CERCI calls latest PSSA 4.9 GHz proposal ‘unlawful’ and ‘unsound’

An alternative proposal from the Public Safety Spectrum Alliance (PSSA) to indirectly provide the FirstNet Authority with the ability to operate on 4.9 GHz spectrum nationwide continues to be legally flawed, absent action by Congress, according to the Coalition for Emergency Response and Critical Infrastructure (CERCI).

This marks the second time in less than a month that a PSSA proposal about the future use of 4.9 GHz spectrum has been deemed “unlawful” by the law firm of Jenner & Block. Jenner & Block researched the matter on behalf of CERCI, a coalition opposed to the PSSA notion of the FCC granting a nationwide 4.9 GHz spectrum license to the FirstNet Authority.

A Jenner & Block legal analysis submitted to the FCC in April asserted that the FCC could not grant a 4.9 GHz license to a federal entity like the FirstNet Authority. A subsequent PSSA filing disputed this conclusion but also suggested that the FCC could grant a nationwide “overlay” 4.9 GHz license to a band manager with rules stipulating use by the FirstNet Authority (FNA), so the license would not be awarded directly to a federal entity.

But having the band manager as the 4.9 GHz  license holder still would not make the alternative PSSA proposal legal, according to a Jenner & Block memorandum included in a CERCI filing submitted to the FCC last week.

“Granting FNA [the FirstNet Authority] control of the 4.9 GHz band is unlawful, regardless of whether the Commission attempts that end directly or indirectly,” the CERCI filing states. “The Commission lacks statutory authority … to award FNA the ability to operate beyond the 700 MHz band addressed in the [2012 law that established in the FirstNet Authority], and no other statute authorizes such operation.”

Jenner & Block’s legal memorandum said the PSSA interpretation of a law allowing a non-federal licensee to share spectrum with a federal entity does not reflect its intent.

“Section 2.103 is a narrow rule intended to authorize mutual agreements whereby a licensee that would otherwise actually and exclusively use its licensed spectrum would instead share that spectrum with a federal entity,” the Jenner & Block memorandum states. “It was never intended as a backdoor for the Commission to create a license for a sham ‘Band Manager’ that would itself never use the licensed spectrum.

“PSSA’s proposed amendment to Section 2.103 would not solve this problem—to the contrary, it makes the lack of statutory authorization even more obvious. PSSA’s proposal would fundamentally alter the Commission’s role under Section 2.103 from merely approving mutual sharing agreements to mandating the allocation of federal spectrum by fiat.”

Typically, the FCC does not have jurisdiction of spectrum used by federal entities like the FirstNet Authority. Of course, the FCC did grant a license for the FirstNet Authority to operate on 20 MHz of 700 MHz spectrum now known as Band 14, but that was done at the direction of Congress in the 2012 law.

Congress would have to get involved in a similar matter to execute the PSSA proposals that would give the FirstNet Authority the ability to operate on the 4.9 GHz airwaves, according to Jenner & Block.

“However PSSA frames its proposal, … it asks the Commission to make an allocation of spectrum resources to FNA that only Congress can authorize,” the Jenner & Block memorandum states. “PSSA’s proposed ‘sharing agreement’ [with the band manager] cannot change the fact that FNA is limited by statute to operating in the 700 MHz band. No amendment to the Commission’s rules can overcome this fundamental, statutory obstacle to FNA operating in the 4.9 GHz band.

“Beyond the lack of any statutory authorization for the ‘sharing agreement’ proposed by PSSA and the fact that the proposal disregards incumbent users’ reliance interests, the use of a ‘sharing agreement’ to accomplish indirectly what the Commission cannot accomplish directly introduces a host of statutory and constitutional problems. Specifically, PSSA’s proposal conflicts with the Anti-Deficiency Act (‘ADA’) and the Federal Advisory Commission Act (‘FACA’) and would implicate numerous constitutional issues.”

CERCI and other organizations opposing the PSSA proposals have cited concerns about what the proposed FirstNet Authority use of 4.9 GHz would mean for existing users of the 4.9 GHz spectrum. PSSA representatives repeatedly have stated that it believes the FCC should ensure that incumbents in the band would be protected from harmful interference and that their systems would not be negatively impacted by changes in the band.

In addition to its legal questions, the CERCI filing asserts that the PSSA proposal would not be good from a policy perspective, because it would result in AT&T—the U.S. carrier that builds and maintains the FirstNet nationwide public-safety broadband network (NPSBN)—gaining an unfair advantage on other cellular competitors.

“The PSSA would provide AT&T free access to billions of dollars’ worth of spectrum, a step that would substantially harm and distort competition in the commercial wireless marketplace where spectrum access is premised on auctions and secondary market transactions,” the CERCI filing states. “PSSA wants to integrate the 4.9 GHz band into the Nationwide Public Safety Broadband Network (‘NPSBN’), but as FirstNet officials have acknowledged, AT&T owns all of the equipment and infrastructure that comprise the NPSBN, it operates the NPSBN, and it provides services to public safety and commercial customers alike over NPSBN spectrum.

“Giving the 4.9 GHz band to AT&T to serve public safety and commercial customers would disrupt the wireless marketplace. As a policy matter, it is unsound.”

PSSA representatives have stated verbally in public that AT&T would not necessarily get access to the 4.9 GHz spectrum, noting that the FirstNet Authority conducted a procurement to select a contractor to build the 700 MHz Band 14 part of the NPSBN and that it would have to comply with any rules the FCC would establish. A PSSA filing with the FCC in December described the CERCI’s perception that AT&T effectively would get access to the 4.9 GHz band as a “false presumption.”

Many of the arguments made in the latest CERCI filing reiterate previous points made by the organization, although they are adapted to address the PSSA’s recent alternative proposal of an overlay license to the band manager. One new aspect of the CERCI filing is the idea that there could be constitutional issues associated with the FirstNet Authority’s self-funding mechanism.

As part of the 2012 law, Congress established the FirstNet Authority as an “independent authority within the NTIA [National Telecommunications and Information Administration, which oversees federal-government spectrum]” and required it to create a “permanent self-funding” regime. The FirstNet Authority achieved this in its agreement with contractor AT&T, which is scheduled to pay the FirstNet Authority a total of $18 billion during the 25-year agreement for the right to use the 700 MHz Band 14 spectrum on a secondary basis for commercial purposes.

This arrangement has meant that Congress has not needed to provide the FirstNet Authority with any additional funding since its establishment in 2012, when the FirstNet Authority was allocated $7 billion in future spectrum-auction proceeds.

But the Jenner & Block memorandum indicates that the FirstNet Authority’s funding structure could face constitutional questions that could prove to be problematic.

“The 2012 Act created a ‘permanent self-funding’ system for FNA that may violate the Appropriations Clause by bypassing Congress’s constitutional power and duty to determine funding for federal programs,” according to the Jenner & Block memorandum. “The Supreme Court has held oral argument on and is currently weighing whether the Consumer Financial Protection Bureau’s perpetual self-funding mechanism violates the Appropriations Clause.

“Respondents there argue—and the Fifth Circuit below held—that Congress may not grant an agency funding that simultaneously bypasses both Congress’s direct control (by allowing the agency to draw on funds without Congress making an appropriation of those funds) and indirect control (by allowing the agency to draw from a source that does not depend on congressional appropriations). Under the same logic, FNA’s self-funding mechanism is constitutionally suspect.”

This potential problem is significant enough that the FCC should avoid putting itself in the middle of the situation, according to Jenner & Block.

“FNA’s funding is wholly insulated from congressional appropriations; Congress lacks direct control over the amount of funding FNA receives and indirect control over the source from which it draws (fee payouts by state, local, and NGO users and licensees),” the Jenner & Block memorandum states. “It would be unwise for the Commission to greatly expand the responsibilities of FNA when its funding regime is constitutionally questionable”