Judicial Relief Sought To Ensure That Hundreds Of Earth Station Owners Aiming To Elect Lump-Sum Option Are Not Shortchanged And Use Of Fiber-Based Solutions Is A Supported Reality
PITTSBURGH, Aug. 27, 2020 — ACA Connects, representing several hundred multichannel video programming distributors (MVPDs), mostly in rural America, today filed a writ of mandamus in the U.S. Court of Appeals for the District of Columbia Circuit, to halt the Sept. 14 deadline for earth-station operators to elect whether to accept an inadequately determined lump-sum payment as part of the Federal Communications Commission’s (FCC) C-Band transition. The deficiencies in formulating the lump-sum amount could indefinitely defer fiber-optic deployment that would allow upgrades and expansion of broadband access in areas served by ACA Connects’ members.
“If MVPDs are forced to make an immediate, irrevocable decision whether to accept the FCC’s Wireless Telecommunications Bureau’s deficient lump-sum amount, they will have a strong incentive to forgo the lump-sum option and choose earth station relocation — even if upgrading to fiber would be less costly overall. The added public benefits from fiber upgrades would be lost. And once lost, those benefits cannot easily be salvaged,” ACA Connects President and CEO Matthew M. Polka said.
The FCC’s C-Band proceeding is an effort to clear out a portion of the airwaves for future use by 5G wireless providers. The C-Band spectrum to be vacated is currently in heavy use by cable operators, which use earth stations to receive video programming from satellites through the C-Band. Migration costs to relocate C-Band earth stations are substantial.
To encourage MVPDs and other earth station operators to make efficient upgrade decisions, the FCC’s C-Band Order and regulations provide that operators may choose to accept a lump sum equal to the estimated cost of relocating their earth stations—a sum MVPDs could then use to upgrade their facilities to fiber where appropriate.
As widely reported, ACA Connects has faulted the Wireless Telecommunications Bureau’s decision to exclude from the lump-sum total the cost of integrated receiver/decoders (IRDs) that MVPD earth stations require for relocation. The Bureau inexplicably asserted that IRDs are a space station — not an earth station — cost. By excluding IRDs, the Bureau failed to carry out the Commission’s directive that the lump sum be equal to earth station relocation costs, and reduced the expected amount of the lump sum by about 50% – amounting to hundreds of thousands of dollars per earth station.
The impact of the Bureau’s decision – if left undisturbed – will be to force many earth station operators to forgo the lump sum.
“The FCC is short-changing earth station owners that elect the lump sum — after saying it would not do so — since the cost of compression/IRD equipment has been excluded from the lump sum, and IRD costs are substantial. As a result, the lump sum will not contain sufficient funding for many ACA Connects members that want to use the lump sum to employ fiber-based transport and retire some earth stations,” Polka said.
As ACA Connects notes in its filing, in addition to being inconsistent with the Commission’s C-Band Order and regulations, the Bureau’s lump-sum determination was developed in violation of the Administrative Procedure Act’s public-notice and disclosure requirements.
The Bureau developed its lump-sum amount with the assistance of a third-party consultant, RKF Engineering Solutions, which conducted confidential interviews with various undisclosed parties. But the Bureau refused ACA Connects’ requests to meet with RKF. ACA Connects’ 700 MVPD members — about 90% of all MVPDs – account for half of all operative MVPD earth stations. It is not clear whether RKF met with any representative of MVPD earth-station operators.
The Bureau also refused ACA Connects’ requests that it disclose the methodology underlying the lump-sum determination. The Bureau never disclosed the calculations and assumptions it used to produce the final lump-sum amount.
“This decision is the product of secret meetings with a handful of unidentified stakeholders and rests on undisclosed data and an impossible-to-reproduce methodology. ACA Connects’ members — which include the vast majority of U.S. cable providers — will suffer irreparable harm,” Polka added.
ACA Connects previously filed, on August 13, an application asking the Commission to review the Bureau’s determination. At the same time, ACA Connects asked the Commission to stay the deadline for earth station operators to make an “irrevocable” election whether to accept the lump sum – currently set for Sept. 14 – until review is complete. ACA Connects requested that the Commission rule upon the Request for Stay by August 26, but the Commission did not act by that day.
ACA Connects was thus forced to file a mandamus petition with the D.C. Circuit, seeking a stay of the Sept. 14 deadline. Because Commission review of the Bureau’s action is still pending, ACA Connects cannot yet seek ordinary appellate review. An extraordinary writ issuing quickly from the court is needed to protect ACA Connects and its members from the substantial harm from the impending Sept. 14 deadline.
ACA Connects’ petition explains that a temporary stay of the lump-sum election deadline will not endanger ongoing efforts to clear the C-Band for 5G wireless. To the contrary, a stay will provide certainty about MVPDs’ lump-sum elections and avoid later disruption to the C-Band transition, the first stage of which is scheduled to be completed in December 2021. Absent a stay, however, both ACA Connects’ members and the public would be harmed—they would lose the substantial efficiency and other benefits from fiber upgrades that the lump-sum was meant to encourage.
“If ever there were a case that warrants a writ of mandamus staying enforcement of agency action pending review, this is it,” Polka said.
About ACA Connects: America’s Communications Association – Based in Pittsburgh, ACA Connects is a trade organization representing more than 700 smaller and medium-sized, independent companies that provide broadband, phone and video services to nearly 8 million customers primarily located in rural and smaller suburban markets across America. Through active participation in the regulatory and legislative process in Washington, D.C., ACA Connects’ members work together to advance the interests of their customers and ensure the future competitiveness and viability of their businesses. For more information, visit: https://www.acaconnects.org