Patton Boggs TechComm Industry Update - Week of September 8, 2008

    8 September 2008

    Time Running Short for Congress To Address Telecom Issues

    With only a few weeks of business scheduled before the elections, federal lawmakers will likely run out of time before advancing telecommunications legislation. Although they have not been marking up bills lately, lawmakers have learned a great deal more recently about Universal Service Fund disbursements for the High-Cost program and data-mining practices which may compromise consumer privacy. Congress is expected to adjourn by mid-October.

    You can expect that USF reform and consumer privacy issues will be at the top of the telecom agenda for the next Congress. Patent reform, net neutrality, disabilities access to advanced telecommunications services, and broadband mapping also are likely to resurface next year. .

    We expect no immediate legislation from the House Oversight and Government Reform Committee, whose Chairman, Henry Waxman (D-CA), sent letters in July to 24 telecom companies, asking them to document how they’ve used billions of dollars of funds disbursed from the Universal Service Fund’s High-Cost Program. Committee staff are weighing responses from the companies and are expected to make a recommendation to the Chairman.

    The House Energy and Commerce Committee also has engaged in a letter-writing campaign to learn more about behavioral online advertising practices which may track consumer online behavior, collect personal information, and engage in a form of data-mining called “deep packet inspection,” all of which may occur without consumer consent and could compromise consumer privacy. Letters were sent to more than 33 companies.

    One issue the Senate Commerce Committee addressed this week is deceptive and fraudulent practices for prepaid calling cards that are used by senior citizens, immigrants, students and military families. A hearing was held on Wednesday, September 10th. In addition, the Committee considered S. 2998, the Prepaid Calling Card Consumer Protection Act of 2008, which was introduced by Sen. Bill Nelson (D-FL) and cosponsored by Committee Members John Kerry (D-MA) and Olympia Snowe (R-ME).

    According to House and Senate Appropriations sources, Congress is expected to pass a short-tem continuing resolution to fund federal agencies, including the FCC, so that they can continue operating until the regular appropriations are enacted. Congress has not yet decided whether to return for a “lame duck” session in December or to simply adopt instead a continuing resolution that would fund the government through next spring.

     

    Comment Sought on Availability of Broadband Services in the United States

    The FCC is seeking comment on a petition for reconsideration filed by Consumers Union, Consumer Federation of America and Free Press (the “joint petitioners”) of the FCC’s 2008 Fifth Report to Congress on the availability of broadband services in the United States. The Fifth Report concludes that broadband services are being deployed to all Americans in a reasonable and timely fashion, and no immediate steps to accelerate deployment are required. Commissioners Michael Copps and Jonathan Adelstein dissented from the Report, citing faulty data and erroneous conclusions. The joint petitioners ask the FCC to reconsider the Report’s conclusions. Petitioners also request that the FCC admit certain ‘failures’ of the broadband market and take immediate steps to ensure that all Americans receive advanced communications capabilities. Petitioners state that the FCC failed to take certain facts and arguments into account, including that virtually all commercial broadband services are “highly asymmetric one-way technologies.” Petitioners also challenge the report for:

    • ignoring the statute’s directive that the FCC monitor and facilitate universal deployment of two-way advanced telecommunications technologies;

    • ignoring evidence that most cable and DSL broadband connections available to consumers are not capable of originating high-quality video content; and

    • failing to respond to evidence that ‘third-platform’ technologies are incapable of providing advanced telecommunications and are not available to most consumers.

    For more information go to http://www.fcc.gov/wcb/. Comments are due by Sept. 17 and reply comments are due by Sept. 24.



    FCC Releases Proposed D-Block Auction Rules

    The FCC released a new proposal for the 700 MHz D-Block auction. The proposal would make spectrum available on a nationwide and a regional basis (58 regions) with the hope that a carrier or a group of carriers will work together to construct an interoperable broadband network for public safety. The proposal also reduces the D-block reserve price and eases build-out requirements and obligations. Chairman Martin supports the selection of the Public Safety Spectrum Trust as the public safety licensee but proposed new restrictions on the licensee to ensure it operates with transparency and no conflicts of interest.

    Chairman Martin held a teleconference in which he told reporters that potential private and public safety licensees encouraged the FCC to offer regional D-block licenses. The proposal includes one auction where a single, nationwide D-block license would be auctioned along side regional licenses supporting either WiMAX or LTE with roaming obligations. If the reserve price of $750 million is not met, at least 50% of the regional licenses must meet the assigned minimum bid in order to be awarded. If 50% of those licenses attract bids and there are no other bids, then the FCC would reduce the minimum bid for the remaining licenses to less than $0.005 per MHz/pop in an effort to attract more bids. Winning bidders would be determined by coverage and then revenues.

    Buildout requirements would be relaxed to 90% in rural areas, 94% in large communities, and 98% in most urban areas and the buildout deadline would be extended from 10 years to 15 years. Buildout requirements would also include “baseline hardening”, which was not well explained.

    To promote openness, the public safety licensee would be required to hold open meetings and would be prohibited from operating as a mobile virtual network operator. A $5 million cap was also proposed on the amount the public safety licensee could charge in lease payments for use of the public safety portion of the interoperable broadband network. To promote greater certainty in the business arrangement between the private and public licensees, a new minimum mandatory term sheet would be required that specifies how much the private licensee could charge the public safety licensee for use of the private licensee’s frequencies. Chairman Martin proposed $48.50 per customer which is based on a review of what public safety operators pay commercial operators in Washington, D.C., New York City and other large cities for service.

    The comment and reply comment deadlines are not yet available but are expected to be 14 and 7 days, respectively, from publication in the Federal Register. More information is available here.

    Comcast Files Court Challenge to FCC’s Net Neutrality Order

    Comcast appealed to the U.S. Court of Appeals for the D.C. Circuit an FCC Decision that Comcast violated the FCC’s net neutrality rules, including the requirement that Internet service providers may not discriminate among how different applications are carried. Comcast asserts the FCC acted outside of its authority and its conclusions are not supported by the record. In spite of the appeal, Comcast acknowledges that it will comply with the FCC’s Order which require, among other obligations, reporting requirements, greater disclosure of its network management practices, and the development of a compliance plan.

    Cablevision Completes Phase I Construction of the Largest U.S. WiFi System

    Cablevision announced it completed the first phase of construction for its “Optimum WiFi” deployment. Based on geographic coverage, Cablevision’s WiFi system is the largest in the U.S. and it offers free and unlimited wireless Internet access to its wired high-speed Internet customers. Cablevision believes that “One of the keys to Cablevision's continued growth and success is ensuring that we are delivering the best and most technologically advanced services to our customers,” said Tom Rutledge, Cablevision’s chief operating officer, as reported in PR Newswire. “WiFi has become the most common form of wireless broadband connectivity in the consumer and mobile worker marketplace in the U.S., especially in major markets like the New York metropolitan area," said Yankee Group's Chief Strategy Officer Berge Ayvazian. He predicts “By mid-2009, we will start seeing a new category of 'mobile Internet devices' all of which will be WiFi connected." Additional information about Cablevision’s new network is available here, which includes tutorials and coverage maps. Cablevision currently provides WiFi service in selected areas in New York, New Jersey, and Connecticut.

    FCC Backup Power Rules Heads to the Federal Register for Publication

    The FCC’s Order requiring a minimum of 24 hours of emergency backup power for telecommunications assets inside central offices and eight hours for other sites, including but not limited to cell sites and remote switches, has been sent to the Federal Register for publication. The Order was appealed to the U.S. Court of Appeals for the D.C. Circuit, which also has issued a stay for the Order. When OMB completes its review of the Order, the D.C. Circuit will be able to rule on the merits of the appeal filed by CTIA, Sprint Nextel and USA Mobility. Carriers argue that the cost of compliance is in the tens of millions of dollars and the reporting requirements are overly burdensome. Publication of the Order in the Federal Register is imminent and starts the 30-day clock for the filing of petitions for reconsideration with the FCC and additional court appeals.

    IEEE Quietly Approves Key Enterprise WiFi VoIP Standard

    The IEEE recently approved an additional standard for WiFi that will impact the enterprise wireless VoIP market. The IEEE 802.11r standard minimizes handoff delays by reducing the time it takes to re-establish connectivity after a user moves between access points while roaming.
    New Voluntary Electronic Filing System for New Towers and Collocation Submissions

    The FCC is releasing a new voluntary electronic filing system for compliance with Section 106 of the National Historic Preservation Act and the Nationwide Programmatic Agreement (NPA) for Review of Effects on Historic Properties. The Section 106 Filing System will automate, expedite, and facilitate the exchange of documentation and correspondence required by the NPA among applicants, reviewers, and other interested parties. A demonstration of the Section 106 Filing System will takes place at the FCC on Monday, September 15, 2008, from 1:00 PM – 3:00 PM. Interested parties need to pre-register for the event by September 11, 2008 and remote participation is available. The demonstration will include: how to electronically file New Tower and Collocation submissions, an overview of the SHPO electronic review process, and a discussion of the Section 106 Filing System introductory period and deployment.

     

    FCC Launches Biennial Review of Telecommunications Regulations

    The FCC last week launched its 2008 biennial review of telecommunications regulations as required by Section 11 of the Communications Act of 1934. This section requires the Commission to review regulations that apply to “operations or activities of any provider of telecommunications services” every two years and to modify or repeal any that are no longer necessary in the public interest. Each of the Commission’s seven main FCC bureaus and offices will make recommendations for rules to be eliminated or modified. Public comments and recommendations for rule changes are due by October 6th and reply comments are due by October 27th.

    FCC Grants AT&T Forbearance From ARMIS Reporting Rules

    The FCC issued an Order granting AT&T forbearance from certain automated reporting (ARMIS) rules and extended the forbearance to all other incumbent carriers subject to the reporting requirements. (The Order also extended the forbearance relief granted to AT&T in April regarding the cost assignment rules to Verizon and Qwest.) The reporting of ARMIS data has been part of the debate surrounding the “special access” market for last mile services that the FCC deregulated in 1999. ARMIS is an automated system developed in 1987 for collecting common carrier financial and operating information for submission to the FCC. ARMIS includes reports on costs and revenues, service quality, and network infrastructure, among other data.

    AT&T sought and the FCC granted forbearance for its affiliates from having to submit ARMIS reports on service quality, customer satisfaction, infrastructure, and operating data. Chairman Martin called the FCC’s action “another step to remove unnecessary regulatory burdens and ensure a regulatory level playing field.” Competitive carriers, however, have a different view of the FCC’s decision to lift the ARMIS reporting rules. COMPTEL, an association representing competitive communications service providers, released a statement saying that it was “disappointed that the Commission has eliminated the cost assignment and allocation rules that are critical to the performance of its function in ensuring just and reasonable rates and a competitive environment.” The Commission found that AT&T, Verizon and Qwest continue to have exclusionary market power within their respective regions, yet it has eliminated reporting and recordkeeping requirements needed to detect abuse of that power.

     

    Spectrum Trading Website SpecEx.Com Launches

    Spectrum Bridge recently launched SpecEx.com, an online spectrum trading website, with a starting spectrum inventory worth approximately $250 million. SpecEx lists what spectrum is available with details similar to a real estate listing and then publishes sales data so buyers and sellers are more able to accurately value their spectrum, but we do not believe they provide due diligence on the spectrum to be purchased. The website will vet buyers and sellers and collect a commission from each transaction. Parties are required to obtain FCC approval for any sale or lease of spectrum before a transaction may be closed. Prior spectrum trading services have failed because they have been unable to attract enough buyers and sellers. The timing for SpecEx.com may work to its advantage because of all the wireless broadband spectrum that is now available in the 700 MHz, AWS, WCS, EBS and BRS bands, among others.

     

    FCC Requested to Open An Investigation into Arbitron’s Use of the Portable People Meters

    On September 2, 2008, a petition was filed with the FCC requesting a fact-finding inquiry into Arbitron’s use of Portable People Meters (“PPM”), which were recommended by the FCC’s Advisory Committee on Diversity on July 28, 2008. Petitioners argue that PPM methodology undercounts minority radio listeners, and that the rollout of PPM methodology starting October 8, 2008 in eight markets (including the four largest radio markets) will seriously harm minority broadcasting and defeat the Commission’s diversity goals. The petition argues that an FCC inquiry is the best way to identify the methodological problems identified in early PPM markets and avert harm to minority broadcasters from a rollout of PPM with a flawed methodology that undercounts minority audiences. The FCC seeks comment on the petition. Comments are due September 24, 2008 and reply comments are due October 6, 2008.

    FCC’s Disaster Information Reporting System and Emergency STA Procedures

    With the recent series of hurricanes, including Hurricane Ike, the Commission has activated its voluntary Disaster Information Reporting System (DIRS). DIRS allows carriers to report which of their facilities are not operating so that the FCC is able to coordinate with emergency personnel to ensure that the resources carriers need, such as fuel, are readily available. DIRS is deactivated once the emergency has passed. In times of emergency, the FCC staff is available 24-hours a day to grant waiver requests and requests for special temporary authority so that carriers are able to continue and restore operations as soon as possible. 

    Wilmington Broadcasters Turn Off Analog TV Signals

    Commercial television broadcasters in five counties serving the Wilmington, NC market voluntarily agreed to turn off their analog signals and broadcast only digital signals to their viewers. Throughout September, viewers tuning to the stations’ traditional analog channels will see graphics informing them of options for receiving digital broadcast signals. This effort is part of a test to prepare for a nationwide transition to digital television on February 17, 2009. On that date, all full-power broadcast television stations will stop transmitting analog signals and will transmit only digital signals. Transitions for noncommercial stations and low-power stations will occur later.

    Proposed FCC Open Meeting Agenda for September 25, 2008

    The following items, in addition to various FOIA requests, assignment applications and other matters, are on circulation for consideration at the FCC’s September 25, 2008 Open Meeting:

    • Public Safety Airwaves (D-Block/700 MHz Auction) - A Third Further Notice of Proposed Rulemaking addressing the D Block and a nationwide interoperable broadband public safety network in the 700 MHz Band.

    • Video Relay Service (VRS) – Addresses a request for limited waiver of interim emergency call handling rules that would enable VRS providers to give emergency response authorities the caller’s 10-digit callback number, before the new emergency call handling rules take effect on December 31, 2008.

    • Mixed Groups (Commercial/NCE), MO&O on Recon - Commission considers eight petitions for reconsideration filed against the Reexamination of the Comparative Standards for Noncommercial Educational Applicants, Second Report & Order, MM Docket No. 95-31, 18 FCC Rcd 6691 (2003).

    • Applications for Consent to Transfer of Control of Adelphia - Commission considers a Petition for Reconsideration of Applications for Consent to the Assignment and/or Transfer of Control of Licenses; Adelphia Communications Corporation (and subsidiaries, debtors-in-possession), Assignors, to Time Warner Cable Inc. (subsidiaries), Assignees; Adelphia Communications Corporation (and subsidiaries, debtors-in-possession), Assignors and Transferors, to Comcast Corporation (subsidiaries), Assignees and Transferees; Comcast Corporation, Transferor, to Time Warner Inc., Transferee; Time Warner Inc., Transferor to Comcast Corporation, Transferee, Memorandum Opinion and Order, MB Docket No. 05-192, 21 FCC Rcd 8203 (2003).

    INDUSTRY CALENDAR

    FCC Rulemakings / Deadlines

    September 10, 2008

    Freeze Lifted on New 17/24 GHz BSS Satellite Applications as of 10:00 a.m. EDT

    September 12, 2008

    Comment Deadline: Proposed Rule Revisions for Speech-to-Speech Telecommunications Relay Service

    September 15, 2008

    Comment Deadline: Additional Steps to Establish The Commercial Mobile Alert System (replies due September 29)

    Reply Comment Deadline: Petition for Reconsideration of Interim Cap on Universal Service Payments to Competitive Carriers

    Comment Deadline: CTIA’s request for Clarification, Preemption of State and Local Review of Tower Siting Applications (replies due September 30)

    Comment Deadline: Two Petitions for Reconsideration of FCC Rules Assigning Traditional Ten-Digital Telephone Numbers to IP-Based TRS Users

    September 16, 2008

    Reply Comment Deadline: FCC Adopts Rules to Assign Traditional Ten-Digit Telephone Numbers to IP-based TRS Users

    September 17, 2008

    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

    Reply Comment Deadline: Steps to Implement the NET 911 Improvement Act of 2008: E911 Service by VoIP Providers

    September 18, 2008

    Comment Deadline: Proposed Additions to Services Eligible for Support in the E-Rate Program in 2009 (replies due October 3)

    September 22, 2008

    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 (replies due October 22)

    Reply Comment Deadline: Petitions for Reconsideration of the InterCall Order Confirming Audio Bridging Services Must Contribute Directly to the USF Fund

    September 24, 2008

    Comment Deadline: Petition requesting an inquiry into Arbitron’s use of Portable People Meters

    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.

    September 25, 2008

    Reply Comment Deadline: Two Petitions for Reconsideration of FCC Rules Assigning Traditional Ten-Digital Telephone Numbers to IP-Based TRS Users

    September 29, 2008

    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

    September 30, 2008

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

    October 6, 2008

    Reply Comment Deadline: Petition requesting inquiry into Arbitron’s use of Portable People Meters

    Comment Deadline: Biennial Review of Telecommunications Regulations

    October 27, 2008

    Reply Comment Deadline: Biennial Review of Telecommunications Regulations

    Meetings and Events

    September 18, 2008

    FCC, USDA Regional Broadband Workshop - Austin, Texas

    One of four educational workshops on rural broadband to be held during 2008 by the FCC and the US Department of Agriculture

    FCC Pandemic Preparedness Summit

    Summit on Pandemic Preparedness: Enhancing Communications Response for Health Care and First Responders, 9:00 a.m. - 1:15 p.m. at the FCC

    September 19, 2008

    NTIA Spectrum Management Advisory Committee Meeting, U.S. Dept. of Commerce - 9:30 a.m. to 12:30 p.m., 1401 Constitution Ave. N.W., Room 5855

    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 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 10, 2008

    Senate Commerce, Science and Transportation Committee hearing on “Improving Consumer Protection in the Prepaid Calling Card Market”

    September 16, 2008

    Hearing: Senate Committee on Commerce, Science, and Transportation will hold a hearing onWhy Broadband Matters at 10:00 a.m.

    September 26, 2008

    Congress expected to adjourn

     

    Public Safety

    September 10, 2008

    Regional Planning Committee Meeting of Region 20 (Northern Virginia, Maryland and District of Columbia) regarding 700 MHz and 800 MHz in, Hanover, MD

    September 23, 2008

    Regional Public Safety Planning Committee Meetings for Buffalo and Rochester, New York regarding 700 MHz and 800 MHz

    Regional Public Safety Planning Committee Meeting for Region 24 in Jefferson City, Missouri regarding 700 MHz and 800 MHz

    September 25, 2008

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