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Telecom/IT Policy Highlights

Volume: 8.05
May 2008

Microsoft Word version / May, 2008 TiPH (175kB)

Adobe PDF version / May, 2008 TiPH (109kB)

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

    In this issue of the TIPH, we call attention to a number of interesting developments. In Congress, passage of a resolution in the Senate could overturn the FCC’s recent rulemaking relaxing the Commission’s longtime, absolute ban on newspaper/broadcast cross-ownership. The measure passed the Senate by voice vote; however, passage is also required by the House in order for the Commission’s rulemaking to be rescinded. In addition, several telecommunications and Internet related bills were introduced in May. The “Internet Crime Prevention Act of 2008,” introduced in the Senate, would fund programs through the Department of Justice to educate the public about how to recognize and prevent potential criminal activity on the Internet. A House bill, the “Internet Freedom and Nondiscrimination Act of 2008,”would mandate network neutrality by broadband service providers, ensuring that providers did not favor access to particular content, or deny access, for consumers of broadband services. Unlike most other net neutrality legislation introduced in past sessions, this bill relies upon antitrust law and enforcement by the Department of Justice, rather than communications law and FCC enforcement, to mandate net neutrality.

    The most important regulatory item from May is the FCC’s examination on how best to re-auction the D Block of the 700 MHz broadcast spectrum. Originally allocated for public safety applications, this block of spectrum failed to meet its reserve price of $1.3 billion in the FCC’s March auction. The Commission is now seeking comment on how to proceed with a re-auction, including whether the original public safety provisions are still appropriate. The Commission also clarified two earlier rulemakings this month. First, the FCC defined the limits of contact between providers and consumers of the Telecommunications Relay Service (TRS). Second, it detailed its plans to move private land mobile radio (PLMR) licensees to more efficient technologies.

    Finally, the courts addressed several important telecommunications issues this past month. Most notably, the Supreme Court declined to hear T-Mobile USA v. Laster, letting stand a Court of Appeals opinion that determined arbitration clauses in wireless service contracts to be unenforceable. In another case, a Court of Appeals upheld the FCC’s 800 MHz reconfiguration order and timetable, a measure designed to address problems of interference on those frequencies.


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  • Legislative Activities

    Internet Crime Education Bill Introduced in Senate

    05.14.2008 – Sen. John Kerry (D-MA) and four co-sponsors introduced the “Internet Crime Prevention Act of 2008” [S. 3016]. The bill would create a grant program within the Department of Justice to fund crime prevention education initiatives aimed at teaching parents, children, educators, and communities how to recognize and prevent potential criminal activity on the Internet. The bill’s sponsors are particularly interested in the prevention of sexual or racial harassment, cyberbullying, sexual exploitation, exposure to pornographic material, and the violation of privacy on the Internet.

    The proposed legislation would fund such educational efforts through a proposed allocation of $5 million per year for fiscal years 2008 through 2012. For more information, please view the text of the bill at [http://thomas.loc.gov/cgi-bin/query/z?c110:S.3016:]. [Source: Library of Congress]

    Media Ownership Rules Overturned by Senate Resolution

    05.19.2008 – By a voice vote, the Senate voted in favor of a resolution that would overturn the FCC’s recent Report & Order [FCC 07-216] relaxing the Commission’s absolute ban on newspaper/broadcast ownership (see TIPH 8.02 for more information). The resolution, entitled “A joint resolution disapproving the rule submitted by the Federal Communications Commission with respect to broadcast media ownership” [S.J. Res. 28], was introduced by Sen. Byron Dorgan (D-ND) in March 2008 and had the support of 27 co-sponsors.

    Overturning a 32-year absolute ban on newspaper/broadcast cross-ownership, the FCC voted in February to craft an approach that would presumptively allow a newspaper to own one television station or one radio station in the 20 largest markets, subject to strict criteria and limitations. FCC chairman Kevin Martin described the ruling as a minimal loosening of the ban aimed at helping struggling newspapers in big cities by spreading local news-gathering costs across multiple media platforms. However, the R&O passed by a 3-2 vote, as the Democratic commissioners Michael Copps and Jonathan Adelstein opposed the measure. Critics of the FCC Order have contended that consolidation of the media industry and a possible decline in local news coverage might result. Some have also suggested that the FCC rule contains loopholes that would allow media owners to combine newspapers and broadcast outlets in many smaller markets around the United States, not just the top 20 cities.

    In order for the FCC Order to be overturned, the resolution must be passed by both chambers of Congress. The House has yet to vote on the issue. For a copy of the Senate resolution, please see [http://thomas.loc.gov/cgi-bin/query/D?c110:3:./temp/~c110aDQ0QP::]. [Sources: Library of Congress, FCC, Reuters, and Associated Press]

    Network Neutrality Bill with Antitrust Emphasis Introduced in House

    05.08.2008 – Rep. John Connors (D-MI) and Rep. Zoe Lofgren (D-CA) have introduced the “Internet Freedom and Nondiscrimination Act of 2008” [H.R. 5994] in the House of Representatives. If passed into law, the Act would require all broadband Internet service providers to offer broadband network services on reasonable and nondiscriminatory terms and prohibit service providers from blocking or impairing the ability of users to access lawful Internet content. The bill is similar to other net neutrality legislation proposed in recent years, particularly the “Internet Freedom and Nondiscrimination Act of 2006” [H.R. 5417] introduced by Connors and Rep. Jim Sensenbrenner (R-WI).

    The proposed bill would amend the Clayton Antitrust Act [15 U.S.C. § 12-27] by adding a Section 28 with four provisions to ensure network neutrality by broadband service providers. What makes this bill unique from similar legislative proposals, however, is the reliance on antitrust law to enforce net neutrality. The “Internet Freedom and Nondiscrimination Act” would rely upon the Department of Justice for enforcement and the judiciary committees in Congress for oversight. Other proposals for net neutrality have utilized communications law, with enforcement by the FCC and oversight by Congressional commerce committees, to achieve this goal.

    For a copy of this bill, please see [http://thomas.loc.gov/cgi-bin/query/z?c110:H.R.5994:]. [Source: Library of Congress]


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  • Policy / Regulatory Activities

    Contacts between TRS Providers, Consumers Focus of FCC Ruling 05.28.2008 – The FCC issued a Declaratory Ruling [FCC 08-138] to clarify its earlier restrictions on contracts between Telecommunications Relay Service (TRS) providers and the consumers of those services. The TRS is a service providing text-to-voice service, via telecommunications devices for the deaf (TDD), for the benefit of callers with hearing or speech impairments. These services are provided by telephone companies who are compensated through state and federal funds.

    In previous rulings, particularly the 2007 TRS Cost Recovery Declaratory Ruling [FCC 07-186], the FCC reminded TRS providers seeking compensation from the Commission’s Interstate Fund of its prohibition against offering consumers financial or other incentives to make relay calls. Concerned with the possibility of attempts by TRS service providers to bolster the compensation they received for the provision of such services, the FCC prohibited uses of consumer or call database information by TRS providers in order to attempt to influence consumers’ use of relay service or for lobbying or any other purpose. The FCC continues to believe that reasonable restrictions on the use of consumer information are necessary to prevent improper marketing practices and to ensure that interstate TRS funds are used for their intended purpose.

    However, this Declaratory Ruling clarifies some issues raised in the 2007 Declaratory Ruling. The Commission is concerned that its earlier ruling might have been overly broad and may have the unintended effect of preventing TRS providers from communicating important information, including critical public safety information, to TRS users relating to the handling of relay calls. Hence, it clarifies those restrictions to prohibit the use of caller data or the service for purposes not related to the handling of relay calls, such as lobbying or advocacy activities directed at consumers.

    For more information, please see the FCC’s Declaratory Ruling at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-138A1.txt] (PDF and MS Word formats also available). [Source: FCC]

    Private Land Mobile Radio Narrowbanding Rules Clarified by FCC

    05.12.2008 – The FCC adopted and released its Fourth Memorandum Opinion and Order [FCC 08-127], which clarifies its rules regarding the transition of private land mobile radio (PLMR) licensees to narrowband technology. PLMRs are wireless services used by companies, local governments, and other organizations to provide internal voice and data communications in such a way to control business operations and production processes, ensure the security of communications, protect worker and public safety, and respond quickly to natural disasters or other emergencies. Currently, many of PLMRs operate by using 25 kHz of spectrum for one voice path. The FCC is working to develop new rules in which such services would utilize technologies that would narrow this use of spectrum to 12.5 kHz, with an eventual goal of 6.25 kHz per voice path. In short, the FCC is attempting to encourage PLMRs to become efficient in their use of bandwidth.

    In this latest MO&O, the Commission clarified a goal outlined in its Third Report & Order, by affirming that language in the R&O encouraging licensees to consider migrating directly to 6.25 kHz technology was not intended to dissuade migration to 12.5 kHz technology by licensees that have already begun the process. The FCC has established January 1, 2013, as the deadline such PLMR services to either migrate to 12.5 kHz technology, or utilize a technology that achieves equivalent efficiency.

    For more information, please see the Fourth MO&O at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-127A1.txt] (PDF and MS Word formats also available). [Source: FCC]

    Re-Auction Plans for 700 MHz D Block Spectrum, Comments Sought

    05.14.2008 – The FCC adopted and released a Second Further Notice of Proposed Rulemaking [FCC 08-128] that seeks comment on how the Commission should proceed with the re-auction and licensing of the 700 MHz D Block spectrum. In its March 2008 auction of the 700 MHz band spectrum, the D Block did not meet the reserve price of $1.3 billion established before the auction, while the other blocks offered for sale—the A, B, C, and E Blocks—all met and exceeded their reserves (see TIPH 8.03 for more information). The FCC intends to re-auction the D Block of spectrum under revised rules.

    The latest FNPRM asks for comment, ideas, and recommendations on how to revise the rules for the D Block. Originally, the FCC planned for the creation of a 10-megahertz license in the D Block to be part of a 700 MHz Public/Private Partnership with the adjacent 10 megahertz of spectrum dedicated to a Public Safety Broadband License. The 700 MHz Public/Private Partnership was designed to achieve the important public policy goal of promoting public safety interoperability, allowing police, fire, and other first responders to better communicate with one another in times of emergency. The FCC seeks comment on whether it remains in the public interest, following the 700 MHz Auction, to retain a Public/Private Partnership between the D Block licensee and the Public Safety Broadband Licensee. The FNPRM also solicits feedback on potential modifications to the current rules governing the Public/Private Partnership. For instance, the Commission asks whether only entities that provide public safety services are eligible to use the public safety spectrum portion of the shared network established by the Partnership. Comments are also sought on the technical requirements of the shared wireless broadband network.

    Conversely, the FCC also inquires how the D Block should be auctioned and licensed for commercial use if it were not required to be part of a Public/Private Partnership. The Commission requests input on other ways to facilitate the deployment of a public safety broadband network if it found such a partnership were no longer in the public interest. The FRNPRM has observed that if the D Block no longer contained the Public/Private Partnership condition, additional actions by Congress may be necessary to support the cost and build-out of a nationwide, interoperable broadband network for America’s first responders.

    For more information, please see the Second FNRPM on the D Block spectrum re-auction at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-128A1.txt] (MS Word and PDF formats also available). Comments are due 30 days after publication of the Notice in the Federal Register; reply comments will be due 45 days after publication. [Source: FCC]


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  • Judicial Activities

    FCC’s 800 MHz Band Reconfiguration Orders Upheld by Court of Appeals

    05.02.2008 – The U.S. Court of Appeals for the District of Columbia Circuit has issued its opinion in Sprint Nextel v. FCC (No. 07-1416), a case involving the Commission’s decision to reconfigure the 800 MHz band to deal with interference issues. Ruling in favor of the FCC, the Court of Appeals upheld the orders.

    In 2004, the FCC adopted a Report & Order (FCC 04-168) to address the problem of interference to 800 MHz public safety communications systems from Commercial Mobile Radio Services (CMRS) providers operating on nearby frequencies. The R&O required Nextel (now Sprint Nextel) to return the interference causing spectrum to the FCC in return for 10 MHz of spectrum located at other bandwidths. Eventually, Nextel would be allowed channels vacated by National Public Safety Planning Advisory Committee (NPSPAC) licensee.

    At issue in this case was the timetable established by the FCC. The Commission gave Nextel 36 months to complete its band reconfiguration. However, only a small fraction of public agencies had relocated to their new 800 MHz spectrum by 2007. Nevertheless, in its September 2007 Third Memorandum Opinion and Order (FCC 07-167), the FCC ruled that Sprint Nextel must comply with the original June 26, 2008, deadline, regardless of the fact that many NPSPAC licensees will not be ready to vacate their spectrum by June 2008, and many will need until 2009 or 2010 to do so.

    Sprint Nextel argued that the Commission had acted arbitrarily and capriciously. However, it failed to make its arguments via the proper means, by filing a petition for reconsideration. The Court of Appeals upheld the District Court’s ruling that because the FCC did not have the opportunity to formally consider the claims and because Nextel failed to file the petition for consideration, the FCC’s orders stand. This ruling is significant for two reasons: First, it rejects Sprint Nextel’s challenges regarding the timing of 800 MHz rebanding process, thusly impacting Sprint Nextel's operations. Second, it sets precedent for the proper procedure for bringing petitions for review of FCC orders.

    For more information, please see the Court of Appeals’ opinion at [http://pacer.cadc.uscourts.gov/common/opinions/200805/07-1416-1114329.pdf] (PDF only). [Source: D.C. Court of Appeals]

    Supreme Court Lets Stand Ruling on Arbitration Clauses in Wireless Contracts

    05.27.2008 – The U.S. Supreme Court denied certiorari in T-Mobile USA v. Laster (Sup. Ct. No. 07-976), a case involving the legality of arbitration clauses in wireless service contracts. By declining to hear the case, the nation’s highest court let stand the ruling of the U.S. Court of Appeals for the Ninth Circuit (App. Ct. No. 06-55010).

    At issue in this case was the enforceability of arbitration clauses in wireless consumer contracts under the Federal Arbitration Act (FAA). In October 2007, the Court of Appeals ruled that the clauses requiring arbitration to address consumer complaints were unenforceable. T-Mobile contained a prohibition on class action lawsuits within its consumer contracts, and the company required consumers to resolve any complaints through arbitration. The company argued in court that federal law, namely the FAA, which generally requires that arbitration clauses be enforced, overrules those state laws that limit the ability of companies to ban class actions. Under contract laws in some states, class-action bans are considered inherently unfair. The courts, including those in California, where the dispute originated, may choose to not enforce them. The Court of Appeals’ decision in T-Mobile USA v. Laster, and its subsequent upholding by the Supreme Court’s decision to deny certiorari, is viewed by some legal experts as inconsistent with federal law on this issue.

    Wireless carriers historically have supported arbitration because they consider it a faster and cheaper means to resolving customer disputes than litigation. The Court of Appeals’ ruling against the mandated enforcement of arbitration clauses may be viewed as a defeat for the wireless telecommunications industry and a victory for those individuals interested in using class action lawsuits as a means for addressing complaints. Consumer groups argued in court that class action bans are unfair, because in legal disputes over small amounts of money, individuals may not have the incentive to file suits.

    The U.S. Supreme Court also declined to hear two other cases, T-Mobile v. Ford (Sup. Ct. No. 07-1103) and T-Mobile v. Gatton (Sup. Ct. No. 07-1036), thereby exhausting the carrier’s current attempts to maintain the enforceability of the arbitration clauses in its contracts. [Sources: U.S. Supreme Court, 9th Circuit Court of Appeals, Associated Press, and CNN]


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  • Studies / Reports

    Broadband Adoption in U.S. on Par with Most OECD Countries, One Study Finds

    05.28.2008 – The Phoenix Center for Advanced Legal & Economic Public Policy Studies, a non-profit policy research center based in Washington, D.C., has released a study entitled “The Broadband Efficiency Index: What Really Drives Broadband Adoption Across the OECD” (Phoenix Center Policy Paper No. 33). It addresses the issue of broadband penetration among counties who are members of the Organization for Economic Cooperation and Development (OECD), an organization of 30 countries whose members represent leadership in representative democracy and free market economies.

    In a recent survey, the OECD ranked the United States in 15th place regarding overall broadband penetration. The Phoenix Center study reevaluates the OECD’s findings by calculating a “Broadband Efficiency Index” (BEI) to measure the “efficiency with which each of the 30 OECD member countries converts its economic and demographic endowments into broadband subscriptions.” With very few exceptions, the Phoenix Center finds that broadband subscription in OECD countries is consistent with those endowments. About two thirds of OECD countries have an efficiency rate of 95 percent or better. Significantly, the United States has an efficiency index of 96.7 percent, which is slightly higher than Japan (96.3 percent) and Korea (95.8 percent), two countries ranked higher than the U.S. by the OECD on the issue of broadband penetration.

    The Phoenix Center’s study contends that 91 percent of the differences in the broadband adoption rate among industrialized countries may be explained by demographic and economic factors such as education, income inequality, and population age and density. Because countries have different demographic and economic conditions, the study suggests that the most effective mix of policies will vary country-to-country. Therefore, the study concludes that “blindly following the policies of countries ‘ranked’ higher in the OECD raw rankings is not likely to result in optimal success.”

    A copy of the Phoenix Center’s study may be found at [http://www.phoenix-center.org/pcpp/PCPP33Final.pdf] (PDF only). [Sources: Phoenix Center, OECD, and Government Technology]

    Digital Television Transition Report Released by GAO

    05.20.2008 – The U.S. Government Accountability Office (GAO) has released a report entitled “Digital Television Transition: Majority of Broadcasters Are Prepared for the DTV Transition, but Some Technical and Coordination Issues Remain.” The report noted that, on the whole, broadcast stations have made substantial progress in transitioning to digital television (DTV), with the overwhelming majority already broadcasting a digital signal. Approximately 91 percent of full-power stations are currently transmitting in digital. Of these, 68 percent of survey respondents are transmitting their digital signal at full strength, and 68 percent of respondents are currently transmitting their digital signal on the channel from which they will broadcast after the transition date.

    However, the GAO report found that 97 stations, or 9 percent of stations, responding to its survey, are not currently broadcasting digitally. Almost all of these stations, however, indicated that they plan to have their digital signal operational by February 17, 2009, which is the deadline to complete the transition to DTV.

    For a copy of the GAO report, please see [http://www.gao.gov/new.items/d08510.pdf] (PDF only). [Source: GAO]


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  • Other Activities and Items of Interest

    < Microsoft Withdraws Offer for Yahoo

    05.03.2008 – In a statement issued on May 3, 2008, Microsoft announced that it was withdrawing its bid of about $47.5 billion for Yahoo, Inc. In an unsolicited bid to purchase the Internet services company back in February, Microsoft proposed acquiring all outstanding shares of the Yahoo common stock for $31 per share (see TIPH 8.02 for more details). The company raised its offer by almost $5 billion, but Yahoo still rejected it as too low. /p>

    Days after Microsoft withdrew its offer, shares of Yahoo fell by as much as 17 percent. Following the failed deal, Yahoo's board of directors received many letters from shareholders criticizing the company's tactics during the negotiations with Microsoft. About two weeks later, Yahoo investor and shareholder, Carl C. Icahn was said to be considering a proxy fight for seats on the Yahoo board in hopes of pushing the company to restart talks to sell itself to Microsoft. However, it remains to be seen whether such actions will take place. [Sources: New York Times and Associated Press]


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  • Upcoming Events

    DTV Converter Box Workshop Sponsored by FCC

    06.19.2008 – The FCC has announced a DTV Consumer Education Workshop focused on DTV converter boxes, to be held on Thursday, June 19, 2008, from 10:00 a.m. to 2:00 p.m. at the FCC Headquarters, 445 12th Street, SW, Washington, DC, in the Commission Meeting Room. The meeting will also be webcast live from the FCC’s website at [http://www.fcc.gov/realaudio].

    The workshop will address issues related to DTV converter boxes for analog television sets that receive signals over-the-air. Specifically, the session will explain how to connect DTV converter boxes to analog television sets and will discuss the converter boxes’ features, including closed captioning and parental controls. Several manufacturers and vendors will display their DTV converter boxes and be available to answer questions about them.

    A more detailed agenda for the meeting will be released soon. In the meantime, please see the Public Notice at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-282481A1.txt] (MS Word and PDF formats also available). [Source: FCC]


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  • Newsletter Info

    Center for Advanced Communications Policy
    Telecom/IT Policy Highlights Volume 8.05
    May 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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