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FCC, stakeholders align on communications policy -- for now

Relative ease in relations among government and private interests in the Internet ecosystem are a welcome change of pace at CES. But it could be the calm before the storm.

LAS VEGAS--Peace appears to be breaking out between mobile Internet users and regulators.

During the three-day Innovation Policy Summit here at CES, members of Congress, FCC commissioners, industry representatives, and consumer groups found little to disagree on, whether the topic was incentive auctions for more broadband spectrum, retiring legacy copper networks in favor of native IP, sharing government spectrum in the 5 GHz band for high-speed Wi-Fi, or the continuing threat of international efforts to turn Internet governance over to repressive national governments so they can destroy it.

Some minor skirmishes broke out, of course, but the conversation this week has been remarkably civil. That's in stark contrast to the last three years, where heated discussions over Net neutrality, SOPA, and spectrum scarcityregularly drew blood. Indeed, the only loss of decorum took place during an interview with FCC Chairman Julius Genachowski, when a heckler had to be removed from the room by security.

The chairman's visit was his fourth in a row, and he used the opportunity to announce that the FCC was moving toward making an additional 195 MHz of spectrum available for unlicensed uses that could revolutionize a new generation of Wi-Fi. The spectrum, located in the 5GHz range, was identified in the 2012 Middle Class Tax Relief and Job Creation Act (PDF). Now, the FCC and stakeholders in the federal government will need to find ways to make it shareable between military systems that currently license it and new unlicensed devices and networks.

In a follow-up session featuring all four FCC commissioners, there was no disagreement about hopes the 5 GHz band can help ease increasing congestion on shared Wi-Fi networks in public spaces such as convention centers and hotels. Commissioner Robert McDowell, a long-time proponent of expanding unlicensed uses in the "white spaces" between broadcast television channels, expects next-generation W-iFi networks to be put into operation within five years. The other commissioners joined what Commissioner Ajit Pai called "the chorus of joy" over the announcement.

Providing more unlicensed spectrum is just part of what Commissioner Mignon Clyburn called an "all of the above" approach to satisfying the exploding demand for bandwidth from mobile devices and applications. The Commission is also deeply engaged in the process of developing a first-of-its-kind "voluntary incentive auction" (VIA) in which over-the-air television broadcasters will be able to share in the proceeds of future auctions for valuable spectrum currently licensed to them.

The process, also authorized in the Middle Class Tax Relief bill, will begin with a reverse auction in which broadcasters will bid for their lowest acceptable price. Based on participation, the FCC will then repack remaining VHF channels to create larger blocks of contiguous spectrum that will then be put through a forward auction for mobile network operators to bid on.

The auctions are expected to net as much as $26 billion for the government, some of which will be used to build an interoperable, nationwide public safety network. The commissioners agreed that the agency had made good progress on designing the complicated system that will be necessary for the auctions to work, but that more needed to be done. "We need to establish auction rules early on, and on a timetable to attract capital," according to Commissioner Jessica Rosenworcel.

At an earlier panel discussion on the incentive auctions introduced by Rep. Lee Terry (R-Neb.), government and industry panelists expressed concern that Congress' ambitious revenue goals for the auctions could fall victim to other FCC policy objectives. Neil Fried, senior telecommunications counsel to the House Energy and Commerce Committee, said the agency had proposed suspiciously large guard bands between mobile users and remaining broadcasters, motivated perhaps in part by the FCC's desire to make the guard bands available for additional unlicensed uses.

But that, he said, would come at the cost of maximizing auction proceeds.

Fried and other panelists also expressed concern that the agency's ongoing review of competition guidelines for spectrum holdings could lead to auction rules that unduly limit potential bidders. Based on agency missteps that dogged the 2008 auctions for 700 MHz. spectrum reclaimed in the transition to digital TV broadcast, Fried said the FCC needed to resist its natural urge to attach extraneous conditions to the VIA auctions.

There was general optimism, however, that broadcasters in urban markets where mobile spectrum is most needed were already signaling interest in participating. But few believe the auctions will take place before 2014, the date offered by the FCC. That's a key milestone set in the 2010 National Broadband Plan, which found that exploding demand for mobile broadband would require 300 MHz of additional spectrum by 2015, and 500 MHz by 2020.

So far, the FCC has only made a fraction of that amount available, in large part because the U.S. no longer has significant quantities of usable spectrum that isn't already licensed to public or private users.

IP transition, U.N. Internet takeover
As reported earlier by CNET, there is also growing consensus on the need to relax federal and state regulations that are slowing the process of retiring legacy copper phone networks -- used by fewer Americans all the time -- and replacing them with new networks with native support for Internet-based packet-switching technologies and protocols.

The FCC has created a new agencywide task force on IP transition and has asked for comments on an AT&T proposal to begin trials in select locations. One goal of the trials would be to determine where the agency needs to waive or eliminate obsolete rules and reporting requirements, and to ensure that state and local authorities do the same.

While none of the commissioners expressed concern over the trials, Rosenworcel said that the agency needed to go further and "help make clear to consumers how this helps them." For example, the move to all-IP networks would improve mobile performance as well as offering better wired service. That's because mobile communications still rely heavily on aging switched networks for backhaul.

On another topic, Genachowski echoed concerns over a United Nations communications treaty conference held in December in Dubai. Proposals circulated ahead of the conference encouraged the 193 nations in the U.N.'s International Telecommunications Union to make drastic changes to both the structure and governance of the Internet, some of which found their way into the revised treaty language. As a result, the U.S. and 54 other countries refused to sign the document.

Before and during the U.N. conference, government, industry and consumers inside and outside the Beltway demonstrated impressive unity on the importance of maintaining the Internet's wildly successful model of multi-stakeholder, engineering-driven operation.

But Genachowski warned that the treaty process had brought together a dangerous coalition of repressive governments and failing European ISPs opposed to that model and its efficiency. The former are determined to cut off the Internet's power to foster free speech and other civil liberties, he said, while the latter want to use international law to shift revenue from Internet content providers. "Together, they make the challenge more serious than they do individually," Genachowski said.

The chairman refused to comment on the pending mergers of T-Mobile USA and MetroPCS, or of the proposed takeover by SoftBank of Sprint. He also demurred on questions about Verizon's appeal of the 2010 Open Internet order -- the so-called Net neutrality rules -- which will be taken up by a D.C. appeals court sometime this year.

Supreme Court case as wild card
Oddly, there was no discussion at all on an important case being argued next week at the U.S. Supreme Court, City of Arlington v. FCC. The case could be a game-changer.

The case concerns a challenge by local authorities to timetables established by the FCC in 2009 for consideration of permit requests for cell towers and other mobile infrastructure subject to local zoning and other rules. The so-called "shot clock" was created after the FCC determined that local authorities were simply sitting on applications, in many cases for years.

While the Court will not be ruling on the shot clock itself, it will be considering what could be a more far-reaching question. The appeal asks whether federal agencies including the FCC should be given deference by courts in interpreting the federal laws that define their authority.

Since 1984, the Supreme Court has held that federal courts must weigh heavily an agency's interpretation of aspects of the law within its technical expertise. But appellate courts have split on the question of whether that deference extends to an agency's interpretation of the limits on what the agency can and cannot do -- that is, to its own jurisdiction.

A loss for the FCC in the Arlington case would significantly shift the balance of power between agencies and the courts, and could play a key role, for example, in how the Net neutrality case gets decided.

That's because whether the FCC has any authority from Congress to make rules on broadband Internet services relies on the agency's strained reading of an ambiguous provision in the Communications Act, Section 706. The agency argues that section should be read to grant the agency explicit authority to regulate ISPs whenever the agency determines that broadband is not being deployed in a "reasonable and timely manner to all Americans."

If the agency loses the Arlington case, the court overseeing the Net neutrality case will need to conduct its own independent analysis of Section 706, further weakening what is already a tough sell for the agency.

Genachowski deflected questions on the Net neutrality appeal. But a loss on the Open Internet rulemaking would have wide-ranging ripple effects on the FCC's ambitious broadband agenda.

The honeymoon in communications policy, in other words, could prove short-lived.