Patton Boggs Techcomm Industry Update - Week of April 6, 2009

    6 April 2009

    House Panel Seeks Answers on Broadband Stimulus Spending

    A House Energy and Commerce panel held a hearing on the $7.2 billion in broadband stimulus funding, with lawmakers urging Commerce and Agriculture Department officials to carefully consider eligibility requirements and broadband mapping as they race to distribute the funds within the statutory deadline.

    With so many of the details of administering the broadband programs left to the agencies to determine, members of the House Subcommittee on Communications, Technology and the Internet stressed the importance of Congressional oversight.

    Rick Boucher, the Virginia Democrat who chairs the subcommittee, called the dual allocation a wise administration of funds, but recognized the need for close coordination between NTIA and RUS, as well the FCC, with whom the agencies must consult on defining certain terms and on matters of broadband mapping.

    Definitions

    Boucher opened the hearing by calling on agency officials to craft a “sensible definition of ‘unserved.’ We would not, for example, want to exclude areas where there is a smattering of broadband service but where the service is generally absent throughout the community.” Similarly, Boucher called on the agencies to craft the definition of “underserved” with care. “It is, for example, appropriate to provide support where there is currently only one broadband provider, so a community gets the benefit of market competition,” the Chairman said. “And we should not equate underserved only with the absence of competition.”

    With the comment period still open, Mark Seifert, senior policy advisor at NTIA and David Villano, assistant administrator of the Telecommunications Program at RUS, declined to indicate what areas would be deemed unserved or underserved, designations which would prioritize funding under that statute. He did, however, note that the agencies by law must consider the sustainability of a project after stimulus funds are expended, whether the project is scalable and whether it serves “anchor institutions” such as schools, public safety, libraries or community colleges.

    Seifert, however, when pressed by Rep. John Shimkus (R-IL) on the issue of middle mile, said “it’s one of the Administration’s priorities,” noting that middle mile provides the opportunity for unconnected communities to receive broadband services.

    One witness, Jonathan Large, a Dan River District Supervisor in Ararat, Virginia, cautioned agency officials not to subject applications to “overly restrictive” definitions. Large told the story of how his region applied for an RUS grant but was deemed ineligible because the program would not award grants if high-speed broadband service already existed in the area because it would no longer be considered an “unserved” area. “We confirmed high-speed Internet access to one household in our area,” Large said.

    Rep. Doris Matsui (D-CA) asked Seifert how NTIA intends to address urban areas in the NTIA grants.

    “We are making sure rural and NTIA programs work together,” Seifert said, adding that “if a person in the inner city can’t afford the price of broadband, that person isn’t served.” Seifert said that income and the price of broadband will be a consideration as the agencies craft a definition of underserved.

    Boucher urged Seifert and Villano to consider issues like what speeds are available, whether the market is competitive, and the cost/affordability of service. Boucher suggested that a market may be underserved even if it had several service providers, but each only offered slow or dial-up speeds.

    Mapping

    A great deal of attention focused on broadband mapping. The Recovery Act allocates up to $350 million to NTIA to develop a national broadband map, a project many states have already undertaken.

    Florida’s Cliff Stearns, the subcommittee’s ranking Republican, said the agencies must develop a comprehensive broadband map to pinpoint which areas have the lowest adoption rates.

    Rachelle Chong, Commissioner for the California Public Utilities Commission, said that broadband mapping was a critical first step for her state before it began subsidizing broadband deployment through grants with the private sector. When Stearns asked Chong whether she thought the federal government could complete a broadband map before dispensing broadband stimulus maps, Chong said yes. California spent about $400,000 and completed its broadband map in six months, with “three to four months spent convincing carriers to give us data.” She said carriers were finally convinced to relinquish sensitive competitive information to a third party, which protected the information.

    Chong said California undoubtedly would have misspent funds without first conducting a broadband inventory. As it was, Chong said the state determined that it cost about $2,800 to reach one unserved household.

    Brian Mefford, Chairman and CEO of Connected Nation, agreed that the entire country could be mapped in six to nine months.

    Of the 10 states that have already mapped broadband access and adoption in their states, Seifert said the data points among states often are not comparable and that data must be collected from the states as part of the nationwide mapping effort.

    RUS, Oversight and Other Issues

    Other questions covered the gamut of issues: could communities with access to Wi-Fi be considered underserved? What about emerging technologies, such as WiMAX?

    “I can tell you that we’ve heard a range of opinions,” Siefert said, stressing the Recovery Act’s intent to deliver the fastest service to the largest number of people at the lowest cost.

    Rep. Bart Stupak (D-MI), asked Villano whether RUS anticipated any statutory changes in stimulus fund oversight as a result of reforms to RUS programs enacted under the 2008 Farm Bill.

    Villano said the Agriculture Department intends to publish its interim final rule within the next 60 to 90 days. Broadband stimulus funds, however, are exempt from the new Farm Bill reforms, Villano said. When Stupak asked about pending applications under existing RUS programs, Villano said his agency has four pending applications to review and are awaiting the publication of the new Farm Bill regulations. “There is not a heavy demand for our existing programs until the rules come out,” Villano added.

    On the Senate side, two Commerce Committee members this week said they will closely monitor distribution of broadband stimulus loans and grants, particularly to rural areas. Sen. Kay Bailey Hutchison (R-TX), ranking member of the Committee, emphasized she wants the focus on unserved areas lacking broadband access and not underserved areas with limited access or older technology. Sen. John Kerry (D-MA), chairman of the Communications, Technology and the Internet Subcommittee, echoed Hutchison’s concern about tracking stimulus funds. The Subcommittee is expected to hold hearings on broadband stimulus funds in upcoming months.

    The agencies are wrapping up a period of public comment as they determine the criteria for the grant-review process. RUS and NTIA close a public comment period on a joint Request for Information on April 13, with the expectation that each of the agencies would publish a Notice of Funds Availability 30-60 days later. The Recovery Act directs the agencies to obligate broadband funds by the end of fiscal 2010, with projects required to be “substantially complete” two years later.


    Rockefeller, Snowe Introduce Cybersecurity Bill

    Senate Commerce Committee Chairman John (Jay) Rockefeller, of West Virginia, and Sen. Olympia Snowe (R-ME) this week introduced cybersecurity legislation to address the nation’s vulnerability to cyber crime, global cyber espionage, and cyber attacks.

    “We must protect our critical infrastructure at all costs – from our water to our electricity, to banking, traffic lights and electronic health records – the list goes on,” said Rockefeller, who also serves on the Senate Intelligence Committee.

    The bill would, among other provisions, raise the profile of cybersecurity within the federal government and streamline cyber-related government functions and authorities. It would also:

    • Promote public awareness and protect civil liberties.

    • Foster innovation and creativity in cybersecurity to develop long-term solutions.

    • Establish the Office of the National Cybersecurity Advisor within the Executive Office of the President. The National Cybersecurity Advisor would lead the office and report directly to the President. The Advisor would be the lead official on all cyber matters, coordinating with the intelligence community, as well as civilian agencies.

     


     

    Hutchison Calls on Cable Industry to Offer Cheaper Programming Options

    Senate Commerce ranking member Kay Bailey Hutchison (R-TX) told the annual National Cable and Telecommunications Association conference this week that companies should offer low-cost television programming options to consumers. Hutchison’s call to cable companies to voluntarily offer less-expensive programming options met with tepid response, she noted her opposition to an “a la carte” approach, which would allow customers to pay only for channels they want.

    “Basic cable is not inexpensive, and that is becoming more and more of a problem,” Hutchison said, recommending that operators offer “smaller packages geared toward people who are interested in sports, or news or history or things like that.” While “a la carte” originally “sounded good” as a way to protect children from adult programming, she rejected the idea because it could lead to higher per-channel prices. The cable industry opposes the approach, which it considers a threat to its business model.

    Hutchison also said she opposes forthcoming “network neutrality” legislation aimed at preventing cable and telecom providers of high-speed Internet service from establishing Internet fast lanes with swifter downloads of proprietary content. Hutchison wants the marketplace to solve the issue and warned that such a measure could stifle investment. Sens. Byron Dorgan, (D-ND) and Olympia Snowe (R-ME), are considering introducing such a plan.


    Acting Chairman Copps Responds to Congressmen’s Questions about Broadband Stimulus Funding

    In a letter dated March 31, 2009, Acting Chairman Michael Copps answered several questions from minority leaders on the House Energy and Commerce Committee about how the broadband stimulus monies will be spent. On March 25, 2009, Rep. Joe Barton (R-TX), Ranking Member of the House Energy and Commerce Committee, and Rep. Cliff Stearns (R-FL), Ranking Member of the Subcommittee on Communications, Technology and the Internet, posed several questions to agency officials about priorities for stimulus projects and how to appropriately spend and direct the money. In his response, Acting Chairman Copps noted that most of these questions are better answered by NTIA and RUS because they are the agency responsible for deciding how to prioritize and allocate the stimulus funds. However, Acting Chairman Copps noted that the FCC is seeking comment on its consultative role in defining broadband, unserved and underserved. Regardless of how these terms are defined, it will be the job of NTIA, RUS and the FCC together to ensure universal broadband access to Americans in all areas of the US. Regarding prioritizing unserved verses underserved areas, Acting Chairman Copps noted that certain factors in addition to the number of providers in an area are also important for NTIA and RUS to consider including quality of service, affordability, ubiquity of service, and competition. When asked about technological and competitive neutrality, Acting Chairman Copps said that while technological and competitive neutrality is important, the statute specifically directs NTIA to take into consideration the differences between wireline and wireless technologies and how these different technologies have different advantages and benefits depending on the circumstance. Acting Chairman Copps also noted that the FCC in coordination with the Federal-State Joint Board will continue to review how to reform universal service and how that funding will interplay with stimulus funds.


    Congressmen Request Updated USF Information to Reform the Universal Service Fund

    In an effort to push a proposal to reform the Universal Service Fund (USF) program, Rep. Henry Waxman (D-CA), Chairman of the Committee on Energy and Commerce, Rep. Joe Barton (R-TX), Ranking Member of the Energy and Commerce Committee, Rep. Rick Boucher (D-VA), Chairman of the Subcommittee on Communications, Technology and the Internet, and Rep. Cliff Stearns (R-FL), Ranking Member of the Subcommittee on Communications, Technology and the Internet sent a letter to Acting Chairman Copps, requesting the following updated information on the high-cost USF program:

    • a list of the top ten recipients of high-cost support for calendar years 2006 through 2008;

    • a state-by-state list of total disbursements to the top ten recipients of high-cost support for calendar years 2006 through 2008;

    • a list of the ten largest per-line subsidies by study area including a list of competitive eligible telecommunications carriers (ETCs) in these study areas, the total support amounts received by these competitive ETCs for calendar years 2006 through 2008, and a list of other competitors that do not receive high-cost support;

    • a list of the ten areas with the most ETCs, including competitive ETCs, and the total and per-line support received for calendar years 2006 through 2008 per study area and a list of competitors that do not receive high-cost support per study area;

    • the geographic scope of each of the top ten study areas and the number of ETCs;

    • local rate information for the top ten study areas by support and by number of ETCS;

    • a state-by-state list of total USF high-cost support payments;

    • a state-by-state list of ETCs and the names of these ETCs; and

    • a list of states that have a statewide fund and a brief description of the basis for contribution and the supported services.

    The Congressmen have asked Acting Chairman Copps to provide the requested information by Thursday, April 23, 2009.


    Clearwire Boasts Spectrum Position and Announces New Devices at CTIA

    In a shift away from the usual 4G WiMAX vs. LTE discussion, Clearwire’s co-Chairman Ben Wolff in his keynote address at CTIA, commented that he did not see many differences between the two technologies and instead, promoted both technologies as the way to shift users from wireline broadband data connections to wireless broadband data connections. He also said that Clearwire’s significant spectrum holdings are what give the company a competitive advantage over its competitors. The technologies are about 80% the same, according to Wolff, so the big difference will be in how each technology is deployed and the companies with the most spectrum will be the victors.

    Clearwire has in excess of 100 MHz of spectrum in most metro markets and 120 MHz in others, compared to Verizon Wireless’ 22 MHz 700 MHz nationwide licenses and AT&T’s 12 MHz of 700 MHz spectrum in most metro markets. However, Verizon Wireless and AT&T also have AWS spectrum which can be used to offer 4G wireless broadband service. Wolff boasted that Clearwire could construct a network with a capacity of 540 Mbps per cell in markets where it has 120 MHz of spectrum versus the 45 Mbps that is possible over a single 10 MHz channel. As users substitute wireless broadband connections for wired ones, there will be increased demand for higher capacity networks since users expect the same experience from wireless broadband that they are used to with wired connections.

    Clearwire also unveiled two new products – the Samsung Mondi WiMAX tablet and a Wi-Fi router called Clear Spot. If the Wi-Fi router is connected to a Clearwire modem, then any Wi-Fi device in the immediate area will have access to that wireless broadband connection. Clearwire also announced plans for a 20 square-mile WiMAX network in Silicon Valley that will serve as a test bed for new mobile broadband applications. The test bed’s strategic location includes the campus’ of Intel, Google, Cisco Systems and other technology companies.


    4G Challenges Include Channel Quality and Individual User Throughput

    The economy may be struggling but wireless carriers are planning for large expenditures in order to launch 4G networks. There is great promise that OFDM will allow for very high broadband speeds on 4G networks but data throughput is still limited by channel quality in spite of improved channel structure and coding. In many urban areas, channel quality may be compromised by interference from other users of the same channel. Some interference can be mitigated through the use of multiple input/multiple output (MIMO) antennas that increase the number of permitted simultaneous users on the same channel in a small area. Unfortunately, it is too early to tell how well such technologies will work once deployed in real world network operations and it may take years of network management to refine 4G operations.

    Wireless channels are shared and whatever capacity is available on those channels is also shared decreasing the available throughput for a single user. Individual throughput rates will vary depending on an individual’s usage patterns. As the popularity of applications shifts to high bandwidth applications where degraded performance will be noticeable, such as streaming video and peer-to-peer file sharing, networks will need to decrease the number of users per channel in order to increase the throughput available to each individual. A decrease in the number of users per channels will significantly increase a provider’s costs and only add to the increasing demand for spectrum in highly populated urban areas.

    Moving forward, 4G networks will need to develop improved techniques for managing interference and implement user-friendly throughput limitations in order to maximize network operations.


    In-Flight Internet Access and Cell Phone Access is Set to Expand

    American Airlines recently announced plans to expand its in-flight Internet access program to nearly half of the planes in its fleet over the next two years. The carrier expects the expansion to increase revenues and improve customer service. Wi-Fi hot spots will be available on about 300 planes, up from 15, used in the continental United States and American will charge up to $12.95 for the service. Delta Air also announced plans to increase its in-flight Internet access from 77 planes to more than 300 by the end of this year and to over 500 in 2010.

    Aircell’s Gogo service will be used by both airlines to provide in-flight Internet access. The cost to end users is set by Aircell and Aircell shares its profits with the airlines. Prices vary from $5.95 to $7.95 for handheld devices depending on the time of the flight, $9.95 for laptop usage on a three hour flight, and $12.95 for laptop usage on longer fights. Aircell is also considering expanding its pricing structure to include different prices based on the time of the day and a monthly charge for frequent flyers. Users may register for Gogo on the ground and are then able to connect in the air once the plane reaches 10,000 feet. Carriers use filters to block access to porn, in response to customer complaints, and voice over Internet protocol (VoIP) sites to keep cabin noise to a minimum.

    The EU has taken a different approach to in-flight telephone conversations and the number of planes equipped with in-flight mobile phone access is set to double by next year. The EU started an in-flight mobile phone access program a year ago in spite of safety concerns. In-flight mobile phone access is currently available on certain Midland Airways, Portugal’s TAP, and Ryanair planes. Air France completed a trial last year but has not decided if it will offer the service on its European routes.

    Unlike the EU, the United States and other countries have declined to implement in-flight mobile phone access due to safety concerns.


    INDUSTRY CALENDAR

    Meetings and Events

    April 8, 2009

    • FCC Monthly Public Meeting

    April 17, 2009

    • U.S. Court of Appeals for the D.C. Circuit: Oral Arguments in National Cable Television Association v FCC, No. 08-1016, Exclusive Contracts Ban for Video Services to MDUs

    April 18-23, 2009

    • NAB Show, Las Vegas, NV

    April 22

    • Keeping Kids Safe in a Mobile Environment, joint conference by Family Online Safety Institute and The Wireless Foundation, Washington, DC

    April 22-23, 2009

    • CEA Washington Forum, Washington, D.C.

    April 23

    • 2009 State of the Mobile Net Conference, hosted by the Congressional Internet Caucus Advisory Committee, Washington, DC.

    April 24, 2009

    • U.S. Court of Appeals for the D.C. Circuit: Oral Arguments in Comcast Corporation v FCC, No 08-1114, on Nationwide Cable TV Ownership Limits

    April 27-29, 2009

    • Broadband Properties Summit 09, Dallas, TX (Jennifer Richter to speak on broadband stimulus)

    May 3, 2009

    • Pursuant to OMB Guidelines, federal agencies to make performance funding plans with respect to the stimulus bill publicly available

    • Pursuant to OMB Guidelines, federal agencies to begin reporting on their allocations for entitlement programs under the stimulus bill

    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

    May 14, 2009

    • FCC Monthly Public Meeting

    May 15, 2009

    • Pursuant to OMB Guidelines, detailed agency financial reports to become available for purposes of stimulus funding

    May 20, 2009

    • Pursuant to OMB Guidelines, federal agencies to begin reporting stimulus competitive grants and contracts

    July 15, 2009

    • Pursuant to OMB Guidelines, recipients of federal funding to begin reporting on use of their stimulus funds

    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

    April 6, 2009

    • Reply Comment Deadline: Request for Clarification of Rules for 900 MHz Business and Industrial Land Transportation (B/ILT)

    April 9, 2009

    • Comment Deadline: FCC Seeks Bids for ‘Basic In-Home Installation Services’ to Help Consumers Transition to DTV

    April 10, 2009

    • Comment Deadline: Comments Sought to Implement International Comparison, Consumer Survey Provisions of Broadband Data Improvement Act

    April 13, 2009

    • Comment Deadline to NTIA and RUS: Joint Request for Information on the American Recovery and Reinvestment Act of 2009 Broadband Initiatives

    • Comment Deadline to FCC: Consultative Role for Broadband Provisions in the American Recovery and Reinvestment Act of 2009

    • Comment Deadline: FCC Clarification Sought of Rules on “Prior Express Consent” for Use of Auto-dialers to Cell Phones

    April 14, 2009

    • Reply Comment Deadline: Sirius-XM Merger Condition, Compliance Deadline Extended

    April 16, 2009

    • Comment Deadline: Steps to Implement the Child Safe Viewing Act of 2007 (S.602)

    April 17, 2009

    • Reply Comment Deadline: Implement International Comparison, Consumer Survey Provisions of Broadband Data Improvement Act

    April 22, 2009

    • Comment Deadline: Annual Report to Congress on Intelsat Privatization (ORBIT Act)

    April 24, 2009

    • Comment Deadline: GoAmerica Seeks Rule Change to Prevent ‘White Label’ IP Relay Practices

    April 27, 2009

    • Comment Dadline: Starkey Laboratories Seeks Waiver of Unlicensed Spectrum Rules for Low-Power RF Devices Pending Action on Rulemaking Petition (ET Docket 09-38, DA-09-676A1)

    April 28, 2009

    • Comment Deadline: Years of Coverage Expanded: Fourteenth Inquiry on Competition for the Delivery of Video Programming

    April 29, 2009

    • Comment Deadline: First Alert System Text Corp. Proposes Emergency Text Messaging System for Lifeline Program

    • Reply Comment Deadline: Comments Sought for Annual Report to Congress on Intelsat Privatization (ORBIT Act)

    May 5, 2009

    • Comment Deadline: Starkey Laboratories Seeks Amendment of Unlicensed Spectrum Rules to Operate Low-Power RF Devices

    May 11, 2009

    • Comment Deadline: GoAmerica Seeks Rule Change to Prevent ‘White Label’ IP Relay Practices

    • Comment Dadline: Starkey Laboratories Seeks Waiver of Unlicensed Spectrum Rules for Low-Power RF Devices Pending Action on Rulemaking Petition (ET Docket 09-38, DA-09-676A1)

    May 15, 2009

    • CC Action Deadline: Verizon New England’s Request for Forbearance from Unbundling and Dominant Carrier Regulation in Rhode Island

    May 18, 2009

    • Reply Comment Deadline: Steps to Implement the Child Safe Viewing Act of 2007 (S.602)

    May 20, 2009

    • Reply Comment Deadline: Starkey Laboratories Seeks Amendment of Unlicensed Spectrum Rules to Operate Low-Power RF Devices

    May 28, 2009

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

    June 29, 2009

    • Deadline: Action on Verizon’s Request for Forbearance from Unbundling and Dominant Carrier Regulation in Virginia Beach



    Public Safety

    April 8, 2009

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

    April 14, 2009

    • Regional Public Safety Planning Committee Meeting for Region 9 in Travares, Florida regarding 700 MHz and 800 MHz

    May 20, 2009

    • Regional Public Safety Planning Committee Meeting for Region 7 in Centennial, Colorado regarding 700 MHz

    June 9, 2009

    • Regional Public Safety Planning Committee Meeting for Region 19 in Cranston, Rhode Island regarding 700 MHz