The FCC and staffer Sharon Stewart continue discussions with a mediator about settling her hostile work environment lawsuit (see 1803260002), the sides said Monday in a U.S. District Court in Washington docket 15-cv-0057-CKK status report (in Pacer).

Charter Communications should cease and desist saying it complied with -- and exceeded -- New York state obligations to expand its broadband network, agency officials said Tuesday. “These misrepresentations, coupled with Spectrum's overall pattern of unacceptable conduct in New York, call into question the continued viability of Spectrum as a regulated telephone/cable company in this State,” said New York Public Service Commission General Counsel Paul Agresta in a letter to CEO Thomas Rutledge. Spectrum is a Charter brand name. The Department of Public Service referred the matter to the New York attorney general and the SEC, Agresta said. The agency seeks a log of “all such advertising in advance of potential direct enforcement action for penalties” by the New York Public Service Commission, he said. “Preserve all documents, including email, text messages, voice mail, recordings, and other documentation relating to the aforementioned matters.” Charter never told customers about missing a December buildout target that was a New York condition of the carrier's Time Warner Cable acquisition, but instead “continues to assert in advertisements and publications that it has complied with -- and even exceeded -- its commitments to New York,” Agresta said. “Those representations are demonstrably and materially false.” The PSC earlier fined the MVPD $2 million over the charge that it missed the buildout target (see 1806140063). It’s not the first time New York claimed the company misled consumers, added Agresta, referring to the state AG’s lawsuit about the company’s advertised internet speeds that last week got court OK to continue (see 1806210060). “The situation regarding Charter/Spectrum is getting more serious with each passing day,” said PSC Chair John Rhodes, agreeing the company is misleading consumers. The operator “built out our broadband network to more than 42,000 unserved or underserved homes since the merger,” a spokesperson responded. “We find it baffling that the PSC thinks that some New Yorkers count and others don’t, given their belief that access to broadband is essential for economic development and social equity.” New York is unlikely “to do anything drastic,” cable consultant Steve Effros emailed Tuesday. “The regulators, after all, have made strong accusations against most operators in the State at one time or another. This reflects either unreasonable expectations or a regrettable form of negotiating leverage.” Effros doubts New York could find another company to replace Charter that could better meet the state’s timing demands.

The FCC granted 12 of 14 waiver petitions in the Connect America Fund Phase II auction of subsidies for fixed broadband and voice services, though some didn't qualify to bid. Meanwhile, Comcast and MediaCom told us they didn't apply to bid in the auction starting July 24. The Wireline and Wireless bureaus granted 10 of 11 applicant waiver petitions asking regulators to accept late-filed Form 477 submissions as evidence of their voice and/or broadband service experience but denied Net Vision Communications' request because it didn't file a 477 for a relevant period, said an order in docket 17-182 and Tuesday's Daily Digest. The bureaus noted the waivers didn't necessarily mean applicants were qualified to bid, as applications were judged in totality; a public notice Monday announced 220 applications were accepted and 57 denied (see 1806250051). Waiver grantees qualified to bid were Workable Programs and Systems, Hankins Information Technology, Red Spectrum Communications, 360 Communications, Pueblo of Laguna Utility Authority and Northern Arapaho Tribal Industries. Not qualified were Redzone Wireless, Emerald Cable, Good Connections and Skyrunner. The bureaus denied Sonus Technologies' request to waive a requirement that applicants with fewer than two years of experience submit three years of audited financial statements. In another order, the bureaus granted waivers to Horizon Telcom and Hawaiian Telcom to amend applications to reflect pending ownership changes, conditioned on deal consummation. The FCC May 29 approved transfers from Horizon Telecom and two subsidiaries to Horizon Acquisition Parent; June 19, it approved transfers of control from Hawaiian Telcom to Cincinnati Bell. Both applicants were qualified to bid.

The Broadband Access Coalition plan for the 3.7-4.2 GHz C-band doesn’t qualify for the expedited review reserved for “innovative” new technologies and services under Section 7 of the Communications Act, the FCC Wireless Bureau and Office of Engineering and Technology wrote BAC. We “do not believe that its proposal for use of the 3.7-4.2 GHz band-i.e. authorizing point-to-multipoint services to share use of the band with fixed services (fixed satellite service and fixed service) through the Commission's Part 101 frequency coordination procedures -- qualifies as a ‘new’ technology or service," the letter said. “Point-to-multipoint services, which are deployed in numerous spectrum bands, are not new, and the Part 101 coordination procedures are frequently used when sharing of spectrum among fixed services.” But, the FCC said, the proposal is being considered as part of a broader look at mid-band spectrum. Commissioners are expected to vote on a C-band NPRM July 12 (see 1806260027). Consistent with Section 7, “we plan to take action in the near-term to promote more flexible use of the 3.7-4.2 GHz band that would serve the public interest,” the FCC said. OET Chief Julius Knapp signed the letter. FCC Chairman Ajit Pai pledged the agency will follow Section 7. The agency sought comment in February on formal rules (see 1802220045). BAC filed its plan last summer (see 1708100037).

Some experts and advocacy groups criticized the Supreme Court's 5-4 Ohio v. American Express issued Monday as having significant implications for tech firms in two-sided markets. The dissent by Justice Stephen Breyer raised the idea of the opinion treating internet retailers differently from other businesses in antitrust evaluations. It's "an enormous setback for consumers who rely upon the antitrust laws to promote market competition," Public Knowledge said, "a particularly dangerous setback that will open the door for communications and internet platforms to continue building dominant market positions virtually impenetrable to innovation from smaller competitors." The decision was "a HUGE victory for platform providers who can now escape antitrust liability" by claiming -- and not proving -- even a fraction of overages on one side of the two-sided market went to customers on the other side, tweeted economist Hal Singer. Open Markets Institute called the decision "a huge and intellectually unjustifiable obstacle to effective antitrust enforcement." OMI said special treatment of two-sided markets "greatly rais[es] the burden that plaintiffs must carry at the very earliest stages of litigation" and gives more power to monopolies. OMI said it argued in its amicus brief that federal law traditionally looked at both credit card companies and communications firms as intermediaries, but the decision makes tech platforms into "de facto regulators of these markets." OMI said DOJ and the FTC should "use their full legal authorities" to "limit the damage from this poorly reasoned decision" and Congress should "take immediate action." Others defended the decision. The court was "exactly right" when it said plaintiffs didn't meet the burden of proof when they focused on the fees paid by merchants, tweeted International Center for Law & Economics Executive Director Geoffrey Manne. "Gov’t can’t meet its burden by showing 'some' effect on 'some part' of the market. Output didn’t go down and price didn’t go up. If it were pointing to a real effect, they would have." The U.S. and states sued AmEx for contractual provisions with merchants stopping them from steering consumers from using their credit cards in favor of another that charges lower merchant fees. Justice Clarence Thomas wrote the majority opinion holding anti-steering provisions don't violate the Sherman Act.

The FCC issued an order raising by 43 percent a USF Rural Health Care Program cap to $571 million to account for 20 years of inflation and address a funding shortfall in the face of rising demand. With the unanimous order released Monday in docket 17-310, "the FCC takes swift and long-overdue action to address this critical funding crisis," said Chairman Ajit Pai. He and Commissioner Brendan Carr said other steps would provide longer-term certainty. The agency ordered the budget cap be adjusted annually for inflation, with a process to carry forward unused funds from past funding years for future use. The order is "a first step in a much-needed process to revamp the program to ensure that it is operated in a predictable, sustainable, and accountable manner," said Commissioner Mike O'Rielly, who said "there is much more to do." He also said the order "highlights the need for an overall cap" on USF. He said the FCC should work with other agencies "to determine how our rather narrow telemedicine program works within the larger health care system." He said the FCC doesn't get credit for RHC Program benefits to other agencies. Commissioner Jessica Rosenworcel said: "While injecting more funding into the program is the right call, we need to acknowledge our actions here are no more than a short-term band-aid. If we want this program to truly thrive, it is going to require more long-term care and attention." Pai's draft order (see 1806060057) received votes of all colleagues recently (see 1806140017 and 1806190063).

The Supreme Court won't consider an appeal by Dish Network designated entities SNR Wireless and Northstar Wireless about FCC handling of the AWS-3 auction bidding credits, the court said Monday. The DEs' petition for writ of certiorari was distributed last week. The cert petition was seen facing steep odds (see 1801290033). Dish and the DEs have made several changes to Dish's control of the them after the U.S. Court of Appeals for the D.C. Circuit last year upheld the FCC withholding the DEs' AWS-3 auction bidding credits due to their too-close connections to Dish (see 1806080063). Dish and the FCC didn't comment Monday.

The FCC said 220 applicants qualified for the Connect America Fund Phase II reverse auction of subsidies for fixed broadband and voice services, scheduled to begin July 24. Short-form applications of 57 parties were rejected, said a public notice Monday in docket 17-182. Auction 903 is making available up to $1.98 billion -- in aggregate over 10 years -- in high-cost areas traditionally served by large ILECs that denied initial CAF II offers. Among qualified bidders: Allband, Altice USA, Cincinnati Bell, Consolidated Telephone, Cox Communications, Docomo Pacific, Frontier Communications, Hawaiian Telcom, Hughes Network Systems, Lumos Telephone, Midcontinent Communications, New Cingular Wireless (AT&T), U.S. Cellular, Verizon, Viasat and Windstream. Companies sometimes submit applications under other names. CenturyLink and T-Mobile told us they didn't apply. Charter Communications, Comcast and Sprint didn't comment. Qualified bidders are eligible to bid in at least one of the states for at least one of the broadband performance tier and latency combinations they selected, but may not be eligible to bid in every state or performance tier and latency combination they targeted. Among unqualified applicants: Accipiter Communications, Shentel, Skybeam and Sonus Technologies. They remain subject to rules prohibiting certain communications on bids and bidding strategies. Qualified bidders can participate in a July 18-19 mock auction and the actual auction over the internet using a CAF Bidding System. A user guide for that system and other resources are available at the Auction 903 webpage. An online tutorial will be Friday at noon EDT, and a workshop will be July 9 at 2-4 p.m. at commission headquarters.

Jonathan Friedland resigned as Netflix chief communications officer after using “insensitive” remarks in speaking to his staff “about words that offend in comedy,” he tweeted Friday. “Leaders have to be beyond reproach in the example we set and unfortunately I fell short of that standard,” he said. “I feel awful about the distress this lapse caused to people at a company I love and where I want everyone to feel included and appreciated. I feel honored to have built a brilliant and diverse global team and to have been part of our collective adventure.” Netflix didn’t comment.

Verizon met with aides to the four FCC commissioners to press for action on rules reducing barriers to infrastructure deployment. “Rapid growth in wireless usage demands continued investment in fiber facilities and small cells to support users’ needs,” said a docket 17-79 filing last week. Verizon emphasized the importance of addressing state and local zoning rules and said it tries to collaborate with local governments. “While this collaborative approach has been successful in some cases, many municipalities unfortunately continue to demand exorbitant fees for access to rights-of-way and structures within them, including, for example, attachment fees that exceed $4,000 per year,” the carrier said.