Patton Boggs TechComm Industry Update - Week of June 12, 2009

    12 June 2009

    House Panel Releases Top USF High-Cost Recipients

    House Energy and Commerce Chairman Henry Waxman, D-CA, and Communications, Technology and Internet Subcommittee Chairman Rick Boucher, D-VA, released information about the top recipients of high-cost subsidy dollars from the FCC’s Universal Service Fund. The information released by the Committee was provided by the FCC in response to an April 1, 2009 letter requesting that the agency provide an update to an earlier data request. The top ten recipients in 2008, in order of rank starting with the leading High-Cost Fund recipient are AT&T, Inc., Alltel Corporation, Verizon Communications, Inc., CenturyTel, Inc., Telephone and Data Systems, Inc., America Movil, Windstream Corporation, Embarq, Sprint Nextel Corp., and Citizens Communications Company.

    Reps. Joe Barton, R-TX, and Cliff Stearns, R-FL, on the House Energy and Commerce Committee used the release of the FCC data detailing Universal Service Fund spending to criticize the cost of the program, calling it “bloated” and in dire need of reform due to its price tag of more than $7 billion per year. Barton said it is unreasonable that 11% of a subscriber’s long distance bill is dedicated to USF support, which is used to support many telephone providers in each market when other carriers are serving the same markets without any support. He advocates changing USF to a market-based, competitive support mechanism such as reverse auctions or competitive bidding. Stearns commented that the data clearly highlights the need for fundamental market-based reform of the USF.


    President Nominates McDowell to Another Term; Hearing With Genachowski Scheduled for June 16th

    President Obama announced his intent earlier this week to nominate Robert McDowell, a GOP commissioner at the FCC, to serve another term. McDowell was sworn in as FCC Commissioner for his first term on June 1, 2006. Since that time, he has collaborated with his fellow commissioners to develop and establish communications policy covering the wireless, media, and Internet industries, in addition to international policy matters, the Administration said in a statement this week. Prior to joining the FCC, McDowell was a senior executive for a trade association representing competitive facilities-based telecommunications service providers. McDowell’s Senate confirmation hearing will be held on June 16th. At the hearing, the Senate Commerce Committee will also consider the President’s nominee for FCC Chairman, Julius Genachowski. There was still no word, however, on the nominations of Mignon L. Clyburn and Meredith A. Baker for the two other open spots at the agency. President Obama announced his intent to nominate Ms. Clyburn, a member of the South Carolina Public Service Commission, in April, while Ms. Baker, the former acting administrator at the National Telecommunications and Information Administration, is expected to be nominated for the open Republican seat any day.


    Department of Energy Announces $256 Million Investment to Improve the Energy Efficiency of American Businesses Including Information and Communications Technology

    U.S. Department of Energy Secretary Chu recently announced plans to make $256 million from the American Recovery and Reinvestment Act available to invest in energy efficiency improvements in major industrial sectors, such as manufacturing and information technology. The funding will help support efficient energy use while companies create new jobs and stimulate economic growth. The projects being funded will focus on three primary areas: Combined Heat and Power, District Energy Systems, Waste Energy Recovery Systems, and Efficient Industrial Equipment ($156 Million); Improved Energy Efficiency for Information and Communication Technology ($50 Million); and Advanced Materials in Support of Advanced Clean Energy Technologies and Energy-Intensive Processes ($50 Million). Under the Improved Energy Efficiency for Information and Communication Technology, projects will be funded that help companies control the power usage of their microprocessors or servers and cooling systems. Funding will be available for companies to conduct research, development, and demonstration projects to promote new technologies that improve energy efficiency in the information and communication technology sector.


    House Panel Releases Report on Broadband Deployment

    House Energy and Commerce Committee Chairman Henry Waxman, D-CA, Communications, Technology and Internet Subcommittee Chairman Rick Boucher, D-VA, and Congressman Zack Space, D-OH, on June 10th released a GAO report focused on federal efforts to promote broadband deployment. Among other things, the GAO report recommends that the FCC work with the Departments of Agriculture and Commerce to "specify performance goals and measures for broadband deployment and to define the departments' roles and responsibilities in carrying out the plan."

    Waxman, Boucher and Space sent the report to Acting FCC Chairman Michael Copps for the Commission to utilize as it moves forward with its work on national broadband policy matters.


    Wireless Industry Opposes Environmental Groups’ Migratory Bird Petition

    A recently filed petition for rulemaking file by the American Bird Conservancy, the National Audubon Society, and Defenders of Wildlife encourages the FCC to strengthen its rules to comply with the requirements of the National Environmental Policy Act (NEPA), the Endangered Species Act (ESA), and the Migratory Bird Treaty Act (MBTA). Not surprisingly, the petition is opposed by the wireless industry and strongly supported by environmental groups. The wireless industry argues that the petition goes beyond the actions the FCC needs to take in order to comply with a 2008 U.S. Court of Appeals for the D.C. Circuit remand and the petition is not based on scientific evidence. The Court remanded the case and directed the FCC to take a second look at a petition filed by environmental groups that challenged the FCC’s approval of the siting of certain towers in the U.S. Gulf Coast region and to more fully consider two environmental laws the FCC did not properly consider in its 2006 decision approving the towers. Part of the FCC’s original decision was vacated by the Court because the FCC failed to apply the correct NEPA standard, did not include a reasoned explanation for its decision, and did not give enough notice of pending applications. Environmental groups are requesting the current 14-day period for filing petitions to deny be extended to 30 days.


    Blair Levin Rejoins FCC to Coordinate the Development of a National Broadband Plan

    Blair Levin, former FCC chief of staff under former FCC Chairman Hundt, recently joined Acting Chairman Copps’ office to coordinate the development of a national broadband plan. According to Chairman Copps, the development of a national broadband plan is one of the Commission’s most important undertakings. Prior to joining the Obama transition team, Levin had been managing director at the research firm Stiffel Nicolaus.


    DC Circuit Upholds Video Exclusivity Ban

    The U.S. Court of Appeals for the DC Circuit upheld an FCC Order prohibiting cable operators from entering into new exclusivity contracts with owners of multiple dwelling units (MDUs) and from enforcing old exclusivity contracts with owners of MDUs. The FCC first addressed the reasonableness of exclusivity contracts in 2003 in its Inside Wiring Order. At that time, the FCC found no sufficient basis in the record to ban exclusivity contracts. In 2007, the FCC again addressed the issue of whether exclusivity contracts were reasonable, analyzing competitive harms and benefits of the contracts. The FCC stated that there had been a shift from stand-alone services (telephone, cable, Internet) to service bundles and a dramatic growth in the number of triple-play service offerings. Consumers are increasingly using the same facilities to receive video, voice, and data services. Accordingly, the Commission concluded that exclusivity contracts cause significant harm to competition and barred them for cable operators.

    The National Cable & Telecommunications Association appealed the decision to the D.C. Circuit, arguing that the Commission failed to justify in its 2007 Order the change in policy from its 2003 Order. The court disagreed, concluding that the FCC provided a reasoned analysis which did not result in retroactive rulemaking. As a result, cable operators will no longer be able to insist upon exclusivity as a condition of providing video service to certain residential environments. The court noted that the prohibition applies only to cable companies, and does not require or prohibit any action by MDUs.


    House Appropriators Move Commerce-Justice-Science Measure Forward

    The Commerce-Justice-Science Appropriations Subcommittee approved its draft FY 2010 spending measure — the first for the year — by voice vote.  It contains $64.4 billion in budget authority, most of which is discretionary funding, 12% more than was appropriated for these programs in FY 2009 and slightly less than President Obama’s budget request.  The Commerce Department would receive $13.8 billion, 49% more than FY 2009 and slightly less than the $13.7 billion Obama requested. Much of the increase for the department would be funding for the Census Bureau, which is preparing for its 2010 count.

    Although not highlighted in the subcommittee’s markup, the Commerce Department’s FY2010 budget will assist the National Telecommunications and Information Administration (NTIA) with “its important work of managing the Federal use of spectrum and performing cutting-edge telecommunications research and engineering, including resolving technical telecommunications issues for the Federal government and private sector,” Commerce Secretary Gary Locke said recently in testifying before the subcommittee.

    The House Appropriations Committee is expected to mark up the measure next week, and the full House is expected to take it up the week of June 15.  House appropriators also are expected to move on several other FY 2010 measures next week, and Senate Majority Leader Harry Reid, D-NV, said that he wants the Homeland Security and Legislative Branch bills to pass the Senate this month.

    Last week, Secretary of Agriculture Tom Vilsack testified before a Senate Appropriations Committee subcommittee on the Department of Agriculture's proposed FY 2010 budget.  Vilsack testified that the President’s FY2010 budget includes funding to support $1.3 billion for telecommunications loans and grants, including broadband. This funding level, coupled with the additional funding provided for USDA’s broadband programs in the Recovery Act, will “significantly accelerate the deployment of broadband access in rural America,” Vilsack said. In response to concerns from Sen. Ben Nelson, D-NE, about the progress of the Recovery Act stimulus program, Secretary Vilsack confirmed that he is "confident that by the end of the month" the application process will be released, that funds will begin to be distributed in "the fall,” and that RUS and NTIA are seeking to move "in a streamlined way" with common application forms.

    The 2010 budget also supports $546 million in direct loans, loan guarantees and grants for essential community facilities, such a health care and public safety facilities.  The House Appropriations Agriculture Subcommittee has not yet voted on the Agriculture spending measure.


    Bill Would Require Data Breach Notification

    A House Energy and Commerce subcommittee approved legislation last week that would require companies to provide adequate security and notify consumers of data breaches that could lead to identity theft. The Commerce, Trade and Consumer Protection Subcommittee approved the bill, H.R. 2221, that would require companies that hold data with personal information to develop "reasonable" security measures to protect the data and notification procedures when there is a breach of that data, subcommittee Chairman Bobby Rush, D-IL, said. Companies do not have to notify consumers if they determine that "there is no reasonable risk of identity theft, fraud or other unlawful conduct," he said at an earlier hearing on the bill.


    Lawmakers Call for Continued U.S. Oversight of ICANN

    House Energy and Commerce Telecommunications Subcommittee members last week sought an extension of the U.S. government's oversight agreement with the nonprofit organization that administers the Internet domain name system -- citing concerns about the organization's transparency, accountability, budget processes, and stakeholder affairs. The agreement is set to expire on Sept. 30, 2009. The Internet Corporation for Assigned Names and Numbers (ICANN) remains "far from a model of effective and sustainable self-governance" and it would be imprudent to change the federal government's role amid increased cyber attacks and rapid Internet innovation, said Rep. John Dingell, D-MI, during a Subcommittee hearing. Subcommittee Chairman Rich Boucher, D-VA, is said to be drafting a letter to NTIA with the backing of Stearns and Energy and Commerce ranking member Joe Barton, R-TX, for a one-year extension of the oversight agreement. Boucher said after the hearing that he had not made a firm decision on how to proceed.

    ICANN President Paul Twomey insisted his group has improved its operation and has "passed the test" proposed in its original 1998 arrangement with NTIA that a multi-stakeholder, private sector led could perform a narrow technical function. He also pointed out that a separate NTIA-ICANN deal pertaining to the global coordination of the domain name system's backbone and IP address allocation, which is the "key instrument of oversight," will not sunset. Twomey pledged not to move forward on ICANN's introduction of new top-level domains -- such as .biz, .info, and .us -- until fraud-related fears by brand owners are addressed. ICANN plans to begin accepting applications for new domains in early 2010, which could bring in an initial $90 million for ICANN -- plus steep renewal fees. As a result, businesses and consumers will face higher Internet-related costs, Verizon Associate General Counsel Sarah Deutsch said. She suggested that ICANN conduct an impartial study of the domain name marketplace to gauge whether there is a need for hundreds of new domains and whether proposed changes would guard against cyber-squatting, fraud, and marketplace confusion.


    Commerce Approves Money for DTV Call Centers

    With the digital television transition just days away, Commerce Secretary Locke has approved the transfer of $9.6 million to the FCC for operations at call centers expecting a surge of inquiries prompted by the June 12 shut-off of nearly 1,000 analog signals. FCC regulators said that without the cash infusion, the centers could only remain fully staffed with 4,000 operators for a few days beyond June 12. The money, to be drawn from $90 million Congress set aside for Commerce to assist with DTV outreach, will keep operators available until June 22.


    Qualcomm Begins Retail FLO TV Sales

    To improve customer adoption of its mobile TV service FLO TV, Qualcomm will begin offering its FLO TV service directly to customers after the DTV transition on June 12th. The completion of the DTV transition will allow Qualcomm to launch its FLO TV service nationwide. Qualcomm’s mobile TV service is currently available from Verizon Wireless and AT&T. Qualcomm’s retail strategy will initially focus on the automotive in-car entertainment system with embedded and stand-alone FLO receivers and the mobile market with what amounts to a modem accessory that can transmit FLO content to WiFi-enabled media devices like the iPhone. As the market for mobile TV expands, Qualcomm hopes its receivers will be embedded directly into media devices such as portable DVD players, netbooks and Internet tablets. Qualcomm plans to continue its wholesale mobile TV operations and has no plans to enter on the mobile TV handset market.


    INDUSTRY CALENDAR

    Meetings and Events

    June 16, 2009

    • Pre-Auction Seminar for Auction of 122 FM Broadcast Construction Permits (No. 79)

    June 18-19, 2009

    • FCBA Broadband Policy Summit V, Sheraton Crystal City, Arlington, VA

    June 21, 2009

    • LeadAmerica Youth Leadership Conference, Washington, D.C.

    June 23, 2009

    • WRC-11 Advisory Committee - Informal Working Group 4: Regulatory Issues

    July 2, 2009

    • FCC Monthly Public Meeting

    July 15, 2009

    • Pursuant to OMB Guidelines, recipients of federal funding to begin reporting on use of their stimulus funds
    • WRC-11 Advisory Committee - Informal Working Group 2: Terrestrial Services
    • WRC-11 Advisory Committee - Informal Working Group 3: Space Services

    July 19-22, 2009

    • NARUC Summer Committee Meetings, Seattle, WA

    July 21, 2009

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

    August 5-8, 2009

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

    August 11, 2009

    • FCC Monthly Public Meeting

    August 28, 2009

    • Mock Action for 122 FM Broadcast Construction Permits (No. 79)

    September 15, 2009

    • WCAI International Symposium at 4G World, Chicago, IL

    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

    Broadband Stimulus Deadlines & Other Federal Funding

    • June 19, 2009
    • Application Deadline: RUS Community Connect Broadband Grants

    June 22, 2009

    • Comment Deadline: OMB Guidance on Recovery Act Rules including the Buy American Requirements

    July 7, 2009

    • Reply Comment Deadline: FCC Begins Work on 'National Broadband Plan' Mandated by Congress

    July 9, 2009

    • Comment Deadline: NSIT Smart Grid Interoperability Standards

    July 15, 2009

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

    Congressional Schedule

    June 11, 2009

    • House Energy and Commerce Subcommittee on Communications, Technology and the Internet hearing on low power FM, prison phone rates and commercial volume: H.R. 1084, H.R. 1133 and H.R. 1147 at 10 a.m. in 2322 Rayburn HOB.

    June 12, 2009

    • House Energy and Commerce Subcommittee on Energy and the Environment Hearing on “The Future of the Grid: Proposals for Reforming National Transmission Policy,” at 9:30 a.m. in 2123 Rayburn HOB.

    June 16, 2009

    • Senate Commerce Committee hearing on nomination of FCC Chairman Julius Genachowski and re-nomination of Robert McDowell to the Commission at 2:30 p.m., Senate Russell Building 253.

    FCC Rulemakings / Deadlines

    June 11, 2009

    • Reply Comment Deadline: FCC to Collect $341.9 million in Regulatory Fees in 2009, Requests Comments on Regulatory Fee Program
    • Reply Comment Deadline: TRS Reimbursement Rates and Contribution Factor for 2009-2010, Proposed Modifications to VRS Rates

    June 12, 2009

    • Auction Deadline: Registration for Pre-Auction Seminar for Auction of 122 FM Broadcast Construction Permits (No. 79)

    June 15, 2009

    • Reply Comment Deadline: Petition for Expedited Rulemaking on Migratory Bird Collisions with Communications Towers
    • Comment Deadline: Fourteenth Inquiry on Competition in the Mobile Wireless Marketplace
    • Comment Deadline: Third Annual Satellite Competition Report
    • Comment Deadline: Two Petitions for Reconsideration of Rules for Assigning Traditional Ten-Digit Telephone Numbers to IP-based TRS Users

    June 18, 2009

    • Reply Comment Deadline: Petition for Rulemaking to Increase Tier 4 Lifeline Funding from $25 to $30 per Month
    • Comment Deadline: Denali Requests Forbearance from Unjust Enrichment Provisions of Spectrum Auction Rules

    June 20, 2009

    • Reply Comment Deadline: 2008 and 2009 Data Sought for Fourteenth Annual Report on Competition for the Delivery of Video Programming
    • Reply Comment Deadline: 2007 Data for Fourteenth Inquiry on Competition for the Delivery of Video Programming

    June 22, 2009

    • Reply Comment Deadline: Petition for Reconsideration of E911 Self-Certification Provisions of ETC Forbearance Granted to TracFone and Virgin Mobile
    • Reply Comment Deadline: Virgin Mobile's Compliance Plan for Participation in Lifeline Program
    • Reply Comment Deadline: Petition for Declaratory Rulings on Universal Service Fund (USF) Contributions

    June 23, 2009

    • Comment Deadline: Annual Review of Services Eligible for Support in the E-Rate Program

    June 25, 2009

    • Application Deadline: Auction of 122 FM Broadcast Construction Permits (No. 79)

    June 26, 2009

    • Comment Deadline: Steps to Improve Collection of Data on Minority and Female Broadcast Ownership

    June 29, 2009

    • Reply Comment Deadline: Fourteenth Inquiry on Competition in the Mobile Wireless Marketplace

    June 30, 2009

    • Reply Comment Deadline: Third Annual Satellite Competition Report
    • Reply Comment Deadline: Annual Review of Services Eligible for Support in the E-Rate Program

    July 1, 2009

    • Comment Deadline: FCC Inquiry on Arbitron's Portable People Meter (PPM) Audience Measurement System

    July 6, 2009

    • Reply Comment Deadline: Denali Requests Forbearance from Unjust Enrichment Provisions of Spectrum Auction Rules

    July 7, 2009

    • Reply Comment Deadline: FCC Begins Work on 'National Broadband Plan' Mandated by Congress

    July 13, 2009

    • Comment Deadline: Procedures to Encourage Radio Service to Rural and Tribal Communities
    • Reply Comment Deadline: Steps to Improve Collection of Data on Minority and Female Broadcast Ownership

    July 15, 2009

    • Deadline: Wireless Manufacturers: Hearing Aid Compliance Reports Due

    July 20, 2009

    • Comment Deadline: Adjustments to 4.9 GHz Band Rules for Public Safety Broadband Use, Further Proposals

    July 23, 2009

    • Deadline: FCC Report to Congress Due on 911 and E911 Fees Collected by States under the NET 911 Act

    July 31, 2009

    • Reply Comment Deadline: FCC Inquiry on Arbitron's Portable People Meter (PPM) Audience Measurement System

    August 11, 2009

    • Comments Deadline: Proposed Medical Micro-power Network (MMN) Service in the 413-457 MHz Band
    • Reply Comment Deadline: Procedures to Encourage Radio Service to Rural and Tribal Communities

    August 19, 2009

    • Reply Comment Deadline: Adjustments to 4.9 GHz Band Rules for Public Safety Broadband Use, Further Proposals

    September 1, 2009

    • Auction No. 79: 122 FM Broadcast Construction Permits

    September 10, 2009

    • Reply Comment Deadline: Proposed Medical Micro-power Network (MMN) Service in the 413-457 MHz Band

    Public Safety

    June 11, 2009

    • Regional Public Safety Planning Committee Meeting for Region 55 in Cheektowaga, New York regarding 700 MHz

    June 16, 2009

    • Regional Public Safety Planning Committee Meeting for Region 6 in Fairfield, California regarding 700 MHz and 4.9 GHz
    • Regional Public Safety Planning Committee Meeting for Region 10 in Forsyth, Georgia regarding 700 MHz and 800 MHz

    June 17, 2009

    • Regional Public Safety Planning Committee Meeting for Region 13 in Springfield, Illinois regarding 700 MHz and 800 MHz

    June 19, 2009

    • Regional Public Safety Planning Committee Meeting for Region 3 in Litchfield Park, Arizona regarding 700 MHz and 800 MHz

    July 22, 2009

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

    September 8, 2009

    • Regional Public Safety Planning Committee Meeting for Region 19 in Windsor Locks, Connecticut regarding 700 MHz and 4.9 GHz

    September 10, 2009

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