Patton Boggs TechComm Industry Update - Week of February 9, 2009

    9 February 2009

    Senate Democrats Respond to President’s Call to Reduce Stimulus Spending To Secure GOP Votes

    The Senate is poised to vote tomorrow on the stimulus bill, after cutting off debate tonight and voting 61-36 on the key compromise amendment.

    On Saturday, a bipartisan agreement overseen by Sens. Ben Nelson (D-NE) and Susan Collins (R-ME) emerged. The agreement would reduce the original Senate stimulus package by over $110 billion, bringing it closer to the $800 billion that President Obama said the country needs to jumpstart the economy.

    "…There are items within the bill, such as some research items ... [that] should be in omnibus legislation, not part of the stimulus bill,” Nelson said. “What we're trying to do is pare down the bill so that it really is about jobs creation, jobs retention ... because if you facilitate that, you'll have people able to pay their mortgages if they continue to work, and at the same time they'll be in the position to buy other consumer goods."

    The bipartisan agreement, which must be voted on before the bill's final passage, would cut Senate broadband spending from $9 billion to $7.1 billion, with $100 million going to the Commerce Department's Rural Utilities Services (RUS) and $7 billion to the Commerce Department's National Telecommunications and Information Administration (NTIA). Also of note are:

    • An additional $650 million goes to NTIA for the DTV-transition, which is the same as the amount in the House bill.
    • The $100 million that goes to RUS would be used for loans and could be multiplied to a considerably larger amount.
    • The $7 billion to NTIA includes $350 million for broadband mapping, $200 million for public computing centers, $250 million for innovative programs to encourage broadband adoption, $10 million for audits and $6.19 billion for broadband infrastructure. Of the funding, 50 percent is to go to rural areas. Some of that rural funding can be transferred to RUS at the discretion of the NTIA director.
    • The bill includes a tax incentive provision from Sen. Jay Rockefeller (D-WV) that would provide a 10 percent tax credit for current broadband technology in underserved areas and 20 percent in unserved areas, as well as 20 percent for next generation in either area. This provision is expected to be amendment to lift the tax credit to 30 percent for current general and 40 percent for next generation, but then it would only apply in rural and unserved areas.

    Once the Senate approves the bill, House and Senate leadership will appoint conferees, who will reconcile the differences in each chamber's version. The total broadband spending, for instance, is $6 billion in the House bill and $7.1 billion in the Senate bill, plus the broadband tax incentive. In addition, the House broadband funds include open access requirements for grant and loan recipients that are not required in the Senate bill.

    There are jurisdictional differences as well. In the House version, RUS would receive $2.825 billion for loans and grants, versus $100 million in the Senate version. In the House version, NTIA would get $2.825 for broadband buildout versus $6.65 billion in the Senate version. The Senate version, however, permits NTIA to transfer some funds to RUS.

    Congressional Democrats stay they are still on track to deliver a stimulus package to the President for his signature by next week.
     
    Broadband Funds Will Take Longer to Spend

    A recent cost estimate of the Senate version of the American Recovery and Reinvestment Act introduced by Senators Daniel Inouye (D- HI) and Baucus, (D-MT), anticipates that funds provided to NTIA to administer a new broadband grant program would take a long time to spend.

    The Congressional Budget Office (CBO) estimates that it will take seven years to spend the broadband grants because new appropriations would far exceed the agency’s 2009 funding of $17 million, and the legislation would require, in most circumstances, that grant recipients provide 20 percent of the project’s cost from nonfederal sources. By comparison, funds appropriated for grants in other areas, such as improving the criminal justice system, or for science and technology research, would be spent from fiscal years 2009 through 2011.

     


     

    Health IT

    Senate Health, Education, Labor and Pensions Chairman Edward Kennedy of Massachusetts and Sen. Debbie Stabenow (D-MI), are expected to try to amend the health information technology section of the economic stimulus package to ensure that electronic medical records collect data on race, ethnicity and gender, which they believe will help eliminate disparities in health care.

    The proposal is one of several changes to health IT language anticipated as the debate over the bill continues today.

    Language that would allow state attorneys general to file class-action lawsuits against those who violate federal health privacy laws could change. Sources said Sen. John Cornyn, (R-TX), plans to introduce language stipulating that states cannot hire outside lawyers on a contingency basis, thus ensuring that damages collected are returned to taxpayers. Critics of the state empowerment provision have argued it is too broad and is an inefficient use of government resources. They believe there are ample enforcement mechanisms at the federal level.

    Additionally, Sen. Olympia Snowe, (R-ME), plans to introduce an amendment to change the trigger for public notification of data breaches. The current version exempts inadvertent acquisition, access, use, or disclosure of protected health information by an employee or agent of a "covered entity" or "business associate." Snowe believes there are too many loopholes in the provision that would prevent consumers from knowing if their sensitive medical information inappropriately changed hands or was leaked.


    FCC Focuses on DTV Transition

    At the FCC’s February 5th Open Meeting, the three remaining Commissioners heard presentations from FCC staff, NTIA, trade associations, consumer groups and affected companies regarding the status and challenges with the upcoming DTV transition and the new deadline, June 12, 2009. The Commissioners, including Acting Chairman Copps, expressed relief that Congress provided a delay of the DTV transition deadline. However, the legislation requires the FCC to allow stations flexibility to transition earlier than June 12, 2009. Some panelists expressed concern over early transitioners who could leave consumers behind who are not yet prepared for the transition.

    To address this issue, the FCC released a Public Notice announcing the procedures that full-power TV broadcast stations must follow if they wish to terminate analog television broadcast service before the new deadline. Broadcast stations that wish to turn off their analog signals on February 17th must notify the FCC by next Monday, February 9th, of their intent to transition. The FCC said it will deny these requests if they are not in the public interest or if they frustrate Congress’ goal of giving consumers adequate time to prepare for the transition. Acting Chairman Copps noted that broadcasters who have expressed their commitment to staying on the air until June 12th are truly serving the public interest by putting consumers first.


    McDowell Recommends Revamping the FCC

    In a recent letter to Acting Chairman Michael Copps, Commissioner McDowell congratulated Copps on his appointment and thanked him for his dedication to public service. Commissioner McDowell said he is energized by Acting Chairman Copps’ commitment to promoting greater transparency at the FCC and creating a more informed and collaborative decision making process. In the spirit of collaborative decision making, Commissioner McDowell outlines in the letter his suggestions on how to reform the FCC, including: conducting an operational, financial and ethical audit of the FCC and its related agencies like USAC; updating the FCC’s strategic plan; and, possibly, restructuring the Commission. Commissioner McDowell also recommended as an immediate first step that the FCC establish and publish FCC Open Meeting Dates for the rest of 2009 and provide at least 6 months notice on meeting dates for 2010. Finally, Commissioner McDowell proposed that the commissioners work to build relationships with other sectors of government, particularly in the areas of consumer protection, homeland security and technology. To great applause, Commissioner McDowell reiterated his excitement about working with Acting Chairman Copps to increase FCC transparency and external and internal communications at an FCBA luncheon held in his honor.

    Acting Chairman Copps responded to Commissioner McDowell by letter stating that he is already at work to improve internal communications within the FCC. Copps also committed to holding FCC Open Meetings, for so long as he is Acting Chairman, near to the first Thursday of each month. Copps also applauded Commissioner McDowell’s ideas about the strategic plan and conducting Commission audits, but said those tasks should more appropriately be considered by the new Chairman.


    FCC to Host Next Generation E911 and IP-Enabled 911 Services Summit

    The FCC’s Public Safety and Homeland Security Bureau plans to hold a summit on February 25, 2009, on deployment and operational guidelines for next generation IP-enabled 911 and E911 services. The recently enacted New and Emerging Technologies 911 Improvement Act of 2008 (NET 911 Act) requires that the Commission work with public safety organizations and others to promote consistency in the deployment and operation of IP-enabled 911 and E911 services through development of standards for Public Safety Answering Points (PSAPs). The FCC will host the summit to address PSAP certification and testing requirements, network diversity requirements for delivery of IP-enabled 911 and enhanced 911 calls, call-handling in the event of call overflow or network outages, validation procedures for processing location information, and the format for delivering address information to PSAPs.


    WRC-11 Takes Shape

    The date for the World Radio Conference-11 (WRC-11) has not yet been set, but the International Telecommunications Union (ITU) has published a preparatory agenda for the conference. International and satellite communications and technology typically drive the WRC agenda. WRC-11 is no different. The agenda includes possible allocations to the mobile-satellite service, determining primary allocation to the radiolocation service in the 15.4-15.7 GHz band, and deciding spectrum usage for 21.4-22 GHz for broadcasting satellite service. The WRC-11 also includes consideration of software-defined radios and cognitive radio systems, supporting technology for operations in the fixed and mobile services, and reviewing sharing studies between mobile and other services in the 790-862 MHz band. Stay tuned for WRC-11 updates.


    Open Range Raises $374 Million in Financing, Secures RUS Broadband Loan

    Open Range Communications, a rural wireless broadband provider, announced that it has raised $374 million in equity and debt financing from One Equity Partners, Globalstar, Inc. and the Department of Agriculture's Rural Utilities Program (RUS). In March 2008, RUS approved Open Range’s application for a $267 million broadband loan with the prerequisite that Open Range also secure private financing. One Equity Partners has contributed $100 million to Open Range and Globalstar has contributed the remaining $7 million. This investment satisfies the RUS’s loan terms, making the RUS funds available to Open Range. Open Range also announced that it has finalized an agreement with Globalstar to deploy broadband service in rural areas using Globalstar’s recent ATC authority.

    Interestingly, the House Stimulus Bill provides $2.825 billion in additional broadband grants, loans and loan guarantees for broadband infrastructure in the U.S. through the RUS Broadband Loan program, with priority given to current and former RUS recipients. As a consequence, Open Range will be in a priority position with respect to this additional $200 million in funding.


    EchoStar Acquires Sirius XM Debt

    EchoStar has quietly acquired a large amount of Sirius XM’s debt, which may be an indication that EchoStar has plans to takeover the Sirius XM inside or outside bankruptcy. Charlie Ergen, who controls the satellite-television Dish Network, acquired part of the $300 million in outstanding Sirius XM debt that matures on February 17, 2009, which Sirius XM has been trying to refinance. Sirius XM has an additional $350 million of secured bank debt due May 2009, and $433 million in convertible notes due in December 2009.


    NARUC Releases Wireless Consumer Protection Survey Results

    NARUC’s Ad Hoc Committee on Wireless Consumer Protection conducted a survey, which was sent to state commissions, consumer groups, and service providers, requesting information regarding wireless consumer protection standards. A summary of the results is available here. According to NARUC, the results support the need for wireless consumer protection regulations, including improved disclosures of general and billing terms and conditions, the clear identification of advertising, better customer service.


    INDUSTRY CALENDAR

    Meetings and Events

    February 8-9, 2009

    • The Digital Broadband Migration: Imagining the Internet’s Future, Silicon Flatirons, Boulder, CO

    February 9-10, 2009

    • Radio Ink: Convergence ’09, San Jose, CA

    February 15-18, 2009

    • NARUC Winter Committee Meetings, Washington, D.C.

    February 17, 2009

    • Oral Arguments in Globalstar, Inc. v FCC on Big LEO Spectrum Ban Plan Revisions (US Court of Appeals for the DC Circuit No. 08-1046)
    • WRC-11 Advisory Committee - Informal Working Group 3: Space Services
    • WRC-11 Advisory Committee - Informal Working Group 2: Terrestrial Services

    February 18, 2009

    • WRC-11 Advisory Committee - Informal Working Group 1: Maritime, Aeronautical and Radar Services

    February 23-25, 2009

    • Telecom Expense Management, New York, New York
    • NCTA Winter Educational Conference, Charlotte, NC
    • WRC-11 Advisory Committee - Informal Working Group 4: Regulatory Issues

    February 20, 2009

    • Oral Arguments in Ad Hoc Telecom Users v FCC on Granting AT&T Forbearance from Broadband Regulation (US Court of Appeals for the DC Circuit No. 07-1426)

    February 25-26, 2009

    • Digital Music Forum East, New York, NY
    • FCC Summit on Next Generation IP-Enabled 911 and E911 Services

    February 26, 2009

    • Catholic University, Columbus School of Law’s 2009 Spring Symposium presented in association with the FCBA, Washington, D.C.

    February 27, 2009

    • Greener Gadgets Conference, New York, NY

    February 27-28, 2009

    • The 4th Annual Syracuse University Communications Law & Policy Symposium presented in associated with the NY Chapter FCBA, Syracuse, NY

    March 3-5, 2009

    • Emerging Communications Conference, San Francisco Airport Marriott

    March 5, 2009

    • FCC Monthly Public Meeting

    March 5-6, 2009

    • WCA Conference

    March 19, 2009

    • Evaluating Software Patents, Silicon Flatirons, Boulder, CO

    March 22-24, 2009

    • NAB Futures Summit, Pebble Beach, CA

    April 1-3, 2009

    • International CTIA Wireless, Las Vegas, NV
    • The Cable Show, Washington, D.C.

    April 18-23, 2009

    • NAB Show, Las Vegas, NV

    April 22-23, 2009

    • CEA Washington Forum, Washington, D.C.

    April 27-29, 2009

    • Broadband Properties Summit 09, Dallas, TX

    May 6-7, 2009

    • Radio Ink: Hispanic Radio Conference, Los Angeles, CA

    May 11-15, 2009

    • 2009 Technology and Standards Spring Forum, St. Louis, MO

    July 19-22, 2009

    • NARUC Summer Committee Meetings, Seattle, WA

    August 5-8, 2009

    • Radio & Records: Triple A 2009 Summit, Boulder, CO

    September 15-17, 2009

    • WiMAX World 2009, Chicago, IL

    September 23-25, 2009

    • The NAB Radio Show, Philadelphia, PA

    October 7-9, 2009

    • International CTIA Wireless I.T. & Entertainment, San Diego, CA

    October 18-21, 2009

    • 2009 Technology and Standards Fall Forum, Phoenix, AZ
    • CEA Industry Forum, Phoenix, AZ

    October 25-30, 2009

    • Cable Connection, Denver, CO

    November 3-5, 2009

    • WiMAX World Emerging Markets, Prague, Czech Republic

    November 15-18, 2009

    • NARUC Annual Convention, Chicago, UL

    December 2, 2009

    • Radio Ink: Forecast, New York, NY
    • FCC Rulemakings / Deadlines

    FCC Rulemakings / Deadlines

    February 9, 2009

    • Reply Comment Deadline: Revised Rules to Verify AM Directional Antenna Performance, Proposed Rules for Tower Construction Near AM Stations
    • Comment Deadline: AT&T Seeks FCC Action to Prevent 'Whipsawing' on the US-Tonga Route

    February 12, 2009

    • Comment Deadlines Announced: FCC Actions on Closed Captioning Requirements for Digital Programming, Consumer Complaints

    February 17, 2009

    • Comment Deadline: Thirteenth Annual Report on Competition in Video Programming Markets; Comments Sought on Data Collection Form for 70/70 Rule
    • Reply Comment Deadline: AT&T Seeks FCC Action to Prevent 'Whipsawing' on the US-Tonga Route
    • Comment Deadline: NECA Proposes Changes to Average Schedule Formulas for Interstate Access Settlements

    February 20, 2009

    • Comment Deadline: Rural Cellular Association Seeks Rulemaking to Prohibit Exclusivity Arrangements between Wireless Carriers and Handset Manufacturers

    February 23, 2009

    • Comment Deadlines: CTIA Petition to Transition Cellular Services to Geographic Market Area Licensing

    February 24, 2009

    • Deadline for Action on Verizon's Request for Forbearance from Recordkeeping and Reporting Requirements

    February 27, 2009

    • Reply Comment Deadline: Comment Deadlines Announced: FCC Actions on Closed Captioning Requirements for Digital Programming, Consumer Complaints
    • Comment Deadline: Fourteenth Inquiry on Competition for the Delivery of Video Programming
    • Reply Comment Deadline: NECA Proposes Changes to Average Schedule Formulas for Interstate Access Settlements

    March 2, 2009

    • Comment Deadline: FCC Launches Review of Rules Adopted in 1997 Affecting Small EntitiesCompliance Deadline: Annual CPNI Certifications Due
    • Annual CPNI Compliance Certifications Due

    March 5, 2009

    • Deadline for Action on Virgin Mobile's Request for Forbearance from ETC Facilities Ownership Rules

    March 9, 2009

    • Comment Deadlines: CTIA Petition to Transition Cellular Services to Geographic Market Area Licensing

    March 14, 2009

    • Reply Comment Deadline: Thirteenth Annual Report on Competition in Video Programming Markets; Comments Sought on Data Collection Form for 70/70 Rule

    March 27, 2009

    • Reply Comment Deadline: Fourteenth Inquiry on Competition for the Delivery of Video Programming

    March 31, 2009

    • Deadline: Interconnected VoIP Providers to Transmit 'Nomadic' 711 Calls to Relay Providers
    • Deadline: TRS Provider Delivery of 711 Calls to PSAPs

    April 11, 2009

    • Deadline for Action on Embarq's Request for Forbearance from ESP Access Charge Exemption

    Public Safety

    February 10, 2009

    • Regional Public Safety Planning Committee Meeting for Region 30 in Albany, New York regarding 700 MHz and 800 MHz

    February 11, 2009

    • Regional Public Safety Planning Committee Meeting for Region 15 in Des Moines, Iowa regarding 700 MHz

    February 24, 2009

    • Regional Public Safety Planning Committee Meeting for New York - Metropolitan Area in Newark, New Jersey, New York regarding 700 MHz and 800 MHz

    March 10, 2009

    • Regional Public Safety Planning Committee Meeting for Region 19 in Kennebunkport, Maine regarding 700 MHz

    April 8, 2009

    • Regional Public Safety Planning Committee Meeting for Region 15 in Des Moines, Iowa regarding 700 MHz