Update: D.C. Circuit Downs Drone Appeal

Last May we reported on an appeal that had been filed with the U.S. Court of Appeals for the D.C. Circuit with respect to the FAA’s efforts to regulate the use of drones. We noted that there were some likely problems with the appeal, not the least of which was the fact that the FAA order being appealed wasn’t really an order. Rather, it was just an email – and a pretty informal email at that – from an FAA representative describing the FAA’s policy. As we noted back then, it didn’t look much like an official agency action

And that, as it turns out, is what the Court thought, too. It concluded that the challenged email wasn’t a formal decision, it didn’t reflect any final FAA decisionmaking, and it didn’t really have any legal consequences (notwithstanding the email’s ominous and threatening tone). In a terse two-page order, the Court shot the appeal down.

While the usual flight paths are available for reconsideration or appeal to the Supremes, we think it unlikely that we’ll see the case winging in that direction: the probability that this decision might get flipped would appear to be somewhere between zero and nil. So this appeal has crashed and burned. But you never know. If the case takes back off, we’ll let you know.

Performance Royalties: The State of Play

[Blogmeister’s Note: The following post by FHH’s Frank Montero first appeared in Radio Ink Magazine. Our good friends at Radio Ink have given us permission to reprint Frank’s piece here, for which we thank them.]

There is much afoot these days in the world of copyrights and performance rights and royalties. Any radio station owner knows about the license fees collected by ASCAP, BMI, and SESAC, which pay royalties to composers and publishers. Less familiar are royalties collected by performers and the recording industry. For musical recordings, radio stations pay SoundExchange when streaming music over the Internet, but not for over-the-air broadcasts. The logic has been that the recording industry already reaps a huge benefit from having its records played over the air. In fact, traditionally the money stream has flowed in the opposite direction, with radio stations, DJs, and PDs being paid to play recordings on the air. There’s even a name for it: payola.

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Wireline Competition Bureau Clarifies That You Do - or Do Not - Need Agency Approval Before Transferring Control of Some ETCs

Well, that clears that up

On July 24, the FCC’s Wireline Competition Bureau (WCB) issued a public notice “reminding” carriers of prior approval requirements when certain Eligible Telecommunications Carriers (ETCs) plan to undergo a transfer of control. ETC status is granted by state public utility commissions in most cases, but the FCC itself handles this function in the 20% or so of the states that have chosen not to regulate in this area. ETCs receive millions of dollars from the Universal Service Fund (USF) to support the services they provide, so the administering agency, whether it be the FCC or a comparable state agency, reviews the identity and commitments of proposed ETCs carefully before granting them that status and thus making them eligible to receive the USF support. It would not be surprising, therefore, for the pertinent regulatory agency to require ETCs to seek approval before control of the entity is transferred to a new entity.

The problem is that there is nothing in the FCC’s rulebook that requires such approval.

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5.8 GHz U-NII Update: Dates Set for Responses to Recon Petitions

A couple of weeks ago we reported that several petitions for reconsideration had been filed relative to last April’s changes to the rules governing the 5 GHz unlicensed band. The FCC’s notice concerning those petitions has now made it into the Federal Register, which means that the deadlines for filing oppositions and replies have now been set. If you’re inclined to oppose any (or all) of the petitions, you’ve got until August 14, 2014. Replies will be due by August 25.

Testing Completed For Seventh White Space Database System

Google wraps up trials on its modified system; FCC invites comments

Looks like it’s time to fill yet another white space in on our white space grid. According to the FCC, hot on the heels of Comsearch (which wrapped up its testing just last month), Google has completed the testing of its modified white space database system. With the report of those tests now on file, the Commission is soliciting comments on the report and on Google’s tests generally. Comments are due by August 13, 2014; replies are due by August 19.

As our handy-dandy white space chart indicates, of the 11 database systems proposed thus far, only five have yet to make it through the FCC’s gantlet and achieve approval – and it’s been that way since last November. But with the completion of Comsearch’s testing last month and Google II’s now, we may be looking at a couple more approvals in the not too distant future. Check back here for updates.

(Fuzzy on the whole white space database administrator question?  Check out this post for some background.)

Coordinator

Test Started

Test Finished; Comments Sought

Coordinator Approved

Comsearch

Feb. 24, 2014

June 23, 2014

 

Frequency Finder Inc.

     

Google Inc.

Feb. 27, 2013

May 29, 2013

June 28, 2013

Google Inc. II

June 2, 2014

July 29, 2014

 

LS telcom AG

June 18, 2013

     Nov. 14, 2013

 

Key Bridge Global LLC

March 4, 2013

May 29, 2013

 Nov. 19, 2013

Microsoft Corp.

     

Neustar Inc.

     

Spectrum Bridge Inc.

Sept. 14, 2011

Nov. 10, 2011

Dec. 22, 2011

Telcordia Technologies

Dec. 2, 2011

Feb. 1, 2012

March 26, 2012

   WSdb LLC

     

Congress Says Unlocking Cell Phones is Okay

You ask: why is this even a question?

Thanks to action by Congress – something we don’t get to say often, these days – it will soon once again be lawful to “unlock” your cell phone so as to use it with a different carrier.

You ask: why is this even a question?

Because of an earlier act of Congress – the Digital Millennium Copyright Act (DMCA), to be specific – whose Section 1201(a)(1)(a) provides that:

[n]o person shall circumvent a technological measure that effectively controls access to a work protected under this title.

The software in a phone is a “work protected under this title.” The locking software is a “technological measure that effectively controls access” to the phone. So to “circumvent” the software by unlocking it violates the DMCA. Even a first offense, if done “willfully and for purposes of commercial advantage or private financial gain," can draw a fine of up to $500,000 plus up to five years in the federal penitentiary.

The DMCA allows the Librarian of Congress, the official in charge of copyright matters, to make exceptions to the law. And indeed, he used to have an exception on the books that covered cell phone unlocking. Located in 37 C.F.R. § 201.40(b)(3) (2012), it permitted

[c]omputer programs, in the form of firmware or software, that enable used wireless telephone handsets to connect to a wireless telecommunications network, when circumvention is initiated by the owner of the copy of the computer program solely in order to connect to a wireless telecommunications network and access to the network is authorized by the operator of the network. 

Note the requirement that unlocking (“circumvention”) be initiated by the “owner of the copy of the computer program” – i.e., the owner of the software in the phone. That’s you, right? When you’ve bought a phone, haven’t you also bought the software inside it? That’s what a reasonable person might think.

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Update: 3550-3650 MHz Replies Extended to August 15

No need to read the post; the headline says it all.

A recent item in in our series of posts on the FCC’s novel spectrum-management proposals for the 3550-3650 MHz band (and possibly 3650-6700 MHz as well) told you the reply comment date was … well, it doesn’t matter what we told you, because the FCC has now extended the reply comment date to August 15.

Resume your vacation.

Congress Contemplates Cohabitation at 5.85-5.925 GHz

Bill would set timetable for unlicensed operation, deferred by FCC in April.

The crack electrical engineers and spectrum policy experts elected to the U.S. Congress are considering a bill called the Wi-Fi Innovation Act.

Readers may recall that the FCC proposed to add rules for Unlicensed National Information Infrastructure (U-NII) operation on 5.85-5.925 GHz at one watt output power. (U-NII overlaps with Wi-Fi and serves many of the same purposes.) The proposed use would share spectrum with “Dedicated Short Range Communications” (DSRC), authorized in 2004 for automatic communications among vehicles and between vehicles and roadside points, to facilitate safety and the movement of traffic. Although interest in DSRC remains high among vehicle manufacturers, widespread deployment does not appear imminent.

Some who support DSRC opposed the new U-NII rules in the 5.85-5.925 GHz band, fearing interference. The FCC’s First Report and Order in the proceeding did not resolve the issue, deferring action on it pending the completion of ongoing technical analyses.

If enacted, the Wi-Fi Innovation Act would take over the FCC’s deliberations. The FCC would have to: (a) consider “interference mitigation techniques and technologies” that would enable the proposed U-NII service at 5.85-5.925 GHz while protecting DSRC; (b) conduct tests of those technologies, and (c) adopt U-NII rules (or not) based on the outcome of those tests – all within two years.

In addition to imposing particular deadlines for FCC action, the bill would require actual interference testing. Parties to a proceeding often submit test results, and the FCC has sometimes done its own testing (in the TV white space proceeding, for example), but this is not part of the FCC’s usual routine.

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Update: FCC Announces Form 477 Web Pages, Webinar

Webinar on new filing interface for Form 477 to be held on August 6; FCC releases link to Form 477 filing resources.

As we reported last month, the new Form 477 filing interface implemented as part of the Commission’s expansion of the Form 477 Data Program goes live on July 31. And as the FCC promised, additional Form 477 guidance – consisting of several web pages with instructions, resources, system guides, background information – is now available to prospective filers on the FCC’s website. (Cautionary note: While the FCC has indeed set up potentially useful web pages, it has included on those pages a number of links that are not yet live, at least as of the date the availability of those pages was first announced. The Commission assures one and all that those links will be updated before the new interface goes live on July 31.)

The Commission also promised an instructional webinar after the launch. True to its word, the FCC has announced that the promised webinar has been scheduled to occur on August 6, 2014 from 2:30-3:30 p.m. (ET). You can attend the real deal at the FCC’s Meeting Room in Washington, or you can watch it live over the ether at http://fcc.gov/live. Stay-at-home viewers will be given the opportunity to email questions in to the presenters during the show.

.media is The Message

Calling all media-related folks interested in getting in on the ground floor of a new opportunity. The Top Level Domain (TLD) “.media” is now available. Come one, come all. For the measly sum of $39.99, you could lay claim to your own private piece of the Internet labeled “[YOURNAME].media”. (That assumes, of course, that that particular domain name hasn’t already been scooped up.) Check with your favorite registrar to see if they’re offering “.media” registrations; if they’re not, we know for sure that GoDaddy is. We have previously written about the impending arrival of more than 1,000 new generic TLDs, so ideally readers are familiar with the lay of the land. (If not, check out the posts at this link.)

Music Licensing Study Gets an Encore

Copyright Office seeks more input in proceeding as it considers possible overhaul of the music licensing system.

As readers should know by now, the long-stable music licensing  system may soon be in flux. Nearly every aspect of the licensing process is under scrutiny – even attack – on several fronts, and the possibility of change looms large.

Of course, you’ve got your Congressional hearings, which could lead to changes in the Copyright Act. Then you’ve got the Department of Justice review of the decades-old consent decrees governing ASCAP and BMI (remember, SESAC isn’t subject to a consent decree). And the Copyright Office (CO) is looking not only at those same consent decrees, but also at a much wider range of licensing-related questions.

With so many governmental fingers in the pie, what’s likely to get done? 

A CO Notice of Inquiry requesting more comments in its “Music Licensing Study” may shed some light on that question.

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Looking for a Way Around a Statute of Limitations?

Video Division forfeiture order shows flexibility, but not necessarily in a good way

One thing you can say about the FCC: If they think they’ve caught a licensee in a violation, they can be persistent in their efforts to impose penalties for that violation. Whether those efforts are entirely consistent with the law is another question entirely.

With respect to any fine it issues, the Commission must consider the relevant statute of limitations. FCC forfeitures are subject to two separate such statutes. First, under Section 503 of the Communications Act, it can levy forfeitures for actions going back to the beginning of the current license term or one year, whichever is earlier. 

Once the Commission has issued its formal “forfeiture order”, a licensee can simply ignore that order. If the Commission wants to collect the fine in the face of such licensee inaction, it must convince the Department of Justice to sue the target licensee in federal district court. But a second, separate, statute (28 U.S.C. § 2462) says that law suits to enforce penalties must be started within five years of “the date the claim first accrued”.  

A recent forfeiture order reflects the Video Division’s awareness of that latter limit and at least one way the Division has devised to try to sidestep it.

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Fifth Circuit: False Claims for USF Funds Are Not Subject to False Claims Act Suits

Court holds that USF funds, administered by a private corporation, are not “federal funds” within meaning of False Claims Act.

One weapon in the government’s anti-fraud arsenal – the False Claims Act – will no longer be available to the Feds in their efforts to combat bogus claims made to the Universal Service Fund (USF) if a recent decision out of the U.S. Court of Appeals for the Fifth Circuit sticks.

The USF, of course, is the multi-billion dollar cash reservoir used to subsidize a variety of programs designed to assure that all Americans have affordable access to essential telecommunications services. Created by Congress in 1996 (but having roots dating back to 1934), the USF is funded by mandatory contributions from telecom carriers, who in turn pass the charges along to their customers. If you haven’t heard of it, take a look at your phone bill, which has a surcharge of more than 15% to cover your share of your carrier’s mandatory contribution to the USF. Since pretty much every phone bill every month to every customer everywhere includes that line item, the cash coming into the USF is not chickenfeed. (Illustrative examples: Annual USF disbursements exceeded $8.5 billion in 2012; earlier this month the Commission expanded the funds available to the Education Rate (E-rate) component of USF – which supports communications technology (e.g., Wi-fi) in schools and libraries – to more than $3 billion annually for the next two years.)

The USF is administered by the Universal Service Administrative Company (USAC), a non-profit corporation established to oversee the day-to-day operation of the USF. Contributions go directly to the USAC, which then distributes them back out to service providers in furtherance of USF programs.

When so much money is doled out anywhere, you can pretty much count on people trying to get their hands on more than they’re entitled to.

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One in a Million: Coming Clean in the Net Neutrality Proceeding

Open Internet comments have passed the seven-figure mark, but one in particular sticks out.

Update: Word is that the total number of comments filed in the net neutrality proceeding leapt from around 650,000 the day before the original comment deadline, to more than 1,000,000 by the end of the extended comment period.

First, congrats to those of you who guessed right in your office’s over/under on the comment total – but don’t get too cocky. There are still a couple of months’ worth of reply comments yet to show up, so be sure to read the fine print on your internal office pool rules before you claim any prizes.

Second, with the new total, we have to revise the estimates we laid out in our earlier post. At that point, we estimated (based on then-available numbers) that, if 650,000 comments had been filed, one FCC staffmember doing nothing but net neutrality comment review for 52 40-hour weeks per year, and processing one comment every five minutes, would take more than 26 years to complete the job. With 1,000,000+ comments now in hand, let’s re-calculate. Under the conditions we are positing – and now also assuming that the hypothetical staffer would be willing to work beyond the usual retirement age – he or she would require 40 years to complete review of 1,000,000 comments.

And third, we want to highlight one particular submission which arrived in the FCC’s ECFS system on July 16. Filed by one Kurt Schaake (of Lawrence, Kansas), these comments consist, in toto, of a copy of the user instructions for a Whirlpool Dishwasher. True fact – you can find them for yourself by searching ECFS in Docket No. 14-28 (the Open Internet proceeding) or you can just click here to get there more quickly.

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Aereo Loses First Round in Copyright Office, While Dish Wins its Next Round in the Ninth Circuit

More developments in the realm of Internet retransmission of OTA signals.

Aereo – the gift that keeps on giving, at least when it comes to blogworthy content. As we reported, after it got its clock cleaned at the Supreme Court, Aereo bounced back with Plan B, which amounted to declaring itself (a) a cable system and, thus, (b) eligible for the compulsory copyright license granted to cable systems. But you can’t just say “I’m a cable system” and expect anybody to believe you. So Aereo went ahead with some of the paperwork required of f’real cable operators; among other things, it filed a bunch (14, to be exact) of Statements of Accounts with the U.S. Copyright Office, along with some royalty and fee payments amounting to the princely sum of $5,310.74.

A nice gesture, but wouldn’t you know it, the Copyright Office (CO) was not inclined to play along with the gambit. In a brief letter dated July 16, 2014, the CO let Aereo know that, as far as the CO is concerned, Aereo is not a cable system entitled to the compulsory license. As it turns out, more than a decade ago the CO had concluded that “internet retransmission of broadcast television fall outside the scope” of the compulsory license. That’s bad news for Aereo, whose system is firmly – indeed, exclusively – based on Internet retransmission.

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