Thursday, May 30, 2013

House IP Subcommittee Legislative Hearing on Mobile Device Unlocking Bill Scheduled for June 6

The House Judiciary Committee's Subcommittee on Courts, Intellectual Property and the Internet has scheduled a legislative hearing to consider H.R. 1123, the "Unlocking Consumer Choice and Wireless Competition Act," for Thursday, June 6, 2013m at 10:00 a.m. EST. The witness list for the hearing has not yet been released.

H.R. 1123 was introduced by House Judiciary Committee Chairman Goodlatte (R-VA) and Ranking Member Conyers (D-MI) as well as other bipartisan Members of the House. A companion bill (S. 517) was introduced in the Senate by Senate Judiciary Committee Chairman Leahy (D-VT) and Ranking Member Grassley (R-IA) as well as other Senators. In light of the fact this legislation enjoys bipartisan support by the key folks in the House and Senate, this measure is likely to be enacted into law, even though some argue that this legislation is too limited in scope and does not open the Digital Millennium Copyright Act for changes.

According to the Congressional Research Service summary, H.R. 1123 and S. 517:

  • Repeals a Library of Congress (LOC) rulemaking determination, made upon the recommendation of the Register of Copyrights, regarding the circumvention of technological measures controlling access to copyrighted software on wireless telephone handsets (mobile telephones) for the purpose of connecting to different wireless telecommunications networks (a practice commonly referred to as "unlocking" such devices).

  • Reestablishes, as an exemption to provisions of the Digital Millennium Copyright Act (DMCA) prohibiting such circumvention, a previous LOC rule permitting the use of computer programs, in the form of firmware or software, that enable used wireless telephone handsets to connect to a wireless telecommunications network, when circumvention is initiated by the owner of the copy of such computer program solely to connect to such a network and access to the network is authorized by the network operator, thus permitting unlocked phones.

  • Directs the Librarian of Congress, upon the recommendation of the Register, to determine whether to extend such exemption to include any other category of wireless devices in addition to wireless telephone handsets (e.g., tablets and other mobile broadband-enabled devices).

The live video of the legislative hearing can be viewed live here.

If you have any questions regarding this hearing as well as any legislation or activity in Congress that could impact the telecommunications, media and technology sectors, please contact Vance Schuemann or any member of the TLP team.




Tuesday, May 28, 2013

Comments Due: FCC Regulatory Fees

The FCC released a Notice of Proposed Rulemaking (“NPRM”) and FurtherNotice of Proposed Rulemaking(“FNPRM”) seeking to update the way it assesses regulatory fees.  The Commission aims to make the allocation of licensees’ regulatory fee burdens more transparent. 

The NPRM proposes to combine wireline and wireless voice services into one regulatory fee category for FY 2014, which would result in one uniform fee rate that would be assessed on revenues.  The Commission explains that the services are currently in separate fee categories despite being very comparable for assessment purposes.  The Commission recognizes that assessing fees for these services based on revenue instead of subscribers may give the licensees “an incentive to allocate more of their revenues to data services in order to reduce their regulatory fees,” because the Commission does not currently assess regulatory fees on broadband revenues.  The Commission invites comments on whether another measurement methodology would be fair and sustainable.  Relatedly, it asks if it should use revenues to measure assessment for other industries, like cable and satellite. 

The NPRM seeks further comment on how it should improve fee assessments for multi-year wireless services, which pay their regulatory fees up front when their five or ten year licenses are renewed.  The NPRM asks what steps the Commission can take when the fee rate “fluctuates dramatically from one year to the next because of changes in the unit count.” 

The NPRM also identifies the declining subscribership to CMRS messaging services (including paging) as making the Commission question whether it should modify its methodology for collecting regulatory fees from entities in declining industries.  It explains that its current methodology “may be burdensome on the industry and of negligible value to the Commission, due to the administrative burden of assessing the fee on many very small companies.” 

Administratively, the NPRM proposes to require all regulatory fee payments to be made electronically as of October 1, 2013, and it announces that starting in FY 2014, the Commission will no longer mail initial regulatory fee assessments to CMRS licensees.  Those licensees will instead be able to access their estimates online.  Because the proposals contained in the NPRM will increase the assessment on some fee categories in FY 2013, it proposes to limit any rate increases for this year to 7.5 percent.  This limitation would prevent licensees from being negatively impacted by unexpected increases. 

The FNPRM portion of the document seeks comment on how the FCC should treat non-US licensed space stations, direct broadcast satellites, and other services like broadband.  It asks whether the Commission has authority to include broadband as a fee category, and how the costs of any such additional fee categories should be assessed. 

Comments on the NPRM and FNPRM are due by June 19, and Reply Comments are due by June 26.  Please feel free to contact us with any questions.

Public Notice on Technology Transition Trials

The Public Notice proposing to launch trials of three technological transitions was published in the Federal RegisterComments are due by July 8, and Reply Comments are due by August 7. 

Please feel free to contact the TLP team with any questions.

Comments Extended: Rural Call Completion NPRM

The Wireline Competition Bureau extended the deadline to file Reply Comments on the rural call completion NPRM from May 28 to June 11, upon request by NASUCA and over the objection of NECA, NTCA, the Western Telecommunications Alliance, and the Eastern Rural Telecom Association.  NASUCA argued that the issue is complex and that it needs additional time to review the comments and circulate a draft reply among its members.  The opposition argued against the extension because “solutions to the rural call completion problem have already been delayed too long.”

Please feel free to contact us with any questions.

Connect America Phase I Order

The FCC released a Report and Order (“R&O”) announcing a second round of Connect America Phase I funding to accelerate broadband deployment by price cap carriers.  The FCC allocated $300 million for this round, with the option to add an additional $185 million if carrier demand exceeds the $300 million budget.  These funds will be distributed in 2013. 
 
Price cap carries will receive $775 to serve each location that currently receives Internet service below 768 kbps/200 kbps.  Carriers will also receive $550 to serve each location that currently receives less than 3 Mbps/768 kbps.  However, the R&O prohibits carriers from accepting funding for locations that receive at least 768 kbps/200 kbps unless it has already accepted funding for all routes that include locations that receive less than 768 kbps/200 kbps, if those locations can economically be built with $775 in Connect America funding, plus $775 of the carrier’s own funds. 
 
Carriers may elect to receive all, none, or a portion of their allocated amounts.  If carriers decline support, those funds will be redistributed to carriers that are willing to make additional deployment obligations.  Any unclaimed Phase I support will be added to the budget for Phase II.  The R&O prohibits census blocks from receiving funding from both Phase I and Phase II.  A carrier that accepts Phase I support must deploy broadband to two-thirds of the required number of locations within two years, and must complete deployment to all locations within three years.  In the second and third year certifications, carriers must provide geocoded latitude and longitude location information for each location that the carrier counts towards its deployment. 
 
The R&O sets up a challenge process for carriers to argue that the National Broadband Map overstates an area’s broadband speeds.  If the challenge is granted, then the carrier is obligated to deploy in that census block.  The R&O also sets up a mechanism for interested parties to argue that the census blocks the carriers plan to serve already receive Internet access with speeds of 3 Mbps/768 kbps or higher. 
 
Please feel free to contact us with any questions.

City of Arlington v. FCC

The Supreme Court released its 6-3 Opinion in City of Arlington v. FCC.  The decision holds that courts must apply the Chevron framework of deference to an agency’s interpretation of an ambiguous statute concerning the scope of the agency’s jurisdiction.  Below, please find background information on the case and our summary of the Supreme Court’s decision.

Background

The cities of Arlington and San Antonio, Texas challenged a declaratory ruling by the FCC in which the Commission interpreted a section of the Communications Act that requires state and local governments to act on personal wireless facility siting applications “within a reasonable period of time.”  The statute makes clear that the “reasonable time” restriction is the only limitation on state authority over siting decisions.  The FCC interpreted the “reasonable period of time” limitation to set concrete deadlines by which states must act.  Arlington and San Antonio appealed the FCC’s decision to the Fifth Circuit, arguing that the FCC did not have the statutory authority to implement the timeframes.  When the Fifth Circuit analyzed whether the FCC accurately interpreted its own jurisdiction under the statute, it had to decide whether it should review the FCC’s decision de novo, without deference, or whether it should apply Chevron deference.  Chevron requires deference when (1) Congress has not expressly addressed the issue and (2) the FCC’s determination is reasonable.  The Fifth Circuit applied Chevron deference and upheld the FCC’s determination as reasonable.

Summary

Justice Scalia, writing for the majority, dismisses the proposed distinction that some agency decisions consider routine matters and others consider jurisdictional matters.  Scalia instead determines that all agency decisions should be analyzed alike by asking “whether the statutory text forecloses the agency’s assertion of authority, or not.”  As long as the statutory text does not foreclose the agency’s action, it should be subjected to Chevron’s framework of deference.  In this case, Scalia observes that the FCC has general rulemaking authority with respect to the Communications Act, and Congress did not expressly circumscribe its administration of the tower siting section in question.  Scalia reasons, therefore, that FCC’s interpretation of the section was promulgated in the exercise of its authority to administer the Communications Act.  Because Scalia assumes that the FCC’s interpretation of the section was reasonable, he concludes that the FCC’s decision should receive deference.

In dissent, Justice Roberts contends that every time a court reviews an agency’s decision, it should first decide whether “Congress has conferred on the agency interpretive authority over the question at issue.”  In Roberts’ view, the question of whether an agency has the authority to interpret a particular provision of the statute must be decided by a court without deference to the agency.  He argues that, only after the court determines that Congress expressly intended the agency to interpret the statute in question, should it move forward in applying the Chevron framework.  Roberts acknowledges, however, that a “general delegation to the agency to administer the statute will often suffice” unless “Congress has exempted particular provisions from that authority,” which courts should decide.  In this case, Roberts concludes that the Fifth Circuit should have independently determined “whether Congress delegated interpretive authority over” the section to the FCC before granting the FCC’s determination deference.  Therefore, Roberts “would vacate the decision below and remand the cases to the Fifth Circuit to perform the proper inquiry in the first instance.” 

This decision is significant because, as Scalia correctly notes, “[s]avvy challengers of agency action [. . .] play the ‘jurisdictional’ card in every case.”  Therefore, according the agency deference when it asserts jurisdiction to resolve a particular issue will likely benefit the agency.

Please feel free to contact us with any questions.

Monday, May 20, 2013

Sept. 30 Deadline - Text-to-911 Bounce-Back Message

The FCC released a Report and Order (“R&O”) requiring all CMRS and interconnected text messaging providers to enable automatic bounce-back messages when consumers attempt to text 911 in areas where text-to-911 is not available.  The rules go into effect on September 30, 2013, but the R&O encourages providers to implement bounce-back messages sooner, especially if they have indicated that it would be technically feasible to do so.  AT&T, Verizon, Sprint, and T-Mobile have already agreed to provide bounce-back messages by June 30.  Carriers that cannot meet the September deadline should request a waiver of the rule.

The bounce-back messages must state that (1) text-to-911 is not available, and (2) the consumer should try to contact 911 using other means.  The R&O does not require providers to word the bounce-back messages in any particular way.  Bounce-back messages must be provided when text messages cannot be delivered to 911 for any of the following reasons: (1) the PSAP has not enabled text-to-911 in the consumer’s area; (2) the text provider does not support text-to-911; (3) the text provider cannot determine the PSAP that should receive the message; or (4) the PSAP requested a temporary suspension of text-to-911.  Carriers must deliver the bounce-back messages to consumers that are roaming on their networks.  However, providers are not required to deliver bounce-back messages to legacy devices that are incapable of sending texts via three-digit short codes and cannot be upgraded remotely, or to non-service initialized phones. 

The R&O estimates that implementing the bounce-back messages will cost $43,200.  The R&O declines to require carriers to provide their customers with specific educational materials or to revise their terms of service agreements to include text-to-911’s limitations.  It also declines to require a text-to-911 testing capability for consumers.  As to the FCC’s authority to adopt the bounce-back rule, the R&O cites Title III of the Communications Act, the CVAA, and the Commission’s ancillary authority. 

Please feel free to contact us with any questions.                          

Mobile Wireless Competition

The FCC’s Wireless Telecommunications Bureau (“the Bureau”) released a Public Notice seeking data on mobile wireless competition for its Seventeenth Annual Report on the State of Competition in Mobile Wireless.  Comments are due by June 17, and Reply Comments are due by July 1. 

The Public Notice requests data on industry structure, spectrum, provider conduct, performance, consumer behavior, input and downstream segments, intermodal competition, urban-rural comparisons, and international comparisons.  It asks that data cover calendar year 2012 and early 2013.  A summary of the information requested for each of these categories follows:

Industry Structure

The Public Notice asks for information on major resellers and Mobile Virtual Network Operators and how they compete with facilities-based providers.  It also asks about the role of mobile satellite service providers in the wireless industry.  The Public Notice requests recent information on market entry by mobile wireless service providers and market exit, including consolidation.  It seeks comment on the effects that barriers to entry have on concentration in the industry. When the Bureau measures market concentration, it asks whether the Herfindahl-Hirschman Index is a useful tool. 

Spectrum

The Bureau seeks feedback on its “analysis of the spectrum used for mobile wireless services,” as well as individual providers’ spectrum holdings and the competitive effects of those holdings.  The Public Notice asks how much additional spectrum will be required to support next-generation technologies and mobile broadband applications.  It asks whether there is sufficient access to prevent spectrum from becoming a significant barrier to entry in the industry.  The Bureau further asks how providers’ network deployment plans are affected by their spectrum holdings in frequencies above and below 1 GHz. 

Provider Conduct

The Public Notice seeks comment on how mobile wireless pricing plans have evolved in 2012 and 2013 for voice and non-voice devices.  It asks what role handset and device pricing play in wireless competition.  It also asks what steps providers are taking to protect consumers from bill shock.  Regarding networks, the Public Notice requests information on how providers have upgraded to 3G and 4G technologies.  It asks how much money the industry spent on advertising and marketing in 2012 and 2013.  The Bureau also expresses interest in collecting information on what mobile data applications are available, including mobile web browsers and application stores, and how consumers can access them. 

Performance

The Public Notice proposes to measure wireless performance by subscribership levels, penetration rates, net subscriber additions, usage levels, pricing levels and trends, revenue, investment, profitability, and network and service quality.  The Bureau specifically asks whether it should analyze wireless service adoption rates among different segments of the population, including by age, income, and geographic area.  It asks carriers to submit data on their mobile data traffic volumes, including total megabytes of mobile data traffic on their networks on a quarterly or annual basis.  It also asks for the data to be organized by type of device, type of subscription, age group, and region.  The Public Notice requests information on how mobile voice, messaging, and broadband services are priced.  The Bureau also seeks suggestions for how it can quantifiably measure network quality. 

Consumer Behavior

The Bureau asks how consumers manage early termination fees and whether consumer switching costs should be included in its competitive analysis.  It also requests updated churn information. 

Input and Downstream Segments

The Public Notice expresses interest in how the infrastructure sector, handset, and operating system markets affect competition in the mobile wireless services industry.  It asks how many new cell sites individual providers deployed in 2012 and 2013.  It also seeks information on the extent to which providers will need to purchase additional backhaul facilities to accommodate increasing mobile broadband traffic. 

Intermodal Competition

The Bureau requests data on the extent to which mobile voice service competes with wireline voice service and how many households or individuals have cut the cord.  It seeks similar data on the relationship between mobile broadband services and wired broadband services.  Regarding Wi-Fi, the Public Notice asks how wireless providers use it to offload data and whether it is considered a substitute for mobile wireless networks. 

Urban-Rural Comparisons

The Public Notice seeks comment on the extent of mobile voice and broadband network deployment in rural and tribal areas.  It requests suggestions on how the Commission can examine “whether pricing in rural areas conforms to national pricing plans or whether there are meaningful differences in mobile wireless pricing plans and pricing promotions between urban and rural areas.”

International Comparisons

The Bureau invites commenters to submit studies or analyses that compare the mobile wireless marketplaces in the US and other countries.

If you have any questions regarding the above, please feel free to contact the TLP Team.

House Hearing to Examine Cybersecurity of the Communications Supply Chain

The House Energy and Commerce Committee's Subcommittee on Communications and Technology is scheduled to hold a hearing entitled "Cybersecurity: An Examination of the Communications Supply Chain" on Tuesday, May 21, 2013, at 2:00 p.m. EST. Appearing as witnesses at the hearing will be Jennifer Bisceglie of Interos Solutions, Inc.; Robert B. Dix, Jr., of Juniper Networks, Inc.; Mark L. Goldstein of the Government Accountability Office (GAO); John Lindquist of Electronic Warfare Associates; David Rothenstein of Ciena; Stewart A. Baker of Steptoe & Johnson LLP; and Dean Garfield of the Information Technology Industry Council.

The Subcommittee on Communications and Technology hearing will follow a full Committee hearing on "Cyber Threats and Security Solutions," which will start at 10:00 a.m. EST and will focus on the President's Executive Order on Cybersecurity. The following witnesses will testify at the first hearing: Patrick D. Gallagher of the National Institute of Standards and Technology; Dave McCurdy of the American Gas Association; Mike McConnell of Booz Allen Hamilton; James Woolsey of Woolsey Partners LLC; Michael Papay of Northrop Grumman Information Systems; Phyllis Schneck of McAfee, Inc.;  Charles Blauner of Citigroup, Inc., on behalf of the American Bankers Association; Duane Highley of Arkansas Electric Cooperative Corporation on behalf of the National Rural Electric Cooperative Association; and Robert Mayer of the United States Telecom Association.

Both hearings will be webcast live here.

The following is some background on the issue of cybersecurity of the communications supply chain as presented in the majority Committee staff's briefing memorandum for the hearing.

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Background

The features of modern communications networks that make them so useful are also what make them vulnerable: their decentralized, interconnected nature and their international scope. The more the world relies on communications networks for business, entertainment, and emergency response the more, too, it risks if those networks are compromised. This hearing will look at challenges in securing the communications supply chain, what steps industry is taking, and what role standards organizations, public-private partnerships, and the government might play.

The Potential Threat. The complex, interdependent, and myriad software and hardware components that make up the communications infrastructure present multiple points of attack for those that seek to do harm. Bad actors can plant vulnerabilities in the supply chain or take advantage of vulnerabilities that creep in inadvertently. They can insert malicious or insecure hardware or software into a communications network or alter legitimate software operating on legitimate equipment. And, because communications networks are interconnected, someone else’s vulnerability can be everyone’s vulnerability. Just as there is a strong decentralized component to the networks so, too, must there be a strong decentralized component to the defenses. Moreover, just as there is no one-size-fits-all network, there cannot be a one-size-fits-all response. Since the technology underlying both the U.S. infrastructure and cyber-attacks can change rapidly, protective measures must evolve rapidly, as well.

How vulnerable is the supply chain? What are the main vulnerabilities? How much of the vulnerability comes from malicious activity and how much comes from poor design? How can the supply chain be secured in the various stages of manufacture, shipment, installation, and operation? What are the different challenges in protecting the software and hardware supply chains? Is one more vulnerable than the other? How can the networks be defended without losing the benefits that come from the interconnected nature of our communications architecture? Would better information sharing between and among government and the private sector help? What kinds of cost-benefit and risk analyses should go into securing the communications supply chain?

Standards Organizations. Various organizations in the U.S. and abroad—such as the International Standards Organization and the American National Standards Institute—develop best practices and standards for securing the supply chain. What types of best practices and standards have organizations such as these promulgated? Have they been successful in ameliorating supply chain risks? What additional challenges do open standards present? Are proprietary processes more or less secure than open standards? Can standardization itself ironically make vulnerabilities more widespread? Where are best practices and standards most effective? Are voluntary approaches sufficient or are some mandatory measures necessary?

CFIUS and Team Telecom. The Committee on Foreign Investment in the United States (CFIUS) and Team Telecom are two organizations that review significant communications transactions. While not their sole focus, they sometimes examine supply chain issues.

The CFIUS examines purchases of U.S. businesses by foreign entities. An inter-agency group headed by the U.S. Department of Treasury, the CFIUS includes representatives from the Departments of Justice, Homeland Security, Commerce, Defense, State and Energy, as well as the Office of the U.S. Trade Representative and the White House Office of Science and Technology Policy. Additionally, the Office of Management and Budget, the Council of Economic Advisors, the National Security Council, the National Economic Council, the Homeland Security Council, the Director of National Intelligence, and the Secretary of Labor participate as observers or ex officio members. French company Alcatel’s acquisition of Lucent Technologies, U.K. company Vodafone’s acquisition of AirTouch, and German company Deutsche Telekom’s acquisition of VoiceStream were all subject to CFIUS review.

Team Telecom is an informal inter-agency group within the U.S. government that advises the Federal Communications Commission on the law enforcement and national security implications of significant transactions. It includes representatives from the Departments of Homeland Security, Justice (including the FBI), and Defense.

How well do the CFIUS and Team Telecom processes work? Should they be expanded to cover purchases of equipment or software by U.S. communications companies? If so, what types of purchases should they focus on? What impact would such review have on the operation of communications companies?

Trusted Delivery and Code Escrow. To secure the supply chain, some companies—and countries—arrange for trusted third-parties to take delivery of the hardware and software for communications networks. The third parties may serve a variety of functions, from inspecting manufacturing facilities to securing and testing products. They may be involved in the entire lifecycle of the equipment or software. In the case of software, the third party may hold a copy of the code in escrow. In such cases, the security company first receives and secures a copy of the software prior to its compilation. Experts then review the "raw" software for anomalous code, coding errors, and potential vulnerabilities. Next, the security company takes delivery of the compiled software, referred to as the binary code. To ensure the reviewed software is the same as what is being installed, the firm compares this binary code to the binary code that results from compiling the raw software it received in step one. Finally, the company may randomly test future shipments of the software or manage installation of the software on delivered hardware.

How well do trusted delivery and code escrow work? In what situations should they be used? The United Kingdom has used trusted delivery and code escrow to manage hardware and software purchased from companies such as China’s Huawei. Is there greater reason to employ such measures in the purchase of foreign products than domestic ones?

Foreign Suppliers. The House Permanent Select Committee on Intelligence initiated an investigation in November 2011 into the level of security risk posed by telecommunications companies with potential ties to the Chinese government or military. The Intelligence Committee focused on Huawei and ZTE, the top two Chinese telecommunications equipment manufacturers. The Committee concluded in an October 2012 report that the companies had failed to quell concerns that relying on their equipment could pose security threats because of the possible influence of the Chinese government. The report recommended, therefore, that the companies be more transparent; that the Committee on Foreign Investment in the United States block acquisitions, takeovers, or mergers involving Huawei and ZTE; that the relevant congressional committees consider expanding the role of the CFIUS to cover purchasing agreements; that U.S. government systems not use Huawei or ZTE equipment, particularly if the systems are sensitive; that the private sector strongly consider using other vendors; and that congressional committees of jurisdiction consider whether legislation—including information sharing legislation—is needed to better address the risk posed by telecommunications companies with nation-state ties.

How do cost pressures on domestic communications companies in the competitive communications marketplace and the growing dependence on foreign suppliers impact supply chain security? How do the supply chain risks compare between the purchase of hardware and software from foreign companies and domestic companies? Are purchases from some countries riskier than others and, if so, how should that relative risk be assessed? Much of the equipment in U.S. communications networks are manufactured and assembled in China, or contain components that are manufactured and assembled there, even when the vendor itself is not a Chinese company. How should the risk in those scenarios be assessed?

Recent Federal Activity. The National Institute of Standards and Technology (NIST) released its "Notional Supply Chain Risk Management Practices for Federal Information Systems" in 2012. In the document, NIST details an approach for government agencies to determine the risk associated with elements of an information system to identify and secure each stage of the supply chain and to manage security mechanisms through the entire lifecycle of the purchased equipment. The Obama Administration released its National Strategy for Global Supply Chain Security in January 2013. The National Strategy seeks to harmonize supply chain practices across the Federal government and develop best practices for application to commercial networks. The Administration released its Executive Order on cybersecurity and Presidential Policy Directive 21 in February 2013, both aimed at improving U.S. cybersecurity, including supply chain integrity. The Executive Order and Presidential Policy Directive instruct Executive Branch agencies to review existing regulations and to propose new ones to improve cybersecurity if necessary. Executive Branch agencies are currently in the process of implementing these orders.

How well are each of these approaches expected to work? What role should the Federal government play in securing the supply chain? Can it set a positive example in the deployment of its own networks? What impact can it have as a large purchaser of private-sector hardware and software? Should the Federal government be establishing best practices or requirements for supply chain security? What role should the National Telecommunications and Information Administration play? What role should the Department of Homeland Security play? What role should the Federal Communications Commission and its Communications Security, Reliability and Interoperability Council play?

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TLP has helped clients with issues related to cybersecurity policies, including assisting a client in testifying before Congress on the subject of cybersecurity and communications networks. If you have any questions regarding these hearing, the Executive Order or any legislation or activity in Congress that could impact the telecommunications, media and technology sectors, please contact Vance Schuemann or any member of the TLP team.


Order Grants Forbearance on USTelecom Petition

The FCC released a Memorandum Opinion and Order (“Order”), Reportand Order (“R&O”), Further Notice of Proposed Rulemaking (“FNPRM”), andSecond Further Notice of Proposed Rulemaking (“2nd FNPRM”) in response to USTelecom’s Petition for forbearance from 17 categories of legacy regulations on behalf on incumbent local exchange carriers (“ILECs”).  USTelecom’s Petition argues that the requirements impose a competitive disadvantage on ILECS because non-ILEC competitors are not subject to the rules.  The Order grants forbearance from 126 of the approximately 141 rules covered in USTelecom’s petition.

The Order grants forbearance from:

  • The equal access scripting requirement;
  • Cost assignment rules, subject to conditions;
  • Property record requirements in Sections 32.000(e) and (f), subject to conditions.  However, forbearance is denied for rate-of-return carriers;
  • Part 42 recordkeeping requirements, with conditions for forbearance from Section 42.10(a);
  • ARMIS Report 43-01, subject to conditions;
  • Annual revenue and total communications plant reporting;
  • Structural separation requirements for independent ILECs subject to price cap regulation;
  • The cash working capital allowance requirement, except for price cap carriers to the extent that they seek relief based on a rate-of-return methodology;
  • Recordkeeping and collection action requirements for Sections 64.804(c)-(f);
  • Rules governing the recording of telephone conversations with telephone companies; and
  • Prepaid calling card reporting and certification requirements, subject to one condition. 

 The Order denies forbearance from:

  • The open network architecture (“ONA”) and comparably efficient interconnection (“CEI”) requirements, enhanced services structural separation rule, and all-carrier Computer Inquiry rules.  However, the Order eliminates the bell operating companies’ obligation to file CEI and ONA reports;
  • Part 32 uniform system of accounts;
  • Rules governing notices of network changes; and
  • Service discontinuance approval requirements.

The other accompanying documents complement the Order. The R&O eliminates CEI/ONA narrowband reporting requirements.  The FNPRM seeks comment on whether the FCC should streamline or eliminate legacy regulations contained in the Computer Inquiry proceedings.  The 2nd FNPRM seeks comment on the structural separation requirements in Section 64.1903 of the FCC’s rules as they apply to rate-of-return carriers that provide in-region long distance services.  Comments on the FNPRM and 2nd FNPRM will be due 30 days after they are published in the Federal Register, and Replies will be due 60 days after publication.

Please feel free to contact us with questions.

Friday, May 17, 2013

Comments Due: 600 MHz Band Plan

The FCC released a Public Notice requesting further comment on variations of the Down from Channel 51 band plan, for use in connection with the broadcast Incentive Auction. 

Comments are due by June 14, and Reply Comments are due by June 28.  Please feel free to contact the TLP Team with any questions.

Comments Due: TracFone Lifeline Petition

The FCC released a Public Notice seeking comment on TracFone’s Petition to prohibit carriers from distributing handsets in person to Lifeline customers.  TracFone claims that in-person distribution to prospective Lifeline subscribers prevents carriers from properly verifying whether the consumers are eligible to participate in the Lifeline program.  TracFone suggests that carriers should be required to mail handsets to Lifeline subscribers once their eligibility is verified.  TracFone promotes this measure as a way to prevent waste, fraud, and abuse in the Lifeline program.

Of note, TracFone’s Petition was filed on May 13, a few days after Senator David Vitter began tweeting pictures of signs offering free, in-stock cellphones.  On May 7, Senators Vitter and Inhofe introduced a bill to eliminate Lifeline support for wireless service. 

Comments on the Public Notice are due by June 17, and Reply Comments are due by July 2.  If you have any questions, please feel free to contact the TLP Team.

Thursday, May 16, 2013

Interim Waiver for Temporary Towers

The FCC released an Order granting an interim waiver of its pre-construction environmental notice requirements for certain temporary towers, which sometimes hinder carriers from avoiding service disruptions.  CTIA previously petitioned for an exemption from the environmental notification process for certain temporary towers and asked that the process be waived during any rulemaking proceeding (please see my earlier email, included below, for more detail on CTIA’s Petition).  The pleading cycle on CTIA’s Petition ended in March 2013, and no party opposed the Petition or the waiver request. 

The FCC’s interim waiver of the environmental notification process covers temporary towers that: (1) will be used for 60 days or less; (2) require the FAA to have notice of the construction; (3) do not require marking or lighting under FAA regulations; (4) will be no taller than 200 feet; and (5) require no or minimal ground disturbance.  The FCC reasons that these kinds of towers “rarely generate public comment regarding potentially significant environmental effects and rarely are determined to require further environmental processing.”  The FCC also concludes that the waiver will allow carriers to address short-term capacity constraints and avoid service disruptions. 

Please do not hesitate to contact us with any questions regarding the above.

Tuesday, May 14, 2013

House to Vote on Internet Governance Policy Legislation

Today, the full House of Representatives will vote on H.R. 1580, a bill "To affirm the policy of the United States regarding Internet governance."  The bill will be considered under "suspension of the rules" procedures, in which no amendments may be offered on the House floor and a two-thirds majority of Members present must vote in favor of the measure to pass.

The following is some background on the legislation from the House Energy and Commerce Committee's report to accompany H.R. 1580 (H. Rpt. 113-50).

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PURPOSE AND SUMMARY

To show the nation's resolve against regulation of the Internet by international governmental bodies and to garner support from other countries, H.R. 1580 makes it `the policy of the United States to preserve and advance the successful multistakeholder model that governs the Internet.' The bill is modeled after a resolution the House and Senate unanimously passed in 2012 expressing the sense of Congress that the U.S. delegation to a treaty negotiation in Dubai should oppose efforts to regulate the Internet through a U.N. agency. By all accounts, that resolution emboldened more than 50 nations to join the United States in refusing to sign the treaty. Unfortunately, close to 90 nations did sign the treaty, and international attempts to regulate the Internet are continuing to escalate. Just as international advocates of a regulated Internet are redoubling their efforts, so, too, must the United States. That is why H.R. 1580 elevates the language of last year's resolution from a sense of Congress about a particular treaty negotiation to a law stating U.S. policy on Internet governance.



BACKGROUND AND NEED FOR LEGISLATION
International efforts to regulate the Internet could jeopardize not only its vibrancy, but also the benefits it brings to the world. Nations from across the globe met at the December 2012 World Conference on International Telecommunications in Dubai to consider changes to the International Telecommunications Regulations. Although the treaty negotiation was billed as a routine review of rules governing international operation of traditional telephone service, a number of countries sought to use the treaty to subject the Internet to regulation through the International Telecommunication Union, a U.N. agency.

This development was not unanticipated. That is why leading up to the conference last year, the House and Senate unanimously passed S. Con. Res. 50 expressing the sense of Congress that the Secretary of State and the Secretary of Commerce should `articulate[ ] the consistent and unequivocal policy of the United States to promote a global Internet free from government control and preserve and advance the successful multistakeholder model that governs the Internet today.' Under the multistakeholder model, non-regulatory institutions develop best practices, with public and private sector's input to manage and operate the content, applications and networks that make up the Internet.

The Origins of the Internet and Internet Governance

The Internet finds its roots in the Advanced Research Projects Agency (ARPANET), launched in 1969 by the Defense Advanced Research Projects Agency to connect universities and research laboratories working on Department of Defense projects. Over the next two decades, ARPANET transitioned from a government network to include civilian users under the auspices of the National Science Foundation and became the National Science Foundation Network (NSFNET). As the NSFNET grew and standards evolved to connect computer networks, a larger `network of networks' emerged. Then, in 1992, the Scientific and Advanced-Technology Act (P.L. 102-476) allowed the NSFNET to interconnect with other non-governmental networks and opened the door to commercial participation. It was at this point that the network began to grow exponentially, and the modern Internet was born.

When network use was limited to U.S. government purposes, the Department of Defense managed the network. By the 1990s, however, most of the growth was coming from non-military users, and the NSF created the Internet Network Information Center (InterNIC) to manage both numeric addressing on the networks and the databases of sites. As the number of commercial users grew, Internet addressing and domain name management became exceedingly complex. By 1998, these functions were transferred from the control of the U.S. government to the Internet Corporation for Assigned Names and Numbers (ICANN), a California non-profit corporation that manages a number of Internet-related tasks.

A series of ad hoc groups form the engineering corps of the Internet. The Internet Engineering Task Force, the Internet Architecture Board, the Internet Engineering Steering Group, and the Internet Research Task Force are collectively organized under the international non-profit Internet Society. They are run by volunteers, and all work to create voluntary standards for Internet users to make interconnection of all networks easier.

ICANN, as well as the groups that oversee the creation of voluntary Internet standards under the auspices of the Internet Society, receive input from governments, Internet users, those investing in the Internet, academics, and engineers that develop the technology that makes the Internet possible. This bottom-up governance structure, referred to as the `multistakeholder model,' mirrors the decentralized nature of the Internet. This approach has enabled the Internet to grow at an astonishing pace as a driver of jobs, commerce, discourse, and innovation and become perhaps the most powerful engine of social and economic freedom the globe has ever known. It maximizes flexibility and innovation, helping to prevent any one governmental or non-governmental actor from exerting control over either the design of the Internet or the content it carries. That is why the Internet has been able to evolve so quickly, both as a technological platform and as a means of expanding the free flow of commerce and ideas. Deviation from that multistakeholder model weakens the Internet, harming its ability to spread both prosperity and freedom. That is why there is bipartisan agreement that the United States should adopt a policy to preserve and advance the multistakeholder model of Internet governance.

The ITRs and the WCIT

International telecommunications service is governed pursuant to regulations adopted through treaty by the 193 nation members of the International Telecommunications Union (ITU), the United Nations' specialized agency for information and communications technologies. The ITU was originally chartered in 1865 to organize the international regulation of telegraph service.

The ITU convened the World Administrative Telegraph and Telephone Conference in 1988 to consider a `new' regulatory framework for the international regulation of telecommunications. Among the resulting International Telecommunications Regulations (ITRs) were revisions to the way telecommunications providers pay each other for completing international phone calls, often referred to as `settlement rates.' The United States Senate ratified the International Telecommunications Regulations in 1992. These regulations specifically addressed voice telephony, not data processing capabilities, and resulted in large payments to telephone companies often owned or controlled by governments.

In December 2012, the ITU convened the World Conference on International Telecommunications in Dubai, UAE, to consider changes to the ITRs. Despite assurances from ITU officials that the conference would not address Internet governance, several proposals from member nations sought to bring aspects of the Internet into the text of the ITRs. A number of the Internet-related provisions, including provisions referencing unsolicited electronic communications and network security, were of particular concern as they appear to enshrine an international cybersecurity regime; could serve as a justification for countries to engage in Internet censorship in the name of national security; and serve as the predicate for international regulation of the Internet, replacing the multistakeholder model that has served the Internet and the world so well.

Buttressed by the unanimous passage of S. Con. Res. 50, the United States and 54 of the 144 other member states that attended the WCIT left without signing the new International Telecommunications Regulations. Unfortunately, eighty nine nations did sign the treaty. The revised ITRs will be implemented by those nations beginning in January 2015. A number of upcoming conferences, including the May 14-16, 2013, World Telecommunication/ICT Policy Forum in Geneva and the Oct. 20-Nov. 7, 2014, ITU Plenipotentiary Conference in Busan, South Korea, will present additional opportunities for countries to pursue international regulation of the Internet. The continued and growing threat of such regulation prompted the House Energy and Commerce Committee to move H.R. 1580, elevating language similar to last year's S. Con. Res. 50 from a sense of Congress aimed at particular treaty negotiations to a law establishing generalized U.S. policy.

Development of the Language of H.R. 1580

The language of H.R. 1580 is similar to two resolutions introduced in the 112th Congress: H. Con. Res. 127, which unanimously passed the House Aug. 2, 2012, and S. Con. Res. 50, which unanimously passed the Senate Sept. 22, 2012, and the House Dec. 5, 2012. Both H. Con. Res. 127 and S. Con. Res. 50 included a series of `whereas' clauses describing the societal benefits of the Internet and the importance its governance structure has played in producing those benefits. They also both contained a `resolved' clause expressing the sense of Congress that the U.S. Department of State and U.S. Department of Commerce `should continue working to implement the position of the United States on Internet governance that clearly articulates the consistent and unequivocal policy of the United States to promote a global Internet free from government control and preserve and advance the successful multistakeholder model that governs the Internet today.'

Section 1 of H.R. 1580 coverts to findings language from the `whereas' clauses of the resolutions, with minor modifications to reflect what happened at the WCIT and to make them more generalized. Section 2 of H.R. 1580 elevates the `resolved' clauses of the resolutions from a sense of Congress aimed at particular treaty negotiations to a law establishing generalized U.S. policy.

At a Feb. 5, 2013, legislative hearing and an April 10 and 11, 2013, markup, the Subcommittee on Communications and Technology considered a discussion draft of what would become H.R. 1580. In that version, section 2 sought to make it `the policy of the United States to promote a global Internet free from government control and to preserve and advance the successful multistakeholder model that governs the Internet.' That language was lifted directly from the end of the `whereas' clause of S. Con. Res. 50.

During the April 10 and 11, 2013, subcommittee markup, Ranking Member Waxman and Ranking Member Eshoo expressed their belief that elevating from a resolution to a law the language making it `the policy of the United States to promote a global Internet free from government control' might interfere with FCC rules on network neutrality and possibly even efforts regarding IP protection, child pornography, or other government action. Chairman Walden explained that a statement of policy does not impose statutorily mandated responsibilities on an agency, and that just as a policy statement cannot authorize the FCC to adopt network neutrality regulations, it cannot require the FCC to strike them. He also pointed out that the legislation does not make illegal activity any less illegal simply because someone has used digital tools to perpetrate the act. Child pornography is no less illegal if it is disseminated over the Internet rather than in photographs and magazines. But punishing illegal activity is different than regulating the Internet itself. The structure of the Internet and the content and applications it carries are organized from the ground up, not handed down by governments. This allows the Internet to evolve quickly, to meet the diverse needs of users around the world, and to keep governmental or non-governmental actors from controlling the design of the network or the content it carries.

In response, Mr. Waxman clarified that the objections raised by Democrats did not stem from a belief that the legislation would force the FCC to change its Open Internet rules, but rather, it would allow another party to use the policy statement as a basis to challenge the FCC rules. He expressed concern that a court might consider the policy statement differently than intended by the Committee.

In recognition of the importance bipartisan agreement on this issue played in Dubai and on the world stage, Chairman Walden and Ranking Member Eshoo directed staff to try and work out mutually agreeable legislative language before the full committee markup. Based on the Chairman's commitment to work towards a bipartisan solution, the Subcommittee passed the draft legislation by voice vote, without any amendments being offered or debated.

As a result of those discussions, Chairman Walden and Ranking Member Eshoo introduced H.R. 1580 on April 16, 2013, which contained slightly modified language. In particular, it dropped the reference to promoting a `global Internet free from government control' and focused on the remaining language making it U.S. policy `to preserve and advance the successful multistakeholder model that governs the Internet.'

At the full committee markup the following day, Chairman Walden reiterated that, while statements of policy can help delineate the contours of statutory authority, they do not create statutorily mandated responsibilities. For that reason, he said he did not believe the language passed in subcommittee would have required or prohibited U.S entities from taking any particular action on network neutrality or any other matter. He also explained that there is a big difference between government control of the management and operation of the Internet, and punishing use of it to commit illegal acts. Chairman Walden concluded by stating that he still opposes the FCC's network neutrality rules, but was willing to make the changes to send a unified message. He said that governments' hands off approach to the Internet has enabled its rapid growth and made it a powerful engine of social and economic freedom. By elevating from a sense of Congress to a law language similar to last year's resolution, the legislation will show the United States' commitment to the multistakeholder governance model and resolve to oppose efforts by authoritarian nations to exert their grip on the Internet.

Ranking Member Waxman recognized the significance of striking the words `free from government control' from the operative provision of the bill and urged his colleagues to support the measure so Congress could once again send a strong, united signal to the global community. He noted that the modification agreed to was significant because it made clear that the policy statement contained in H.R. 1580 would not implicate the legitimate activities of the U.S. government online or the authority of federal agencies.


HEARINGS
The Subcommittee on Communications and Technology held a hearing February 5, 2013, on `Fighting for Internet Freedom: Dubai and Beyond.' The Subcommittee received testimony from Commissioner Robert McDowell of the Federal Communications Commission; Ambassador David A. Gross, former U.S. Coordinator for International Communications and Information Policy with the U.S. Department of State; Ms. Sally Shipman Wentworth, Senior Director, Public Policy at Internet Society; Mr. Harold Feld, Senior Vice President at Public Knowledge; and Dr. Bitange Ndemo, Permanent Secretary in the Kenyan Ministry of Information and Communications and a Director of the Communications Commission of Kenya.


COMMITTEE CONSIDERATION
On April 10 and 11, 2013, the Subcommittee on Communications and Technology met in open markup session and approved for full Committee consideration, without amendment, by a voice vote, a discussion draft of legislation to affirm the policy of the United States regarding Internet governance.

Chairman Greg Walden, together with Ranking Member Anna Eshoo and 31 additional cosponsors, introduced H.R. 1580 on April 16, 2013.

On April 17, 2013, the Committee on Energy and Commerce met in open markup session and ordered H.R. 1580 to be reported favorably, without amendment, by voice vote.

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If you have any questions this legislation or activity in Congress that could impact the telecommunications, media and technology sectors, please contact Vance Schuemann or any member of the TLP team.


Senate Hearing on Advanced Vehicle Technology

The Senate Commerce Committee will be hold a hearing entitled "The Road Ahead: Advanced Vehicle Technology and its Implications” tomorrow (Wednesday, May 15, 2013) at 2:30 p.m. EST.  According to the Committee, [t]he hearing will explore the safety benefits, potential risks, and policy implications from the development and implementation of advanced vehicle technologies," which "include advanced driver assistance systems such as adaptive cruise control and lane-keeping systems, partially and fully self-driving vehicles, vehicle-to-vehicle communication, as well as communications and entertainment devices for drivers."  Of course, most of these advanced vehicle technologies and devices use, in some manner, radiofrequency spectrum that is regulated by the FCC.

Appearing before the Committee as witnesses will be Mitch Bainwol of the Alliance of Automobile Manufacturers, Dr. Peter Sweatman of the University of Michigan Transportation Research Institute, Dr. John D. Lee of the University of Wisconsin-Madison and Jeffrey J. Owens of Delphi Automotive.

The hearing will be webcast live here.

If you have any questions regarding this hearing as well as any legislation or activity in Congress that could impact the telecommunications, media and technology sectors, please contact Vance Schuemann or any member of the TLP team.

Friday, May 10, 2013

Summary of FCC Public Notice on Technology Transition Trials

The FCC’s Technology Transitions Policy Task Force (“Task Force”) released a Public Notice proposing to launch trials of three technological transitions: (1) the time-division multiplexed (“TDM”) to Internet protocol (“IP”) transition; (2) the Next Generation 911 (“NG911”) transition; and (3) the wireline to wireless transition.  The goal of these trials is to gather a factual record that will help the FCC guide the transitions with policies that promote investment and innovation while protecting consumers and competition. 

  1. TDM to IP Transition
The TDM to IP transition trial would examine voice over IP (“VoIP”) interconnection.  The Public Notice proposes to conduct the trial in at least one major metropolitan area and one rural area.  The trial would shed light on the issues that arise when carriers negotiate VoIP interconnection agreements, including which issues are difficult to resolve and which issues are easily agreed upon.  The Public Notice asks whether providers should be allowed to “negotiate in good faith without a backstop of regulations or specific parameters” or if they should “negotiate pursuant to the existing section 251/252 framework or a similar process.”  The Task Force is interested in gathering data on the length of time it takes parties to reach an agreement, the issues in dispute, the agreements that are reached, and any technical problems that are encountered.

  1. NG911 Transition
The NG911 transition trial would deploy an all-IP NG911 service on an accelerated basis in a number of geographic areas where public safety authorities are prepared to deploy NG911.  Trial participants would make caller location available through NG911 mechanisms.  The Public Notice proposes that participants document the network design and conversion process and gather data on call handling, interoperability, location accuracy, and system failures. 

The Public Notice also asks how the issue of wireless and IP network reliability should be integrated into the trial, specifically providers’ need to establish adequate back up power solutions. 

  1. Wireline to Wireless Transition
The wireline to wireless transition trial would test how service providers can replace consumers’ wireline voice and broadband services with wireless substitutes.  The trial would gather data on the consumer experience, including challenges and benefits.  The Task Force proposes to compare wireline and wireless offerings on several metrics, including quality, terms of service, price, function, E-911 performance, accessibility, reliability, and carrier savings.  The Public Notice proposes to conduct the trial in at least one geographic area within and outside each participating LEC’s service area.

The Public Notice also asks about AT&T’s proposed IP transition trials, questioning whether it should combine the individual proposals described above into a single trial in designated geographic areas.  The Public Notice asks carriers that are interested in such a trial to “submit a more detailed, comprehensive plan of how such a trial would work, including the design of the trial, the data that would be collected, the rules that would need to be waived and the role of the sates and Tribes.”  The Public Notice briefly seeks comment on other possible trials, including numbering issues, access for people with disabilities, the copper-to-fiber transition, consumer protection and universal service, and Tribal deployment. 

Comments on the Public Notice will be due 45 days after it is published in the Federal Register, and Reply Comments will be due 75 days after publication.  Please do not hesitate to contact us with any questions.