AT&T Asks McDowell for Help in Spectrum Screen Controversy; Walden Weighs In
AT&T asked Republican FCC Commissioner Robert McDowell for help in its battle over spectrum screen standards (CD Dec 6 p1), an ex parte notice on docket 11-18 showed. In a Dec. 2 meeting with McDowell’s chief of staff, Angela Giancarlo, AT&T Senior Vice President Robert Quinn and Vice Presidents Gary Phillips and Joan Marsh discussed their company’s proposed spectrum deal with Qualcomm, the ex parte notice said. The company executives then mentioned footnote 137 in the T-Mobile report, which tightened standards on the spectrum screen. FCC officials didn’t comment.
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Meanwhile, House Communications Subcommittee Chairman Greg Walden is writing a letter to FCC Chairman Julius Genachowski to take issue with the spectrum screen, Walden’s spokeswoman told us. He will explore the matter as he considers broader FCC process reform, the spokeswoman added Wednesday. Walden protested hazy rules and unclear process related to the FCC’s spectrum screen. “Because the spectrum screen is applied on a case-by-case basis during transactions, it is not entirely clear whether and how the FCC conducts an analysis of the marketplace to establish the spectrum screen, nor precisely how it uses that screen in review of a transaction,” said Walden and full committee Chairman Fred Upton, R-Mich., in a Wednesday letter. “The FCC has never adopted formal rules or process to govern the setting and use of the spectrum screen, which has resulted in uncertainty as to the FCC’s process, reasoning, and rationale."
The FCC seems to have changed how it uses the spectrum screen, Walden and Upton said. “Traditionally, the use of the screen has mirrored the way in which the Department of Justice looks at the Herfindahl-Hirschman Index (HHI): a high or increased HHI is not itself an indication of lack of competition, rather it is used to identify those markets that require additional scrutiny,” they said. “Recent FCC actions seem to indicate that the Commission intends to use the spectrum screen as an indication of de facto lack of competition."
The Republicans sought “additional information on how you decide whether to release staff analyses or other materials surrounding withdrawn items and how the FCC uses the ’spectrum screen’ process in reviewing the spectrum holdings of FCC licensees.” Among many questions, Walden and Upton asked how much advance notice the FCC gives to the public when it changes the spectrum screen and why changes are appropriate without a full notice and comment rulemaking. They also asked why the FCC decided to release staff analysis on the AT&T/T-Mobile deal and what process it followed. The FCC should respond by Dec. 19, they said.
In its FCC meeting, “AT&T argued that there was no record for making that reduction in this proceeding,” the ex parte notice about the Giancarlo meeting said. “AT&T further argued that if the screen is to be adjusted, the Commission should account for other spectrum bands that are currently undercounted or uncounted, including all 194 MHz of BRS/EBS spectrum, not just the 55.5 MHz it currently considers, the 1900 MHz G block (where Sprint will deploy a LTE network next year) and the MSS bands, which the Commission has acknowledged could be used for the provision of mobile voice and broadband services."
AT&T told Giancarlo that spectrum screen standards ought to be subject to open proceedings, according to the ex parte notice: “Given the central role the spectrum screen plays in the Commission’s competitive analysis of transactions filed before it, AT&T argued that the Commission should make adjustments to its screen in an open rulemaking, conducted and concluded annually, allowing party participants to file comments, and subjecting the Commission’s decisions on the screen to judicial review.” McDowell has not commented publicly on the controversy.