Tech & Telecom Law News

Longer FCC Shutdown Standstill May Slow 5G Launches

Jan. 11, 2019, 4:43 PM

The partial government shutdown has left Federal Communications Commission operations mostly at a standstill and reviews of transactions, including the proposed merger of T-Mobile US Inc. and Sprint Corp., suspended.

So far, the shutdown has not been debilitating for the nation’s wireless carriers, cable providers, broadcast stations, and satellite operators, telecom attorneys told Bloomberg Law.

They are contending mostly with a stoppage in agency reviews of transactions and in licensing services for phone companies, satellite operators, and TV stations. FCC employees tasked with approving new technologies and devices are furloughed. Meetings are canceled, and no new products, such as internet of things gadgets that need approval, are getting cleared.

What’s been largely a nuisance so far could have broader consequences, including stifling the rollout of national 5G services and new technologies, if the funding lapse dragged on. It’s unclear whether the FCC’s monthly meeting, tentatively scheduled for Jan. 30, will be postponed if the shutdown continues.

“Is it horrible at this point? Not yet but obviously each day and week that goes on things get a little bit more complicated,” Glenn Richards, a telecom lawyer at Pillsbury Winthrop Shaw Pittman LLP, told Bloomberg Law.

Hindering 5G?

The shutdown may slow 5G infrastructure build out because the FCC won’t be able to handle disputes over the placement of next-generation network equipment until the shutdown ends, Maria Browne, a telecom attorney at Davis Wright Tremaine whose clients include wireless carriers, told Bloomberg Law.

Some municipalities have challenged the placement of 5G equipment, called small cells, and other telecom equipment on utility poles and other public infrastructure. Local governments have sued to block an FCC order that would make it easier for carriers to install small cells on public rights-of-way, but it’s unclear if that will move forward during the partial shutdown, Browne said.

“Any delay is certainly not welcomed” by telecom providers, including Verizon Communications Inc. and AT&T Inc., who are racing to be the first to launch a national 5G network, she said.

The U.S. court system plans to operate through Jan. 18. The shutdown hampers the FCC’s ability to participate in litigation, however, Robert May, a telecom partner at Telecom Law Firm PC, told Bloomberg Law.

Browne’s wireless clients are also monitoring whether the FCC’s so-called “one touch make ready” rules, which still need the White House Office of Management and Budget’s blessing, will be approved and implemented in February if the shutdown continues. The rules are aimed at making it easier for telecom providers to attach fiber and other telecom equipment to utility poles.

For the burgeoning satellite industry, FCC officials aren’t at work to approve licenses for new communications satellites, or to authorize satellites to move into new orbits to tap into radio frequencies, potentially tamping down business for industry players, Luxembourg-based Intelsat SA spokeswoman Dianne Van Beber told Bloomberg Law. Intelsat operates a global video and broadband satellite network.

No New Devices

The longer the shutdown lasts, the more catch-up work the FCC will face once funding is restored.

That could lead to long delays for companies to get new technologies, equipment, or products approved. Anything that uses radio frequencies, including smartphones being developed for 5G networks, computers, TVs, and smart speakers, must be FCC-approved before going to market.

The shutdown “will have a serious and negative impact on the approval of new connected devices that are designed to enable both 5G deployment and the full ecosystem of next generation technologies that 5G will support,” Cinnamon Rogers, senior vice president of government affairs at the Telecommunications Industry Association, said in a statement.

The FCC will have to decide how to handle its backlog once funding is restored and it’s back on its feet, potentially prioritizing applications that were pending when the partial shutdown started.

“If the shutdown keeps going for a couple more weeks I think it’s really going to have some impact on transactions and equipment authorizations where you really do need the FCC’s blessing to get things done,” Richards said.

With assistance from Alexis Kramer

To contact the reporter on this story: Jon Reid in Washington at jreid@bloomberglaw.com

To contact the editor responsible for this story: Keith Perine at kperine@bloomberglaw.com

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