Wheeler Stays Firm on In-flight Cellphone NPRM, Considers Killing QRA

"This is the responsible thing to do,” Wheeler told House lawmakers of the FCC NPRM. He spoke with Transportation Secretary Anthony Foxx that morning, and Foxx said that yes, the FCC is the technical agency overseeing these issues, while others handle the rules on practical implementation, Wheeler said. Other government bodies will be moving forward with a rule addressing voice calls, Wheeler said, recounting the conversation with Foxx.

Subcommittee Chairman Greg Walden, R-Ore., told Wheeler it would be “helpful” if the public were able to see the FCC’s NPRM. Wheeler agreed and said the Thursday vote would help allow the FCC to “put the language out.” He told Walden the proposal did not violate the agency’s net neutrality rules due to the premises exemption, which covers locations such as coffee shops and airplanes.

The Transportation Department is considering a ban on voice calls. “Over the past few weeks, we have heard of concerns raised by airlines, travelers, flight attendants, members of Congress and others who are all troubled over the idea of passengers talking on cell phones in flight -- and I am concerned about this possibility as well,” Foxx said in a statement when queried about his meeting with Wheeler. “As the FCC has said before, their sole role on this issue is to examine the technical feasibility of the use of mobile devices in flight. We believe USDOT’s role, as part of our Aviation Consumer Protection Authority, is to determine if allowing these calls is fair to consumers. USDOT will now begin a process that will look at the possibility of banning these in-flight calls. As part of that process, USDOT will give stakeholders and the public significant opportunity to comment."

Opposition to in-flight voice calls is strong in Congress. On Thursday, Sens. Lamar Alexander, R-Tenn., and Dianne Feinstein, D-Calif., introduced the Commercial Flight Courtesy Act, which would forbid voice calls on cellphones during commercial flights. In a news release, Alexander’s office said this bill “mirrors current regulation” on cellphone prohibitions. Feinstein, in a statement, said plane travel is not “conducive to numerous passengers talking on cell phones” and that the legislation, without affecting a passenger’s ability to text or email, “recognizes the use of cell phones to make calls during flights can be disruptive and irritating to other passengers and would prevent such communications during domestic flights.” House Transportation Committee Chairman Bill Shuster, R-Pa., introduced the Prohibiting In-Flight Voice Communications on Mobile Wireless Devices Act Monday, which would compel the Transportation Department to issue rules banning conversation while commercial planes are in-flight. Shuster’s bill, HR-3676, has 21 co-sponsors from both parties, including Communications Subcommittee ranking member Anna Eshoo, D-Calif.

But 10 House Democrats sent Wheeler a letter supporting the NPRM. “We oppose the use of voice services during flights,” said the letter dated Wednesday (http://1.usa.gov/1d9VBze), an effort led by Doris Matsui, D-Calif., and Suzane DelBene, D-Wash. “However, as Members of Congress who are concerned about making sure that our laws and regulations keep up with the pace of modern technologies, we support this process, and believe that appropriate actions can be taken to modernize an outdated technological rule and enhance passenger connectivity while in flight.” They support airlines deciding whether to allow voice calls but also back the FCC’s proceeding exploring in-flight communications.

Members Raise USF Concerns

Subcommittee members pressed the FCC members on the commission’s November 2011 updates to its USF rules and specifically the quantile regression analysis (QRA), used to determine allocations from the agency’s high-cost fund. Multiple stakeholders have attacked these benchmark rules saying they create market uncertainty. Multiple FCC commissioners have also criticized them before. Walden asked if Wheeler would reconsider the analysis’s application.

"Yes,” Wheeler said. “I have asked the bureau to draft and let me see what an order that I could share with my colleagues that would be to eliminate the QRA and return to the high-cost loop support model.”

After the hearing, NTCA CEO Shirley Bloomfield lauded Wheeler’s comment “that he has directed FCC staff to prepare a plan to consider the elimination of these statistical caps” on the USF, which she said “are penalizing investment decisions made years before.” Western Telecommunications Alliance Vice President-Government Affairs Derrick Owens also released a statement saying the group welcomes the comment. “We have been making the point for some time now that the QRA is stymieing investment, particularly broadband-related investment, by rural local exchange carriers,” Owens said, asking the FCC to consider an alternative proposal to the quantile regression analysis that WTA and other rural associations have submitted.

Committee ranking member Henry Waxman, D-Calif., questioned Wheeler’s recent policy address in Ohio and asked where the new chairman stands on net neutrality rules. “I am a strong supporter of the Open Internet rules, full stop,” Wheeler replied. “The rules were written in such a way as to envision opportunities for innovation and experimentation and to impose on them a balance between protecting the open Internet, protecting consumers and stimulating innovation. New ideas under the Open Internet Order in a wireless environment particularly are not prohibited but there is a clear responsibility for the commission to make sure what takes place does not interfere with Internet access, is not anti-competitive, and does not provide preferential treatment, and we will enforce that."

The FCC has “long overdue responsibilities,” Walden said in his opening statement. For example, despite multiple unsuccessful trips to the 3rd Circuit Court of Appeals, the commission’s responsibility to address the media ownership proceeding remains unfulfilled. Additionally, licensing -- one of the original reasons for the creation of the commission -- has fallen woefully behind.” He lamented the Media Bureau’s “tragic pace of processing of applications” as “AM radio industry has been clamoring for the ability to use FM translators to give new life to a classic medium.”

Rep. Lee Terry, R-Neb., criticized how the FCC defines a “buying group of MVPDs [multichannel video programming distributors] for purpose of program access rules in a way that excludes the NCTC [National Cable Television Cooperative], essentially the only buying group out there,” asking if the FCC had plans to amend this process. Wheeler said, “I've just become aware of the issues that have been raised about this and want to get all over it.”

Administration ‘Encouraged’ by Spectrum Bill

The White House knows “the importance of ensuring Federal agencies are able -- and incentivized -- to share or relinquish spectrum in a cost-effective and timely manner, while protecting the mission capabilities of existing and future systems that rely on spectrum use,” U.S. Deputy Chief Technology Officer for Telecommunications Tom Power wrote in a blog post (http://1.usa.gov/1byXjYh) Thursday, citing Wednesday’s favorable Commerce Committee vote on the Federal Spectrum Incentive Act, HR-3674 (CD Dec 12 p2). “We are encouraged by lawmakers’ attention to this important issue and look forward to continuing to work with them to address challenges that industry stakeholders and federal agencies face in achieving more efficient use of spectrum.” The bill would let federal agencies tap the revenue from spectrum they give up to offset sequestration cuts.

Wheeler called the bill “a great step forward.” Matsui asked Wheeler if the incentives proposed are “adequate” to sway the federal government to give up spectrum, but Wheeler said he couldn’t answer because it hadn’t been “market-tested.” But “what’s important is the concept that’s been developed,” Wheeler said. Commissioner Jessica Rosenworcel also praised the bill as “creative” and called it a “good starting point for conversation."

Vice Chairman Bob Latta, R-Ohio, quizzed commissioners on whether the agency would allow any interested bidder to participate fully in the broadcast spectrum incentive auction, now scheduled for mid-2015. Wheeler replied the statute is “quite explicit” in mandating the FCC not exclude anyone, but there are certain provisions the agency has to keep in mind to ensure it’s “not just the giants” participating. FCC Commissioner -- and until recently, acting chairwoman -- Mignon Clyburn agreed, citing FCC authority to introduce and enforce “rules of general applicability that will allow for spectrum aggregation to promote competition.” Rosenworcel said, “We just have to follow the law.” Commissioner Pai cautioned against “strict spectrum policies” that could limit carrier participation. “I'm worried about anything that would depress auction revenues,” Commissioner Michael O'Rielly said.

Other Bills Afoot

In his opening statement, Latta touted his controversial CableCARD bill, which would end the integration ban requiring cable operators to use CableCARDs instead of built-in security in set-top boxes. He introduced HR-3196 in September, and it now has six co-sponsors, despite TiVo’s lobbying against it. Committee Chairman Fred Upton, R-Mich., cited Latta’s proposal at the hearing’s outset, saying it “seems to make a lot of sense” and does something “the FCC should have considered doing a while ago.” Eshoo, in her opening statement, said the FCC should “uphold the goals of Section 629” of the Communications Act -- which observers say Latta’s bill would weaken -- to ensure a robust set-top box market and allow greater choice. A Democratic staffer told us earlier this week that Eshoo stands by the concerns with Latta’s bill she aired in a summer letter on a bill draft and has concerns about it now.

Eshoo also reiterated the need for her bill resolving retransmission consent blackouts, based on a draft bill she released in late summer. Since that draft bill, stakeholders have been “abundantly clear” in their message to her, she said: “Our video laws are in need of reform. They're broken.” She formally introduced the bill Thursday.

Walden and Rep. Joe Barton, R-Texas, are preparing a bill to protect low-power TV stations throughout the incentive auction process. It’s a bill “that we hope to introduce very soon” that “does create, I hope, a pathway, so they may continue to exist,” Barton told Wheeler. Wheeler described the agency’s public notice on the delivery of the content of low-power TVs. “This ends up being more of a digital technology question than anything else,” Wheeler said. “There may be a safeguard in the reality that rural areas don’t have that great a demand for spectrum for wireless services to begin and so they may be operating in areas where there is less pressure for spectrum.”

At the hearing’s outset, Walden mentioned the subcommittee leadership’s ambition to update the Communications Act -- with hearings and white papers in 2014 and legislation on the table in 2015. Wheeler, when discussing retransmission charges that cable operators have placed on consumer bills, said he is trying to figure out the FCC’s authority and that fits into the broader set of issues that need to be addressed in a Telecom Act rewrite. “But that'll be like seven years from now,” Eshoo said, prompting Walden to cut in: “Oh, no.”