facing a complex and multiplatform world. I think having more diverse forms of capital is a good thing.” Section 310 is “one of the more cryptic portions of the Communications Act,” she said. The FCC’s interpretation today bans more than 25 percent of foreign ownership in a broadcast entity, she said. “I think it’s a good thing that we are going to take a fresh look at that and acknowledge that going forward we can do that on a case-by-case basis.” A draft declaratory order tentatively set for a vote at the Nov. 14 FCC meeting would do that, other officials have said (CD Oct 25 p5).

On spectrum, “it is important for us to resist the temptation to look at all of our spectrum policies in isolation,” said Rosenworcel. “Because ultimately, the interest that providers might have in our traditional auctions affects their expectations for spectrum opportunities in our incentive auctions, which in turn can affect their willingness to promote the secondary markets. So as we think about these issues, I think we have to make a concerted effort to think about them holistically."

Good spectrum policy uses a balance of licensed and unlicensed spectrum, Rosenworcel said. The 2.4 GHz band is “getting crowded,” which makes it important to try to identify other unlicensed opportunities in other bands, she said. In the spectrum law approved by Congress last year, lawmakers said “guard bands that were technically reasonable” in the 600 MHz band should be made available -- and within those guard bands, unlicensed uses are available, she said. “One of the things that I think deserves immediate attention is the 5.150-5.250 GHz band.” Rosenworcel cited a July letter by the Department of Defense that acknowledged the band could be made available for Wi-Fi. “It’s time to seize that opportunity, because I think that’s some unlicensed spectrum that could do some really good things for the economy,” she said.

Rosenworcel wants federal authorities to have “structural incentives” to be efficient with their spectrum assignments. That could wind up being financial, through “adjustments to the consequences of sequestration,” or through the budget or appropriations projects, she said. “The bottom line is they need to see advantage on their side of the ledger. And if we do that, they would see gain and not just loss for reallocation.” But that has to come through legislation, because the commission doesn’t have that authority, she said. “I'm just evangelizing.”

On the H-Block auction, Rosenworcel disagrees with the agency’s decision to auction early 10 MHz of the 65 MHz of spectrum that Congress directed the FCC to make available in traditional auctions. “I don’t think that’s the best way to go,” she said. “The spectrum that is enumerated within the statute is within 500 MHz of one another, which means it’s a good substitute for one another. All of that means that if you auctioned it all together -- 65 MHz at once -- you'd have more interest: More interest from the capital markets, more bidders, and more revenue.” Wall Street analysts agree, she said. “I think that that would be the best spectrum policy and the most likely to yield the most revenue, which would help fund the First Responder Network Authority.

It’s been about a year since superstorm Sandy, and since Rosenworcel toured the damage, which she described as “post-apocalyptic.” Rosenworcel walked away from that trip with two lessons, she said. “First, we need to start thinking about what resiliency means in the wireless and digital age.” In affected areas, one in four wireless towers were without service -- and that number was above 40 percent in a lot of affected New Jersey areas. “We need to have an honest conversation about backup power, access to fuel under the Stafford [Disaster Relief and Emergency Assistance] Act, and making sure that local, state and federal authorities all work together to make sure networks stay up and running."

Second, “we really need to start managing consumer expectations,” Rosenworcel said: “If you can’t plug it in, you need to be prepared” -- with backup batteries and solar powered chargers. “There are tradeoffs” associated with use of technologies such as IP and wireless, she said.

When it comes to the IP transition, “we can scour the statute, we can comb through its minutiae, but I don’t think there are easy answers,” said Rosenworcel. The ways we communicate and connect are changing, she said. Rosenworcel cited a nearly 50 percent decrease in the use of switched access lines over the last decade, a 77 percent increase in the use of VoIP since 2008 and an increasing number of households with wireless as their only phone.

Rosenworcel reiterated the “essential values” through which regulators can figure out how to regulate the new telecom world. Those values include public safety, universal service, competition and consumer protection. “They become the prism through which we can start assessing the consequences,” she said. “But in order to make that all happen I think the next thing we need to is some location-specific trials,” she said to a smattering of applause. When you make big changes to network architecture, with “substantial” adjustments to the regulatory systems to go to them, “it is good to proceed with a test, and I think this is one of those circumstances,” she said.

The agency has done “great work as a commission of three,” and acting Chairwoman Mignon Clyburn deserves the credit for that, Rosenworcel said. “The agency functions best with a full complement of commissioners. So I'm looking forward to having some new colleagues,” she said. “But we'll acknowledge it’s up to the good men and women of the Senate to decide when.”

"We [would] obviously vote sooner rather than later,” responded Di Scipio. “I have the Chairman’s Dinner coming up,” Di Scipio said of the annual FCBA event. “It would be nice to have a chairman for that.”