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Telecom/IT Policy Highlights

Volume: 6.09
October 2006

Microsoft Word version / October, 2006 TiPH (192kb)

Adobe PDF version / October, 2006 TiPH (131kb)

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

    This month’s TIPH comes to our readers on the eve of the upcoming 2006 midterm elections, which will take place on November 7th. Because of the elections, Congress has been in recess for much of the month, and there has been little legislative activity on telecommunications to report. Nevertheless, a vote by the full Senate on Communications Opportunity, Promotion, and Enhancement Act (COPE Act) remains a viable proposition, and Senate Commerce Committee chairman Ted Stevens (R-AK) is committed to bringing the proposed legislation to the Senate floor for consideration after Congress re-convenes in mid-November. Also worth reporting this month is the passage of the Warning, Alert, and Response Network Act (WARN Act), part of a larger law to tighten security at the nation’s ports. Signed into law by the President in mid-October, the WARN Act paves the way for enabling emergency communications to be relayed to consumers via cellular telephones and other wireless devices, a response to the need for improved emergency communications in the wake of last year’s Gulf region hurricanes.

    Much of October’s telecommunications policy activities have taken place in the FCC. The Commission has been especially involved with the upcoming transition from analog to digital television, addressing the future of the bandwidth to be vacated and its potential applications for commercial wireless, public safety, and other uses. FCC Commissioner Jonathan Adelstein, for example, has emphasized that both commercial wireless services and emergency responders might benefit from being “neighbors” in the newly allocated 700 MHz portion of the broadcast spectrum. Finally, the FCC continues to consider the proposed merger of AT&T and BellSouth. The Department of Justice’s Antitrust Division gave its approval to the acquisition of BellSouth by AT&T earlier this month, and the FCC is about to complete its own proceeding into the matter, after delaying its vote twice and reopening the issue for public comment.

    Finally, we continue to track stories of ongoing interest. Perhaps most prominent is the case against former executives at Hewlett Packard for their involvement in pretexting, or illegal acquisition of consumer phone records, against company employees and journalists. Five individuals affiliated with HP or contracted surveillance firms have been charged with four counts of criminal activity in the State of California.


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  • Legislative Activities

    Senate Commerce Committee Releases Report on Telecom Bill
    09.30.2006 – The Senate Commerce Committee issued a long-awaited report on the telecommunications legislation it adopted in late June that would essentially amend the Telecommunications Act of 1996. The report, entitled “Communications Opportunity, Promotion, and Enhancement Act of 2006: Report of Committee on Commerce, Science, and Transportation on H.R. 5252, Together with Additional Views,” provides a detailed analysis of the proposed legislation, along with a statement of dissent from prominent Democrats who have criticized certain components of the bipartisan bill. The 283-page report, released just before Congress embarked on its pre-election recess, emphasized that the proposed “Communications Opportunity, Promotion, and Enhancement Act of 2006” [H.R. 5252] will serve to update the nation’s communications laws “in a manner that benefits consumers and that encourages high-speed Internet deployment.”

    Nevertheless, Democratic members of the Senate Commerce Committee, including co-chair Daniel Inouye (D-HI), Sen. Barbara Boxer (D-CA), and Sen. Byron Dorgan (D-ND), disagreed with such claims in the report. They contended that the bill “fails to promote innovation and competition by prohibiting broadband network operators from unfairly discriminating against their rivals,” referring to the lack of “net neutrality” provisions in the bill. In addition, the senators suggested that the proposed legislation would exacerbate the nation’s “digital divide” between those individuals who have access to technology and those without such access by failing to mandate build-out requirements, “uniform” upgrades of telecom and cable networks. The final major criticism of the bill is the view of dissenting senators that the legislation would preempt state authority in the area of video-franchising laws.

    The bill’s chief sponsor, Senate Commerce Committee chair Ted Stevens (R-AK), plans to bring the bill to the Senate floor for debate and a possible vote in the post-election session, to begin in mid-November. Stevens has acknowledged that he remains a few votes short of the 60 senator majority required to override a filibuster of the measure.

    A copy of the report is available online at [http://commerce.senate.gov/public/_files/SenateCommunicationsBillConferenceReport.pdf] (PDF only). [Sources: Senate Commerce Committee and National Journal]

    WARN Act Passed as Part of Larger Port Security Bill
    10.13.2006 – On October 13, 2006, President Bush signed into law the “Port Security Improvement Act of 2006” [Pub. Law No. 109-347]. While most of the law deals with the security of America’s ports, two telecommunications-related provisions were signed into law as part of the legislation. One of these, the “Unlawful Internet Gambling Enforcement Act of 2006” [H.R. 4411], outlaws online betting practices. More notable is the passage of the “Warning, Alert, and Response Network Act” (WARN Act) [S. 1753], which was introduced by Sen. Jim DeMint (R-SC) in September 2005.

    The WARN Act mandates the creation of a Commercial Mobile Service Alert Advisory Committee (see below story, “FCC Seeks Nominations”) to consider technical issues in the development of a service to provide mobile service customers with emergency alerts.

    The advisory committee will make its recommendations to the FCC, which will then undertake a proceeding to 1) allow any licensee providing commercial mobile service to transmit emergency alerts to subscribers or users of that service, and 2) require any commercial mobile service provider which elects not to transmit the voluntary emergency alerts to provide “clear and conspicuous notice at the point of sale…that it will not transmit such alerts via the service it provides for the device.” [Sources: Library of Congress and Washington Post]


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  • Policy / Regulatory Activities

    Advanced Television Services’ Impact on Existing Television Service Considered
    10.20.2006 – In its Seventh Further Notice of Proposed Rulemaking [FCC 06-150] , the FCC has begun the final stage of the transition of the nation’s broadcast television system from analog to digital television (DTV) by undertaking the final step in its channel election process. As much as possible, the FCC has attempted to accommodate broadcasters’ channel preferences while mitigating any potential interference problems. In this Seventh FNPRM, the FCC has issued a proposed DTV Table of Allotments, which includes a channel for each eligible broadcast station and rules for specific technical facilities, such as effective radiated power, antenna height above average terrain, and geographic coordinates for operation. The Commission has expressed its own belief that 1) the proposed new DVT Table provides all eligible stations with channels for DTV operations after the DTV transition; 2) the DTV Table is the result of informed decisions by licensees when making their channel selections; 3) that the licensees benefited from the clarity and transparency of the channel election process; 4) the FCC’s proposed DTV Table recognizes industry expectations protecting existing service and respecting investments already made; and 5) that the DTV Table reflects the Commission’s efforts to promote overall spectrum efficiency and ensure the best possible DTV service to the public. The FCC invites comment on its proposed DTV Table.

    For a copy of the Seventh FNPRM, please see [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-06-150A1.txt]. Proposed post-DTV transition channel assignments are available in Appendix A of the Seventh FNPRM, and the proposed technical facilities for each of these channels are included in Appendix B. Comments are due on January 11, 2007, and reply comments are due on February 12, 2007. [Source: FCC]

    AT&T-BellSouth Merger Approved by DOJ, Decision Delayed by FCC
    10.11.2006 – On October 11, 2006, the Department of Justice’s (DOJ) Antitrust Division announced its approval of AT&T’s pending acquisition of BellSouth. After an investigation of the areas where the two companies compete—residential local and long distance service, business telecommunications services, and Internet services—the Antitrust Division determined that the merger is not likely to reduce competition substantially. Citing the presence of other competitors, changing regulatory requirements, and the emergence of technologies in markets for residential local and long distance service, the DOJ concluded that AT&T’s purchase of BellSouth is not likely to harm consumer welfare. Nor does the acquisition raise competition concerns regarding Internet services markets or “net neutrality.” The DOJ found that the merged firm would continue to face substantial competition from other rivals in this telecommunications area.

    Despite the DOJ’s approval, the FCC has twice delayed a vote on whether to approve the merger and has extended the public comment period. The FCC has received a number of comments from policy researchers, competing firms, and other stakeholders who oppose the merger on the grounds that it will harm competition and slow technological advances. These filings have been countered by arguments from lawmakers and other industry advocates claiming that the new AT&T will be able to launch video services faster to compete with cable television.

    Few observers question that the FCC will approve the deal; rather, the chief issue is when it will happen and under what conditions. FCC chairman Kevin Martin has expressed his desire to approve the sale without conditions, but in order to gain bipartisan support, some concessions from AT&T may be necessary. The company has agreed to several proposals for approval of the merger, including price freezes on certain services that are sold to competing providers and, on the consumer side, making high-speed Internet available to every customer, whether by DSL or some other means, such as satellite. In their filings to the FCC, some competitors have criticized AT&T’s offers as too limited. Others have expressed concerns that such concessions will have too short of a lifespan, with “sunset provisions” as short as 2 ½ years in some cases. The FCC is scheduled to bring the merger to a vote on November 3, 2006. [Sources: FCC, Department of Justice, New York Times, and Atlanta Journal-Constitution]

    Competition for Delivery of Video Programming Considered by FCC
    10.20.2006 – The FCC has issued a Notice of Inquiry [FCC 06-154] seeking data and information for its annual report to Congress on the status of competition in the market for the delivery of video programming. As directed by the Communications Act of 1934, as amended, the Commission requests information, comments, and analyses that will allow it to evaluate the status of competition in the video marketplace, changes to the marketplace since the 2005 Report, prospects for new entrants, factors that have facilitated or impeded competition, and the effect these factors are having on consumers’ access to video programming. The FCC’s report concerns the delivery of video programming via cable television services, direct-to-home satellite services, wireline service providers (local exchange carriers, broadband service providers), broadcast television services, wireless cable systems, private cable operators, Internet video, and home video sales and rentals.

    In addition, the FCC requests 1) data that will allow the FCC to evaluate horizontal concentration in the video marketplace, vertical integration between programming distributors and programming services, and other issues relating to the programming available to consumers; 2) information on technical issues, including equipment and emerging services; and 3) comment regarding developments in foreign markets, which may contribute to the FCC’s understanding of domestic markets and provide insight into factors affecting video competition.

    For more details on the information being sought by the FCC for its 2006 Annual Report, please view the NOI at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-06-154A1.txt]. Comments are due by November 29, 2006, and reply comments are due no later than December 29, 2006.

    Low Power Devices Cleared for Use in TV White Spaces
    10.12.2006 – The FCC has issued a First Report and Order and Further Notice of Proposed Rulemaking[FCC 06-156] that clears the way for new low power devices to operate in the television broadcast spectrum. The Commission has determined that fixed low power devices can be allowed to operate on television channels where those frequencies are not being used by television stations or other authorized services, areas of the broadcast spectrum commonly known as “white spaces.” Such devices include those used for the propagation of wireless broadband service. A consensus among the FCC’s commissioners is that “white spaces” provide an important opportunity for furthering the deployment of Wi-Fi services.

    At the same time, the FCC declined to permit operation on TV channel 37, which is used by radio astronomy and wireless medical telemetry services; and on channels 52-69, which have been reallocated for public safety and other mobile services. The commission also refused the operation of personal/portable devices on TV channels 14-20, which are utilized by the public safety service in 13 cities, but has left for further consideration the issue of whether fixed devices might be used in that band. Finally, the devices cleared for use by the FCC may not be marketed until February 18, 2009, after the digital television (DTV) transition is complete and all television stations are in operation on their permanent DTV channels.

    The Commission has invited further comment on a number of issues raised in response to the NPRM, including additional information to determine whether personal/portable devices can operate in any of the TV channels without causing harmful interference; whether low power devices should be permitted on TV channels 2-4, which are used by TV interface devices such as VCRs; and whether fixed low power devices may be permitted for use on TV channels 14-20. For a copy of this First R&O and NPRM, please see [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-06-156A1.txt]. Comments are due 75 days after publication in the Federal Register, and reply comments are due 105 days after initial publication. [Source: FCC]


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  • Judicial Activities

    HP Executives and Associates Charged in California, Lawsuits Filed
    10.04.2006 – The State of California’s Department of Justice has charged five former executives and associates of Hewlett Packard for their roles in a scheme to spy on reporters and HP employees by fraudulently obtaining their confidential phone call records from wireless carriers, a practice known as pretexting. As reported in last month’s issue of the TIPH, the House Commerce Committee’s Subcommittee on Oversight and Investigations held a hearing to consider the HP pretexting scandal.

    The defendants in the State of California’s criminal case include Patricia Dunn, former Chairman of the Board of HP, who ordered the first investigation into obtaining journalists and HP phone records through illegal means, and Kevin Hunsaker, a former senior attorney at HP, responsible for ethics, and who resigned amid allegations that he was aware of and involved in the scheme. Also charged are Ronald DeLia, Matthew DePante, and Bryan Wagner, all three of whom were affiliated with outside firms responsible for the actual pretexting activities, including placing fraudulent calls to wireless carriers to

    obtain phone records. Each of the five defendants has been charged with four crimes: wire fraud, identity fraud, computer fraud, and criminal conspiracy. The criminal charges were formally filed in Santa Clara County Superior Court on October 4, 2006. Since the California Department of Justice has not yet concluded its investigation, further charges may be possible.

    In related stories, Verizon Wireless filed a complaint in the U.S. District Court for the District of New Jersey, against John Doe defendants. Verizon alleges that the defendants violated various federal and state laws by fraudulently obtaining confidential customer records by phone from customer service representatives, as well as online. Similarly, Cingular Wireless has filed suit in the U.S. District Court for the Northern District of Georgia against CAS Agency, Inc., Charles Kelly, and John Doe and XYZ corporation, claiming that the defendants broke state and federal laws in connection with pretexting to fraudulently obtain customer phone records. Cingular’s complaint alleged common law fraud, civil conspiracy, violation of the federal “Computer Fraud and Abuse Act” [18 U.S.C. § 1030], violation of the federal “Racketeer Influenced and Corrupt Organization Act” (RICO) [18 U.S.C. §§ 1961-1968], and violation of the Georgia RICO statue. Plaintiffs in both cases implicate agents working on behalf of HP in its pretexting operations against HP employees and journalists.

    For a copy of the “Felony Complaint” filed against the five defendants, please see [http://ag.ca.gov/newsalerts/cms06/06-087_0a.pdf?PHPSESSID=b861c624550c80e7b0db3c63705f1860] (PDF only). [Sources: New York Times, Washington Post, and Superior Court of California].

    Supreme Court Declines to Hear Telecommunications Cases
    10.10-16.2006 – The U.S. Supreme court declined to hear a number of significant telecommunications-related cases this month. These cases, for which the Supreme Court denied a petition for writ of certiorari, do not necessarily mean that the nation’s highest court agrees with the decisions of lower courts, but they are significant because they let stand the decisions of lower appellate courts.

    In denying certiorari in the case of FreeEats.com, Inc. v. North Dakota [No. 06-127], the U.S. Supreme Court let stand a decision of the Supreme Court of North Dakota. That case upheld a North Dakota telephone solicitation statute that bars making prerecorded phone calls for political polling purposes, against arguments that the state law was preempted by the federal “Telephone Consumer Protection Act of 1991” (TCPA). Hence, the U.S. Supreme Court declined to rule on a case which would have provided clarity regarding the meaning and scope of the limited preemption clause in the TCPA. In this particular case, the North Dakota Supreme Court’s decision in favor of the primacy of the state law will stand.

    Certiorari was also denied by the Supreme Court in Hatch v. Cellco Partnership [Sup. Ct. 05-1159], a case involving Title 47, Section 332 of the U.S. Code and state authority to regulate wireless service providers. The Supreme Court’s decision not to hear the case lets stand the judgment of the U.S. Court of Appeals for the Eight Circuit. In that case, the Court of Appeals ruled in favor of Verizon Communications and other wireless service providers that a Minnesota state statute for “wireless consumer protection” was preempted by 47 U.S.C. § 332(c)(3)(A), which provides that “no State or local government shall have any authority to regulate the entry of or the rates charged by any commercial mobile service or any private mobile service.” Cellco Partnership, doing business as Verizon Wireless, alleged that the Minnesota state statute undermined federal primacy in this matter, and the Court of Appeals agreed with the carriers. [Source: U.S. Supreme Court]


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  • Studies / Reports

    Cell Phone Worms and VoIP Fraud Predicted as Top Threats in 2007
    10.03.2006 – A panel of experts assembled at the SANS (SysAdmin, Audit, Network, Security) Institute’s Network Security 2006 conference in Las Vegas has issued a report declaring that cell phone worms and VoIP fraud will be the biggest threats to telecommunications security in 2007. The panel’s findings indicate that cell phone worms will affect at least 100,000 phones next year, jumping from phone to phone via wireless data networks. Another important trend to watch will be the compromising of Voice over Internet Protocol (VoIP) phone systems. Hackers have begun penetrating VoIP servers and selling dial tone as if they were a phone company, one expert on the panel noted. The hackers can collect the revenue from the people that use the hijacked service, while the company operating the servers gets the bill.

    Other predicted threats on the SANS top 10 list worth noting: a) targeted attacks will become more prevalent, especially against government agencies; b) spyware will continue to be a pressing issue; c) zero-day vulnerabilities will result in major outbreaks resulting in many thousands of PCs being infected worldwide; d) the majority of bots will be bundled with rootkits; e) Network Access Control will grow in sophistication and become more common; and f) theft of PDA smartphones will grow significantly. The panel of experts has also predicted a surge in response from lawmakers and regulators, including a rise in mandatory laptop encryption of confidential data, as well as the passage of legislation at the federal and state levels to govern the protection of consumer information. [Sources: E-Commerce News and SANS Institute].

    Mobile 3G Capabilities Underused, Survey Finds
    10.24.2006 – Despite the continuing prevalence of third generation (3G) mobile wireless technologies, few Americans are taking advantage of these products and services. A survey conducted by TNS Global Technology Insights, Inc. has found that only 16 percent of American consumers with cell phones have 3G handsets, and of that number, only 10 percent make use of the advanced 3G functionality such phones offer. A spokesperson for the marketing firm that did the survey suggested that widespread use of 3G services may be inhibited because consumers do not realize the power of the technology in their 3G phones. The continued deployment of 3G services remains a priority of the Bush administration and telecommunications regulatory agencies such as the FCC and NTIA. [Source: TechWeb]


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  • Other Activities and Items of Interest

    Martin Speaks on the Communications Act 10.26.2006 – FCC chairman Kevin Martin gave a speech to the American Bar Association’s 2006 ABA Administrative Law Conference in Washington, D.C., on the topic of challenges faced by the FCC in enforcing the Communications Act. Martin opened his speech by noting how the pace of technological change has increasingly challenged the FCC’s regulatory framework. For instance, the governance of distinct services, such as wireline telephony, cable television, and wireless services, has been complicated by convergence within these industries. Martin opined that the Commission must develop “a way to establish consistent regulatory frameworks to apply to these services as they are competing across technological platforms.” His strategy for undertaking this goal includes 1) removing regulations wherever possible; 2) removing legacy rules from new investment and ensuring that the FCC’s regulations do not favor one company’s investment in technology over another’s; and 3) creating a level playing field to allow different network technologies to compete fairly with one another.

    Chairman Martin also discussed the challenge faced by the FCC and the courts in maintaining a balance between creating a less burdensome regulatory scheme in the provision of telecommunications services and giving administrative agencies such as the FCC too much discretion in decision making. In particular, Martin’s speech focused on the recent Brand X decision handed down by the Supreme Court, The FCC’s Biennial Review process mandated by the Telecommunications Act of 1996, and the FCC’s forbearance obligations for certain telecommunications services.

    A copy of Chairman Martin’s speech is available online at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-268089A1.doc] (MS Word document and PDF only). [Source: FCC]

    McDowell Calls for Wireless Partnerships
    10.18.2006 – In a speech to wireless industry executives, delivered at an event sponsored by 3G Americas, FCC Commissioner Robert McDowell encouraged the wireless telecommunications industry and emergency service providers to develop technology partnerships. In particular, McDowell suggested that public-safety agencies might find it useful to employ commercial systems or partner with commercial entities to fulfill their roles as emergency responders. Such relationships between public safety entities and commercial enterprises will become even more crucial, McDowell noted, after both interests become “neighbors” on the airwaves following the 2009 DTV transition. The 700-MHz band to be vacated by analog television providers is expected to be auctioned by January 2008 for use in commercial wireless applications and emergency and public-safety capacities. The FCC currently has three proceedings underway to determine how best to maximize use of the 700-MHz band. Companies such as Ericsson and Lucent Technologies have also played a role in developing partnerships between emergency providers, wireless manufacturers, and service providers by demonstrating how commercial wireless technology can assist rescue and recovery operations after disasters. [Source: National Journal]

    AT&T Plans to Build Citywide Wi-Fi Network in Riverside, California
    10.18.2006 – AT&T has announced plans to build a new citywide Wi-Fi network in Riverside, California, which the company claims will be the largest Wi-Fi network in the United States designed for both public and municipal use. The planned Riverside network is indicative of AT&T’s Wi-Fi development strategy, which involves building municipal Wi-Fi networks as part of a “holistic broadband strategy” that includes indoor Wi-Fi, DSL, Cingular’s HSDPA service, and wireless satellite broadband for rural areas. AT&T is among a number of telecommunications firms which has been exploring a wider role in the creation of municipal wireless networks. [Source: Telephony Online]

    FCC Seeks Nominations for Commercial Mobile Service Alert Advisory Committee
    10.16.2006 – The FCC is seeking nominations for membership on its Commercial Mobile Service Alert Advisory Committee. The Committee has been established to develop recommendations on technical standards and protocols to facilitate the ability of commercial mobile service providers to transmit emergency alerts to their subscribers to the extent that providers elect to do so. This new advisory committee fulfills one of the mandates of the Warning, Alert, and Response Network Act (WARN Act), which was signed into law by President Bush on October 13, 2006. In order to hold its first required meeting within 60 days of the statute’s enactment, no later than December 12, 2006, the FCC is asking that nominations be submitted as early as possible.

    In particular, the FCC is seeking committee members from among state and local government representatives, tribal governments, subject matter expects (e.g. communications service providers; vendors, developers, and manufacturers; third-party service bureaus; technical experts from the broadcasting industry; national organizations representing individuals with special needs, such as persons with disabilities and the elderly), and qualified representatives of other stakeholders and interested parties. Nominees for the advisory committee must be willing to commit to at least a one year term of service and should be willing and able to attend meetings in Washington, D.C.

    For more information about the nomination process for this advisory committee, please see the FCC’s public notice at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-06-2037A1.txt].


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  • Upcoming Events

    FCC Open Commission Meeting Scheduled
    11.03.2006 – The FCC will hold an Open Meeting on Friday, November 3, 2006, at 9:30 a.m. in Room TW-C305, at 442 12th Street, SW, Washington, D.C. The meeting will consider 1) a Report and Order regarding changes to the process for community of license changes and the process for amendments to the FM Table of Allotments; 2) a Notice of Proposed Rulemaking on whether the FCC should adopt certain measures to mitigate migratory bird collisions with communications towers; 3) a Memorandum Opinion and Order concerning the classification of broadband over power line (BPL) Internet access service; and 4) a Memorandum Opinion and Order regarding the transfer of control application of AT&T and BellSouth.

    The FCC will provide open captioning for this meeting, and other accommodations for persons with disabilities will be provided upon request. Advance notice of any accommodations is requested. In addition, the meeting will be broadcast live over the Internet. For more information on this Open Meeting, please see the FCC’s notice at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-268215A1.txt].


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  • Newsletter Info

    Center for Advanced Communications Policy
    Telecom/IT Policy Highlights Volume 6.09
    October 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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