Patton Boggs TechComm Industry Update - Week of September 29, 2008

    29 September 2008

    Meltdown of Financial Markets Hits Tech Sector

    The nation’s ailing financial sector and congressional attempts to salvage it are playing out on Wall Street, and the technology sector is no exception. Some of the world’s leading technology stocks have declined sharply in recent days as investors’ fears mount that the crisis on Wall Street will slow U.S. consumer demand for communications and technology services and devices. Big names such as Research in Motion, Apple Inc., Google Inc. and Nokia have experienced double-digit price declines in the wake of Congress’ failure earlier this week to pass a financial bailout plan. By comparison, some technology stocks such as International Business Machines Corp., which are aggressively diversified in international markets, fell only slightly. The long-term forecast remains unclear as the House is poised to vote Thursday on a revised bailout plan that the Senate approved.


    Broadband Mapping Bill Clears House

    A bill that would more accurately track the availability of broadband Internet access across the country cleared Congress with the Senate approving the final version on Sept. 30th by voice vote. The bill, the Broadband Data Improvement Act, S. 1492, heads to the President for his signature.

    Key provisions of the bill direct the FCC to conduct inquiries into the deployment of advanced telecommunications services annually and direct the Comptroller General to conduct a study to evaluate more accurate information about cost and capability of broadband connections. The bill also would establish a $300 million grant program through fiscal 2010 for state broadband data and development.

    Many of the bill’s supporters hope that the legislation is a step toward closing the so-called “digital divide” for citizens without broadband Internet access, often in rural and low-income areas of the country. The bill contains other provisions, including one directing the Small Business Administration, subject to appropriations, to conduct another study evaluating the impact of broadband speed and price on small businesses. The measure also includes language from another bill that would protect children from online predators. That provision would authorize $10 million for public education on Internet safety.


    Sprint Launches its Xohm WiMAX Service in Baltimore

    Sprint launched mobile wireless WiMAX broadband service under the name Xohm this week in Baltimore, meeting its own internal timeline for initiating commercial service. The Baltimore deployment marks the first commercial launch of a mobile WiMAX broadband service by a major wireless operator in a major market. DigitalBridge Communications is operating fixed WiMAX wireless broadband services in 13 markets in Idaho, Montana, Indiana, Virginia and South Dakota and, earlier this year, launched a pilot of mobile WiMAX service in Jackson, Wyoming. Towerstream also operates fixed wireless WiMAX broadband service in Boston, New York Chicago, Miami, Seattle, Los Angeles, San Francisco and Dallas. Later this year, Xohm will launch in Chicago and Washington, D.C. A nationwide rollout in more than 30 markets is expected next year as part of the new Clearwire.

    With the Sprint launch in Baltimore, new details about Xohm were revealed including pricing, service packages, and network management procedures. With an eye toward shaking up the market, Xohm is priced below the typical cost of home DSL or cable modem service, which are not mobile. No annual service contract is required and a Xohm compatible PC card is available for $60; a desktop modem is available for $80. Additional devices will be available later this year. Residential Xohm service begins at $25 per month and mobile is available starting at $30 per month. Comparable mobile services are offered by other carriers for $60-$80 per month.

    Xohm’s terms and conditions not surprisingly state that it reserves the right to limit a user’s access to certain content that is bandwidth-intensive, such as file sharing. Sprint explains that it has no intent of policing or restricting access to certain content or applications but it will do so if a customer’s disproportionate use of Xohm bandwidth limits other users’ access.

    Congress Clears Way for Greater Wireless Access on D.C. Metro

    Congress took a key step on Oct. 1st toward letting all D.C. Metro riders talk on their mobile phones.

    The measure, contained in the Federal Railroad Safety Improvement Act, H.R. 2095, would grant federal funds for capital improvements and preventative maintenance to the Washington Metropolitan Area Transit Authority conditioned on the Authority’s providing access to mobile service to customers of any licensed wireless provider.

    The legislation sets a timetable for the rollout of wireless service. Within one year of the Act’s enactment, customers at 20 metro station platforms with the highest passenger traffic would have access to wireless service from any licenses provider. Wireless access would reach the entire rail system within four years.

    In 1993, the Authority entered into an agreement with Bell Atlantic Mobile Systems, later Verizon Wireless, to build and own the system now in use. In exchange, Verizon has been paying the transit agency annual usage fees. Verizon also invested $7.6 million in building a public safety radio communications system for Metro. The wireless system is compatible only with Verizon phones and Sprint phones that roam on the network. T-Mobile and AT&T customers do not currently have wireless access, not even to call 911.

    Broadband Execs Urge Senate Committee Not to Mandate Privacy Standards for Online Advertising

    Executives from AT&T, Time Warner Cable and Verizon Communications urged the Senate Commerce Committee to forgo privacy mandates for online advertising and allow the industry to police itself. The executives testified at a Sept. 25th hearing, the second hearing the Committee has held to explore the privacy implications of online advertising.

    Acting Chairman Byron Dorgan, D-ND, cited a Consumer Reports poll released on Sept. 25th that 72 percent of consumers are concerned that their online behavior is being tracked and 93 percent think Internet companies should always ask permission before using personal information. Dorgan noted that because little competition exists in the broadband market, it is necessary to ensure that providers protect consumers’ privacy. Nevertheless, Dorgan said lawmakers should wait to mandate privacy standards and allow the industry time to address the issue. Sen. David Vitter, R-LA, said he agreed that the committee needed to proceed cautiously, address bad actors, and be mindful of legislating as technology advances. However, Sen. Amy Klobuchar, D-MN, said that privacy legislation would root out practices of bad actors.

    Public Knowledge’s Gigi Sohn told the committee that, although there are many beneficial reasons to monitor customers’ online activities to customize advertising, she was concerned that information gathered through a practice known as deep packet inspection (“DPI”) could be sold to third parties. Sohn likened the online invasion of privacy through DPI to the postal service reading a recipient’s mail. “For the most part, customers are not aware their ISPs are engaging in this behavior.” Sohn cited Comcast and NebuAd for using DPI, and urged the committee to pass privacy legislation. Sohn said the lack of broadband competition, notably in rural areas, is a key reason why legislation governing DPI is needed. At the very least, Sohn called on the committee to amend the Communications Act of 1934 to create a level playing field for cable and ISPs. Cable services are covered by stricter privacy regulations, she said.

    Dorothy Attwood, AT&T’s chief privacy officer, stated that her company does not participate in online behavioral advertising and will only engage in it “after ensuring clear and consistent methods to ensure control.” Attwood cited four principles for online advertising: transparency, customer control, privacy protection and customer value. She also said the framework must apply across technologies, not just to ISPs.

    Tom Tauke, executive vice president of Verizon Communications, Inc., told the committee that any privacy policy should be centered on meaningful consent. He called “opt in” and “opt out” ineffective in an online environment because customers often click “OK” at the bottom of a page to enter a web site without appreciating what they are signing. As a result, Verizon defines meaningful consent as transparency, affirmative choice and consumer control. Tauke said the advertising industry appears to be interested in establishing a system of best practices.


    House Committee May Issue Report on FCC Probe

    The House Energy and Commerce Committee soon may announce its findings regarding a year-long investigation into allegations that FCC Chairman Kevin Martin used hard line tactics against colleagues to further his deregulation agenda. Shortly before Congress broke for its August recess, the FCC delivered roughly 40 boxes of documents to the House Subcommittee on Oversight and Investigations. The documents were delivered nearly five months after they were requested.

    “Given the timing, we will not hold a hearing this year,” a committee spokesman recently told Congress Daily. “We are currently considering various options for making the findings of our investigation public, including a report.” The bipartisan investigation, announced in December 2007, was sparked by Democratic outrage over Martin's successful push to further loosen the nation's media ownership limits despite bipartisan requests to delay the vote until the agency fully considered issues relating to minority ownership and localism.

    Since the inquiry began, Martin has taken steps to make the agency’s regulatory process more transparent, including listing all items on circulation and alerting the public to items up for scheduled votes. It is unclear what impact the findings of the investigation will have on Martin, a Republican who is expected to be replaced by the next president. Martin has been criticized for, among other things, FCC meeting delays and giving his colleagues on the Commission inadequate time to review new plans and proposed orders. Martin has stated that the delays are the result of his interest in reaching a consensus with Republican and Democratic commissioners.


    USDA Announces $342 Million in Broadband and Telecommunications Loans

    The Agriculture Department recently announced the award of more than $342 million in broadband and telecommunications loans to 18 companies serving 22 states. The funds will help bring new and improved communications services to rural residents and businesses. “Providing state-of-the-art communications services in rural areas promotes business development, increases job opportunities and improves access to educational services,” Agriculture Secretary Ed Schafer said.

    The loans are part of the Rural Development Broadband Loan and Loan Guarantee Program, which provides low-interest loans to deploy broadband and telecommunications services to rural communities of 20,000 residents or less. Priority is given to areas without broadband. For example, International Broadband Electric Communications, Inc., in Hokes Bluff, Ala., was selected to receive a $49.2 million loan to construct a broadband over power line (BPL) network. The company will partner with 13 electric utilities to provide BPL service in seven states to connect 62,143 subscribers. The states are Alabama, Indiana, Maryland, Pennsylvania, Texas, Virginia and Wisconsin. 


    Leap Wireless and MetroPCS Finally Sign an Agreement to Share Resources

    Despite prior failed attempts by Leap and MetroPCS to merge or form an alliance, it appears the two flat-rate, unlimited wireless carriers, have entered into a series of agreements including a roaming agreement, a spectrum swap, and a plan to resolve their pending litigation. The new 10-year roaming agreement includes existing and future markets and allows the customers of each company to access wireless services at reduced rates. Both carriers have struggled to enter into nationwide roaming agreements with other carriers on terms they consider fair.

    Under the agreement, Leap will acquire 10 MHz of spectrum in San Diego, Fresno, Seattle, and parts of Washington and Oregon. MetroPCS will gain 10 MHz of spectrum in Dallas/Ft Worth and other parts of Texas, in addition to spectrum in Shreveport-Bossier City, Louisiana, and Lakeland-Winter Haven, Florida. The financial terms of the spectrum swap were not announced.

    To resolve their pending litigation, Leap and MetroPCS have entered into an intellectual property cross-license agreement. Only limited details of the agreement are available. Wall Street expects the companies to form a stronger alliance that will likely develop into a merger. MetroPCS last tried to acquire Leap for $5.1 billion in November of 2007.


    FCC May Address USF, Access Charge Reform Next Month

    The FCC is expected to consider proposals on Universal Service Fund (USF) contribution and access charge reform at its Nov. 4th meeting, according to a report from Medley Global Advisors LLC (MGA). The MGA report noted that the agency will likely shift USF contributions from an assessment of interstate interexchange revenues to a telephone number-based contribution, a long-considered proposal that has industry support. The MGA report also indicated that the FCC is poised to abandon the identical support rule, which would immediately reduce the amount of money competitive eligible telecommunications carriers receive in USF support.

    As for access charge reform, the MGA report said the Commission may seek to unify state and federal access charges and apply them equally to all voice providers. The plan also may mandate that carriers properly identify local terminating voice traffic for compensation purposes, which rural incumbents advocate. An increase in the subscriber line charge also may be adopted.


    FCC Seeks Comment on Specific 700 MHz D Block Technical, Performance and Auction Requirements

    Earlier this year, the FCC held an auction of 700 MHz licenses in which it tried to auction the 700 MHz D Block with public/private partnership rules, but the D Block did not meet its $1.3 billion reserve price and the auction failed. In May, the FCC sought comment on whether it should revise the 700 MHz public/private partnership and re-auction the spectrum. Last week the FCC adopted a Third Further Notice of Proposed Rulemaking (NPRM) that seeks comment and provides tentative proposals to address the partnership issue. Comments are due 30 days after the NPRM is published in the Federal Register, which has not yet occurred, and reply comments are due 40 days from Federal Register publication.

    The FCC tentatively concludes that it will require that the D Block licensee enter into a public/private partnership with the Public Safety Broadband Licensee for the purpose of constructing a wireless broadband network that will operate over both D Block spectrum and other broadband spectrum and provide broadband services to both commercial users and public safety entities.

    The FCC proposes to retain the requirement to enter into a Network Sharing Agreement (NSA), and to make the NSA a condition of the grant of the D Block license(s). The FCC also will resolve, through competitive bidding: (1) the appropriate geographic license area for the D Block, and (2) the need for a common broadband technology platform nationwide. The FCC will offer three alternative sets of D Block licenses, including a single nationwide license with technology to be selected by the winning bidder, 58 regional licenses specifying use of LTE technology, and 58 regional licenses specifying WiMAX technology. The regional licenses, known as Public Safety Regions (PSRs) are based on 55 FCC-designated Regional Planning Commissions plus Guam, Northern Marianas and the Gulf of Mexico. The bidding will determine the size of the license(s) and the technology used. The goal of the auction is to maximize the geographic coverage of the shared commercial/public safety network.

    The FCC provided three proposals regarding spectrum use. First, it proposed that a D Block licensee may construct and operate its shared wireless broadband network using the entire 20 MHz of D Block spectrum and public safety broadband spectrum as a combined, blended resource, but public safety users will still be guaranteed unconditionally preemptive access to 10 MHz of capacity at all times. Second, the FCC proposed to revise the rules governing public safety priority access to D Block spectrum capacity in emergencies that trigger public safety priority access to commercial spectrum capacity and limit the additional capacity that must be provided to public safety users in emergencies to a specified percentage of the D Block spectrum capacity. Third, the FCC proposed that commercial users will have secondary access to public safety’s 10 MHz of spectrum capacity subject to unconditional and immediate preemption when the spectrum capacity is needed by public safety users.

    In addition to its broadband technology platform, the FCC seeks comment on several technical issues including: (1) interoperability and public safety roaming; (2) availability, robustness, and hardening of the network; (3) capacity, throughput, and quality of service; (4) security and encryption; (5) power limits, power flux density limits, and related notification and coordination requirements; and (6) ensuring the availability of a satellite-capable handset.

    The FCC proposed to extend the license term to fifteen years and adopt performance benchmarks applicable at the fourth, tenth, and fifteenth years following the license grant date. At the fourth and tenth benchmarks, the FCC proposed that D Block licensees must provide signal coverage and offer service to at least 40 percent of the population in each PSR by the end of the fourth year, and at least 75 percent by the end of the tenth year. For the final benchmark, the FCC proposes a tiered approach, applying one of three different population coverage requirements depending on the population density of the PSR.

    The FCC also proposed that eligible users of the public safety broadband spectrum capacity must be providers of “public safety services,” and that the nationwide D Block licensee(s) will fund the Public Safety Broadband Licensee by making annual payments, which would be the sole allowable source of funding for the Public Safety Broadband Licensee’s annual operating and administrative costs.


    Congress Approves Bill To Save Internet Radio, Resolve Royalties Debate

    Congress on Wednesday smoothed the way for a potential agreement that may save the Internet radio market from a significant increase in copyright royalty rates. The legislation would authorize the digital royalty collector SoundExchange -- on behalf of copyright owners and performers -- to negotiate an alternative royalty agreement with any Internet radio service.

    Negotiations between the two sides have been going on since a March 2007 ruling by the Copyright Royalty Board that increased the rates that Internet radio stations must pay artists and record labels. Internet radio stations say the new rates are so high that they could drive them out of business.

    The National Association of Broadcasters voiced concern over the measure, authored by Rep. Jay Inslee, D-WA, and urged lawmakers to proceed cautiously on a plan that a spokesman said could have “serious implications for broadcasters, webcasters, and consumers of music.” One concession to broadcasters' concerns was to change the effective enactment date of the legislation from Dec. 15th to Feb. 15, 2009, according to staff. That would enable the two sides to continue talking through that time and would make any deal struck during a congressional recess legally binding.

    AM and FM broadcasters are currently exempt from copyright royalty rates for over-the-air play since that airplay is thought to provide free promotion for artists and labels. Broadcasters, however, are subject to the new rates for any songs streamed over the radio station Websites.


    House Bill Would Amend NTIA Act, Improve Spectrum Reallocation

    A new House bill would amend the National Telecommunications and Information Administration Organization Act to improve the reallocation process of spectrum from federal government uses to commercial uses. Rep. Jay Inslee, D-WA, introduced H.R. 7207 (bill forthcoming) on Sept. 28th. NTIA and the FCC share spectrum management duties under the Telecommunications Act. NTIA oversees federal government spectrum uses, while the FCC manages non-federal government spectrum uses, including broadcasting, commercial services, public safety communications, and use by state and local governments.


    Huawei Technologies – A New Mobile Infrastructure Player

    Huawei Technologies is a Chinese mobile infrastructure provider with its sights set on challenging Ericsson, Nokia and Alcatel. A relatively unknown company in North America, Huawei has been experiencing significant growth in Europe, the Middle East, Africa, and China. It is gearing up to tackle the U.S. and Latin American markets during the next year. Huawei has experienced significant growth since 2006 and has seen sales increase from $11 billion in 2006 to $16 billion in 2007.

    Huawei has agreements with major European carriers Telefonica and Vodafone, is the market leader in Asia Pacific, and owns 44 percent of the market in Africa and the Middle East. Its market share will continue to grow in the Asia Pacific region because carriers have announced plans to spend nearly $80 billion on infrastructure in the next three years. Estimates are that Huawei will get 20 percent of that business. In the next three to five years, Huawei will likely be one of the leading mobile infrastructure providers.


    Alltel’s Early Termination Fee Targeted in Class Action Lawsuit

    A class action lawsuit was filed recently against Alltel Communications over early termination fees (ETFs) charged to customers that leave the wireless carrier before the end of their service contract. Similar to other wireless carriers, Alltel charges a $200 fee for early termination of a service contract after the trial period has ended. The ETF is charged regardless of the customer’s reason for terminating the service contract. Carriers claim ETFs help to offset the handset subsidies offered to customers when they sign a two year contract.

    Similar class action lawsuits are pending or were recently settled involving T-Mobile, Sprint Nextel, Verizon, and AT&T. There is a pending ETF lawsuit in California against Sprint Nextel and the judge ordered the carrier to pay $18.25 million to users who paid ETFs and provide a credit of $54.75 million to those who were charged but didn’t pay the fees. Verizon settled a California ETF class action lawsuit for $21 million earlier this year and there is a pending ETF litigation against AT&T in California.

    The FCC is trying to reform ETFs by creating a national ETF framework but Chairman Martin does not yet have the support of the other Commissioners. The wireless industry strongly supports such a plan, but consumer advocates, state regulators, and some lawmakers are concerned that state rights will be eliminated. The FCC needs the support of consumer groups if it wants to adopt an ETF framework before the end of this year.

    The House and Senate are working on wireless consumer protection legislation but pending bills and draft legislation differ on the role of states, among other issues. If Democrats win the White House and maintain control of Congress, it is safe to expect greater federal regulation of wireless carriers in the area of consumer protection.


    FCC Clarifies Digital Carriage Responsibilities of Cable Operators

    Cable systems are presumptively required to carry all local television stations in all television markets they serve. As the deadline for the full-power digital transition approaches, the FCC clarified that full-power carriage elections must be made by October 1, 2008, and will determine a station’s carriage rights throughout the entire 2009-2011 carriage election cycle. Low-power broadcasters are not required to make their transition to digital by February 17, 2009, but are doing so in increasing numbers. For those low-power stations that have the right to demand carriage by cable operators, statutory carriage rights apply to digital broadcasting.

    Carriers Improve Customer Product and Service Education

    Wireless carriers are increasing efforts to educate consumers since wireless devices and service plans are becoming increasingly complicated. For example, Sprint Nextel through its “Ready Now” program, educates customers about devices and service options. Customers sit down with a store employee to learn about their new wireless device and service plan. Cellular South, a regional wireless carrier, also provides a similar in-store customer service program at its “Discover Centers”. Discover Centers help customers learn about the new features of their wireless device and teach them how to access the Internet and other data applications. Each carrier also offers its Ready Now and Discover Centers, respectively, online at its website. Verizon Wireless offers training seminars to ensure customers know how to call, text message, download games, music, etc., before leaving the store. It also offers online tutorials and seminars in some markets to provide training for other wireless device services and features.

    Cellular South started branding service packages to better meet the needs of its customers. The “Smart Mom” package, for example, includes a browser link to a calendar coordinator, Google maps, a recipe section and more. Other packages focus on hobbies or current events, including the Gridiron package, the Olympics package, and an Election 2008 package.

    House Passes NET911 Act Technical Correction

    The Senate and House last week passed a technical correction to the New and Emerging Technologies 911 (“NET911”) Improvement Act, clearing the way for the President’s signature. The law, P.L. 110-283, signed on July 23, 2008, requires VoIP providers that offer interstate communications services to provide 911 service and Enhanced 911 service to subscribers, interconnect with the public safety answering points (PSAPs), and provide call location information to PSAPs. The technical correction would eliminate a provision requiring IP-enabled voice service providers to register with the FCC and to establish a point of contact for public safety and government officials for 911 and E911 service and access. The correction would be retroactive and would take effect as of July 23, 2008.


    Prepaid Calling Card Bill Advances

    The House Energy and Commerce Committee passed the Calling Card Customer Protection Act, H.R. 3402, on Sept. 23rd. The bill, awaiting consideration by the full House, gives prepaid calling card customers greater notice about the terms and conditions of their cards. The bill also grants the Federal Trade Commission express jurisdiction over common carriers for the enforcement of the legislation’s provisions and recognizes the FTC as the preeminent agency for consumer protection while preserving the FCC’s jurisdiction of spectrum licensees for non-federal uses.

    The committee’s vote follows a Sept. 16th House hearing. Prepaid calling cards, often used by the military, college students and the elderly, allow consumers to make long distance calls without committing to a long distance carrier or using a credit card.

    Some Republican subcommittee members expressed preemption concerns. For example, Rep. Cliff Stearns, R-FL, said the bill would create duplicate regimes at the federal and state levels and that a uniform set of rules is necessary. Rep. George Radanovich, R-CA, echoed Stearns’ concerns, noting that state authorities newly empowered to take action would result in more litigation. The House bill would exempt retailers that sell prepaid calling cards from liability for damages unless they acted with actual knowledge that the act or practice they engaged in is unfair or deceptive and unlawful under the bill’s provisions.

    The Senate Commerce Committee held a hearing on this subject on Sept. 10th and is considering a companion bill, the Prepaid Calling Card Consumer Protection Act of 2008, S. 2998.


    House Bill Would Grant Short-Term DTV Extension for Public Safety Announcements

    Rep. Lois Capps, D-CA, introduced a measure last week that would require a brief extension, from Feb. 18, 2009 through March 3, 2009, of analog television broadcasting authority so that public safety and digital transition information may be provided as broadcasters transition to digital television. Existing law requires that full-power broadcast stations transmit only digital signals and that they cease transmitting analog signals after February 17, 2009. The bill, co-sponsored by Reps. Rick Boucher, D-VA, and Hilda Solis, D-CA, was referred to the House Energy and Commerce Committee.

    In addition to broadcasting emergency information, the Short-term Analog Flash and Emergency Readiness Act, H.R. 7013, would allow for the broadcast of English and Spanish information about the DTV transition and steps viewers should take to convert to receiving digital television service, including a phone number and Internet address to obtain more details.


    Bill Would Ensure Access to Free Radio Broadcast Service in a Digital World

    House Telecommunications and Internet Subcommittee Chairman Ed Markey, D-MA, introduced legislation on Sept. 26th that would ensure that consumers continue to receive AM and FM radio signals. The bill, H.R. 7157 (text forthcoming), would direct the FCC to establish rules requiring that equipment shipped in interstate commerce or manufactured domestically that is designed to receive signals in the satellite digital audio radio service be equipped with technology capable of receiving and playing digital radio audio signals as transmitted by terrestrial AM and FM stations.


    Legislation Would Give Viewers a Tax Credit for Expired DTV Coupons

    A House bill would grant viewers a refundable credit against their federal income tax for expired digital-to-analog converter box coupons. U.S. households are eligible to receive up to two coupons of $40 each to purchase a digital converter box beginning Jan. 1, 2008. However, the coupons expire after three months. Rep. Thaddeus McCotter, R-MI, introduced H.R. 7100 on Sept. 25th. The bill has been referred to the House Ways and Means Committee.


    Common Alerting Protocol Profile Released by EAS Manufacturers

    The EAS-CAP Industry Group announced that it has released a draft profile for the Common Alerting Protocol (CAP) for the next generation of broadcast EAS (Emergency Alert Service). The profile will allow interoperable emergency operations across agencies, jurisdictions, systems and vendors to help ensure that first responders are able to communicate. The profile will be submitted to the FCC, FEMA, National Weather Service, and other organizations for review.

    The EAS-CAP profile will immediately be implemented by Group members and provides developers and manufacturers guidelines as to which elements in a CAP message are required for an EAS message, identifies how a mandatory alert from a state/territorial Governor would be identified, describes basic authentication and security features, recommends accepted formats for audio messages, and other features. CAP will also be used by wireless companies that choose to participate in the Commercial Mobile Alert System and deliver emergency messages to wireless devices.


    Telecom Italia Restructuring Continues

    Telecom Italia’s current management continues to struggle with turning around the company. The previous restructuring plan announced earlier this year has not been successful, and a new plan should be announced in December. The company is considered to have the most potential of any European telecommunications company, but it is unclear if current management can make the cuts needed to reduce debt.

    If projected cost savings are realized and used to pay down debt and performance remains the same, Telecom Italia’s operating margin will improve but its debt will still be 2.9 times earnings by 2010, which is significantly higher than its rivals. The Libyan Investment Authority is interested in investing in the company but the company has not named its price. The company’s stock trades at 9 times future earnings, an 18 percent discount compared to similar stocks.


    Portable People Meter Investigation Requested by the New York City Council

    Echoing similar requests filed with the FCC by the Advisory Committee on Diversity for Communications in the Digital Age and the PPM Coalition, the New York City Council (“NYCC”) filed a request with the FCC seeking an investigation into Arbitron’s Portable People Meter methodology. Arbitron does not believe that the FCC has the necessary jurisdiction to conduct an investigation into its PPM methodology. The FCC has not yet opened an investigation, but the comment period on the FCC’s jurisdiction recently ended.


    FCC Ignores IBC’s Time Warner and Comcast Ownership Concerns

    The FCC denied a Petition filed by IBC Worldwide, Ltd. seeking reconsideration of the FCC’s decision to allow Comcast and Time Warner to acquire certain Adelphia Communications Corporation licenses. Comcast and Time Warner control about one-half of U.S. cable subscribers. IBC argued that the control and dominance of Comcast and Time Warner already limits competition by content providers, advertisers, satellite operators, telecommunications companies, other cable companies, and all new technology providers.


    FCC Releases Tentative Agenda for its October Open Meeting

    The FCC’s Chairman Kevin J. Martin has circulated a tentative agenda for consideration by the other FCC Commissioners for the FCC’s next open meeting scheduled for Wednesday, October 15, 2008. On the tentative agenda, Chairman Martin has proposed to address Sprint Nextel’s request for modification or waiver of the requirement that it vacate its non-border spectrum in the 800 MHz Interleaved Band. The Chairman also proposed reconsideration of certain aspects of its Secondary Markets leasing rules regarding the scope of prior declaratory rulings on foreign ownership and certain low power television digital transition issues.


    House Announces Start Date for New Congress

    The House will hold the opening session of the 111th Congress on Jan. 6, 2009. The House also set Thursday, Jan. 8, 2009, for the counting of the electoral votes that will officially determine the next President of the United States.




    FCC Rulemakings / Deadlines

    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: Proposals for Revised E911 Location Accuracy Requirements

    October 8, 2008

    Comment Deadline: Verizon's Compliance Plan for Forbearance Relief from Cost Assignment Rules

    October 9, 2008

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

    October 10, 2008

    Comment Deadline: Petition for Reconsideration of XM-Sirius Merger Approval

    Comment Deadline: Two Petitions for Reconsideration of Multiple Tenant Environments (MTEs) Voice Exclusivity Order

    October 14, 2008

    Reply Comment Deadline: CTIA Seeks Clarification, Preemption of State and Local Review of Tower Siting Applications

    Reply Comment Deadline: Proposals for Revised E911 Location Accuracy Requirements

    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

    Reply Comment Deadline: Petition for Reconsideration of XM-Sirius Merger Approval

    Reply Comment Deadline: Two Petitions for Reconsideration of Multiple Tenant Environments (MTEs) Voice Exclusivity Order

    October 22, 2008

    Reply Comment Deadline: FCC Actions on Broadband Radio Service (BRS) and Educational Broadband Service (EBS) Spectrum in the 2496-2590 MHz Band

    Reply Comment Deadline: Inquiry and Proposed Revisions to 'Sponsorship Identification Rules' to Address Embedded Advertising

    October 23, 2008

    Reply Comment Deadline: Verizon's Compliance Plan for Forbearance Relief from Cost Assignment Rules

    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

    Reply Comment Deadline: FCC to Collect $312 million in Regulatory Fees in 2008, Considers More 'Equitable' Burden among Industry Segments for Future

    November 10, 2008

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

    December 9, 2008

    Reply Comment Deadline Inquiry Regarding “Hybrid” Satellite-Terrestrial Radio Reception Devices

    December 12, 2008

    FCC Deadline: Qwest's Request for Forbearance from ARMIS Reporting Requirements

    Meetings and Events

    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 16, 2008

    Advisory Committee on International Communications and Information Policy

    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 6, 2008

    Federal-State Joint Conference on Advanced Services: WCA's 14th Annual International Symposium and Business Expo, San Jose, California

    In conjunction with WCA’s Symposium and Business Expo, the Federal-State Joint Conference on Advanced Services plans to hold a meeting on broadband policy at the Fairmont Hotel in San Jose, California.

    November 14, 2008

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

    November 20, 2008

    FCC-USDA Regional Broadband Workshop in Phoenix, Arizona


    Public Safety

    October 1, 2008

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

    October 8, 2008

    Regional Public Safety Planning Committee Meeting for Region 7 in Centennial. Colorada regarding 700 MHz

    October 12, 2008

    Regional Public Safety Planning Committee Meeting for Region 1 in Orange Beach, Alabama regarding 700 MHz

    November 18, 2008

    Regional Public Safety Planning Committee Meeting for Region 11 in Honolulu, Hawaii regarding 700 and 800 MHz

    December 9, 2008

    Regional Public Safety Planning Committee Meeting for Region 19 in Putney,. Vermont regarding 700 MHz

    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.