Trade Group Prepared To Seek Judicial Relief In The Absence Of An Appropriate Outcome At The FCC
PITTSBURGH, August 14, 2020 – ACA Connects yesterday asked the Federal Communications Commission to stay the Aug. 31, 2020 C-Band lump-sum election deadline to give earth station owners adequate time to demonstrate – in court, if necessary – that the FCC’s Wireless Telecommunication Bureau’s lump-sum determination is inconsistent with the Commission’s C-Band Order, rests on arbitrary and capricious reasoning, and was developed in violation of the Administrative Procedure Act’s public-notice and disclosure requirements. Concurrently with the stay request, ACA Connects filed an Application for Review with the FCC presenting those legal arguments and asking the FCC to correct the Bureau’s erroneous determination.
The FCC is in the process of clearing a broad swath of the C-Band for future use by wireless 5G communications providers. A key component of the plan involves reimbursing incumbent users that are forced to vacate the cleared portion of the C-Band. Those users may choose either to migrate their thousands of earth stations to continue to receive services on other portions of the C-Band, or to receive a lump-sum payment that can be used toward converting to alternative technologies, such as fiber.
ACA Connects’ filings come following release of a public notice by the Wireless Telecommunications Bureau in which the Bureau concluded that the lump-sum amount for multichannel video programming distributors (MVPDs) would exclude the cost of Integrated Receiver/Decoders (IRDs). Omitting IRD costs results in the lump-sum payment becoming a lesser option, defeating the Commission’s prior decision to give individual earth station owners flexibility to decide whether it would be more efficient to continue utilizing the C-Band, or instead apply the same amount of money toward building a predominantly future-proof, fiber-based, video distribution network.
“Staying the election deadline now will give the FCC an opportunity to review and correct the Bureau’s determination and will also reduce the risk of future significant disruption that would occur if the Bureau’s lump-sum determination were later set aside on judicial review,” ACA Connects President and CEO Matthew M. Polka said.
ACA Connects stressed that the Bureau’s exclusion of IRD costs from the lump sum defied the Commission’s clear directives, including its instruction that the lump sum must encompass the cost of “any necessary changes that will allow the earth stations to receive C-band services on new frequencies or from new satellites once space station operators have relocated their services to the upper portion of the band.”
ACA Connects also explained that the Bureau’s process for determining the lump-sum amount was arbitrary and capricious. For example, the Bureau relied on a third-party contractor that met with various stakeholders, but those meetings were confidential and excluded ACA Connects, which represents more than 90% of all MVPDs and over half of all MVPD earth stations. The Bureau never revealed what information was provided at these secret meetings or how it was used. The Bureau also never adequately disclosed major aspects of its methodology, thereby giving interested parties like ACA Connects no meaningful opportunity to evaluate and critique the Bureau’s approach.
ACA Connects said its members face irreparable harm if the August 31 deadline is not stayed. Earth stations must make an irrevocable election whether to accept the lump sum by August 31. Thus, if the Commission does not stay the deadline (or overturn the Bureau’s determination before the deadline), MVPDs will be forced to make an election based on the Bureau’s existing lump-sum amount. Because that amount improperly excluded significant costs, many MVPDs that would otherwise elect the lump sum — which the Commission intended them to do where that would be the “more efficient option” — will be forced to elect to relocate all of their earth stations instead.
ACA Connects has asked the FCC to rule on its stay request by Aug. 20. If the FCC declines to issue a stay pending the conclusion of review, ACA Connects has requested that the FCC issue a limited, 14-day stay of the lump-sum election deadline to allow ACA Connects time to seek a stay from the court of appeals.