Patton Boggs TechComm Industry Update - Week of October 20, 2008

    20 October 2008

    NARUC Calls on FCC to Delay Decision on USF, Intercarrier Compensation Reform

    Citing an inadequate record, the National Association of Regulatory Utility Commissioners (NARUC) urged the FCC on Tuesday to shelve its anticipated November 4, 2008 vote on universal service and intercarrier compensation reform until commissioners have a thorough opportunity to review the plan and solicit public input. “In the wake of the credit crisis still reverberating throughout the U.S. economy, the FCC is rushing to resolve a thirteen billion dollar problem based on insufficient information, an inadequate record, and an incredibly compressed deliberative period,” NARUC stated in an October 21, 2008 Motion/Request for Public Comment.

    NARUC said the plan will “dramatically change how many carriers serving rural and insular areas can access capital to maintain existing infrastructure as well as rollout broadband to those areas where build-out is most costly.” The two weeks remaining until the FCC is scheduled to vote on the measure do not provide sufficient time for state commissions to obtain any “authoritative information about the details of the proposals,” including what impact the plan has on existing state universal service and broadband deployment initiatives.

    NARUC requests that the Commission decide the future treatment of compensation for termination of ISP-bound traffic before the November 5, 2008 deadline imposed by the remand of the D.C. Circuit Court; issue a Further Notice of Proposed Rulemaking summarizing universal service and intercarrier compensation reform issues raised; and provide interested parties at least 90 days to comment.

    NARUC is not alone in its assessment. COMPTEL, along with CLEC carriers, told the Commission in an October 13, 2008 ex parte letter that the sweeping set of reforms would, among other changes, virtually eliminate a critical source of carrier revenues that have existed for decades and shift universal service assessment from interstate revenues to phone numbers – from a usage to a flat-rated system. CTIA noted its support for a numbers-based universal service contribution system and dedicated universal service support for advanced mobile services in high-cost areas, but CTIA also expressed concern about the proposed elimination of high-cost support for wireless eligible telecommunications carriers (ETCs) without the development and implementation of a sufficiently funded high-cost support mechanism for wireless ETCs. For a more detailed look at the 500 or so ex partes submitted in the docket since March 2007.

    Other carriers, such as AT&T, support Chairman Martin’s proposal to reform intercarrier compensation and the universal service fund. As reported by TR Daily, AT&T noted that there is broad consensus that intercarrier compensation needs to be reformed but it is doubtful the Chairman will get three votes on any reform proposal before the Commission’s November meeting.

    Globalstar Seeks Waiver of the Integration Requirement for Open Range

    Continuing to push for expansion of its ancillary terrestrial component (ATC) authority, Globalstar filed an ex parte letter with the FCC requesting a short-term waiver, until 2011, of the FCC’s integration requirement. The Commission requires that Mobile Satellite Service (MSS)/ATC end-user devices integrate both satellite and terrestrial communications. In view of Globalstar's relationship with Open Range, and Open Range's plans to use Globalstar's ATC spectrum for a terrestrial WiMAX network, Globalstar contracted with Hughes Network Systems (Hughes) to design and manufacture a new chipset that will allow for integration of Globalstar’s satellite (MSS) communications and Open Range’s proposed terrestrial (ATC) communications. Unfortunately, Hughes’ chipset will not be available for production until 2011 and Open Range must meet a Rural Utilities Service (UTC) mandated deadline of mid-2009 for initial service rollout. Globalstar has, therefore, requested a waiver of the integration requirement until the Hughes chipsets are available. According to Communications Daily, if Globalstar’s ATC modification request is not granted by November 1, 2008, Open Range will be unable to use ATC spectrum to provide WiMAX service and it will lose its RUS funding.

    Return of the Fairness Doctrine?

    With Presidential candidate Barack Obama ahead in the polls and Democrats poised to take full control of Congress, some industry insiders speculate that proposed legislation may hasten the return of the Fairness Doctrine. The original Fairness Doctrine, phased out in the 1980s, required television and radio stations to provide balanced airtime to opposing viewpoints or risk fines or license revocation. Conservative talk shows dominate radio broadcasting and if the Fairness Doctrine is adopted, that influence will be diminished, according to a recent editorial in the New York Post. Prominent Democratic Party members such as Nancy Pelosi, John Kerry and Al Gore do not support the concept of requiring “fairness” in broadcasting.

    AT&T Reports Strong Wireless Gains Despite Difficult Economy

    AT&T’s third-quarter earnings report reveals strong wireless gains and stability in its business services, including ongoing growth in its IP data service and improvements in its wholesale revenues. AT&T attributes its success to excellent assets, a solid balance sheet and cash flow, shareholder value, and the careful execution of its strategy.

    Wireless gains are attributed to increases in new wireless data service customers and high demand for next generation devices such as the iPhone. iPhone 3G activations during the quarter reached 2.4 million and approximately 40% are new wireless AT&T customers. AT&T’s third-quarter net postpaid subscriber increase is the highest ever in its history and represents a 40% increase over the same quarter last year. AT&T also reports flat total monthly subscriber churn at 1.7 percent compared to last year and post paid churn of 1.2%, which is down from 1.3% from last year. Gains were also reported in its wireline business with double-digit growth in IP-based data revenue, significant improvement in wholesale revenues and subscriber increases for its U-Verse service, AT&T’s IP-based television, Internet access and voice service.

    Broadcasters Ask FCC to Solicit Public Comment on TV White Spaces Report, Seek Delay of November 4 Vote

    Broadcasters are requesting that the FCC put its TV white spaces report out for public comment before voting the item at its November 4, 2008 Open Meeting. The FCC is reviewing the request but noted that the report is based on results from field testing that were the subject of public comment. Rumors indicate that Chairman Martin may have three votes for the TV white spaces order but it is unclear if those votes have been officially cast. With the FCC’s November Open Meeting less than two weeks away, any comment period the FCC may grant would delay a vote.

    FCC Grants VoIP Providers Access to 911 and E911 Capabilities

    The FCC has adopted rules implementing the New and Emerging Technologies 911 Improvement Act of 2008 (NET 911 Act). On July 23, 2008, the President signed into law the NET 911 Act, which amends the Wireless 911 Act, to promote and enhance public safety by facilitating a national IP-enabled emergency network. The NET 911 Act mandates that the Commission issue regulations to ensure that interconnected Voice Over Internet Protocol (VoIP) providers have access to any and all capabilities they need to provide 911 and E911 service to subscribers.

    Under the FCC rules, interconnected VoIP providers are required to forward all 911 calls made over their interconnected VoIP service, as well as a call back number and the caller’s “Registered Location” for each call, to the appropriate Public Safety Answering Point (PSAP). The FCC’s new rules grant interconnected VoIP providers the same rights of access to the capabilities, controlled in most cases by local exchange carriers, as CMRS providers to provide E911 service. The FCC noted, however, that VoIP providers are granted access only for the provision of E911 service.

    Viewers Still Confused About DTV Transition, Poll Finds

    A new Consumer Reports poll finds that millions of Americans who will be affected by the DTV transition remain confused about how it will impact them and what they need to do to prevent losing television programming. “With the digital television transition just four months away, millions of consumers remain confused about how to prepare for it and are vulnerable to wasting money on unneeded or unwanted equipment,” said Joel Kelsey a policy analyst with the Consumers Union. “The federal government, broadcasters and cable companies have a responsibility to make sure consumers are educated about the most cost effective way to make this transition, and that simply isn’t happening.”

    The Consumers Union said the poll found that about 17% of Americans living in television households have at least one television set that will be affected by the digital transition, and 13% rely exclusively on over-the-air signals. Unless some viewers act before February of 2009, nearly 19 million Americans will be without television programming.

    McDowell Calls for Full Court Press on DTV Education

    FCC Commissioner Robert McDowell called on broadcasters to take more urgent action to educate viewers that their analog television signals will end in four months. Commissioner McDowell urged broadcasters to expand their public service campaigns to cover the mechanics of connecting the converter boxes and to prepare viewers for a potential loss of signals, since digital doesn’t always reach as far as analog.

    The FCC’s commissioners are touring the country to highlight the February 17, 2009, switch from analog to digital television. Commissioner McDowell encouraged stations to conduct “soft tests” in anticipation of the upcoming digital transition. Under a soft test, a station temporarily replaces analog programming with messages alerting viewers to purchase digital converter boxes so that they may continue to view their programs after the transition.

    Commissioner McDowell’s attention to DTV resonates with some members of Congress who are concerned that the FCC has failed to prioritize the digital transition, particularly to viewers in rural areas, inner cities, and southwest border towns. Commissioner McDowell acknowledged that it would take congressional action to permit television stations to broadcast analog advisories beyond February 17, 2009.

    FCC Signs NASCAR Sponsorship Deal to Raise DTV Awareness

    In recent months, the FCC has increased its efforts to educate the public about the upcoming DTV transition on February 17, 2009. Now, the FCC has added sponsoring a NASCAR driver to its arsenal of DTV outreach tools. The FCC signed a $355,000 sponsorship deal, reduced from the usual $450,000 fee, with car number 38 driven by David Gilliland from North Carolina, Chairman Martin’s home state, for three races. Mr. Gilliland’s helmet, uniform and pit stall, will bear DTV messages such as “Is Your TV Ready for Digital?” and the web site www.dtv.gov. The sponsorship is for the following three races: Martinsville, Virginia, Phoenix, Arizona and Homestead, Florida.

    FCC Retains Immediate Processing Requirements Regarding Foreign Ownership

    The FCC denied a petition filed by T-Mobile USA, Inc. (T-Mobile) seeking application of the FCC’s immediate processing requirements for lease, assignment and transfer applications, notwithstanding foreign ownership issues. To be eligible for immediate processing, the spectrum lessee, assignee or transferee must certify that (1) it does not have more than 25% indirect foreign ownership or (2) it has previously obtained a declaratory ruling that would allow immediate approval procedures, the proposed transaction falls within the scope of that declaratory ruling, and there has been no change in foreign ownership since. T-Mobile sought reconsideration of this policy, arguing that it requires carriers with indirect foreign ownership, like T-Mobile, to seek additional declaratory rulings and excludes such carriers from the benefits of the FCC’s streamlined procedures. Noting that it struck the appropriate balance between promoting secondary markets and the need to review applications for potential public interest harms to national security, law enforcement, and foreign policy, the FCC denied T-Mobile’s request.

    WCA and NEBSA Compromise on Grandfathered EBS Leases

    The Wireless Communications Association International (WCA) and the National EBS Association (NEBSA) have reached an agreement regarding grandfathered Educational Broadband Service (EBS) leases. WCA and NEBSA filed last Thursday an ex parte letter proposing that the Commission limit the validity of EBS leases entered into prior to January 24, 1999 to 15 years from execution, unless: (a) such lease “commenced” prior to March 20, 2008, and documentary evidence of such commencement exists (including evidence that the lessor has been paid under the lease); or (b) both parties to the lease have agreed in writing to its continuation as a grandfathered lease through a specified expiration date which may be no later than March 20, 2023. The letter further proposes that any agreement entered into between January 24, 1999, and January 9, 2005, that provided for the lease to commence at a point following execution be grandfathered for up to 15 years from the “start date” as agreed to by the parties in the agreement. Permissible lease terms for new EBS leases were expanded to 30 years in 2006.

    Study Finds Unique IDs Improve Patient Privacy

    As Congress weighs the merits of standardizing electronic medical records, a new study by the RAND Corporation reports that a system of unique patient IDs for electronic health record management would reduce medical errors, increase efficiency and help protect patient privacy. The study by RAND, a nonprofit think tank, was reported in Congressional Quarterly. According to RAND, statistical matching, which relies on personal information such as name, address or social security number, returns incomplete medical records about 8 percent of the time. By comparison, unique identifiers can reduce errors and improve privacy by disaggregating individuals’ health data from personal information, it said.

    Deborah Peel, founder of Patient Privacy Rights, a privacy advocacy organization, disagreed with the study’s findings and said it was funded “to improve the bottom line of the data mining industries. Centralized ID systems are privately destructive.” Peel supports health trusts, which are independent institutions responsible only to those whose data resides within them. Members of the health trust would be able to review their information for accuracy and approve those who may access the data. Representative Dennis Moore (D-KY), introduced a health trust proposal, H.R. 2991, last year.

    Several bills encouraging electronic medical records have advanced this year. The Senate bill, S. 1693, by Health, Education, Labor and Pensions Chairman Edward M. Kennedy (D-MA), has not moved beyond committee approval, largely because of concerns that its privacy protections were too weak. The House bill, H.R. 6357, by Energy and Commerce Chairman John D. Dingell (D-MI), was voted out of the House Energy and Commerce committee but stalled when Ways and Means Health Subcommittee Chairman Pete Stark (D-CA), voiced concern about the absence of an enforcement mechanism.

    The 1996 Health Insurance Portability and Accountability Act, known as HIPAA, P.L. 104-191, required the Secretary of the Department of Health and Human Services to adopt standards for a unique health identifier system within 18 months, but Congress has annually banned the use of funds to create such a system for individuals since fiscal 1999.

    California Adopts New Pole-Top Antenna Construction Standards

    The California Public Utility Commission (PUC) has adopted uniform construction standards for wireless antennas installed on utility poles above or between power lines, otherwise known as pole-top antennas. The PUC revised its construction standards to facilitate California’s wireless infrastructure expansion while protecting the public, minimizing costs and potential environmental impacts, and maintaining reliability of the equipment. California’s new construction standards apply to pole-top antennas installed on joint-use utility poles. The new standards allow for a 4-foot vertical clearance between antennas and supply lines energized at 0 to 750 volts, a 6-foot vertical clearance between antennas and supply lines energized at 750 to 35,000 volts, and a 10-foot vertical clearance for supply lines energized at 35,000 to 50,000 volts.

    Verizon Merger Threatens Wireless Competition, Group Says

    As we reported last week, orders consenting to the Clearwire-Sprint Nextel and Verizon Wireless-ALLTEL mergers are circulating at the FCC. The Public Interest Spectrum Trust, a group of six organizations, has renewed its efforts to convince the FCC that the Verizon merger is a threat to competition in the wireless industry and not in the public interest. In separate meetings with the FCC’s Commissioners, the Trust stated that the FCC needs to make clear that the blocking of devices or violations of open network guidelines will not be tolerated. Other organizations, such as the Consumers Union, question how the FCC is able to determine the Verizon merger is in the public interest since it will create the largest wireless phone company with 80 million subscribers. Free Press also asked the FCC to impose an open access requirement on the Verizon merger. Clearwire and Verizon are pushing the FCC to quickly act on each merger due to the financial crisis and the upcoming presidential election.


    New Financial Industry Data Retention Requirements Benefit Wireless Archiving Companies

    The Financial Industry Regulation Authority, a non-governmental regulator of securities firms, adopted new regulations that require financial institutions to monitor and archive text and instant messages sent by securities company employees using company issued devices. Similar requirements already exist for e-mail messages. Securities companies that do not comply with the new regulations are subject to penalties. The necessary software is available today from LiveOffice AdvisorMail, Akonix Systems and Onset Technology and allows companies to scan messages prior to delivery for prohibited words or phrases in financial communications. Some securities’ firms prohibit the use of text or instant messaging for company business because it is too costly for the company to comply with the new regulations.


    Verizon Wireless Certifies First Independent Third-Party Device Testing Lab

    As part of Verizon Wireless’ Open Development initiative, it has certified Intertek as the first independent third-party device testing lab for its initiative and has approved two wireless devices for use on its network. With Verizon’s approval of Intertek, companies may go straight to Intertek for certification to operate on Verizon’s network rather than first approaching Verizon, who had contracted with Intertek to conduct device testing. Intertek is now directly responsible for testing potential devices to make sure they meet the specifications needed to operate on Verizon’s network.

    Teen Wireless Market Slows

    Over the past few years, the wireless industry has benefited from significant growth in teen markets. The teen market is attractive because teens are a continuing source of new subscribers and teens teach older customers how to use wireless devices. The 12- to 17-year-old market grew 12% in 2007 to more than 16 million subscribers. Strong teen growth has helped the overall wireless market continue to grow. But the teen market is expected to reach saturation in 2012 when the number of teen subscribers will increase to 17 million, only one million more than 2007.


    INDUSTRY CALENDAR

    FCC Rulemakings / Deadlines

    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
      • Opposition Deadline: Applications for 35 AWS-1 Licenses Won in Auction No. 78
      • Opposition Deadline: Applications for 18 Broadband PCS Licenses Won in Auction No. 78

    October 29, 2008

      • Reply Comment Deadline: Qwest Compliance Plan for Forbearance Relief from Cost Assignment Rules

    November 3, 2008

      • Comment Deadline: Further Comments Sought on Re-Auction of the 700 MHz D Block and a Public-Private Partnership for Public Safety Communications
      • Reply Deadline: Applications for 35 AWS-1 Licenses Won in Auction No. 78
      • Reply Deadline: Applications for 18 Broadband PCS Licenses Won in Auction No. 78

    November 5, 2008

      • Comment Deadline: Proposed 2009 Local Switching and High-Cost Loop Universal Service Support Formulas

    November 10, 2008

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

    November 12, 2008

      • Reply Comment Deadline: Further Comments Sought on Re-Auction of the 700 MHz D Block and a Public-Private Partnership for Public Safety

    November 13, 2008

      • Comment Deadline: Inquiry to Further Strengthen the Administration, Management and Oversight of the Universal Service Fund (USF)

    November 14, 2008

      • Reply Comment Deadline: FCC Lifts ARMIS Reporting Requirements for Incumbent Carriers, Proposes Industry-Wide Reporting of Public Safety and Broadband Data

    November 17, 2008

      • Comment Deadline: Petition for Rulemaking: Create ‘Event Radio Services’ (ERS) in the FM Band
      • Comment Deadline: Petition for Rulemaking: Improve Video Programming Emergency Information for the Blind and Visually Impaired

    November 20, 2008

      • Reply Comment Deadline: Proposed 2009 Local Switching and High-Cost Loop Universal Service Support Formulas

    November 21, 2008

      • Reply Comment Deadline: Inquiry and Proposed Revisions to ‘Sponsorship Identification Rules’ to Address Embedded Advertising

    December 2, 2008

      • Comment Deadline: NTIA and NHTSA on Implementation of E-911 Grant Program
      • Comment Deadline: RCA Petition for Rulemaking to Prohibit Device Exclusivity (replies due December 22)
      • Comment Deadline: RTG Petition for Rulemaking to Adopt a 110 MHz Spectrum Cap on Spectrum Below 2.3 GHz (replies due December 22)

    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

    December 15, 2008

      • Reply Comment Deadline: FCC Lifts ARMIS Reporting Requirements for Incumbent Carriers, Proposes Industry-Wide Reporting of Public Safety and Broadband Data
      • Reply Comment Deadline: Inquiry to Further Strengthen the Administration, Management and Oversight of the Universal Service Fund (USF)

    December 22, 2008

      • Rely Comment Deadline: RCA Petition for Rulemaking to Prohibit Device Exclusivity
      • Reply Comment Deadline: RTG Petition for Rulemaking to Adopt a 110 MHz Spectrum Cap on Spectrum Below 2.3 GHz

    January 17, 2009

      • FCC Deadline: Embarq’s Request for Forbearance form Contract Tariff Filing Requirements

    January 21, 2009

      • FCC Deadline: Feature Group IP’s Request for Forbearance from Application of Access Charges to ‘Voice-Embedded Internet’

    Meetings and Events

    October 28, 2008

      • NTIA Public Meeting on Low-Power Television and Translator Upgrade Program, Las Vegas, NV
      • FCC Advisory Committee on Diversity for Communications in the Digital Age, Washington, D.C.

    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 4, 2008

      • Federal Communications Commission Open Meeting

    November 6, 2008

      • Federal-State Joint Conference on Advanced Services: WCA’s 14th Annual International Symposium and Business Expo, San Jose, California
      • National Security Telecommunications Advisory Committee (NSTAC) Meeting

    November 14, 2008

      • “The Colorado Broadband Summit,” Silicon Flatirons Center Program at Level 3 Communications, Broomfield, CO
      • FCC’s Consumer Advisory Committee meeting on Digital TV transition, broadband and universal service, closed captioning and telecommunications relay services, and the provision of auditory access to televised programming containing emergency information.

    November 17, 2008

      • Oral Argument: Verizon Telephone Companies v. FCC, No. 08-1012, U.S. Court of Appeals for the D.C. Circuit

    November 20, 2008

      • FCC-USDA Regional Broadband Workshop in Phoenix, Arizona

    Congressional Hearings

    January 6, 2009

      • 111th Congress begins

    Public Safety

    October 27, 2008

      • Regional Public Safety Planning Committee Meeting for Region 42 in Roanoke, Virginia, regarding 800 MHz

    October 29, 2008

      • Regional Public Safety Planning Committee Meeting for Region 45 in Wisconsin Dells, Wisconsin regarding 700 and 800 MHz

    October 29, 2008

      • Regional Public Safety Planning Committee Meeting for Region 5 in Irvine, California regarding 700 MHz

    November 5, 2008

      • Regional Public Safety Planning Committee Meeting for Region 54 in Morris, Illinois regarding 700 and 800 MHz

    November 18, 2008

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

    November 20, 2008

      • Regional Public Safety Planning Committee Meeting for Region 24 in Jefferson City, Missouri regarding 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.