CommLawBlog : Broadcast & Communications Lawyers & Attorneys : Fletcher Heald & Hildreth Law Firm : Telecommunications, FCC Regulation, Communications Act

Because USF support is expressly targeted at “telecommunications services,” the FCC jeopardizes its whole scheme for supporting broadband. For example, the FCC relies on Section 706 of the Act as a source of authority to support broadband through the USF. That section directs the Commission to accelerate the deployment of advanced telecommunications capabilities regardless of whether they are strictly “telecom” services. However, the Commission then imposes on non-telecom service broadband providers the same requirements that apply to regular eligible telecommunications carriers (ETCs) who of course are telecom service providers. 

One of the requirements so imposed is that an ETC must provide stand-alone voice telephony throughout its “designated service area,” yet many non-telecom broadband providers will not have designated service areas. Similarly, many broadband providers simply offer a broadband data pipe and do not care what particular applications (such as a VoIP application) their customers use over the pipe. Although it would make sense for such service providers to qualify for USF support, the Commission’s scheme would exclude them.

Required service levels. USF fixed service recipients must provide broadband at speeds of 4 Mbps downstream and 1 Mbps up. This represents a great leap upward in the minimum speed expected of a broadband provider. Latency of less than 100 milliseconds is expected and, while monthly capacity requirements are not specified, the FCC expects wireless broadband providers to offer capacity limits consistent with those offered in urban areas. 

Build-out areas and “unsubsidized competitors”. USF support will be offered for the build-out of areas now unserved by an unsubsidized competitor.  The definition of an “unsubsidized competitor” is critical here because there are many areas where mobile wireless providers offer service and landline providers do not. This would prevent landline providers from receiving build-out support in those areas. The Commission protected local exchange carriers (LECs), however, by defining an “unsubsidized competitor” as a “facilities-based provider of residential fixed voice and broadband services.” Fixed voice and broadband service is defined as service to end users primarily at fixed endpoints using stationary equipment. This limitation to fixed services is curious since so many people these days are now cutting the cord not only for voice service but for data service as well.

Broadband service to end users primarily using mobile stations would not qualify. However, the FCC did note that a mobile services provider could become an unsubsidized competitor by offering fixed service that guarantees that the speed, latency and capacity minima applicable to fixed providers will be met throughout the relevant area. 

Elimination of identical support rule. The FCC has done away with the identical support rule which subsidized multiple carriers in any given area. This action alone hacks several hundred million dollars in support away from competitive ETCs (CETCs) because they now no longer qualify for duplicate payments. 

Strangely, the FCC did not seem to even consider the possibility that a CETC, whether wired or wireless, should be the surviving single recipient of the funding instead of the LEC.  It simply provided for a phase-out of support to existing non-LEC recipients by mid-2016. In addition to retaining their current subsidies (as revised to cut out certain support mechanisms), LECs also get the privilege of offering to be the sole provider of basic services in currently unserved areas in each part of a state where they provide service. That is, an existing LEC ETC may propose to provide the full panoply of supported services everywhere – but not less than everywhere – in the state where it is the designated LEC. 

If the LEC picks up that option, obviously no other carrier would be designated to provide fixed service in those areas. If no LEC picks up the challenge, then there will be unserved areas in each state where USF support will be offered by a reverse auction mechanism. Build-out in these currently unserved areas will be supported by a one-time distribution of up to $300 million to price cap LECs.

Mobility Fund (Phase I). The FCC is also offering a one-time build-out subsidy to mobile services providers via a Mobility Fund (Phase I). Under this program, up to $300 million will be distributed to companies willing to provide service to areas currently without 3G or better wireless service. (An additional $50 million is made available for build-out of unserved tribal areas.)  These funds are expected to be up for grabs by a reverse auction to be conducted in the third quarter of 2012. Several components of participating in this auction involve considerable lead time.

• Identifying unserved areas. The FCC has promised to identify, prior to the auction, the areas that are actually currently unserved. This is a big improvement over the 2009 federal stimulus plan process where each individual applicant had to figure out for itself whether an area was unserved or not. In determining whether an area is unserved, the FCC will take into account commitments to provide service in an area (including stimulus fund-based commitments) made prior to the end of 2012. 

Unserved areas will be determined on a census block basis using road miles as the marker of mobile service. A tentative map of unserved areas will be posted prior to the auction, with the public given an opportunity to point out that areas have not been accurately characterized. A final map of unserved areas will be posted prior to the auction (typically a couple of months before), but that poses an obvious logistical problem: most interested parties will not have enough time to apply for ETC designation in those unserved areas.

• Auction eligibility requirements. To participate in the auction, an entity must: (1) be an ETC; (2) have access to spectrum by ownership or lease; and (3) be financially qualified to provide service after the build out takes place. This raises a host of chicken and egg problems that the FCC does not seem to have adequately considered.  

First, in some states the ETC designation process can take years. By imposing this hurdle, the FCC is precluding perfectly capable and willing carriers from participation. 

Second, in many instances it may be impossible to serve as an ETC unless one is receiving USF support. One would be loathe to take on ETC responsibilities without knowing beforehand that the support money will be available, but the rules are set up backwards. The Commission alludes cryptically at one point in the Order to a “conditional” ETC designation where one could be designated as an ETC conditioned on receipt of USF support. This process would partly solve the problem, if both the FCC and the states will grant provisional ETC designations – something that is far from clear. In any case, interested parties should start thinking about applying for ETC designation now if they hope to participate in the auction.

Third, a prospective service provider whose viability depends on whether it will be receiving USF money might not be want to buy or lease the necessary spectrum without that assurance. Yet the Commission’s rules require that the spectrum be in hand. The sole break here is that the spectrum acquisition or lease may be conditioned on receipt of Phase I USF support.    

And fourth, the auction participant must not only certify that it is financially capable of providing service in the area after the build-out is complete, but also secure its obligation by posting a letter of credit in favor of the FCC. This unusual arrangement might preclude all but very financially well-heeled companies from being able to participate.

• Obligations of winners.   Winners in the reverse auction will have to provide either 3G service (200kbps down/50 kbps up) or 4G service. The service provided must be measured by drive tests and reported to the FCC. Winners must also: allow collocation at reasonable rates on towers constructed with USF money; allow voice and data roaming; and charge rates comparable to urban rates.   Winning bidders who fail to meet their build-out obligation will default on their Line of Credit to the FCC and be required to repay all monies received under the program.

• Auction procedures. Most of the details of the reverse auction have been left to the FCC’s auction staff to hash out, but the FCC did express a preference for a single-round sealed bid auction, as distinct from its normal multiple round bid process. This would obviously require bidders to make their single best bid at the outset with no opportunity to drop the bid lower in reaction to other bids.

Mobility Fund (Phase II). In addition to the one-time Phase I funding opportunity, the FCC plans a Phase II program providing funds to cover on-going costs of providing mobile service to areas requiring subsidies. $500 million has been allocated for this purpose, of which up to $100 million is prioritized for tribal needs.   This money will be awarded by a reverse auction process similar to that used for Phase II.  

The specifics of which areas – unserved? underserved? high cost? – will qualify for such subsidies are not yet clearly defined. In particular, if Phase II support is limited to unserved areas, that would seem to preclude recipients of Phase I build-out funding from qualifying for Phase II operations funding, particularly since they would have been required as a Phase I condition to attest that they have the financial wherewithal to operate without such support. Phase II will be fleshed out by the further rulemaking portion of the FCC action.

Intercarrier compensation (wireless issues only).   The second major subject area of the FCC’s order is intercarrier compensation, a field which spans all exchange of traffic between carriers and, now, some non-carriers. Because of the sweeping extent of the changes regarding intercarrier compensation, we will limit this discussion to items particular affecting wireless interests.

The FCC’s Order here is a genuine and fundamental sea change in the way traffic exchanges have been handled for generations.   Specifically, the FCC has adopted as its root principle that “bill-and-keep” should be the basis for exchanges. This principle – that each carrier should charge its own customers for service provided to them and not be compensated by other carriers that interconnect with it – represents a repudiation of the previously prevailing concept that the calling party is the party who benefits by a communication. Instead, the FCC now recognizes that both the called and calling party benefit by connection to the network and that each party should bear its own costs for participating. 

This radical reform at one swoop would erase a myriad of complex payment structures that have governed intercarrier relationships for years. To minimize the trauma of this upheaval, the FCC has provided a six-to-ten year transition period for LECs who have depended on these intrinsic subsidies. The ultimate effect of this reform should be positive for wireless carriers, since various access charges will be reduced or eliminated over time.  To be sure, the FCC did confirm that non-access traffic exchanged between wireless carriers and LECs (typically intraMTA traffic) is to be exchanged on the basis of interconnection agreements between the parties. But with bill-and-keep as the default payment model, non-LECs have a significant leg up in such negotiations. A few other points to be aware of:

• The Commission did not immediately impose the bill-and-keep regime on originating access charges, though it capped those charges and signaled that intends to move in that direction.
• The Commission intends its bill-and-keep principle to apply to both intrastate and interstate communications, but the Commission’s authority to impose this rule on intrastate communications is questionable. This issue will certainly be hashed out in the appeals that have already been filed in court.
• Reciprocal compensation rates between CMRS carriers must be consistent with the rate model adopted for price cap carriers.
• The FCC decided to treat all VoIP-to-PSTN traffic similarly, regardless of whether it is fully interconnected on a two-way basis. Such VoIP traffic is subject, in the case of toll traffic, to the same rates applicable to non-VoIP traffic, and in the case of other traffic, to reciprocal compensation agreements. This reform is intended to eliminate the widely decried disparity in treatment between VoIP and non-VoIP traffic. Here again the Commission’s refusal to denominate VoIP traffic as telecommunications could undercut its regulatory effort.

We have gone on at greater length here than is our wont, but only because the scope of the FCC’s order is so vast. We expect to be providing further guidance on some of the elements of the USF/ICC Order in the weeks ahead. 

In the meantime, interested parties should be aware that, since FCC’s magnum opus was published in the Federal Register on November 29, the date for seeking reconsideration of any part of the FCC’s action is December 29. Comments on the rate represcription, Connect America Fund, ETC, and auction refinement elements of the Further Notice of Proposed Rulemaking are due by January 18, 2012, and reply comments by February 17. Comments on the intercarrier compensation portion of the rulemaking are due by February 24. with replies by March 30.  

Judicial appeals are due no later than January 30.  Anyone thinking about taking the new rules to court should be aware that a number of other parties have already headed down that path – and, thanks to the U.S. Judicial Panel on Multi-District Litigation, it has been decided that the U.S. Court of Appeals for the Tenth Circuit, headquartered in Denver, will be the court to hear all such appeals in a consolidated proceeding.

• Redistribution of USF funds.   Acting more like Congress than an administrative agency, the FCC is re-purposing what we have known as the USF. Till now, the USF was a vehicle used to subsidize voice service in high cost areas and to low income consumers which was funded by contributions from customers. The FCC has re-dubbed this $4.5 billion pool of cash as the Connect America Fund, with the mission of assuring universal reasonably priced services that include both voice and broadband, with broadband now at least as important as voice, if not more so.   The Commission attacks the problem of excessive growth in the Fund by capping it at 2011 levels for six years. Although Christmas and Hannukah are still months away, the FCC plans to dole out: $300 million in one-time grants to price cap carriers to subsidize broadband build-out in areas unserved by any unsubsidized carrier; $300 million in one-time grants to wireless carriers to provide mobile broadband in unserved areas; and $50 million in funding for mobile service to tribal lands. All of these build-outs, we are earnestly told, are going to be subject to strict deadlines and quality control. The Mobility Fund will in addition get $500 million per year in on-going support, including $100 million for tribal areas. Another $100 million will go for annual support for the most remote, high cost areas. A hundred million here, a hundred million there. . . .
• Price cap carrier reform. Price cap carriers will have their current high cost support frozen; support levels will be reduced where price cap companies charge artificially low rates; a forward-looking cost model will be generated to establish reasonable levels of high cost support going forward; and price cap carriers will be encouraged to make a state-wide commitment to provide affordable broadband service in most of their high cost service areas in a state.
• Rate of return carrier reform. The FCC will require rate of return carriers, like price cap carriers, to deliver broadband at actual speeds of 4 Mbps down and 1 Mbps up if they expect to continue receiving subsidies. The FCC will gradually eliminate numerous programs of existing high cost support that allegedly have encouraged inefficiency, gold-plating and redundant services.   The FCC will look at reducing the current 11.25% rate of return which these carriers enjoy, while observing that they will take a second hit through reduced current intercarrier compensation revenues.
• Identical support rule.   As expected, the FCC is eliminating the identical support rule via a gradual five-year phase-out.
• Snuffing traffic pumping and phantom traffic.   The FCC blocks these two abuses by requiring: (a) LECs to lower their access tariffs in circumstances where it is clear that traffic pumping is going on (presumed if inbound traffic is three times or more the outbound traffic, or there is revenue sharing with a customer); and (b) all carriers and interconnected VoIP providers to include calling party number info in the signaling stream.
• Fundamental Intercarrier Compensation reform. Here the FCC acted very boldly by adopting a bill-and-keep framework for exchange of all traffic with LECs. This dramatic step will significantly simplify intercarrier relations, though some will raise questions because costs differ among carriers. Since this new policy can be imposed only on interstate traffic, it will be up to the states to follow the FCC’s lead on this for intrastate traffic – or not. The FCC will effect a multi-year transition by first capping ICC rates, then bringing interstate and intrastate terminating end office rates into parity, then going to bill-and-keep after six years (for price cap carriers) and nine years (for rate of return carriers). These generous transition periods should ease the blow considerably for the carriers involved.
• New recovery mechanism. Having eliminated some forms of subsidy to carriers, the FCC now establishes a new one. It will permit carriers to charge an ARC (Access Recovery Charge) not to exceed $1.20 -$1.80 for consumers (not including revenue recovered by existing SLC charges) and $12.20 for multi-line businesses (including the existing SLC). These charges are to be phased out over time and not applied to Lifeline customers.
• VoIP and CMRS traffic. Toll VoIP to PSTN traffic will be treated like non-VoIP traffic, and non-toll traffic will be handled on a reciprocal compensation basis, ending claims by some VoIP carriers that they are not obligated to pay carriers who deliver their traffic to end users.   CMRS-LEC traffic will be handled on a bill-and-keep basis.

We have been critical over the years of the Genachowski Commission’s failings, but in this instance we have to credit it with finally taking on a many-headed monster that had defied regulatory reform for years, even though everyone agreed reform was needed.   There will still be plenty of argument and a spate of appeals before any of this is finally settled, but the FCC has at last set a firm course for USF and ICC reform and gotten the ship underway.

The furor over bill shock died down in 2011, with the FCC turning its attention to other matters, and what had seemed to be a major consumer crisis in 2010 faded from the spotlight entirely.   Some carriers, chastened by the bad publicity and customer relations resulting from the horror stories, started voluntarily warning their customers about impending surcharges. Now that voluntary movement has crystallized into an industry standard.   CTIA (official name: “CTIA – The Wireless Association®” – don’t forget the ®, please), which is comprised of companies serving the vast majority of American wireless customers, announced that it has adopted new guidelines as part of its Consumer Code for Wireless Service. Dubbed the “Wireless Consumer Usage Notification Guidelines” (and appended to the Consumer Code as the eleventh provision), the CTIA’s standards appear largely to track the proposals put forth by the Commission last year. The plan calls for notification to consumers that they are about to exceed and/or have exceeded the minutes of use included in their plans, and notification when international roaming charges will be assessed. All notifications will be cost-free to the consumer, and they will be provided on an “opt-out” basis – i.e., unless Joe or Loretta Cell-User expressly chooses not to receive the notices, he/she can expect to be getting them.   

The guidelines are, of course, voluntary. No carrier has to abide by them, unless it voluntarily subscribes to the CTIA’s Consumer Code.  The notifications are to be phased in over the next couple of years. By October, 2012, participating wireless providers will be providing required alerts relative to at least two of the four service categories (i.e., voice, text, data and international use); full compliance is not due until April, 2013. The fine print on the guidelines has yet to be revealed – for example, how and when is the consumer supposed to receive these warnings?   Nevertheless, the FCC breathed a sigh of relief at not having to impose new regulations on an already highly regulated industry. If the industry is willing to police itself, all the better. So the FCC put its proposed anti-bill shock regulations back in the freezer in the hope and expectation that the industry guidelines will eliminate the problem.

This observer can attest that he has already gotten a timely warning from AT&T that his daughter was fast approaching the data limit on her smart phone plan. That warning resulted in a rather more forceful and dire warning being delivered to the daughter in question. Disaster safely averted. And possibly proof that common sense, bad publicity and the mere threat of regulatory intervention can sometimes work as well as actual governmental regulation in addressing social ills.

Online Video Captioning

The proposed rules would require captioning only for on-line television programming: i.e., programming offered by a television broadcast station “or generally considered comparable to programming provided by a television broadcast station.” This does not include “consumer-generated media,” so the FCC will not require closed captioning for the funny cat videos you post to YouTube. The FCC seeks comment on the scope of the new rule, asking, for example, what would constitute IP-delivered video programming that is not comparable to programming provided by a television broadcast station.

Furthermore, and importantly, the closed captioning requirement will apply only to programming that was previously shown with captions over traditional media such as broadcast or cable. The Commission proposes to create a mechanism through which distributors can find out whether programs they intend to show online have been previously shown on television with captions.

In contrast to the current closed captioning rules (the ones that apply to 20th century media, like broadcast and cable), the proposed rules place the primary responsibility for providing closed captioning of online video on content owners – the persons or entities actually holding the copyright, rather than the distributors. Video programming owners will be required to send program files with all required captions to video provider/distributors, who will then have to pass the captioned programming through to the end user. Either the content owner or the distributor can petition for relief based on a showing that compliance would be “economically burdensome.”

The NPRM follows the Act’s propensity to play fast and easy with the term “IP-delivered”, using it to mean, generally, “over the Internet.” Of course, data transmitted over the Internet uses Internet protocol (IP). But there is an ongoing transition to networks that deliver all content via IP, regardless of the communications channel. Some providers, for example, operate “triple play” lines to the home that deliver telephone, television, and Internet access using a single IP stream. The TV component of this service could be considered “IP-delivered” video, but it’s not over the Internet. To avoid unintended, duplicative, or confusing obligations, the Commission should clarify how the new rules will relate to these services.

Captioning Capability of Video Devices

The CVAA requires that, if technically feasible, any “apparatus” designed to receive or play back video programming, as well as any “interconnection mechanisms or standards,” must be able to display closed captions (or transmit them, as the case may be). The only exceptions are for: (1) display-only monitors; (2) devices with a picture screen less than 13 inches for which closed captioning capability is not “achievable”; and (3) devices for which the Commission has waived the requirement because they derive their essential utility from non-video purposes.

On the one hand, this represents a stunning expansion of FCC jurisdiction over a vast host of devices it has not previously regulated (except as to stray radio-frequency emissions). Device manufacturers may well become alarmed. On the other hand, except for PCs and larger laptops, most display devices may be able to claim an "achievability" exemption, an exemption available only for devices with less-than-13-inch screens. The iPad, for example, comes in at 9.7 inches, well under the limit, and most competing tablets are smaller. Furthermore, if the industry can settle on a standard file format for IP captions, a simple software switch would be enough to toggle the captions on and off. Added requirements for hardware display devices would then be essentially zero.

The FCC seeks comment on the definitions, terminology, and scope of the requirement, as well as the parameters of each of the exemption categories. Does “apparatus” include software? Are computer monitors exempt? How is “achievable” different from “technically feasible”? Is there a particular file delivery format that devices should support? What multi-purpose devices, or categories of devices, should be waived? And so on. Commenters should note the specific rule provisions set out in Appendix A that are not addressed in the text: for example, requirements allowing users to select the appearance and other properties of the closed captioning display.

The NPRM also proposes procedures for complaint and enforcement of the new rules, including a stipulation that “de minimis” failures will not be treated as rule violations.

This proceeding is set to move quickly, mainly because of the Congressionally-imposed deadline (January 12, 2012) for getting the rules adopted. The Commission’s Notice of Proposed Rulemaking got hustled into the Federal Register, as a result of which comments are due by October 18, 2011, and reply comments by October 28.

•  ABC, CBS, Fox, and NBC affiliates located in the top 25 television markets (as of January 1, 2011) must provide 50 hours per calendar quarter of video-described prime time or children’s television. (Fuzzy on exactly current TV market rankings? Click here for the 2010-2011 Nielsen listings.) When the list of top 25 markets will be updated remains to be determined. Note that by the end of 2016, the 50-hour rule will apply to the top 60 television markets.

To count toward the 50-hour requirement, the programming must not have been previously aired with video description, on that particular channel or station, more than once. Only programming on the primary stream of digital broadcasters counts toward the 50-hour requirement. If another top-four network is carried on a secondary stream, however, it also must meet the 50-hour requirement, as though it were carried by a separate station. 

• Multichannel video programming distributors (MVPDs) with more than 50,000 subscribers must also provide 50 hours per calendar quarter of video-described prime time or children’s television on the five most popular cable channels: USA, the Disney Channel, TNT, Nickelodeon, and TBS. (The list of “top five popular cable channels” will be revised at three year intervals, if ratings change.)  ESPN and Fox News are not on the list because they provide fewer than 50 hours per quarter of programming that is not live or near-live (i.e.,broadcast within 24 hours of recording).  Live and near-live programming is exempted from the rules due to the difficulty in furnishing video description in such a short time frame.

• All network-affiliated broadcasters and all MVPDs must “pass through” video described-programming to their viewers if the network provides it, so long as it has the technical capability to do so and that capability is not being used for another purpose related to the programming (such as an audio stream in another language). “Technical capability” means having all the necessary equipment except for items that would be of minimal cost. This requirement extends to secondary digital streams and to low power broadcast stations. Any programming aired with description must always include description if re-aired on the same station or channel.

If a station or MVPD becomes newly-obligated to provide video description (through a new affiliation or by gaining more than 50,000 subscribers), it will have three months to come into compliance.

The Commission declined to carve out any special exemptions from the above obligations for local programming, news programming, and the like. The rationale: since only four hours of programming a week must be video described, and stations and systems can choose what programming to describe, they can simply choose not to describe any programming that poses any particular difficulty. However, if a video described program is interrupted by a breaking news bulletin, it will still count toward the 50 hours.

The rules are not without additional complexities, subtleties and possible surprises. They spread over six single-space pages, after all. So TV licensees and MVPDs would be well-advised to spend the next several months familiarizing themselves with the ins and outs of the new rules. Their requirements are likely to be with us with us for some time.

Because of the on-going transition to digital operation in that particular sector, LPTV/Class A/Translator licensees may be operating a single analog station, or a single digital station, or two companion stations (one analog, one digital). Regardless of the mode you’re in (i.e., digital or analog), the FCC will be looking for a reg fee from you. That’s not unreasonable. But then the Commission adds: “In instances in which a licensee is operating in both an analog and digital mode as a simulcast, a single regulatory fee will be assessed for this analog facility that has a digital companion channel.” Note, in particular, the phrase “as a simulcast”. It’s not clear exactly what that is intended to mean. 

Presumably, if you have two companion channels, each broadcasting identical programming (one in analog, one in digital), you’d only owe a single reg fee. And if you have two such channels but provide completely different programming on each, we’re guessing that the Commission expects you to pay two separate fees, one for each.

But what if you’re using the digital station to provide not only a digital version of the analog’s programming, but also streams of other, completely separate programming? Arguably you’d be operating the two stations as a simulcast, meaning you’d only be stuck with a single fee. But the fact that you’re providing additional programming on the digital station might mean that it’s not a “simulcast” as the Commission means it.  We don’t know what the answer to this seeming conundrum is, but if you’re in this situation, it would probably be a good idea to get the answer tied down before you pay.

And speaking of paying, heads up. The Commission cautions that the fees are due when they are due, payable in full, thank you very much. (Late filers get hit with a 25% late fee.) If you think you’re entitled to a full waiver, or even just a reduction, you’re supposed to tender the full amount by the deadline, along with your request for waiver/reduction. If you’d rather not tender any payment at all with your request, you’ve got to request a deferral of the deadline – and that request must be accompanied by a showing of financial hardship. In other words, you can’t just plead poverty and expect to avoid having to pay by the deadline; rather, you have to document your hardship at the time you request the waiver/reduction.

Which brings us to the question of deadlines. When are this year’s fees due? The Commission hasn’t announced that yet, but it does allude in passing to a “September 2011 filing window”. Looks like we may not have to forfeit the deposit on that August beach house rental after all. (Check back here for updates on the deadline front.)

Finally, the Commission wraps up its Report and Order with a commitment to revisit “the nature and extent of all changes that need to be made to our regulatory fee schedule and calculations”. That inquiry – which the FCC assures us will be initiated before the end of 2011 – may lead to a “re-assess[ment of] the regulatory fee burden of all fee categories” as well as a “rebalancing of regulatory fees among existing service providers”. The Commission has been toying with the notion of such a proceeding for years, but this time it seems to be serious about it. We’ll see.

Of course, the new A/85 RP may not be substantially different from the old one. We won't know for sure because, as matters now stand, interested parties won't get their first official look at the revised A/85 RP until July 26.  Hey, isn't that a tad late?  No worries, since folks will now have until August 1 – that’s six days, total, including a weekend – to prepare and submit comments on it. Get out the Red Bull and stock up on No-Doz.

The Commission’s stuck between a rock and a hard place when it comes to the CALM Act. Congress has told the FCC (a) what to do (i.e., incorporate the A/85 RP into the rules, and then enforce it), and (b) when to do it by (i.e., December 15, 2011). But, through the Administrative Procedure Act, Congress has also instructed the FCC to engage in a notice-and-comment rulemaking proceeding as part of the process. Such a proceeding is designed – in theory, at least – to provide interested parties a meaningful opportunity to chip in their two cents’ worth on the proposed rule change.

When the guts of the proposed rule revision change on the eve of the final reply comment deadline (i.e., after comments have been filed), and when interested parties are then given less than a week to track down the revised proposal and get their thoughts together about it, it’s difficult to see that as a meaningful opportunity to comment. Rather, the Commission’s activities begin to resemble a parody of the administrative process.

Again, this is not entirely the Commission’s fault. But the Commission might have at least pretended to care about the interests of commenters by providing another week or two.

The network solution was always less accurate and more problematic due to the need for at least three proximate towers to get a meaningful reading.   On the other hand, not all cell phones had GPS capability, so there had to be an alternative to the handset approach. But the FCC has determined that GPS capabilities have become so widespread – and are likely to become even more so – that exclusive reliance on the handset standard is appropriate.  Eight years, the Commission figures, should give the public plenty of time to wring the useful life out of their existing non-GPS-capable phones before those phones get turned in for something new. The FCC is, however, requiring CMRS systems coming on line after the effective date of the new rules to comply immediately with the more rigorous handset accuracy standard. (In any case carriers can continue to use whole or hybrid network- based location techniques – but they must nevertheless meet the stricter handset-based standard of accuracy.)

The new rules also mandate that carriers conduct periodic tests of their actual accuracy levels, with the results to be reported to local authorities and the Commission itself. The Commission feels, understandably, that if called upon to measure their performance regularly and be judged on the results, carriers will be more likely to make maintenance of accuracy a priority.   The exact nature of the tests to be conducted awaits recommendations from the Communications Security, Reliability and Interoperability Council.

Always looking for ways to further the reach of call location technology, the FCC is also seeking comment (in the NPRM portion of the R&O/NPRM) on whether it should extend the E-911 accuracy requirements to outbound-only interconnected voice services. (After much debate, the FCC a few years ago extended the location-identification rules to two-way, interconnected voice services provided over the Internet.  The problem was that a computer being used for VoIP doesn’t know where it is, nor does the network, so the customer has to affirmatively register his/her location so the system will know where he/she is. This is not a very good solution since it depends on the customer to vigilantly protect his/her own health and safety rather than making it the service provider’s responsibility.) 

So now the FCC is now asking: (a) if it should extend this requirement incrementally to include one-way VoIP calling (a “Skype-out” only situation); and also (b) whether there is some way technically to locate VoIP users that does not depend on registration by customers themselves.   No one yet has been able to figure out how over-the-top VoIP providers can possibly do the latter.  

The FCC is also seeking input on how indoor calling locations can be established more accurately. This capability will be increasingly helpful as more and more consumers use their mobile phones as their only phone. Locating a cell phone in a ten-story apartment building on a city block would be impossible even with the strictest outdoor standards adopted by the Commission. Finally, the FCC wants to see if WiFi hotspots can somehow be used to help locate callers.

Comments on this forward-looking part of the FCC's action are due 60 days after publication in the Federal Register, with replies 30 days later. (Check back here for updates on those deadlines.)

We cannot close without sounding a warning note on the civil liberties front. The FCC certainly means well in trying to compel carriers and VoIP providers to carefully, constantly and precisely track the location of their customers. But the potential for abuse is already apparent. Divorce lawyers have discovered that they can track an errant spouse's whereabouts by cell phone. Law enforcement now relies on cell phones to easily track not only fugitives from justice but also “persons of interest”. Merchants track people’s whereabouts so that coupons and promotional offerings can be sent to them when they are immediately next to the potential point of sale.  

Knowledge of a person’s location, it turns out, is a valuable commodity indeed.  

But we are being forced to give this knowledge away for free and without any opt-out choice. The Commission’s R&O/NPRM nods at the privacy concerns raised by the heightened location requirements, but also notes that consumers’ privacy rights are statutorily waived in connection with the delivery of emergency services.

Imagine if a chip were compulsorily implanted in each of us at birth that would permit a government computer to know where we are at all times. In some ways that would be very useful – no lost children, no missing persons, no wandering dementia victims – but the notion is an affront to the inviolability of our persons. Unfortunately, the cell phone, which has become a kind of externally-appended computer chip for many of us, will soon serve that exact function.   We are learning once again that “security” is too often purchased with a subtle loss of privacy, a loss of freedom, and a loss of that most  cherished right cited by Justice Brandeis in his dissent in Olmstead v. United States: the right to be let alone.

To determine where translators might be allowed, the 3rd FNPRM contemplates an LPFM channel “floor” in the top 150 markets: unless a certain number of channels are available for LPFM in any specific market, no new FM translator applications would be accepted in that market, and any pending translator applications for that market would be dismissed.  Comments are invited on various important details, presumably including how the floor number might be determined, how a “market” should be defined, and whether existing LPFM stations – or only channel availability for new stations – will be counted in determining whether the floor test has been met.

The Commission intends to open a window for new LPFM applications once the availability of spectrum has been established through the market-floor process. That could be the final window for either LPFMs or FM translators if, as anticipated, applications filed during the window completely exhaust the available spectrum.  The filing window won’t likely open until comments and reply comments in response to the 3rd FNPRM have been submitted and the Commission has released a report and order adopting new rules. 

While that process would ordinarily be expected to take a year or more, Chairman Genachowski expressed hope that the LPFM window could be opened in the summer of 2012.  That schedule is optimistic in any event – even more so in view of the fact that, in addition to the various questions posed in the 3rd FNPRM, the Commission will also have to resolve, in a separate proceeding, a number of other issues necessary for the implementation of provisions of the LCRA. And let’s not forget about the possibility of appeals that might interfere with (or at least discourage) the immediate implementation of any new rules that might be adopted within the next year or so.

Other to-be-resolved questions include: how the Commission plans to address the issue of second-adjacent channel protection for full-power stations, and the related issue of how LPFM applicants may use signal contour plotting (as opposed to fixed mileage separations) to demonstrate that they won’t cause interference. Once such issues have been ironed out, we should all have a better fix on precisely how many channels may be open for filing in the LPFM window (and, thus, about how many applications might be expected).

Processing of long-pending FM translator applications is expected to resume in rural areas and larger communities where the LPFM channel floor is met – but, again, that won’t happen in larger communities until the conclusion of the just-started rulemaking, at the earliest, and it will be tricky even in rural communities while open questions remain about how much spectrum will be reserved for LPFM.

The NPRM also includes proposed limitations on the sale of FM translator licenses. The FCC apparently believes that many FM translator applications were filed by speculators whose primary objective is to sell rather than to operate stations. Whether the FCC will require construction and operation for a minimum period of time or simply restrict sales as it does for LPFM stations remains to be seen. The Commission presumably hopes that it can discourage many such speculators into simply walking away from their applications.

The NPRM would also open up more translators for potential use by AM radio stations.  The present rule allows the rebroadcast of an AM station on an FM translator only if the translator’s underlying permit (or license) was issued prior to May 1, 2009. The Commission invites comment on whether to eliminate that restriction and allow AM stations to use any translator for which an application was filed in the 2003 window, no matter when granted. 

Since there remain a significant number of pending translator applications which might still be granted, the elimination of that restriction would obviously expand the universe of translators available to AM primary stations. Of course, since it’s reasonably certain that many FM translator applications will be dismissed to preserve room for LPFM stations in the top 150 markets, that expansion might be limited to very rural areas. And, since no new translator window is expected until after the next LPFM window – and, as noted, it’s entirely possible that there will be no further new windows for either LPFM or translators if the next LPFM window sucks up all the spectrum – it is extremely unlikely that AM licensees will have an opportunity to file for new translators of their own.

The FCC sees this move as necessary because of the increasing number of people who depend on VoIP for all voice service, including 911 calls.  According to the Commission, market forces and network design have not been enough to ensure network reliability or prevent significant outages.  Rather, the Commission figures that intervention by the Commission itself affords the most effective means of reducing outages – and mandatory outage reporting gives it essential information in that mission.

To support this theory, the Commission offers the following: “[T]he frequency of wireline outages, which had spiked in 2008, has dramatically decreased since the issue was identified through the Commission’s ongoing, systematic analyses of monthly wireline outages.” That observation, while arguably true, is not necessarily persuasive. The wireline reporting rule, after all, has been in effect since 1992 – so it’s not clear how a spike in outages in 2008 and subsequent decrease can be said to demonstrate the rule’s effectiveness.   Likewise, the Commission’s claim that, in 2010, Commission staff finally discerned that outages were being caused by a relatively small number of factors – each of which could be addressed by applying a known best practice – suggests that the FCC may have fallen victim to the correlation/causation fallacy. (Wiki refers to that as “cum hoc ergo propter hoc”, which may thrill Latin scholars everywhere – but we prefer the XKCD illustration of the same phenomenon.)

While the NPRM seeks input on many particulars, the proposed new rules would essentially require both facilities-based and non-facilities-based VoIP providers, as well as broadband Internet access service providers, to report outages of at least 30 minutes or more that also meet certain other criteria. In keeping with the current rules, the FCC proposes to include degrees of degradation based on latency, jitter, and the like in the definition of “outage.” Timing would track the existing rules: a first report within 120 minutes of discovering the outage, with follow-up reports at 72 hours and 30 days. Reports are to be made electronically, through the Commission’s “Network Outage Reporting System” (NORS).

Commissioner McDowell concurred with the NPRM generally, even though he disagreed with his colleagues on the fundamental issue of whether the Commission has authority to do what it’s trying to do. In McDowell’s view, the FCC simply doesn’t have the authority to impose outage reporting rules on broadband Internet service providers. The majority, on the other hand, point to the FCC’s direct statutory authority to “protect and promote the availability of 9-1-1 services for customers of interconnected VoIP service,” noting that unless the FCC can guarantee the reliability of the underlying networks carrying VoIP service, it cannot fulfill its statutory mandate of ensuring that VoIP 911 calls will get through.   Despite his misgivings on this issue, McDowell was willing to open the question up for discussion, which is all the NPRM does at this point. Whether the ensuing discussion will persuade him that Congressional authority really is there remains to be seen.

Comments are due by August 8, 2011 and reply comments are due by October 7, 2011.

TV folks would do well to get familiar with the NPRM’s proposals sooner rather than later. The new rules will affect all commercial TV broadcasters as well as MVPD operators, and it will affect them relatively soon (Congress specified that that new rules will have to be effective one year after the Commission adopts them, although individual waivers may be available).

Bear in mind, too, that the CALM Act’s proponents may have oversold the likely effects of the new law. (One example: Commissioner Copps’s bold assertion that “relief is on the way for viewers who have been complaining for nearly 50 years about loud commercials”.) As a result, a lot of the Public At Large may end up harboring the somewhat unrealistic notion that every time they hear something on TV that they think is too loud, they can get it corrected with a quick email to the FCC. The more that notion gains currency, the more complaints the Commission, and the industry, can expect to receive. But in view of the largely subjective nature of “loudness”, the new rules may not meet the happy expectations that are being loaded onto them.  When the rules finally take effect, it will not be surprising if the public experiences large measures of confusion, frustration and, in the end, disappointment. We shall see.

At first blush, there doesn’t seem to be much reason why the FCC should not allow operators to choose their own bandwidth, and thereby improve 4G broadband performance. Except for one thing: it isn’t as easy – or cheap – to mask out-of-band emissions as sharply when using a broader desired bandwidth as it is when using narrower bandwidth. Faced with this conundrum, the Wireless Communications Association International (WCAI) asked the FCC to loosen the mask.

Ouch! cried some of the people who use adjacent bands for things like Mobile Satellite and TV Broadcast Auxiliary Services. Don’t tread on me!  Spicing things up, one developer/manufacturer of LTE-Advanced gear chimed in that it can produce 20 MHz bandwidth equipment that complies with the existing out-of-band limits. In this manufacturer’s view, no relaxation of the current mask is necessary because the equipment it makes will take care of the problem even at the broader bandwidths. 

According to WCAI, however, other equipment manufacturers support the proposed relaxation as “an appropriate and reasonable trade-off between form factor, battery consumption, and performance”. Worry not, says WCAI, because our mobile units normally don’t occupy the entire bandwidth, and they keep their power low to conserve battery capacity – so overall, the benefits of a relaxed mask outweigh the risks.

What shall we do with no consensus, the FCC asks? A mitigation rule is already in place that requires base stations to comply with a tighter emission mask within 60 days of receiving a documented interference complaint. Mobile devices operate with lower power and do seem to be less of a threat. So the Commission reasons that maybe it can lighten up – but should it also anticipate future bandwidths even wider than 20 MHz, and should it change mobile mask limits to make it easier and cheaper to make those ever-smarter devices without which no self-respecting teenager or twenty-something would be seen on the street?

Comments will be due 30 days after the proposals are published in the Federal Register, with Reply Comments only 15 days later. Those short times suggest the FCC does not expect a major brouhaha. It remains to be seen whether they guessed right.

The vexatious problem of seemingly loud commercials has been around for decades, chronically confounding would-be regulators. The breakthrough that led to the CALM Act arrived with the transition to digital television technology, which affords considerably greater control over the various components of the transmitted signal. As part of their effort to develop the technical standards governing DTV, the Advanced Television Systems Committee (ATSC) devised a “recommended practice” (RP) for “establishing and maintaining audio loudness”. That RP – dubbed ATSC A/85 – can be found here. While the ATSC A/85 RP was initially just “recommended”, Congress stepped in (via the CALM Act) and ordered the FCC to impose that RP as a mandatory standard.

The FCC’s NPRM is the next step in that process. And while you might think that the process would be simple – since Congress (by incorporating ATSC’s work) has spelled out the technical details to be imposed – the project turns out to be somewhat more complicated.

The NPRM proposes to explicitly include the ATSC A/85 RP in the technical rules governing over-the-air and MVPD television. No surprise there – it’s what Congress ordered. But the ATSC A/85 RP assumes that the transmission system includes audio compression capability consistent with the Dolby AC-3 DTV audio standard. Since that standard is included in ATSC Standard A/53 (the overall Digital Television Standard incorporated by reference in Section 73.682(d) of the Commission’s rules), DTV broadcasters are already subject to the standard. Some, but not all, MVPDs (e.g., cable and satellite operators) also use that standard, but the fact that some don’t complicates things. Additionally, programming is often not produced by the broadcaster or MVPD operator who would ultimately be subject to the new rules – that, too, adds a level of complexity to the implementation of the CALM Act.

As best we can tell – and, frankly, there’s a reason that some of us went into communications law rather than psycho-acoustics – the ATSC A/85 RP is based on a recommended “measurement algorithm” developed by the International Telecommunication Union Radiocommunications Sector. That algorithm (“ITU-R Recommended BS.1770”) provides a “loudness measure standard”, i.e., a numerical value indicating the “perceived loudness” of any particular audio content. That value is then encoded as a metadata parameter – called the “dialog normalization”, or “dialnorm” – in the audio content of the programming. According to the Commission,

[t]he “golden rule” of the ATSC A/85 RP is that the dialnorm value must correctly identify the perceived loudness of the content it accompanies in order to prevent loudness variation during content transitions on a channel (e.g., TV program to commercial) or when changing channels.

If the dialnorm parameter is set properly, the transmitted signal (which includes the dialnorm metadata) instructs the AC-3 audio decoder in the consumer’s home receiver to automatically adjust the volume to eliminate loudness spikes during content transitions such as commercial breaks.

So commercial TV stations and MVPDs will have to be able to insure that the dialnorm settings for their commercial content are set right. This can be done through loudness measurement devices and/or software, file based scaling devices, or real time loudness processing devices – as long as the chosen mechanism can measure loudness using the ITU-R BS.1770 algorithm. (The FCC observes in passing that it does not plan to provide any equipment authorization or verification system, although the FCC does solicit comments on the steps affected video providers may be required to take to confirm that their gear will do the trick.) The good news is that, if such providers do install proper equipment – and utilize and maintain that equipment, all “in a commercially reasonable manner” – they will enjoy a “safe harbor”. That is, they will be deemed to be in compliance should any complaints about loud commercials roll in the door. 

The bad news is that the equipment needed to control all this could cost anywhere from a few thousand bucks up to $20K per device, depending on a number of factors.

Over and above this “safe harbor” approach, the Commission suggests that it might permit TV stations and MVPDs to demonstrate, in response to a complaint about loud commercials, that the dialnorm of the complained-of commercial did in fact match the algorithm-generated perceived loudness value for that commercial.

The issue of who is in fact responsible for loud commercials raises some thorny questions. The CALM Act explicitly places that burden on the TV licensees and MVPDs whose programming is received by the consumer. But, as we all know, those licensees and MVPDs rely on a variety of others to produce the programming that they transmit. In addition to their own productions, TV stations get their programming from networks, syndicators and other program producers. MVPDs similarly get theirs from the same sources, and from TV licensees. Mindful of that fact of video life, the Commission suggests that TV licensees and MVPDs may want to include contractual provisions (including indemnification clauses) in their programming contracts. That would not completely relieve the licensee/MVPD of responsibility – since the statute expressly puts them on the hook for it – but such a contractual approach might help demonstrate compliance with the ATSC A/85 RP.

The NPRM is dense with technical information. All licensees and MVPDs who might be affected by it should be sure to review the NPRM in detail with their engineering consultants to make sure that you have a handle on the nitty-gritty. Other questions posed by the Commission include:

• Since the CALM Act is addressed only to loud “commercials”, how should that word be defined? For example, does it include station programming promotional announcements? How about political advertising?
• Also in light of the “commercial” focus of the Act, should noncommercial TV licensees be exempt from the loudness rule? (The Commission suggests that noncommercial TV licensees will “largely” not be affected by any of this because, by definition, noncommercial stations are prohibited from broadcasting “commercials”.)
• How should the term “commercially reasonable” be defined when it comes to installation, utilization and maintenance of the equipment relied on to claim “safe haven” status?

Note also that the ATSC A/85 RP – that is, the recommended practice that forms the core of the proposed rule change – is itself a work in progress. ATSC continues to review and refine its various recommendations. The A/85 RP was first adopted in 2009, but was most recently revised in May, 2011. Since the CALM Act requires incorporation of the ATSC A/85 RP into the rules, the Commission understands that Congress intends the rules to be updated as required to reflect any future revisions of the RP.

Looking down the road, the Commission also solicits comments on how the complaint process should work. The current thinking is that complainants would file online (or by fax or letter), clearly indicating: (a) the complainant’s contact information; (b) the name/call sign of the broadcast station or the name/type of MVPD against whom the complaint is directed; (c) the date/time of the loud commercial complained of; (d) the channel/network involved; (e) the name of the TV program during which the incident occurred; (f) the name of the commercial advertiser or product involved; and (g) a “description of the loud commercial problem”. The Commission would then conclude whether “a possible violation of our rules” has occurred, although the NPRM doesn’t let on how that determination might be reached. Complaints will be forwarded to the targeted station or MVPD for appropriate response.

Since compliance with the loudness requirements will likely involve some not-insubstantial costs, the Commission (at Congress’s direction) is also looking into financial hardship waivers. The NPRM proposes that any station or MVPD asserting such hardship be required to provide, at least 180 days prior to the effective date of the rules: (a) evidenced of its financial condition; (b) a cost estimate for the equipment necessary to assure compliance; (c) a detailed explanation of why postponement of compliance is warranted; and (d) an estimate of how long it will take to comply. The Commission is also open to considering a “streamlined financial hardship waiver approach” for small market broadcast stations and small MVPD systems.

The comment and reply comment deadlines have not yet been set; they will be 30 days and 45 days, respectively, after the NPRM is published in the Federal Register. (Check back here for updates.) Don’t expect any extensions of the deadlines: the CALM Act mandates that the new rules be adopted within one year of the Act’s enactment, which means that the Commission will have to wrap up this proceeding by early December, a scant six months from now. Once the new rules are adopted, they will have to take effect within a year, i.e., by early December, 2012.

While all the nifty, whizbang technology on the table here – ATSC A/85 RP, Dolby AC-3, ITU-R BS.1770 algorithms, etc. – may promise blessed relief from the scourge of loud commercials, there is reason for skepticism. Unlike “volume”, which is an objective, readily measurable characteristic, “loudness” is not an objective feature that is easily susceptible to measurement. Rather, it’s the subjective effect that occurs when sound reaches an ear. That’s why the ATSC had to rely on algorithms – essentially, a model or estimate based on the results of group studies – to come up with the dialnorm factor on which the ATSC A/85 RP depends.

But the vast majority of TV viewers are in all likelihood blissfully unaware of the algorithms and other technology, and those viewers will certainly not undertake any objective measurements on their own. Rather, to identify “loud” commercials, we can reasonably expect most viewers to use a variation of Potter Stewart’s hard-core pornography test: they will know it when they hear it . . . or, rather, when they think they hear it.

So while the new technology may provide TV stations and MVPDs a defense against claims of loudness, it’s a near certainty (to this observer, at least) that complaints will continue to roll in. Indeed, the extensive publicity likely to accompany the adoption and effectiveness of “loud commercial” rules can’t help but increase the expectations of the public, creating the impression that “loud commercials” – however each individual viewer may define “loud commercials” – have been legislated away. We can thus probably expect a substantial increase in complaints. That in turn would chew up the time of FCC staffers and TV/MVPD personnel. And while some complaints may in fact identify actual violations of the rules, we will not be surprised if the vast majority of complainants end up being told that, contrary to their heart-felt belief, the commercial(s) of which they complained were not, in fact, “loud”.

Still, it’s probably worth the effort. With DTV technology the FCC has tools not previously available to it to try to address the problem of loud commercials. Let’s see if those tools can get the job done. But let’s not be surprised if, once the new rules are in place, we all find ourselves not much better off than we are now on the “loud commercial” front.

First, in recognition of the fact that the digital TV transition continues on for LPTV, TV Translator and Class A licensees, the Commission observes that

a fee will be assessed for each facility operating either in an analog or digital mode. In instances in which a licensee is operating in both an analog and digital mode as a simulcast, a single regulatory fee will be assessed for this analog facility that has a digital companion channel.

The Commission may revisit its instructions on this point “[a]s greater numbers of facilities convert to digital mode”.

Second, this year the FCC will not be sending out “pre-bill” reminders to broadcasters advising them of the fees they’re being assessed. All that information should be available on the FCC’s website, though.

Third, on the AM/FM side, the Commission notes that a station’s fee is based in part on the population it serves. Populations tend to change every ten years when the Census is completed and released, and such changes could affect radio licensees’ reg fees. But not this year. Even though the latest Census was technically completed last year, its results are still unofficial and subject to change – which means that this year’s regulatory fees will be based on the 2000 Census, not the 2010. (Additional rationale: since 2011 reg fees are calculated based on the subject station’s status as of October 1, 2010, the FCC thinks it would be “inappropriate” to rely on incomplete 2010 population figures.)

The proposed fees are just that – proposals. We won’t know the final fees until sometime this summer, although historically the final fees tend not to stray too far from the initial proposals. We also do not yet know when the fees will be due, although that tends to be in August or September. Look for an announcement sometime mid-Summer.

The type of wireless signal booster contemplated by the NPRM is essentially a system consisting of an inside antenna paired with an amplifier and an outside antenna. The inside antenna communicates with the user’s cell phone or other wireless device and the outside antenna with a wireless service provider’s base station, with the amplifier boosting the signal to improve the connection.  Such boosters could be designed for either fixed use, such as in a building or tunnel, or mobile use, such as in a car. The NPRM notes that such devices would be particularly useful in rural areas where wireless coverage gaps exist, and in other difficult-to-serve indoor areas. Signal boosters could also provide public safety benefits by allowing users to connect to 911 and emergency services where their wireless signals would otherwise be blocked (e.g., tunnels, garages, inside buildings). 

While the benefit of wireless signal boosters seems clear, their use also creates a number of potential problems. The FCC identified five primary issues in the NPRM, four of them involving different types of interference. Those four types of interference are:

• “Near-far” interference. This type of interference arises when a signal booster is closer to a base station on an adjacent channel than to the base station with which it is attempting to communicate. In some applications, particular mobile, an improperly designed booster may amplify and interfere with communications on that adjacent channel.
• Oscillation. This arises when the booster’s signal level remains elevated as it approaches the base station with which it is communicating, creating an effect similar to that of moving a microphone too close to a speaker.
• Base station overload. This affects base stations that use dynamic power control to maximize performance by adjusting the power of both the base station and the handsets with which they are communicating. Boosters which are not dynamically controlled by the base station may continue to provide amplification when it is not necessary, interfering with the base station’s efficient operation and potentially causing an overload.
• 800 MHz spectrum interference. This arises in the 800 MHZ spectrum band, where channels used commercially, primarily by Sprint Nextel, are interleaved with public safety channels. Unless there is proper coordination between the two, use of a wideband signal booster by either type of user may overload base stations operating on the adjacent channels, causing dropped calls and reduced network capacity. 

The fifth booster-related problem identified in the NPRM is not an interference problem, but a distortion of network-based E- 911 systems. These systems determine the location of handsets used to call 911 by measuring the time it takes for the handsets signal to reach units installed at the operators’ base stations. If the handsets signals are amplified by a signal booster, this may lead to inaccurate location estimates. 

The Commission in the NPRM discusses some “real-world” examples of these problems identified by Verizon, AT&T, and other operators, noting that the interference issues can have wide-ranging effects, sometimes entirely disabling a base station. According to the NPRM, operators claim that it is often extremely difficult to identify a specific signal booster as the source of these problems, particularly where the signal booster may be used in a mobile setting. 

Despite these issues, the Commission believes that there is a genuine need for “well-designed” signal boosters. It therefore proposes a regulatory regime which will allow for their use while avoiding the various harms they may cause. The Commission’s proposal is to regulate consumer signal boosters through a “license by rule” regime. Under such a regime, no individual licenses are issued for consumer signal boosters; rather, rules are adopted setting the technical parameters such boosters must satisfy before being marketed or sold. The NPRM generally seeks comment on whether this type of regulation is appropriate for signal boosters. Assuming this is the appropriate means by which to regulate boosters, the NPRM provides the broad outlines of its proposed technical requirements, seeking further comment on the appropriateness of these requirements. 

First, the NPRM proposes requiring all signal boosters operated in a given band to satisfy the existing technical requirements (e.g., power, out-of-band emissions) for mobile units (not base stations) operating in that band. The NPRM also proposes requiring signal boosters to be designed to “self-monitor” to ensure their compliance with these rules and to automatically shut down if they detect any non-compliance. Similarly, boosters would be required to automatically shut-down if they were to detect any feedback or oscillation. The NPRM requests comment on:  the effectiveness of such a requirement; the appropriate specific triggers for shut-down; and whether a booster’s power should be measured by effective radiated power (ERP) or transmitter output power.

The NPRM proposes to ensure compliance with radiofrequency (RF) exposure limits through existing procedures, requiring all applications for equipment authorization for signal boosters to demonstrate compliance with the RF exposure limits applicable to the device’s intended use. As with existing devices, the NPRM proposes requiring labeling and clear instructions for end users regarding appropriate use and installation of signal boosters. 

In addition to labeling related to potential RF exposure, the NPRM proposes requiring labeling regarding the responsibility of the signal booster owner and installer to ensure that the booster does not cause interference and, for fixed boosters, to coordinate the booster’s installation and use with the appropriate local wireless carrier. The NPRM proposes that for fixed boosters, this label include reference to an FCC website where licensee information will be available (www.fcc.gov/signalboosters – as of this writing, this site is not active). 

The NPRM further proposes requiring the operator of any signal booster to immediately cease operations if the booster is causing harmful interference. The NPRM also seeks comment on whether and how signal boosters should be regulated to prevent interference between and among boosters themselves. 

In addition to the above proposals, which would apply to all signal boosters, the NPRM proposes additional requirements that would apply only to fixed or mobile boosters. The NPRM would require that all fixed signal boosters coordinate frequency selection and power levels with local wireless carriers before use; it seeks comments on what specific coordination procedures should be required. The NPRM specifically asks how, under any coordination procedure, to ensure that the wireless carrier responds to any coordination requests in a timely manner. 

The Commission recognizes that for mobile signal boosters, the type of advance coordination appropriate for fixed boosters may be impossible. Rather than requiring such coordination, the NRPM proposes requiring mobile boosters to automatically reduce power as they approach the base station with which they are communicating; it also seeks further comment on how to address interference concerns, particularly the “near-far” interference issue identified above. 

The Commission also generally requests comment on any other issues related to signal boosters, in particular seeking input on whether, and if so how, it should require remote shut-off capability, location detection features, and activation of boosters by wireless carriers before use. Recognizing that signal boosters are already in use in many areas, the Commission requests comment on how to treat these existing boosters, suggesting that it may allow their use to continue, at least for some period of time, although it might require that they be registered. 

The Commission also notes that many wireless providers have expressed concerns that interfering boosters are often difficult to locate. Accordingly, the NRPM proposes setting up a national clearinghouse for registration of boosters and suggests including features in boosters that would prevent them from operating unless they were first registered in this clearinghouse.

Finally, the NPRM proposes some additional requirements that would apply only to non-consumer signal boosters operated by wireless licensees under Part 90 of the Commission’s Rules. Under Part 90, certain signal boosters have been allowed since 1996, generally for internal, non-public communications. The NPRM generally proposes to retain the existing rules for such Part 90 boosters, with certain modifications to prevent interference. Although narrower in application than the changes proposed in the rest of the NPRM, any parties who currently operate Part 90 boosters should review these proposals. 

Comments will be due to the FCC 45 days after the NPRM is published in the Federal Register, with reply comments due 30 days later. Check back here for updates on that front.

The spectrum re-purposing NPRM, released last November, was the opening barrage in the FCC’s campaign for full implementation of the National Broadband Plan – a plan which calls for the “repurposing” of 120 MHz of prime spectrum real estate from television broadcasters to wireless broadband providers.  Among other things, the FCC is proposing to: (a) loosen service rules to permit wireless uses of broadcast spectrum on a co-primary basis with television stations; (b) establish a framework for two or more television stations to share a single six-megahertz channel; and (c) explore opportunities to increase the viability and attractiveness of VHF channels to folks might move on down the band. The FCC claims these steps are necessary to increase the efficient use of the TV spectrum (both UHF and VHF) and facilitate ongoing wireless innovation.

In their initial comments, as might be expected, many wireless providers and wireless equipment manufacturers have heartily agreed with the Commission’s plans. (They even hosted a pow-wow with FCC staffers at CTIA’s headquarters.) 

Broadcasters, on the other hand, have been less receptive to the FCC's ideas. They have questioned whether the incentive auction would truly be voluntary and expressed concern over the potential impact of repacking on a wide range of factors (e.g., service contours, availability of minority-focused programming, ownership limits, disruption of nascent mobile TV services).

Other commenters have urged the FCC to look beyond a strictly auction scenario. Perhaps, for one example, stations could be allowed to use their spectrum flexibly, providing both wireless broadband and over-the-air TV.  Or maybe broadcasters could be permitted to negotiate directly with broadband providers to lease/sell portions of their spectrum.   

If you have an interest in the outcome of this proceeding – and, frankly, who doesn’t? – you should take this opportunity to join the debate. Check out the comments that have been filed thus far in the docket and then take the time to let the FCC know your thoughts. Again, the reply comment deadline has been extended to that anyone looking to participate may submit their reply comments electronically by 11:59 p.m. on April 25, 2011.  If you have any questions about this or would like any help, feel free to let us know.

The goal of the programs is to insure that “quality telecommunications services” are available to low-income customers at “reasonable and affordable” rates. To that end, the government does not reimburse the low-income customers directly; rather, it reimburses eligible telecommunications carriers (ETCs) who provide service to low-income customers. The ETCs submit quarterly forms reflecting the extent of low income support they have provided. In 2010, the cost of the Lifeline/Link Up programs was $1.3 billion (roughly five times its 2007 size) – in other words, there’s a serious pot of cash to dip into.

There is no uniform, nation-wide set of standards and procedures by which ETCs identify eligible “low-income” customers. Standards and procedures vary among the various states. In many instances, verifying documentation is not required. The potential for innocent error or less innocent fraud is not insubstantial.

The focal points of the FCC’s Lifeline/Link Up reform efforts described in the NPRM are:

• eliminating fraud, waste and abuse;
• capping the Low Income Fund;
• improving program administration; and
• modernizing Lifeline and Link Up (including reimbursement for broadband, of course).

Out of the hundreds of discrete issues teed up for comment, we have selected a few highlights below.

Fraud, waste and abuse. The FCC is confident that it can reduce fraud, waste, and abuse in the Lifeline and Link Up programs. (It’s so confident, in fact, that it’s already planning a broadband adoption pilot program on which it can spend the money it’s going to save.  See below for more details). To do that, it proposes to eliminate a number of problem areas in the way the programs are implemented. For example, the following would be axed by the Commission:

• Link Up (activation) reimbursement for carriers that do not routinely impose activation charges on all customers within a state;
• Duplicate discounts going to the same household (under the rules, each household may only receive one telephone line, either wireline or wireless). To prevent duplication, the FCC proposes to require carriers to obtain a certification from consumers that there is only one Lifeline service per address;
• Self-certifying for eligibility by consumers (instead, the FCC proposes to require carriers to demand documentation);
• Inadequate verification sampling (the FCC may require larger sample groups or a census of all customers if an initial sample group reveals too many ineligible customers);
• Reimbursement for services unused for 60 days (a particular concern for prepaid services);
• Complete – as opposed to pro rata – reimbursement for subscribers who enroll or disconnect during the month; and
• Toll limitation service reimbursement (obsolete and susceptible to over-reimbursement).

To ensure that eligible telecommunications carriers (ETCs) providing Lifeline are on board with these goals, the FCC proposes a “more rigorous” approach – including more, and more expanded, audits – to the management of the program.

Capping the Low Income Fund. The NPRM seeks comment on various issues relating to capping the size of the Low Income Fund, for example at the 2010 disbursement level.  It recognizes that the Fund already has an ultimate cap in the sense that only a defined population of eligible households may participate, and support is limited to $10 per month per household.

Program administration. The NRPM suggests various ways to improve program administration, such as: 

• Adopting a one-per-residence (i.e., U.S. Postal Service address) eligibility rule;
• Clarifying the eligibility rules for residents of Tribal lands  and proposing eligibility through participation in federal Tribal low income programs;
• Imposing federal baseline eligibility criteria, including perhaps raising the cutoff from 135% of the Federal Poverty Guidelines to 150%;
• Coordinating enrollment with other social service assistance programs;
• Developing a national database to prevent duplicate claims and verify eligibility (anyone who has worked with the FCC’s CORES database will likely be amused at the idea of the FCC creating a database intended to eliminate duplication); and
• Imposing mandatory outreach requirements.

Broadband.  In keeping with its conviction that broadband service should be universally available, the FCC also proposes to extend the Lifeline program to include broadband. It seeks comment on whether a Lifeline discount should be available for any plan that includes a local voice component, including bundled voice and broadband.  It queries further whether broadband itself should be eligible for Lifeline support (note that this is a separate query from whether broadband should be a required supported service) – and, if so, how can broadband costs be integrated into the program in a way that minimizes (if not avoids) additional waste, fraud or inefficiencies?

Demonstrating that even imaginary money can burn a real hole in a governmental pocket, the FCC already has plans for how to spend the cash that it will save. Of course, any actual savings will require, first, that the proposals be adopted and implemented and, second, that those proposals in fact be effective. Apparently taking for granted that all those pieces will fall happily into place, the Commission has its heart set on indulging its compulsion to pocket funds to feed its broadband habit: it plans to set aside its savings to create a pilot broadband program. The pilot program will test different approaches to providing support for broadband to low-income consumers across different geographic areas and demographics. In particular, the Commission is looking to test how much of a factor hardware is in broadband adoption.

Of particular interest to Lifeline carriers. Carriers considering the daunting prospect of applying for Lifeline-only ETC designation through the forbearance process will be cheered that the FCC is considering doing away with the own-facilities and rural areas redefinition requirements. These requirements are designed to prevent cream-skimming in a High Cost context and don’t make sense in a Low Income-only situation. The Commission is considering codifying the conditions that it has been applying to forbearance grants instead. Even more radical, but strangely sensible, is the Commission’s apparent interest in AT&T’s proposal to allow any carrier to provide Lifeline discounts at a flat rate.

However, the Commission somewhat grimly notes that the fact that “numerous carriers are seeking designation as Lifeline-only ETCs . . . suggests that the current structure of the program may present an attractive business opportunity for firms that employ different business models than traditional wireline carriers.” To prevent funds going to carriers rather consumers, the FCC seeks comment on whether there is a more appropriate reimbursement framework than the current four-tier system based on an ILEC’s subscriber line charge. Furthermore, to protect Low Income consumers from receiving less-than-adequate service, the FCC asks if there should be minimum service requirements for prepaid ETCs (or for other carriers), such as a minimum number of monthly minutes.

The design and implementation of modified Lifeline/Link Up programs present problems of immense complexity for the Commission. Besides the enormity of the project – the raw numbers of eligible customers, the multiple mechanisms for determining eligibility, the detailed auditing process already in place – the Commission must also deal with the concept of grafting a new service (broadband) onto the system. Additionally, the underlying business of delivering telecommunications services is itself developing rapidly, creating new and different business models that may or may not be easily integrated into the Commission’s approach either now or in the future. The preferences of the consuming public also come into play. And don’t forget that we’re talking about a pool of funds that already exceeds one billion dollars, a tempting target for less-than-honest entities.

The scope of the NPRM suggests that the Commission recognizes the daunting nature of the challenge it is undertaking. Whether – and if so, when – the Commission will ever be able to claim that it has met that challenge remains to be seen. But at least the FCC has made the first move in its quest.

The NPRM was published in the Federal Register on March 23. Comments on the proposals in the NPRM are currently due to be submitted by April 21, 2011; reply comments on Sections IV, V (Subsection A) and VII (Subsections B and D) are due by May10, 2011. Reply comments on the remaining sections are due by May 25, 2011.

TRS contributions.  Section 103(b) of the CVAA requires that all VoIP providers contribute to the Telecommunications Relay Service (TRS) Fund.  (The TRS Fund supports services that allow deaf people or people with speech disabilities to communicate by phone.)  Of course, interconnected VoIP providers are already contributing (as our readers should be aware).  One of the two NPRMs addresses the Section 103(b) mandate by proposing to expand that requirement to non-interconnected VoIP providers, that is, VoIP that doesn’t interconnect with the regular telephone network.  We’re looking at you, Skype et al.

While the CVAA requires all VoIP providers to contribute to TRS, it leaves the FCC some discretion as to details. Accordingly, the Commission asks for comment on specific issues such as:

• Should the VoIP safe harbor apply to non-interconnected VoIP? (The “safe harbor” allows carriers to report a specified fixed percentage of revenue as interstate if they are unable or unwilling to measure interstate and intrastate traffic separately.)
• What revenues should be included in calculating TRS contributions (just revenues from interstate end-user calls, or revenues from all sources?)
• Should providers of free services, that have no end-user revenues, be required to make any contributions to the TRS fund?

Clearly the FCC is focused on how to treat free, non-interconnected Internet voice services (again, that’s Skype-to-Skype et al.). Some such services are supported by advertising, and the FCC suggests that it might require TRS contributions based on those revenues, in place of or in addition to subscriber revenues. The answers to these questions will significantly affect contribution amounts; affected companies will want to express their viewpoints when the docket is open for comments. 

Accessibility. As required by Section 104 of the CVAA, the FCC proposes to make VoIP, electronic messaging (emails, IMs, etc), and video conferencing “accessible to and usable by” persons with disabilities. Naturally, a new rule needs a new acronym – we must learn to call these types of services “advanced communications services” (ACS).

ACS will be subject to a higher standard of achievement than “telecommunications services” under the existing Section 255 of the Communications Act. Section 255 requires telecommunications manufacturers and providers (including interconnected VoIP but not including non-interconnected VoIP) to provide accessibility if readily achievable. For ACS manufacturers and providers, on the other hand, the presumption is reversed; they must make their services and products accessible to people with disabilities, unless it is not achievable to do so. (According to the CVAA, “achievable” means “with reasonable effort or expense, as determined by the Commission” taking into account a list of certain factors.)

Further, ACS providers may not install network features, functions, or capabilities that impede accessibility or usability. Finally, all equipment and networks used to provide ACS services must allow information content that has already been made accessible to pass through in accessible form. The NPRM seeks comment on definitions of relevant terms (e.g., what is “achievable”?) as well as input regarding matters such as:

• the standards that would apply to requests for waivers for equipment designed for non-ACS purposes but having incidental ACS capability
• whether any exemption(s) for small entities might be warranted
• obligations for applications or services accessed over service provider networks rather than based on user hardware features
• recordkeeping and enforcement 

Mobile web access. The ACS NPRM also gets a head start on assuring that Internet browsers built into mobile phones will be accessible to those with visual impairments. As with ACS services, mobile Internet browsers must be “accessible to and usable by individuals who are blind or have a visual impairment, unless doing so is not achievable.” The statutory requirements do not take effect for three years, but the FCC seeks input now on how best to get everyone up to speed before then.

Some ramp-up time may be needed, because ACS and browser accessibility raise practical difficulties. Accessibility functions will work only if they are supported by each component or layer of the device: i.e.,the hardware, the operating system, the user interface, the application, and the network. This practical reality has at least two major consequences: (1) a broad array of entities will be affected, some of whom may not have previously fallen under FCC jurisdiction and may not be habituated to regulatory compliance matters; and (2) various entities will have to cooperate with each other on technical standards, without much market motivation to do so.

So the FCC will have to get in the business of compelling information-sharing: mandating industry standards, setting up industry forums and working groups, and so on. Yes, even Apple may have to share information about iPhone design, which is certainly not their custom. This process inevitably raises hard questions. For example: Who will develop and enforce compatibility standards? What is the appropriate balance between the necessary sharing and protecting proprietary, confidential technical information? Will components have to be compatible only with existing fellow components, or also with potential future components? At what stage of development should accessibility be considered?

The FCC has tackled tough inter-industry compatibility issues before, with some success. Doing so in this case, however, will certainly require the agency to delve into technical minutiae generally outside its usual expertise (such as software). It will also require constant calibration to keep things running smoothly in the future.

The bottom line here is that Congress, through the CVAA, is determined to impose new and substantial burdens on VoIP providers in order to ensure technological access for people who are deaf, blind or subject to other disabilities or impairments. That means that the FCC has little discretion going forward with these two NPRMs, at least with respect to the Big Picture aspects. Congress did, however, give the Commission some leeway in working out the operational details, and it’s there that affected parties (including, particularly, VoIP providers) may have their best chance to ease the ultimate burden. Given that, VoIP providers should give serious thought to submitting helpful comments in these proceedings.

On the other hand, the Commission has somewhat unrealistically allocated only 45 days for initial comments on the majority of the NPRM and 35 days thereafter for replies.  (Note: a separate abbreviated comment period was established for the part of the NPRM addressing pressing abuses of the existing system such as traffic pumping and phantom traffic.)  As we have previously reported, preliminary comment deadlines have already been established: April 18 for comments on all but Section XV; May 23 for reply comments.  Given the breadth of the inquiry and the years it took to bring this NPRM to term, the comment period strikes us as a bit stingy.   The FCC supposedly has this on a fast track, but there are simply too many moving parts in this vast proceeding for everyone to get their two cents worth in in this timeframe. Expect these dates to be extended

In approaching the reform effort, the Commission will be guided by four prinicples: (i) modernization of the USF and ICC for broadband, (ii) fiscal responsibility, (iii) accountability, and (iv) market-driven policies.   Turning these noble principles into concrete regulations is the hard part. As we’ve indicated, the scope of the proceeding is too all-encompassing to permit detailed treatment of every aspect of it here, but the highlights are outlined below.  

Short Term/Long Term Solutions: Recognizing that billions of dollars have been invested in, and depend on, the existing regulatory regime, the FCC proposes to adopt remedial measures for the most obvious abuses and inefficiencies in the short term, while putting in place long term permanent reforms that come into play gradually over a period of years. While it is understandable that the Commission might not want to upset settled investment expectations (particularly of ILECs), the Commission demonstrated precious little solicitude to CLECs in 2008 when it abruptly capped their access to USF funds in a single stroke, leaving them well short of the support presumptively necessary to meet their ETC obligations. Be that as it may, the FCC contemplates comfortable “glidepaths” and phased transitions to ease the pain of companies accustomed to feeding at the USF and ICC troughs.

Short Term Universal Service Solutions.  In the short term, the FCC proposes to:

• circumscribe or eliminate several high-cost support programs which may have outlived or outspent their usefulness, including high-cost loop support, local switching support, interstate common line support, and interstate access support. The FCC asserts that these programs as currently structured reward inefficiency and actually discourage movement to more advanced technologies. 
• not only develop benchmarks for capital and operating expenses fundable under the high-cost programs, but also cap the amount of support per line that can be received by any one carrier at $250. (There are horror stories of carriers receiving as much as $2,000 per month per line in support!) 
• change its procedures to encourage rational consolidation of service areas eligible for support in order to reflect operational efficiencies rather than USF gaming.
• eliminate the identical support rule. This rule, which somewhat nonsensically ascribes the same high-cost reimbursement to a CLEC as to the ILEC in the same market, has been long due for change.
• stimulate broadband build-out by a one-time disbursement (between $500 million and one billion dollars) based on a reverse auction. The funds recipient in each area would be the carrier willing to build broadband facilities in unserved parts of the country at the lowest cost. Broadband service under this proposal could be provided by either wireline or wireless technology or even by satellite (on an ancillary basis) if that proved most efficient for remote areas. This program is apparently a complement to the Mobility Fund proposed last year to disburse $500 million via a reverse auction to construct mobile broadband facilities in needy areas.

Long Term Universal Service Solutions. The Commission’s long term vision for USF involves phasing out all of the existing support mechanisms entirely and replacing them with the Connect America Fund (CAF), a mechanism for supporting broadband in areas of the country where broadband is not economically sustainable without such support. Voice service would simply be a component of the larger broadband service. Support under the CAF regime would be determined in one of two ways.  

Under Plan A, there would be a reverse auction in which any carrier using any technology (wireline, wireless or satellite) could bid on the right to provide broadband (or voice only) service in given regions. A single low bidder would receive the funding and have the obligation to provide supported basic services. The Commission envisions satellite service as being a part of the mix since some areas are so remote as to be most economically servable only by satellite, while other areas are more conducive to terrestrial coverage. The most efficient plan would incorporate both technologies to reach everyone at the lowest overall price. The reverse bidding process should ensure that the level of support provided is directly related to the actual costs associated with providing service without the need for bureaucratic review of cost components to determine if the costs are justified or reasonable. This plan has immediate appeal since on its face it ensures that the basic telecom service needed by people in high-cost areas is delivered at the lowest price without redundancy.

No doubt to mollify ILECs concerned about the possible loss of support through such a process, the Commission also floated Plan B. Under this option, current carriers of last resort would have a right of first refusal to take on the obligation of providing broadband/voice service throughout their area.   While this would ensure that such carriers (invariably ILECs) continue to receive not just some but all of the subsidies available for their areas, it would also require the Commission to establish and administer a detailed cost recovery model and continuing oversight to preclude padding of expenses. In a highly competitive carrier environment, such cost recovery models seem antiquated. Moreover, this option seems like a step backward to what was essentially the monopoly subsidization system that existed prior to the introduction of competition into the USF scheme. So it’s hard to see this as a meaningful reform in any sense.  

Finally, the Commission mentions a third option for rate of return carriers only: maintaining the current system but capping elements such as ICLS in order to incentivize the carriers to reduce costs. It is unclear why this is even part of the long term reform vision since a reform like this could be imposed on rate of return carriers in the near term to good effect.

Short Term ICC Reform.  The FCC’s immediate reform of the Intercarrier Compensation regime would deal with what are recurring abuses of the system. The current regulatory scheme creates opportunities for arbitrage that have resulted in unnatural schemes of a different nature – phantom traffic, access stimulation, traffic pumping. When millions of dollars are to be had by simply structuring a phone call in one way rather than another, the human capacity for innovation and ingenuity is marvelous indeed.  The Commission proposes to forestall the access stimulation device by requiring rate of return carriers who enter into “revenue sharing” arrangements such as chat lines to modify their tariffs to account for the new traffic.  Competitive carriers would have to benchmark their rates to the largest ILEC in the state, thus ensuring a more normal rate. The problem of phantom traffic (traffic which is passed on to a connecting carrier without sufficient information to identify the party to be billed) would be addressed by requiring all calls, including VoIP calls, to carry the necessary identifying info.  

Long Term ICC Reform. The deeper problem of how to handle VoIP traffic (which now sometimes goes unbilled) is part of the FCC’s long-term solution. Clearly all traffic will eventually be IP and the current regulatory distinction between IP traffic and circuit-switched traffic will have to be erased. For more than a decade, the FCC has danced around the issue of whether VoIP should constitute a telecom service or an information service – a distinction that has enormous consequences for the regulatory treatment which it gets. The FCC has so far handled the problem by using its non-Title II authority (i.e., sources of jurisdiction not based on telecommunications carrier status) to make VoIP carriers comply with many of the same obligations as regular carriers.  This evasion of the issue continues, with the Commission concocting new ways of regulating broadband or IP traffic without actually denominating such traffic as telecommunications. 

Ultimately, this dance will have to come to an end. In the context of this overall reform effort, the Commission should certainly have teed up the issue for resolution. Its failure to do so (the Commission devotes a single paragraph out of 703 paragraphs to this fundamental question) unfortunately casts a shadow on all of its other more specific proposals to rationalize the treatment of VoIP traffic by treating such traffic the same as circuit-switched traffic.  Until the Commission bites the bullet and reclassifies VoIP, VoIP can’t be treated exactly the same as other traffic since it falls into a different regulatory peg hole.

Long term ICC reform also presents other fundamental jurisdictional problems, the foremost being the historical division of regulatory authority between interstate and intrastate traffic.   Those distinctions (which made sense back in 1934) make no sense at all today.   Without a single nationwide regulatory framework, possibilities for arbitrage and discriminatory intrastate rates continue. The FCC struggles with this problem by proposing different hooks on which it can hang a pre-emptive hat (such as its plenary authority over CMRS rates), but it also suggests ways in which it can induce states to toe the federal line by moving up subsidies or other means. Ultimately, this division of regulatory authority is an obstacle to a consistent nationwide regulatory framework that requires a fundamental change in the Act; in the meantime, the Commission can only do what its limited authority allows.

If it can find the jurisdictional ground to stand on, the FCC proposes to reduce access charges across the board by getting away from per minute charges. It could do so by simply mandating a bill-and-keep approach (where neither connecting carrier charges the other) or flat-rate connection not based on volume. It could also, either on an interim basis or permanently, establish rate benchmarks which would keep the size of access charges within reasonable bounds while also permitting carriers’ costs to be recovered. Shortfalls arising in high-cost areas would be dealt with through explicit subsidies from the CAF rather than through invisible overcharges for access.  

Given the combination of jurisdictional hurdles and billions of dollars that will move from one company’s pocket to another’s as a result of ICC reform, the likelihood of paralysis on this issue is high. Yet it is here that reform is most needed because the current market for telecommunications traffic is artificially distorted by the feudal system that still prevails.

We expect to be providing more targeted thoughts on some of the Commission’s specific proposals in the weeks ahead. In the meantime, interested parties are encouraged to weigh in at the Commission to make it aware of particular problems and abuses and to suggest possible alternatives.

In the CVAA, Congress directed the Commission to reinstate its rules more or less exactly as they were in 2000, with certain mandated changes. One might ask, why go through a rulemaking at all, if all the agency has to do is find a copy of the old rules, cut-and-paste them into a new order, and insert the necessary changes? It turns out, though, that the Commission does have some discretion this time around. In particular, the CVAA leaves it to the FCC to decide what entities – broadcast stations, multichannel video programming distributors (MVPDs), networks – are to be subject to the video description rules. Accordingly, the Commission would like public input on a limited number of points.

So, if you’re a broadcaster or an MVPD, you may want to refresh your memory of the original rules and consider commenting if you might be affected by the proposed modifications.

The Basics

As in the first go-round with video description, the rules this time around will have two main components: the “50-Hour Rule” and the “Pass-Through Rule”.

The “50-Hour Rule” will apply to broadcast stations that are: (a) affiliated with the top four national commercial networks (ABC, CBS, Fox, and NBC); and (b) located in the top 25 markets (per the 2011 Nielson rankings). Such stations must provide 50 hours per calendar quarter of video-described programming during prime time – although any children’s programming can also be included in the 50 hours, regardless of when it happens to be aired. A program can be counted twice – but only twice – if it is re-run. A station can count a program even if the program has previously been telecast elsewhere, so long as the program is airing for the first or second time on that station. [Note: the CVAA requires the Commission to expand this requirement to the top 60 markets by October 2016].

MVPDs (cable, satellite, etc) with 50,000 or more subscribers must also provide 50 hours per calendar quarter of video-described prime time and/or children’s programming on each channel on which they carry one of the top five national non-broadcast networks.  (FYI: the FCC figures that the top five currently are USA, the Disney Channel, ESPN, TNT, and Nickelodeon’s Nick at Nite.  But heads up – Fox News, TBS, A&E, History, the Cartoon Network’s Adult Swim, the Family Channel, and HGTV could also be contenders if any of the top five come up short on the non-exempt programming front.)

Under the “pass-through” rule, broadcasters affiliated with any network and all MVPDs will have to pass through any video description that they receive from a broadcast station or network or a cable network channel, including re-airings, so long as they have the technical capability to do so. And yes, providers subject to the 50-hour rule must also pass through video description programming.

Questions For Comment

These two basic requirements are not up for discussion. However, the FCC would like input on a number of questions regarding their implementation:

• What is “near-live” programming? The CVAA exempts “live” and “near-live” programming from the new rules. This exemption seems superfluous given that video providers already have latitude in selecting which 50 hours will have video description.  Presumably, the exemption would mainly come into play if a top five cable channel had so much live programming that there weren’t 50 hours left over for video description. The FCC logically proposes, in that case, to exclude the channel from the top five list. It also proposes that “near-live” programming would mean programming produced no more than 24 hours prior to its telecast.
• How often, if at all, should the list of top 25 markets be updated? As the FCC aptly notes, while market rankings routinely change over time, constant revision of the list would burden and aggravate everyone concerned. Therefore it seeks comment on whether, and how often, to reconsider the top 25 rankings.
• What equipment would be needed to comply with the pass-through requirement, and how much it would cost?
• How much would the 50-hour rule cost, per program or hour described? The FCC would like to hear from both the purchasers and producers of video description on this point.
• Under what circumstances would the rules become so “economically burdensome” to providers to warrant an exemption? The prior version of the rules allowed exemptions when the rules posed an “undue burden.” The CVAA changed the exemption standard to “economically burdensome.” The FCC is not fazed by this change and proposes to use the same factors it used in the previous version.
• Should the 50-hour and pass-through rules apply to commercial low power stations?
• Is there a continuing need for the previous “another program-related service” exception?  The former version of the pass-through rule did not apply in situations where the second audio program (SAP) equipment and channel were being used to provide some other program-related service. But a digital universe permits numerous audio channels for any video stream – meaning that there may be no continuing need for an exception. The Commission seeks comments on that question.
• What digital stream should the rules apply to? For the 50-hour rule, the Commission would for sure count programming carried on the primary stream. But it also proposes to apply the rule to each separate stream which carries another top-four network’s programming. The pass-through rule would apply to all network-provided programming on all digital streams.
• Should the Commission adopt quality standards for video description?
• How should programs be selected and advertised?
• Should the new ATSC standard be incorporated to ensure that video description can be received by all DTV receivers?
• Should children’s programming mean programming directed at children 16 years old and under?

Finally, the FCC proposes to require compliance with the video description rules (subject, of course, to any OMB approval that may be required for any of the rules) starting January 1, 2012, 85 days after they are scheduled to be adopted and published.

The proposed video description requirements present virtually all of the serious practical difficulties, as well as potential First Amendment arguments, that the earlier version did. The last time around, though, the Court didn’t have to address those considerations because the wholesale lack of statutory authority eliminated the need to do so. Now that the CVAA has plugged that hole, it will be interesting to see whether any appellant(s) raise other, still undecided, issues.

Comments will be due 30 days after publication in the Federal Register. Check back here for updates on that front.

Such disputes have been rare. But last year, after some particularly noisy set-tos, a group of cable operators asked the FCC to devise new rules governing retransmission consent negotiations. The petitioners wanted the Commission to block broadcasters from withdrawing retransmission consent during negotiations and to order binding arbitration in the event negotiations did not produce a result. Broadcasters countered that such requirements would undermine the free market nature of retransmission consent negotiations.

Responding to the petition, the NPRM recognizes that the FCC’s authority to involve itself in retrans negotiations is limited. Since 1999, the Communications Act has required broadcasters to negotiate with MVPDs in good faith – but it gave the Commission only a limited role in determining what “good faith” might involve in this context.   Acknowledging that limitation, the FCC in the NPRM rejects as beyond its statutory authority the ideas of imposing either (a) “interim” retransmission consent (providing the MVPD with a right to carry programming despite the broadcaster’s refusal) or (b) mandatory arbitration. 

Rather, the FCC focuses on tweaking existing rules that affect how parties to retransmission consent negotiations conduct themselves. Specifically, the FCC’s proposals address possible changes in rules relating to: (1) “strengthening” the “good faith” standard governing negotiations; (2) notice to subscribers; (3) deletion of channels during “sweeps” periods; and (4) syndicated exclusivity and network non-duplication rules.

Good Faith Negotiations. The FCC’s current rules require parties to engage in “good faith” negotiations for retransmission consent. Not surprisingly, then, the FCC’s proposals focus on whether the “good faith” rules might be strengthened by adding to the list of actions that are considered “per se” violations of the rules. For instance, should a station giving its network the right to approve retrans agreements be considered a “per se” violation of the station’s duty to negotiate in good faith? How about a station appointing another licensee (pursuant, say, to a JSA or LMA) to negotiate the retrans terms? Should one party’s refusal to agree to non-binding mediation in the event of a negotiation impasse be deemed a “per se” violation? The NPRM seeks comment on a range of conduct which might be deemed “per se” violations of the good faith requirement.

Notice to Subscribers. Noting that adequate warnings of impending retransmission consent disputes might help consumers prepare for disruptions, the NPRM looks at the Commission’s rules governing notices to subscribers. The rules currently require that cable operators give their subscribers 30 days prior notice before deleting channels or changing channel lineups. But the uncertainty produced by retransmission consent negotiations makes it difficult for cable operators to know 30 days in advance whether or not a particular broadcast channel is going to be deleted. Accordingly, the NPRM questions whether the rules should be amended to require notice of potential deletions in advance of retransmission consent negotiations and whether the notice requirements should extend to broadcasters, as well.

“Sweeps” Prohibition. Cable operators – but not other MVPDs (i.e., satellite providers) – are prohibited from deleting or repositioning channels during “sweeps” periods (i.e., when rating companies conduct audience measurements and, consequently, the networks roll out all the good episodes of your favorite shows). That could affect retrans negotiations, since the disparity accords non-cable MVPDs some greater freedom than their cable compatriots. The Commission questions whether it would be appropriate to put all MVPDs on an equal footing by extending the “sweeps” prohibition to non-cable MVPDs. The NPRM also raises the possibility of imposing a corresponding prohibition on broadcasters. On that point the Commission tentatively concludes that it doesn’t have the authority to do so; nevertheless, the FCC invites comment on whether or not it does have the authority.

Syndex/Network Non-dupe. Finally, and perhaps most significantly, the NPRM seeks comment on the possible elimination of the current rules governing syndicated programming exclusivity and network non-duplication. These rules generally protect the contractual rights of broadcasters in their programming by requiring cable and satellite operators to black out programming on other channels that duplicate programming for which a broadcaster holds exclusive rights. Since the exclusive programming rights they hold provide much of the broadcasters’ leverage in retransmission consent negotiations, changes to the FCC rules relating to those rights could affect the dynamics of retransmission consent negotiations. The underlying contractual rights to exclusivity would, of course, remain unchanged. But the elimination of the FCC’s rules would eliminate the FCC as a forum in which the parties’ rights could be adjudicated – meaning that parties would likely have to go to court in the first instance to enforce their rights. Whether that would really be a preferable alternative to either side in a retransmission dispute is far from clear.

Comments in this proceeding will be due 60 days after the NPRM is published in the Federal Register and reply comments will be due 30 days after that. Check back here for updates on that front. As this proceeding is certain to attract a lot of attention from all sides, interested parties should strongly consider making their views known.

But from what we have read already, the outlines of the proposal look very promising.

• The current system permits redundancy by funding multiple providers of basic service when one provider would be enough. The reform would eventually eliminate that problem by designating, based on reverse auctions, a single recipient of the USF support in any particular geographic area. That process should encourage providers to ask for the least amount of support they need to actually provide the required services.

• The current subsidy system does not establish incentives for some providers to operate efficiently.  The reform will impose limits on reimbursement to address that problem.

• There will be a measured transition to the new scheme to avoid disruption of current structures. Expect major battles over how long the transition will be, since subsidy recipients will have to have the subsidies pried from their fingers.

• The Universal Service Fund will be re-dubbed the Connect America Fund in keeping with its new role in achieving the universal availability of broadband. This will require defining broadband for the first time as a supported service and repurposing current funding mechanisms toward broadband rather than plain old voice.

• Several of the different USF support programs will be consolidated or eliminated to reduce overlap.

• The ICC scheme will be revised to eliminate incentives for carriers to game the system by artificial arbitrage arrangements such as traffic pumping and phantom traffic.

• The new ICC regime will recognize IP-based telecommunications as the wave of the future and the system will recognize such traffic while eliminating artificial incentives to maintain legacy networks.

• The interplay between state and federal regulation of ICC will have to be rationalized. Some federal pre-emption of the field may be called for where permitted by the Communications Act.

• Workshops will be held to get input from the public on the issues.  (Workshops are for some reason beloved by the Democrats on the Commission, though to us they often seem like an extremely inefficient way to gather data.)

Make no mistake: the task ahead is truly herculean (and here we’re thinking in particular of the Augean Stables). All of the entrenched interests which have so far barricaded themselves against change will be stacking their sandbags and summoning legions of lobbyists to their aid. But at least the battle is now joined.

• re-name the TIS as the “Local Government Radio Service”;

• eliminate certain site and power limitations; and

• expand the permissible content of TIS messages to include, among other things, alerts concerning the safety of life or protection of property, such as NOAA weather radio transmissions, AMBER alerts and other civil defense announcements.

The key question posed by the NPRM is: “Should the Commission significantly expand the scope of permitted communications by local governments on TIS stations, or should it adopt more limited changes that are consistent with the traditional traveler-related focus of TIS?” In other words, does TIS get a comprehensive, possibly mission-changing overhaul, or should it just be tweaked here and there to preserve its “traditional” focus?

The proceeding started back in 2008, with a petition by Highway Information Systems, Inc., proposing sweeping changes to the TIS. Two months later, the American Association of Information Radio Operators (AAIRO, represented by Fletcher Heald) took a more measured approach: it asked the Commission simply to confirm that the permissible content of TIS stations includes “any message concerning the safety of life or protection of property that may affect any traveler or any individual in transit or soon to be in transit” – a reasonable interpretation of the notion of “travelers information”.

But other groups followed up with their own separate, and broader, suggestions. Declining to simply provide the confirmation that AAIRO had asked for in the first place, the Commission now asks whether the permissible content of TIS stations should be expanded to include such matters as NOAA Weather Radio retransmissions, AMBER Alerts, terror threat alert levels, civil defense announcements and the like. (How limited is the FCC’s view of existing content limitations? In 2007, the Enforcement Bureau issued a Notice of Violation to the City of Santa Monica for retransmitting NOAA weather broadcasts.)

Other questions up for discussion: If such expansion is permitted, what limits should be imposed? For example, should only non-routine NOAA reports be permitted, or could routine reports be included as well? Would the proposed changes adversely affect commercial broadcasting, as NAB maintains? One proponent goes so far as to suggest that TIS stations be permitted to “any information of a noncommercial nature”. Another emphasizes the possible use of TIS for general emergency-readiness information along with announcements about local history, environment and parks.

With respect to the technical aspects of TIS, the Commission is considering a variety of proposals advanced by the petitioners. Should TIS stations be untethered from their current geographical anchors (i.e., roads, highways, public transportation terminals, etc.) and allowed to be located pretty much anywhere? One prominent engineering firm has objected to that proposal, citing its potential adverse effect on nighttime interference in the medium wave AM band. With that in mind, the Commission seeks comments on whether and to what extent interference problems could arise and, if so, how they should be addressed.

Along the same lines, should TIS stations be given greater potential power to expand their service areas? One possible rationale for a power increase:  because of higher speed limits since 1977, vehicles are within TIS service areas for shorter durations, thus allowing only 90 seconds for transmission including station ID.

The Commission also addresses a proposal to allow networks or “ribbons” of TIS stations along a highway. It asks about the nature of the system proposed and how it would operate. On the one hand, such systems could be useful in, for instance, directing evacuation efforts along certain routes; on the other, they might attract travelers away from commercial stations with superfluous or redundant information.

The potentially far-reaching nature of the changes under consideration is revealed in the seemingly simple proposal to change the name of the service from the “Travelers Information Service” to the “Local Government Radio Service” (or some variant along those lines). While some might invoke Shakespeare to suggest that a mere name change would have little effect, the proposed change here reflects the fundamentally different view of the service envisioned by some of the petitioners. After all, a “travelers information service” by definition provides information to travelers. A “local government radio service”, on the other hand, would appear to re-focus the goal of the service away from its intended beneficiaries (i.e., travelers) and toward its operators (i.e., local governments). While local governments might still be inclined to provide travelers information, they might also be inclined to expand the content far beyond that traditional limitation.

The Commission does not appear to have developed strong preferences on any of these issues yet, so if you’re inclined to drive into the TIS debate, now’s your chance. Comments will be due 30 days after (and reply comments 45 days after) the NPRM is published in the Federal Register. Check back here for updates on that front. 

Meantime, be safe out there.

Few would dispute that the current system has become an obstacle. The various regulations for experimental and developmental licenses are scattered haphazardly through eight different rule sections. But the biggest problem facing development efforts, whether corporate, educational, medical, or scientific, is the need for project-by-project approval. The process is not only slow, but uncertain as to the outcome. And all the more so, as the technology at issue departs from current practice.

To address these problems, the NPRM lays out six kinds of rule changes.

First, a new licensing scheme would allow universities and non-profit research facilities to conduct testing and experiments on almost all frequencies, without separate approval for each project. Special requirements would help to protect cell phone, 3G, 4G, and broadcast frequencies. Operation would be restricted to the licensee’s campus, with emissions limited at the campus boundaries. Licensees would have to register their operations seven days in advance on a publicly accessible FCC website, through which spectrum incumbents can raise concerns of harmful interference. The FCC invites comment on a great many specifics.

Second, the FCC would establish “Innovation Zones” – geographic areas, possibly away from population centers – within which multiple innovators would have flexibility to experiment without separate project approvals. Licensees would need technical credentials, but would not be limited to universities and non-profit facilities. A landlord-licensee might invite companies and entrepreneurs to the facility to conduct research and development. As above, the public would have seven days’ prior notice of operations. The FCC again leaves a lot of details open for discussion.

Third, the FCC would establish a new licensing program specifically for institutions conducting research into medical applications, under rules otherwise similar to those above. Questions here center on the institutions that would qualify, the kinds of applications that could be investigated, and the appropriate reporting requirements.

Fourth, the FCC would consolidate and clarify a confusing collection of rules that now govern in-the-field testing and market studies for new devices. The revision would, among other changes, allow a manufacturer to sell not-yet-certified devices to a service provider, which in turn could lease (but not sell) them to consumers wanting to try them out. Manufacturers could sell uncertified devices to developers and system integrators as evaluation kits. The FCC would ease the caps on the numbers of uncertified devices that can be imported for testing and evaluation.

Fifth, the FCC would consolidate and streamline the existing rules on experimental licensing. The presently separate category for developmental licenses, little used, would be folded into the experimental licensing regime.

Sixth, the FCC makes proposals relating to specific situations such as anechoic chambers, Faraday cages, and open area test sites.

The proposed rules, which run to 37 pages, will affect just about every current and prospective user of the spectrum. The FCC should expect vigorous and conflicting comments. We foresee a major divide between entities committed to innovation, which will want greater flexibility, and spectrum incumbents, who will each demand greater protection for their own particular operations.

In the first three categories above, the FCC proposes to allow licensees to use any frequencies except those few marked as “restricted” in the FCC rules. (Restricted bands correspond to certain services that use especially sensitive receivers, such as GPS, satellite downlinks, and radio astronomy bands.) Even though most frequencies above 38.6 GHz are restricted by default (a few have been exempted), most of these, too, would become available to experimental licensees. Expect large numbers of incumbents in non-restricted bands to push back, each arguing that the importance of its service entitles it to greater protection.

Comments and reply comments are due 30 and 60 days, respectively, after the NPRM appears in the Federal Register. Watch this space for updates.

First, the Commission is proposing to include fixed and mobile wireless services as potential uses in the VHF and UHF spectrum blocks currently reserved primarily for television. This involves a simple amendment to the Table of Frequency Allocations (the Table), which can be found at 47 C.F.R. §2.106. The Table is the official master list of authorized uses of the spectrum. Spread over more than 40 pages of the FCC rule book, it consists of a chart reflecting (a) all of the blocks into which the radio spectrum has been divided and (b) the specific permitted uses for each of those blocks. The Commission is proposing to include “Fixed" and "Mobile” as additional uses for the spectrum currently assigned for television services. 

This change by itself would not mean that broadband uses would automatically flood that spectrum. Rather, it would mean that the Commission could authorize such uses in that spectrum. Of course, the conventional wisdom is that the FCC will authorize such uses once it gets the rest of its ducks in a row. In order to facilitate that eventual process, the Commission is proposing to take this initial reallocation step now.

Second, the Commission is proposing rule changes to permit two television licensees in the same market to “share” one of their 6 MHz channels, thereby freeing the second channel for broadband uses. (Under such a sharing arrangement, two stations would share a single transmitting facility – although each station would be separately licensed and, in principle, independent of the other.) Historically, each TV station has had a full 6 MHz channel to use. Analog operation generally consumed the entire 6 MHz for a single program service, but the advent of DTV service has allowed multiple program streams by a single station over a single 6 MHz channel. The Commission apparently views this arrangement as inefficient. If every station were willing to share channels, that would free up 50% of the spectrum currently devoted to television – leaving that freed-up spectrum available for broadband.

Such channel-sharing would entail a number of complexities, many of which are addressed in the NPRM. Most obviously, the rules would have to be revised to permit such sharing in the first place. But beyond that, channel-sharing raises a host of questions. For example, as envisioned by the Commission, the proposed channel-sharing approach would provide TV licensees who agree to share channels the same MVPD carriage rights they currently hold. Licensees who agree to share channels would not be removed from cable, satellite, or other MVPD systems (e.g., FIOS) for helping out the government. 

The Commission is also seeking comment on other nitty-gritty details of sharing: Should commercial and noncommercial stations be permitted to share common facilities? Should a potential for loss of service by stations seeking to share transmission facilities be considered in determining whether that sharing proposal should be permitted? Ironically, on this last point the Commission suggests that its policy for dealing with service loss is one of flexibility, with the Commission happy to consider “any counterbalancing factors” a licensee might advance. But it doesn’t take a particularly long memory to recall a completely different Commission approach during the DTV Transition, when the Commission routinely denied minor changes to DTV facilities where more than 1% of the population would lose service.

Finally, the Commission is proposing rules to “maximize” the usage of the VHF spectrum. During the DTV Transition, many concluded that the VHF spectrum was not as well-suited for DTV use as UHF. As a result, most full-power stations elected to move to the UHF band to ensure uniform coverage within their service areas. But the UHF spectrum is particularly good for broadband operation, which means that the Commission would now like to wrangle as many TV stations back into the VHF band as possible.

To make such a move more palatable, the Commission is proposing VHF power increases and other revisions to improve the performance of indoor antennas. The goal is to try to offset any disadvantages, perceived or real, in VHF operation. In particular, the Commission is seeking comment on the adoption of the baseline standards for indoor antennas based on the 2009 ANSI/CEA-2032 standard, which establishes testing and measurement procedures for indoor antennas. By taking these steps, the Commission would squeeze more television stations back into the VHF spectrum bands, and free up a larger contiguous block of spectrum adjacent to the 700 MHz A Block which was previously auctioned for wireless uses.

The deadlines for comments and reply comments on the Commission’s various proposals will not be set until the NPRM is published in the Federal Register. Comments will be due 45 days after publication, reply comments will be due 75 days after publication.  Check back here for updates.

While the NPRM clearly sets the stage for TV re-purposing, it’s only the first step in what will likely be a complicated and contentious process. After all, the re-packing of large numbers of TV operations into a tighter chunk of the spectrum will present thorny issues, including the development of a New And Improved DTV Table of Allotments. 

Here again the recent DTV Transition experience provides a glimpse of things to come. Back in the early days of the DTV Transition, the adoption of the first DTV Table of Allotments led to many a battle over which channel would be assigned to which station. Such struggles will likely be even more problematic in a repacking process because that process contemplates a reduced number of channels overall. With fewer options from which to pick, we can expect considerable competition for channels which may be perceived as somehow “better”. How the Commission plans to manage, and resolve, such competition is still a mystery. 

Another concern about repacking: Thousands of Low Power TV stations, Class A TV stations, and television translators are operating on channels not included on the current DTV Table of Allotments. They will face certain displacement during this repacking effort.  While some of these stations may be able to take advantage of the proposed channel-sharing rules, or perhaps participate in the incentive auction, the devil will be in the details.

One thing that sticks in this author’s craw is the suggestion – expressly advanced by Chairman Genachowski and Commission Copps – that the television industry has been sloth-like in taking advantage of the digital spectrum.  Genachowski laments that some stations are not “seizing the opportunity to offer multicast streams or mobile TV”. Copps says that he “would have little interest” in a repacking process if only TV spectrum had been put to “positive use” through the provision of “public interest multi-casting”. 

Such perceptions conveniently miss several important points. 

First, the DTV Transition is still relatively recent. The transition required the acquisition of billions of dollars of new equipment by broadcasters, who also took extensive steps to educate the public on the new technology. They universally accepted, and rose to, that challenge. 

But to create a second or third program stream, a broadcaster has to create, in effect, a second or third station. To be sure, the transmission plant is already in place, but what about the studios, production facilities, staff – and advertising support – for the new program streams? These do not come pre-packaged, available for instant deployment. Quality programming requires extraordinary effort under any circumstance. That is even more the case here, where the new multi-cast streams would not be based on existing network fare (since most network programming is already committed and, thus, often not available for such additional streams).

Additionally, the development of such additional programming is expensive. Let’s not forget that the recession which has plagued the U.S. economy got its start in 2007 and hit hard in 2008, mere months before the government-mandated DTV Transition.

And if you’re talking about supposedly inefficient use of spectrum, what about the fact that other portions of the wireless spectrum for new wireless broadband services (700 MHz D block, for one) lay unused. The current state of multi-cast broadcast television may not meet the halcyon expectations of Copps, Genachowski and others, but at least the television industry built out a nationwide digital television service with the spectrum available to it.

To say that the television industry has somehow come up short and blown its chance is, in my own personal view, demonstrably wrong.   To rely on that misperception as justification for a new repacking initiative strikes me as regrettable.

Be that as it may, the battle call has sounded and the FCC has made its first move. It’s time to fall in and prepare for the long haul. This is likely to be an extended engagement.

• voice or text alerts when a customer approaches and reaches monthly limits triggering overage charges;
• notification that international or other roaming charges not covered by their monthly plans are about to be incurred; and
• disclosure of any tools offered by mobile providers to set usage limits or review usage balances (on this point, the Commission also suggests that it might be inclined to require all carriers to offer consumers the means of setting their own usage limits).

On the assumption that such limits will be imposed, the Commission is interested in suggestions about how the rules should be implemented. For example, should such notifications be provided in “real time”, and if so, what technical limitations might come into play? How should notifications be provided for multi-line family plans? What is the most effective way to provide the notification (e.g., via voice or text alerts)? 

Also, should the FCC establish a precise usage level at which the initial notification message would be triggered? For example, new EU regulations require that wireless providers notify a consumer using a data roaming service when the consumer has reached 80% of an agreed-upon limit. 

Also, should multiple alerts be provided (either at reaching the trigger amount, upon exceeding the monthly usage amount, or every time the charge is to be incurred) or would a one-time alert be enough to do the trick? In any scenario, should the exact amount of the soon-to-be-incurred charge be provided? How long should mobile providers be given to implement any usage alert requirements that might be adopted. What are the best methods to ensure that consumers are made aware of the available tools for monitoring usage balances and limiting usage? How can consumers access these tools and any applicable charges? Also, should all mobile service providers be required to comply with the proposed requirements? Should prepaid services be exempted from the alerting requirements?

The NPRM was published in the Federal Register on November 26. That establishes the deadlines for comments on the various proposals: Comments are due by December 27, 2010, and reply comments are due by January 25, 2011.

After seeking further input, the FCC basically accepted the consensus of the industry and Public Safety as to what was both feasible and would provide a heightened degree of accuracy for first responders. While we are usually uncomfortable when the FCC lets AT&T, Verizon and a few other large carriers speak for “the industry,” in this case the FCC listened both to the largest carriers and to representatives of smaller carriers who moaned that they did not have the same access to new aGPS equipment as the majors. The resulting decision seems to reasonably reflect the needs and concerns of most parties.

The FCC afforded network-based carriers an unusual degree of flexibility in establishing compliance. They can elect to be measured over either counties or PSAPs in their service areas, whichever they desire. And they can use either network-based accuracy data, handset-based data (after a few years), or a combination of both. To further sweeten the deal, the FCC will permit carriers to exclude from the calculation counties or portions of counties where triangulation is not technically possible. The pertinent counties must be reported in the FCC Docket and sent to Public Safety.

This concession to the laws of physics is huge since the triangulation problem was a major impediment to compliance by rural carriers. In addition, even a network-based carrier may rely on handset-based accuracy data if it has a high degree of aGPS-equipped subscribers (85%) network-wide or if it gives aGPS equipment to subscribers in the area at no charge. Handset-based carriers also got some relief: they can exclude up to 15% of counties or PSAPs whose heavy forestation limits handset location accuracy.

All of this is not to say that the new rules do not impose significant burdens. They certainly do. To wit:

• Carriers who use the network-based solution must meet the 100 meters/67% of calls metric over 60% of their counties or PSAPs within one year of the effective date of the new rules. The counties included must cover at least 70% of the counties covered by the carrier over its entire network. The 70% requirement is presumably there to preclude manipulation of the data, but the FCC offered no explanation for it whatsoever, so it is unclear whether the reference to a carrier’s “entire network” means its entire nationwide network or its network within the particular call sign being measured. Within three years, carriers must meet this metric in 70% of the counties or PSAPs, with 80% of the counties in the entire network being included. Finally, in five years carriers must meet the metric in 100% of the counties or PSAPs. At this point, handset-based accuracy data may also be used to demonstrate compliance, on the assumption that aGPS devices will be relatively widely available by that time.
• Network-based carriers must meet the 300 meters/90%-of-calls metric on a three year – five year – eight year timetable. Note that the metric for this level of accuracy has been reduced from 95% of calls to 90%.
• Meanwhile, handset-based carriers have two years to meet an accuracy metric of 50 meters/67% of calls and 150 meters/80% of calls. By year eight they must reach 150 meters accuracy for 90% of calls.
• No self-respecting FCC regulation would be complete without a reporting requirement. Here the FCC is requiring the reporting of “confidence and uncertainty” data at the request of any PSAP. We appreciate this requirement because a fragile balance of confidence and uncertainty so defines the human condition. The precise nature of this data is notably unclear from the FCC's order, leaving us somewhat on the uncertainty side of the equation in this regard.
• Finally, the FCC has clarified that the accuracy metrics noted above only apply to outdoor measurements. But how will the measurement process know whether any particular call originated from indoors or outdoors, and therefore whether it should be included in the accuracy calculations?

Having adopted these requirements, the FCC issued a companion notice of proposed rulemaking (NPRM) inquiring into a number of important issues:

• Should there be single accuracy metric given the accelerating convergence of handset and network technology?
• Can the level of accuracy required be stepped up even higher given the new technologies?
• Should “Z-axis” (i.e., height above ground data) be added to the location requirement?
• More broadly, should the Commission extend the current VoIP ALI rules to a wider universe of service providers?   The current rules require VoIP users to self-report their location since there is no other way for the network to know where a computer happens to be located. And even this requirement applies only where the customer originates and terminates calls to the PSTN in real time. But as the use of computers and computer-like devices with voice capability spreads, so too does the need to be able to locate 911 calls originated from such devices. The Commission recognizes that such an expansion of the E-911 process would be problematic since the new computing devices are themselves mobile – self-reporting one’s whereabouts would be impractical and would defeat the purpose of “automatic” location identification. This inquiry is plainly at its inception, but it will become more important as all communications move to an Internet-based model.

The deadlines for comments and reply comments have not yet been set. They will depend on the date the NPRM is published in the Federal Register (comments will be due 60 days after publication, replies 90 days after publication). Check back here for updates.

Digital Conversion Deadline – 2012. However the digital transition for LPTV stations may shake out, the FCC currently thinks that it should be wrapped up sometime in 2012 (i.e., “approximately three years after the June 12, 2009 full-power transition date”). 

A 2012 deadline for finishing the process? The FCC understands that this deadline may be a problem. But it figures that most, but not all, full-power stations made the transition in only about four-five years, and many LPTV stations have already availed themselves of the opportunity to convert to digital. With knowledge gleaned from that transition experience, the Commission speculates that three years might be enough finish up with LPTV. 

Of course, that three-year period would start as of the full-power transition date, June 12, 2009 – meaning that more than one-third of the time has already passed. Telling LPTV stations in September, 2010, that their digital transition countdown started 15 months ago is a bit of a stretch. On top of that, there are some 7,500 LPTV stations compared to only about 1,800 full-power stations. The logistics alone (e.g., equipment manufacture, installation, tower rigging) for all these stations are not likely to permit completion by a deadline barely two years away.

Further complicating matters is the National Broadband Plan (NBP).  Among its various ambitions, the NBP would repack the TV spectrum to free up 120 MHz of TV spectrum for broadband. That would reduce the spectrum available for all over-the-air TV considerably – so much so that many LPTV stations may not be able to find suitable new homes. The idea of spending a lot of money to convert to digital, only to have to change channels again or even be shut down a year or two later by broadband, is unsettling, if not terrifying. 

The FCC is not oblivious to these problems, but it may be a bit unrealistic about possible solutions. For example, the NPRM mentions an NTIA grant program to help pay for the cost of digital transmitters. But it fails to mention that: NTIA is limited by statute to funding rural stations; grant maximums are $6,000 and $20,000, far below the cost of a digital transmitter; and grants are made only after the grantee has shelled out its own cash to buy the equipment. (The NPRM does solicit comments detailing the anticipated practical considerations – including particularly conversion costs – that LPTV stations are likely to face.)

The Commission also wants to know what kind of community outreach efforts it should plan for the LPTV transition. How many of the bells and whistles imposed ad nauseam during the full-power transition (e.g., audience-education efforts, call-in centers, re-scanning instructions) should be dusted off and re-deployed?

And the FCC invites comments on whether the deadline should be later, perhaps 2015, and whether exceptions should be made in hardship cases or communities where LPTV is the only available over-the-air TV service.

However much LPTV stations may be quaking in their boots at this point, the fact remains that more than half have already applied to the FCC for some kind of digital conversion, and the current pace of digital applications is pretty brisk. The real question is how many stations still feel that there is any audience for their analog signals and, as a result, want to postpone conversion to continue to serve that analog audience. Some suggest that minority and niche audiences and rural residents often served by LPTV stations still have a lot of analog receivers, but statistics are not plentiful.

700 MHz Band Clear-Out Deadline – December 31, 2011. Turning to Channels 52-69, the FCC says that enough is enough. Whether or not those channels are being put to use by their non-broadcast licensees, it’s time to clear out the broadcast hold-overs – all of whom happen to be LPTVs. Now that the full-power transition has come and gone and full-power stations are no longer taking up two channels each, channels in “the core” (i.e., below 52) are as easy to come by as they are going be. 

Accordingly, the FCC proposes to require all LPTV stations on Channels 52-69 to apply to move to lower channels by June 30, 2011, and to move there by December 31, 2011. 

There may be some practical problems with that ambitious schedule. Can the FCC process all these applications in six months? How fast can the FCC resolve conflicts if two stations apply for the same channel? The answer, we suspect, is that those who wait until the last day to file applications will pay the price: earlier filers will have more time to work out kinks in their FCC applications and get grants, leaving them time to build; and since applications are processed on a first-come, first-served basis, conflicts should arise only if two stations file on the same day. 

Additionally, the NPB repacking plan could gum up the works here as well. The scope of the repacking proposal might be clear before June 30, 2011, but then again it might not – in which case the process of picking a lower channel, and then obtaining authority to use it, may turn out to be risky business.

The Freeze Is On. Effective immediately, no more applications will be accepted for new analog LPTV stations on any channel. Existing stations on Channel 52-69 may no longer request analog modifications except in extreme hardship cases (think involuntary loss of transmitter site), and no new digital companion applications will be accepted on Channels 52-69, even if no lower channel is available.

“Minor” Change?   The FCC proposes to limit transmitter site changes in “minor” change applications to 30 miles. Currently, a proposed change is “minor” if there is any overlap between the old and new service contours. By proposing a smidgen of overlap, some stations have succeeded in moving long distances into new markets, including urban markets. As proposed in the NPRM, moves of more than 30 miles would be deemed “major” changes, which are currently forbidden in urban areas. (The FCC says it plans to remove geographic restrictions on first come, first-served applications for new stations and major changes – although it doesn’t say when.)

VHF To The Rescue? With the likelihood of NBP-induced spectrum scarcity in mind, eyes are turning to VHF channels, which aren’t suitable for broadband (and not ideal for digital television, either). The FCC nevertheless asks whether VHF channels may become a good home for digital LPTV stations, and it offers the carrot of a power increase above the present 300-watt limit. VHF LPTV stations, particularly those on Channels 7-13, have been clamoring for more power for several years, and the door may now be open to meet that need. In fact, the FCC invites comments on whether power increases and/or changes in interference standards are needed for all digital LPTV stations.

Channel Surrender.  Analog LPTV stations with companion digital channels have, as a matter of policy, been permitted to terminate analog operation and either keep their companion digital or move their digital operation to their analog channel. The FCC proposes to make that policy permanent. In the past, Class A stations have not enjoyed the same degree of choice, because their companion channel was not afforded Class A spectrum priority. Now the FCC proposes to give Class A stations the same ability to choose to operate digitally on their analog channel or their companion channel, and whichever channel they select will be granted Class A status. This change will be of significant benefit to Class A stations whose analog channels are not suitable for digital operation and who thus have little choice but to stick with their companion channel and need a way to retain Class A status.

Vertical Radiation Patterns/Emission Masks. LPTV antennas do not always have the same horizontal and vertical radiation patterns, but FCC interference studies are based on only the horizontal plane and assumed vertical characteristics which may not accurately depict actual operation. The FCC now proposes to require vertical pattern information in applications for new or modified stations. Existing stations not making changes may either: (a) file their vertical pattern or (b) continue to rely on the old assumptions. 

The FCC also proposes to allow the use of a full-power TV digital emission mask by LPTV stations, in addition to the previously authorized simple and stringent masks. Because the full power mask exceeds the performance of a stringent mask, it will allow more digital LPTV stations to avoid predicted interference to first-adjacent channel stations, opening a door for some applications that were previously stymied.

Ancillary/Supplementary Services Fee. Digital stations – LPTV and full-power – are permitted to provide the same subscription-based, non-broadcast ancillary services on their spare digital capacity as their full-power colleagues. Since 2004, digital LPTV licensees have, just like full-powered licensees, had to pay the same annual fee of 5% of the gross revenue derived from such services.  But in 2007, the Commission expanded that fee obligation on the full-power side to include any authorized DTV stations, not just “licensees” (in other words, stations operating pursuant to an STA would be subject to the fee as well). The Commission now proposes to close the loop by extending that tweak to LPTVs as well. 

And finally, the NPRM notes that a petition asking that LPTV licenses be made secondary to “White Spaces” unlicensed broadband use of vacant TV channels was denied in the separate White Spaces rule making.

Comments will be due 60 days after the Notice of Proposed Rule Making appears in the Federal Register, with replies 30 days later. We will post the deadline when available. Of course, by the time the comment cycle has been completed, and a decision is reached, there will probably be less than one year left in the FCC’s theoretical three-year transition period if the proposed 2012 deadline sticks.

Not only would the licensee/renewal applicant have to produce its own documents, it would have to track down and turn over a similar universe of documents for each of its “affiliates” – “affiliates” not just in the usual sense of “under common control or management”, but in the very broad sense of sharing facilities, participating in joint venture arrangements, or even just having contractual relationships. (For all the unpleasant details, check out the definition of “affiliate” in Section 1.2110 (c)(5) of the FCC’s rules.) This broad definition normally applies in auctions, to avoid competitive bidding credits going to undeserving entities. It does not fit well in the renewal context, where the point is to assess the qualifications of the licensee, not entities that it can’t control. 

Worse, the proposed document production exercise would repeat each time any license held by the applicant and any of its affiliated entities comes up for renewal. Especially for larger entities, the procedure would result in a cascade of repeated document productions, in some cases involving hundreds of affiliates and thousands of licenses. No wonder AT&T and Sprint are worried. This type of due diligence is no cakewalk for smaller entities either, who will have fewer resources to put towards compiling the required information. 

Expensive, time-consuming – and probably unlawful.   The federal Paperwork Reduction Act (yes, it’s hard to tell, but there really is one) bars governmental agencies from requiring the filing of “unnecessarily duplicative” information otherwise reasonably accessible to the FCC. All of the requested paper is already in the FCC’s own files. If that isn’t unnecessarily duplicative, then nothing is.

After all that, if the Commission finds an applicant’s submission to be “insufficient”, the Commission will deny the application. Don’t ask us what “insufficient” means – the FCC isn’t saying. Apparently, like Justice Stewart in Jacobellis v. Ohio, it will know it when it sees it. Given that people’s livelihoods can be at stake, we expect a better articulation of what the Commission is looking for. We think the Administrative Procedures Act expects the same.

Reply comments about the proposed rule changes are due by August 23. The Commission will accept ex parte communications after that.

The first notice, the Fourth Further Notice of Proposed Rulemaking, seeks to update the CableCARD rules and policies. The CableCARD is a device that, once installed into retail devices such as television or retail navigational devices (think TiVo), eliminates the need for a separate set-top box.   Section 629 was part of the Telecommunications Act of 1996, and it took seven years for the industry (MVPDs and manufacturers) to develop a standard for the device. However, the standard adopted in 2003 did not address two-way communications such as Video on Demand, and the device requires professional installation. 

In the National Broadband Plan, the Commission indicated that it would examine whether there should be changes to the existing rules to encourage the greater use of CableCARD devices.   In particular, the Commission is seeking comment on rules that would: (i) ensure that devices are able to access multi-stream video programming; (ii) make the pricing, billing and installation practices of CableCARD equipment transparent and similar to those for leased set-top boxes with the CableCARD already installed; and (iii) encourage the rapid development of new retail CableCARD devices. 

While the Commission recognizes that the CableCARD regime is somewhat outdated, it seeks to make these changes to its rules as an interim measure while it implements what it believes to be the next generation of devices, namely, the AllVid device. The second notice, a Notice of Inquiry, is intended to jumpstart the quest for such a device. The AllVid approach, still merely a “concept” developed by the Commission in the National Broadband Plan, would serve as a gateway between consumer premises equipment such as DVRs, computers, and televisions on one side, and the proprietary systems of MVPDs on the other side. While the Commission acknowledges that such a “gateway” device is in concept form only, it believes that the adoption of this concept would lead to a nationwide interoperability standard like Ethernet and the standard phone-jack of yesteryear.

Under the AllVid concept, MVPD’s would be able to deliver their services directly to a small device, which would connect to the navigational devices such as computers, DVRs, televisions, and gaming systems. The MVPD would not have the headaches of working with individual device manufacturers, and the Commission believes that this concept will spur development of a retail market for new devices without the need for the manufacturers to deal with the MVPDs. Just as fax machines and answering machines could perform different services so long as they could be plugged into the standard RJ-11 phone jack, the Commission believes that AllVid devices will free up parties on either end of the gateway device to develop new and innovative methods for delivering service to consumers.

The Commission envisions that this device could be installed either on the back-end of a television, or as a device to which multiple devices would be attached. But, as with most “concepts”, the Commission is seeking comment on almost all elements of how this device will operate, including communications protocols, content protection requirements, and whether the consumer market demands that these devices should be developed by the Commission. One potentially sticky aspect of the proposal is that the Commission envisions that there would be a uniform channel guide and navigational features across all devices. While the Commission notes that there is an inherent conflict between standardization and innovation, it does appear to favor a standardized user interface that would improve customer service and ease of use.

Since this proceeding is at the Notice of Inquiry stage, there is very little meat on the proposals offered by the Commission. Instead, much like the National Broadband Plan, the Commission has teed up the subject matter, and is interested in receiving comments on all aspects of the proposal. On the other hand, combined with the adoption of the Notice in the CableCARD proceeding, it is clear that the Commission believes both that (a) the MVPDs and manufacturers have not fully met the goals set forth in Section 629 of the Communications Act, and (b) some sort of Commission-directed nudge is necessary. 

Whether or not the final result is the adoption of the equivalent of the MVPD phone-jack is unknown, but we will keep you up-to-date as the proceedings move forward.

For example, the FCC rule section on painting/lighting specifications currently requires conformance with an FAA circular that was superseded, by the FAA, more than six years ago. (This problem had been called to the FCC’s attention back in 2006.) The FCC proposes to fix the problem now by (a) deleting references to any circulars, and (b) requiring instead that structure owners comply with whatever determination the FAA issues with respect to their particular structures. 

Along the same lines, Sections 17.14 and 17.17 of the Commission’s rules – which specify (a) which structures are subject to notification to the FAA and (b) which are exempt – merely parrot the FAA’s rules. The FCC correctly observes that this approach “risks creating confusion in the event the FAA were to change its criteria”. So now the FCC proposes simply to cross-reference, in its own rules, the corresponding FAA rule.

Curiously, discrepancies within the FCC’s own rules have developed as well. Sections 17.2 and 1.907 both purport to define “antenna structure”, but they use slightly different language. The Commission asks whether the two should be “harmonized”. (Our suggested answer: “yes”.) And the FCC’s definition of “antenna structure owner” – i.e., the guy who bears ultimate responsibility for compliance with lighting/marking/etc. requirements – could be read to include not only the structure’s owner, but also the owners of any antennas that happen to be located on the structure. Since that reading would be inconsistent with longstanding Commission precedent, the FCC suggests that the definition should be clarified some.

Similarly, FCC rules currently require that each structure’s Antenna Structure Registration number be displayed “in a conspicuous place so that it is readily visible near the base” of the structure. But elsewhere the Commission has suggested that the number be displayed “along a perimeter fence” or “at the point of entry of the gate” – in both cases, places not necessarily “near the base” by any means. Since the purpose of the display is to provide the public information, the latter approach seems to make more sense than the one in the rules. The FCC proposes to resolve this by requiring the display to be visible from “the closest publicly accessible location[s]” near the base.

And if you’re looking for internal discrepancies, look no farther than Section 17.58, which requires compliance with Section 1.70 of the FCC’s rules. But check this out – Section 1.70 was deleted from the FCC’s rules in 1977! Not surprisingly (but without a hint of obvious embarrassment), the Commission now proposes to delete Section 17.58.

The Commission also proposes to streamline requirements regarding inspection and maintenance of marking and lighting by, e.g., eliminating the separate inspection component entirely while retaining the obligation to assure proper lighting at all times. Timely notification of outages would still have to be made to the FAA. As an alternative, if inspection requirements are retained, the FCC may consider exempting certain network operations control center-based monitoring systems.

Another proposal: defining what alterations to a structure would require a new FAA study. The Commission’s rules currently contain no such definition, even though the FCC has, since 1995, applied the informal standard that any change in height of one foot or more, or any change in location of one second or more, would trigger a new FAA study. The Commission now proposes to codify that standard.

And another: structure owners would have to keep records of observed or known lighting outages/improper functioning for two years.

Despite the Commission’s historical inclination to let the FAA call the shots vis-à-vis the substantive standards for antenna structure lighting/marking, a number of the NPRM’s proposals suggest a curious independence of spirit on the FCC’s part. 

For example, to determine the coordinates of a structure, the FCC suggests that it might insist on specific accuracy standards or survey methods. But the FAA has declined to impose such a requirement, and conflicts with the FAA’s process could arise if the FCC insists on specific standards/methods that yield results at odds with the FAA’s approach.

Along the same lines, the FAA requires structure owners to notify it of the structure’s construction or dismantlement within five days. The FCC, by contrast, provides only 24 hours for such notice and, without explanation, the Commission proposes to stick by that limit.

Since the NPRM is intended to “update and modernize” all of Part 17, there are more specific proposals, as well as broad invitations for comments and suggestions. This presents an excellent opportunity for anyone with an antenna structure to weigh in.

But one of the more intriguing aspects of the FAA/FCC relationship may be out of the FCC’s hands for now. The FAA has on occasion asserted authority over not only the physical nature of antenna structures, but also their RF characteristics as well. (The FAA’s approach is understandable in view of the fact that the FCC defines “antenna structure” to include not only the physical structure, but also any radiating and/or receive systems and related gear.)  In particular, at times the FAA has withheld “no hazard” determinations based on the particular frequencies to be transmitted from the structure – for example, where operation of a proposed FM station would interfere with navigation frequencies used at a nearby airport. Since 2006 the FAA has been considering its own NPRM which would expand its own notification requirement to include a range of frequency-specific limits.   In its NPRM the FCC now inquires whether the FCC’s rules or policies should be altered in the event the FAA adopts the proposals pending in its 2006 NPRM. It is not at all clear whether the Commission sees a possible inter-agency impasse here and, if so, what the prospects for resolution might be.

While we may welcome the opportunity to chip in our respective two cents’ worth to the FCC, all concerned might be better off if the Commission and the FAA were to commit themselves to ironing out, once and for all, all aspects of their shared responsibilities. Unilateral action by either agency creates the possibility of conflict with the other, with resulting confusion for the regulated masses. Of course, the FCC and FAA have been unable to resolve their relationship to date – as is evident throughout the FCC’s NPRM – so it may be idle to suggest that they should do so now. But there’s no harm in asking.

The deadlines for comments and reply comments have not yet been set. Check back here for updates.

Ah, the old days . . .

But first, a nagging question. The Internet has been popular for two decades. Why are we are talking about network neutrality only now? The anti-NN forces note that the stunning growth of the Internet occurred without regulation. Why not just continue?

True, there was no Internet regulation in the dial-up days, but an even stronger force was at work: competition.  The phone companies all had departments functioning as Internet service providers (ISPs). The FCC’s Computer III rules required the bigger phone companies to open their networks to competing ISPs. That gave most people dozens of ISPs to choose from. None of the ISPs dared tamper with customers’ content, because the customers could easily go elsewhere.

Then broadband appeared, and quickly became essential as web pages grew more complex. Most consumers have either one or two sources for broadband: the cable company, over the same wires that carry cable TV; and the phone company, first via DSL and later, in some areas, through fiber-optic cables. 

The DSL channel was originally subject to the Computer III sharing rules, but the cable never was. The FCC asked whether it should open the cable to competing ISPs, in the manner of Computer III.

Follow this part closely. To apply Computer III, the FCC would have to find that cable broadband is, or includes, a “telecommunications service” – that is, the pure transport of information, for payment, offered to the public. Common sense tells us that sending Internet pages over the cable has to involve a telecommunications service, among other things. But the FCC is not always bound by common sense. According to its 2002 order, the telecommunications component is not separable from the other components, such as interactive choice of content. The FCC resolved to treat the combined, non-separable service as non-telecommunications. That means Computer III does not apply. A cable operator need not open its facilities to competitors, and can require its Internet customers to use its own ISP service. Cable subscribers are not entitled to competition among ISPs.

The Supreme Court’s Brand X case subsequently upheld the FCC. But it did not say the FCC’s decision was the only right one. Rather – and this is the kind of thing that makes non-lawyers glad they picked some other line of work – the court deferred to the FCC’s right to make the decision. The distinction matters because, ruling the way it did, the Court could easily have supported even the opposite outcome from the FCC.

In the meantime, phone companies answered the FCC’s 2002 cable ruling with outraged filings about a “level playing field.” They still had to put their ISP competitors on the broadband channel, while the cable companies enjoyed the exclusive use of their own cables. In 2005, just a few weeks after the Supreme Court handed down Brand X, the FCC ruled that phone-company broadband was, like cable broadband, a combined service to be regulated as non-telecommunications. No more Computer III; no more competing ISPs.

As a result, if you have broadband Internet service, it is very likely that your ISP is the cable company or the phone company. And, if both companies serve your location, odds are your provider has tried to lock you into a long-term deal with a stiff early termination fee. Unhappy with the service? Tough luck.

Still, some people don’t want the Government intruding into the market for Internet services. Others don’t want a near-monopoly provider deciding what content they should receive. After Comcast, is there any hope for the second camp?

A possible way out

Suppose the FCC were to revisit that 2002 cable decision, the one holding the telecommunications and non-telecommunications aspects of Internet service to be inseparable. Could the FCC now change its mind, and separate out the transport-for-pay component as a telecommunications service? Then, instead of applying the full weight of common carrier rules, it could impose just one: a requirement like that in Computer III, requiring the operator to allow competing ISP on the cable. That would bring back competition among ISPs, and create a major disincentive to tampering with content.

Until last year, this would not have been workable. An agency like the FCC could not change its position without an intervening change of circumstances, such as a major shift in the industry landscape. But last year’s Supreme Court case of Fox v. FCC changed the rules on changing the rules. 

After Fox, the FCC need show only that the new policy makes sense – not that it makes more sense than the old policy. Admittedly, abrupt reversals of established policy have historically been disfavored for many good reasons, and such reversals may – as Brother Feldman observes – still be subject to attack as unjustified. But Fox appears to given the agency considerably greater leeway to change its mind.

Had the FCC chosen to regulate the cable transport back in 2002, the cable companies would have gone to court, but they probably would have lost, under the reasoning in Brand X that defers to the FCC’s judgment. And if the FCC could have required ISP competition on the cable in 2002, then the Fox case strongly suggests they could do it today. 

The argument is even better for phone company broadband, which was subject to mandatory-competition rules until 2005. If anything, the case for requiring ISP competition is stronger now, in light of abuses by the providers, followed by the Comcast court’s closing off more direct remedies.

The process has one more step. The FCC can require ISP competition, as above, but not network neutrality, after Comcast. Either one – competition or neutrality – can protect consumers against content discrimination. So why not give the provider a choice? Undo the 2002 and 2005 broadband orders; regulate data transport as telecommunications; require providers to open their facilities to competitors – but waive that rule for providers that adopt network neutrality. Competition will flourish, or content will be available without discrimination. Either way, consumers come out ahead.

Appeal to the Supreme Court.  In its Comcast arguments, the FCC relied on the Supreme Court’s 2005 Brand X decision. That case involved the Commission’s determination that cable modem Internet access service is an “information service” subject to regulation under Title I of the Act, rather than a “telecommunications service” subject to Title II. In its Brand X

opinion, the Supreme Court observed that the FCC “remains free to impose special regulatory duties on [cable Internet access providers] under its Title I ancillary jurisdiction.” In Comcast, the FCC argued to the D.C. Circuit that that Supreme Court language established that the FCC could claim ancillary jurisdiction derived from Title I.

But the D.C. Circuit felt that the Commission was reading too much into that quotation. In the Circuit’s view, just because the Supreme Court said that the FCC had jurisdiction to impose some kind of regulation on ISPs under Title I doesn’t mean that the agency had jurisdiction to impose this particular regulation (i.e., “reasonable” traffic management); rather, the Circuit held, each claim for ancillary jurisdiction must be analyzed on its own merits.

Given that, the FCC could try to convince the Supreme Court to provide a broad interpretation of its Brand X language, broad enough to support the Commission’s claim of authority to regulate ISP traffic management. This would not be an easy case for the FCC. As the D.C. Circuit’s Comcast decision makes clear, the Supreme Court itself has, in a number of decisions, treated the concept of ancillary jurisdiction as narrow. Like the Circuit, the Supreme Court has held that each new assertion of such authority must be evaluated on its own terms.  So the prospects of a broad, result-changing opinion out of the Supreme Court are not good. Additionally, a trip to the Supreme Court would not be quick: it is unlikely that a decision would be released prior to June, 2011, even if the Supreme Court agreed to take the case (which it is not required to do – indeed, the Supreme Court routinely agrees to review only about 1% of the cases presented to it).

Go to Congress. Seemingly the most direct way to fix a lack of jurisdiction is to get Congress to eliminate that lack by enacting legislation specifically providing the Commission with the authority to do what it wants to do. While legislation is perhaps the most direct route, it is neither the quickest nor the surest. Bills designed to give the FCC such authority have been introduced over the last few years – but they have not progressed significantly. While it’s difficult (if not impossible) to pinpoint precisely why proposed legislation gets stalled, in this instance that may be attributable, at least  in part, to a preference by Congressional Democrats to give the FCC a chance to take a first shot at crafting net neutrality regulations. Another factor possibly staying Congress’s hand: a desire to wait and see what the D.C. Circuit would do in the Comcast case. But now that the D.C. Circuit has ruled against the FCC’s assertion of ancillary authority in this area, those two factors have been eliminated.  

While it may be possible to get legislation authorizing very narrow FCC regulation of Internet traffic management enacted before everyone’s attention turns to the November elections, that seems unlikely. Verizon has been calling for much broader legislation to re-write the Communications Act for the “Internet Age,” but that seems even less likely to occur before November, and Verizon’s proposal probably would not provide the FCC authority to adopt net neutrality rules. Indeed, it took years of work to get the last re-write of the Communications Act enacted in 1996.  

Re-classify the Transport Component of Internet Access to be a Title II Telecommunications Service.  The FCC has recognized for some time that their 2008 Comcast Order was in trouble (as anyone who attended the oral argument at the Circuit could have surmised).  Perhaps because of that, some Commissioners have been floating a possible alternative approach: re-classify at least some aspects of Internet access (including, e.g., the transport component) as a Title II telecommunications service. Since Title II unquestionably contains “statutorily mandated responsibilities” (more so than Title I), so the thinking goes, the Commission would be better able to establish that its regulation is “reasonably ancillary” to such responsibilities, thus avoiding the jurisdictional problem identified in the Comcast decision.

But this “re-classification” approach has its own problems. 

First, re-classification would require the reversal of multiple FCC decisions made between 2002 and 2006. Those decision classified cable modem, DSL, wireless broadband and broadband-over-powerline as “information services” rather than telecommunications services. To be sure, the FCC already has a pending “Open Internet” proceeding through which a record might be built in support of re-classification of Internet transport as a telecommunications service. But what would Net Neutrality advocates use to make the case that the Internet environment has changed so radically in the last couple of years: the growth of “edge” providers and third-party Internet applications? Another difficulty: the FCC’s reasoning back in 2002, upheld by the Supreme Court in Brand X, was that even accessing the world wide web required an integrated information service, not merely telecommunications transport. 

Further complicating matters is Congress. Would a majority of Congress be happy with the FCC taking things into its own hands, when many in Congress probably believe that re-classification (at least re-classification that involves increasing regulation on the re-classified service providers) is the responsibility of Congress, not the FCC.  

And, of course, re-classification would generate very strong resistance on all fronts from across many industry segments. Further lengthy court appeals would be certain. 

Build a Stronger Case for Title I Ancillary Authority.  In Comcast, the D.C. Circuit did not rule that it was impossible for the FCC to make the case for ancillary jurisdiction, just that the Commission had failed to do so here. The Court left open the alternative possibility that the FCC could assert jurisdiction over Internet traffic management if such regulation were in fact ancillary to the Commission’s responsibilities under Section 201 of the Communications Act (which requires that common carrier charges and practices must be just and reasonable). 

The potential for such an alternative arises from the fact that the Circuit declined to consider one line of argument presented by the Commission in support of its claim of ancillary jurisdiction. In its brief, the Commission argued that it could regulate Comcast’s practices because discriminatory practices that impact VoIP traffic affect the prices and practices of traditional telephone common carriers. But the FCC had not included that as a basis for its regulation back in its 2008 Comcast Order that was on review – and the Circuit (as well as most other courts) refuses to consider justifications for an agency action which are made only at the appeal stage, and not in the original action on review. So the ultimate strength of that particular argument has not yet been tested in court.

Accordingly, the FCC could use the pending Open Internet proceeding to build a record establishing a nexus to Section 201 responsibilities. However, the FCC’s Section 201 theories seem pretty far-fetched, and it is hard to conceive of other theories that could be stronger. And while the Court also left open the possibility that the FCC could try to show a nexus to its responsibilities to protect broadcast TV stations under Title III of the Communications Act, it is unclear if and how the FCC would take on that task.

Statements released by Democratic FCC Commissioners and legislators suggest that they are determined to move forward and find a way to enact net neutrality regulations. Of the alternatives set out above, re-classification of Internet transport as a Title II service currently seems to have the most momentum, but the Obama administration may choose to push one of the other alternatives, or perhaps to work on multiple paths at the same time.   Either way, we are sure to see the struggle over this issue continue.

The FCC’s position was a little shaky from the start. It never had a rule prohibiting the Comcast action that caused all the trouble, just a loosely-worded policy statement. And nothing in the Communications Act, from which the FCC derives all of its authority, specifically authorizes control over Internet traffic. The FCC thus had to fall back on a claim of “ancillary authority,” based on a catch-all statutory provision that allows the FCC to do pretty much anything “as may be necessary in the execution of its functions.” 

But as the Court had previously held on a number of occasions, ancillary authority applies only if (1) some other statutory provision covers the subject matter, and (2) the challenged action is “reasonably ancillary” to the FCC’s exercising of its authority under (1). The FCC passed the first test, but not the second. The “other provisions” on which the FCC relied, said the Court, were either mere statements of congressional policy (which cannot support ancillary authority) or statutory provisions that miss the specific topics involved in Comcast’s behavior.

As a result, the FCC is legally barred from imposing or enforcing network neutrality.

The FCC still has a few options.  For example, it can ask the same court for a hearing en banc (Latin for “lots more judges”) or appeal to the Supreme Court. Or it can ask Congress for a law that gives it the authority it needs. There may be other alternatives as well, involving adjustments to the existing regulations for a better fit with the existing statutes, but their likelihood of success in court remains to be seen.

But right now, the view from the broadband mountaintop is a little murky. For the time being, at least, Internet providers are free to favor or block content as they choose. And no use complaining to the FCC.

• Robocallers would be required to get “express written consent” before delivering prerecorded telemarketing messages to any residential customer, whether or not he/she has registered on the FTC’s “do not call” list. (Current FCC rules require such written consent only for those on the “do not call” list.) The proposed requirement would apply even if an established business relationship exists between the caller and the customer which otherwise permits live telemarketing calls. Under the FCC’s proposal, “written” consent for robocalls would not actually need to be “written”, but could also be obtained in other ways, including pressing a particular number on the phone keypad. That flexibility would, of course, cushion the blow for telemarketers. BUT the written “consent” would have to: (a) reflect that the telemarketer had provided “clear and conspicuous notice” to the consumer that he/she was authorizing delivery of robocalls and that the consumer is willing to receive such calls; and (b) make clear that the consent was not obtained as a condition to the purchase of any good or service; and (c) include the consumer’s phone number.
• Robocaller messages would be required to include an automated, interactive mechanism to allow consumers to opt out of receiving future robocalls from that particular company.
• During any one campaign, telemarketers using automated dialing equipment to connect consumers to live pitchmen (or pitchwomen) would be permitted to abandon no more than three percent of the calls that people answer. (A call is abandoned, according to the FCC, if the consumer is not connected with a sales representative within two seconds after the end of the greeting.) The FCC’s current rule allows the same abandonment rate over a 30-day period, thereby permitting the telemarketer to average its rate over multiple campaigns.
• Healthcare-related prerecorded messages from certain federally regulated entities would be exempt. This includes messages such as flu shot and prescription refill reminders, requests for documents needed for insurance billing, and calls to encourage enrollment in treatment programs.

The proposed amendments would not change other robocall exemptions, such as fundraising calls from non-profit organizations, calls from politicians or political campaigns, and calls from commercial entities that are purely informational, such as airline flight cancellation notices. Emergency alerts are also exempt.

Comments regarding the proposed rules are due 60 days after the Notice of Proposed Rulemaking is published in the Federal Register, which has not yet occurred. Reply comments are due 30 days after the comment deadline.   We will publish the dates when they become available.

The judges seemed to feed “softballs” to the attorney for Comcast, while giving the FCC lawyer a much harder time. We noted three particularly telling moments:

• The Chief Judge asking the FCC lawyer, “How would you prefer to lose – [on due process or on jurisdiction]?”
• Another judge pointedly asking the FCC lawyer, “Are there any limits” to the FCC’s jurisdictional claim? The lawyer seemed unable to come up with an answer that both satisfied the court and squared with his own theory.
• The Chief Judge remarking, “The impact of our decision [on the FCC’s pending network neutrality rules] will be perfectly clear,” in a context suggesting the court expects to undercut the FCC’s ability to adopt those rules.

But even if the FCC loses this case, it would be a mistake to suppose that marks the end of network neutrality. There are two points to remember.

First, the FCC believes it has a decent argument for jurisdiction based on the Supreme Court’s Brand X decision, which has language supporting the FCC’s authority to regulate at least some aspects of Internet service.  The Comcast court appeared uninterested in hearing about Brand X. But the FCC could ask the Supreme Court to rule in its favor under that precedent.

Second, a loss here on jurisdictional grounds will be an invitation to Congress to step in and give the FCC whatever authority it needs to impose network neutrality. Recent congressional proposals have been a lot tougher than the FCC’s proposed rules.

Either way, an FCC loss in this court will only set off the next stage of the dispute.

Just two months ago, the FCC issued a Report to Congress relative to parental controls on video and audio programming (regardless of source).  (We blogged about it back in March when the Commission initiated the proceeding leading to the report. A follow-up account of the report itself was carried in the September issue of our Memo to Clients, which you can read here.)  The preparation of that report was ordered by Congress, which is the boss of the FCC, so the Commission had no choice but to invite and review public comments and prepare the report.

In its report the Commission mentioned that it planned to issue its own NOI following up on its 87-page magnum opus to Congress. Little did we know that that NOI would be released less than two months after the report to Congress.

The stated goal of the NOI is to “develop a record that will help [the Commission] answer the question of how to empower parents to help their children take advantage of these opportunities [presented by technological developments], while at the same time protecting children from the risks inherent in use of these platforms.” Bear in mind, just last March the Commission issued an inquiry into essentially the same questions relating to “advanced blocking technologies and existing parental empowerment tools” and looking to “improve or enhance the ability of a parent to protect his or her child”. And the Commission managed to generate nearly 100 pages of report in response. While the NOI supposedly “picks up where the [earlier report] left off”, it’s difficult to imagine exactly what more the Commission expects to learn that it did not already learn in response to the broad inquiry it posed last March (which resulted in the report to Congress).

But before delving into such practical questions, let’s focus on a more fundamental threshold question: where does the Commission think it gets the authority to sprawl itself out into the area of child-raising? After all, the FCC is not a free-wheeling operation that can take up any subject matter it chooses. Rather, it’s a federal agency whose range of activities is strictly limited by Congress and the Constitution. Before an agency can act at all, it must first determine whether it has the necessary authority to take the action, and it should always be mindful of whether the Constitution permits it to take the action.

And yet, in the NOI, the Commission makes no such determination. To the contrary, it isn’t until Page 3 of the NOI that the FCC acknowledges any concern about such niggling details. And there it merely asks commenters to “discuss whether the Commission has the statutory authority to take any proposed actions and whether those actions would be consistent with the First Amendment”. (On the third-from-the-last page of the NOI, the Commission circles back around to the questions of statutory and Constitutional authority. Again, though, it declines to offer its own analysis, but instead simply asks for suggestions as to where the Commission might look for such authority.)

It’s not like the Commission is putting the cart before the horse here; it’s more like the Commission has started pulling the cart down the road while it asks passersby whether they happen to have seen a horse anywhere nearby.

And as to the Constitution – it does not appear to be much of a concern to the Commission. The NOI refers repeatedly to the risks or threats posed by (among other things) “inappropriate content” (which includes such non-specific concepts as “offensive language” and “hate speech”), as if the Commission (or any governmental agency, for that matter) could regulate “inappropriate content” for being, well, “inappropriate”. Maybe we missed something back in Constitutional Law 101, but it’s news to us that the government might be able to regulate speech simply by characterizing that speech as “inappropriate”. There is, of course, a set of well-established constitutional standards for defining “obscenity”. But beyond that, the government’s ability to regulate speech is far less clear. 

That’s especially so when the trigger for such regulation is the dramatically imprecise concept of “inappropriate” – and when that concept is used in connection with child-raising. It is difficult to imagine a subject more private and less susceptible to definition (much less control) by a federal agency than what may be deemed “appropriate” for children. Perhaps the paramount privilege and responsibility of parenthood is the task of instilling one’s children with standards and values of the parents’ choosing. Does the First Amendment countenance governmental intrusion into the ultra-private realm of child-raising in the name of controlling the “inappropriate”? We doubt it, and the NOI provides no analysis to support the contrary position.

Still, the Commission plunges deeply into the inner sanctum of the family, even going so far as to ask about “household media rules”, by which it means rules which parents establish to govern their own children’s media use.

Putting aside the threshold question of statutory and Constitutional authority, we should also note – as the Commission itself does – that “other federal agencies are addressing some of the same issues” presented in the NOI. But if that’s the case, why should the FCC feel the need to weigh in? It is, after all, the Federal Communications Commission, not the Federal Child-Raising-and-Protecting Commission. Of course, if other agencies with more direct interest in this area – say, the Department of Education, or maybe the Department of Health and Human Services, for two – call on the FCC for input relative to areas within the FCC’s particular area of expertise, the FCC should assist. But it’s unclear why the FCC believes that it can or should be in the forefront of any such effort.

The NOI consists of 25 single-spaced pages chock-a-block full of questions along the following lines:

• What is “the level of awareness among parents, teachers, and children of the benefits of electronic media”?

• “Is there a sufficient amount of cognitive/intellectual children’s programming available today?”

• “What options are there to protect [certain] children from the risks of exposure to electronic media?”

• Is there “a minimum level of media literacy that parents, teachers, and children must have to ensure that children can participate effectively in modern society and enjoy the benefits of electronic media while avoiding the potential harms”? (Note that responding to this particular question will be complicated by the fact that the NOI fails to define (a) “media literacy” or (b) “effective participation in modern society”.)

We could go on, but you get the point: these are not questions which are likely to generate any seriously useful answers.

Oh, and in case the questions posed by the Commission aren’t enough, the NOI also invites comments to “ask and answer any other questions that this NOI fails to raise which they believe would help inform [the FCC’s] inquiry.” Talk about open-ended! 

The deadlines for comments and replies have not yet been set – they depend on when the NOI is published in the Federal Register. Since the Commission’s inquiry last March attracted more than 10,000 comments, we may see the same here. On the other hand, since that last inquiry covered largely the same turf as the NOI, maybe not; but in view of the vastness of the questions posed, the NOI may attract more. We’ll have to wait and see.

While perhaps well-intentioned, the NOI is reminiscent of the presentation made by Professor Harold Hill to the parents in River City, Iowa. Hill (the central character in The Music Man) wanted to convince the town’s parents that a serious problem existed among the town’s youth, a problem for which he, conveniently enough, had the solution. Was there really a problem? Probably not, but you never know. Did Hill have the solution to the possibly non-existent problem? Again, probably not, but he managed to convince the parents that he did. The analogy to the NOI is tempting, but it isn’t perfect. Perhaps there is indeed some trouble in our River City – but that would be trouble with a “T”, and that rhymes with “FCC” and that stands for . . . well, you know the tune.

Some noteworthy details:

• While the proposed rules would apply to broadband Internet access, they would not apply to dial-up Internet access, or to private “intranets.” The exemption for dial-up may offer some comfort to small and rural Internet service providers.
• Unlike the FCC’s existing Internet Principles – which state what “consumers are entitled to” – the proposed rules are phrased as obligations imposed on IASPs. But this raises the issue of what sorts of entities the rules should apply to. AT&T has called on the FCC to apply Net Neutrality rules to application service providers such as Google, as well IASPs. While the NPRM seeks comments on that idea, the rules as proposed would apply only to IASPs.
• The proposed Non-Discrimination Rule would prohibit IASPs from charging content, application, and service providers for enhanced or prioritized access to subscribers, but makes no mention of charges to the end users. This might allow, for example, the end user to subscribe to a service that increases throughput (and hence quality) for a video channel, even if it reduces throughput to the same user’s other applications. The Chairman did say at the meeting that users should have the final say on their own Internet experience.
• The NPRM tees up the issue of whether so-called “managed services” should be exempt from some or all of the Net Neutrality rules. Examples include IP-enabled cable television-like services (AT&T’s U-verse, Verizon’s FIOS video), facilities-based VoIP services, and telemedicine applications. These are delivered over the same network facilities as Internet access, but are not themselves traditional Internet services. This issue will almost certainly be hotly contested.
• The NPRM asks whether only “unreasonable” discrimination should be prohibited. Such a limitation would allow forms of discrimination that may be desirable for end users (e.g., to promote quality of service for a particular application). While the IASPs can be expected to support that approach, there may be a catch: the concept of prohibiting “unreasonable discrimination” has traditionally be a fundamental component of common carrier regulation, and IASPs do not want to be treated as common carriers. Additionally, drawing the line that defines “unreasonable” will be a contentious task.
• In exploring the “transparency” rule, the NPRM seeks comment on the proper balance between giving consumers the information that they need and overwhelming them with detail. The NPRM also asks whether the transparency rule should require IASPs to give details of network management to content/application/service providers, and/or to the FCC. While the IASPs may have limited concerns about providing this information to consumers, they will likely fight this extension of the concept.
• There will be numerous FCC “workshops” in this proceeding, and more importantly, a formal process of technical outreach led by the FCC’s Office of Engineering and Technology. The latter seeks details on what is reasonable network management, what is workable in terms of transparency, and how the FCC can prevent the rules from having detrimental impact.
• Commissioners McDowell and Baker dissented in part, laying down their “markers” as to how they would oppose the Chairman’s proposal with the “factual and legal predicates” of the NPRM. Commissioner McDowell agreed on the need to preserve an open Internet, but wanted it done through non-government management entities such as ICANN and other voluntary entities – a “bottom up” rather than a “top down” approach. He argued that countries that regulate the Internet more than the U.S. tend to be less free than the U.S., and are waiting for the U.S. to enact more regulation in order to justify their own more intrusive and political regimes. And while the Chairman has stated that a goal of Net Neutrality is to protect innovation at the “edge” of the network, McDowell noted an unprecedented overlap between “edge” applications and “core” ISPs. He also suggested that any anti-competitive conduct by IASPs could be addressed by anti-trust laws.

Comments on the NPRM are due to be filed by January 14, 2010. Reply comments are due March 5, 2010.

Recent history suggests that the proceeding will be a titanic battleground. Time to strap on your armor, grab your lance, and head to the field of combat.  Let the tilting begin!