Telecom/IT Policy Highlights
Volume: 6.10
November 2006
Microsoft Word version / November, 2006 TiPH (185kB)
Adobe PDF version / November, 2006 TiPH (119kB)
Contents:
Overview
Legislative Activities
Policy / Regulatory Activities
Judicial Activities
Studies / Reports
Other Activities and Items of Interest
Upcoming Events
Newsletter Info
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Overview
The most notable development this month was not any particular telecom/IT issue, but rather, the results of the midterm Congressional elections. Next year will see the Democrats gain a small majority of seats in both the Senate and the House of Representatives. Undoubtedly, this change in control of Congress will impact telecommunications and IT legislation in the coming months. One such sign of this change is the unlikelihood that proposed legislation such as the Senate’s bipartisan Communications Opportunity, Promotion, and Enhancement Act (COPE Act) will receive a vote before the end of the current session of Congress. Nevertheless, it is entirely possible that certain provisions of this and other acts will surface in proposed legislation during Congress’s next session. The editors of TIPH remain committed to bringing you these developments as they occur.
As the current session of Congress winds down, there has been some activity, such as the Senate’s approval of FCC Chairman Kevin Martin to a second term. In other areas, the FCC engaged a number of important regulatory issues this month, including an action to place Broadband over Power Line (BPL) service on the same regulatory footing as other broadband Internet services. The commitment of the FCC to continue pushing for continued broadband deployment in the United States was underscored by the Commission’s awarding of 550 licenses for advanced wireless services and an editorial by Commissioner Michael Copps in the Washington Post, among other things. Despite such fervent activity, the FCC still has business it has yet to resolve, namely a decision on whether to approve the merger of AT&T and BellSouth.
Perhaps the most important story this month, however, is the U.S. Supreme Court’s decision to hear arguments in a telecommunications antitrust case. The high court’s ruling will certainly alter the conditions under which a company can be charged with anti-competitive practices. The case, according to more than one source, represents the most important of its kind considered by the Supreme Court in 20 years.
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Legislative Activities
Senate Confirms Martin for Second Term as FCC Commissioner
11.16.2006 – The President’s nomination of Chairman Kevin Martin for another term as FCC commissioner and chairman was unanimously approved by the Senate on November 16, 2006. Martin has been an FCC commissioner since 2001 and became the Commission’s chairman in March 2005. His new term will end in 2011. Martin was nominated in April for a second, five-year term just before his first term expired June 30, 2006. The Senate Commerce Committee had voted 21-0 in September to approve Martin’s nomination, but the floor vote that was expected before the November elections did not take place. Such delays are not uncommon, as was the case with votes on the nominations of FCC commissioners Robert McDowell and Jonathan Adelstein. Even without renomination, however, Martin could have served until the end of the next session of Congress, which would have meant until the fall of 2007.Senate approval for Martin’s nomination for a second term comes as the FCC prepares to make some important decisions, including whether to approve an $80 billion merger between AT&T and BellSouth, considering changes to rules on media ownership, and contesting two appeals court challenges to the FCC’s rules on broadcast indecency. Martin has expressed his own commitment toward providing a regulatory environment that promotes competition and drives investment while protecting consumers and promoting public safety. [Sources: Senate Commerce Committee, CNET News, and Washington Post]
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Policy / Regulatory Activities
AT&T-BellSouth Merger Delayed Again by Commission
This third postponement by the FCC highlights a difference of opinion by commissioners over what conditions, if any, to place on the deal that be the largest ever U.S. phone company merger. Commissioners Michael Copps and Jonathan Adelstein, both Democrats, have insisted that price controls and airwave license sales be imposed as part of the proposed AT&T-BellSouth merger. These moves have been resisted by the FCC’s Republican commissioners, Chairman Kevin Martin and Commissioner Deborah Taylor Tate. Martin may need to win the support of either Copps or Adelstein for approval of the sale because the FCC’s fifth commissioner, Robert McDowell, has acted under the assumption that he will be disqualified from voting on the transaction. McDowell, who has worked in the past as a lobbyist for companies that compete with AT&T and BellSouth, has played very little part in the proceedings and has not reviewed relevant documents. Nevertheless, the FCC’s general counsel eventually could authorize McDowell to cast a tie-breaking vote if the other four commissioners are unable to resolve the 2-2 impasse. Supporters of AT&T’s bid to purchase BellSouth remain optimistic that the deal will be approved before Democrats take control of Congress in January, either through a
vote by McDowell that would break the tie or through minor concessions that would convince the Democrats on the Commission to grant their votes. [Sources: FCC, Reuters, and Atlanta Journal-Constitution]
BPL-Enabled Internet Access Classified as “Information Service” by FCC
11.07.2006 – The FCC has issued a Memorandum Opinion and Order [FCC 06-165] that formally classifies Broadband over Power Line (BPL)-enabled Internet service as an “information service.” The FCC’s decision places BPL-enabled Internet access service in the same regulatory category as other broadband services, such as cable modem service and DSL Internet access service. In its Order declaring that BPL-enabled Internet service’s underlying transmission component is “telecommunications,” the Commission is furthering its goal to have like services regulated in a similar manner.By placing BPL-enabled Internet access service on the same regulatory footing with cable and DSL Internet service, the FCC hopes to further broadband deployment in the United States by providing another option for service, especially in rural areas where the deployment of other broadband services is not as feasible. In addition, the regulatory certainty given to BPL-enabled Internet service may serve to increase competition among broadband service providers, providing consumers with more and better services at lower prices. See [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-06-165A1.txt] for a copy of the FCC’s MO&O. [Source: FCC]
Closed Captioning Rules Comment Period Extended
11.21.2006 – On November 7, 2006, the Consumer and Governmental Affairs Bureau of the FCC placed on public notice 494 petitions requesting exemption from the closed captioning requirements for their programs. Each of the petitioners claims that compliance with the FCC’s closed captioning requirements would impose an undue burden, as outlined in the Commission’s Rules, 47 C.F.R. § 79.1(f). In response to the 494 petitions requesting an exemption, the FCC issued the November 7 Public Notice, which solicited public comment on these petitions and set a 20-day comment period.Parties interested in filing comments regarding the petitions for comments requested that the FCC give an extension on the comment period for the requested exemptions. Potential commenters cited the great burden they faced in reviewing, evaluating, and responding individually to each of the 494 petitions for exemption within the 20-day comment period originally designated by the Commission. The FCC has concurred and extended the comment period by 120 days. Comments on and oppositions to petitions requesting exemptions to closed captioning requirements are due no later than March 27, 2007. The FCC has also established a 40-day period for filing replies to these comments and oppositions.
The November 7 Public Notice containing a list of parties that have requested an exemption to the FCC’s closed captioning rules is available at [http://www.fcc.gov/da062287.pdf] (PDF only). The Public Notice extending the comments period and containing instructions on how to submit a filing may be found at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-06-2329A1.txt]. This notice also contains the list of parties seeking exemptions. [Source: FCC]
Wireless Licenses Awarded by Commission
11.29.2006 – The FCC’s Wireless Telecommunications Bureau has granted the first set of Advanced Wireless Services (AWS) Licenses won in an auction completed in September 2006 (see TIPH 6.08 for more details). The Bureau granted 550 of the 1,087 licenses won in that auction, and it continues to review the remaining AWS license applications. The 550 licenses granted so far represents $12.2 billion of the $13.7 billion in total net high bids, and this revenue will nearly double the approximately $14 billion in total revenue transferred to the U.S. Treasury from all previous FCC auctions combined. The grant of this first set of licenses is meant to promote the further deployment of broadband services in the United States, especially innovative wireless services and technologies, including those with voice, data, and video components. For a copy of the FCC’s Public Notice, please see [http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-06-2408A1.txt]. A listing of all the applications granted by the FCC is available at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-06-2408A2.pdf] (PDF only). [Source: FCC]Cable Television Not a Utility, Court of Appeals Rules
11.14.2006 – The U.S. Court of Appeals for the Fifth Circuit issued an opinion in Darby v. Time Warner [No. 05-20931], declaring that for the purposes of bankruptcy law, cable service is not a utility. At the center of the issue was 11 U.S.C. § 366, a provision in the Bankruptcy Code designed to protect debtors from a cut off of their service because of the filing of a bankruptcy petition. The case involved a customer of Time Warner Cable in Texas who had his service suspended by Time Warner after he filed a Chapter 13 bankruptcy petition. The customer offered the cable company a deposit in order to reinstate his service. Time Warner refused, prompted the customer to file a motion with the bankruptcy court compelling the company to reinstate service as mandated by 11 U.S.C. § 366, which was designed by Congress to prevent monopoly gas, electric, and telephone service providers from withholding service from customers solely because they had filed a bankruptcy petition.The bankruptcy court denied the petition, and this ruling as affirmed by the Court of Appeals. Particularly important is the reasoning of the appeals court that there exists competition such as satellite television service. However, the Court did not consider whether the provision of other services such as telephone or Internet might alter such a decision. In addition, the Court of Appeals found that because cable television is neither a necessity, nor would the customer be faced with a “crippling inconvenience in obtaining alternate service,” Time Warner is not a utility as defined by 11 U.S.C. § 366. [Source: 5th Circuit Court of Appeals]
Supreme Court Hears Arguments in Telecom Antitrust Case
11.27.2006 – The U.S. Supreme Court heard arguments in what appears to be a key antitrust case. In Bell Atlantic v. Twombly [No. 05-1126], the Supreme Court is considering the question of how much evidence is necessary for plaintiffs to litigate a private antitrust-company suit. At issue is a class action lawsuit filed in 2002 on behalf of U.S. consumers of local telephone and Internet service. The lawsuit alleged thatincumbent local telephone companies, or Baby Bells, illegally conspired to prevent competition by excluding new local phone companies from their territories and by agreeing not to compete against each other. Hence, the plaintiffs accused the dominant telephone companies of conspiring to violate antitrust laws by divvying up service areas. Despite Congress’s expectation that the Telecommunications Act of 1996 would create a more competitive marketplace, the Baby Bells remained dominant in their respective markets. The original seven incumbent carriers named in the suit have been reduced to four through mergers and acquisitions: Verizon Communications, BellSouth Corporation, Qwest Communications, and AT&T.
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Judicial Activities
The plaintiffs had no direct evidence of a conspiracy, however; and they based their case on circumstantial indicators of anticompetitive behavior, such as the parallel conduct of the Baby Bells in declining to compete in each other’s territory and allegedly impeding other carriers from connecting to their networks. A federal district court dismissed the original case on the grounds that the plaintiffs did not have enough evidence to demonstrate that a conspiracy would most likely be proved at trial. That decision was reversed when the U.S. Court of Appeals for the Second Circuit ruled in 2005 that the plaintiff only needed to submit a “short and plain statement of the claim” for the case to go forward and survive a motion from the defense to dismiss the case. The results of this case are being watched very closely by a number of telecommunications companies, who contend that a low standard of evidence for conspiracy charges would allow “meritless” and “abusive” cases to proceed, but the original plaintiffs respond that a higher standard will render it impossible for individuals to file valid antitrust cases. If the Bells prevail in the Supreme Court’s ruling, then the original case will end here. However, if they lose, then the original case charging them with anticompetitive practices will continue through discovery, and the plaintiffs can pursue evidence of a conspiracy. [Sources: U.S. Supreme Court, Wall Street Journal, New York Times, and National Journal]
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Studies / Reports
Economic Studies Undertaken as Part of Media Ownership Rules Review
11.22.2006 – The FCC continues its Quadrennial Broadcast Media Ownership Review, seeking to determine the impact of media ownership on competition and delivery of services to consumers. As reported in September’s TIPH (6.08), the FCC held its first public hearing on the matter in Los Angeles in October. A second public hearing is scheduled for December in Nashville, Tennessee (see story below). In addition to its public hearings, the FCC will be conducting 10 economic studies as part of its review of its media ownership rules. Each of these studies will be peer reviewed.Several of the studies will examine the news media in particular, including the effects of ownership on the quality of news delivered to consumers. Among these studies are “How People Get News and Information,” a Nielsen study that will examine consumers’ sources of news and information and use of and access to the news media; “News Operations,” a study that will collect data on the size and scope of the news operations of radio and television stations and newspapers, as well as analyze the relationship between the nature of news operations and market characteristics; and “News Coverage of Cross-Owned Newspapers and Television Stations,” a study to determine the effect of newspaper cross-ownership on television news coverage by using matched pairs of cross-owned and non-cross owned television stations. Another consumer oriented study,
“Effect of Ownership Structure and Robustness on the Quantity and Quality of TV Programming,” will look at the relationship between media ownership and the quantity and quality of television programming, including local news and public affairs, minority programming, children’s programming, family programming, religious programming, and violent and indecent content.
Broader media ownership issues are to be examined in “Ownership Structure and Robustness of Media,” a study that will gather information on the current media marketplace and compare it to the media marketplace when the FCC last reviewed its rules in the years 2002-2003; and “Vertical Integration,” a study that will examine levels of vertical integration in the media industry. “Station Ownership and Programming in Radio” will similarly examine how ownership structure affects programming and audience of radio stations, while “Radio Industry Review: Trends in Ownership, Format, and Finance” will update a study done by the FCC in its last review of the media ownership rules. Finally, the FCC has commissioned two studies entitled “Minority Ownership,” which will examine levels of minority ownership of media companies and barriers to entry. [Source: FCC]
WiMax Potential Suggested in Several Reports
11.27.2006 – Several reports issued this month strongly suggest the potential of WiMax technology to provide an inexpensive wireless alternative to wired broadband Internet service, such as DSL and cable. WiMax technology permits service providers to broadcast a signal from a central location, thus reducing costs associated with deploying physical infrastructure such as cables. Unlike current Wi-Fi technology, WiMax can cover several miles instead of several yards, offers much better reliability, and the potential for higher speeds than wired broadband.Though the deployment of this new technology is occurring somewhat slowly, due in part to major technological and regulatory issues, a report by the TeleGeography Group notes that fixed WiMax networks are beginning to materialize throughout the globe. There were 22 commercial fixed WiMax networks globally and 53 trials underway at the end of September 2006. Asia and the Pacific lead the way with 10 deployed networks and 19 trials. In contrast, there are currently 2 deployed networks and 6 trials in North America. Another report published by Unstrung Enterprise Insider touts the potential of mobile WiMax networks to allow users to roam between coverage areas, while offering faster speeds and capacities than the data networks currently offered for data devices. As interest in WiMax as a solution for offsetting the infrastructural costs of wired broadband services continues to grow, even major telecommunications firms such as Sprint are becoming more interested.
However, there are major technological and regulatory impediments which will need to be surmounted for WiMax to become more viable. There is limited space for WiMax in the wireless spectrum. As a new technology, WiMax and its proponents must convince regulators to allocate more spectrum for its use. WiMax providers are rushing to gain access to what spectrum is available and working to lobby legislators to open up additional bands for WiMax use. Regulators must struggle with the rights and obligations that should accompany licenses, particularly in markets where cellular providers have paid a premium to buy space for their data services. [Source: Wall Street Journal, Unstrung Enterprise Insider]
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Other Activities and Items of Interest
Adelstein Gives Speech to Satellite Investment Symposium
11.28.2006 – FCC Commissioner Jonathan Adelstein gave a speech to the ISCe Satellite Investment Symposium’s (ISIS) 2006 conference in New York City on November 28, 2006. His speech focused on the state of the satellite industry and the FCC’s role in promoting its continued growth and innovation. Adelstein discussed the myriad roles that satellite technologies play in American life and its economy, and then turned his attention to the role of the FCC to promote the public interest. He noted, in particular, the need for the public and private sectors to work together and that such collaboration works well with the satellite industry. Adelstein also focused on the FCC’s commitment to ubiquitous broadband and the role that the satellite industry may play in achieving this goal. He mentioned recent FCC actions designed to promote advanced communications that have a bearing on satellite systems and services, including the role that satellite service played in the disaster recovery process following Hurricane Katrina. Adelstein observed that the present is a transformational time for the satellite sector, but that the FCC will work to maximize the role that satellite services can play in ensuring that Americans have access to the most advanced communications services possible. See [http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-268740A1.txt] for a copy of Commissioner Adelstein’s speech. [Source: FCC]Broadband Deployment Lagging According to Copps
11.08.2006 – In an editorial for the Washington Post, FCC Commissioner Michael Copps discussed the pressing need to expand broadband infrastructure and service in the United States. His observation that the U.S. is ranked 15th in the world in broadband penetration, and 21st after other factors were taken into consideration, served as the basis for Commissioner Copps editorial that too few Americans have broadband connections, and those who do have them pay too much for service that is too slow. The first half of the editorial was devoted to Copps’s assessment of the reasons why the U.S. has “fallen so far behind.” In particular, he cited a lack of adequate competition that has been detrimental, he argued, to both consumers and businesses.After discussing the scope of inadequate broadband deployment and its potential problems for American education and business productivity, Copps then turned his attention to steps he believes the government must take to reverse a “slide into communications mediocrity.” In particular, Copps argued that the FCC, of which he is a member, must work to lower prices and introduce competition in the broadband marketplace. He contended that the FCC’s measures of broadband (200 kilobits per second) and its measures of deployment (based on whether one person in a given ZIP Code has access to broadband service) obscure levels of deployment and fail to consider issues of pricing. Among the more specific measures advocated by Copps are 1) making new licensed and unlicensed spectrum available, 2) authorizing “smart radios” that use spectrum more efficiently, and 3) doing a better job of encouraging “third pipe” technologies such as wireless and broadband over power line (BPL) Internet service. However, the major thrust of Copps’s editorial was the need for a broadband strategy for the United States, one that would meet the legislative mandate to deliver advanced telecommunications services to all Americans at reasonable prices. Copps then concluded by noting that the solution to this “broadband crisis” must ultimately involve public-private initiatives like those responsible for the construction of railroad, highway, and telephone systems. This emphasis on a collaborative public-private sector approach
echoes a similar point made by FCC Commissioner Robert McDowell in an October speech and reported in last month’s TIPH (6.09), as well as Commissioner Adelstein’s speech this month. [Source: Washington Post]
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Upcoming Events
First Commerce Spectrum Advisory Committee Meeting
12.13.2006 – The Department of Commerce’s National Telecommunications and Information Administration (NTIA) will hold a public meeting of the Spectrum Management Advisory Committee. This first meeting of the Committee is designed to organize the Committee and establish future agendas and a work schedule. In addition, briefings on the matters related to the President’s Spectrum Policy Initiative will be discussed at the meeting. The Committee provides advice to the Assistant Secretary For Communications and Information on spectrum management affairs. The meeting will be held at the U.S. Department of Commerce, Herbert C. Hoover Building, Room 6059, 1401 Constitution Avenue, N.W., Washington, D.C., on December 13, 2006, from 10:30 a.m. to 12:30 p.m. The meeting will be open to the public and press on a first-come, first-served basis. Space is limited. When arriving for the meeting, attendees must present photo or passport identification or a U.S. Government building pass, if applicable, and should arrive at least one-half hour prior to the start time of the meeting. The meeting will be physically accessible to people with disabilities. Individuals requiring special services, such as sign language interpretation or other ancillary aids are asked to contact Joe Gattuso, at (202) 482-0977 or [jgattuso@ntia.doc.gov], at least two (2) business days prior to the meeting.Interested parties are invited to attend and to submit written comments. Written comments should be sent to the above listed address and received by close of business on December 11, 2006 to provide sufficient time for review. Comments received after December 11, 2006 will be distributed to the Committee, but may not be reviewed prior to the meeting. For more information, please visit the NTIA’s website at [www.ntia.doc.gov].
Open Meeting of FCC’s Mobile Service Alert Advisory Committee
12.12.2006 – The FCC’s Mobile Service Alert Advisory Committee, established as part of the Warning Alert and Response Network Act (WARN Act), holds its first meeting on Tuesday, December 12, 2006, at 10:00 a.m. in the FCC’s Commission Meeting Room (TW-C305) in Washington, D.C. The FCC will announce the Committee’s membership and release an agenda prior to the December 12th meeting. This meeting is open to the public, and the agenda will include the committee’s mission and organizational structure, although admittance is limited the seating available. Real Audio access to the meeting will be available at [http://www.fcc.gov]. For persons with disabilities, open captioning will be provided for this event. Also, other reasonable accommodations for persons with disabilities are available upon request. Such requests need to be made at least five days in advance.For a notice about the meeting, with additional information on requesting accommodations, please see [http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-06-2356A1.txt]. (MS Word also available).
Second Public Hearing on Media Ownership Scheduled
The FCC will hold a hearing on media ownership in Nashville, Tennessee, on Monday, December 11, 2006. The hearing is designed to fully involve the public in the FCC’s current Quadrennial Broadcast Media Ownership Review. It will be the second of a series of proceedings on media ownership to be held throughout the United States. At the Commission's first public hearing in Los Angeles, the FCC heard from a large number of citizens about the current state of the media and specific issues facing that local market. Similarly, this second hearing will provide an opportunity for those in the Nashville area to broadly discuss media ownership issues as well as those of concern to their community.See [http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-268469A1.txt] for a copy of the he notice for the meeting. Further details on the public hearing, including the time and place, will be released by the FCC at a later date.
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Newsletter InfoCenter for Advanced Communications PolicyTelecom/IT Policy Highlights Volume 6.10
November 2006
Nathan W Moon, EditorTelecom/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.BACK TO TOP OF PAGE