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Telecom/IT Policy Highlights

Volume: 6.03
March 2006

Contents:
Overview
Policy / Legislative Activities
Regulatory Activities
Judicial Activities
Research / Reports
Items of Interest
Events
Newsletter Info
  • Overview

    The watershed announcement this month that AT&T has reached an agreement to acquire Bellsouth for $65 billion coincided with ongoing debates over video franchising, net neutrality, Voice over IP (VoIP), and a host of other telecom related issues. Of all the telecom headlines this month, draft legislation entitled the "Communications, Promotion, and Enhancement Act of 2006" introduced by Joe Barton (R-TX) deserves special mention. As described below, the bill would streamline the video franchising process by creating a national system. Verizon, AT&T, and other phone companies are anxious to enter the video programming market and this legislation would facilitate that goal. Bill sponsors argue that expediting the franchising process would hasten the deployment of broadband networks, an objective shared by the Congress and the Federal Communications Committee (FCC). Incumbent cable providers such as Comcast and Time Warner do not oppose video franchise reform as long as it maintains a level playing field. According to House Telecommunications Subcommittee Chairman Fred Upton (R-MI) legislators are "very close" to getting cable and phone companies to sign off on the bill. Rep. Barton said "the odds are 2 to 1" that the president will sign a bill of this nature before the end of the year. Nonetheless several congressmen, companies, and public interest groups objected to certain aspects the bill.


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  • Policy / Legislative Activities

    "Communications Opportunity, Promotion, and Enhancement Act of 2006" Subject of House Subcommittee Hearing
    03.30.2006 – The House Committee on Energy and Commerce’s Subcommittee on Telecommunications and the Internet held a hearing on proposed legislation by Representative Joe Barton (R-TX) on March 30. Though a formal bill has not been introduced or sponsors named, a committee print of the bill suggests that it will be called the “Communications, Promotion, and Enhancement Act of 2006,” or COPE Act, once introduced. A Subcommittee markup of the bill is expected sometime during the week of April 3, 2006, and Rep. Barton has expressed his desire for a full Committee markup in 4 to 5 weeks, which would then bring the bill to the floor of the House.

    Legislation that would create a national franchising system for cable television providers, the COPE Act would permit Verizon, AT&T, and other "traditional" telecommunications providers to offer video services by filing a single form with the Federal Communications Committee (FCC). The proposed legislation obviates the need for new video providers to negotiate individual franchising agreements with municipalities. Already existing cable television providers will be allowed to opt-in to a national franchise agreement in markets where there is a nationally franchised competitor. The proposed legislation is designed to streamline a franchise negotiation process for which there are some 33,000 local franchise authorities. The bill’s proponents note that while the bill would nationalize the process, the option for local arrangements still exists, as do other elements of local control, such as local control over rights-of-way and required carriage of local public, educational, and governmental (PEG) programming.

    Despite promising competition that would lower prices for consumers, the bill has been sharply criticized. Senator Ron Wyden (D-OR), who introduced legislation that would codify "net neutrality" earlier this month (see story below), Rep. Edward Markey (D-MA), and several public interest groups including spoke out against the bill.
    To view copies of Reps. Barton and Upton’s statements, as well as witness testimony, see [http://energycommerce.house.gov/108/Hearings/03302006hearing1823/hearing.htm].
    A copy of the draft legislation is available at
    [http://static.publicknowledge.org/pdf/20060327-house-telecom-print.pdf] (PDF only)
    [Sources: House Committee on Energy and Commerce, C|Net (3/27), TVWeek.com (3/28)]

    House Committee Passes Anti-Internet Gambling Bill
    03.15.2006 – The House Financial Services Committee approved the "Internet Gambling Protection Act" [H.R. 4777]. The bill is meant to put an end to online gambling in the US and signifies an attempt to regulate international commerce. The measure forbids gambling websites from accepting credit cards and other methods of payment. Some of the most popular and lucrative online gaming sites are located outside the US. However, the legislation would make it illegal for bettors in the US to place offshore bets. Shutting down the $12 billion a year industry seems unlikely considering its popularity. An estimated 8 million Americans placed bets online last year. Government regulation, especially regulation that would allow name brand casinos to set up American-based operations, might be a more tenable solution than proscription. Bill text: http://thomas.loc.gov/cgi-bin/query/z?c109:H.R.4777:
    [Sources: Reuters (3/15), Mercury News (3/15), LA Times (3/16)]

    House Committee Passes ID Theft Bill
    03.29.06 – The House Energy and Commerce Committee approved the "Data Accountability and Trust Act (DATA)" [H.R. 4127]. The legislation is designed to stamp out identity theft by regulating how data brokers such as ChoicePoint collect and store customer data. The bill would require any company that "experiences reasonable risk of identity theft" to notify potential victims, as well as the Federal Trade Commission (FTC), of such risk. Companies that encrypt their data would be exempt from the notification according to a clause designed to encourage more companies to secure their data using encryption. The legislation would also empower the FTC to create standards for companies that handle sensitive personal data and it would grant the FTC permission to audit a data broker's security practices in the event of a security breach. Bill text: http://thomas.loc.gov/cgi-bin/query/z?c109:H.R.4127:
    [Source: Library of Congress (3/23), Computer World (3/29)]

    Net Neutrality Measure Introduced
    03.02.2006 – Senator Ron Wyden (D-OR) introduced legislation that would codify "net neutrality" principles and thus prohibit Internet network operators such as Verizon or AT&T from charging companies like Amazon, eBay and lesser known firms for faster delivery of their content to consumers or favoring certain content providers ahead of others. The "Internet Non-Discrimination Act of 2006" [S. 2360] addresses concerns raised by consumer groups, including Public Knowledge and the Electronic Frontier Foundation, that a "fast lane" dedicated to content providers who are willing to pay for the privilege would create a walled network, much different than the "end-to-end" or open Internet model currently operating. Bill text: http://thomas.loc.gov/cgi-bin/query/z?c109:S.2360:
    [Source: New York Times (3/2)]

    Senate Commerce Committee holds USF Contributions hearing
    02.28.2006 – Senators and industry representatives discussed how best to reorganize the Universal Service Fund (USF) at a hearing held by the US Senate Committee on Commerce, Science and Transportation. Most who testified at the hearing supported an expansion of the fund, but debate ensued over what types of companies should be required to contribute and how the fund should be distributed.

    Phone companies are required by law to contribute a fixed percentage of their revenues to the fund. Typically this money is raised by tacking a small fee onto customers' bills. The money is then used to subsidize telecommunications services in rural and other high-cost areas, schools, and libraries. The hearing addressed concerns that rules governing the fund do not adequately reflect the changing telecommunications landscape. Several speakers recommended a "technology neutral" approach that would make broadband services such as voice over IP (VoIP) providers both contributors to, and benefactors of, the fund. Some VoIP providers—including Vonage, for example—currently contribute to the USF but they are not yet required by law to do so.

    Representatives at the hearing also discussed how the FCC should collect monies for the fund. The FCC has previously indicated that the Commission is considering a "numbers based" approach that would require anyone with a phone number to contribute to the fund rather than the existing approach based on long distance revenues.
    USF Hearing Round-up: http://commerce.senate.gov/hearings/witnesslist.cfm?id=1707
    [Sources: C|NET (2/28), Telephony Online (2/28)]


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  • Regulatory Activities

    FCC Establishes Public Safety Bureau
    3.17.2006 – The FCC voted unanimously to create a Public Safety and Homeland Security Bureau. The new bureau "is designed to provide a more efficient, effective, and responsive organizational structure to address public safety, homeland security, national security, emergency management and preparedness, disaster management, and other related issues," according to a press release by the FCC. The Bureau's top priorities include handling all public safety communications, network reliability and resiliency, and spectrum licensing for emergency responders. The terrorist attacks of September 11th and Hurricane Katrina, in conjunction with the prospect of another terrorist attack or natural disaster, helped prompt the creation of the bureau.

    The Public Safety and Homeland Security Bureau will be organized into three divisions: the Policy Division, the Public Communications Outreach & Operations Division, and the Communications Systems Analysis Division.
    News Release: http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-264395A1.doc
    [Source: FCC]

    FCC Seeks Comment on Proposal for Modifying Public Safety Spectrum
    3.17.2006 – The Federal Communications Commission (FCC) adopted an Eighth Notice of Proposed Rulemaking [FCC No. 96-86] seeking comments on whether "certain channels within the 24 MHz of spectrum in the 700 MHz band allocated for public safety use should be modified to accommodate broadband communications." This portion of spectrum will become available for use by wireless services once the transition to digital television is complete in February 2009.

    In December 2005, the FCC began to examine whether the current allocation of spectrum could be modified to accommodate broadband communications. Specifically, the Notice seeks comments on three proposals submitted to reallocate the 700 MHz band. The proposals were submitted by the National Public Safety Telecommunications Council, Motorola, Inc., and Lucent Technologies, Inc. The Notice also invites additional proposals and seeks comment on the FCC’s tentative conclusion not to alter the narrowband portions of the 700 MHz public safety band.
    NPRM: http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-06-34A1.doc
    News Release: http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-264393A1.doc
    [Source: FCC]

    Verizon's High Speed Data Lines Deregulated by FCC
    03.21.2006 – The FCC deregulated several "common carrier" obligations pertaining to high-speed data services provided by Verizon Communications to its business customers. The agency exempted Verizon from having to file proposed prices with the government and lifted the requirement that it provide competitors access to its infrastructure. The rationale, according to FCC Chairman Kevin Martin is that the deregulation would give Verizon "flexibility to further deploy its broadband services and fiber facilities without overly burdensome regulations." Broadband deployment is a top priority for the Commission; however, efforts have not been without criticism. The concern reflects potential market disruption absent the regulatory balance provided by the FCC.
    News Release: http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-264436A1.doc
    [Sources: FCC, Washington Post (3/21)]


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  • Judicial Activities

    Judge Limits Government Data Request from Google
    03.17.2006 – In Alberto R. Gonzales v. Google, Inc., United States District Court for the Northern District of California [Docket No. 5:06-mc-80006-JW], US District Court Judge James Ware approved the US Department of Justice's (DOJ) revised and reduced request for information from Google to aid the government's defense of the "Child Online Protection Act" (COPA) [15 USC §§ 6501-6506]. In its revised request, the Justice Department asked for 50,000 URLs and said it would look at only 10,000. It also said it wanted 5,000 search queries and would look at 1,000. The government promised not to share this information or attempt to identify individual users. Judge Ware granted this more limited request and Google has promised to comply. The decision is mindful of user's privacy and Google's trade secrets.

    COPA is designed to protect children from pornography on the Internet, however, the American Civil Liberties Union has filed a lawsuit alleging that the law is unconstitutional and unnecessary, contending that it violates the first amendment, that filtering software can protect minors effectively and that the request is an invasion of user's privacy. The government maintains that filters are ineffective and aims to bolster its defense of the law by conducting a study of queries submitted to and results rendered by popular search engines. Last August, the government subpoenaed data from Google, Microsoft, Yahoo, and AOL, among other companies. Only Google chose to contest the subpoena which requested a "random sampling" of 1 million Internet addresses accessible through Google's search engine and 1 million search queries submitted to Google over a one-week period.
    Order (PDF only): http://i.n.com.com/pdf/ne/2006/google_case.pdf
    [Sources: C|Net (3/17), Google Blog (3/17)]

    RIM, NTP settle Blackberry Patent Dispute
    3.3.2006 – A few days before a judge was to issue an injunction on the Blackberry e-mail service in NTP, Inc. v. Research in Motion, Ltd., United States District Court for the Eastern District of Virginia [Docket No. 03-CV-1615], NTP, the patent holding company of Blackberry technology, dropped its lawsuit against Research in Motion (RIM), the maker of the device. RIM paid NTP $612.5 million in exchange for full settlement of the case. The announcement followed three days of negotiation in the case as well as setbacks for NTP at the United States Patent and Trademark Office where the three patents involved in the case were rejected. Observers state that the settlement is lower than expected since RIM will not have to pay any future royalties. Although customers and investors welcomed the settlement, RIM executives were not as excited about having to agree to a settlement. With the settlement, RIM was able to avoid installing alternative e-mail software that they claimed would’ve worked around NTP’s patent claims but would’ve been costly and time-consuming.
    [Source: The Associated Press, 3/3/2006 and The New York Times, 3/4/2006]

    Spitzer Files Suit Against Web Marketer for Privacy Breach
    03.23.2006 – New York Attorney General Eliot Spitzer filed a suit against the Internet marketing firm Gratis Internet The suit, The People of the State of New York v. Gratis Internet Inc., Supreme Court of the State of New York [Docket No. 06-CV-401210], alleges that Gratis sold personal consumer data collected from millions of customers, despite a promise clearly posted on the company's website that it would never divulge such information. Gratis maintains the website FreePay.com and several related sites that offer free music discs, consumer electronics and retail gift cards to users who participate in advertiser-sponsored trials. Earlier this month, email marketer Datran Media Corp. agreed to pay $1.1 million to settle with Spitzer over accusations that it misused personal data. Datran, according to Spitzer's office, purchased consumer records from Gratis.

    The effort on behalf of Mr. Spitzer's office to protect consumers' personal information dovetails with recent efforts by Congress to pass the "Data Accountability and Trust Act (DATA)". DATA is designed to protect sensitive data and stop identity theft (see story above).
    Verified Petition of Assistant Attorney General Karen Geduldig (PDF only): http://www.oag.state.ny.us/press/2006/mar/Verified%20Petition%20-%20Karen%20Geduldig.pdf
    [Source: Reuters (3/23)]


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  • Research / Reports

    Municipal WiFi Keeps Spreading
    03.15.2006 – A report released by ABI Research estimates that Municipal WiFi networks will cover as much as 126,000 square miles worldwide by 2010, an increase of 840 percent. As of 2005, Municipal WiFi networks cover 1,500 square miles. The report contains additional insights pertaining to the applications driving metro-scale wireless networking. ABI Report:
    http://www.abiresearch.com/products/market_research/Wireless_Mesh_Networking
    [Sources: Networking Pipeline (3/15)]

    Tracking Video Franchise Legislation
    03.21.2006 – The law firm Miller & Van Eaton is keeping a careful watch on federal and state legislative activity pertaining to statewide and national video franchises.
    [Source: Miller & Van Eaton]

    Verizon Offers Lower Prices in Texas
    03.10.2006 – The Texas Association of Telecommunications Officers and Advisors (TATOA) has posted a county-by-county breakdown of cable rates in Texas. Verizon, which was granted a statewide franchise last September, tends to offer lower prices than incumbent competitors.
    Texas Cable Rates: http://www.tatoa.org/docs/cablerates.pdf
    [Source: Municable (3/10)]

    VoIP Reports: Adoption up slightly; Revenue to Reach $18B by 201003.14.2006 – A report released by the consulting firm Telephia entitled "VoIP Slowly Gaining Ground…" indicates that VoIP adoption increased slightly between June 2005 and January 2006. About 3.5 percent of U.S. households (approximately 3.9 million) used VoIP in January 2006, up from 2.9 percent in June 2005, according to the report. Vonage had the highest market share at 47.5 percent. Skype Technologies had the second highest market share, 11.8 percent.

    Another report entitled "Global VoIP: Hosted & Non-Hosted Services" released by Juniper Research, projects VoIP revenue to reach $18 billion annually within four years. The report suggests catalysts for the growth, which include businesses switching to VoIP from traditional circuit-switched lines and enormous growth in the Chinese telecom market. The report estimates that VoIP will cost telcos $36B per year in lost revenue by 2010. Although VoIP is poised to grow by leaps and bounds over the next few years, it will not prove as lucrative as leasing land lines.
    Telephia Report (PDF only):
    http://www.telephia.com/documents/VONSpring2006FINAL3.14.05.pdf
    Order Form for Juniper Research Report:
    http://www.juniperresearch.com/reports/37_gvoip_hnh/press_release.htm


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  • Items of Interest

    AT&T and BellSouth Propose Merger
    3.6.2006 – AT&T recently announced it plans to purchase BellSouth Corp., the country’s third largest phone company which operates in the Southeastern portion of the United States. AT&T is expected to pay $65 billion for BellSouth. The purchase will create a giant telephone company that would reunite four of the Baby Bells developed as a result of the 1984 breakup of Ma Bell. Although AT&T will assume a $22 billion debt, the deal will cause a market capitalization of $167 billion, making it the largest telecommunications operator in the world. Despite these numbers, the combined company will face major competition in the race to dominate telecommunications, television and the internet.

    A combined AT&T and BellSouth would face stiff pressure from the cable industry and other companies that are fast moving into the phone business. The increasing use of e-mail, cell phones and other technology continues to erode the number of traditional phone lines in use. And while Verizon and AT&T are slowly moving into the television business, the construction of the networks to carry their programming is proving expensive to build. Opponents to this deal argue that it will reduce competition and raise prices for consumers. Some observers believe that the proposed merger may have an impact on what provisions are included in the upcoming telecom legislation. This deal will need to be approved by regulators who seem to be showing greater tolerance in recent years for large mergers despite concerns from consumer groups and independent phone companies.
    [Source: The New York Times and The Wall Street Journal, 3/6/2006]

    Companies launch Wi-Fi phone
    03.14.2006 – TelTel and D-Link announced a pocket-sized mobile phone that uses WiFi and VoIP. The phone makes VoIP calling more portable. TelTel allows users to make Internet calls for free and charges $.02 per minute for off-Internet calls. The phone will retail for approximately $200.
    [Source: Telephony Online (3/14)]

    Georgia Tech to Implement Statewide Emergency Communication System
    02.28.2006 – "The Georgia Office of Homeland Security/Georgia Emergency Management Agency (OHS/GEMA) asked the Georgia Tech Research Institute (GTRI) to help implement a statewide communications system that enables interoperability among public-safety agencies," according to a press release on the Georgia Tech website. The network will use multi-protocol label switching (MPLS) technology to make existing communications devices—phones, walkie-talkies and so forth—interoperable, thus linking jurisdictions across the state and emergency response personnel from police to firemen to EMTs.
    GT Press Release: http://www.gatech.edu/news-room/release.php?id=878


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  • Events

    2006 Alliance for Community Media International Conference and Trade Show
    The Alliance for Community Media (ACM) 2006 International Conference and Trade Show will be held in Boston, Massachusetts July 6-9. The alliance is noted for working with the FCC, Congress, state legislatures and other regulatory agencies to ensure that all people regardless of race, age, gender, disability, religion or economic status have access to technology, especially Public, Educational and Governmental (PEG) television channels. The ACM’s conference website is available at http://acmboston.org.

    CTIA Wireless 2006: Las Vegas, NVThe Cellular Telecommunications and Internet Association (CTIA) Wireless 2006 conference will be held in Las Vegas, NV April 5-7, 2006. Conference attendees represent the complete wireless, mobile computing and wireless Internet industries and the conference is the largest wireless show in the world. Representatives of the Wireless RERC will be in attendance. Registration information is available at http://www.ctiawireless.com/index.cfm.

    RFID Journal LIVE! 2006: Putting RFID to Work
    The RFID Journal is sponsoring a conference and exhibition from May 1-3, 2006 at the MGM Grand in Las Vegas. Industries that will be represented include retail and consumer goods, health care and pharmaceuticals, defense and aerospace, manufacturing, and transportation and logistics. For more information, please see the RFID Journal’s website at http://www.rfidjournal.com/live2006.


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  • Newsletter Info

    Center for Advanced Communications Policy
    Telecom/IT Policy Highlights Volume 6.03
    March 2006
    Michael Wilt, Editor
    Lynzee Head, Editor in Chief

    Telecom/IT Policy Highlights presents legislative, regulatory, legal, and other items of interest pertinent to information, telecommunications, and related technology policy and research. For additional information regarding the information provided in this report, or if there are newsworthy items that should be included in future editions, please contact , Graduate Research Assistant, or , Research Scientist.
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