Center for Advanced Communications Policy | Archives

Telecom/IT Policy Highlights

Volume: 6.05
May 2006

Overview

Policy / Legislative Activities

Regulatory Activities

Judicial Activities

Research / Reports

Items of Interest

Events

Newsletter Info

Overview
A number of telecom bills were unveiled in Congress this month. Most notably, Senate Commerce Committee Chairman Ted Stevens (R-AK) and Co-Chairman Daniel Inouye (D-HI) introduced legislation that would amend the 1996 Telecommunications Act. The "Communications, Consumer's Choice and Broadband Deployment Act of 2006" [S. 2686] would create new policies for emergency communications networks, the Universal Service Fund, video franchising, municipal broadband networks, network neutrality, and other matters. Because it is an election year, some analysts have noted that Congress will have fewer working days than normal. And given the wide-ranging nature of the Stevens-Inouye bill, it could be difficult to achieve consensus before the Congressional term comes to a close.

Meanwhile, the "Communications Opportunity, Promotion and Efficiency Act of 2006," or COPE Act [H.R. 5252] was expected to make an appearance on the House floor this month, but a vote will not come until sometime in June. Wrangling between the House Commerce Committee and the House Judiciary Committee over the COPE Act is one cause for the delay. The Judiciary Committee wanted to help frame the COPE Act, but Commerce Committee Chairman Joe Barton (R-TX) would not concede any ground. In response, Judiciary Committee Chairman F. James Sensenbrenner (R-WI) introduced the "Internet Freedom and Nondiscrimination Act of 2006" [H.R. 5417].

In other news, the Senate finally approved FCC commissioner nominee Robert McDowell, thus filling the long-vacant fifth seat on the panel and giving Republicans a 3-2 majority. It also bears special mention that EarthLink continued its strategy to stimulate Internet usage by circumventing traditional network operators. The Internet service provider invested several million dollars in Current Communications Group, a broadband over power lines provider. These stories, and more, are discussed.

BACK TO TOP OF PAGE
Policy / Legislative Activities
Comprehensive Telecom Reform Bill Introduced
05.01.2006 – Senate Commerce Committee Chairman Ted Stevens (R-AK) and Co-Chairman Daniel Inouye (D-HI) introduced a massive 135-page bill that would amend many facets of telecommunications law. Among other matters, the "Communications, Consumer's Choice and Broadband Deployment Act of 2006" [S. 2686] establishes guidelines for:
• Emergency Communications Systems. The legislation would require states to develop a statewide interoperable communications plan before receiving federal grants that would fund an interoperable emergency communications network.
• The Universal Service Fund. The legislation would require all companies providing a "communications service" (this distinction would include VoIP and cable providers, not just traditional phone companies) to pay into the Universal Service Fund in order to subsidize telecommunications services in rural and other high-cost areas, schools, and libraries.
• Video Franchising. The legislation does not create a national video franchise. Instead it institutes a model where local governments must decide on an application by a phone or cable company wishing to offer local video service within 30 days.
• Broadcast Flag. The legislation would authorize the FCC to outlaw digital and satellite radio recording devices, forbidding receivers to record any transmissions that are digitally encoded with an audio broadcast flag. The legislation would also ban certain digital television recorders, but does include some safeguards to protect consumers' rights to "fair use."
• Municipal Broadband Networks. The legislation would allow governments to compete with private companies by allowing them to set up municipal broadband networks. The legislation would override state laws that prohibit municipally owned and operated networks, and also includes provisions that will assist private firms in competing with the public sector.
• Digital Television. The legislation would establish procedures for a consumer education campaign relating to the transition to digital television. The changeover will occur by February 2009.
• "White Space" Spectrum Allocation. The legislation would allow unused channels, or "white spaces," on the broadcast television bands to be used for unlicensed wireless projects.
• Network Neutrality. The legislation does not codify network neutrality. The bill instructs the FCC to study Internet commerce and file annual reports. But even if the FCC identifies network abuses, the Commission would be limited in its ability to enact and enforce regulations to curb such activity.
The Senate Commerce Committee held a hearing on the proposed Stevens-Inouye legislation in mid-May and has scheduled two more hearings in June, so this bill remains a work in progress. Still, it may prove impossible for lawmakers to reach a consensus before the end of this Congressional term unless the bill's focus is narrowed significantly. This legislation is far more expansive than its counterpart in the House of Representatives, the COPE Act. Although that bill has been pared down considerably from its earliest iteration, it has still sparked heated debates among policymakers.
The bill can be read in its entirety at
http://thomas.loc.gov/cgi-bin/query/z?c109:S.2686:
[Source: Library of Congress, C|Net (5/1), Los Angeles Times (5/22), Telecommunications Reports (5/15), PC Magazine (5/18)]

Internet Nondiscrimination Act Introduced
05.18.2006 – House Judiciary Committee Chairman F. James Sensenbrenner (R-WI) introduced the "Internet Freedom and Nondiscrimination Act of 2006" [H.R. 5417]. The legislation would require broadband Internet service providers to interconnect and manage their networks on nondiscriminatory terms and not interfere with consumers' access to lawful content, services, and applications. The legislation is similar to Rep. Markey's network neutrality bill [H.R.5273] although it does not explicitly use the phrase "network neutrality." Perhaps the most significant difference between the Sensenbrenner and Markey legislation is that Sensenbrenner's amends the Clayton Antitrust Act. Therefore, penalties for parties found guilty of engaging in unlawful discrimination would likely be more severe than penalties under the Markey proposal.
The "Internet Non-Discrimination Act of 2006" [S. 2360] shares a similar name and purpose and was introduced by Sen. Ron Wyden (D-OR) in March.
The Sensenbrenner bill can be read in its entirety at:
http://thomas.loc.gov/cgi-bin/query/z?c109:H.R.5417:
[Source: Library of Congress, Multichannel News (5/22)]

Net Neutrality Act Introduced
05.02.2006 – Rep. Edward Markey (D-MA) introduced a bill entitled the "Network Neutrality Act of 2006" [H.R.5273]. In April, Rep. Markey and others argued for an amendment to the "Communications Opportunity, Promotion and Efficiency Act of 2006," or COPE Act [H.R. 5252] that would codify network neutrality. Because this amendment was defeated, Rep. Markey has introduced separate legislation that would expressly prohibit Internet service providers from discriminating against certain content or service providers. Network neutrality proponents believe this legislation will ensure that individual inventors, entrepreneurs, and small businesses will be able to compete on a level playing field with established businesses.

The Network Neutrality Act contains three parts. First, it explains precisely what is meant by network neutrality. Second, the legislation offers certain exceptions, for example, emergency communications and spam blocking technology are special cases that would not necessarily be subject to network neutrality mandates. Third, the bill sets up a process by which grievances and violations will be considered by a special committee within thirty days.
Last month Senators Byron Dorgan (D-ND) and Olympia Snowe (R-ME) released similar draft legislation that would also codify network neutrality. That legislation, now entitled the "Internet Freedom Preservation Act" [S. 2917], was formally introduced this month in the Senate.
The Markey bill can be read in its entirety at:
http://thomas.loc.gov/cgi-bin/query/z?c109:H.R.5273:
The Dorgan/Snowe legislation can be read in its entirety at:
http://thomas.loc.gov/cgi-bin/query/z?c109:S.2917:
[Source: Library of Congress, Markey.House.gov (5/2)]

Video Franchising Bill Introduced
05.24.2006 – Sen. Kay Bailey Hutchison (R-TX) introduced a bill [S. 2989] that would transfer cable franchising authority from cities and towns to state governments. The bill is modeled after a Texas law passed last September that created a statewide video franchise. The new law has helped phone companies such as Verizon enter local cable markets in one fell swoop rather than requiring them to negotiate agreements with individual municipalities, a frequently time consuming and labor intensive process. Critics of the legislation have noted that while the bill does forbid discrimination against communities based on income, it does not enable states to impose buildout requirements on new entrants.
By comparison, the aforementioned Stevens-Inouye bill [S. 2686] would leave more control in the hands of city and town governments with regards to video franchising. On the opposite end of the spectrum, the COPE Act [H.R. 5252] would create a national video franchising system overseen by the FCC.
At the time of publication, the text of the Hutchison bill is not available. Once the text has been received by the Library of Congress from the Government Printing Office, it will be available at http://thomas.loc.gov/cgi-bin/query/z?c109:S.2989:
[Source: FreePress (5/24), Multichannel News (5/24)]

BACK TO TOP OF PAGE
Regulatory Activities
FCC Refuses to Investigate NSA Spying Allegations
05.22.2006 – The FCC will not investigate allegations that the National Security Agency (NSA) helped some of the country's biggest phone companies spy on American citizens. Rep. Edward Markey (D-MA), the ranking Democrat on the House Telecommunications and Internet Subcommittee, requested an FCC investigation into the charges. In response, Chairman Kevin Martin noted that the NSA’s activities were classified, and as such, the FCC could not launch an investigation at the present time without undermining the Agency’s intelligence information, sources, and methods in general.
Rep. Markey has also requested that Commerce Committee Chairman Joe Barton (R-TX) conduct hearings on the subject.
Rep. Markey's letter to the FCC can be read at
http://markey.house.gov/docs/telecomm/iss_telecom_ltr060515.pdf (PDF only)
The FCC's response to Rep. Markey's can be read at
http://markey.house.gov/docs/privacy/iss_telecom_resp060522.pdf (PDF only)
[Source: Markey.House.gov (5/23), Wall Street Journal (5/24)]

McDowell Confirmed for FCC Seat
05.26.2006 – FCC commissioner nominee Robert McDowell has finally been approved by the Senate, thus breaking the panel's deadlock between two Democrat and two Republican commissioners. The panel has been operating with less than five commissioners for more than a year after previous commissioners left the panel for either personal or professional reasons. But now the Senate's approval returns a 3-2 majority to Republicans. In the coming months, the Commission will likely address media ownership rules, as well as the latest telecom mergers, including the acquisition of Adelphia by Time Warner and Comcast, and the proposed BellSouth-AT&T merger. McDowell is expected to be sworn in before the FCC's June 13th meeting at which the Commission will begin redrafting media ownership rules.
McDowell, a telecommunications lawyer and former lobbyist for Comptel, a trade association that represents small telephone companies, was nominated in February by President Bush. However his confirmation was blocked by senators seeking leverage on other issues.
[Source: FCC (5/26), Reuters (5/26), Los Angeles Times (5/27), Benton.org (3/28)]

VoIP Providers Must Comply with CALEA
05.12.2006 – The FCC released a Second Report and Order and Memorandum Opinion and Order [FCC 06-56]. The Order affirms the deadline for Internet phone companies, including Voice-over Internet Protocol (VoIP) providers, to comply with the "Communications Assistance for Law Enforcement Act," or CALEA [PL 103-414] by May 14, 2007. Congress passed CALEA in 1994 to help law enforcement agencies conduct surveillance of citizens over telephone networks. CALEA requires that telephone companies make it possible for law enforcement agencies to wiretap any phone conversations that occur over their networks.
The constitutionality of CALEA is pending in a Federal Appeals court in Washington, DC. The outcome of this case could affect FCC rulings such as this one. In addition, it was announced this month that Phil Zimmermann, the inventor of "Pretty Good Privacy," or PGP, an open source technique used to encrypt email, released software called Zfone that enables secure voice communications using VoIP. In other words, Zfone allows callers to circumvent CALEA surveillance.
The FCC Order is available at
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-06-56A1.doc
[Source: FCC (5/12), New York Times (5/22), TMCnet (5/23)]

Wireless Spectrum Auction Delayed Until August
05.19.2006 – In a Public Notice [FCC 06-71] the FCC announced that it has moved the start date for the Advanced Wireless Services (AWS) auction from June 29, 2006, to August 9, 2006. The AWS licenses are expected to be highly sought after by phone, cable, and Internet content providers alike, as the spectrum is well suited for high-speed wireless networks.
The delay is related to procedures recently established for bids placed by Designated Entities [DE] on behalf of larger companies. Last month, the FCC adopted rules that would bar a bidder that leases or resells more than half of the spectrum capacity of a license from qualifying for discounts meant to encourage the participation of small businesses in the AWS auction. But the attempt to close this loophole is flawed, at least according to Commissioner Jonathan Adelstein. Commissioner Adelstein released a statement about the delay, stating in part, “Now it appears that the changes that the Commission did adopt may actually do more harm than good to the DE participation in the upcoming auction, notwithstanding this last-ditch effort to cure this troubled proceeding."
The Public Notice [FCC 06-47] is available at
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-265462A1.doc
Commissioner Adelstein’s statement can be read in its entirety at
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-06-71A2.doc
[Source: FCC (5/19)]

BACK TO TOP OF PAGE
Judicial Activities
Oral Arguments Heard in EarthLink v. FCC Appeal
05.09.2006 – Oral arguments were held before a federal appeals court in a case that concerns a legal challenge filed by Internet service provider EarthLink against the FCC. The suit came about as a result of the FCC's decision in 2004 that exempted the “Baby Bells,” including Verizon, BellSouth, Qwest, and SBC, from a provision of a 1996 Telecom Act that obliges incumbent carriers to share their networks with new competitors, unless there is already sufficient competition in the marketplace. EarthLink lawyers argued that there is not sufficient competition in the marketplace—that the broadband market is essentially a duopoly controlled by telephone and cable companies—and therefore the Bells should not be exempt from sharing their networks.
A decision is expected in this matter within the next few months.
EarthLink, Inc. v. Federal Communications Commission, U.S. District Court of Appeals for the District of Columbia [Docket No. 05-1087]
[Source: C|Net (5/9)]

TorrentSpy.com Files Complaint Against MPAA
05.25.2006 – Valence Media, parent of the BitTorrent site TorrentSpy.com, filed a "Complaint for Damages and Injunctive Relief and Demand for Jury Trial" against the Motion Picture Association of America (MPAA). The complaint alleges the MPAA paid a former associate of the plaintiffs $15,000 to break into the TorrentSpy intranet to collect email correspondence, computer files, and trade secrets that the MPAA could use in its lawsuit against the file sharing website.
The complaint in Justin Bunnell, Forrest Parker, Wes Parker, and Valence Media, LTD., v. Motion Picture Association of America, US District Court for the Central District of California is available at
http://www.p2pnet.net/stuff/ts-mpaa.pdf (PDF only)
[Source: San Jose Mercury News (5/25), News.com (5/24)]

BACK TO TOP OF PAGE
Research / Reports
Bundled Services to Increase Revenue for Cable, Telephone Companies
05.18.2066 – A study released by the consulting firm Parks Associates entitled The Business of Bundled Services: Consumers, Models, and Uptake projects that annual revenue generated by bundled communication services in the U.S. will increase six-fold to $119.5 billion by the year 2010. The report suggests that as voice, television, and Internet communications systems converge around Internet Protocol-based technologies, business models that offer consumers a seamless integration across these types of services (integration that transcends a single billing statement) will help businesses to retain customers and maximize revenue streams.
A copy of the report is available at
http://www.parksassociates.com/research/reports/tocs/2006/bundled_services.htm
[Source: TechWeb.com (5/18)]

GAO Report Sheds Light on Broadband Penetration
05.05.2006 – The Government Accountability Office released a report [GAO-06-426] that examines factors affecting the deployment and the adoption of broadband services across the U.S. According to the report, about 30 million American households have some form of broadband service. The report’s findings are based on FCC surveys of zip-code level data that collects where subscribers are served. However, a limitation of such a method, the GAO contends, is that it does not provide enough information on where providers have established broadband infrastructure. While surveys such as the FCC’s reveal an extensive deployment of broadband networks, they cannot adequately convey the locations of local broadband infrastructures, making it difficult to assess the extent of deployment gaps in rural areas in the U.S.
Senate Commerce Committee Chairman Ted Stevens (R-AK), co-sponsor of the "Communications, Consumers' Choice, and Broadband Deployment Act of 2006" [S. 2686] and an advocate of Universal Service Reform, noted that the report indicated 41 percent of American households are not connected to the Internet at all and that rural Americans are less likely to subscribe to broadband than those living in cities. Stevens believes his reform bill will help correct these deficiencies as Congress and the President have indicated that broadband access for all Americans is vitally important to the nation's well being.
The report, as well as a one-page summary of the report, is available at
http://www.gao.gov/docsearch/abstract.php?rptno=GAO-06-426
Senator Stevens' analysis of the bill is available at
http://commerce.senate.gov/newsroom/printable.cfm?id=255239
[Source: GAO (5/5); Commerce.Senate.gov (5/5)]

Study Links Teens' Unhappiness with Cell Phone Use
05.24.2006 – At the American Psychiatric Association's annual meeting held in Toronto, researchers from South Korea presented findings indicating a correlation between teens' cell phone use (including text messaging) and their happiness. Increased cell phone usage could point to a certain degree of unhappiness or anxiety, but is not necessarily a sign of clinical depression, according to the report's lead author, Dr. Jee Hyan Ha.
[Source: LA Times (5/24)]

BACK TO TOP OF PAGE
Items of Interest
EarthLink, GE Invest in BPL Provider
05.04.2006 – EarthLink and General Electric have joined Google and the Goldman Sachs Group, among others, as investors in the Current Communications Group. Current Communications provides high-speed Internet access over power lines in Ohio and, in the near future, Texas. EarthLink and GE invested a combined $130 million in the company.
In addition, EarthLink will act as a retail provider on behalf of Current Communications. Presumably EarthLink and/or Current will lease infrastructure from utility companies. EarthLink is also affiliated with Duke Power (Charlotte, North Carolina), Progress Energy (Raleigh, North Carolina) and Con Edison (New York).
Interference issues with emergency radio networks have traditionally hampered widespread deployment of broadband over power lines (BPL) networks. Short-wave HAM radio operators have also complained about interference from BPL networks. The latest BPL technology has mitigated these problems. Slow data transmission speed is another common criticism of BPL. However, Current Communications's service delivers data at speeds between 512 kB/s and 3 Mb/s, as fast as or faster than DSL. Because power lines are so common, BPL proponents believe the technology is well suited for providing access to rural and other areas underserved by telephone and cable companies. In areas where consumers already have a choice between cable Internet and DSL, BPL could become an attractive third option.
[Source: C|Net (5/4, 12/19/05)]

Construction on Philadelphia WiFi Network Has Yet To Begin
05.28.2006 – EarthLink won the contract to deploy a wireless network in Philadelphia in October 2005, but it was not until this month that the city council committee approved provisions allowing EarthLink to hang networking equipment from city-owned utility poles and signed the final contract with the company. The rights of way will cost EarthLink approximately $2 million. The city intends to invest this money in programs that will close the digital divide, including equipment and training programs for low-income residents.
However, it should be noted that citywide WiFi for Philadelphia residents is not quite imminent. The agreement specifies that EarthLink must initially build a 15-square mile network that demonstrates proof-of-concept. Thereafter, it may take up to 18 months before the 135-square mile network is fully deployed.
[Source: C|Net (5/3, 3/2)]

Startup Proposes Free Nationwide WiFi
05.24.2006 – A San Francisco Bay Area startup, M2Z Networks, requested a license from the FCC for access to an unused 20-megahertz band to deploy a nationwide, free, high-speed broadband network. M2Z has asked for the bandwidth free of charge for a minimum of ten years. In exchange, the company will deposit five percent of the company's profits into the federal treasury.
The company's business model would rely on advertising as well as a premium service that would offer users a faster connection than the free 384 kB/s connection, which is about six times faster than dialup. If the FCC approves the plan (analysts have commented that while it's unlikely that the Commission will give the spectrum away for free, a compromise is not entirely out of the question) M2Z predicts 33 percent of the network would be deployed within three years, 66 percent within five years, and 95 percent within 10 years. However, the proposed network is relatively slow, even by today's standards; it could be obsolete in 10 years. Also, it should be noted that users would be required to purchase a special antenna that M2Z estimates will cost approximately $250.
A copy of M2Z's application is available at
http://www.m2znetworks.com/pdf/Application.pdf (PDF only)
[Source: PC Magazine (5/24)]

Technology to Boost WiFi Signal
05.22.2006 – Not surprisingly, more regions have announced their intent to build wireless networks for their constituents. The state of Rhode Island and Silicon Valley are two recent, high profile examples. However, the earliest municipal WiFi projects, including ones in Tempe, Arizona, Mountain View, California, and St. Cloud, Florida, have suffered from weak signals, requiring users to purchase special antennas and contractors to deploy additional access points.
As WiMax and 802.11n technologies continue to mature—both are more robust than typical WiFi but have yet to gain widespread adoption—Wavion, a company based in San Jose, California, has developed a networking device that increases the transmission distance of a WiFi signal. "One spatially adaptive [access point] from Wavion does the work of three to four conventional [access points], reducing service providers’ capital and operating expenditures by 50 percent," according to the company's website.
[Source: Wavion.co.il (5/22), Reuters (5/2)]

BACK TO TOP OF PAGE
Events
2006 Alliance for Community Media International Conference and Trade Show
The Alliance for Community Media’s (ACM) 2006 International Conference and Trade Show will be held in Boston, Massachusetts, on July 6-9, 2006. The ACM 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.

Building the MuniWireless Ecosystem
The Muniwireless Silicon Valley Conference is scheduled for June 19-21, 2006, in Santa Clara, California. The conference will provide a platform for decision-makers "across the muniwireless ecosystem to come together to meet, plan, and build new relationships." The conference website, http://www.mw06sv.com/, contains more information.

Supernova 2006: Making Connections in a Complex World
Supernova 2006, a conference to understand how decentralization and pervasive connectivity are changing the world, will be held in San Francisco from June 21-23, 2006. Now in its third year, the conference will draw together businesses, government officials, and other leaders in cutting edge technologies. Produced in partnership with the Wharton School of Business at the University of Pennsylvania, sponsors for the event include AT&T, IBM, and Microsoft, among other companies. For more information, please see http://www.supernova2006.com.

BACK TO TOP OF PAGE
Newsletter Info

Center for Advanced Communications Policy

Telecom/IT Policy Highlights Volume 6.05
May 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.
BACK TO TOP OF PAGE

BACK TO Publications

Volume: 6.05 May 2006

Contents:

Volume: 6.05
May 2006