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Telecom/IT Policy Highlights

Volume: 8.01
December 2007/January 2008

Microsoft Word version / Dec 07/Jan 08 TiPH (173kB)

Adobe PDF version / Dec 07/Jan 08, TiPH (112kB)

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

    This special winter issue of the TIPH highlights important developments in telecommunications and IT policymaking for December 2007 and January 2008. While no new telecommunications legislation was introduced in Congress during the past two months, both the House and Senate Commerce Committees have been active, holding hearings on the issue of FCC oversight; this will continue in February with hearings on the digital television (DTV) transition. Meanwhile, the FCC was busy with a number of rulemakings on issues ranging from the diversification of broadcast ownership to increasing localism in broadcasting to reforming the high-cost support program of the Universal Service Fund (USF).

    The courts were also active during the past two months. In one ruling, the U.S. Court of Appeals for the Ninth Circuit ruled that wireless arbitration agreements may be ruled unconscionable and unenforceable by state governments, and that the federal government may not preempt state governments’ preferences on this issue. In another case, the U.S. Supreme Court denied an appeal by the FCC in a case involving the rights of state and local governments to regulate the billing practices of wireless companies.

    One other key issue raised during the hearing was the role of the Commission in the ongoing digital television (DTV) transition and the education of consumers about the process. Sen. Claire McCaskill (D-MO) asked Martin why he was putting resources into lifting the cross-ownership ban while not doing more to educate the public and aid broadcasters on the conversion to digital television. Martin replied that his agency has asked Congress twice for money to spread the word about digital television and twice has been denied. Martin responded, "I think without funds we are doing a very good job of educating consumers.”

    For more information about the oversight hearing, including copies of the majority and minority statements and the testimony of the five FCC commissioners, please see [http://commerce.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=1920]. An archived webcast is also available for viewing. [Sources: Senate Commerce Committee, FCC, and Washington Post]


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  • Legislative Activities

    Senate Commerce Committee Holds FCC Oversight Hearing

    12.13.2007 – A week after the House Commerce Committee held a hearing on the same issue, the Senate Commerce Committee held its regular oversight hearing of the FCC on December 13, 2007. The hearing included a majority statement from Senate Commerce Committee Chairman Daniel Inouye (D-HI) and minority statements from Sen. Ted Stevens (R-AK), Sen. Olympia Snowe (R-ME), and Sen. Jim DeMint (R-SC). Much of the hearing focused on a contested proposal by FCC Chairman Kevin Martin to partially lift a 35-year-old ban on one company owning a newspaper and a radio or television station in the same city. In response to queries from senators on the matter, Martin responded that it was impossible to achieve consensus on the highly contentious and political issue of media ownership and that his agency is under court and congressional order to keep its media-ownership rules up to date.


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  • Policy / Regulatory Activities

    Diversification of Broadcast Ownership Subject of FCC Rulemaking

    12.18.2007 – The FCC adopted, but not yet released, a Report and Order and Third Further Notice of Proposed Rulemaking [FCC 07-217] designed to expand opportunities for participation in the broadcasting industry by new entrants and small businesses, including minority- and women-owned businesses, to own broadcast outlets. The FCC’s rulemaking on this issue focuses on helping eligible entities with access to financing and availability of spectrum. Among the more specific changes enacted in the R&O, the FCC will 1) change its construction permit deadlines to allow “eligible entities” that acquire expiring construction permits additional time to build out the facility; 2) revise the Commission’s equity/debt plus (EDP) attribution standard to facilitate investment in eligible entities; 3) modify the Commission’s distress sale policy to allow a licensee – whose license has been designated for a revocation hearing or whose renewal application has been designated for a hearing on basic qualifications issues – to sell its station to an “eligible entity” prior to the commencement of the hearing; and 4) adopt an Equal Transactional Opportunity Rule that bars race or gender in broadcast transactions.

    Regarding its NPRM, the FCC seeks comment on whether it can or should expand its definition of “eligible entity” to include other businesses. The Commission is exploring how best to improve its collection of data regarding the gender, race, and, ethnicity of broadcast licensees. Finally, the FCC requests comment on a number of additional proposals designed to expand ownership opportunities for new entrants and small businesses. The comment period will be disclosed once the FCC formally releases the R&O and NPRM. [Source: FCC]

    Forbearance Requests Made by Verizon Denied by FCC

    12.04.2007 – The FCC adopted and released a Memorandum Opinion and Order [FCC 07-212] regarding requests made by the Verizon Telephone Companies seeking forbearance relief in the New York, Boston, Philadelphia, Pittsburgh, Providence, and Virginia Beach Metropolitan Statistical Areas (MSAs). In particular, Verizon sought relief from dominant carrier regulation of its mass market switched access services and Section 251(c)(3) loop and transport unbundling obligations. Dominant carrier regulations include, among other things, requirements related to transfer of control and discontinuance, cost-supported tariffing requirements, and price regulation for services falling under the Commission’s jurisdiction. In addition, Section 251(c)(3) imposes on incumbent LECs the duty to provide any requesting telecommunications carrier with nondiscriminatory access to network elements on an unbundled basis. Verizon had sought relief in these areas similar to those the FCC granted to Qwest Communications in the Omaha MSA. In addition, Verizon sought forbearance from the FCC’s Computer III Order, including such obligations as open network architecture (ONA) and comparably efficient interconnection (CEI) requirements.

    In its MO&O, the FCC determined that the current evidence of competition does not satisfy the Section 10 forbearance standard with respect to any of Verizon’s requests. Accordingly, the Commission denied the requested relief in all six MSAs. For a copy of the FCC’s MO&O in this matter, please see [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07-212A1.txt] (MS Word and PDF versions also available). [Source: FCC]

    Localism in Broadcasting the Focus of FCC Report and Proposed Rulemaking

    12.18.2007 – The FCC adopted its Report and Notice of Proposed Rulemaking [FCC 07-218] regarding broadcast localism. The Report and NPRM are the outcome of the FCC’s Quadrennial Review of Media Ownership, which included 83,000 comments and the testimony of 500 witnesses over the course of six field hearings throughout the nation.

    The FCC’s Report includes several tentative conclusions, and the FCC is seeking public comment on these proposals. First, qualified low power television (LPTV) stations should be granted Class A status, which would require them to provide at least 3 hours of locally-produced content per week. Second, licensees should establish permanent advisory boards (including representatives of underserved community segments) in each station community of license with which to consult periodically on community needs and issues. Finally, the FCC seeks Commission adoption of renewal processing guidelines that would ensure that all broadcasters provide at least some locally-oriented programming.

    The Report and NPRM may be found at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07-218A1.txt] (MS Word and PDF versions also available). Comments will be due 30 days after publication in the Federal Register, and reply comments will be due 60 days after publication. [Source: FCC]

    USF High Cost Support Program Addressed in Three FCC NPRMs

    01.29.2008 – The FCC adopted and released a Notice of Proposed Rulemaking [FCC 08-22], with two embedded NPRMs, designed to reform a program of the Universal Service Fund (USF) known as the high cost support program. The Notice came in response to recommendations made by the Federal-State Joint Board on Universal Service. In May 2007, the Joint Board recommended that the FCC adopt an interim cap on high-cost universal support provided to competitive eligible telecommunications carriers (ETCs), in order to stem growth in high-cost support. Taking up the Joint Board’s recommendations, the FCC issued two additional NPRMs to enact the reforms the Commission seeks.

    First, the FCC released an NPRM [08-4], which proposes and seeks comment on the elimination of the Commission’s “identical support” (or “equal support”) rule, which provides ETCs with the same per-line high-cost universal service support amounts that incumbent local exchange carriers (LECs) receive. Second, the FCC released an NPRM [08-5], which tentatively concludes that reverse auctions should be used as the disbursement mechanism to determine the amount of high-cost universal service for ETCs serving rural, insular, and high-cost areas. The Commission seeks comment on how to implement reverse auctions for this purpose.

    Comments for these three NPRMs will be due 30 days after publication in the Federal Register, and reply comments will be due 60 days following publication. For a copy of the FCC’s NPRM responding to the Joint Board’s recommendations, please see [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-22A1.txt]. The NPRM pertaining to the “identical support” rule may be found at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-4A1.txt], and the NPRM on reverse auctions may be found at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-5A1.txt] (MS Word and PDF versions also available). [Source: FCC]


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  • Judicial Activities

    Supreme Court Denies Appeal in Wireless Billing Case 01.22.2008 – The U.S. Supreme Court denied certiorari in Sprint Nextel v. NASUCA [Sup. Ct. No. 06-1184], letting stand an earlier decision by the U.S. Court of Appeals for the Eleventh Circuit. At issue were the billing practices of wireless carriers such as Sprint Nextel and T-Mobile, as well as the authority of the states to regulate billing practices. 47 U.S.C. § 332(c)(3)(A) prohibits state governments from regulating telephone rates, but it does reserve for them the right to regulate “other terms and conditions” of commercial mobile service. In March 2005, the FCC issued a Declaratory Ruling that held that federal law prevented the states from regulating the billing practices of wireless companies. The FCC ruling was the result of wireless companies who claimed that state and local governments attempt to “hide” taxes and fees by requiring carriers to fold them in with the rest of their charges, rather than listing them separately. Hence, the FCC’s Declaratory Ruling marked an attempt to extend the Commission’s “truth in billing” provisions to wireless phone service.

    The National Association of State Utility Consumer Advocates (NASUCA) filed a petition for review. The National Association of Regulatory Utility Commissioners (NARUC) joined in support of NASUCA, while Sprint Nextel and other wireless companies sided with the FCC in the case. In its ruling, the Court of Appeals found that the FCC exceeded its authority when it issued its Declaratory Ruling preempting the states from requiring or prohibiting the use of line items in wireless billing. Due to the Supreme Court’s decision not to hear the case, the Court of Appeals ruling stands. The issue has gone back to the FCC, and the Commission is considering additional grounds for preempting state regulation of the wireless industry.

    For a copy of the 11th Circuit Court of Appeals ruling, please see [http://www.ca11.uscourts.gov/opinions/ops/200511682.pdf] (PDF only). [Sources: U.S. Supreme Court, 11th Circuit Court of Appeals, Associated Press, and CBS News]

    Wireless Arbitration Agreement Unenforceable in Washington State, Court Rules 01.22.2008 – The U.S. Court of Appeals for the Ninth Circuit issued its opinion in Lowden v. T-Mobile [No. 06-35395], a class action case involving the enforceability of arbitration clauses in consumer contracts within the State of Washington. At issue was a class action lawsuit filed on behalf of current and former customers of T-Mobile. The plaintiff alleged that T-Mobile violated the Washington Consumer Protection Act by improperly charging for certain fees beyond the advertised price of service, charging for calls during a billing period other than that in which the calls were made, and charging for roaming and other services that should have been free. In response to these charges, T-Mobile moved the case from state court to U.S. District Court, where it then moved to compel arbitration in order to settle the dispute. The District Court denied the motion, and T-Mobile appealed the case.

    The Court of Appeals affirmed the original decision of the District Court, essentially finding for the plaintiff. The Court of Appeals found that the arbitration provision in T-Mobile’s contract is substantively unconscionable and unenforceable under Washington law. Furthermore, it held that the state law is not preempted by the Federal Arbitration Act (9 U.S.C. §§ 1-16).

    See [http://www.ca9.uscourts.gov/ca9/newopinions.nsf/35C7007B9679B281882573D8005E7842/$file/0635395.pdf] (PDF only) for a copy of the Court of Appeals’ decision in this case. [Source: 9th Circuit Court of Appeals]


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  • Studies / Reports

    Broadband Growth Highlighted in NTIA Report 01.31.2008 – The National Telecommunications and Information Administration (NTIA) has released a report entitled “Networked Nation: Broadband in America, 2007,” which highlights the growth of broadband in the United States. The report claims that the NTIA’s technology, regulatory, and fiscal policies have stimulated innovation and competition, and encouraged investment in the U.S. broadband market contributing to significantly increased accessibility of broadband services.

    The report provides data that suggests continued broadband penetration throughout the United States. According to the FCC’s 2006 data, broadband service was available in 99 percent of the nation’s zip codes, encompassing 99 percent of the nation’s population. Also, the total number of broadband lines in the United States has grown by more than 1,100 percent from almost 6.8 million lines in December 2000, to 82.5 million in December 2006, according to the most recent FCC data. Furthermore, by December 2006, 91.5 percent of ZIP codes had three or more competing service providers and more than 50 percent of the nation’s ZIP codes had six or more competitors.

    For a copy of NTIA’s report summary, please visit [http://www.ntia.doc.gov/reports/2008/NetworkedNationBroadbandSummary.pdf]. The full report is available at [http://www.ntia.doc.gov/reports/2008/NetworkedNationBroadbandinAmerica2007.pdf] (PDF formats only). FCC Commissioners Michael Copps and Jonathan Adelstein provided opposing viewpoints to the conclusions of NTIA’s report. Commissioner Copps’ statement

    may be found at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-279906A1.txt], and Commissioner Adelstein’s comments may be found at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-279916A1.txt] (MS Word and PDF versions also available). [Sources: NTIA and FCC]

    GAO Report Finds No Comprehensive Plan for DTV Transition 12.11.2007 – The Government Accountability Office (GAO) has released a report entitled “Digital Television Transition: Increased Federal Planning and Risk Management Could Further Facilitate the DTV Transition.” The report was undertaken in response to both the upcoming transition from analog to digital television transmission, which is to be completed by February 19, 2009, as well as in response to NTIA’s program to subsidize digital-to-analog converter boxes for consumers unable to receive digital signals after the DTV transition is completed. The report examined progress made 1) by federal authorities in facilitating the transition, 2) in educating consumers on the transition, and 3) in implementing the converter box program.

    The GAO found that the FCC and NTIA, working with other stakeholders, “have taken steps to facilitate the DTV conversion,” but it also concluded that “no comprehensive plan exists for the DTV transition.” For example, while the FCC and NTIA have made progress in educating consumers about the DTV transition, the GAO finds that the initiative “remains largely in the planning stages, and widespread efforts have yet to be implemented.” The GAO report concluded with the recommendation that the FCC and NTIA launch a comprehensive plan that “can detail milestones and key goals, which provide meaningful guidance for assigning and coordinating responsibilities and deadlines and measuring progress. Such planning also includes assessing, managing, and mitigating risks, which can help organizations to identify potential problems before they occur and target limited resources."

    For a copy of the GAO’s report, please see [http://www.gao.gov/new.items/d0843.pdf] (PDF only). The FCC’s response to the plan may be viewed at [http://www.fcc.gov/GAO_DTV_response/FCC_Response_to_GAO_Report_on_DTV.pdf] (PDF only). [Sources: GAO and FCC]


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  • Other Activities and Items of Interest

    AT&T Announces Open Cell Phone Networks 12.05.2007 – AT&T has announced that starting immediately, customers will be able to use any wireless phone, device and software application from any maker, and they will no longer be restricted to using just AT&T phones. AT&T’s announcement came shortly after an announcement by Verizon, which also plans to let customers use any device and application they want. Analysts have suggested that the moves being made by the two companies are partially the result of pressure by Internet companies like Google. The technology firm has established itself in the Internet search business for personal computers, and is hoping to replicate that success in the wireless market. Google recently announced plans to work with more than two dozen wireless companies, including Sprint Nextel, with the goal of developing an operating system that lets consumers use any application on mobile devices, much as they now do on PCs. Other partners include Japanese cell phone provider DoCoMo and handset maker Samsung.

    AT&T had historically not informed wireless customers of their option for using devices and applications other than those offered by AT&T. But now salespeople in AT&T phone stores will make sure that consumers "know all their options" before making a final purchase. AT&T Wireless CEO Ralph de la Vega has not specified whether AT&T plans to launch a marketing campaign to promote "open" platforms, but allows that might be a possibility. However, one AT&T device will remain closed for now: the Apple iPhone. AT&T has a deal with Apple to be the exclusive U.S. distributor for the next five years. To get the device, consumers must sign a two-year contract. AT&T has no plans to change that arrangement, de la Vega notes: "The iPhone is a very special, innovative case." [Source: USA Today]


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  • Upcoming Events

    DTV Readiness Hearing to Be Held by Senate and House Commerce Committees 02.13-14.2008 – The House Commerce Committee will hold a hearing into the DTV transition on Wednesday, February 13, 2008. The hearing will assess the nation’s preparedness to make the switch from analog to digital television on February 17, 2009, and will be the fourth such hearing by the Committee to do so. House Commerce Committee Chairman John D. Ringell (D-MI) has publicly expressed concerns that government agencies, retailers, broadcasters and all other stakeholders are not taking all the steps necessary to ensure consumers are adequately informed and ready for this transition. A particular focus in this hearing will be placed on consumer access to converter boxes that will allow digital signals to be displayed on analog televisions. Hearing witnesses will be announced at a future date.

    The summit will take place on Wednesday, February 6, 2008, from 9:00 a.m. until 1:30 p.m., at the FCC’s Commission Meeting Room (TW-C305), in Washington, D.C. Those individuals who are interested in attending the summit may pre-register on-line at: [http://www.fcc.gov/pshs/summits/911/]. A live audiocast will be available at www.fcc.gov on a first come, first serve basis (maximum of 200 listeners at any one time). Also, accommodations will be available for people with disabilities, but requests need to be made in advance.

    For more information, including how to register for the summit and the meeting agenda, please see: [http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-279665A1.txt] (MS Word and PDF versions also available). [Source: FCC]


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  • Newsletter Info

    Center for Advanced Communications Policy
    Telecom/IT Policy Highlights Volume 8.01
    December 2007/January 2008
    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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