LightSquared files for Bankrupcy (Chapter 11)

     To the surprise of very few, LightSquared has filed for Bankruptcy protection under Chapter 11.

Given that the firm has virtually no path forward to use its frequencies to provide 4G-type services in light (no pun intended) of the apparently unresolvable GPS interference issues, Chapter 11 gives LightSquared a way to step back and see what it can salvage of their operations.

In a Chapter 11 bankruptcy proceeding, in most cases, the debtor remains in control of its business and operations as a “debtor in possession.” The day-to-day operations are subject to the oversight and jurisdiction of the federal court (and typically the trustee). The goals of a Chapter 11 proceeding is for the company to find the cash to emerge from bankruptcy having paid its creditors some portion of the amount due, cancelling or renegotiating some contracts, and then resuming normal operations after completing the bankruptcy.

It seems pretty clear to me that the $9B contract LightSquared entered into with Sprint will be a target for cancellation.  That will place even more pressure on Sprint to fund its Network Vision project.

A Chapter 11 bankruptcy proceeding is is very different from Chapter 7 proceeding.

In a Chapter 7 bankruptcy action the business ceases its regular operations.  The court-appointed trustee sells off all of the business’s assets and distributes the sale proceeds to the creditors. If there’s any money leftover after all the creditors are paid, that balance is returned to the owners/shareholders of the bankrupt company, and the company ceases to exist.

Sometimes a firm starting out on a Chapter 11 bankruptcy path can still end up shutting down.  It would not surprise me if that’s the case with LightSquared, especially if they are forced to sell off their licensed frequencies.

Time will tell.

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FCC Shot Clock Affirmed by 5th Circuit

Yesterday, the 5th Circuit Court of Appeals denied the FCC Shot Clock appeal promoted by the City of Arlington, Texas and the City of San Antonio, Texas. For the foreseeable future, the Shot Clock will remain with us. Here is the decision: CITY OF ARLINGTON, TEXAS; CITY OF SAN ANTONIO, TEXAS v. FCC.

Although the Mayan Calendar predicts the end of the world on December 21st, 2012, it seems unlikely that the FCC Shot Clock will be the cause. It also seems unlikely that a petition for Certiorari will be favorably reviewed by the U.S. Supreme Court given the nature of the ruling, and the lack of a split among the various Circuits.

This appeal grew out of the FCC’s adoption of its wireless tower siting Shot Clock rule in 2009 (click here to read the FCC’s Shot Clock Declaratory Ruling) setting deadlines for governments to process to a decision wireless site applications “within a reasonable period of time” (see 47 U.S.C. § 332(c)(7)(B)(ii).

In its ruling, the FCC interpreted Congressional intent regarding § 332(c)(7)(B)(ii) to define the reasonable time as being 90 days for a collocation site, and 150 days for a new site and other types of applications. 47 U.S.C. § 332(c)(7)(B)(v) requires that when there is a failure to act on an application within the applicable time period, the aggrieved party (usually the carrier) should file a suit with a court of competent jurisdiction within 30 days and that “[t]he court shall hear and decide such action on an expedited basis.”

So, what does this mean for local governments? Likely not too much for now.

Most local governments, since the Commission’s adoption of the Ruling, have taken the order in stride and tried to comply. Most carriers have done the same thing. Most times, when the 90 or 150 day clock was about to run out, the carrier and government would enter into a tolling agreement (by mutual agreement to stop the Shot Clock where it was, so that everyone would have some breathing room to keep working on a project).

Why are tolling agreement needed? Even the Commission recognized the value of such agreements when it said,

We conclude that a rigid application of this cutoff to cases where the parties are working cooperatively toward a consensual resolution would be contrary to both the public interest and Congressional intent. Accordingly, we clarify that a “reasonable period of time” may be extended beyond 90 or 150 days by mutual consent of the personal wireless service provider and the State or local government, and that in such instances, the commencement of the 30-day period for filing suit will be tolled.

(FCC Shot Clock Order @ 49)

As someone who reviews and processes wireless site applications for many local governments, the most important clock is not 90 or 150 day clocks; it’s the first 30 day ‘application deemed complete’ clock.

The FCC said of this first 30 days,

[A] review period of 30 days gives State and local governments sufficient time for reviewing applications for completeness, while protecting applicants from a last minute decision that applications should be denied as incomplete. Accordingly, we conclude that the time it takes for an applicant to respond to a request for additional information will not count toward the 90 or 150 days only if that State or local government notifies the applicant within the first 30 days that its application is incomplete.

(FCC Shot Clock Order @ 53)

Some states, including California, already provide for an initial 30 day review period for application completeness (in California see Gov. Code § 65943). Unlike the California law, however, which ‘resets’ the clock back to zero if an application is returned incomplete within the first 30 days, the FCC shot clock simply stops where it is at the time the incomplete notice is issued. If the local government takes 25 days to review a project for completeness, and returns the application as incomplete on that day, it only has 5 more days to review the project when resubmitted.

Because the FCC first 30 day clock is the toughest to deal with, local governments will be well-served to create carefully-crafted and very detailed applications that make incomplete submissions easy to detect. For an example of a wireless application form that is both detailed and highly structured, take a look at the one I’ve maintained for nearly a decade and which is used in one form or another by various jurisdictions around the country: CLICK HERE.

PRACTICE TIP

I believe that local governments will be best served by a combination of a carefully-crafted wireless siting application facilitating an easy completeness check, coupled with the requirement that wireless site applications only be filed by appointment where legally permissible.

Taking in and reviewing a complex wireless siting project and the underlying thorough siting application and data can take an hour or more.

By requiring appointments, a government planner can allocate sufficient time to take in and review the application at the time it hits the counter. Any facial omissions or errors can be identified during the intake, and the planner can immediately log in the project and simultaneously issue the applicant with an incomplete letter at the same time. This approach will blunt the worst impacts of the 30-day clock by never allowing it to start for facially incomplete or incorrect applications.

♫ ‘A siting we shall go; a siting we shall go…’ ♫

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AT&T&T Likely to Have to Divest Portions of Networks

Reuters is reporting that AT&T CEO Randall Stephenson believes that his company will have to divest portions of its existing wireless network to secure federal permissions to acquire T-Mobile.  Stephenson’s comments were made in New York at a Council on Foreign Relations event held on March 30, 2011

My suspicion is that T-Mobile will be similarly required to divest portions of its existing wireless network in the same or adjoining areas as those assets that AT&T will shed to make the deal work for the Feds.

The shed assets will help strengthen the remaining, small competitors, who will then become known as current take-over targets for other major players.

Stephenson also said at the same event that he expected consumer prices for wireless services to continue drop as a result of the proposed merger.  His comments came just hours before April Fools Day.

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AT&T&T?

It’s no surprise that T-Mobile will soon cease to exist in the U.S.  What is a surprise is that AT&T is claiming the prize, rather than the widely-rumored suitor, Sprint/Nextel.

What is more of a surprise is that T-Mobile lasted so long before giving up the ship. T-Mobile has always played a game of the catch-up wanna-be to the legacy national carriers in the U.S. 

What does make sense is that AT&T, rather than Sprint/Nextel looks like the winner: Sprint/Nextel certainly needs access to more sites and licenses, but AT&T can make better use of T-Mobile’s assets, specifically the AWS-Band frequency assignments around 2100 MHz.

AT&T went the other direction when it focused, rightly, on gaining new 700 MHz frequencies for its LTE data (and later, voice) deployments.  By taking T-Mobile, AT&T gains more spectrum in the 1900 and 2100 MHz bands to add to its existing 700 and 860 MHz assignments.  Sweet.  AT&T’s recent purchase of the national 700 MHz band license from the ill-conceived and now all-but-defunct MediaFLO/FLO-TV operation of Qualcomm makes even more sense given the pending marriage with T-Mobile.  Sweeter.

Sprint could not have benefited to the same degree as AT&T given that it does not have 860 MHz band assignments (yes, I’m discounting the Nextel assignments for this discussion since those have turned out to be such a poor deal for Sprint).

IF THIS DEAL GOES THROUGH, and there’s certainly a big IF in there, I suspect that the even-newer AT&T will be forced by the DOJ/FTC/FCC to sell off chunks of the existing networks of both firms.  This has been the trend in prior mergers/buy-outs, and it’s unlikely that this deal will not see sales of major network assets in the name of competition.

What’s next?

For site landlords, in about a year it will be time to take out their AT&T and T-Mobile lease contracts and look at those transfer terms.  It’ll be a really interesting time for site lessors with both AT&T and T-Mobile currently collocating at the same site.

For other wireless carriers, this deal will force some shotgun marriages. 

I predict that Sprint/Nextel will now look to MetroPCS.  Verizon will look at MetroPCS, too.  This may also be the start of the end-game for Cricket Wireless.

Finally, many of the roaming contracts between the biggies and the smaller regional PCS and cellular carriers contain buy-out options (the biggie can for the sale of the small fish).  We’ll see Verizon continue its aggressive campaign of Roam-to-Buy as a first step of blunting the AT&T/T-Mobile deal.

For now I think we should start calling the new network: “AT&T&T”!

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US Cellular v. Albion,ME: FCC Shot Clock Case

In what I suspect is one of the first FCC shot clock cases to be filed, now comes US Cellular v. Town of Albion, Maine.

In its amended complaint (which I have attached to this posting, below) US Cellular asserts that:

34. The Town’s failure to act on the Application “within a reasonable period of time” under Section 332(c)(7)(B)(i)(II) constitutes “a failure to act” under Section 332 (c)(7)(B)9v) permitting US Cellular to seek judicial relief pursuant to a Declaratory Ruling of the Federal Communications Commission, dated November 18, 2009, WT Docket No. 08-165.

35. US Cellular is accordingly entitled to an injunction directing the Town Planning Board to grant site plan approval for the Application for construction of its proposed telecommunications facility.

(Emphasis added; Complaint @ 34-35.)

Oddly, US Cellular’s attorneys apparently failed to read the FCC’s order carefully, which I have also attached, below.

The FCC order, in relevant parts, says:

[T]he [CTIA] Petition asks the Commission to find that, if a zoning authority fails to act within the above timeframes, the application shall be “deemed granted.”

(Order @ 10.)

[W]e find that a “reasonable period of time” is, presumptively, 90 days to process personal wireless service facility siting applications requesting collocations, and, also presumptively, 150 days to process all other applications. Accordingly, if State or local governments do not act upon applications within those timeframes, then a “failure to act” has occurred and personal wireless service providers may seek redress in a court of competent jurisdiction within 30 days, as provided in Section 332(c)(7)(B)(v). The State or local government, however, will have the opportunity to rebut the presumption of reasonableness.

(Order @ 32 [internal footnotes omitted].)

We reject the Petition’s proposals that we go farther and either deem an application granted when a State or local government has failed to act within a defined timeframe or adopt a presumption that the court should issue an injunction granting the application. Section 332(c)(7)(B)(v) states that when a failure to act has occurred, aggrieved parties should file with a court of competent jurisdiction within 30 days and that “[t]he court shall hear and decide such action on an expedited basis.” This provision indicates Congressional intent that courts should have the responsibility to fashion appropriate case-specific remedies. As the Petitioner notes, many courts have issued injunctions granting applications upon finding a violation of Section 332(c)(7)(B). However, the case law does not establish that an injunction granting the application is always or presumptively appropriate when a “failure to act” occurs.125 To the contrary, in those cases where courts have issued such injunctions upon finding a failure to act within a reasonable time, they have done so only after examining all the facts in the case. While we agree that injunctions granting applications may be appropriate in many cases, the proposals in personal wireless service facility siting applications and the surrounding circumstances can vary greatly. It is therefore important for courts to consider the specific facts of individual applications and adopt remedies based on those facts.

(Emphasis added; Order @ 39 [internal footnotes omitted].)

FCC Chairman Julius Genachowski, in his separate statement regarding the Commissions adoption of the shot clock rule, said

The decision we reach today does not grant the full relief that the industry’s petition seeks—for example, the petition argued for a shorter set of deadlines, and a requirement that zoning applications be “deemed granted” as soon as the deadlines expired. I believe that the timeframes we adopt today, and the requirement that parties seek injunctive relief from a court, are more consistent with preserving State and local sovereignty and with the intent of Congress.

(Statement of Chair Genachowski @ pg. 2.)

So, while the Shot Clock order may have opened the doors to the federal courts for U.S. Cellular, its assertion it “is accordingly entitled to an injunction directing the Town Planning Board to grant site plan approval for the Application for construction of its proposed telecommunications facility” is inconsistent with the ruling set down by the Commission.

It now turns to the Town of Albion to rebut U.S. Cellular’s assertion that its review, exceeding 150 days, was unreasonable.  If it is successful in doing so, then the court should deny U.S. Cellular the relief it seeks.

U.S. Cellular v Town of Albion, ME0911929287

FCC 09-99 Shotclock Order

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The FCC’s Shot Clock…Now a Game of Chicken

FCC Shot Clock

The FCC’s Shot Clock for siting decisions in wireless cases is turning out to be the bad idea that most governments expected it would be.   Right now we’re seeing the first round of “Chicken” …  The carriers are starting to demand siting decisions on cases because the Shot Clock rule entitles them to sue if they don’t get it.

“Okay… you want a decision?  DENIED for the following reasons based on evidence in the administrative record….”  is what some governments are starting to offer applicants who demand their ‘final’ decision on day 90 or 150.  At the last minute will one side or the other ‘blink’ in this high-stakes game of Chicken? 

In some cases, especially in California with its state law CEQA requirements and when looking at compliance with local siting ordinance requirements, the decisions simply can’t pop out on time like the output of an assembly line.

I suspect we’ll see a fair number of application denials in the next few months while all sides figure out how to live under the Shot Clock…at least until the rule is overturned or seriously limited by the courts.

It was a dumb idea for the wireless industry to push for this rule.  The only ones who will really benefit from strict and severe application of the rule will be the attorneys and experts.  As both, I still think this was a dumb idea becuase it will make siting a more rigid process.

Those are my opinions.  What are yours?

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Anti-RF Boogie Rap

We all know that some members of the public view radio frequency emissions to be unsafe, and they lobby against wireless projects based on their fears of RF.   Yet those who have studied the broadly accepted scientific research, and understand how the FCC set the current national standards, recognize that non-ionizing emissions from cell towers are safe.

It’s fairly common to see someone show up at a city or county planning meeting to oppose a wireless site based on concerns over RF safety, yet one gentlemen, Jeff Haebig has taken this type of protect to a new and highly artistic level.

Very amusing, even if not based on scientific fact.

Jonathan Kramer

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Major New RF Safety Practice Guide

The Public Law Journal of the State Bar of California has published Jonathan’s Kramer paper, “A Practical Guide to Radio Frequency Emissions Safety.” The article appears in the Summer 2009 edition (Vol. 32, No. 3).

This guide discusses how local government agencies can properly and effectively deal with RF safety issues that come up in connection with wireless siting cases (primarily cell sites, but also broadcast, ham radio, and commercial two-way users, as well).

While written primarily for California public law attorneys, attorneys around the country will find many important and useful gems in the article.

The editor of the Public Law Journal has kindly granted permission for me to reproduce the article in PDF format.

Please follow this link to download the article download page.

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US Court of Appeals – No decision on FCC’s emergency power rules

On July 8, the Court of Appeals for the D.C. Circuit declined to act on the CTIA’s request to block the FCC rules on emergency power of telecom sites (including cell sites).

From the order:

RANDOLPH, Circuit Judge: Hurricane Katrina exposed several weaknesses in the Gulf Coast’s communications infrastructure, among which was the loss of power for critical communications networks. To address this problem, the Federal Communications Commission promulgated a rule requiring commercial mobile radio service (CMRS) providers to maintain a minimum amount of emergency backup power for “all assets necessary to maintain communications that are normally powered from local commercial power.” In the Matter of Recommendations of the Independent Panel Reviewing the Impact of Hurricane Katrina on Communications Networks, 22 F.C.C. Rcd 18,013, 18,035 (2007) (“Reconsideration Order”).

The rule thus requires a backup power source (e.g., batteries or generators) for every cell site and paging transmitter unless an exemption is met.  Petitioners, who are wireless and paging service providers, oppose the backup power rule on the grounds that the Commission adopted it without statutory authority, that the parties lacked notice, and that the Commission acted arbitrarily and capriciously. We decline to address these contentions now because the case is not ripe for review.

You can download the entire order by clicking here.

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Birds/NEPA 1, FCC/CTIA 0

Today, the Federal Court of Appeals for the District of Columbia Circuit reversed an FCC order regarding tower siting as being in violation of the proper NEPA standard.

The case caption and introduction are below, followed by a PDF of the decision.

No. 06-1165
AMERICAN BIRD CONSERVANCY, INC.
AND FOREST CONSERVATION COUNCIL,
PETITIONERS
v.
FEDERAL COMMUNICATIONS COMMISSION,
RESPONDENT
CTIA – THE WIRELESS ASSOCIATION, ET AL.,
INTERVENORS

PER CURIAM: The American Bird Conservancy and Forest conservation Council petition for review of an order by the Commission denying in part and dismissing in part their petition seeking protection of migratory birds from collisions with communications towers in the Gulf Coast region. In Re Petition by Forest Conservation Council, American Bird Conservancy and Friends of the Earth for National Environmental Policy Act Compliance (“Order”), 21 F.C.C.R. 4462 (2006). Their petition claimed that Commission rules and procedures for approving new towers failed to comport with the National Environmental Policy Act (“NEPA”), 42 U.S.C. § 4321 et seq., the Endangered Species Act (“ESA”), 16 U.S.C. § 1531 et seq., and the Migratory Bird Treaty Act (“MBTA”), 16 U.S.C. § 701 et seq. We vacate the Order because the Commission failed to apply the proper NEPA standard, to provide a reasoned explanation on consultation under the ESA, and to provide meaningful notice of pending tower applications.

Court Decision

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