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Telecom/IT Policy Highlights

Volume: 6.08
September 2006

Microsoft Word version / September, 2006 TiPH (122kB)

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Contents:
Overview
Legislative Activities
Policy / Regulatory Activities
Judicial Activities
Studies / Reports
Other Activities and Items of Interest
Upcoming Events
Newsletter Info
  • Overview

    In this month’s issue of the Telecom/IT Policy Highlights, we focus on several ongoing telecommunications issues which continue to develop. Though Congress has not yet voted on any of the key telecommunications bills, such as the “Advanced Telecommunications and Opportunities Reform Act,” and is unlikely to do so before the November recess for elections, it did address a couple of important matters through its committees. Perhaps the most important story this month is the unfolding story involving Hewlett Packard and allegations that it conducted unethical surveillance on its directors and members of the press. The House Commerce Committee has convened a hearing to address the issue, just as state and federal criminal investigations are underway. The Senate Commerce Committee took time out from its schedule to hold hearings on the re-appointments of NTIA chairman John Kneuer and FCC chairman Kevin Martin. On the regulatory side, the FCC announced that it has concluded the largest and most lucrative auction of spectrum licenses in the history of the Commission. Over $13.9 billion was raised by the federal government and 1,087 licenses tentatively awarded. Use of this portion of spectrum is expected to further the goals of the federal government to provide innovative wireless services.

    This month marks the fifth anniversary of the terrorist attacks on the New York World Trade Center on September 11, 2001. There have been some timely developments in the area of telecommunications. The FCC formally launched its Public Safety and Homeland Security Bureau, which promises to provide better coordination of emergency communications and highlights the growing dependence of Americans on communications services. In addition, the U.S. Attorney General and President both delivered notable speeches on the role of telecommunications technologies as vehicles for terrorist activities and their role in combating terrorism.


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  • Legislative Activities

    House Commerce Committee Considers “Hewlett-Packard Pretexting Scandal”

    09.28.2006 – The House Commerce Committee’s Subcommittee on Oversight and Investigations held a hearing entitled “Hewlett Packard’s Pretexting Scandal,” on September 28, 2006. The hearing comes amid admissions made by HP that it had spied on its directors, journalists following the company, and others, with the intent to determine who was responsible for leaks of confidential information to the news media. “Pretexting” refers to the use of subterfuge to obtain confidential information, such as obtaining telephone records by posing as that particular subscriber. The comparatively lax privacy protection policies of telecommunications carriers allow such deception to take place. There have been allegations that some HP executives undertook investigations to determine how leaks from the company’s boardroom meetings in late 2005 and 2006 made their way into the media, especially CNET.

    On September 22, it was announced that Patricia Dunn, HP’s former chairwoman, had resigned from the company amid the company’s admission of such spying. Several days later, as the House Commerce Committee’s hearing was to get underway, HP’s general counsel, Ann Baskins, also announced her resignation from the company. The House Commerce Committee’s hearing focused especially on the role that Dunn and HP’s president and chief executive, Mark Hurd, may have had in the company’s investigative activities. According to the New York Times, the scandal, which became public only three weeks ago, surfaced as a result of deep divisions between HP’s leaders in the boardroom. The pretexting scandal is now the subject of federal and state criminal investigations. A bill introduced by Rep. Lamar Smith (R-TX), the “Law Enforcement and Phone Privacy Act of 2006” [H.R. 4709] would specifically criminalize pretexting activities.

    For copies of witness testimony and statements from House Commerce Committee leaders, most notably Chairman Joe Barton (R-TX), please visit [http://energycommerce.house.gov/]. [Sources: New York Times, Associated Press, and House Commerce Committee]

    Senate Telecommunications Bill Not to Receive a Vote Before Recess
    09.21.2006 – Senate Commerce Committee Chairman Ted Stevens (R-AK) gave a speech to the Progress and Freedom Foundation in which he noted that the bipartisan telecommunications reform bill proposed by members of the Senate Commerce Committee will not receive a vote by the full Senate before the November recess for elections. The bill, entitled both the “Advanced Telecommunications and Opportunities Reform Act” and “Communications Act of 2006” [H.R. 5252], may still be taken up by the Senate following its return on November 13, 2006. Stevens has expressed some optimism that the bill may still be passed, despite calls from some lawmakers for a net neutrality provision to be added to the bill. Stevens has emphasized the support the bill has received from lawmakers, consumers, and companies. Most recently, he called attention to a letter received by the Senate Commerce Committee in mid-September from over 100 companies in support of the bill.

    On the same day that he gave his speech to the Progress and Freedom Foundation, Stevens took to the floor of the Senate to promote the telecommunications bill. In particular, he highlighted its potential advantages, such as reducing phone rates for American armed forces personnel overseas, providing funds for emergency services, and encouraging broadband deployment for consumers. Much of Stevens’s speech to the Senate concerned the potential benefits the “Advanced Telecommunications and Opportunities Reform Act” would have for American consumers. [Source: Senate Commerce Committee]

    Senate Commerce Committee Considers Re-nominations of FCC and NTIA Chairs
    09.12.2006 – The Senate Commerce Committee held a hearing to consider the re-nomination of Kevin Martin, chairman of the FCC, and John Kneuer, chairman of the National Telecommunications and Information Administration (NTIA). The senators’ questions during the hearing were directed primarily at Martin and his leadership at FCC on such matters as media mergers and concentration, net neutrality, and the pending “Advanced Telecommunications and Opportunities Reform Act” [H.R. 5252] in the Senate. Committee members also asked Martin about emergency communications, multicast must-carry requirements, and the FCC’s position on the recent controversies concerning the National Security Agency (NSA) and phone records. In his testimony, Chairman Martin reiterated his belief that a “robust, competitive marketplace, not regulation, is ultimately the greatest protector of the public interest.” Nevertheless, he was forced to respond to concerns levied by such senators as Barbara Boxer (D-CA) and Byron Dorgan (D-ND) regarding ongoing media concentration and net neutrality.

    FCC chairman Martin’s fixed five-year term as a commissioner, which began in 2001, expired on June 30, 2006, but he is allowed to serve until Congress recesses at the end of 2007. He was appointed by President Bush in 2005 to replace Michael Powell as FCC chairman. Martin’s hearing appeared to be more about pressing telecommunications issues rather than securing support from senators for his next term. Senators on the Commerce Committee gave little indication of how they would vote regarding his reappointment. [Source: Senate Commerce Committee, FCC, New York Times]


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  • Policy / Regulatory Activities

    Auction for Advanced Wireless Services Concludes

    09.18.2006 – The FCC’s first auction of Advanced Wireless Services (AWS) spectrum concluded on September 18, 2006. Of the 1,122 wireless licenses offered, the Commission announced that 104 bidders won 1,087 licenses. The auction, which began on August 9, included 161 rounds of bidding and raised total gross bids of almost $13.9 billion, the most successful spectrum auction in FCC history. Based on their total winning bids, the top five winning bidders in the auction were T-Mobile License LLC; CellCo Partnership d/b/a Verizon Wireless; SpectrumCo LLC; MetroPCS AWS, LLC; and Cingular AWS, LLC. Despite the dominance of these large companies, it is important to note that more than half of the winning bidders in the auction certified their qualifications as small business entities, which enabled them to use bidding credits offered by the FCC. The AWS licenses offered by the FCC are expected to be used to provide a wide array of innovative wireless technologies and services, including voice, data, video, and wireless broadband services offered over Third Generation (3G) networks. The spectrum licenses were offered in a number of geographic locations throughout the United States and various megahertz sizes, in order to accommodate the varying spectrum needs of different types of wireless providers, especially those in rural areas. [Source: FCC]

    Guard Band License Rule Changes Considered by Commission

    09.08.2006 – The FCC has issued a Notice of Proposed Rulemaking [FCC 06-133] seeking comment on possible changes to the rules that govern licenses for the Guard Band portions of the 700 MHz spectrum. The Guard Bands are special portions of the spectrum that are designed to protect public safety from adjacent commercial operations by reducing the possibility of interference, but the FCC has permitted operations in the Guard Bands to allow for effective, efficient, and valuable use of the spectrum. As such, the FCC has special service of the Guard Bands. Their licensees, also known as Guard Band Managers, make the spectrum available to system operators or directly to end users through private, written contracts known as “spectrum user agreements.” Guard Band Managers retain ultimate control over the spectrum they license and are charged by the FCC with coordinating the use of their frequencies with other Guard Band Managers and frequency coordinators in the adjacent public safety frequencies.

    The current NPRM considers how the FCC might continue to make efficient and effective use of this spectrum. In particular, the Commission is seeking comment on: 1) whether to extend the FCC’s spectrum leasing rules to the Guard Bands or maintain the current Band Manager rules; 2) whether to increase band flexibility for incumbents and prospective licensees; 3) whether to eliminate the prohibition on the deployment of cellular architecture within the Guard Bands; and 4) whether to change the Adjacent Channel Power limits in the Guard Bands. Finally, the FCC is seeking comment on what it should do with the Guard Band licenses it reclaimed from Nextel as part of an 800 MHz band reconfiguration proceeding.

    Comments are due 30 days after publication of the NPRM in the Federal Register, and reply comments will be due 15 days later. For a copy of the Notice, please see [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-06-133A1.txt]. [Source: FCC]

    Public Safety and Homeland Security Bureau Launched by Commission

    09.25.2006 – On September 25, the FCC released its Order [FCC 06-35] formally creating a Public Safety and Homeland Security Bureau within the Commission. With this newest addition, the FCC now has eight bureaus, each of which oversees a particular aspect of telecommunications regulation and policy, ranging from consumer and government affairs to wireline competition. The new Public Safety and Homeland Security Bureau’s stated mission is to “promote a more efficient, effective, and responsive organizational structure and to better promote and address public safety, homeland security, national security, emergency management and preparedness, disaster management, and related issues.” In particular, the events of September 11, 2001, and last year’s hurricane season underscored the need of the FCC to address threats to the nation’s telecommunications infrastructure.

    In order to promote the Commission’s commitment to providing robust, reliable, and resilient communication service in times of emergency, the new bureau will include three divisions. The Policy Division will oversee the creation and administration of related rulemaking, including Enhanced 911 (E-911) service and interoperability of public safety communications. The Public Communications Outreach & Operations Office will be responsible for coordinating FCC emergency response procedures and operations on both a day-to-day basis and during emergencies and disasters, when inter-governmental coordination is most essential. Finally, the administration of information collection pertaining to emergency activities, such as network outage reports, will be handled by the Communications Systems Analysis Division.

    For a copy of the Order creating the Public Safety and Homeland Security Bureau, please see [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-06-35A1.txt].


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  • Judicial Activities

    Appeals Court Delivers Opinion on Interconnection Dispute

    09.07.2006 – The U.S. Court of Appeals for the Ninth Circuit issued its opinion in Verizon California v. Peevey. The decision affirms in part, and reverses in part, an earlier decision by the District Court regarding an order made by the California Public Utilities Commission (CPUC) regarding an interconnection dispute between two carriers. Verizon California is the incumbent local exchange carrier that was brought into competition with another carrier, Pac West Telecomm, following the passage of the Telecommunications Act of 1996. Despite being able to reach an interconnection agreement in 1996, the two companies could not develop an agreement in 2001. As a result, they submitted their claims to the CPUC for resolution. The CPUC ruled in favor of Pac West on two issues: 1) that Verizon had to pay reciprocal compensation at a pre-existing rate that was higher than a new, lower-capped rate set by the FCC; and 2) that Pac West could exclude calls to paging services before applying an FCC presumption that terminated calls are more than three times the number of originated calls, the excess calls are bound for Internet service providers. In addition, the CPUC ruled against and for both companies when it found that Pac-West was entitled to compensation for traffic originating from and terminating within a single exchange, while Verizon was entitled to collect call origination charges for the cost of transporting Virtual Local traffic to a distant point of interconnection.

    Verizon appealed the CPUC’s ruling to the District Court. The court found that the commission’s decision was “not arbitrary or capricious.” Both sides (Verizon and the CPUC and Pac West) then appealed the case. In its ruling, the Court of Appeals upheld the District Court’s opinion, except on one matter. Regarding the CPUC’s decision that Pac-West could disregard paging traffic in making assessments of volume, the court found that federal law was contrary and should take precedence. A copy of the Court of Appeal’s decision may be found at [http://www.ca9.uscourts.gov/ca9/newopinions.nsf/60614CA259EE70E8882571E20055378B/$file/0416382.pdf] (PDF only). [Source: U.S. Court of Appeals for the Ninth Circuit]


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  • Studies / Reports

    Competition in the Wireless Industry Report Adopted by Commission

    09.26.2006 – The FCC has adopted its eleventh annual report to Congress on the state of competition in the wireless telephone industry. Through an analysis of various measures of competition, such as the number of competing carriers in a particular area, market shares, pricing behavior and trends, and subscriber growth, the FCC has concluded that there was effective competition in the wireless telephone industry during the year 2005. A particularly notable finding of the report is the continuing growth of mobile wireless

    telephone use among Americans. During 2005, the number of subscribers grew from 184.7 million to 213 million, increasing the rate of wireless penetration to approximately 71 percent of Americans. At the same time, Americans are also talking and text messaging more than ever on their phones. For example, the volume of text message traffic increased from 24.7 billion messages in the second half of 2004 to 48.7 billion messages during the same period a year later. [Source: FCC]

    Informal Consumer Inquiries and Complaints Report Released by FCC

    09.07.2006 – The FCC has released its report and findings on the top subject areas for inquiries and complaints processed by its Consumer and Government Affairs Bureau during the second quarter of 2006. The main finding of the report is an overall decrease in complaints between the first quarter and second quarter of 2006, in the areas of wireless (decrease from 4,616 to 4,050), wireline (decrease from 23,358 to 15,753), and, especially, radio and television broadcasting (decrease from 275,257 to 53,352). The Telephone Consumer Protection Act replaced Equipment as the leading category of wireless complaints.

    In contrast to complaints, the FCC noted an overall increase in the number of inquiries in the second quarter of 2006. Wireless inquiries increased from 7,130 in the first quarter, to 9,296 in the second quarter. In addition, Billing and Rates, and Contract – Early Termination replaced Commercial License and Land Mobile Issues as the main inquiry category. Wireline inquiries increased from 31,231 to 35,324 in the second quarter of 2006. Radio and Television Broadcasting was the only category with a decrease in inquires, down from 4,238 in the first quarter to 3,390 in the second quarter of 2006. Low Power Issues replaced Accessibility issues as the main focus of broadcasting inquiries. [Source: FCC]

    NTIA Spectrum Relocation Report Presented to Congress

    09.22.2006 – The NTIA presented a report to Congress entitled “Spectrum Relocation Report: Compensation Options for Relocation Costs of Federal Entities.” The report examines the various policy options available to compensate federal entities for relocation costs whenever their spectrum has been reallocated by the FCC for unlicensed, public safety, shared, or non-commercial use. After its passage of the “Commercial Spectrum Enhancement Act” (CSEA) [Pub. L. No. 108-494] in December 2004, Congress established a mechanism to provide compensation for federal users of the spectrum displaced by FCC reallocation for non-federal users, and it created a Spectrum Relocation Fund (SRF) for this purpose.

    A copy of the NTIA’s report to Congress is available at [http://www.ntia.doc.gov/osmhome/reports/2006/SpecRelo_HR5419.htm] (also available as a Microsoft Word document and PDF file). [Source: NTIA]


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  • Other Activities and Items of Interest

    Georgia Governor Promotes Community Wireless Projects 09.01.2006 – An article by Tod Newcombe, entitled “Show of Support,” in the August 2006 issue of Government Technology features Governor Sonny Perdue of Georgia and

    his efforts to encourage community wireless efforts. The article discusses Purdue and the state legislature’s decision in May 2006 to make available funding for Georgia communities to establish wireless broadband networks. In the article, Purdue emphasized his commitment to see that community Wi-Fi efforts are led by local governments. The role of the state government, he contended, should be to “encourage and ‘incentivize’ local governments” to undertake such initiatives that will benefit the state as a whole.

    The article highlights Governor Purdue’s initiative, the Wireless Communities Georgia Progress, to provide funding for applicants from city and county governments in the development of municipal wireless projects. Recipients of state funds are expected to provide a minimum of 25 percent of the project’s total cost. In addition, priority is given to networks operated by a private-sector company. The program, Purdue contends, is aimed at closing the urban-rural gap in wireless broadband deployment, as well as promote overall economic development in the state of Georgia. [Source: Government Technology]

    President, Attorney General Give Speeches on Terrorism and Communications

    09.07.2006 – U.S. President George W. Bush and Attorney General Alberto Gonzales both gave speeches on the relationship between terrorism and telecommunications policy. In his speech to the Manhattan Institute in New York, entitled “Law Enforcement and the Prevention of Terrorism Five Years After 9/11,” Attorney General Gonzales discussed how terrorists are utilizing information and communication technologies (ICTs) to plan, coordinate, and undertake their activities. For example, Gonzales cited the use of the Internet for recruitment and training, cell phones that permit terrorists to communicate, and digital cameras and other imaging technologies for determining targets and planning attacks. Gonzales contrasted the efforts of terrorists with the coordination of the United States and its allies, most notably through Joint Terrorism Task Forces (JTTFs), to combat terrorism, as well as the use of telecommunications technologies to combat terrorism.

    In his speech at Cobb Galleria Centre in Atlanta, Georgia, President Bush provided a detailed history of the war on terrorism. However, most of the speech was devoted to an explanation and defense of the National Security Agency’s (NSA) Terrorist Surveillance Program. The President also expressed his opposition to last month’s decision by a Michigan district court, in ACLU v. NSA, upholding a legal challenge to the NSA program (see TIPH 6.07 for more details). In addition to a vow to appeal the court’s decision, the President also called for Congress to promptly pass legislation to provide additional authority for the Terrorist Surveillance Program and make broader reforms in the 1978 Foreign Intelligence Surveillance Act. The September 2005 speeches of Gonzales and Bush commemorated the fifth anniversary of the New York Trade Center attacks.

    For a copy of the Attorney General’s speech, please see [http://www.usdoj.gov/ag/speeches/2006/ag_speech_060907.html]. The text of the President’s speech is available at [http://www.whitehouse.gov/news/releases/2006/09/20060907-2.html]. [Sources: Department of Justice and the White House]

    Telecommunication Policy Research Conference at George Mason University 09.29.2006 – The Telecommunication Policy Research Conference (TPRC) hosted its 34th Annual Research Conference on Communication, Information, and Internet Policy, at the George Mason University School of Law, in Arlington, VA, on the weekend of September 29-October 2, 2006. Among the key presentations at the conference was a panel on the effects of the Supreme Court’s 2005 decision in NCTA v. Brand X. This session examined, in particular, the role of antitrust can play in shaping telecommunications policy. Other notable panels at the conference addressed such issues as municipal and community wireless networks, net neutrality, and Internet governance.

    The TPRC is a non-profit organization that provides an annual forum for scholars engaged in publishable research on policy-relevant telecommunications and information issues, and for public- and private-sector decision makers engaged in telecommunications and information policy. The purpose of the conference is to acquaint policy makers with the best of recent research and to familiarize researchers with the knowledge needs of policy makers. For more information, including this year’s program, please see [http://www.tprc.org/TPRC05/Program05.htm] (also available as a PDF document).


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  • Upcoming Events

    FCC Public Hearing on Media Ownership

    10.03.2006 – The FCC will hold a field hearing on media ownership in Los Angeles, on October 3, 2006. The hearing will be held in two parts—at the University of Southern California’s Davidson Conference Center from 1:00 to 4:30 p.m., and later, El Segundo High School in El Segundo from 6:30 to 10:00 p.m. The hearing is designed to fully involve the public in the FCC’s current Quadrennial Broadcast Media Ownership Review. It will be the first of a series of proceedings on media ownership to be held throughout the United States.

    Seating for the Los Angeles hearing is on a first-come, first-served basis. The public is encouraged to attend and participate. For more details, please see [http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-267624A1.txt].


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  • Newsletter Info

    Center for Advanced Communications Policy
    Telecom/IT Policy Highlights Volume 6.xx
    Month 2006
    Nathan W Moon, Editor

    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 , Research Specialist , or , Director of Research and Editor in Chief.
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