Patton Boggs TechComm Industry Update - Week of September 22, 2008

    22 September 2008

    Senator Dorgan Seeks Answers from Chairman Martin on Fallow Spectrum

    In a recent letter to Chairman Kevin Martin, Sen. Byron Dorgan, D-ND, requested detailed information on the current utilization of licensed spectrum under the FCC’s jurisdiction, citing a need to ensure the efficient use of the nation’s airwaves. Dorgan asked the FCC for:

    • A list of licensed spectrum under 3 GHz that could be used for broadband, specifying bands that have not been assigned, deployed or have been underutilized, differentiating the top 25 markets from other markets.
    • Spectrum that is subject to build-out requirements, with details about the build-out requirements.
    • An explanation of how the FCC determines whether a band is adequately utilized consistent with the statutory goal of “efficient and intensive” use of spectrum or whether a band should be put to better use.
    • An explanation of FCC procedures that ensure timely spectrum licensing and promote new entry and what steps the FCC has taken to assign spectrum to ensure new entry and broadband competition.

    Dorgan also noted that he is requesting that the Senate Commerce Committee hold a hearing on the oversight of spectrum management. The Senator sent a similar letter to NTIA last year.

     

    FCC Considers How To Make Vacant EBS Spectrum Available

    Thirteen parties filed comments this week regarding how the Commission should license remaining unassigned Educational Broadband Service (EBS) spectrum, the so-called EBS “white spaces”. EBS spectrum is licensed by the Commission at 2.5 GHz to educational institutions and it is ideal spectrum for wireless broadband applications. Most of the commenters agree that the FCC should auction EBS white space spectrum, at least at some stage in the licensing process, but there is not agreement on the procedures that should lead up to an auction.

    The Hispanic Information and Telecommunications Network (HITN), a holder of significant EBS spectrum nationwide, proposes a several-step auction process. The first stage would be open to current EBS licensees which desire to expand their current GSA into adjacent areas with identified co-channel white spaces. The second stage would be open to any EBS eligible entities to apply for discrete areas of identified remaining white spaces. If two or more applicants applied for the same identified white space area, HITN proposes that the FCC require a 180 day settlement period between. If no settlement is reached, HITN suggests the FCC hold a private auction between applications for white spaces.

    A group of rural carriers utilizing EBS spectrum propose that the FCC expand existing GSA boundaries to BTA boundaries, but without overlapping with existing GSAs. The rural carriers then propose that the FCC hold an auction open to commercial interests.

    The National EBS Association (“NEBSA”) urges the Commission to resolve certain EBS licensing issues such as several outstanding late-filed license renewal applications and waiver requests of old construction deadlines and to finalize the EBS license database before determining how to license EBS white spaces. Following that process, NEBSA proposes that for each EBS channel in each BTA in which at least one licensed station on that channel already has a GSA that covers any portion of the BTA, the white space in that BTA on that channel is incorporated into such GSA. After that, NEBSA proposes that the FCC accept applications by qualified EBS applications for new EBS stations, on a channel group by channel group, BTA by BTA basis. Competing applicants would be given opportunity to settle their conflicting applications through private sellers. Remaining mutual exclusivities, NEBSA proposes, would be resolved by auctions. But NEBSA opposes an auction open to all EBS eligibles and the use of bidding credits.

    The Catholic Television Network (CTN) opposes the use of auctions to license the EBS spectrum. CTN proposed to license the unassigned EBS spectrum without competitive bidding by first identifying eligible local educators that wish to use the spectrum, and then licensing the spectrum to those entities that service the most enrolled students in each BTA. CTN proposed that only accredited institutions, government entities and non-profit organizations providing service to local accredited institutions or government entities should be eligible to hold EBS licenses.

    Several educational associations including among others the American Association of School Administrators, National Association of State Boards of Education, and Rural Schools and Community Trust, filed joint comments in this proceeding suggesting that EBS white spaces spectrum should only be licensed to educational institutions with classrooms or campuses located in the service area.

    Rural Health Care Participants Seek Bids for Design and Construction of Broadband Networks and Broadband Service

    Sixty-nine telehealth networks that were selected to participate in the FCC’s Rural Health Care Pilot Program are now beginning to seek service providers to design, build and service broadband connections to their remote telehealth networks. The FCC has dedicated $417 million to the three-year pilot program, which will support the connection of more than 6,000 public and non-profit health care providers nationwide to broadband telehealth networks. The pilot program is the primary means of federal telemedicine support.

    A half-dozen project participants already have issued requests for proposals (RFPs) and others are expected to follow. Each project will receive a reimbursement of up to 85 percent of the cost to build and deploy the network. The Universal Service Administrative Company, which administers the pilot program on behalf of the FCC, describes the components that are eligible for funding under the pilot program. See http://www.fcc.gov/cgb/rural/rhcp.html#faqs. They are:

    • Initial network design studies;
    • Construction and network deployment;
    • Transmission facilities;
    • Recurring and non-recurring costs of advanced telecommunications and information services, such as connection to the public Internet; and
    • Costs of connecting the regional or state networks to Internet2 or National LambdaRail.

    The following project participants have issued competitive bids for their projects. Consortia must wait at least 28 days from the date the RFP is posted on the USAC web site before committing to a selected service provider. It does not appear that any contracts have been awarded. Let us know if desire further information about any of the following pilots, or if you’d like to make a bid to become involved.

    Alaska Native Tribal Health Consortium: This Alaska consortium is comprised primarily of rural health care practitioners. The consortium proposes to unify and increase the capacity of disparate healthcare networks throughout Alaska. The new network infrastructure will electronically connect providers, patients, healthcare organizations and federal and state agencies across Alaska. The proposed network also must provide managed video and access to health networks and services in the lower 48 states through the use of Internet2 or similar services. Date posted: Aug. 12, 2008. Allowable contract date: Sept. 8, 2008. Maximum support: $10,425,250.

    Health Information Exchange of Montana: In an area with Internet2 or National LambdaRail connections, the Montana consortia proposes to build a new fiber network to connect approximately nine facilities for distance consultation, electronic record keeping and exchange, disaster readiness, clinical research, and distance education services. The new network also will serve as a natural connection point to Internet2 or National Lambda Rail. The infrastructure and supporting facilities will include an unrestricted fiber-based communications network path of at least 12 fibers connecting five Montana towns; hotel facilities in each of the towns with fiber patch panels for termination of fiber optic cable runs; access points within each of the towns, among other elements. Date posted: Aug. 15, 2008. Allowable contract date: Sept. 12, 2008. Maximum support: $13,600,000.

    Heartland Unified Broadband Network (South Dakota, North Dakota, Iowa, Minnesota, Nebraska, Wyoming)Existing networks in the 5 states propose to interconnect to a fiber-optic DS3 44.7 Mbps-capacity line forming an expanded network of about 180 facilities in the 5 states with connections to Internet2. The expanded and enhanced network will address health problems of the area’s aging population, increase the use and quality of teleradiology, and increase distance education activities. The RFP contains detailed site specifications for each site, include the desired transport type and the preference for Cisco Systems type/model for the primary routers to provide OSI Layer 3 edge connectivity for the circuits. While other brands or systems may be proposed, they must meet compatibility requirements. Date posted: Aug. 18, 2008. Allowable contract date: Sept. 15, 2008. Maximum support: $4,781,931.

    Iowa Rural Health Telecommunications Program: To solve the problems of isolation, travel and limited resources that constrain health care delivery in rural Iowa and its surrounding regions, a new Iowa statewide broadband network proposes to link approximately 100 facilities in Iowa, Nebraska and South Dakota to Internet2 at speeds of 1 Gbps. Date posted: July 31, 2008. Allowable contract date: Aug. 28, 2008. Maximum support: $9,948,961.

    Palmetto State Providers Network (South Carolina): This South Carolina network currently connects four rural and underserved regions to a fiber optic backbone being developed in the state and Internet2. The proposed network will connect approximately 58 facilities at speeds ranging from 10 Mbps to 10 Gbps. Date posted: Aug. 1, 2008. Allowable contract date: Aug. 29, 2008. Maximum support: $7,944,950.

    Pennsylvania Mountains Healthcare Alliance: The Pennsylvania Alliance proposes a new broadband network consortium of approximately 12 hospitals in rural western Pennsylvania that will provide a variety of telehealth services, specialty care, and tele-pharmacy in 18 counties. The network will provide a minimum of 10 Mbps service and connect with Internet2. Date posted: Aug. 12, 2008. Allowable contract date: Sept. 9, 2008, 2008. Maximum support: $1,180,004.

    FCC To Consider 700 MHz D Block Proposal at September 25th Meeting

    At its open meeting today, the Commission proposes an aggressive agenda of 17 items, most of which involve AM and FM radio applications. Chief on the FCC’s list is a Third Further Notice of Proposed Rulemaking seeking comment on proposed rules for the Upper 700 MHz D Block and the proposed public/private partnership. The Commission also will consider its comparative standards for noncommercial educational applicants and reconsider Adelphia Communications Corporation’s request to transfer certain properties to Time Warner and Comcast.

    Exclusivity Bans for Voice and Video Service to Multi-Tenant Environments Under Reconsideration

    In March of this year, the FCC issued an order prohibiting common carriers, such as local exchange carriers, from entering into or enforcing exclusive “access” clauses in voice communications contracts to serve residential multi-tenant environments. These exclusive access clauses are viewed as an impediment to competition because they seek to prevent other carriers from accessing and providing service to the same residential environments. The decision expanded on an old FCC order that prohibited the same kind of exclusive access clauses in common carrier voice contracts for commercial multi-tenant environments. The FCC now seeks comment on two petitions for reconsideration of the voice exclusivity order. Both petitions argue that that the prohibition against exclusive voice contracts should apply equally to common carriers and all providers of voice service to multi-tenant environments, regardless of technology. The comment dates have not yet been set. We will keep you informed.

    In July, the FCC ruled that cable operators will no longer be able to insist upon exclusivity as a condition of providing video service to certain residential environments. That decision was the latest in a line of decisions prohibiting exclusive contracts for certain multi-tenant communications services (telephone, cable television and/or Internet access). Some important features of the video prohibition are as follows:

    • The video exclusivity ban applies to cable operators and local exchange carriers who offer video service, but it does not apply to private cable operators (PCOs) or direct broadcast satellite (DBS) companies such as DirecTV and EchoStar. The FCC found that cable operators are primarily responsible for newly executed exclusivity clauses for video services and that such exclusivity impedes competition and consumer choice for multi-channel video programming.
    • The video exclusivity ban applies to a variety of residential environments including apartment buildings, condominiums, cooperatives, gated communities, and mobile home parks. The ban does not apply to time shares, academic campuses and dorms, military bases, hotels, prisons, jails, hospitals, or assisted living facilities. In these environments, cable operators and local exchange carriers who offer video service can, apparently, continue to insist on exclusivity as a condition of providing video service.
    • Exclusivity clauses for video service are prohibited in new contracts, and enforcement of such clauses in existing contracts also is prohibited.
    • The exclusivity ban applies to cable services, and any other services (data and voice) that are offered in combination with the cable service. As a consequence cable operators cannot insist upon exclusivity for “triple play” contracts but they can, seemingly, enforce exclusivity provisions in contracts for stand-alone voice or data service.

    The FCC continues to examine how far they should impose exclusivity prohibitions. In addition to the petitions for reconsideration of the voice exclusivity ban, the Commission is presently considering: (1) whether to extend the exclusivity ban related to video services to all multi-channel video programming distributors including DBS and PCOs; and (2) whether to prohibit exclusive marketing and bulk billing arrangements, which could provide alternate means for requiring buildings to commit to one service provider. Exclusive marketing and bulk billing arrangements are not presently prohibited by the FCC, but the FCC found that such provisions may prove anticompetitive depending upon how they are implemented. The formal pleading cycle in which these issues are being examined has concluded, but the dockets remain open for any parties interested in providing the FCC with input.

    If you need to reexamine or renegotiate any communications service contracts for multi-tenant environments, or if wish to participate in the open FCC proceedings related to exclusivity bans, don’t hesitate to contact us.

     

    House Bill Would Require USF Recipients to Offer Roaming

    House Oversight and Government Reform Committee Chairman Henry Waxman, D-CA, introduced legislation that would require recipients of Universal Service Fund (USF) high-cost support to offer roaming services to other carriers at reasonable rates.

    Legislating roaming services is not a new idea. Sen. Ted Stevens, R-AK, has explored such legislation in recent years. But Waxman’s bill represents a novel approach by attaching the requirements to USF funds.

    The measure would require carriers that receive high-cost support to offer roaming services “without territorial limitation or restriction” to any technically compatible provider upon request, TR Daily reported.

    Eligible telecommunications carriers would be allowed to opt out only if they and their affiliates stopped receiving high-cost support. The FCC would be directed to adjudicate disputes regarding terms or technical compatibility.

    H.R. 7000, the Universal Roaming Act of 2008, is not yet available.

     

    Senate Explores Importance of Broadband

    Witnesses at a Senate Commerce Committee hearing last week told members how broadband services have made it easier for Americans in remote areas to receive medical advice in minutes, stay connected to troops in Iraq, and keep the elderly engaged at home through distance learning.

    Even as witnesses extolled broadband’s virtues, Committee Chairman Daniel Inouye, D-HI, noted the decline in the nation’s global standing for broadband penetration and overall speed. Inouye introduced legislation in 2007, the Broadband Data Improvement Act, which would direct the FCC to revise its definition of broadband to take into account greater speeds and gather more accurate data on broadband deployment. The Commerce Committee passed the legislation, S. 1492, last fall. It may advance to the Senate floor before it adjourns for the November election. A similar bill, H.R. 3919, passed the House late last year.

    Senator Ted Stevens, R-AK, noted the importance of broadband service during his opening statement, particularly to the elderly and others in need of access to online health care information. Meanwhile, Sen. Amy Klobuchar, D-MN, said that broadband is essential to telecommuting and retaining jobs.

    Hearing witness Rey Ramsey, chief executive officer of One Economy Corp., told the committee how One Economy has formed a public interest online channel to reach underserved communities and to make the Internet more relevant to low-income communities.

    Jonathan Linkous, executive director of American Telemed Association, testified about rural Americans who rely on the Internet for healthcare. Linkous’ organization represents physicians and telecommunications companies. He described how broadband services would help increase patient monitoring from home and with cell phones.

    Margaret Conroy, the State Librarian for Missouri, appeared on behalf of the American Library Association and noted the key role libraries play as providers of the only free Internet access in many communities. Farmers in Missouri, Conroy said, are using the library’s broadband services to order seeds and other products, while families stay connected to soldiers fighting in Iraq.

    Gene Peltola, president and chief executive officer of Yukon-Kuskokwim Health Corporation, represents a consortium of 50 Native American groups that has developed a broadband network to address its members’ health care needs. The consortium uses its network to transfer data among clinics and other facilities. Peltola also described how X-rays from Alaskan patients are being read by doctors in Ohio, thanks to broadband.

    Mobile Telephony Tops the Competition

    The FCC’s local telephone competition data reveals that mobile telephony continues to grow at a fast pace. As of December 31, 2007, mobile telephony providers reported having 249.2 million mobile telephony service subscriptions, an increase of more than 9 percent from the previous year. Seven percent of these subscribers were billed by mobile telephony service resellers. Comparatively, incumbents LECs reported having 129.7 million switched access lines and competitive LECs reported having 28.7 million switched access lines.

    FCC Seeks Comment on E911 Accuracy Requirements, Again

    Earlier this year, the United States Court of Appeals for the District of Columbia Circuit (Court) stayed the FCC’s Location Accuracy Order. That Order required wireless licensees subject to the Commission’s wireless E911 Phase II location accuracy and reliability standards to satisfy these standards at a geographical level defined by the coverage area of a Public Safety Answering Point (PSAP).

    Subsequently, APCO and the National Emergency Number Association (NENA) filed an ex parte letter with the FCC stating that they are now willing to comply with E911 requirements at the county level rather than the PSAP level. As a result, the Commission requested that the Court vacate and remand its stay based on the proposals contained in the APCO and NENA ex parte letter.

    After the Court granted the FCC’s request, NENA, APCO, Verizon Wireless, Sprint Nextel Corporation, and AT&T submitted written ex parte letters with the Commission with proposed new wireless E911 rules. The FCC believes that these proposals reflect agreement among those parties for new E911 accuracy requirements for both handset-based and network-based technologies, in order to achieve E911 accuracy compliance at the county-level.

    The FCC, therefore, seeks comment on these proposed changes to the E911 accuracy requirements, including benchmarks, limitations, and exclusions for handset-based and network-based location technologies. Comments are due Oct. 6th and reply comments are due Oct. 14th.

     

    Senators’ Telehealth Bill Aimed at VA, Rural Facilities

    Small rural health care providers and Veterans Affairs facilities would be among new participants in the FCC’s Universal Service Fund, according to a telehealth measure introduced by Sen. Ted Stevens, R-AK.

    Stevens introduced the Telehealth for America Act of 2008 last week to coincide with the Committee’s hearing on broadband services. Chairman Daniel Inouye, D-HI, Sen. Gordon Smith, R-OR, and Sen. Kay Bailey Hutchison, R-TX, co-sponsored the bill, S. 3491. The legislation would enable smaller health care providers to share information, such as medical records, with others in the healthcare community and provide training opportunities for healthcare personnel through video-conferencing.

    The legislation calls for discounted support of up to 60 percent on telecommunications, information services and network management services for rural healthcare providers, including private physician’s offices or clinics, nursing homes or other long-term care facilities, pharmacies, emergency medical service facilities, behavioral health facilities, and facilities deemed eligible by the Department of Veterans Affairs to provide healthcare services to veterans. By comparison, the USF’s Rural Health Care support program targets larger health care facilities for discounted support.

    The bill also would require the FCC to report to Congress on its system of fiscal accountability relating to all four USF support programs. The measure has been referred to the Senate Committee on Commerce, Science, and Transportation.

    Wireless Carriers Continue to Deploy New Devices and Services

    With continued wireless innovation and features, it is estimated that one in five United States households will be wireless-only by the end of this year. Increased service areas and unlimited calling plans are allowing households to eliminate landline phones in favor of the flexibility and convenience of mobile devices. Wireless only households tend to be smaller, have lower incomes, and frequently move or change jobs.

    Sony just announced a new HD Radio receiver, CD clock radio, boombox, and docking speakers that are compatible with iPods and iPhones. The new devices will also charge iPods and iPhones.

    In a new advertising campaign, MetroPCS is encouraging Verizon Wireless and Sprint customers to “bring your phone” to MetroPCS. MetroPCS does not have customer contracts and a customer’s existing CDMA-compatible devices can be retuned to MetroPCS’ network for a $30 activation fee, which is off-set for new customers by one month of free unlimited in-network calling and long distance service. MetroPCS’ MetroFlash service is only available in limited markets due to spectrum compatibility issues, which will be resolved when it migrates its customers to dual band AWS-PCS devices.

    T-Mobile and Google are set to launch the HTC Dream, the first phone to use the Google-developed Android operating system. T-Mobile continues to launch 3G service and expects to have a footprint of 27 markets by year’s end. The HTC Dream will be available about mid-October at which time T-Mobile expects to have 3G service in place in 21 markets. Google also announced a new Google Maps application for mobile devices that includes street level photo images, a beta version of an application that provides walking directions, and a star rating and review application for restaurants and other businesses.

    Verizon Wireless has quietly implemented its open developer program, which allows third-party developers to run new applications and devices on Verizon’s data network. So far two new devices have been approved: a parolee home monitoring bracelet and a residential meter reading device.

    In an effort to increase the adoption of music on mobile devices, Nokia recently released more details about its “Come with Music” phones, which includes one year of unlimited song downloads with the purchase of a phone for a single, undisclosed price. Consumers have been unwilling to rent songs by the month and have not widely adopted music on phones due to inadequate interfaces, high song download costs, and complicated loading systems. Nokia’s service will initially be available only in the United Kingdom but other similar services are starting to appear in other countries.

     

    Department of Commerce Spectrum Management Advisory Committee Update

    At a recent meeting of the Spectrum Management Advisory Committee, six reports were presented to the Committee and all were adopted. The report recommendations include finding ways to increase transparency and streamline the spectrum sharing process, developing a new spectrum management system, cataloging federal systems in use to increase spectrum sharing, aligning the NTIA’s application and enforcement procedures with those of the FCC, and preparing a final, combined Committee report incorporating all of the Committee’s recommendations and efforts to implement with President’s Spectrum Policy Initiative. More details about the Committee and its recommendations are available here.

    NTIA’s Acting Assistant Secretary Meredith Attwell Baker noted that the two year term for Committee members would soon expire, and announced a Sept. 26, 2008, deadline for Committee member applications. The Committee’s next meeting is tentatively scheduled for Dec. 4, 2008.

     

    House Panel Considers Wireless Taxes

    State and local government representatives squared off on a bill that would restrict discriminatory taxes on mobile phones and wireless devices. The representatives testified before the House Judiciary Commercial and Administrative Law Subcommittee regarding H.R. 5793 introduced by Rep. Zoe Lofgren, D-CA.

    Rep. Chris Cannon, R-UT, the subcommittee’s ranking member, said the wireless tax rate had risen so high that it was akin in some states to so-called “sin taxes” on alcohol and tobacco.

    Scott Mackey, an economist who has worked with wireless providers, said some local taxes on wireless communications are 60 percent higher than local sales taxes. He also noted that there is historical precedent to limit local taxes, citing federal prohibitions on local governments’ excessively taxing railroad property in the 1970s.

    Gail Mahoney, a county commissioner in Jackson County, Michigan and witness for the National Association of Counties, offered a different view and called wireless taxes a critical income stream for local governments. Absent such taxes, localities would have difficulty providing services in trying economic times.

    Lofgren’s legislation is not expected to advance this year. “This is really setting the table for the 111th Congress,” she said. A similar measure introduced by presidential candidate Sen. John McCain, R-AZ, S. 166, was introduced in the Senate, but also is not expected to advance before the year’s end.

     

    Congress Poised to Give NTIA More Funds for DTV Coupons

    NTIA is asking Congress to free up more money to dispense coupons for digital set top converters before the nation’s television stations convert from analog to digital transmissions.

    The administration's converter-box-coupon program could run out of funds to process those coupons by the end of January without an infusion from Congress. That would be 17 days short of the DTV-transition date and shy of the March 31st deadline to apply for coupons. That shortfall could be a problem as there is an anticipated spike in coupon requests from viewers as the Feb. 17, 2009, digital transition deadline nears.

    Congress is poised to act on NTIA’s request for more money. A draft of the Continuing Resolution that is under consideration by the House and Senate would permit NTIA to spend up to $180 million for administration of the DTV coupons. The House Telecommunications and Internet Subcommittee held a Sept. 16th hearing on NTIA’s and the FCC’s progress toward preparing consumers and broadcasters for the digital transition.

    Rep. Anna Eshoo, D-CA, a subcommittee member, told C-Span that because viewers won’t focus on the digital transition until the last minute, the government should permit viewers to reapply for converter box coupons they’ve received, but have expired. The coupons are good for 90 days. Fellow Democrat and subcommittee member Hilda Solis, D-CA , proposed legislation to establish a process for border broadcasters to apply to continue simulcasting in analog and digital after the national deadline in order to educate border communities.

    FCC Chairman Kevin Martin, in a written statement to the subcommittee, said that more than 90 percent of full power television stations are operational with digital service or on schedule to transition by the national deadline. Martin reported on the recent digital transition test in the Wilmington, N.C., market. He said the Wilmington pilot yielded an unexpected lesson in emergency preparedness and the need for battery operated converter boxes designed to work in power outages, such as hurricanes.

    Martin also noted the Commission’s enforcement of DTV consumer education requirements. The FCC issued a Notice of Apparent Liability of $51,000 against one company for failing to notify customers of the transition as required under our rules. In addition, Martin said a Commission-level order is being circulated that would propose $12.3 million of fines collectively against eight companies for notification failures.

     

    NAB Radio Show Recap

    During the recent NAB Radio Show, attendees were not shy about voicing their opinions regarding localism, financing, and other topics of the day. On the issue of localism and increased reporting requirements, FCC Commissioner McDowell commented that reviving long retired reporting requirements for broadcasters was nonsense, would be overly burdensome for smaller broadcasters, and did not make sense in this highly competitive media environment. He said the time has passed for ascertainment and program reporting and that consumers have many more media outlets available to them and are no longer solely dependent on radio and television for information. Chairman Martin's comments during the Chairman’s Breakfast were more subtle stating he believed that broadcasters intend to serve the public and encouraged broadcasters to find solutions to the issues raised by Congress, including empty stations overnight and voicetracking. FCC Commissioner Adelstein doubts there will be any FCC action on localism this year and notes the NAB “has raised a ruckus” about the new localism rules. Commissioner Adelstein also stated that he supports HD radio and increased media ownership diversity.

    NAB President and CEO David Rehr said in his keynote address that there is a perception that radio is obsolete and not changing fast but that is only because radio’s frequent success stories are not being told often enough. He noted that the number of radio listeners increased by 3 million to 235 million per year and in the last five years there have been a number of innovations including HD radio, Internet streaming and FM radio receivers in cell phones. Mr. Rehr also stated that radio is using digital technology to deliver programming with excellent sound quality and is working with auto manufacturers and dealers to get the word out that a car is not fully equipped unless it has an HD radio. NAB does not support the FCC’s proposed localism rules and notes they are unnecessary and outdated. It also objects to radio royalties that amount to a tax on local radio stations.

    Broadcasters also took every opportunity to question the FCC's decision to approve the XM-Sirius merger. Broadcasters commented that the FCC allowed a monopoly and should have required Sirius XM to include HD Radio in all satellite receivers. Another broadcaster remarked that unless AM is “in the box” in the factory, it will cease to exist. Broadcasters agree that online advertising is another revenue stream but differ on its usefulness based on the size of the market.

    On the financial side, bankers admit Wall Street is struggling and this impacts radio’s ability to arrange financing for radio deals. The bankers were quick to note they are not lending money to anyone else either. Bankers expect a no-growth year for radio but note that radio seems to be adjusting better to the economy than in the past and is making money in ancillary and non-traditional business arrangements. Radio values continue to be fluid and the bankers do not expect any big deals in the upcoming months since debt and equity financing is difficult to obtain and most radio companies are overleveraged.

    In spite of tight funding, radio is still spending money on improving websites, streaming, mobile phone ventures and HD radio. Industry leaders are also in discussions with wireless companies to install radio receiver chips in every mobile phone over the next few years. This effort dovetails with Congress’ push to develop a new emergency alert system for mobile phones, the Commercial Mobile Alert System (CMAS).

     

    INDUSTRY CALENDAR

    FCC Rulemakings / Deadlines

    September 24, 2008

    • Comment Deadline: Petition requesting an inquiry into Arbitron’s use of Portable People Meters (replies due October 6)
    • Reply Comment Deadline: Petition for reconsideration of the FCC’s June 2008 Fifth Report to Congress regarding the availability of broadband services in the United States

    September 25, 2008

    • FCC Annual Regulatory Fees due by 11:59 p.m.
    • Reply Comment Deadline: Two Petitions for Reconsideration of FCC Rules Assigning Traditional Ten-Digital Telephone Numbers to IP-Based TRS Users
    • Reply Comment Deadline: Intrado Requests FCC Preemption of Virginia Regulator in Interconnection Dispute with Verizon over 911 Services

    September 29, 2008

    • Comment Deadline: CTIA request for Clarification, Preemption of State and Local Review of Tower Siting Applications (replies due October 14)
    • Reply Comment Deadline: Proposed Rule Revisions for Speech-to-Speech Telecommunications Relay Service
    • Reply Comment Deadline: Additional Steps to Establish the Commercial Mobile Alert System

    October 3, 2008

    • Reply Comment Deadline: Proposed Additions to Services Eligible for Support in the E-Rate Program in 2009
    • Comment Deadline: FCC to Prohibit Wireless Microphones, other Low Power Auxiliary Station Operations in 700 MHz Band after the Digital TV Transition (replies due October 20)

    October 6, 2008

    • Reply Comment Deadline: Petition requesting inquiry into Arbitron’s use of Portable People Meters
    • Comment Deadline: Biennial Review of Telecommunications Regulations (Replies due October 27)
    • Comment Deadline: Petition to Coordinate Unlicensed PCS Band with Proposed Service Rules for Advanced Wireless Services
    • Comment Deadline: E911 Proposed Location Accuracy Rules

    October 9, 2008

    • Comment Deadline: CenturyTel Seeks to Convert from Rate-of-Return to Price Cap Regulation

    October 14, 2008

    • Reply Comment Deadline: CTIA Seeks Clarification, Preemption of State and Local Review of Tower Siting Applications
    • Reply Comment Deadline: E911 Proposed Location Accuracy Rules

    October 20, 2008

    • Reply Comment Deadline: FCC to Prohibit Wireless Microphones, other Low Power Auxiliary Station Operations in 700 MHz Band after the Digital TV Transition

    October 22, 2008

    • Reply Comment Deadline: FCC Seeks Comment on Auction Rules for Unassigned BRS spectrum, a Reinstated Gulf of Mexico Service Area, and other Related EBS and BRS Rules
    • Reply Comment Deadline: Inquiry and Proposed Revisions to 'Sponsorship Identification Rules' to Address Embedded Advertising

    October 24, 2008

    • Reply Comment Deadline: CenturyTel Seeks to Convert from Rate-of-Return to Price Cap Regulation

    October 27, 2008

    • Reply Comment Deadline: Biennial Review of Telecommunications Regulations

    November 10, 2008

    • Comment Deadline Inquiry Regarding “Hybrid” Satellite-Terrestrial Radio Reception Devices (replies due December 9)

     

    Meetings and Events

     

    September 25, 2008

    • FCC Open Meeting, 10 a.m.
    • “Innovation Economics for the Next Administration,” Silicon Flatirons Center Program at The Newseum, Washington, DC, 8:30 a.m.

    October 3-4, 2008

    • “Digital Policy in the Information Age,” National Digital Policy Institute Policy Conference, Ball State University (Scheduled Speaker: Jennifer Richter, Chair of the Patton Boggs Technology and Communications Group)

    October 12-15, 2008

    • “The 2008 Wireless Infrastructure Show,” Hosted by PCIA, Westin Diplomat, Hollywood, FL (Sponsor: Patton Boggs LLP)

    October 7, 2008

    • Oral Arguments in Core Communications v. FCC on Forbearance Petition on Intercarrier Compensation. The court will review whether the FCC properly denied Core Communications’ petition for regulatory forbearance to replace the current intercarrier compensation regime of access charges with a reciprocal compensation regime.

    October 10, 2008

    • Oral Arguments in NCTA v. FCC on Inside Wiring. The court will review the FCC’s Multiple Dwelling Unit (MDU) order clarifying its inside wiring rules.

    October 17, 2008

    • “The Structure of the Video Programming Industry: Revolution, Regulation, or the Return of Yesterday’s Battles,” Silicon Flatirons Center Program at The Cable Center, Denver, CO

    November 4-6, 2008

    • “Broadband Wireless @ Work For You, Changing the Way We Live,” WCA’s 14th Annual International Symposium and Business Expo, Fairmont, San Jose, CA (Scheduled Speaker: Jennifer Richter, Chair of the Patton Boggs Technology and Communications Group)

    November 14, 2008

    • “The Colorado Broadband Summit,” Silicon Flatirons Center Program at Level 3 Communications, Broomfield, CO

    Congressional Hearings

    September 25, 2008

    • Hearing: Senate Committee on Commerce, Science, and Transportation on Broadband Providers and Consumer Privacy. 253 Russell Senate Office Building, 10:00 a.m.
    • Hearing: House Domestic Policy Subcommittee of the House Government Reform Committee on health effects of cell phones, 2154 Rayburn House Office Building, 2 p.m.

    September 26, 2008

    • Congress expected to adjourn.

    Public Safety

     

    September 25, 2008

    • Regional Public Safety Planning Committee Meeting for Region 38 in Pierre, South Dakota regarding 700 MHz and 800 MHz

    October 1, 2008

    • Regional Public Safety Planning Committee Meeting for Region 14 in Indianapolis, Indiana regarding 700 MHz and 800 MHz

    October 12, 2008

    • Regional Public Safety Planning Committee Meeting for Region 1 in Orange Beach, Alabama regarding 700 MHz
      If you have any questions about the foregoing or if you require additional information, please contact:  Jennifer Cetta - 202.457.6546, jcetta@pattonboggs.com; Carly Didden - 202.457.6323, cdidden@pattonboggs.com; or Rebecca Murphy - 202.457.5312, rlmurphy@pattonboggs.com.

      This information is not intended to constitute, and is not a substitute for, legal or other advice. You should consult appropriate counsel or other advisers, taking into account your relevant circumstances and issues. While not intended, this update may in part be construed as an advertisement under developing laws and rules.