Two developments happened since I posted my Insanely Long Field Guide to the Fox29 license renewal challenge that potentially bear on the challenge. The first is Rupert Murdoch’s retirement announcement. The second is the Administrative Law Judge Decision in the other pending Character Policy case. As discussed below, neither really impacts the challenge to Fox29 — at least not at the hearing determination stage.
I explain why below.
In July, the Media and Democracy Project filed a Petition to Deny the license renewal of Fox29 (WTFX-TV) in Philadelphia. The Petition rests on a particular feature of Federal Communications Commission (FCC) broadcast licensing law. Every 8 years, a broadcast station must apply to the FCC to renew its broadcast license, which requires a showing that the licensee has — among other things — the requisite character to hold a broadcast license. The scope of behavior the FCC will consider under its 1986 Character Policy and subsequent amendments is fairly narrow — it does not, for example, include littering or making a nuisance of oneself. But it is not entirely limited to behavior involving the broadcast license itself. It includes any conduct that calls into question whether you can be trusted to run a broadcast station under the FCC’s rules and as a “trustee of the community of service.” In other words, the FCC can send you to the Group W Bench (here, a hearing) where, to paraphrase Arlo Guthrie, they decide if you are moral enough to hold an FCC broadcast license.
MAD challenges renewal of Fox29 on the grounds that Fox Corp, the ultimate owner of Fox Television Broadcast Stations (FTBS) and Rupert Murdoch and son Lachlan (principle shareholders who have previously been found to have de facto influence or control over FTBS as well as Fox Corp.) lack the requisite character to hold a Commission broadcast license. They point to the settlement in the Dominion defamation case, where Fox Corp. and Murdoch as the named defendants acknowledged (but did not formally admit to the truth of) the earlier findings of the district court that they had made false statements about the outcome of the 2020 election on Fox News Cable Network and the role of Dominion Voting System machines in supposedly “stealing” the election. (They attach the relevant decision and press statement to the Petition). This conduct, they argue, violates the Commission’s Character Policy — making Fox Corp and Murdoch inherently unfit to act as a broadcast licensee. FTBS responds in opposition that this is all irrelevant because none of the behavior involved Fox29 and that refusing to renew the license would violate the First Amendment. MAD replies that actions that violate the Character Policy do not need to involve the licensee, and that holding licensees accountable under the Character Policy does not violate the First Amendment, as it is long settled that there is no First Amendment right to a broadcast license and that the Commission has an obligation to ensure that all license grants serve the public interest. (See NBC v. United States and Red Lion Broadcasting Co. generally).
Most people who have paid attention to this have dismissed the Petition as frivolous and a waste of time. But the Petition raises some interesting, novel questions under the law. It also has attracted support from a number of folks involved in the formation of Fox as the fourth TV network, including Preston Padden (Fox’s main lobbyist in the 1980s and 90s), Ervin Duggan (former FCC Commissioner) and William Kristol (conservative pundit and former frequent guest on Fox), Jamie Kellner (first President of Fox Television) and former FCC Chair Al Sikes. I also note that the FCC has taken the highly unusual step of opening this license renewal hearing to public comment. To be clear, this step by the FCC does not indicate that the FCC has made any determination about the merits, but is a recognition that there is a public interest in allowing people to file in favor and against.
My point is that while getting the FCC to hold a hearing — let alone deny Fox29’s application for renewal — is certainly a long shot given how the FCC works, this is not a frivolous claim. To the contrary, it raises some very interesting questions from an FCC law perspective. So it is worth actually walking through the process here and what questions the FCC would need to resolve either to dismiss the Petition to Deny or to Designate for a Hearing. Because ultimately, unless the FCC finds a procedural deficiency, the FCC is going to have to actually write up a real and binding decision with real consequences and real precedential value.
Full disclosure, I’ve known and been friends with Preston Padden for a long time, and I rather hope this gets to the hearing phase if for no other reason than It Would Be Fun. But I will also say up front (and for reasons I will elaborate in below), I find it extremely unlikely the FCC will grant on the Petition. Still, it cannot get out of addressing the interesting questions raised by this case.
More below . . . .
There are two types of public events here in DC. Those designed to actually educate people and those designed so that folks can display their talking points like dancing peacocks displaying their tail feathers to attract a mate. The Federal Communications Commission and National Science Foundation had a half-day workshop on July 13 to discuss the role of AI in telecom and — specifically — what is the FCC’s role here in promoting innovation and adoption of AI tools in telecom and what are the challenges the FCC should address. Happily, this event was of the educational kind and well worth watching if the intersection of AI and telecom is your thing. You can see the video here.
To forestall the usual panic and “regulation, we hates it precious!” response, I will point out that Chairwoman Jessica Rosenworcel is a self-described optimist about the value of AI in telecom. You can see her opening remarks here. The event was very much about showcasing the positives of AI and pushing back on the current uncanny valley freakout driving the current policy discussions. I was invited to speak on the first panel, which focused on the current state of research and applications and how this fits into the FCC’s overall responsibilities for spectrum management and telecommunications network management. These are the remarks I prepared below. It didn’t quite come out this way (I appear on the video at about 57:30 for those interested in how it actually came out.
For most people, the Supreme Court’s decision in West Virginia v. Environmental Protection Agency was about environmental policy and what the Environmental Protection Agency can still do to cut carbon emissions. For a smaller subset, mostly lawyers, W. VA v. EPA was an important (but confusing) administrative law case that we will spend a bunch of time arguing about how to apply to agencies generally. And for the tiniest of all possible subsets, meaning me and a handful of other telecom lawyers, it was about . . . net neutrality. Because just about everything in telecom still revolves around net neutrality. Srsly. If we were living in the Don’t Look Up universe and a giant asteroid was about to smash into the Earth, I’d be getting questions from folks about whether I thought the asteroid supported classifying broadband as Title II.
The other basic truism about these events is that they are rather like ink blots, where what you see depends a lot on what you already think. So those who hate Title II are convinced that this spells doom for any FCC reclassification efforts, whereas those on the pro-Title II side think this doesn’t really change anything. I’m as much a human being subject to this bias as anyone else. So I can only explain why I think W.VA. v. EPA hasn’t changed anything and let y’all decide if I’m right. It all depends on what the Court means by a “major question” that requires “clear proof” that Congress intended to vest the agency with the power to do the thing.
Annoyingly, the Supreme Court has not been particularly clear on this concept. The anti-Title II folks point to Kavanaugh’s dissent from the D.C. Circuit’s refusal to rehear USTA v. FCC (the case that upheld the FCC’s 2015 Title II/Net Neutrality Order, which rested in part of what Kavanaugh called “the major rule” doctrine (now officially called “major question” doctrine) and the fact that the Roberts decision in W.VA v. EPA cited the Kavanaugh dissent (although not for anything having to actually do with net neutrality.) On the other hand, as I explain below, the actual language describing the “major question doctrine” if you read the case runs against the description of the “major rules doctrine” as described by Kavanaugh in USTA. More importantly, the Court’s reliance on Gonzales v. Oregon – which cites the FCC’s authority over broadband in Brand X approvingly as an example of where Congressional delegation is “clear” – seems to me much more important than a passing citation to the Kavanaugh dissent.
Additionally, while we always knew where Kavanaugh would be if this ever reaches SCOTUS again, there is plenty of reason to believe he lacks 4 additional votes for his position. Notably, Thomas (and to some degree it seems Alito and Gorsuch) have all fallen in love with common carrier again. True, that is in the context of social media, but it would be a level of weirdness to find that judges by common law can determine Facebook is a common carrier but broadband providers can’t be common carriers without Congress expressly saying so. Also, Thomas actually wrote the Brand X opinion, which found that it was totally cool for the FCC to classify DSL as Title II even if cable broadband were classified as Title I, so it’s hard to see how this kind of agency discretion is compatible with “major question doctrine.”
I break all this down in detail below . . .
I would never have imagined that we could get past Memorial Day without Gigi Sohn’s confirmation as the 5th FCC Commissioner/3rd Democrat. But Republicans who think there is no downside to dragging Sohn’s confirmation out interminably to block Title II — especially those who voted in favor of the Infrastructure Investment and Jobs Act of 2021 (IIJA) and are looking for that broadband money to begin flowing to their states — may wish to think again. Why? Because without a vote on the broadband map of 2022, the NTIA cannot distribute the bulk of the Broadband Equity Access and Deployment (BEAD) money (or the Middle Mile money, FWIW). And while it is entirely possible that the FCC might issue the map on a 4-0 vote without controversy, I would not want to bet my state’s broadband on it given that I can’t find a single broadband report vote in the last decade that wasn’t a 3-2 party line vote. (Technically, the 2011 vote was 3-1 with Commissioner Baker not participating. But you get the idea. This does not traditionally go smoothly, and is a lot less likely to go smoothly with $45 billion on the line.)
Why yes, the FCC broadband map does need a majority vote of the full Commission to get issued. Nor does the relevant provision of the IIJA (Sec. 60103) require the FCC to publish the new maps by any specific deadline. It simply requires the FCC to publish the maps before NTIA distributes either the BEAD money or the Middle Mile grant money. So if the Republicans and Democrats cannot come to an agreement on the new 2022 broadband map, the broadband map does not issue in 2022. Or 2023. Or until whenever the FCC gets a third Commissioner.
This is not, of course, much of a problem for the giant ISPs lobbying hard to keep Sohn off the Commission. For them, the BEAD program is more a threat than a money maker, since the money will go to places the largest ISPs don’t want to serve (otherwise, they would be building there already). Indeed, the money is likely to go to potential rivals/competitors. Hence the likely controversy over the maps. The ISPs will do their best to minimize the geographic area unserved by broadband (defined in the statute as 100 megabits down/20 megabits up). Because while giant ISPs might like some of that money, it is far more important to them to keep potential new entrants or existing potential competitors from getting the money anywhere close to where the established ISPs offer service. By contrast, areas that don’t actually have broadband today want maps that reflect this reality — not maps that protect existing incumbents. Hence my belief that (like previous mapping exercises with even less on the line) the vote to produce the 2022 broadband map will be along party lines and thus need a 3rd Democrat.
Which, of course, is impossible without Sohn being confirmed as the 5th Commissioner. Which is just fine by the giant ISPs doing the lobbying, but not for Senators — R or D — from rural states.
I unpack all this below.
It isn’t the sultry Regency drama of Bridgerton, the action psycho-drama of Moon Knight, or even the, um, whatever the heck Human Resources is. But for those of us in Telecom land, the annual season of Spectrum Wars holds an attraction like no other. This year is shaping up to be a major spectacular, with lots of old plot lines coming back (like 5.9 GHz), sleeper issues (like 12 GHz) and an unexpected new dramatic plotline around the FCC’s overall auction authority — and More! With the FCC close to finally getting a full cast, it’s looking like 2022 could be a total blockbuster (which will, of course, end in the cliffhanger of a new Congress — with Ted Cruz as potential Chair of the Senate Commerce Committee!).
Of course, not every potential plotline will work out, and we’ll undoubtedly have plenty of surprises along the way, but here’s a (not so) brief recap of what you need to know to follow along this season. If I missed your favorite show, let me know in the comments.
(And no, we’re not going to talk about net neutrality. Or any of the broadband money. This is just spectrum, not wireless service.)
5G has been accused a lot of ridiculous things — causing Covid, causing cancer, causing autism. This article provides a list of 9 separate conspiracy theory/whacky things 5G is supposed to do, from killing birds to depopulating the planet. Today we can add another thing to the list to make an even ten — causing planes to fall out of the sky. Unfortunately, the source of this particular new rumor is the Federal Aviation Authority (FAA). Specifically, the new FAA “Special Airworthiness Information Bulletin” on “Risk of Potential Adverse Effects on Radio Altimeters” (generally referred to as “FAA guidance” by the industry). This has lead to a spate of articles where FAA folks anonymously leak statements about how sister agency the Federal Communications Commission (FCC) is outa control and does what she wants, bitch, whatevah! and planes are gonna fall outa the sky and shut down air travel for everyone unless the FCC stops the roll out of 5G in something called “C-Band” (with phased in roll out scheduled to start in December — now delayed until January).
If this sounds familiar, it’s because a different agency within the Department of Transportation pulled the same nonsense over the FCC’s efforts to reclaim unused spectrum from the auto industry in the 5.9 GHz band. The Department of Defense has made similar accusations against the FCC wrt its approval of Ligado. I could list several more cases, but they basically boil down to the same thing — the federal government’s processes for addressing spectrum policy is severely broken. Unhappy federal agencies that don’t like the outcome of an FCC proceeding respond by undermining the FCC in the press and trying to wage proxy wars through allies in Congress. But the FAA’s actions here take this behavior to new heights of irresponsibility and danger.
As I explain in greater detail below, the technical evidence on which the FAA bases its interference concerns have a lot of problems — not least of which that about 40 other countries operate similar 5G deployments in the same C-Band without any interference showing up. Either physics works differently in the U.S., or the report at the center of this controversy needs to explain why this hasn’t shown up in any other country where deployments are either authorized or have already taken place. What is worse, the FAA has basically been playing “chicken” with the FCC by failing to turn over needed information to verify the report or replicate the results until literally the day before FAA staff leaked the “planes are gonna fall out of the sky” story to the Wall St. J.
But more importantly, we need this inter-agency warfare over 5G spectrum policy to stop. Things have always been difficult That we now have an FAA that would prefer to actively undermine confidence in the safety of air travel than actually work with the FCC (and trust the FCC to do its job) underscores just how bad this problem has become. Congress can help by swiftly confirming Alan Davidson as head of NTIA (the federal agency that is supposed to mange the spectrum management process on the federal side) and Jessica Rosenworcel and Gigi Sohn at the FCC.
More below . . .
President Biden has finally made his critical telecom appointments to fill out the Federal Communications Commission and the National Telecommunications Information Administration (NTIA). As expected, Biden named Acting Chair Jessica Rosenworcel to serve as full chair and renominated her to fill her expired term. As hoped, he also nominated my former boss (and all around Telecom Boss) Gigi Sohn to be the third FCC Commissioner. In addition, Biden nominated Alan Davidson to serve as Administrator/Assistant Sec. for NTIA. In addition to the critical role NTIA plays in spectrum policy, NTIA will also be the agency running the multi-billion broadband infrastructure program in the Bipartisan Infrastructure Bill (assuming that passes).
This makes lots of important things possible. Not just headline items like reclassifying broadband as Title II (which one would expect any Democratic FCC to do at this point). It includes developing smart and innovative policies to close the digital divide, enhance competition, put consumer protection front and center, and advance new spectrum management technologies that move us from scarcity to abundance. This trio (combined with already serving FCC Commissioner Geoffrey Starks, a champion of privacy and inclusion) are as potentially transformational in telecom policy as the appointment of Lina Kahn and Alvaro Bedoya to the Federal Trade Commission.
The Key word here is “potentially.”
One of the biggest mistakes that people keep making in policy and politics is that you can just elect (or in this case, appoint) the right people and go home to let them solve the problems. Then people get all disappointed when things don’t work out. Incumbents are not going to simply surrender to new policies, and political power has limits. This will be especially true if Congress flips in 2022. So while this is definitely cause for celebration, we are going to have to fight harder than ever to get the policies we need to create the broadband (and media) we need — starting with the fight to get them confirmed over the inevitable Republican resistance.
Happily, fighting to achieve the right thing is much more enjoyable than fighting to prevent the wrong thing. But no one should think we can just go home, problem solved. As I have said for over 15 years, you can’t outsource citizenship. Citizen movements are citizen driven, or they either get co-opted or die. We are going to need to support (and occasionally push) the new FCC and NTIA in the face of unflagging industry pressure and political obstacles. The laws of political reality have not been repealed — but we have a unique opportunity to use them to our advantage.
A bit more about who these people are and the policy opportunities below. . . .
In Part I, I provided all the legal and political background to understand why the Federal Communications Commission’s (FCC’s) investigation into T-Mobile’s data breach impacting about 53 million existing customers, former customers, and folks who applied for credit checks but never have been customers, may be complicated politically. But what are the mechanics of the investigation? How does this actually work? What are the rules, and what remedies or penalties can the FCC impose on T-Mobile?
I explore these questions below . . . . .
T-Mobile announced recently that it experienced a major cybersecurity breach, exposing personal information (including credit card numbers) for at least 53 million customers and former customers. Because T-Mobile is a Title II mobile phone provider, this automatically raises the question of whether T-Mobile violated the FCC’s Customer Proprietary Network Information (CPNI) rules. These rules govern, among other things, the obligation of telecommunications service providers to protect CPNI and how to respond to a data breach when one occurs. The FCC has confirmed it is conducting an investigation into the matter.
It’s been a long time since we’ve had to think about CPNI, largely because former FCC Chair Ajit Pai made it abundantly clear that he thought the FCC should not enforce privacy rules. Getting the FCC to crack down on even the most egregious violations – such as selling super accurate geolocation data to bounty hunters was like pulling teeth. But back in the Wheeler days, CPNI was a big deal, with Enforcement Bureau Chief Travis LeBlanc terrorizing incumbents by actually enforcing the law with real fines and stuff (and much to the outrage of Republican Commissioners Ajit Pai and Mike O’Reilly). Given that Jessica Rosenworcel is now running the Commission, and both she and Democratic Commissioner Geoffrey Starks are both strong on consumer protection generally and privacy protection in particular, it seems like a good time to fire up the long disused CPNI neurons with a review of how CPNI works and what might or might not happen in the T-Mo investigation.
Before diving in, I want to stress that getting hacked and suffering a data breach is not, in and of itself, proof of a rule violation or cause for any sort of fine or punishment. You can do everything right and still get hacked. But the CPNI rules impose obligations on carriers to take suitable precautions to protect CPNI, as well as obligations on what to do when a carrier discovers a breach. If the FCC finds that T-Mobile acted negligently in its data storage practices, or failed to follow appropriate procedures, it could face a substantial fine in addition to the FCC requiring it to come up with a plan to prevent this sort of hack going forward.
Assuming, of course, that the breach involved CPNI at all. One of the fights during the Wheeler FCC involved what I will call the “broad” view of CPNI v. the “narrow” view of CPNI. Needless to say, I am an advocate of the “broad” view, and think that’s a proper reading of the law. But I wouldn’t be providing an accurate primer if I didn’t also cover the “narrow” view advanced by the carriers and Pai and O’Reilly.
Because (as usual) actually understanding what is going on and its implications requires a lot of background, I’ve broken this up into 2 parts. Part I gives the basic history and background of CPNI, and why this provides the first test of how the Biden FCC will treat CPNI enforcement. Part II will look at application of the FCC’s rules to the T-Mobile breach and what issues are likely to emerge along the way.
More below . . .
