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Global Media and Communications Watch

The International Legal Blog for the Tech, Media and Telecoms Industry

Posted in International/EU privacy Eduardo Ustaran

AG Says ePrivacy Applies to Government Access to Communications Data

On  January 15, the Court of Justice of the European Union’s (CJEU) Advocate General (AG) Manuel Campos Sánchez-Bordona delivered his Opinion on four references for preliminary rulings on the topic of retention of and access to communications data.

Of the four references, two originated from France, one from Belgium, and one from the Investigatory Powers Tribunal (IPT) in the United Kingdom. The latter arose from a challenge by Privacy International to the UK Security and Intelligence Agencies’ (SIAs) powers under the Telecommunications Act 2014 and the Data Retention and Investigatory Powers Act 2014. SIAs have the power to compel providers of electronic communications services, such as internet service providers, to retain and hand over bulk communications data. Communications data does not include the content of communications but does reveal traffic and location data, as well as information on users’ social, business and financial activities, communications, and travel.

The IPT found as a matter of fact, and specified in its reference for a preliminary ruling, that these powers are “essential to the protection of the national security of the United Kingdom.” The questions referred to the CJEU concerned:

  1. the applicability of the ePrivacy Directive (ePD) in the context of the use of these powers; and
  2. whether the requirements specified in the previous CJEU decision Tele2 Sverige/Watson also applied.

The IPT went so far as to specify that the imposition of such requirements would “critically impede” the SIAs’ bulk acquisition and automated processing techniques.

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Posted in Technology, Telecoms & Broadband Trey Hanbury

What I’m Watching For at #CES2020

I’m headed to #CES2020 this week with a backup battery, comfortable shoes, and a lot of questions. After eyeing the new televisions and fancy cars, I intend to focus on learning more about the following areas:

5G. Each of the major wireless operators has their own blend of frequencies and their own conception of what will move consumers to take advantage of an immensely more capable and robust wireless 5G NR technology platform. How are the carriers using their preexisting technology choices and spectrum mixes to capture market share and defend against gains from insurgents, such as the cable companies and DISH? And for that matter, how do the cable companies intend to use new spectrum-acquisition models, such as the upcoming CBRS auction, to retain subscribers in an era of over-the-top video consumption and intensified head-to-head competition with wireless operators?

IoT.  Most 5G talk focuses on throughput, but mass connectivity may prove more important in the long run.  With nearly anything with electrical current (and plenty of things without it) gaining access to the web, the need to connect hundreds of thousands or millions of devices within a small geographic area will tax wireless infrastructure and the back office like never before. How are carriers and vendors gearing up for this new service-delivery architecture?

AI. Technology works best when it is neither seen, nor heard, but just happens. And consumers, me included, only grow more demanding with time. As the comedian Jim Gaffigan quipped: “What do you mean I actually have to point the remote control?  What is this?  The 50s?  Can’t I just look at the TV and it’ll know what I want to watch?”  Consumer expectations only increase with technology. What progress have vendors made in breaking down the barriers to cross-platform connectivity so all of our smart devices and services can talk to – and interact with – one another?

Robotics.  The promise of a robotic butler or washing machine or garbage-taker-outer always seems just around the corner. The combination of falling chipset costs, nearly ubiquitous high-speed data connectivity, and improving cross-platform integration could mean our capacity to outsource the drudgery of household or industrial chores may finally cross a tipping point.  What are vendors doing to realize the vision of robots that perform useful functions and require less back-end work than just doing the chores ourselves?

Rural Broadband. Government gives rural service a lot of attention. But I want to hear what the private sector is doing to drive service into geographic areas with low population densities. The economics of service in these areas is forbidding.  But new technologies, such as non-geostationary satellite orbit, fixed-satellite service from the likes of OneWeb, Amazon, and Space, as well as newly available spectrum, such as the low-band frequencies T-Mobile acquired at auction just a few years ago, have the potential to finally close the gap between urban and rural consumers. What new service models have the most promise of raising the bar on rural broadband connectivity and which service providers and network architectures will capture the greatest share of this underserved market?

#CES2020 should be a blast. If you have some ideas on other things to watch, please let me know.  And if you’d like to connect in Las Vegas, shoot me a note.  See you there!

Posted in Consumer Privacy, Data Protection & Privacy, Telecoms & Broadband Mark BrennanArpan SuraKathryn Marshall Ali

Webinar | New TRACED Act and Robocall Year in Review: What you need to know

It was a very busy year on the robocall front, and on 30 December 2019, President Trump signed into law the Pallone-Thune Telephone Robocall Abuse Criminal Enforcement and Deterrence (TRACED) Act (S. 151), which the House and Senate passed by wide, bipartisan margins earlier this year.

The TRACED Act is the most significant robocall legislation in years. It requires the Federal Communications Commission (FCC) to take steps to improve call verification, reduce the number of illegal robocalls, and enhance the federal government’s Telephone Consumer Protection Act (TCPA) enforcement efforts. Among other things, for example, the TRACED Act increases penalties for intentional violations by US$10,000 per call.

We’ll also discuss other key robocall developments from 2019, including the Nuisance Call Act, a New York law that requires live telemarketers to give consumers the option to be added to the seller’s do-not-call list, as well as an important FCC ruling that clarifies the requirements for sending online faxes.

Please join us on this webinar on Thursday, 9 January 2020 at 2:00pm ET as we explore what these and other developments from 2019 mean for your business and your TCPA compliance programs more broadly.

Date:
Thursday, January 9, 2020

Time:
02:00 PM EST

To register, please click here.

Posted in Policy & Regulation, Telecoms & Broadband Mark BrennanArpan SuraJohn Castle

Congress Passes Bipartisan Robocall Legislation

On December 19, 2019, the U.S. Senate unanimously passed the Pallone-Thune Telephone Robocall Abuse Criminal Enforcement and Deterrence (TRACED) Act (S. 151), which the House of Representatives passed in a 417-3 vote earlier this month.  With the Senate’s passage of the reconciled bill, the bipartisan legislation now heads to President Trump’s desk for his review.

The Pallone-Thune TRACED Act requires the Federal Communications Commission (FCC) to take steps to improve call verification, reduce the number of illegal robocalls, and enhance the federal government’s Telephone Consumer Protection Act (TCPA) enforcement efforts.  More specifically, the Pallone-Thune TRACED Act, among other provisions:

  • Requires Implementation of STIR/SHAKEN – The FCC must establish rules requiring voice service providers to implement STIR/SHAKEN, which will allow voice service providers to authenticate Caller ID information.
  • Permits Call Blocking – The FCC must adopt rules that: (1) permit voice service providers to block calls that fail STIR/SHAKEN; (2) provide a safe harbor for voice service providers that inadvertently block lawful calls; and (3) require voice service providers to create a process for blocked callers to have their calls authenticated and unblocked.
  • Creates an Interagency TCPA Working Group – The U.S. Attorney General and the FCC must convene an interagency working group to study government prosecution of TCPA violations and submit a report to the House and Senate Commerce Committees. The working group will include representatives from the Departments of Commerce, State, Homeland Security, as well as the FCC, the Federal Trade Commission, and the Consumer Financial Protection Bureau.  Additionally, the Attorney General has authority to consult with non-Federal stakeholders.
  • Requires the FCC to Initiate a “One-Ring Scam” Proceeding – The FCC must initiate a proceeding to protect called parties from “one-ring scams,” which are short calls made in order to prompt a return call (and thus subject the called party to charges).
  • Requires the FCC to Forward Evidence of Illegal Robocalls to the AG – The law requires the FCC’s Enforcement Bureau Chief to forward evidence of “willful, knowing, and repeated” robocall violations to the Attorney General.
  • Increases Penalties for Intentional TCPA Violations by $10,000 per call – The law creates a stronger penalty for intentional TCPA violations.

The legislation also requires a safe harbor to protect voice service providers from liability for inadvertently blocking lawful calls and a remedial mechanism for inadvertently blocked callers, and the legislation delegates authority to the FCC to determine important details, such as the timeline to resolve any complaints from callers.

The Pallone-Thune TRACED Act now heads to President Trump for his review and signature.

Posted in Policy & Regulation, Spectrum Tony LinGeorge John

WRC-19 Revamps ITU Radio Regulations to Accommodate Emerging Communications Technologies

Communications technologies often evolve more quickly than the regulatory frameworks governing them. To keep pace, the International Telecommunication Union (ITU) World Radiocommunication Conference (WRC) revisits the ITU’s Radio Regulations governing radiofrequency spectrum use approximately every four years to accommodate new technologies and uses. Between WRCs, national administrations and ITU sector members (interested companies and trade associations, for example) meet in working parties to study how proposed rule revisions would impact existing and planned services.

Following four years of careful deliberations at the ITU working party level, more than 3,400 participants from 165 countries and ITU staff recently gathered at WRC-19 in Sharm El-Sheikh, Egypt. During the four-week conference, participants crafted regulatory pathways for emerging communication technologies, including a few listed below.

Terrestrial 5G

The ITU identified the millimeter wave frequency bands 24.25-27.5 GHz (24 GHz), 37-43.5 GHz, 45.5-47 GHz, 47.2-48.2 GHz, and 66-71 GHz for terrestrial systems that deliver high-throughput, low-latency 5G services.

Concern about interference to passive earth observation operations in the band adjacent to 24 GHz was one of the most contested issues at the conference. To mitigate those concerns, the ITU established new power limits. The compromise will require 5G base stations to comply with the following power limits in the 24 GHz band: -33 dBW/200 MHz initially, and then -39 dBW/200 MHz after 2027. News releases since the conference’s conclusion indicate that the weather scientist community that relies on the passive earth observation operations may not be pleased with the compromise and that the power limits may not adequately protect atmospheric water vapor sensors. On the other hand, the lower-than-requested power limits will likely increase the number of base stations required to achieve wide area 5G coverage in the band.

High-Altitude Platform Systems (HAPS)

Balloons, unmanned aircraft systems (UAS), and other HAPS technologies received allocations that will enable them to provide connectivity from altitudes between where terrestrial and satellite networks operate. The ITU identified the following frequency bands for HAPS use: worldwide (31-31.3 GHz, 38-39.5 GHz, 47.2-47.5 GHz, and 47.9-48.2 GHz) and Region 2 (the Americas) (21.4-22 GHz and 24.25-27.5 GHz).

Geostationary Satellite Orbit Satellites (GSOs)

Earth stations in motion (ESIMs) may now communicate with GSO satellites in the Ka-band (17.7-19.7 GHz and 27.5- 29.5 GHz).

Non-Geostationary Satellite Orbit Satellites (NGSOs)

Milestones – The ITU established milestone requirements for Mobile-Satellite Service (MSS), Fixed-Satellite Service (FSS), and Broadcasting-Satellite Service (BSS) systems operating in certain frequency bands between 10.7-51.40 GHz. In short, if a system does not meet the applicable milestone requirements, the ITU will reduce the number of satellites in a filing to the number of deployed satellites, subject to maximum limits.

  • Milestone 1: 10% deployment within 2 years of the regulatory period end or January 1, 2021, whichever comes later. Operators may request waiver of Milestone 1, if the end of their regulatory period is earlier than November 28, 2022. Operators must include their deployment plans and other information to prove the “realness” of the NGSO system in their waiver requests. If the ITU cannot resolve a waiver request, it will refer the request to WRC-23 for consideration. A waiver grant would permit an operator to proceed to Milestone 2.
  • Milestone 2: 50% deployment within 5 years of the regulatory period end or January 1, 2021, whichever comes later.
  • Milestone 3:100% deployment (minus one satellite) within 7 years of the regulatory period end or January 1, 2021, whichever comes later.

V-band – After considering protections for GSO satellites and adjacent band passive earth observation services, the ITU created a new spectrum sharing regime for NGSOs operating in the frequency bands 37.5-39.5 GHz, 39.5-42.5 GHz, 47.2-50.2 GHz, and 50.4-51.4 GHz. Operators that did not file an ITU Notification before November 23, 2019. will now be subject to the ITU’s mandatory coordination procedures and will have to coordinate with all earlier filers prior to commencing operations. All NGSO systems will also need to comply with new single and aggregate power limits and out-of-band emission limits.

Short-duration NGSOs – The ITU permitted short-duration NGSO systems (operating for less than three years and proposing no replenishment satellites) to operate on a secondary basis in segments of the 137-138 MHz and 148-149.9 MHz bands. The new allocations are intended to relieve “spectrum congestion” issues faced by small satellite operators.

Radio Local Access Networks

WiFi technologies may now operate indoors and outdoors in band segments between 5-6 GHz subject to new operational restrictions.

Transportation Communications Systems – RSST and ITS

Railway radiocommunication systems between train and trackside (RSST) are train radio applications for “improved railway traffic control, passenger safety, and security for train operations.” Intelligent Transport Systems (ITS) technologies “connect vehicles, improve traffic management, and assist in safer driving.” While the conference did not allocate new spectrum for RSST and ITS, it did publish new recommendations and resolutions generally supporting spectrum harmonization for the technologies and encouraging regulators to update procedures for implementing these applications.

Next Steps

All changes to the Radio Regulations appear in the Provisional Final Acts. The ITU will likely release the Final Acts in six to nine months, and national administrations will commence rulemakings thereafter to implement the rules domestically.

The conference also decided the future agenda items that the ITU working parties will study and WRC-23 will resolve. Some of the most important future agenda items are highlighted below.

Mid-band terrestrial 5G spectrum

The ITU will consider identifying the frequency bands 3300-3400 MHz, 3600-3800 MHz, 6425-7025 MHz, 7025-7125 MHz, and 10.0-10.5 GHz for terrestrial 5G operations.

HAPS base stations

The ITU will evaluate whether frequencies below 2.7 GHz, including 694-960 MHz and various segments in the 1710-1885 MHz and 2500-2690 MHz bands, can accommodate 5G base stations on HAPS.

GSOs and NGSOs

The ITU will consider whether to permit ESIMs to communicate with NGSO Ka-band satellites and GSO Ku-band satellites. The working parties will also study the possibility of new spectrum allocations between 1695 and 3400 MHz for narrowband MSS systems supporting Internet of Things applications.

Aeronautical applications

The ITU will deliberate several proposals to support further development of aeronautical applications:

  • (i) UAS control and non-payload communication links using FSS Ku-band and Ka-band systems;
  • (ii) the feasibility of a new aeronautical mobile-satellite (route) service allocation for both the Earth-to-space and space-to-Earth directions in all or part of the frequency band 117.975-137 MHz;
  • (iii) changes to Appendix 27 (frequencies between 2850-22000 kHz) to identify any necessary modifications to the aeronautical mobile (route) service and introduce new digital aeronautical wideband HF systems; and
  • (iv) spectrum needs for new non-safety aeronautical mobile applications for air-to-air, ground-to-air, and air-to-ground communications of aircraft systems, the possibility of deleting the “except aeronautical mobile” restriction in the 22-22.21 GHz band, and sharing and compatibility studies on the possibility of adding new primary allocations to the aeronautical mobile service for non-safety aeronautical applications in the frequency band 15.4-15.7 GHz.

WRC-19 succeeded in accommodating a number of new services and potentially increasing overall spectral efficiency. ITU participants, however, will have little time to rest. The next ITU working party meetings begin February 2020 in Geneva, Switzerland, and the ITU will need to study over thirty new items during the WRC-23 and WRC-27 preparation cycles.

 

Posted in International/EU privacy Eduardo Ustaran

Getting Cookie Consent Right

One could be forgiven for thinking that knowing how to comply with a legal obligation that has been in place for nearly a decade would be clear cut. However, widespread practice tells us that this is far from the truth. In November 2009, as part of wider reforms to the European telecommunications regulatory framework, the European Union introduced various amendments to the existing Directive 2002/58/EC (‘e-Privacy Directive’), including to the provisions regulating the use of cookies.

Since then the e-Privacy Directive has required obtaining the consent of users in order to store or access information (typically cookies or similar tracking technologies) on their devices. The only exemptions to this requirement are where this is for the sole purpose of transmitting a communication or where it is strictly necessary to provide an Internet service explicitly requested by the user.

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Posted in Policy & Regulation, Spectrum Trey HanburyAri Fitzgerald

FCC Issues Public Notice on Spectrum Allocations for UAS Operations

The FCC recently issued a Public Notice that sought comment on whether to make the 960-1164 MHz and 5030-5091 MHz bands available to support unmanned aerial system operations (UAS).

The FAA Reauthorization Act of 2018 required the Federal Aviation Administration (FAA), the National Telecommunications and Information Administration (NTIA), and the FCC to submit a report to Congress on whether to allow UAS communications in these frequencies. The joint agency report must discuss: (1) whether the FCC should permit, but not require, UAS operations in these bands on an unlicensed, shared, or exclusive-use basis; (2) any technological, statutory, regulatory or operational barriers to the use of the spectrum for UAS purposes; and (3) recommendations of other spectrum bands if the agencies conclude that the 900 MHz and 5 GHz bands are not suitable to support UAS operations.

As part of the public notice soliciting public comment for the joint agency report, the FCC has also asked for public input on several related issues, including: (1) actions the FCC might take to promote the use of licensed commercial spectrum for UAS operations; (2) information on UAS applications and deployment scenarios wireless service providers and equipment manufacturers are considering; and (3) potential interference concerns and other technical issues associated with UAS operations that might inform the FCC’s decision making.

Comments are due Thursday, December 26, 2019, and reply comments are due Monday, January 27, 2020.

Posted in Policy & Regulation, Technology

Tech Tax and the OECD: it’s as easy as A, B, C

What is it about? OECD proposals to tax the digital economy which will significantly impact all large tech companies that are consumer oriented.

What will the impact be? Businesses will pay more tax. Impact on cash-flow, earnings per share and valuations. There will also be lots of complexity to ensure compliance.

What should businesses be doing now? Watching for what comes out of the OECD, including on 9 Dec on the second round of proposals.  Working with advisors to assess the potential impact.


Late last week OECD held a public meeting in Paris to hear from advisors, industry groups and multinationals on the first half of its proposals for taxing the digital economy. Delegates from Member States plus the 135 country-strong Inclusive Framework on Base Erosion and Profit Shifting will now meet behind closed doors over the coming weeks and months to agree on final details. Final agreement is expected within 12 months.

So what can companies in the technology sector expect?

First, the changes will apply to all large technology companies that are consumer-oriented. That means platforms, media, communications, and possibly even fintech. How large is still an open question, but a revenue threshold of $750m or €750m is being bandied around. If so, it won’t be just the giants, but plenty of other companies.

Second, businesses will pay more in tax. How much remains to be seen, but it will hit cash-flow, earnings per share, and valuations. And that’s before the OECD gets to its proposals for an international version of President Trump’s Tax Cuts and Jobs Act. Those are being discussed in Paris on December 9.

Third, and despite all the noises to the contrary, it’s going to be complex. And involve a lot of work. That’s because once the rules are finalised and implemented, companies will be subject to tax on three separate amounts.

  • Amount A – a share of the profits earnt by a group in excess of a deemed basic return, this being allocated to the jurisdiction where consumers are, and calculated using a pre-determined formula;
  • Amount B – a fixed level of remuneration for baseline marketing and distribution functions that take place in a country; and
  • Amount C – an additional profit accruing where in-country functions exceed the baseline activity compensated for by Amount B.

Critically, tax will be payable on Amount A even in countries where a multinational group has no physical presence, but does have sales. This is a new taxing right, and tears-up the rulebook on international tax that prevailed almost since international tax time began.

Similarly, tax will likely be paid on Amount B wherever a company has a physical presence in a country and performs at least some sales and marketing functions. The fact that consumers enter into the final sales contract with a legal entity located elsewhere will not matter. What are being called “simplifying conventions” will be used to make determination of what is payable easier. That means a fixed percentage of sales for the market, possibly varying by sector or geography, and possibly with a sliding scale depending on factors such as group profitability.

Even if A and B are kept simple (which seems a forlorn hope), multinationals will still have to work out for Amount C how far their activities in each country go beyond “baseline marketing and distribution functions”, and then put a price on that. This will be just as hard as what multinationals need to do today to work-out how much of their profits they should book in each country (i.e. what their “transfer pricing” looks like). It may even be harder, but at least will follow the arm’ length principle and current transfer pricing rules.

Based on what the Hogan Lovells team has learnt from numerous transfer pricing and tax audits around the globe, careful thought and analysis will be required to persuade tax authorities that you have got Amount C right. Fortunately, implementing effective dispute resolution mechanisms is also part of the proposals.

So, one way or another, there’ll be lots to do. Working out Amounts A and B will involve detailed calculations. We don’t know the rules yet, and there are still lots of questions to answer. Some tricky legal thinking may also be required. And that’s before you get to Amount C.

It’s not all bad news though. This is potentially a tiny step on a path towards clarity. It might be a long path, but at least there is one. And there is time for multinationals to assess, plan, and sketch-out what the impact might be. It’s also good news that a lot of countries – from China to Greenland, and the US to Nigeria, to name but a few – appear to be onboard. It’s also good news that dispute resolution is being taken seriously.

Next stop? December 9 and the second round of proposals.

Posted in International/EU privacy, Policy & Regulation, privacy and security litigation Eduardo Ustaran

Hogan Lovells calls for an alternative approach to regulating privacy in the digital economy

LONDON, 25 November 2019 – Hogan Lovells has published a study evaluating the ongoing legislative proposal for a new ePrivacy Regulation, a law aimed at updating the current ePrivacy framework in the EU.

After nearly three years of debates and negotiations, the European Union is nowhere near agreeing a position on how to achieve the right balance between the need for technological innovation, public security and the protection of privacy in the context of the digital economy. According to Hogan Lovells, this is due to the structure and legislative approach of the proposed ePrivacy Regulation, which, rather than complementing the GDPR as originally intended, is in some fundamental respects in conflict with it.

In the context of the confidentiality of electronic communications, the proposed ePrivacy Regulation follows an approach that relies on a blanket prohibition qualified by limited exceptions, which is likely to lead to unwanted effects for the development of machine-to-machine communications, the Internet of Things and artificial intelligence. With regard to the provisions dealing with information collected from and emitted by terminal equipment, the proposed ePrivacy Regulation seeks to limit the processing of a broad spectrum of information, including both personal and non-personal data, irrespective the actual impact of such processing on people’s privacy. In summary, the essence of flexibility in the application of the GDPR created by focussing on risk is fundamentally missing from the proposed ePrivacy Regulation.

In light of these shortcomings, the report released today by the firm provides a number of policy recommendations to improve the current text, including the following:

  • The ePrivacy Regulation should move away from setting out narrow legal bases for the processing of specific types of data
  • The valuable risk-based approach of the GDPR should be applied to the ePrivacy framework
  • Data processing that poses no risks to individuals, particularly where data that is or is made anonymous, should be explicitly excluded from the scope of the ePrivacy Regulation

Eduardo Ustaran, Global Co-Head of the Privacy and Cybersecurity practice at Hogan Lovells, said: “There is clearly a need for the protection of privacy in the digital economy, but to be effective, any ePrivacy legal framework must be compatible with technological development and human progress. The European Union has the opportunity to get this balance right by applying a more flexible risk-based approach which will work now and in the future.”

Download the full report here

Posted in Policy & Regulation, Spectrum Michele FarquharAri Fitzgerald

FCBA Event Highlights Innovative History and Future for Spectrum Auctions

On November 12, members of the Federal Communications Bar Association (FCBA) gathered in Washington, DC, to commemorate 25 years of spectrum auctions at the Federal Communications Commission (FCC).  Hosted at Hogan Lovells LLP, the event featured current and former FCC staff members and industry lawyers, who discussed the history and future of spectrum auctions. The FCC’s leadership and strong record of innovation in administering spectrum auctions was a recurrent theme of the program.

The Beginning of Spectrum Auctions

The first panel focused on the early days of spectrum auctions at the Commission. Mike Altschul, former General Counsel for wireless industry trade association CTIA, offered a brief history of spectrum policy and regulation, beginning with the Radio Act of 1912 and ending with the Omnibus Budget Reconciliation Act of 1993, which authorized the Commission to use competitive bidding to award spectrum licenses. Evan Kwerel, Senior Economic Advisor in the FCC’s Office of Economics and Analytics (OEA), then explained the economic benefits of auctions (a swifter license assignment process and a reduction in windfalls to parties that previously would acquire licenses via lottery or some other means with no intention of providing service) and described the many innovative auction formats the FCC has designed over the years. The simultaneous multiple round auction format, for example, is now used worldwide. Michele Farquhar, partner at Hogan Lovells and former head of the FCC’s Wireless Telecommunications Bureau, noted that the FCC’s enthusiastic embrace of spectrum auctions fueled innovation and the rapid growth of the wireless industry, even as the Commission struggled at times to balance conflicting policy priorities. She also highlighted seminal court decisions addressing the FCC’s auction authority and efforts to encourage entry by smaller and rural bidders.

Lessons Learned over the 25 Years

During the second session, the panelists focused on lessons learned during the past quarter century. Margaret Wiener, Chief of the FCC’s Auctions Division, described a process of ongoing evolution in response to changing statutory authorizations and requirements and technological progress. She also described a culture of continuous improvement and a commitment to increasing access. Jonathan Cohen, a partner at the law firm of Wilkinson Barker Knauer, who worked on the first FCC spectrum auctions, offered practical lessons from the practitioner’s perspective. Chief among these were the importance of knowing the bidding rules for the auction, the service rules for the spectrum, and the contours of the prohibited communications rule.

Current Innovations in Auction Design

The event featured closing remarks by Giulia McHenry, Acting Chief of the FCC’s Office of Economics and Analytics. She described the Commission’s strategic vision in establishing the OEA to expand and better integrate the use of economics and data into rulemakings and proceedings and to better position the FCC’s Auctions Division to support the use of auctions as an allocation or assignment system for FCC benefits throughout the FCC. She emphasized that the use of auctions is no longer limited to the FCC’s Wireless Telecommunications Bureau or for use in assigning licenses, but is now integral to the FCC’s core mission across a wide variety of programs and services.

McHenry said that the current agenda of OEA and the Auctions Division is to continue to release spectrum at a steady pace, consistent with the Commission’s 5G FAST Plan. As she described the upcoming auction proceedings at the FCC, she highlighted the innovative approaches the FCC has devised to address the unique characteristics of each spectrum band auctioned.

  • Auction 103 – The FCC will again use its incentive auction authority, this time to reorganize the 39 GHz band. The Commission will also introduce an innovative voucher system to compensate incumbents and allow them to purchase flexible use spectrum.
  • Auction 105 – The Commission will auction Priority Access Licenses (PALs) that will depend on novel dynamic spectrum sharing to allocate spectrum between Department of Defense incumbents and PAL licensees. The Commission is also exploring innovations in the auction design, including quasi-package bidding and modifications to the bidding activity rules.
  • 5 GHz Band – The FCC has revised the band rules to allow flexible use spectrum and is offering a Rural Tribal Window, a unique opportunity that will allow Tribes in rural areas to directly access unassigned spectrum over their Tribal lands.

The Challenges Ahead

McHenry used the ongoing discussions over the future of the C-Band as an illustrative example of the challenges facing the FCC’s efforts to release spectrum for 5G. There is no more “greenfield” spectrum. The Commission will increasingly have to find creative ways to encourage incumbents to relinquish their spectrum so it can be repurposed for more productive uses. She reiterated the Commission’s four priorities regarding the C-Band:

  • To make available a significant amount of spectrum;
  • To make the spectrum available quickly;
  • To generate a significant amount of revenue for the federal treasury; and
  • To ensure continuation of services currently delivered by the C-Band.

In considering solutions for the C-Band and other bands that require reallocation, McHenry urged stakeholders across the industry to be open to exploring new incentives and auction formats, as well as new mechanisms for sharing between incumbents and new uses. She also reminded attendees that the spectrum landscape will continue to change as the highest value uses continue to evolve.