182 J;r/muz :§. ttdk Wef?&tJMl/t giJtna <ef?alf,dwzia March 141 2018 The Honorable Ajit Pai1 Chairman Federal Communications Commission 44512th Street1 N.W. Washington1 D.C. 20554 Dear Chairman Pai1 l'm writing to express my concern that the FCC bent its rules to allow Straight Path and FiberTower to sell billions of dollars of public assets for private gain. l urge you to reverse the Wireless Telecommunications Bureau's actions1 allow the full Commission to vote on these orders1 revoke Straight Path and FiberTower's licenses1 auction these licenses for the benefit df the public1 and conduct a timely assignment auction of the other available millimeter bands. After years of proceedings1 the FCC found that Straight Path and FiberTower failed taxpayers by not deploying their spectrum as required by their FCC licenses. The FCC's policies unambiguously required Straight Path and FiberTower to forfeit their unbuilt spectrum 1 licenses. But rather than auction the reclaimed spectrum and promote timely deployment1 the FCC1s Wireless Telecommunications Bureau reached 11resolutions11 with Straight Path and FiberTower that allowed them to profit handsomely from their wrongdoing. Following the 11 resolution/' Straight Path sold its assets to Verizon for nearly $p billion1 and FiberTower is 2 estimated to have sold its assets to AT& T for roughly $2 billion. . The Bureau-level decisions awarded investors in Straight Path and FiberTower multi-biHion dollar windfalls at the expense of taxpayers. The Bureau's decisions also further concentrated critical input resources in the hands of the two dominant wireless incumbents. The purchasers of the public assets that Straight Path and FiberTower once held1 Verizon and AT&T1 already control a disproportionate amount of other critical spectrum available for immediate development. Up until recently the industry had an ' "If a [icensee fai[s to commence service or operations by the expiration of its construction period or to meet its coverage or 11 substantia[ service obligations by the expiration of its coverage period1 its authorization terminates automaticaHy. 47 CFR § r.946f c) 1 The terms of FiberTower's transaction with AT&T are not publidy available1 but the amount of spectrum equates to rough[y $2 biHion if valued at the same rate as in Straight Path's transaction. A[though Straight Path wil[ pay approx imately $629 mi[lion to the U.S. government as a result of its Consent Decree1 this fine stiH [eaves Straight Path with a net profit of $2.5 billion. ~·· imbalance in favor of these companies in [ow-band spectrum that lasted for decades. The FCC now risks going down the same wrong path with high-band spectrum should the Commission continue down this course. Allowing Straight Path and FiberTower to fff[ip11 public assets for private gain does nothing for taxpayers1 but does much to further entrench the dominant incumbents1 longstanding spectrum advantage over their rivals. The procedural irregularities associated with the decisions also trouble me. ln the case of 1 1 Straight Path s sale of its licenses to Verizon1 the FCC s Wireless Telecommunications Bureau approved the sale without the input of the full FCC leadership and just weeks after the Commission lifted a ff spectrum screen11 intended to guard against overconcentration of spectrum. ln the case of FiberTower1s sale of its licenses to AT&T1 the Commission majority 1 not only ignored Commissioner Mignon Clyburn s request for a full Commission vote1 but also failed to adhere to precedent and your own transparency po[icy.3 l ask you to reconsider Commissioner Clyburn's request and reconsider both the Straight Path and FiberTower decisions. Finally1 l recognize that you have announced an auction of the 28 GHz band later in 2018. This would have been a step in the right direction1 however1 the Bureau's approval of the Straight Path transaction has since handed over a controlling interest in the band to Verizon. lf anything1 the Straight Path decision will distort the 28 GHz auction since now only Verizon has the ability to aggregate enough capacity on the band to justify a large investment in additional 28 GHz spectrum. As a resu[t1 the Commission's spectrum transfer to Verizon has cost taxpayers twice over1 (1) spectrum that the Commission's rules suggest should have been auctioned will not be1 and (2) the remaining portion of the band that will be auctioned will be sold at a substantial discount and almost certainly to Verizon. Finally1 the FCC still has not provided a timeframe for auction of the rest of the available millimeter-wave spectrum. l urge you to reverse the Bureau's decisions1 reclaim the previously cancelled Straight Path and FiberTower licenses as the FCC's rules require1 and conduct a timely assignment of this spectrum and the other available millimeter bands. Spectrum assignments should be neutral1 transparent and efficient1 and the current Bureau-level decisions are none of these things. l look forward to your timely response. Sincere[y1 a G. Eshoo Member of Congress cc: Members1 Federal Communications Commission 3 You have previously testified before Congress that "it has long been customary at the FCC for Bureaus planning to issue significant orders on delegated authority to provide those items to Commissioners 48 hours prior to their scheduled release. Then1 if any one Commissioner asked for the Order to be brought up to the Commission level for a vote1 that request would be honored." See Oversight ofthe FCC: Before the S. Comm. On Commerce/ Sci./ & Transp./ u4'h Cong. (1015) (March 181 2015) (Statement of FCC Commissioner Ajit Pai). In this case, you denied this request from a feHow Commissioner.