AT&T/T-Mobile Proposed Merger Faces Another Road Block

Federal Communications Commission Chairman Julius Genachowski has recommended that the FCC Commissioners send the proposal to an agency judge for a hearing. This type of referral is generally reserved for proposed mergers that do not demonstrate that they are in the public interest. The hearing is essentially an internal trial within the agency. Many believe that the act of referring a proposed merger such as this to an agency hearing is akin to sending the message that the merger should not be approved. It also provides the proponent of the merger the opportunity to gracefully withdraw its proposal. Such was the case for the last FCC hearing referral in 2002 when the FCC challenged Echostar's proposal to acquire competitor Direc TV. Echostar withdrew its proposed acquisition upon referral to the agency hearing. While AT&T seems to want to continue to press on, it faces significant hurdles including an antitrust lawsuit brought by the Justice Department which is scheduled for trial for February, 2012.

BlackBerries and RIM continue to dominate iPhone and Android in the workplace

A recent survey conducted by Forrester Research confirmed that BlackBerry continues to dominate the iPhone and Android in market share in the workplace. The respective market shares for BlackBerry, iPhone and Android are: 42%, 22% and 26%. While iPhone and Android have made impressive gains in market share since each were introduced, BlackBerry still dominates by an overwhelming amount. Why? Well in my experience, BlackBerries just work. Historically, BlackBerries have not been as flashy as the iPhone or Android, but they are no doubt much better suited for the business world. However, the latest BlackBerries to be released with OS 7 are a major improvement to the overall BlackBerry user interface. Look no further than the new BlackBerry Bold (9930).

Obama Administration Accused of Attempting to Change Testimony of Gen. William Shelton

Gen. William Shelton, a four-star Air Force general who oversees Air Force Space Command, told a group of lawmakers and staff during a classified briefing that the Obama Administration tried to convince Gen. Shelton to alter his testimony in an apparent attempt to soften the Pentagons position concerning the existing LightSquared proceeding before the FCC. Some argue that this was an attempt to help LightSquared, a company which is owned by investment fund operator and Democratic donor, Philip Falcone, complete the review process. A link to the full story can be found here

LightSquared's FCC Application Update

LightSquared, one of the newest wireless communications providers on the scene, proposes to implement a $14 billion network of 40,000 wireless communications base stations covering approximately 260 million people in the United States by the year 2015. LightSquared has received preliminary approval from the FCC, but has now hit a potential road block in the review process. Some, such as Deere and Co., claim that the the proposed system proposed to be utilized by LightSquared will cause “severe harm to critical high precision applications" including numerous applications that rely upon GPS services. Certain manufacturers claim that LightSquared will interfere with GPS navigation used by planes, automobiles, boats and tractors. The National Oceanic and Atmospheric Administration have also provided testimony claiming that LightSquared's signal may disrupt certain terrestrial electronic devices that read data from GPS systems. LightSquared persuasively argues that it can remedy any potential interference issues by ensuring that is base stations are located far from any agricultural GPS receivers in remote areas. LightSquared has also agreed to work to develop filters for GPS receivers to effectively filter out the LightSquared signals. The FCC is currently exploring potential mitigative measures that would allow both LightSquared and the GPS systems to coexist without substantial interference. More information about LightSquared and its objectives can be found at its website: www.lightsquared.com.

Huge Blow to AT&T Proposed Merger with T-Mobile

Department of Justice Sues to Block AT&T Merger with T-Mobile

The US Department of Justice filed a federal action on August 30, 2011 in a recent attempt to block the proposed AT&T/T-Mobile merger currently pending before the Federal Communications Commission.

AT&T released a statement in which is promised to

vigorously contest this matter in court.

I find that highly unlikely. I believe that AT&T and T-Mobile will do almost anything to restructure the deal to appease the Justice Department. AT&T needs this merger to enable it to compete with Verizon Wireless and its LTE (i.e. 4G) service being rolled out in more markets each and every day.

City of Mount Vernon and Center for Municipal Solutions Admonished by United States District Court, Southern District of New York

In the 32 page decision, District Judge Stephen C. Robinson, granted summary judgment in favor of MetroPCS New York, LLC in which the city of Mount Vernon was ordered to immediately approve MetroPCS's application and grant any associated permits to enable it to install its antennas on an existing building located within the city boundaries. Specifically, the court found that the city of Mount Vernon violated the telecommunications act of 1996 by failing to base its denial of MetroPCS's application on substantial evidence, by discriminating against MetroPCS and unreasonably delaying its decision.

This case centers around an application for special use permit filed by MetroPCS with the city of Mount Vernon to authorize the installation and operation of six stealth panel antennas on the roof top of an existing building, on which antennas from three other competing wireless carriers are located. The application was originally filed on June 19, 2008. The city of Mount Vernon planning board denied the application of September 2, 2009.

Significantly, the city had retained the services of Richard Comi, one of the owners of the Center for Municipal Solutions.

The District Court found that the city of Mount Vernon failed to base its denial of the MetroPC's application on substantial evidence and such failure violated the TCA. It appears that one of the reasons for the denying the MetroPCS application related to the alleged failure of MetroPCS to provide the city with information about the viability of expanding the distributed antenna system ("DAS") network within the city.

The court also found that the city of Mount Vernon unreasonably discriminated against Metro PCS. The city acknowledged such discrimination but alleged that it was reasonable to treat MetroPCS differently than the other carriers who currently have antennas at the proposed site because MetroPCS is the only carrier with access to a DAS network. The Court rejected such an argument.

The court also found that the city unreasonably delayed review of the application. In doing so, the district court points out that

CMS and Mr. Comi delayed the application by repeatedly requesting unnecessary information and belaboring issues already resolved, resulting in a failure to put the application on the planning Board agenda for four months after MetroPCS made its final submission in February.

The District Court also tackled the issue of the reasonableness of Mr. Comi's consulting fees. In the view of the court, the assessment of fees was unreasonable. The special use permit application fee for a simple collocation in the city of Mount Vernon is $6000. On top of that outrageous fee, the city of Mount Vernon zoning law also requires an applicant to deposit $8500 to be used to pay the costs of the city's consultant. In striking down the city of Mount Vernon fee structure, it referenced Jewish Reconstructionist Synagogue case handed down by New York Court of Appeals in 1976. The District Court wrote that the fees charged should be reasonably necessary to accomplish the statutory command and fees should be assessed or estimated on the basis of reliable factual studies or statistics. The court was baffled by the fact that the city sought to charge a fee of $6000 for special use permit application for a collocation when a typical special use permit application for a non-telecommunications use was only $500.

In the end, the court struck down not only the $6000 application fee requirement but also the vague and limitless escrow requirement typically found in Mr.Comi's telecommunications laws. In fact, the court seemed so appalled with the fees charged by Mr. Comi that it ordered Mr. Comi to return a large portion of the fees charged.

Municipal agencies should carefully review this case to make sure that local telecommunications laws that may be in effect in their jurisdiction do not have similar problems as pointed out in the MetroPCS case. This is a good example to municipalities to remember to maintain control over the application review process and its consultants.

Second Circuit Rejects Town of Clarkstown Appeal involving DAS

The United States Court of Appeals for the Second Circuit affirmed the District Court Decision in New York SMSA Limited Partnership d/b/a Verizon Wireless, et al v. Town of Clarkstown, 2010 U.S. App. LEXIS 13364 (Decided June 30, 2010).

This action involved a challenge to Town of Clarkstown Local Law No. 14 enacted in 2007, which purported to amend chapter 251 of the Clarkstown Town Code, the purpose of which was to regulate wireless communications facilities. The local law was quickly challenged on several grounds by four FCC licensed communications carriers. The District Court held that Chapter 251 was preempted by the Federal Telecommunications Act in at least two respects. The District Court held that federal law preempted Chapter 251 from regulating proposed facilities with respect to radio frequency interference and alternate technologies.

The Second Circuit has affirmed the District Court Decision.

Town of Clarkstown Local Law No. 14 attempted to create an arbitrary point system designed to categorize various telecommunications applications, the result of which would dictate the specific review process to be followed. For purposes of this article, applications involving distributed antenna systems ("DAS") were highly favorable under the town of Clarkstown law. In fact, an applicant proposing a DAS would likely be subject to a much less rigorous application review process as compared to an application for co-location or a new tower.

The Second Circuit very clearly rejected the approach adopted by the town of Clarkstown. In doing so, the court holds that the town of Clarkstown Local Law No. 14

provisions setting forth a preference for "alternative technologies" are also preempted because they interfere with the federal government's regulation of technical and operational aspects of wireless telecommunications technology, a field that is occupied by federal law.

Municipalities need to be careful (and properly advised and counseled) when attempting to establish regulations that impact wireless communications facilities.