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Public Interest and Labor Organizations Join Rural Groups’ Call for FCC Public Comments After Significant Developments on T-Mobile/Sprint Merger

Wednesday, August 14, 2019

Washington, D.C. - Common Cause, the Communications Workers of America (CWA), Free Press, NTCA – The Rural Broadband Association, Open Technology Institute, Public Knowledge, and the Rural Wireless Association today filed an ex parte summary of their August 12 Federal Communications Commission meetings.

The ex parte summary is available online here. Key excerpts from the summary:

The public interest and labor representatives expressed their support for the NTCA/Rural Wireless and Wireless Internet Service Providers Association (“WISPA”) letters urging the Commission to seek public comment on significant recent developments related to the T-Mobile/Sprint transaction. These developments include the series of agreements that T-Mobile and Sprint have entered with the U.S. Department of Justice (“DOJ”), including, among other things, the proposed divestiture of certain spectrum assets to DISH Network Corporation (“DISH”). Separately, DISH filed applications for waiver and extension of time to complete construction of certain spectrum licenses, and agreed to certain commitments contingent upon Commission approval of the construction extension requests. The Commission has appropriately consolidated the merger proceeding with the DISH extension requests.

The DOJ Consent Decree and the DISH waiver and extension requests represent significant changes to the original transaction and raise new and important public interest and competition issues related to execution risk; operational, technical, managerial, and financial capability of the divested party; enforcement provisions; economic incentives; and jobs. The MVNO and related commercial agreements between DISH and T-Mobile are central to the analysis of the transaction, yet the MVNO Agreements have not been submitted into the record and have not been subject to public comment.

Given the extraordinary nature of these developments, failure to seek public comment on these inextricably interrelated developments would be a violation of the Administrative Procedures Act (APA). Under the APA, agency action is arbitrary and capricious if the agency has “entirely failed to consider an important aspect of the problem.” Earlier this year, the D.C. Circuit ruled in National Lifeline Association v FCC that Commission failure “to provide an adequate opportunity for comment” on “a fundamental change” was “arbitrary and capricious” in violation of the APA. And just last week, the DC Circuit found the Commission in violation of the APA for “arbitrary and capricious” rulemaking in the small wireless cell proceeding. Given the significance of this instant merger proceeding, which will fundamentally restructure the wireless market, the Commission must protect the integrity of the merger review process by putting the DISH waiver and extension request, deployment commitments, and the associated DOJ Consent Decree out for public comment.

The suggestion that there is no requirement in the APA to obtain comment from interested parties because the APA applies only to rulemakings borders on the preposterous. Decisions of federal agencies, including the FCC, are governed by the APA, which establishes the scope of review and directs courts to set aside decisions which are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;...” This is fully applicable to adjudications, including license application proceedings, as well as rulemakings. It is a fundamental tenet of administrative law that an agency decision is arbitrary and capricious if it “has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.” To ignore the fundamental changes to this proceeding that have resulted from the consent decree and DISH’s request to the Commission would be the epitome of arbitrary and capricious decision making. As the D.C. Circuit has said, “Regardless of the formal status of a party, or the technical merits of a particular petition, the FCC ‘should not close its eyes to the public interest factors' raised by material in its files. We have noted that, as a general matter, the federal regulatory agencies should construe pleadings filed before them so as to raise rather than avoid important questions. They ‘should not adopt procedures that foreclose full inquiry into broad public interest questions, either patent or latent.'”

The Commission routinely seeks public comments on construction extension requests. In two prior instances in which DISH requested a waiver and extension of time, the Commission put the request out for public comment. The Commission sought public comment on the request for waiver and extension of time by Multichannel Video Distribution and Data Service (MVDDS) in 2009 and by Skybridge in 2012. Indeed, the Commission has established a high standard for granting a waiver and construction extension request. Section 1.946 of the Commission’s Rules provide that a request for extension of time “may be granted if the licensee shows that failure to meet the construction deadline is due to involuntary loss of site or other causes beyond its control.” The Commission should seek public comment to determine if the DISH waiver and extension request meets this high bar.

To date in this proceeding, the Commission has ensured compliance with the APA by twice seeking Public Comment on new developments and new evidence introduced into the record and should continue to do so in its evaluation of the DISH waiver request and related developments. Certainly, there is Commission precedent for seeking public comment on a divestiture proposal, as the Commission did in the Sinclair/Tribune merger review.

Finally, the Joint Applicants response to the NTCA/RWA and WISPA requests fails to address the substantive issues raised by the rural providers. Contrary to the Joint Applicants’ assertion, the record in this proceeding is not “comprehensive and complete.” The record does not include the T-Mobile/DISH MVNO and related commercial agreements, it does not include public comment on the public interest and competition impact of the substantial changes that result from the Consent Decree, the DISH deployment commitments, and the related waiver and construction extension request. To ensure a full record with adequate opportunity to comment on fundamental changes in the transaction, the Commission should seek Public Comment on those changes.

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