FCC Reopens; Issues Guidance on Revised Filing Deadlines

Now that this month's Federal Government shutdown is over, and after a 16-day suspension in normal operations, the Federal Communications Commission has issued a Public Notice announcing revised deadlines for submitting certain FCC filings. The changes were needed because many of the agency's regular electronic filing systems and web pages were inaccessible during the shutdown. As a result, licensees, applicants, participants in rulemaking proceedings and other interested parties will want to carefully review the Public Notice to help ensure that their FCC filings are made in a timely manner. 

FCC's Outage Reporting Rules Take Effect for Interconnected VoIP Services

In the aftermath of Hurricane Sandy and other recent natural disasters, there is increasing focus on how communications networks weather these storms. In addition to significant, sometimes catastrophic, harm to life and property, severe weather events also sometimes create significant network disruptions or outages, leaving business and residential customers without critical voice and data services. These events make the Federal Communications Commission’s recent expansion of its outage reporting requirements particularly timely.

Under rules that are effective as of yesterday, the FCC has expanded its communications network outage reporting requirements to include providers of interconnected Voice Over Internet Protocol (VoIP) services. As a result, when a VoIP provider suffers an “outage,” defined by the FCC as “a network failure or degradation that significantly degrades the end user’s ability to make or maintain communications,” the VoIP provider must report the outage to the FCC if the outage meets specific criteria. The FCC states that in the case of interconnected VoIP, it interprets "outage" to mean a complete loss of service and/or connectivity to customers, and the provider is deemed to have suffered a reportable outage: 

  • "If the outage even potentially affects a 911 special facility and lasts at least 30 minutes, then within 4 hours of having knowledge of the outage, the provider has to notify the FCC of the outage, through NORS [the Network Outage Reporting System]. The interconnected VoIP service provider also has to contact, as soon as possible, the appropriate personnel at the affected or potentially affected 911 special facility with information that could help mitigate any effects of the outage.
  • If the interconnected VoIP service provider experiences an outage on any of its own facilities or those it operates, leases or otherwise uses (not including 911 special facilities) and the outage lasts at least 30 minutes and has the potential to affect at least 900,000 user minutes, then within 24 hours of having knowledge of the outage, the provider has to notify the FCC of the outage, through NORS.
  • If the outage even potentially affects any “special offices and facilities” and the outage lasts at least 30 minutes, then within 24 hours of having knowledge of the outage, the interconnected VoIP service provider has to notify the FCC of the outage, through NORS."

The expanded rules now apply to facilities-based and non-facilities-based interconnected VoIP providers. The rules define a VoIP service as “interconnected” if it (1) enables realtime, two-way voice communications; (2) requires a broadband connection from the user’s location; (3) requires Internet protocol-compatible customer premises equipment (CPE); and (4) permits users generally to receive calls that originate on the public switched telephone network. "Special offices and facilities" include certain military, government, power plant and airport facilities. The rules apply even if the VoIP service is not “facilities based,” meaning that the VoIP provider neither owns nor has a possessory interest in the “channels of communication” used to provide the service. As a result, these FCC rules explicitly extend to so-called “over-the-top” VoIP providers.

On Friday, the FCC published a small entity compliance guide that discusses these new requirements. As network outage issues gain attention and VoIP services expand, interconnected VoIP providers should become familiar with these requirements. This guide provides a useful starting point in anticipation of the next severe weather event or possible service disruption. 

FCC Extends Outage Reporting Obligations to Interconnected VoIP Providers

The Federal Communications Commission recently released its Report and Order adopting rules by which interconnected VoIP providers must report service outages. In a reversal of what the FCC had proposed in its Notice of Proposed Rulemaking, the FCC declined to impose similar obligations on broadband providers, determining that the issue "deserves further study." The new rules will be effective 90 days following Office of Management and Budget approval of the information collection procedures, a date that the FCC will announce by public notice. 

Here is a brief summary of the outage reporting rules that will apply to interconnected VoIP providers:

Facilities-based and non-facilities-based interconnected VoIP providers are subject to new reporting obligations. In contrast to the more onerous rules initially proposed by the FCC, providers will only need to report significant outages where customers lose service or connectivity, and are therefore unable to access 9-1-1 services. The FCC reasoned that interconnected VoIP providers have the ability to monitor VoIP-enabled end-user devices to determine whether connectivity is lost. The FCC does not expect that interconnected VoIP providers will need to purchase any equipment or software in order to comply with the new reporting rules.

The definition of "outage" will be the same definition that is in Part 4 of the FCC's rules: "a significant degradation in the ability of an end user to establish and maintain a channel of communications as a result of a failure or degradation in the performance of a communications provider's network." A "significant degradation" is one that results in "the complete loss of service or connectivity to customers."

When Outage Reports will be Required:

  • An interconnected VoIP provider will be required to electronically notify the FCC within 24 hours of an "outage" it has experienced, on any facilities it owns, operates, leases or otherwise utilizes that is at least 30 minutes long and potentially affects (1) at least 900,000 user minutes of service and results in a complete loss of service, and (2) any special offices and facilities. Examples triggering this notification include a complete loss of an access router and a loss of all facilities connecting the access router to the backbone.
  • An interconnected VoIP provider also will be required to file an electronic report within 240 minutes of discovering it has experienced on any facilities it owns, operates, leases or otherwise utilizes an outage of at least 30 minutes that potentially affects a 9-1-1 special facility. In addition, for this second category, the interconnected VoIP provider must contact by telephone of other means the point of contact for the 9-1-1 special facility, and shall convey information that might be useful to managing the affected facility in mitigating the effects of the outage on efforts to communicate with that facility. Examples would include loss of all facilities connecting a router to the Public Safety Answering Point (“PSAP”) and the complete loss of the ability to provide location information for interconnected VoIP calls.

Outage reports will be filed electronically using the FCC's Network Outage Reporting System (NORS). In addition to the initial reports, interconnected VoIP providers also must file a final report within 30 days after discovering the outage. The NORS system uses an encrypted technology to ensure the security of the reported information. The information reported will be "presumptively confidential."


In adopting the rules, the FCC emphasized the "public's increased reliance" on interconnected VoIP services and the critical needs of communications infrastructure for public safety goals. The new rules are merely the latest in a series of FCC actions to apply traditional telephone service regulations to Interconnected VoIP providers.  

Congress Makes Sweeping Changes to Spectrum Policy; Authorizes TV Band Incentive Auctions

On Friday, overwhelming majorities of both the House and the Senate passed a payroll extension bill that includes important changes to spectrum policy.  The legislation is expected to raise $15 billion for the Federal Treasury and to create hundreds of thousands of jobs. The details of the legislation are now delegated to the NTIA, the FCC and other agencies to develop reports and to adopt rules to implement Congress' objectives. 

Below is our take on some of the main provisions of the legislation as it applies to spectrum policy and wireless broadband services. 

Incentive Auctions and Band Clearing

Aside from public safety, the main driver of spectrum legislation was the need to address the spectrum crunch (real or imagined) for mobile wireless interests. To do this, Congress decided to offer TV broadcasters compensation to voluntarily relinquish their spectrum for repurposing by the FCC for broadband uses. Congress granted specific authority for a two-phase voluntary "incentive auction" that would clear a portion of the TV band (Channels 2-51) for mobile interests and, as part of that process, change the TV "white space" landscape. Because Channel 51 is adjacent to the Lower 700 MHz A Block (formerly Channel 52), the FCC is expected to attempt to "re-pack" the TV stations into the lower portion of the UHF band (beginning with Channel 14). The auction process is expected to take several years.

Under the legislation's language, "relinquishment" of a TV station means (1) relinquishing all usage rights to a channel, (2) relinquishing a UHF channel for a VHF channel, or (3) sharing a channel with another TV station. In lieu of relocation reimbursement, TV stations can obtain, as appropriate, a waiver of FCC rules to make flexible use of their spectrum so long as the TV broadcaster provides at least one programming stream at no charge. Depending on how the FCC ultimately interprets this provision, TV broadcasters could obtain a limited right to offer broadband on their spectrum alongside video service, but only if they forego relocation reimbursement.

Significantly, the FCC is required to reallocate and auction the T-Band (470-512 MHz, i.e., Channels 14-20) used by public safety in 11 major markets, with the spectrum sale used to cover relocation costs. Although not stated in the legislation, the FCC can also clear other users -- land mobile, for instance -- out of the TV bands. The FCC also can relocate radioastronomy users on Channel 37 at a cost of up to $300 million. The ability to relocate Channel 37 users could be a significant band-clearing opportunity because that channel operates as a nationwide encumbrance in the heart of the TV band.

TV White Spaces

Early House Majority versions of the bill would have required the FCC to auction all unlicensed spectrum (though it was unclear whether this included white space spectrum that had previously been allocated). The version of the legislation that passed essentially creates two flavors of white space.

  • First, the existing TV white space and the TV white space remaining after the re-packing -- remember, that's several years away -- will be available for fixed and mobile wireless use. There will no doubt be a loss of TV white space in many markets as a result of the incentive auction, but Congress and FCC staff expect that there will vacant TV channels will remain in many rural areas after the re-packing. The re-allocation of Channels 14-20 will create additional spectrum in major markets for TV stations to relocate, and the possible relocation of Channel 37 radioastronomy users will also clear spectrum.
  • Second, the FCC has the discretion to use relinquished spectrum or other spectrum to implement guard bands that would, in practice, create a nationwide unlicensed allocation as recommended in the National Broadband Plan. The FCC may "permit" the use of guard band for unlicensed use, but is not required to, and the guard bands must "be no larger than is technically reasonable to prevent harmful interference between licensed services outside the guard bands." (Reports were that earlier versions of the bill used the phrase "technically necessary.") Based on our discussions with the FCC, they see a guard band acting as a "duplex gap" band between LTE-Advanced uplink/downlink spectrum allocations, though this thinking is only preliminary and the ultimate band plan, channel sizes and technical rules will be determined through an FCC rulemaking proceeding. The limits of the FCC's discretion on guard bands appear to be subject to interpretation.

3550-3650 MHz

Earlier versions of both the Senate and House bills would have required the FCC to auction the 3550-3650 MHz band (with certain exceptions). The band is not allocated for commercial use; rather, the Department of Defense uses it at present. The final version removed the auction mandate, but requires NTIA to give priority to options involving exclusive non-Federal use and to choose sharing only if NTIA and OMB determine that relocation of a Federal user is not feasible because of technical or cost constraints. Thus, the 3550-3650 MHz band could be subject to auction ("exclusive use") unless it is not feasible to relocate Federal users.  If that's the case, commercial and Federal users could share the band under technical rules the FCC would adopt. The radar uses in the 3550-3650 MHz band may be difficult to relocate, which would make the case for shared unlicensed use easier.

Other Unlicensed Bands

The spectrum legislation identifies two additional bands for possible unlicensed use. First, NTIA, the Department of Defense and other agencies will study spectrum-sharing and risks to incumbent Federal users if unlicensed U-NII devices were allowed to operate in the 5350-5470 MHz and 5850-5925 MHz bands – a total of 195 MHz of spectrum. The agencies will issue reports on their findings. The report for the 5350-5470 MHz band is due in eight months, and the report on the 5850-5925 MHz band is due in 18 months.

Wireless Facilities Deployment

An under-appreciated section of the bill provides significant benefits to wireless companies, fixed and mobile, that want access to towers owned by state and local governments. Under the legislation, a local government must approve an "eligible facilities request" to modify an existing wireless tower or base station that does not "substantially change" the physical dimensions of the tower or base station. An "eligible facilities request" is a request to collocate new transmission equipment, remove transmission equipment or replace transmission equipment. The FCC will decide how to interpret "substantial change" pursuant to a rulemaking proceeding. In addition, GSA is required to develop master contracts for wireless antenna structures on property owned by the Federal government.


The new spectrum legislation is a beginning, not an end. Many details have yet to be determined, but many interests – including broadband providers, whether fixed or mobile, broadcasters, public safety users and others -- can find something to like in the new legislation.

FCC Adopts USF Reforms, Seeks to Boost Broadband Deployment

Earlier today, the FCC voted to adopt rules to reform the Universal Service Fund and Intercarrier Compensation systems and to create a "Connect America Fund" designed to extend broadband infrastructure to unserved areas.  In the video below, I discuss today's vote and what it means for broadband deployment.

Of Databases and Legislation: TV White Spaces on Trial

This week, the Federal Communications Commission took another important step toward bringing fixed wireless broadband service to rural Americans by announcing the first TV white space database trial.  For a 45-day period beginning September 19, Spectrum Bridge, Inc. (a Rini Coran, PC client) will make publicly available its database, which identifies available TV channels for unlicensed broadband operations.  Separately, FCC Chairman Julius Genachowski issued a supporting statement trumpeting the benefits of white spaces.  This is welcome news in the face of an U.S. white space ecosystem that is threatened by pending Congressional legislation.

In the trial, participants will have access to elements of the database that are designed to protect TV stations, cable headends and broadcast auxiliary stations and registered wireless microphones.  Once the trial concludes – and the FCC can extend the trial beyond the November 2 end date – Spectrum Bridge is required to give the FCC a report that notes any problems and changes to the channel availability calculator. 

Chairman Genachowski took the rather unusual step of issuing a News Release announcing the Spectrum Bridge trial, stating that “[u]nleashing white spaces spectrum will enable a new wave of wireless innovation.  It has the potential to exceed billions of dollars in economic benefit from wi-fi, the last significant release of unlicensed spectrum, and drive private investment and job creation.”  The Wireless Innovation Alliance (WIA) and Public Knowledge were quick to hail the FCC’s initiation of the first database trial.

Meanwhile, at the Super WiFi Summit in Austin this week, attendees got a full slate of information about white space technology, databases and legislation.  On the latter point, Michael Calabrese of New America Foundation reiterated many of the points made in his recent House testimony and discussed the potential for spectrum reform legislation to sharply reduce, if not eliminate, the amount of white space available in many markets.  He detailed WIA‘s efforts to ensure that unlicensed white space is preserved and that Congress does not mandate auctions for future unlicensed bands.  I provided insight into the perspective of wireless Internet service providers (WISPs) that could be harmed by the proposed legislation and noted the “boots on the ground” efforts of the Wireless Internet Service Providers Association (WISPA) to better educate Congress on the consumer benefits of unlicensed spectrum.  To that end, and as just one example, WISPA member Brian Webster created a map using data from the NTIA’s mapping program showing the census blocks in Illinois that are uniquely served by WISPs in both licensed and unlicensed spectrum (not including coverage offered by the cellular technologies or satellite internet).  From the map below, one can see the obvious benefits that WISPs, and only WISPs, provide to consumers.  As Congress pushes forward to consider legislation in the next few weeks, these will be important messages to convey.

(click map below to enlarge)

Fixed wireless unique served areas.png

The Uncertainty of Unlicensed: New Threat Posed by House Draft Legislation

Yesterday, Steve Coran presented a webinar to members of the Wireless Internet Service Providers Association (WISPA) on spectrum reform legislation that is being considered by the U.S. House of Representatives.  The presentation focused on provisions addressing the future of unlicensed spectrum allocation, with discussion on a novel and untested auction concept that would require bidders wanting non-exclusive rules to bid against licensees wanting licensed rules for the same spectrum.  Steve commented that this is "untried and untested, and unlikely to raise significant revenues in light of the uncertainty the rules would raise."  Steve urged the WISPA members to participate in the advocacy effort by communicating with their representatives.

FCC Seeks to Improve Compliance with its Broadband Data Collection Rules

“It is a capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts.” (Sherlock Holmes, “A Scandal in Bohemia”) 

Broadband deployment data are critical to spectrum and broadband policy, both in Congress and at the Federal Communications Commission. Incomplete or incorrect data about infrastructure can hinder FCC initiatives, such as efforts to promote competition, to implement the National Broadband Map or proposals to direct Universal Service funding to underserved areas. Nevertheless, the FCC has determined that many service providers have not complied with mandatory reporting requirements designed to drive the FCC’s data collection, even as an open FCC proceeding considers possible reforms to the program. 

To encourage participation and to improve compliance, earlier today, the FCC hosted a webinar to review the basics of the rules and procedures for filing FCC Form 477 – the FCC’s primary data collection tool for broadband, voice and other services. The filing requirement applies to several categories of service providers, including facilities-based providers of broadband connections to end users, providers of wired or fixed wireless local exchange telephone service, providers of Interconnected VoIP and facilities-based providers of mobile telephony. As a result, the rules apply to companies such as telcos (fixed or mobile), cable operators, satellite companies, Wireless ISPs, managed ISPs, and VoIP providers (including “over-the-top” providers). The filing deadlines for Form 477 occur twice per year: March 1st (providers must file data as of December 31 of the previous year) and September 1st (providers must file data as of June 30 of the same year). 

In the webinar, Wireline Competition Bureau Chief Sharon Gillett emphasized two points for service providers. First, the requirement to file Form 477 is mandatory, and providers are expected to comply. Second, data submitted in Form 477 are afforded confidential treatment, meaning that no provider-specific information is shared with outside parties.  

The Bureau’s chief data officer Steve Rosenberg described how data collection or Form 477 submission problems often fall into three categories: 

  • Nonfilers: According to Rosenberg, several hundred providers don’t file with the FCC, so their data aren’t counted.
  • Improper certifications: Rosenberg indicated that sometimes outside consultants gather and submit the data, but he said that such certifications may make data more difficult to correct and may raise questions of reliability of the data.
  • Repeated mistakes: Rosenberg pointed out that some filers simply file incorrect data, for example, by putting too many subscribers into one census block in a county or build upon incorrect data from prior filings, even after working with FCC staff to correct prior filings. 

Yes, the Form 477 instructions are a bit dense, and gathering data at a granular level can be time-consuming for many providers. The key takeaway from the FCC’s webinar is that the FCC is prioritizing education and compliance efforts for broadband data collection – a move that is often a precursor to stepped-up enforcement efforts.

FCC Provides Guidance on Net Neutrality Compliance Ahead of Federal Register Publication

Late last week, the Federal Communications Commission’s Enforcement Bureau and General Counsel’s office jointly released a Public Notice offering “initial guidance” on how Internet Service Providers can comply with the transparency and disclosure rules that the FCC adopted in its Open Internet Order last December.  These are among the same “net neutrality” rules that Verizon and MetroPCS filed lawsuits to stop last December – lawsuits that U.S. Court of Appeals for the D.C. Circuit dismissed as “premature” because the rules had not been published in the Federal Register. We expect that the clarifications and explanations in the new “initial guidance” will be contained in the Federal Register publication of the Open Internet Order, which will trigger a new round of judicial review.  In this sense, the timing of the guidance can be viewed as a pre-emptive effort to possibly eliminate or narrow the lawsuits that will eventually be filed following Federal Register publication.

In another sense, the Public Notice actually provides some clarity to ISPs on how to comply with the disclosure rules.  The FCC once again stated that the guidance is illustrative and that broadband providers can implement other approaches that will comply.  Here are the five areas where the FCC provided clarification: 

  • Point-of-Sale Disclosures – The Open Internet Order requires ISPs to disclose network management practices, performance characteristics and commercial terms “at the point of sale.”  The Order further stated that, to meet this requirement, a provider must prominently display links to disclosures on a public website.  The FCC clarified that providers do not need to create or distribute hard copies of disclosure materials or to train sales employees to make such disclosures. Providers instead may direct prospective customers to the web page (not just the ISP’s home page) orally and/or prominently in writing.  In retail offices, broadband providers should have available devices that consumers can use to access the disclosures.
  • Service Description – The Open Internet Order requires broadband providers to disclose accurate network performance information.  For fixed broadband, the 13 large ISPs that are participating in the FCC’s SamKnows speed test can use the results as a sufficient representation of what their customers can expect.  Those ISPs that are not participating in the project can use the methodology to measure actual performance.  The FCC plans to release the methodology and the results before the rules become effective.  Alternatively, ISPs may disclose actual performance based on internal testing, consumer speed tests or other reliable third-party sources.  For mobile broadband, the FCC is collecting data on broadband performance and, when that information has been analyzed, the FCC plans to provide further guidance.  Until that time, mobile broadband providers may disclose the results of their own or third-party testing.  For all broadband providers, the Public Notice encourages disclosure of the source and methodology used to evaluate performance, and expects disclosure to be modified if actual performance materially differs from the disclosure. Expect the standards of disclosure to evolve based on comments filed in the FCC's separate "Need for Speed" proceeding, where the FCC has sought comment on the types of broadband speed and performance information that would be of most use to consumers.
  • Extent of Required Disclosures – The Commission stated in the Open Internet Order that its list of potential disclosure topics “is not necessarily exhaustive.”  Obviously, this statement aroused anxiety in ISPs who were concerned that potential findings of non-compliance for disclosures the FCC didn’t even mention.  Given this vagueness – and the potential legal pitfalls that could ensue – the Public Notice “clarified” that certain information contained in the Order will suffice for compliance “at this time,” though the FCC can determine in the future that that different disclosures are appropriate “at that time.”  The compliance disclosure topics are in paragraphs 56 (for all broadband providers) and 98 (for mobile broadband providers) of the Order and are summarized in this presentation.
  • Content, Applications, Service and Device Providers – The Open Internet Order requires disclosure to content, application, service and device providers.  Given the uncertainty over what broadband providers must disclose to these edge providers, the Public Notice clarified that the disclosures sufficient to enable consumers to make informed choices will generally satisfy the disclosure obligations to edge providers.  Thus, the FCC anticipates that broadband providers should only need to have one set of disclosures, and “technologically sophisticated” edge providers should be able to rely on a disclosure statement that the broadband ISP provides to consumers.
  • Security Measures – In response to claims that disclosure of numerous and constantly evolving security techniques would be unduly burdensome on broadband providers, the Public Notice reiterated the “touchstone” of its transparency rules – disclosure of information sufficient for consumers to make informed choices.  As examples, the FCC expects broadband providers to disclose if security measures intended to spread of viruses, malware, spam and other threats also prevent end users from running mail or web servers.  The FCC does not expect ISPs to disclose internal security measures that do not affect consumer choice, such as routing security practices.

Left unaddressed was the uncertainty surrounding enforcement of the Open Internet rules.  As we wrote in our earlier blog post, the FCC’s failure to articulate timing of decisions on complaints and remedies for non-compliance made it difficult for broadband providers to assess the risk associated with the complaint process.  At least with the guidance offered in the Public Notice, broadband providers have a little more clarity that will, hopefully, spur disclosures that are not put to the enforcement test.

FCC Working Group Releases Blueprint for Future of Media

The FCC recently released a long-anticipated report on the future of journalism and localism, prepared by the FCC Working Group on the Information Needs of Communities. 

The report, entitled “Information Needs of Communities: The Changing Media Landscape in a Broadband Age,” could be a potential road map for the FCC moving forward on overhauling and updating the agency’s regulatory approach to print, broadcast, cable and the Internet. The report’s conclusions and recommendations are important because they signal the most current thinking of FCC staff about their roles as regulators.  Nevertheless, a lengthy process remains to transform these recommendations into regulations and policy.  It is unclear how many recommendations ultimately will be adopted. 

The working group comprises journalists, scholars, entrepreneurs and government officials, all of whom the FCC selected.  In 2009, a bipartisan commission by the Knight Foundation considered how technology is changing how the media functions and communities receive and process information.  The Knight Commission called on the FCC to examine these issues more closely, which led to formation of the working group.    

The report presents an optimistic view of the state of journalism.  News and information gathering is more vibrant than ever, and local news continues to play a vital role for media.  Commercial and nonprofit media are working on collaborative projects.  Nonprofit media have become more varied and more important.  The Internet has led to the free exchange of ideas and information.  The report, however, observes that the abundance of media outlets does not necessarily translate into an abundance of reporting. 

How does the working group propose to bridge this gap between the growth of media outlets and the reduction in reporting?  Through a combination of reducing regulatory burdens on media, encouraging entrepreneurship and philanthropy, and focusing on the historically underserved.  Here are some key components of the report: 

Online Disclosure and Transparency.  The report advocates that broadcasters should be required to provide more information about their operations online.  For example, the report recommends: 

  • eliminating the FCC’s requirement that local television stations retain a paper copy of their quarterly-issues programs lists and replacing it with a streamlined, web-based form. The form could include the amount of community-related programming, news-sharing and partnership arrangements, how multicast channels are being used, sponsorship identification, disclosures and the level of website accessibility for people with disabilities. 
  • requiring broadcasters to disclose any pay-for-play arrangements online in addition to the current required on-air disclosures. 
  • requiring satellite operators to post their disclosure forms online. 
  • migrating online or eliminating any material that FCC licensees are required by law to keep in public files and repealing the burdensome enhanced disclosure rules adopted in 2007.  These rules, which have not taken effect, were designed to replace the broadcaster’s quarterly issues/programs lists with a standard form that would report detailed programming information to the Commission and would post the completed form on the Internet. 
  • terminating the FCC’s localism proceeding, which proposed among other items that broadcast stations create community advisory boards, require staff to be on site whenever a station was on the air and provide reports on the quantity of local music played. 
  • formally repealing any remnants of the Fairness Doctrine, which was stricken in 1987. 

Universal Broadband. The report finds that local media innovation, as well as the information health of communities, requires a universal and open Internet. Efforts to expand broadband would include the use of voluntary incentive auctions for commercial and noncommercial broadcasters. 

Underserved Audience.  The report recommends that the FCC ensure that modern media work for people in historically underserved areas.  The report suggests: 

  • reserving TV channels 5 and 6 for TV and radio opportunities for new small businesses, including those owned by minorities and women. 
  • implementing the Local Community Radio Act in a manner that supports the growth of LPFM stations. 
  • that Congress restore the tax certificate program to promote diversity in media ownership. 

State-based C-SPANs. To promote the availability of local public affairs programming, the working group recommends establishment of a state-based C-SPAN in every state and that Congress give regulatory relief to multichannel video programming distributors who help facilitate such networks. 

Media Ownership and Access.  The report remains neutral with respect to increased media ownership, favoring an approach that considers the impact of the Commission’s rules as currently crafted or proposed on local news and public affairs reporting in the community as a whole.  The report implies that the focus of media ownership is whether the arrangement contributes to the overall media health of the community.  This approach may give some hope to broadcasters in smaller markets that the FCC may someday be more open to consolidation. The report also recommends re-assessment of the effectiveness of the satellite TV set-aside for educational programming and of cable TV leased access systems. 

Public Interest.  The report’s public interest analysis is its most interesting and surprising aspect.  The report concludes that many rules intended to advance public interest goals are ineffective and out of sync with the information needs of communities and the nature of modern local media markets.  In some cases, policies do not achieve their intended goals.  In other cases, policies that might have once made sense have not kept up with changes in media markets.  Several policies are not sufficiently oriented towards addressing the local information gap.  Most of all, any rules or policies must live within and respect the essential constraints of the First Amendment. 

Notably, the report states that government is not the solution to providing robust local news and information but can remove obstacles confronting those working to solve these problems.  Instead, most of the solutions to today’s media problems will be found by entrepreneurs, reporters and creative citizens, not by legislators or administrative agencies. 

In 475 pages filled with recommendations, the report defies a quick and simple analysis.  At first blush, one is stricken by the report’s ambitious, comprehensive nature; in the end, however, such scope guarantees that each and every recommendation will not ultimately become law.  Some will face Constitutional challenges (such as any laws that specifically favor minorities or females as opposed to small businesses) and others will face challenges from competing interests and other stakeholders.  All of this assumes of course that there is no change in administration next year, in which case the report could find itself relegated to the dustbin of history, as have so many previous reports. 

One last point: it does not necessarily follow that adoption of these recommendations will result in massive government deregulation.  For example, while substitution of a new disclosure form for the quarterly issues/programs list and elimination of the enhanced disclosure form is certainly welcome news, the report does recommend adopting a new disclosure form.  A parallel example may be the changes in the FCC’s Equal Employment Opportunity (“EEO”) policies; a change from the agency’s traditional analysis to the modern EEO Program Reports.  Although the changes modernized the EEO process, by no means did it unburden broadcasters’ EEO obligations. 

Even with these provisos, the report represents an impressive accomplishment in bringing the discussion of journalism, localism and the media into modern times.

FCC's Outage Reporting NPRM: Comment and Reply Comment Deadlines Set

The Federal Register reports the publication of deadlines for the FCC’s Notice of Proposed Rulemaking seeking to extend outage reporting requirements to interconnected VoIP and broadband Internet service providers. Comments are due August 8 and Reply Comments are due October 7. My earlier blog post about the proposed rules is here.

Don't Change that Channel: FCC Takes Steps to Transition TV Stations ... Again

Effective immediately, the Federal Communications Commission will no longer accept rulemaking petitions for TV stations to change their licensed channels. This is unfortunate news for stations who are still studying ways to improve free local over-the-air DTV service. 

Today’s announcement comes after the FCC staff’s completion of nearly 100 channel changes since lifting its filing freeze on May 30, 2008. FCC staff apparently believes that licensees have had sufficient time to evaluate engineering options and presumes there is no pent-up demand for channel changes. Such speculation might have been avoided if instead of an immediate freeze, a short filing window was established to permit filings for channel changes before the freeze became effective. 

FCC staff indicates that the freeze is necessary to facilitate the re-packing and reallocation of portions of the TV Band for broadband services, as recommended in the National Broadband Plan. While the FCC lacks authority to conduct incentive auctions, it may re-pack the TV band to create more spectrum for wireless broadband. FCC Chairman Julius Genachowski signaled his interest in repacking the TV band in his April 12, 2011 remarks at the NAB Show. FCC staff has been doing a road show around the country promoting the benefits of incentive auctions, so this action comes as no great surprise. 

What is becoming clear is that TV stations should begin contemplating a second DTV transition and the possibility of changing channels yet again. In the meantime, FCC staff has taken a step toward minimizing the number of moving parts in this transition by making sure that TV stations stay put, for now. 

For more information, don’t change that channel …

FCC Storms Ahead, Seeks to Expand Outage Reporting Rules to VoIP and Broadband Providers

            As a follow-on to an earlier comment cycle, the FCC released a Notice of Proposed Rulemaking (“NPRM”) proposing to extend its Part 4 outage reporting requirements to interconnected VoIP providers and broadband Internet providers.  There was little support in last year’s record to further burden network operators with new reporting obligations and the FCC’s authority to require VoIP and broadband providers has been questioned by one Commissioner. Nevertheless, the FCC cites the need to ensure public safety and 9-1-1 communications as the basis for extending its rules.  Comments likely will be due later this summer – 60 days from Federal Register publication of the NPRM – with Reply Comments due 60 days thereafter.  It is perhaps no accident that the FCC initiated this proceeding during an active tornado season and at the outset of hurricane season

            In 1992, the FCC adopted rules requiring circuit-switched wireline providers to file reports of outages.  In 2004, this requirement was extended to providers of paging communications over wireless, cable and satellite communications.  And since 2005, the FCC has required interconnected VoIP providers to provide 9-1-1 emergency calling capabilities to their customers.  The FCC now seeks to make the outage rules applicable to interconnected VoIP providers and broadband ISPs, who would be required to make “presumptively confidential” reports to the FCC as a means to “help providers recover or prevent future outages, and ensure to the extent possible that broadband networks are prepared for natural and man-made disasters.”  The FCC states that its existing reporting obligations provided numerous benefits in the aftermath of Hurricane Katrina in 2005.  The FCC also noted that almost 30 percent of voice calls are made using VoIP service.

            The FCC proposed the actual language of its proposed rules – something that was almost never done in previous administrations but is becoming more common under Chairman Julius Genachowski.  The FCC has requested comment on the following proposal, which adopts certain “triggers” for the reporting requirement: 

Interconnected VoIP Providers

Broadband Internet Access Service Providers

Would be required to electronically notify the FCC within 120 minutes of discovering that they have experienced on any facilities that they own, operate, lease, or otherwise utilize, an outage of at least 30 minutes duration: 

(1) Of a Call Agent, Session Border Controller, Signaling Gateway, Call Session Control Function, or Home Subscriber Server: 

(2) That potentially affects at least 900,000 user minutes of interconnected VoIP service and results in (i) complete loss of service; or (ii) an average packet loss of 1 percent or greater; or (iii) average round-trip latency of 100 ms or greater; or (iv) average jitter of 4 ms or greater, with all packet loss, latency, and jitter measurements taken in each of at least 6 consecutive 5 minute intervals from source to destination host; 

(3) That potentially affects any special offices and facilities; or 

(4) That potentially affects a 9-1-1 special facility, in which case they also shall notify, as soon as possible by telephone or other electronic means, any official who has been designated by the management of the affected 9-1-1 facility as the provider’s contact person for communications outages at that facility, and the provider shall convey to that person all available information that may be useful to the management of the affected facility in mitigating the effects of the outage on efforts to communicate with that facility.

Would be required to electronically notify the FCC within 120 minutes of discovering that they have experienced, on any facilities that they own, operate, lease, or otherwise utilize, an outage of at least 30 minutes duration: 

(1) Of a ISP-operated Domain Name System server, Dynamic Host Control Protocol server, or Home Subscriber Server; 

(2) That potentially affects at least 900,000 user minutes and results in (i) complete loss of service; or (ii) an average packet loss of 1 percent or greater, or (iii) average round-trip latency of 100 ms or greater, or (iv) average jitter of 4 ms or greater, with all packet loss, latency, and jitter measurements taken in each of at least 6 consecutive 5 minute intervals from source to destination host; 

(3) That potentially affects any special offices and facilities; or 

(4) That potentially affects a 9-1-1 special facility, in which case they also shall notify, as soon as possible by telephone or other electronic means, any official who has been designated by the management of the affected 9-1-1 facility as the provider’s contact person for communications outages at that facility, and the provider shall convey to that person all available information that may be useful to the management of the affected facility in mitigating the effects of the outage on efforts to communicate with that facility. 

Similar rules would apply to broadband backbone ISPs.


            For broadband providers to non-mobile users, the number of IP addresses affected would be used to calculate “user minutes.”  For broadband access providers to mobile users, the number of potentially affected users should be determined by multiplying the maximum number of simultaneous users by a concentration ratio of 8.

            Among other things, the FCC asks throughout the NPRM for comment on the burdens and costs associated with the extended reporting requirements.  The FCC specifically asks whether the burdens would be greater on smaller VoIP providers and broadband ISPs, and asks for alternatives (though according to the Initial Regulatory Flexibility Analysis, the FCC considered but did not propose waivers for smaller entities).  

            Importantly, the FCC proposes to treat data collected through the reporting process as “presumptively confidential,” just as it treats existing outage information.  The FCC also asks for comment on whether it should be allowed to share information with other Federal agencies on a presumptively confidential basis. 

            Curiously, the FCC waited until the end of the NPRM to request comment on whether it has the legal authority to impose the new requirements.  The NPRM concludes that the FCC has “ancillary authority” to adopt the rules because it has general jurisdiction covering the regulated subject and the regulations are “reasonably ancillary” to the FCC’s performance of its statutory responsibilities.  For VoIP providers, the FCC finds that collecting outage information is “reasonably ancillary” to ensuring that VoIP providers are able to satisfy their 9-1-1 obligations and to enable the FCC to improve the reliability of 9-1-1 services.  For broadband ISPs, the FCC relies on the same authority, but to get around the fact that broadband providers do not have 9-1-1 obligations, the FCC states that they are subject to outage reporting because interconnected VoIP services ride on broadband networks.  As noted above, Commissioner Robert McDowell – who has a reputation for doubting the FCC’s “ancillary authority” – has questioned whether the FCC can impose these requirements. 

            The record from last year’s preview was predictable, with public safety advocates supporting extension of outage reporting requirements and private industry telling the FCC that the rules should not be extended.  There’s little doubt that the record this time around will be similar.  But at least we have specific language of proposed rules to consider.


Earlier today, the FCC granted a six month extension of time to November 1, 2011 for Educational Broadband Service (EBS) licensees to comply with the substantial service test. The filing itself will now be due on or before November 15th. The substantial service test requires licensees to demonstrate how they are using each licensed channel at least 20 hours per week to fulfill their educational mission.  The substantial service deadline for Broadband Radio Service (BRS) licensees is not affected by today's action, and that deadline remains May 1, 2011.

In this video, I discuss the FCC's decision and its ramifications for EBS licensees and others. 

Video Blog-EBS.mov

No Fooling: April 1st FCC Deadline Looms for Some Telecom Carriers, ISPs to File Form 499-A

April 1st is, as Mark Twain described, “the day upon which we are reminded what we are on the other three hundred and sixty-four.” More specifically, April 1, 2011 is an important date for internet service providers who provide voice services, as well as for telecommunications carriers. This is the deadline for filing this year’s Form 499-A with the Federal Communications Commission, and devoting due attention now to the Form 499-A requirements can help prevent “foolish” problems down the road. 

With limited exceptions, intrastate, interstate and international providers of telecommunications services and interconnected VoIP services in the United States must file FCC Form 499-A within one week of offering service to the public and by April 1 of each year. Form 499-A registers the provider with the FCC and the Universal Service Administrative Company. The Form 499-A filing also paves the way for the provider, where required, to file quarterly and annual regulatory filings for its contributions to the Universal Service Fund (“USF”) and other federal programs. The amount of a service provider’s contribution is based on a government-established percentage of a “contribution base,” which is usually based on the provider’s report in Form 499-A of revenues from interstate and international services. Form 499-A also serves to designate the provider’s agent for service of process in the District of Columbia. 

Interconnected VoIP providers take note: due to the difficulties in separating interstate revenues from intrastate revenues for interconnected VoIP service, the FCC has established a “safe harbor” percentage for interconnected VoIP providers, who may choose to report their interstate revenues as 64.9 percent of their total VoIP service revenue.  Interconnected VoIP providers also may calculate their interstate revenues based on their actual revenues or by using traffic studies. Interconnected VoIP providers are required to make USF contributions unless such contributions would be de minimis under FCC rules. Contributions are considered de minimis if the amount owed for a particular year would be less than $10,000 based on the FCC’s formula, which takes into account revenues from interstate traffic. Nevertheless, even providers that qualify for the de minimis exception must file FCC Form 499-A annually and must retain documentation of their contribution base revenues for three years. There is no filing fee for the form (contributions are billed separately during the year), but failure to file the form may lead to FCC enforcement action. Late, inaccurate, or untruthful filings may result in actions to recover costs or other penalties. 

Ben Franklin once said that “you may delay, but time will not” – so it is with the Form 499-A deadline. So, procrastinators who have not yet tackled their form have until April 1, 2011 to determine whether the FCC’s rules require filing of Form 499-A, and if no exemption applies, to gather the required revenue data and other information to complete the form on a timely basis. Service providers will also need to keep detailed records and to determine whether their service triggers requirements to make other common filings with the FCC. For those who are required to File Form 499-A, and have not already done so, don’t forget Henry Longfellow’s words to the wise: “time is fleeting.”

FCC Provides Guidance on Compliance with BRS and EBS "Substantial Service" Requirement

All broadband radio service (BRS) and educational broadband service (EBS) licensees are required to make a showing to the Federal Communications Commission that they have provided a “service which is sound, favorable and substantially above the level of mediocre service which just might minimally warrant renewal” of their BRS or EBS license. To help provide limited clarity for this vague mandate, the FCC released a public notice on Friday to give guidance on what it expects licensees to submit and when. The notice made clear that the deadline for EBS licensees and BRS Basic Trading Area (BTA) licensees to file their notifications is Monday, May 16, 2011 and for BRS incumbent licensees that expire on May 1, 2011, the deadline is May 2, 2011, the same deadline as for the filing of their renewal application.  The public notice comes as the FCC is accepting public comment on a proposal filed by the National EBS Association (NEBSA) and others – with the support of numerous licensees and commercial operators – requesting that the FCC grant a blanket extension of six months.   

The main point for all licensees and operators: facilities need to be built and actual service needs to be provided to pass the substantial service test with flying colors.

Here is what you need to know:

First, until May 16, 2011, EBS licensees and BRS BTA licensees can electronically file "substantial service" showings via the Universal Licensing System (ULS).  BRS "incumbent" licensees must file their "substantial service" showings as part of license renewal applications on or before May 2, 2011.  "Substantial service" notifications are filed on Form 601 as "NT" filings with an appropriate exhibit (discussed below).  Though the filing process has already begun, the FCC would not guarantee when it might begin to take action on individual "substantial service" showings.  The FCC did say, however, that it doesn't plan to wait for all notifications to be filed before taking action.  In cases where a "substantial service" showing is lacking, FCC staff said it will afford the licensee an opportunity to provide clarity or further information.  In these cases, the FCC indicated that it would return the notification to the applicant and would provide the licensee with a deadline to submit additional information. The FCC may also informally contact a licensee or its counsel for follow-up, so having accurate contact information in ULS is a must. 

Second, the FCC plans to "accept" many "substantial service" notifications only by providing notice in ULS – in other words, there will be no public notice of filing or of acceptance.  In some cases -- presumably the more tricky ones or cases where the FCC concludes a licensee has failed to pass the "substantial service" test – the FCC will issue written decisions.  FCC staff also confirmed to me that there is no right in the rules for parties to file petitions to deny against "substantial service" notifications or against requests for extension of time to comply. It is hoped that this will deter frivolous filings made only to obstruct or cause delay and mischief. 

Third, the public notice also makes clear that the FCC will not review any "substantial service" showing filed by a licensee that has transitioned but has not filed its post-transition modification application to change to the "new" frequencies.  In response to my suggestion, FCC staff also indicated that "acceptance" in ULS of compliant "substantial service" showings would be the only FCC action -- this would put investors on notice that they should not wait for a public notice announcing "acceptance." 

Fourth, any licensee that does not file a "substantial service" showing (by the May 16 filing deadline) or an extension request (by May 1) will have its license automatically terminated.  This statement presumes, of course, that the Commission does not grant the pending request for a six-month extension for EBS.  

FCC staff offered some guidance on what it will be looking for in "substantial service" notifications.  In all cases, the licensee must demonstrate "substantial service" within its geographic service area ("GSA") – service in white spaces or adjacent areas will not count.  For BRS and EBS point-to-multipoint and mobile operations relying on the 30% coverage "safe harbor," licensees should include a map showing where they provide a "reasonably reliable" signal using generally acceptable engineering practices.  Clearwire is developing a methodology for calculating coverage percentages, so perhaps all licensees can get behind a single method.  Licensees are required to use the most recent official Census data.  Licensees also need to indicate the type of service they are providing.  For BRS and EBS licensees relying on the point-to-point "safe harbor" of six permanent links per million pops, the FCC will not require the submission of maps but will want a list of the endpoint coordinates and a description of the spectrum use.  In addition, licensees relying on the rural service “safe harbor” (i.e., for mobile services, coverage to at least 75% of the geographic area of at least 30% of the rural areas within the service area and for fixed services, construction of at least one end of a permanent link in at least 30% of the rural areas within its licensed area) must provide in addition to the other information applicable to their type of service the area and population for counties that the licensee considers “rural” and must indicate which rural counties are receiving service. 

For EBS, the FCC will be looking for a more detailed demonstration for licensees that are relying solely on their educational usage “safe harbor” and do not meet other "safe harbors” (including the 30% coverage, permanent links or the rural safe harbors).  At a minimum, EBS licensees should submit a brief description of (1) the services they are providing in the GSA, and (2) how they are meeting the educational programming and minimum usage requirements. I note the use of the word “and” is in the Public Notice despite the fact that the version of the rule in the Code of Federal Regulations (p.330), in the associated Federal Register publication (p. 35190) and in the attachment to the FCC Order adopting the rule (p.165) uses the word “or.” This may be largely academic because the FCC has wide latitude to interpret its rules and it has repeatedly warned EBS licensees that actual service and use of 20 hours per channel per week is required. Merely transmitting signals is not enough. 

There are some surprises relating to the amount of detail that is to be provided in the substantial service showing, based on the FCC's Public Notice:

  • Licensees relying on the "permanent links" safe harbor must provide, in addition to the coordinates of each end of each link, the population within the geographic service area, an indication of the uses for the links and the bandwidth of the links;
  • Licensees relying on the "30 percent coverage" safe harbor must indicate the signal level that they believe indicates coverage and the percentage of time such a signal is available within the service area; and
  • Licensees relying on the "EBS" safe harbor must provide, in addition to specific descriptions of the service being provided, the names and addresses of any accredited institutions to which the licensee is providing service.

The FCC is sensitive to the workload (ours and theirs) and will not require detailed showings of things like programming schedules, though it will require addresses where service is being provided if it is not being provided to the licensee itself.  Licensees that have channel-loaded or channel-shifted should mention this in their exhibits. 

Finally, a few words about extensions.  The FCC will look at extension requests on a case-by-case basis, and such requests should be filed at least 30 days before May 1.  Though the FCC did not offer a lot of guidance, we expect that a licensee would need to demonstrate that financial difficulties or events beyond its control require additional time and that it is reasonable for the licensee to meet "substantial service" in the near future.  Extensions also will be filed on Form 601 with the "EX" application code. 

Given the lack of any objections in Comments filed last week and the FCC staff’s “receptiveness” to the needs of educators, prospects are excellent that the FCC will grant the blanket extension some time after March 1 when Reply Comments are due. My view is that the blanket extension will be granted this week by March 4th (this is the week of the national NEBSA conference) by circulation to the FCC Commissioners. After all, it would be unfair to leave licensees twisting in the wind not knowing if more time will be provided. 

There is some concern that a government shutdown this week could throw a monkey wrench in the whole process. The reason is that ULS will automatically cancel the EBS license if a substantial service showing is not timely made, and of course if the government is shut down, so is the FCC – and ULS. While it seems unlikely that a government shutdown would extend beyond the applicable deadlines, no one wants to risk losing operating authority, so some licensees may rush to file their showing before Friday’s possible shutdown. If not, having lived through the last shutdown, I believe that there is little risk licenses will be lost during the FCC closure – if it even happens. 

The main point for all licensees and operators: facilities need to be built and actual service needs to be provided to pass the substantial service test with flying colors.

FCC Fines Broadband Operator for Causing Interference to TDWR Operations; Readies Rulemaking Proceeding

Aviation safety remains a critical enforcement issue for the Federal Communications Commission, as we highlighted in a recent blog post.  Late last week, Utah Broadband found out the hard way as the FCC assessed the company a $25,000 fine for violating rules designed to prevent interference to Terminal Doppler Weather Radar (TDWR) stations that operate in the 5.6 GHz band to detect wind shear and microbursts that can affect aviation safety.  In this case, an FCC/FAA enforcement team found that Utah Broadband had modified its transmission equipment to impair TDWR operations at the facility located near the Salt Lake City International Airport.  In addition to its enforcement efforts, the FCC intends to launch a rulemaking proceeding to create a long-term solution to enable access to more than 100 megahertz of spectrum in the 5.6 GHz band, to allow new devices to be certified and to improve interference protection to existing TDWR locations. 

The problems for Utah Broadband occurred in part because the frequencies that the government uses for TDWR systems are shared with commercial users of unlicensed devices – called UNII devices – in the 5600-5650 MHz band.  UNII devices are authorized under Part 15 of FCC rules and are subject to specific technical requirements, including the obligation to use Dynamic Frequency Selection (DFS) in the 5470-5725 MHz band to help allow the device to avoid using channels occupied by nearby TDWR systems.  Toward the end of 2007, TDWR systems began encountering interference at various locations nationwide.  In February 2009, the Federal Aviation Administration (FAA) asked the National Telecommunications and Information Administration (NTIA) and the FCC to assist in resolving the interference problem.   In response, the government conducted initial field testing at the station near San Juan International Airport in Puerto Rico, a station that was subsequently found to be experiencing “severe” interference.  FAA and FCC field engineers agreed that the interference was caused by UNII devices.  

The FCC also halted certifying devices for operations in this band and began to engage an industry group to help develop new testing parameters for equipment certification, while also looking for a short-term solution. Manufacturers wanted to see equipment certifications re-examined.  Wireless ISPs wanted to gain access to additional spectrum – the 5600-5650 MHz band and the 30 megahertz on either side of that block, for a total of 110 megahertz.  The FAA and NTIA wanted to see the interference disappear.  The FCC was acting as the broker for all of these interests, attempting to balance the interests of the public and the governmental sectors.  After months of talks, and with the encouragement of the agencies, the Wireless Internet Service Providers Association and Spectrum Bridge (both clients of our law firm) established a voluntary database by which UNII users could register their technical data and locations.  The registration would be for UNII devices operating within 35 km of a TDWR location on frequencies within 30 megahertz of the TDWR center frequency.  The database proved to be somewhat successful, but interference problems have persisted.  As a “stick” for the database “carrot,” the FCC took the unusual step of writing a memorandum to manufacturers and operators explaining the problem and issuing a stern warning that enforcement would continue.

For the government, detecting and rooting out interference is a bit like playing Whac-A-Mole – interference would disappear at some stations, only to reappear later and in different locations.  In San Juan, in the wake of near-continuous interference, the FAA actually shut down the TDWR station and the FCC sanctioned a company called AyustarTDWR stations in Miami, Ft. Lauderdale, New York, Chicago, Dallas and Salt Lake City have suffered periodic interference.

These developments bring us to the Utah Broadband decision.  Amid reports of substantial interference to the Salt Lake City TDWR station, FCC and FAA enforcement visited the Salt Lake City area in October 2010 and found that Utah Broadband was doing many things wrong:

  • Operating UNII devices outside the authorized frequencies.
  • Disabling DFS functionality
  • Likely operating at power above the maximum permitted by FCC rules
  • Repeatedly and willfully violating FCC rules

Although detecting the source of interference is apparently not easy, when the inspectors enabled DFS to block operations on spectrum used by the TDWR station, the interference from Utah Broadband’s operations disappeared.  Citing “the totality of the evidence, the number of unauthorized systems in operation, and the gravity of the public safety risks posed by the unauthorized operation,” the FCC slapped Utah Broadband with a $25,000 fine, representing an upward adjustment over the base fine and an increase over the forfeiture imposed against Ayustar.  The FCC also required Utah Broadband to make a “blackboard apology” by sending a signed statement into the FCC certifying its compliance with the equipment authorization and FCC rules.

According to the FCC, about two-thirds of the interference cases involve intentional abuses of Commission rules similar to the violations for which Utah Broadband was cited.  We should expect the FCC and the FAA to continue their enforcement efforts to find violators and issue stiff fines.

For a long-term answer, the FCC remains interested in finding solutions that will enable UNII devices to operate in the band while reducing – or eliminating – potential interference to TDWR stations.  DFS requirements and the voluntary database have had a limited impact because rogues will always look for ways around the rules.  Unfortunately, these bad apples have spoiled it for the vast majority of UNII device manufacturers and operators that operate legitimately.

The FCC is expected to commence a rulemaking proceeding this year.  Among other things, the FCC will consider mandatory database registration for all new devices certified under new testing parameters.  This database could be manual – requiring device users to enter technical and location information into a database – or GPS-based – requiring the devices themselves to automatically register in the database under procedures similar to those recently adopted for TV white space devices.  This approach is a bit problematic for legacy devices, which are not equipped for geo-location registration, but mandatory registration will provide the FCC with another “carrot” – compliance by registration – and a “stick” – fines and other sanctions for failing to register. 

For now, the Utah Broadband decision shows that FCC and FAA inspectors remain in the field looking for violators and will take action to address wrongdoers that cause illegal interference.  Aside from the obvious ramifications to manufacturers and operators in the 5.6 GHz band, it’s important for industry to understand that responsibly sharing spectrum with the government can open doors for additional spectrum use down the road.

Comcast-NBCU: FCC Conditions Deal to Promote Online Video Services; Questions Remain

Perhaps video never “killed the radio star,” but what should we expect for online video now that the joint venture between Comcast Corporation and NBC Universal, Inc. (“Comcast-NBCU”) has become a reality? This new entity may be the product of two “old media” powerhouses, but new-media concerns about online video distribution represent a major theme in regulatory approvals of the Federal Communications Commission and the U.S. Department of Justice. These new regulatory ground rules will help shape the online video marketplace – a marketplace that so far is vaguely defined and in a state of transformation.

As we’ve previously described, the FCC often uses its merger-review authority to help advance objectives that may ordinarily exceed the agency’s reach. In light of the continuing legal battles over the scope of the FCC’s legal authority to regulate the Internet, it is noteworthy that Comcast and NBCU, in an effort to obtain FCC approval, agreed to some enforceable commitments and conditions to govern the new entity’s participation in the online video marketplace. While these conditions are specific to the transaction, they will affect how Comcast-NBCU will negotiate with third parties who want access to Comcast-NBCU content.

A key question: what “marketplace”? In conditioning its approval, the FCC expressed concern that Comcast-NBCU would have the “incentive and ability” to discriminate against two FCC-defined categories of online video distributors: 

  • Multichannel video programming distributors (or “MVPDs”) such as cable operators, satellite providers or other providers of such multichannel programming; and
  • Non-MVPD distributors of online video programming, such as standalone “over-the-top providers” like Hulu (in which NBCU has an ownership stake), Netflix, GoogleTV and iTunes.  

In general, these categories contrast MVPDs (as providers combinations of linear program streams such as cable or broadcast channels of programming) with more “over-the-top” video services (such as on-demand and pay-per-view services). To complicate matters further, in a footnote, the FCC left open the possibility that certain types of OVDs also could be deemed MVPDs. The FCC determined that “regardless of whether online video is a complement or substitute to MVPD service today, it is potentially a substitute product” and sought to implement conditions to address these “nascent” online video services. The FCC’s decision has consequences for online video and in other contexts. For example, just yesterday DirecTV asked the FCC to clarify which entities constitute MVPDs for purposes of regulations involving set-top boxes. 

With respect to the marketplace for online video, Cardozo Law School professor Susan Crawford's blog post on Comcast-NBCU provides an interesting analysis of the FCC’s decision to apply conditions to protect OVDs. She asserts that the FCC has “created a market” by designating OVDs as a category entitled to protection. In my view, the “OVD” designation is more like a class of service providers than a market, because the FCC declined to identify current potential substitutes for the provision of these services and implicitly raised the question of whether some OVDs compete in a separate market for the provision of multichannel programming service. For these reasons, and in light of the definitional ambiguities surrounding the “MVPD” designation, the “marketplace” for OVD services, however defined, is an evolving concept. 

Acronym soup notwithstanding, the FCC sought to address Comcast-NBCU’s purported incentives to discriminate against rival OVDs (whether MVPD or not). For example, the FCC expressed concerns that Comcast-NBCU would raises prices for rivals to access its affiliated programming or would refuse to provide this programming in a timely manner or in the same quality. The FCC found that its program-access rules – i.e., rules designed to prevent vertically integrated program suppliers from improperly favoring affiliated cable operators – would not provide sufficient protection because strategies of uniform price increases would not discriminate among service providers. Instead, the FCC required Comcast-NBCU to provide affiliated programming to rival MVPDs at fair market value and on nondiscriminatory prices, terms and conditions.   

For OVDs seeking access to Comcast-NBCU programming, the FCC provides the following rights. 

  • An OVD may decide to become an MVPD and, like other MVPDs, would be entitled to access Comcast-NBCU-affiliated content for online display at fair market value and on nondiscriminatory prices, terms and conditions.  
  • An OVD may request that Comcast-NBCU offer its video programming to the OVD on the same terms and conditions that would be available to an MVPD, provided that the OVD is willing to pay the economic equivalent of the price, terms and conditions on which Comcast-NBCU provides video programming to MVPDs. If the OVD qualifies, Comcast-NBCU must provide “materially” the same programming that it offers to other “similarly situated” MVPDs; however, if the other MVPD is obligated to make the programming available through a linear stream, the OVD’s obligation must be “materially similar.” 
  • An OVD will be entitled to access to “comparable programming” available on economically equivalent prices, terms and conditions if the OVD enters into an arrangement to distribute programming from one or more of Comcast-NBCU’s non-affiliated “peers.” Who are these peers? They include certain broadcast networks, cable programmers, production studios and film studios whose names you’ve heard before (e.g., they are affiliated with Disney, Time Warner, News Corporation, Viacom, Warner Bros., 20th Century Fox or Sony Pictures) or otherwise must be one of a handful of the largest players in their industry. Unlike the second option, this programming need not be provided in linear streams.

So what’s the upshot? Comcast describes these procedures as a “focused mechanism for online video providers to obtain access to certain NBC Universal content [that is] carefully crafted to be fair to all players.” That said, these conditions clearly serve as a filtering function to help ensure that Comcast-NBCU only has to share programming with companies that demonstrate certain “bona fides.” OVDs may opt to enforce these conditions via arbitration, but the legal text is replete withdense interpretive issues. Moreover: 

  • If the OVD opts to become an MVPD, that is an expensive proposition. The OVD must consider the costs of deploying networks, negotiating carriage and programming rights, and obtaining local franchises, as well as the prospects of being deemed another cable company.
  • If the OVD decides to compete on an equal footing with an MVPD, that too is an expensive proposition. The MVPD must consider the costs of economically equivalent programming and the likely requirement that the programming would have to be provided as a linear stream offered on an “all or nothing” basis – i.e., akin to real-time distribution of a program channel as opposed to on-demand programming.
  • If the MVPD enters into an agreement with a Comcast-NBCU “peer” for comparable programming, that is – you guessed it – an expensive proposition. This trigger requires an agreement with one of the largest industry players, who no doubt would have to be presented with a compelling business case to sign an agreement with an unaffiliated distribution partner because many of these participants already have extensive distribution channels.  

In addition, Comcast provides some online programming on an “authenticated” basis to only those individuals who subscribe to Comcast MVPD service. Comcast will continue to be allowed to do so, subject to these sets of conditions. Comcast-NBCU also will not be allowed to put certain online programming behind a paywall for as long as at least one of the other major broadcast networks provides a similar service. 

The FCC has tried in other ways to implement enforceable “fair play” conditions on Comcast-NBCU. Comcast-NBCU may not enter into agreements to hamper online distribution of its or another’s video programming. Comcast-NBCU also must continue to offer standalone broadband Internet access services, at reasonable prices and of sufficient bandwidth that customers can access online video services without being required to purchase a Comcast-NBCU subscription for cable television services. The company may not disadvantage rival online video distribution services through its broadband services and/or set-top boxes. Finally, Comcast-NBCU has agreed to abide by the FCC’s “Open Internet” rules (a.k.a "Net Neutrality"), and it appears that this commitment would remain even if those rules are successfully stricken or modified by judicial appeal

As for Hulu, as a result of the FCC’s approval, neither Comcast nor NBCU will be permitted to exercise any rights to influence Hulu’s conduct or operation, but the companies may retain a purely economic interest. Recent media reports indicate that Hulu is considering an MVPD-style approach to online video distribution. Just yesterday Hulu CEO Jason Kilar posted his thoughts about the future of TV and argued that consumers, advertisers and content owners will play a more important role than distributors in the future of online video – an interesting take in light of the FCC’s actions to limit Comcast-NBCU’s oversight. 

In the end, the FCC’s “transaction-specific” conditions will have major implications for the “over the top” providers who had no part in the transaction. Time will tell how the FCC’s actions, and the reactions of Comcast-NBCU and the competition, will influence the evolution of online video services. In light of this unprecedented vertical combination, all eyes will be on the industry to spot the next players in line with plans to create a similar combination of content and distribution.

FCC Brings "Super Wi-Fi" Closer to Reality in TV White Spaces

While many of us in the Washington, DC area were dealing with white spaces of a different kind, the Federal Communications Commission was taking two important actions to bring closer to reality the use of TV white spaces for wireless broadband service. First, four months after releasing its new rules, the FCC finally adopted an order "conditionally selecting" nine companies to be administrators for the geolocation database that will be used to identify available and unused TV channels. Second, the FCC granted an experimental license to Rini Coran, PC client Carlson Wireless Technologies Inc. (CWT) to deploy a broadband network on white space channels within the Yurok Reservation along the scenic Klamath River in Northern California.

In the database order, the FCC approved these companies to act as database administrators:

All of these companies had submitted requests to be selected for the administrator role. Each entity will have until February 28, 2011 to amend its proposal to comply with the new rules adopted in September. The selected companies also will need to attend mandatory workshops -- the first of which will be March 10, 2011 -- and to work closely with the FCC "to ensure competency, consistency and compliance" with the rules. Each administrator must trial its database for at least 45 days before it can make its database available for actual use by TV bands devices. The administrators will be subject to a five-year term running from the date on which the FCC announces that a particular database is publicly available.

The FCC intends to exercise careful supervision over the databases. In addition to technical compliance, the administrators are subject to privacy and security rules and may not engage in discriminatory or anti-competitive behavior.

Under the experimental license granted to CWT, the Yurok Tribe will be the first Native American tribe in the nation to take advantage of white spaces. Notably, the FCC's National Broadband Plan identified white spaces as presenting a significant opportunity for provision of broadband service to Tribal lands. With this experimental license, CWT joins the white space ecosystem and signals plans to become a major player.

Not that anyone here in the Washington area is wishing for more snow, but if a large dose of the white stuff is what it takes to get the FCC to act on white spaces, let it snow, let it snow, let it snow!

TV White Spaces: Finishing Touches Near as FCC Reconsiders Rules that Preclude Rural Deployment

            Finishing the TV white spaces proceeding has proved to be a bit of a challenge for the Federal Communications Commission.  After more than two years from its adoption of initial rules, the FCC released the second TV white spaces order on September 23, 2010.  The rules recently took effect on January 5, 2011, raising hope that new services would soon follow.  Unfortunately, the FCC still needs to add a few coats of paint to its white spaces rules before we see wide-scale commercial broadband deployments, although the number of action items has dwindled.

      "[T]he rules effectively preclude fixed white space operations in large portions of the country."

     At the top of the list: a few rules are subject to reconsideration.  Most prominently, a consortium of trade associations, database administrator applicants and equipment manufacturers led by the Wireless Internet Service Providers Association (“WISPA”), a Rini Coran, PC client, asked the FCC to relax its tower height and out-of-band emission rules for fixed white space devices.  In the September 2010 order, the FCC limited the maximum height of tower sites to 76 meters above average terrain (HAAT).  Together with the 30-meter tower height limit adopted in November 2008, the rules effectively preclude fixed white space operations in large portions of the country.  As shown in the maps provided by Comsearch at Appendices B and D in WISPA's FCC filing, the areas affected by the height restrictions are, not surprisingly, rural, hilly and mountainous areas of the country where white space spectrum could otherwise be used to provide much-needed broadband service – indeed, the intended targets of white space services.

            The petitioners asked the FCC to adopt a 250-meter HAAT limit while also increasing the keep-out zones for co-channel and adjacent-channel TV stations to ensure that there would be no increase in harmful interference to broadcasters.       

            The September order also tightened the spectral mask for adjacent channels, limiting the amount of usable spectrum and adding cost to equipment and deployment.  Led by Motorola, petitioners asked the FCC to relax the emission mask to reduce costs and promote spectral efficiency, while increasing the adjacent-channel keep-out zones to protect incumbent TV stations. 

             Also on the white spaces wish list: the FCC still has not released its long-awaited order designating geo-location database administrators and establishing final database governance rules.  Long anticipated since the release of the second TV white spaces order, the would-be administrators still have no marching orders.  No doubt, the FCC’s Office of Engineering and Technology has been pre-occupied with net neutrality and a spate of other important orders. The reality is that the FCC can only authorize experimental operations until the database administrators are selected and ready.  The good news is that OET is expected to issue its order any day now, so hopefully that roadblock soon will be in the rear-view mirror.

             Not far behind is the certification of TV white space equipment.  Because of the need for equipment to have geo-location capabilities that are linked to the databases, the FCC cannot certify equipment until the databases are established and certification procedures finalized.  No word on how long the certification process will take, but hopefully that can be measured in days and weeks and not months.

             Fortunately, the FCC only has a few issues to address in the reconsideration phase, so the proposed changes to the height and emission mask rules likely can be implemented soon.  Even so, once the database administration process is set and equipment is certified, white space deployments can begin right away in those parts of the country where the HAAT and mask issues are not impediments. 

FCC Gives Broadband Operator 25,000 Reasons to Comply With Tower Rules

Tower owners take note – if your tower is subject to the Federal Communications Commission’s lighting and registration rules, the FCC expects you to comply with these rules and to heed any FCC warnings about rule violations.  A tower owner in Yorktown, Texas recently learned this lesson the hard way after the FCC provided 25,000 reasons to pay closer attention. 

On January 13, 2011, the FCC announced a $25,000 fine against RAMCO Broadband Services for numerous violations of the FCC’s tower lighting and antenna structure registration rules. The FCC requires tower owners to paint and light antenna structures that may present a hazard to air navigation, and it requires such owners to register with the FCC when their antenna structures meet the criteria for notification to the Federal Aviation Administration.  According to the Enforcement Bureau’s Notice of Apparent Liability for Forfeiture, RAMCO Broadband Services owned a tower that because of its height, must be painted, lit and registered with the FCC.  In response to a complaint, an FCC agent visited the tower site in January, February and March 2010.  The FCC agent noticed that the antenna structure was registered to the previous tower owner and not to RAMCO.  In addition, the agent found that the tower was not lit after sunset, that RAMCO had not notified the FAA of a light outage, and that the antenna structure registration number was not displayed in a readily visible manner at the base of the tower.  According to the NALF, the agent warned RAMCO of these violations orally. 

A subsequent inspection of the tower in September 2010 indicated that RAMCO had not corrected any of the violations.  In the NALF, the FCC fined RAMCO a total of $25,000; $6,000 for failing to update the ownership information for the tower; $4,000 for failing to post the antenna structure registration number and $15,000 for failing to comply with lighting requirements.  RAMCO has until February 12, 2011 to either pay the forfeiture or to seek reduction or cancellation of the forfeiture based on inability to pay or other grounds. In addition, RAMCO must provide the FCC by January 28, 2011 a certification that it has taken certain remedial steps or a timetable for completing repairs and for continued notifications to the FAA regarding the lighting outage.

Why so serious? This decision illustrates an important lesson. All too quickly, what may seem at first glance as “minor” violations of the FCC’s rules can escalate into more serious infractions.  Here, the FCC found that the owner failed to update tower ownership information or properly post the antenna structure registration number at the base of the tower.  These infractions are much less serious than failing to have tower lights that function at night or failing to notify the FAA of such outages.  The rules are designed to give notice to the FAA and to pilots of known hazards to air traffic, and inaction by a tower owner can increase the potential for loss of human life and property damage.  The upshot is that, as RAMCO has learned, the FCC takes violations of these rules very seriously.

Hidden in Plain View: The Threat Within the FCC's Enforcement of its Net Neutrality Rules

Now that the Sturm und Drang over the FCC’s new Net Neutrality Rules is in full throat, some lurking concerns warrant more attention – namely, concerns about the FCC’s enforcement of its new rules and the administration of its complaint process.  The FCC states that it seeks “prompt and effective” enforcement of its new rules, but eyebrows are arching regarding whether the current structure will effectively promote this goal. 

"The FCC states that it seeks 'prompt and effective' enforcement of its new rules, but eyebrows are arching regarding whether the current structure will effectively promote this goal."

First, some context.  Assume for the moment that you provide fixed or mobile broadband service and that the new rules survive unscathed after the administrative, judicial and legislative battles that are almost certainly on the way.  Someone believes that you have violated these rules – for example, your subscriber believes that you have failed to adequately disclose your network management practices, or an edge provider believes that you have blocked its lawful content (if you are a fixed provider) or an end user complains that you have unreasonably discriminated in transmitting their lawful network traffic over your network.  How can this aggrieved party seek legal relief, and what relief is available? 

The FCC has retained independent enforcement authority for the net neutrality rules, but as noted in Matthew Lasar’s overview at Ars Technica, the FCC's enforcement process is overwhelmingly complaint-driven.  The new rules give the aggrieved party two “backstop mechanisms” at the FCC in the event that the interested parties cannot resolve their dispute privately: a formal complaint process and an informal complaint process. 

  • The formal complaint process imposes procedural obligations on the complainant and launches an adjudicatory proceeding.  Formal complaints will be addressed through “accelerated docket” procedures.  Before filing a formal complaint, the complainant must notify the respondent in writing that the complainant intends to file the complaint.  The complaint must comply with FCC processes, and the complainant must pay a filing fee (which may be the FCC Enforcement Bureau’s version of “paid prioritization”).  The complainant must “plead fully and with specificity the basis of its claims and to provide facts, supported when possible by documentation or affidavit, sufficient to establish a prima facie case of an open Internet violation.”  The rules set forth a timetable for answers and replies, and the FCC will issue an order “determining the lawfulness of the challenged practice.” 
  • The informal complaint process, by contrast, is more akin to tossing “paper grenades.”  Anyone with a computer may submit informal complaints (for example, via the FCC’s website or to the agency’s Consumer and Government Affairs division) in an effort to draw the FCC’s attention to challenged practices and perhaps spark an investigation.  There are no “accelerated docket” procedures.  The FCC has stated that individual informal complaints will not typically result in written Commission orders, and the potential remedies and sanctions are unclear.

As Larry Downes describes in his essay regarding the costs of enforcement of net neutrality rules, allowing “any person” to launch net neutrality complaints triggers inefficiencies and transaction costs because the filer can shift enforcement costs to the FCC or to ISPs.  Its not hard to imagine a disgruntled group campaigning and recruiting others to file loosely worded complaints that tie up the resources of broadband providers as they respond to paper grenades launched via the FCC’s electronic transom.  What is hard is running a small business or getting financing while buried in paper when an FCC decision on a complaint – even in a frivolous case – may be months away. 

"Given the FCC's lack of resources (and authority?) to police the entire Internet and its long-standing enforcement track record, we should expect the process to remain complaint-driven..."

Given the FCC’s lack of resources (and authority?) to police the entire Internet and its long-standing enforcement track record, we should expect the process to remain complaint-driven; however, reliance on a formal complaint process alone would reduce the incentive for “any person” to file complaints in bad faith.  The FCC’s decision to make available the “informal” process in addition to the “formal” process may turn out to be costly for broadband providers.  Here’s why:  

  • While the FCC has stated that “any person” may file a complaint, the formal complaint process has more mechanisms in place to deter the filing of non bona fide complaints – for example, there’s a $200 filing fee, procedural requirements and an “abuse of process” sanction against parties who file “unlawful” frivolous pleadings.  These mechanisms should make it much harder for competitors, disgruntled employees or others who suffer no actual harm to game the process. 
  • The availability of informal processes may encourage the filing of “cookie cutter” complaints, where persons or groups may seek to launch a barrage of nearly identical complaints in an effort to get the FCC staff’s attention for political purposes. 
  • The FCC does not set forth any particular remedy for an informal complaint other than saying that the FCC would “take appropriate enforcement action, including the issuance of forfeitures” for any net neutrality violation. 
  • The FCC did not adopt any specific forfeiture amounts for violations, so the penalty would likely be set on a case-by-case basis. 

Also, if what is past is prologue, broadband providers should have concerns that the mere filing of an informal complaint, even a frivolous one, would have other consequences.  Consider the case of those broadcasters who have found that meritless indecency complaints have hindered their ability to conduct legitimate business.  The reason is the “enforcement hold” that the Enforcement Bureau imposes against broadcasters’ FCC applications (e.g., license renewals, approvals for transactions) when one or more complaints are filed against their broadcast station(s).  Under FCC policy, the presence of this “red flag” can force the broadcaster to become involved in potentially protracted negotiations to get FCC clearance for their proposed transaction or license renewal.  This pressure has resulted in some broadcasters giving up legal rights by entering into consent decrees (whereby the station pays a penalty to resolve the complaint but does not admit liability for the conduct) or tolling agreements (where the broadcaster agrees to forego its rights to challenge an FCC action that takes place outside of the statute of limitations; i.e., their “shot clock” for reaching a decision) with the FCC.  Essentially, licensees often face intense pressure to agree to “voluntary” concessions and to raise the white flag in an effort to get the FCC to drop their red one.

One way for broadband providers to minimize liability is to be sure that they are complying with the FCC’s transparency requirements.  Providers that make adequate disclosure of their network management practices, performance characteristics and commercial terms of service will enjoy greater latitude in negotiating with the FCC.  And, so long as those practices are followed, a complaining party will find its burden a bit more difficult to meet. 

Nevertheless, with the broadcast indecency lesson in mind, broadband providers should be concerned.  It is reasonable to expect significant litigation over the rules, just as the FCC’s indecency policies have been heavily litigated. The FCC may hold up informal complaints for a protracted period as the legal challenges continue – recall that there is no “accelerated docket” for informal complaints and even if there was, the FCC may claim authority to waive any its internal timetables for “good cause.”  Such a litigation tangle may result in stalled FCC enforcement and delays in application processing – delays that could apply differently to different categories of service providers because some are more dependent on FCC licensing than others. 

In short, enforcing the FCC’s net neutrality rules represents a regulatory thicket for broadband providers and others – one that is worth the effort to navigate around given the uncertainty and the legal challenges to come. 

Net Neutrality: FCC Declares Open Internet

It seems fitting that the Federal Communications Commission took advantage of yesterday’s winter solstice to shine new light on its plans to regulate the “Open Internet.”  By a 3-2 vote along party lines, the FCC adopted “net neutrality” rules that will govern how fixed and mobile broadband providers do business with their subscribers and others that use the Internet.  Only Chairman Julius Genachowski seemed happy about the rules, calling them a “strong and balanced” approach to Internet governance that avoided the extremes of his colleagues.

At first blush, the rules appear to strike a balance between two extremes – intrusive government micromanagement and toothless requirements that have little practical effect. There are, however, open issues that give rise to concern.

Once it became clear that net neutrality rules would be adopted and the government would be involving itself in Internet access, some fixed wireless broadband providers (WISPs) feared that their small, capacity-constrained networks would buckle under the strain of the same rules that would apply to Comcast, Verizon and other large ISPs operating on high-capacity wired platforms.  As a general matter, broadband providers will not be permitted to block consumers’ access to lawful content, applications and devices and cannot engage in “unreasonable discrimination.”  These rules are subject to “reasonable network management,” a key phrase for any ISP and small WISPs in particular.

As with any regulation, words matter.  And in this case, how the FCC defines “reasonable network management” is especially crucial.  Providers will be given “meaningful flexibility” to manage network issues such as congestion and security.  “Reasonable” is defined generally along the lines of what is appropriate and tailored to achieving a legitimate network management purpose, taking into account such factors as network architecture and technology.  Examples of legitimate network management purposes include ensuring network security and reducing the effects of network congestion.  In this regard, the rules may be interpreted to recognize the unique challenges that WISPs face in operating small businesses in small communities with small networks.      

Not only do words matter, but how the FCC will enforce its rules and applies its definitions will be important to watch.  Given the FCC’s decision to allow consumers to file informal complaints, broadband providers hopefully will not be required to respond to ongoing, time-consuming complaints that may force ISPs to be overly cautious in the way they manage legitimate network issues.  It would not be surprising to see consumer groups spearheading enforcement efforts that create uncertainty in network management.

This is not the last we will hear of net neutrality and the Open Internet. Some have raised serious questions about the legality of the new rules and about whether the FCC has sufficient authority to adopt them.  Republican Commissioners Robert McDowell and Meredith Attwell Baker issued strenuous oppositions in line with their recent statements in the press.  Calling the FCC's failure to learn from the past as “regulatory hubris,” McDowell sharply criticized the majority's reliance on Section 706 of the Communications Act as a legal authority and essentially laid out an analytical roadmap to overturn the rules in court.  Baker also stated that unelected officials should not be making decisions with such far-reaching consequences.  Echoing concerns from House Republicans, McDowell and Baker accused the majority of acting where no competitive harm is present--a position set forth by AT&T. One Republican Senator has already introduced an amendment to an appropriations bill that would strip the FCC of funding for anything related to implementing and enforcing the net neutrality rules.

It will likely be a long time before the full impact of the FCC’s rules can be assessed.  In the meantime, Internet businesses of all kinds will need to account for the potential new costs and the regulatory burdens that may follow.

Incentive Auctions of TV Spectrum for Broadband May End Up Not So Voluntary

The FCC has begun its long anticipated rule making proceeding to reallocate 120 MHz of TV spectrum from wireless broadcast to wireless broadband services. Just a few days ago, the Commission voted 5-0 to consider three different approaches for reclaiming this spectrum, relying mostly on voluntary participation by TV broadcasters who wonder openly how truly voluntary this process will be if not enough TV stations agree to trade spectrum for cash and possibly, a smaller slice of shared spectrum to continue broadcasting.

The first approach is to encourage broadcasters to return 120 MHz of spectrum to be auctioned for wireless broadband service, with broadcasters receiving some portion of the auction proceeds. These incentive auctions would require Congressional approval. The second approach is adoption of rules to encourage two or more television stations to share the same 6 MHz TV channel. The third approach is adoption of new engineering rules to improve the VHF band with the hope that some television broadcasters would relinquish their stations in the UHF band in exchange for stations in the VHF band. The FCC likely will order TV spectrum auction winners to pay the costs to repack the TV Band to clear contiguous blocks of spectrum to auction.

Broadcasters are less than enthusiastic about the third approach because of concerns about impulse noise from electrical power lines, signal quality issues in the VHF band and the costs associated with moving a station from the UHF to the VHF band. The Commission believes the continued growth and importance of wireless broadband services requires allocation of spectrum from other services. The Commission has identified television broadcast spectrum as the most suitable candidate, arguing that television broadcasters do not use their spectrum efficiently, that less than 10% of the nation receives broadcast television through over-the-air reception and that broadcasters will still have 300 MHz of spectrum remaining after the FCC takes away and auctions the reclaimed spectrum.

TV stations question whether the Commission’s proposals will degrade the quality of HD signals because shared spectrum is insufficient to broadcast in HD. It is unclear what costs TV stations would have to bear (and in this economy, the costs of the auction transaction itself could be daunting). There is also fear that this approach could undermine the legal basis for the must carry/retransmission regime. Fundamentally, many question the necessity of reclaiming that much spectrum, pointing out that the demand for spectrum is greatest in the largest metropolitan markets where TV stations are not likely to voluntarily participate in auctions. The quickest path to freeing up more spectrum for broadband applications would be to give broadcasters more flexibility to use their spectrum for broadband services by reforming the technical rules and allowing secondary leasing rules to govern rather than the outmoded command and control model now favored by FCC regulators only with respect to broadcasting.

In an ironic twist, broadband providers are now touting the benefits of a “broadcast type” service over broadcast spectrum. This is allegedly the most efficient use of spectrum to deliver video programming consumers are demanding in greater numbers. At the end of the day, broadcasters are expected to go along with the proposals so long as they are truly “voluntary.” As anyone who has negotiated voluntary conditions as part of an FCC merger review knows, some things in DC are more voluntary than others.


Let Me In, Innovation Man: FCC Revisits Experimental Licensing

The FCC has announced new proposals to promote investment and create jobs in wireless broadband. On November 30, the FCC announced at its open meeting that it sought to boost innovation in the telecommunications marketplace and to help restore the country’s prominence in research and development through two new proceedings.

In the first proceeding, citing past achievements such as Wi-Fi and PCS that grew out of experimental licensing, the FCC is proposing to overhaul its experimental licensing rules to streamline the process by which new devices and technologies can move from R&D to deployment. Utilizing a new license called a “program license,” the FCC will establish “innovation zones” -- specifying areas where experiments can be conducted without command and control licensing. The FCC also will make it easier for universities and labs to conduct experiments and will enable health care institutions to obtain program licenses for telemedicine research. The FCC also signaled that it would ease some of the restrictions surrounding market trials to allow consumers to have more access to new products. Interestingly, Commissioner Baker suggested that improved experimental licensing rules could provide some answers to improve spectrum efficiency in the TV bands.

For the second item, the FCC adopted a Notice of Inquiry on “dynamic spectrum access” and “opportunistic” uses of spectrum to promote more efficient spectrum use. “Dynamic” access refers to the availability of spectrum in certain locations for brief intervals and whether radio technologies can evolve to take advantage of these dynamic spectrum opportunities and thus promote wireless broadband. The NOI also invites public comment on the benefits of mandating a database model – such as the white space geo-location database – to promote efficiency. The NOI will also look at ways the FCC’s secondary markets rules could be enhanced by allowing opportunistic or “spot” use of spectrum.

Taken together, these items demonstrate the FCC’s ongoing push to increase broadband opportunities and to boost availability and efficient use of spectrum resources. These proceedings may offer new opportunities particularly for colleges and universities to move the state of the art forward.


Governmental intervention to referee TV carriage disputes could lead to unintended consequences

There is nothing wrong with TV stations charging cable and satellite companies who repackage popular broadcast channels and sell subscriptions to the public. It’s sort of like saying because you can get tap water for free, bottled water should be free too. Yet there are advocates in Washington from the cable and satellite industries who are seeking governmental intervention to referee private negotiations between TV stations and cable and satellite companies when the vast majority of deals get done without any disruptions in service to the public.

So what is really going on here? Cable and satellite companies are engaged in a not-so-transparent effort to arbitrage the FCC process to involve the government in order to gain leverage in retransmission consent negotiations. At the same time, a real marketplace for broadcast programming is emerging as Congress intended. Senator Rockefeller (D-WV) appears willing to take the bait and to authorize Congress to give the FCC authority to become such a referee. He said at a Congressional Hearing yesterday that “If you fail to fix this situation, we will fix it for you.” While Congress has many priorities, it’s unclear whether imposing more governmental regulation on the marketplace for retransmission consent – a system that works -- is likely to be high on the list given the shift in the House to a Republican majority and the general mood of the country. Moreover, there are more compelling communications law issues, such as finding more spectrum for broadband or clarifying the FCC’s authority to regulate the Internet, that are in need of governmental action.

This strategy is puzzling. The unintended consequences of inviting government regulation of the marketplace, in the absence of a market failure, could lead to a-la carte pricing regulation as consumers demand to know why they are paying for cable and satellite programming services they never watch. The truth is that broadcast programming is provided to cable operators at bargain basement prices relative to cable programming services and yet remains some of the most-watched and popular programming. It is likely to remain so even in this new media era as TV stations continue to lead in providing local news, emergency information and other programming to their communities.

Congress wisely carved a narrow role for itself in 1992 when it gave TV stations the option of negotiating carriage fees or demanding mandatory carriage. Calls for the government to require mediation or interim carriage during a dispute would mean that more, not fewer, deals, would get bogged down as the players attempt to game the FCC process to their advantage. These proposals are not justified by marketplace failures, changed circumstances or any other grounds. Stripped down, it’s clear this is nothing more than one private party seeking additional unwarranted negotiating leverage against another through governmental regulation in the guise of protecting the public.