Weekly News Update - March 8 - 14: RDOF, USF Contribution, Mergers & Acquisitions, FCC, Broadband, SpaceX, Huawei
USF Contribution Factor Jumps To 33.4 Percent – Yet Another New All Time High
March 12, 2021 – The Federal Communications Commission’s Office of Managing Director has announced that the proposed universal service fund (USF) contribution factor for the second quarter of 2021 will be 33.4 percent. This shatters the previous USF contribution factor record of 31.8 percent set last quarter (1Q 2021). For the second quarter of 2021, the Universal Service Administrative Company (USAC) projects $9.905670 billion in total interstate and international end-user telecommunications revenues will be collected. USAC estimates that $2.461070 billion is needed to cover the total demand and expenses for all Federal universal service support mechanisms in the second quarter of 2021. This includes projected program support, administrative expenses, and true-ups and adjustments, and breaks out as follows:
E-Rate Schools & Libraries: $634.61 million
Rural Health Care: $149.36 million
High-Cost: $1.41352 billion
Lifeline: $254.82 million
Connected Care: $8.76 million
If the FCC takes no action on the proposed USF contribution factor within 14 days, it will be declared approved. Historical information on quarterly universal service fund contribution factors is available online from the FCC.
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FCC Releases List Of Banned Equipment & Services
March 12, 2021 – The FCC’s Public Safety and Homeland Security Bureau has officially published a list of communications equipment and services “that are deemed to pose an unacceptable risk to the national security of the United States or the security and safety of United States persons.” The “Covered List” contains certain equipment or services produced by the following five Chinese companies: (1) Huawei Technologies Company, (2) ZTE Corporation, (3) Hytera Communications Corporation, (4) Hangzhou Hikvision Digital Technology Company, and (5) Dahua Technology Company. Full details on the Covered List is included as an Appendix to the Bureau’s Public Notice, and the list will be online at www.fcc.gov/supplychain/coveredlist.
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Mergers & Acquisitions: Cable One Files FCC Application For Purchase Of Hargray Communications
March 12, 2021 – The FCC’s Wireline Competition Bureau is seeking comment on a Section 214 application filed by Hargray Acquisition Holdings, LLC and Cable One, Inc. requesting approval to transfer control of Hargray to Cable One. Comments are due on or before March 26, 2021, and reply comments are due April 2, 2021. Cable One acquired a minority interest in Hargray Communications in exchange for Cable One’s assets in Anniston, Alabama and surrounding areas in October 2020, and in February 2021, announced it was purchasing the remaining 85% of Hargray. The deal for the outstanding equity implies a $2.2 billion total enterprise value for 100% of the equity interests of Hargray on a debt-free and cash-free basis.
Hargray Acquisition is a South Carolina holding company that provides communications services through 10 companies that hold FCC licenses: (1) Low Country Carriers, Inc.; (2) Hargray Telephone Company, Inc.; (3) Bluffton Telephone Company, Inc.; (4) Hargray, Inc.; (5) Hargray of Alabama, Inc.; (6) Hargray of Florida, Inc.; (7) Hargray of Georgia, Inc.; (8) ComSouth Telecommunications, Inc.; (9) ComSouth Telenet, Inc.; and (10) ComSouth Teleservices, Inc. The services are provided to residential and business customers in 14 markets across Alabama, Florida, Georgia, and South Carolina.
Cable One provides telecommunications services, broadband services, and other services in 21 states. Through its Sparklight and Clearwave brands, Cable One provides high-speed internet and advanced Wi-Fi solutions, cable television and phone service to more than 950,000 residential and business customers. Pursuant to the terms of an Agreement and Plan of Merger, Lighthouse Merger Sub LLC, a Delaware limited liability company, will merge with and into Hargray, with Hargray continuing as the surviving entity and becoming a wholly owned subsidiary of Cable One. This will result in Cable One acquiring 100% of the ownership interests of Hargray, as well as control of Hargray and its licensees.
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FCC Grants 3.5 GHz Priority Access Licenses
March 12, 2021 – The FCC’s Wireless Telecommunications Bureau has granted 222 long-form applications, and issued 17,450 Priority Access Licenses (PALs) in the 3.5 GHz band. After review and examination of the 222 applications, the Bureau found them complete and in conformance with the FCC’s rules, and no petitions to deny the applications were filed. Also, full payment for each license has been made. A list of the 222 long-form 3.5 GHz PAL applications that have been granted is available as Attachment A to the Bureau’s Public Notice. A list of the granted long-form applications sorted by Market is available as Attachment B. The Bureau is continuing to review other long-form applications that were accepted for filing.
The results of the auction for PALs in the 3550-3650 MHz portion of the 3.5 GHz band were announced in September 2020. The auction – Auction 105 – raised a total of $4,543,232,339 in net bids – $4,585,663,345 in gross bids. A total of 228 bidders won a total of 20,625 licenses, more than 91.1%, of available licenses. The five bidders winning the largest number of licenses were: Wetterhorn Wireless LLC (Dish) – 5,492; SAL Spectrum, LLC – 1,569; AMG Technology Investment Group, LLC – 1,072; Windstream Services LLC, Debtor-in-Possession – 1,014; and XF Wireless Investment, LLC – 830.
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Kansas Announces 14 Broadband Acceleration Grants
March 12, 2021 – Kansas Governor Laura Kelly has announced grants for 14 broadband improvement projects funded through the Kansas Broadband Acceleration Grant Program. The 14 awarded projects, selected from 38 applications, will receive $5 million in total funding, which will be used to improve access to high-speed broadband for homes and businesses in 18 communities. Awardees are required to provide matching funds equal to the amount of their grants. The Broadband Acceleration Grant program was created in 2020 to bring broadband access to Kansas communities through a competitive, matching infrastructure investment program. The following table details the awards:
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SpaceX Launches 60 More Starlink Satellites
March 11, 2021 – In the early morning hours of March 11th, SpaceX launched a Falcon 9 rocket carrying 60 Starlink satellites. Taking off from Cape Canaveral Space Force Station, it was SpaceX’s seventh mission of 2021 from Florida’s Space Coast. The launch marks SpaceX’s 110th Falcon 9 mission, of which 21 have carried Starlink satellites. This brings the total number of Starlink satellites launched to date to 1,265. According to information on its website, Starlink is currently providing “initial beta service both domestically and internationally, and will continue expansion to near global coverage of the populated world in 2021.” Users of Starlink’s beta satellite Internet access service can expect to see speeds which vary from 50 Mbps to 150 Mbps with latency from 20ms to 40ms. However, Starlink claims “data speed, latency and uptime will improve dramatically” as it launches more satellites, installs more ground stations, and improves networking software. Starlink’s beta service is currently available in parts of the northern United States, Canada, and England – roughly between the latitudes of 45 to 53 degrees. It will soon be available in parts of Germany, New Zealand, and other regions of the United Kingdom, including Wales, Scotland, Northern Ireland, and northern England.
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FCC Final Agenda For March 17th Open Meeting
March 10, 2021 – The Federal Communications Commission has released the final agenda for its open meeting scheduled for 10:30 am, Wednesday, March 17, 2021:
Promoting Public Safety Through Information Sharing – The Commission will consider a Second Report and Order that would provide state and federal agencies with direct, read-only access to communications outage data for public safety purposes while also preserving the confidentiality of that data. (PS Docket No. 15-80)
Improving the Emergency Alert System and Wireless Emergency Alerts – The Commission will consider a Notice of Proposed Rulemaking and Notice of Inquiry to implement section 9201 of the National Defense Authorization Act for Fiscal Year 2021, which is intended to improve the way the public receives emergency alerts on their mobile phones, televisions, and radios. (PS Docket Nos. 15-94, 15-91)
Facilitating Shared Use in the 3.45 GHz Band – The Commission will consider a Second Report and Order that would establish rules to create a new 3.45 GHz Service operating between 3.45-3.55 GHz, making 100 megahertz of mid-band spectrum available for flexible use throughout the contiguous United States. (WT Docket No. 19-348)
Auction of Flexible-Use Service Licenses in the 3.45-3.55 GHz Band – The Commission will consider a Public Notice that would establish application and bidding procedures for Auction 110, the auction of flexible use licenses in the 3.45-3.55 GHz band. (AU Docket No. 21-62)
Promoting the Deployment of 5G Open Radio Access Networks – The Commission will consider a Notice of Inquiry seeking comment on the current status of Open Radio Access Networks (Open RAN) and virtualized network environments, including potential obstacles to their development and deployment, and whether and how deployment of Open RAN-compliant networks could further the Commission’s policy goals and statutory obligations. (GN Docket No. 21-63)
National Security Matter – The Commission will consider a national security matter.
National Security Matter – The Commission will consider a national security matter.
Enforcement Bureau Action – The Commission will consider an enforcement action.
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President Biden Expected To Nominate Tech Antitrust Expert Lina Khan To Federal Trade Commission
March 9, 2021 – White House sources have indicated President Biden will soon formally nominate Lina M. Khan to be a Commissioner on the Federal Trade Commission. Lina Khan is currently an associate professor of law at Columbia Law School. She previously served as counsel to the U.S. House Judiciary Committee’s Subcommittee on Antitrust, Commercial, and Administrative Law, and helped lead the Subcommittee’s investigation of digital markets and publication of its final report on the state of competition online. Prior to that, she served as a legal advisor in the office of Commissioner Rohit Chopra at the FTC. While still a student at Yale Law School in 2017, Lina Khan authored Amazon’s Antitrust Paradox, an antitrust law article which “argues that the current framework in antitrust – specifically its pegging competition to ‘consumer welfare,’ defined as short-term price effects – is unequipped to capture the architecture of market power in the modern economy.”
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Republican Congressional Leaders Ask FCC “Where Are The New Broadband Maps?”
March 8, 2021 – The ranking Republican members of the Senate and House committees and subcommittees with oversight of the FCC, Senators Roger Wicker (R-MS) and John Thune (R-SD), and Representatives Cathy McMorris Rodgers (R-WA) and Robert Latta (R-OH), have sent a letter to FCC acting chair Jessica Rosenworcel concerning broadband mapping. In the letter, the four Republican leaders begin by noting that almost a year has passed since the enactment of the Broadband Deployment Accuracy and Technological Availability (DATA) Act, yet FCC staff has indicated new broadband maps will not be ready until 2022. They have requested quarterly briefings on the+ status of the implementation of the DATA Act. They have also asked for the following information no later than March 22, 2021:
1. Detailed information on why the estimated timeline for completing new maps has changed from three-to-six months to at least one year.
2. A detailed timeline for the development of new maps.
3. Any steps the FCC plans to take to expedite the timeline for completing new maps.
4. Detailed information on whether the contracting process required by statute will affect the timeline for completing the first new map. Please also provide the anticipated dates for completing the contracting process and development of the IT platforms for the collected data.
5. A detailed breakdown of how the FCC plans to spend the $98 million Congress provided for the development of new maps.
6. Detailed information on whether the revised timeline will delay planned subsidy disbursements, including the 5G Fund and the Rural Digital Opportunity Fund Phase II Auction.
7. A detailed plan for how the FCC plans to incorporate its biannual data collections in a timely manner to ensure broadband maps remain up-to-date overtime.
8. Detailed information on how the FCC, as required by law, is coordinating with the NTIA and using NTIA’s National Broadband Availability Map to inform the Commission’s broadband mapping efforts. Please include information on the FCC’s actions to coordinate with NTIA on their Broadband Infrastructure Program, and the Tribal Broadband Connectivity Program.
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Mergers & Acquisitions: DISH Purchasing MVNO Republic Wireless
March 8, 2021 – DISH Network Corporation has announced it has entered into an agreement to purchase Republic Wireless, a mobile virtual network operator which uses T-Mobile’s wireless network. When the deal closes – currently expected in the second quarter of 2021 – DISH will assume approximately 200,000 customers, the Republic Wireless brand, and other assets. The existing Relay division of Republic Wireless will then continue to operate as a standalone company and become a wholesale customer on DISH’s forthcoming nationwide 5G network.
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ETC Petitions Filed By Rural Digital Opportunity Fund Auction Winners; Comments Due April 7th
March 8, 2021 – The FCC’s Wireline Competition Bureau is seeking comment on multiple petitions for designation as an Eligible Telecommunications Carrier (ETC) filed by winning bidders in the Rural Digital Opportunity Fund (RDOF) auction (Auction 904). Petitions were filed by RDOF winning bidders, or entities assigned support through the division of winning bids. The Petitioners are seeking ETC designation in areas where they won RDOF support, as well as areas outside of RDOF-eligible census blocks where a petitioner may receive Lifeline-only designation. Comments are due on or before April 7, 2021, and reply comments are due April 22, 2021. All comments must reference WC Docket No. 09-197, and may be filed using the FCC’s Electronic Comment Filing System (ECFS).
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