Vol. 16

RTG Seeks Limits on AT&T/Verizon Auction Participation

E-Rate and Broadband Headline FCC Open Meeting

AT&T Advocates USF Support for Internet Access

FCC Throws Lifeline Providers a Lifeline

FCC Seeks State Info on Use of 911 Fees

Bigger FCC Budget Proposed for FY 2011

FCC Affirms Tower Fine

FCC Grants Verizon Wireless USF Reporting Waiver

OET Modifies Rule Waiver for L-3 Body Scanners

FCC Takes Action to Promote Rural Radio Service

FCC Satisfied with Present Foreign Ownership Monitoring

CPUC Petitions FCC for Access to NORS Data

FCC Releases Telephone Subscribership Report

News Bite

Upcoming Meetings

The Rural Telecommunications Group (RTG) has filed an ex parte letter with the FCC urging the reimposition of a spectrum cap, as proposed in its 2008 rulemaking petition, and proposing for the first time that the FCC adopt rules for the upcoming Advanced Wireless Services (AWS) and 700 MHz auctions that will prevent acquisition of spectrum in rural markets by AT&T and Verizon.  RTG requests that, if the FCC is unable or unwilling to adopt a spectrum cap on all commercial terrestrial wireless spectrum below 2.3 GHz prior to the adoption of auction rules for the AWS-2 H and J Blocks, AWS-3 Band and Upper 700 MHz D Block, it adopt rules that bar AT&T and Verizon from acquiring spectrum in those bands.  The proposed ban would apply both to spectrum acquired at auction and spectrum that is later made available in the secondary markets.

For additional information, please contact Michael Bennet.

The FCC has released the agenda for the Commission’s Open Meeting scheduled for Thursday, February, 11, 2010 at the FCC’s Washington, DC headquarters.  The Commission will consider an Order and Notice of Proposed Rulemaking that would modify the federal E-Rate program to offer broadband access to the general public at E-Rate funded schools after hours.  The Commission is also considering two proposed rulemaking notices seeking to enhance transparency and efficiency in the FCC’s procedures, particularly regarding its ex parte rules.  The meeting will also include a report on the status of the National Broadband Plan, which has been pushed back to March 17, 2010.

For additional information, please contact Bob Silverman.

AT&T has submitted a white paper to the FCC that presents a legal analysis to support the Commission’s authority to fund broadband Internet access deployment and subscribership from the Universal Service Fund (USF).  To date, the FCC has declined to extend USF support to non-telecommunications Title I information services, such as integrated broadband/Internet access services that are not offered as telecommunications services.  AT&T argues that Sections 254(b)(2) and (b)(3) of the Telecommunications Act (Act) require the FCC to use the USF framework to promote universal access to “advanced telecommunications and information services,” which include Internet access.  AT&T also points to the fact that the USF schools and libraries program already allows discounts for Internet access and internal connections even where these are provided by non-telecommunications carriers.  AT&T concludes that Section 254 of the Act, coupled with the Commission’s broad authority to regulate communications by wire and radio under Title I of the Act, would support a decision to fund broadband Internet access deployment through USF.

For additional information, please contact Howard Shapiro.

The FCC has released an Order granting a number of requests for a declaratory ruling concerning how certain, mostly wireless ETC carriers should proceed when their states do not help them certify their low-income Lifeline customers.  The FCC concluded that when a state commission mandates Lifeline support, but does not impose certification and verification requirements on certain carriers within the state, the affected carriers must follow federal default criteria for certification and verification purposes.  For example, because some states do not assert jurisdiction over CMRS carriers, these carriers may not be subject to state Lifeline procedures.  In the Order, the FCC encourages states that are not federal default states to notify carriers over which they do not assert jurisdiction that the carriers must follow the federal procedures.

For additional information, please contact Ken Johnson.

The FCC is seeking information from U.S. States and territories regarding their collection and use of fees for 911 and E911 services.  The New and Emerging Technologies 911 Improvement Act of 2008 (NET 911 Act) requires the FCC to collect information regarding any fees collected by States or other jurisdictions in connection with 911/E911 services and submit a report to Congress detailing the status in each State of the collection and distribution of such fees and the amount of revenues obligated or expended for any purpose other than the purpose for which such fees are specified.  In July, the FCC issued its first such report, finding that twelve states divert 911/E911 fees to cover state budget shortfalls or the cost of providing other state services.

For additional information, please contact Michael Bennet.

The Obama Administration submitted its fiscal year (FY) 2011 budget request to Congress last week.  The President is seeking $352.5 million for the FCC, up from $335.8 million the agency operated under last year.  In its 102-page budget estimate submitted to Congress, the FCC said the plan is based on the overall strategic goals of promoting broadband, empowering and protecting consumers, spurring competition and innovation, continual improvement of the agency, strengthening public safety and homeland security, and promoting U.S. communications interests internationally.  Specifically, the FCC plans to use some of its FY 2011 money to implement the National Broadband Plan, manage the nation’s spectrum use, and modernize the agency’s data systems and processes using modern communications tools and expertise.  Notably, the FCC budget estimate also includes suggested legislative changes that include a proposal to extend indefinitely FCC authority to auction spectrum licenses and a request to be given the authority to set spectrum user fees.  A copy of the proposed FCC budget is available here.

For additional information, please contact Tony Veach.

The FCC has affirmed an Enforcement Bureau decision imposing a forfeiture of $8,000 on Tidewater Communications for failing to properly light its antennae structure as required by FCC rules.  Tidewater had installed a manual light monitoring system, which required staff to call the system to obtain a light reading.  A Tidewater employee called the system and recorded lighting levels that indicated an outage over a period of three days.  The employee did not contact her supervisor regarding the low lighting levels as she had been instructed to do because she heard two messages from the manual light monitoring system: “Tower lights on” and “No alerts pending” and erroneously believed that the lights were functioning.  The FCC affirmed that the violation was willful even though the employee mistakenly believed the lights were functioning.  In doing so, the FCC noted that its rules require visual inspection of the lighting on a daily basis and that the monitoring system installed by Tidewater did not meet this requirement.

For additional information, please contact Howard Shapiro.

The FCC has granted a request from Verizon Wireless (Verizon) for an extension of waivers of certain universal service fund (USF) reporting requirements on Form 499 as applied to Verizon’s to-be-divested properties from its mergers with Alltel and Rural Cellular Corporation (RCC).  Initially, Verizon requested and the FCC granted waivers for the requirements that (1) all affiliated entities must make a single quarterly election whether to use actual or safe harbor revenues for reporting interstate revenues; and (2) only entities that bill customers under a common trade name and have a single point of contact for all customers can file a consolidated revenue report. Currently, Verizon has shifted all former Alltell and RCC customers onto its billing platform in the markets it has retained and has pending applications to divest itself of other certain Alltel and RCC properties.  Pursuant to the conditions of the mergers, the to-be-divested properties are to be operated as independent, ongoing, and competitive businesses until divestiture.  Due to the circumstances of the pending divestiture applications, Verizon sought an extension of the waivers in order to report revenues based on a weighted average of actual and safe harbor revenues and file a consolidated report.  The FCC found good cause existed to extend the waivers to the to-be-divested properties.  First, it held that requiring Verizon to rely on the safe harbor for all of its properties, including the ones that it will soon divest, would likely result in Verizon over-reporting its revenues and would be inconsistent with the principle of section 254 of the Communications Act that universal service contribution be equitable.  Second, the FCC found that allowing Verizon to file a single report for all of its acquired entities within the divestiture markets will promote efficient administration of USF support mechanisms.

For additional information, please contact Tony Veach.

The FCC’s Office of Engineering and Technology has granted L-3 Communications Security and Detection Systems, Inc. (L-3) a modification of certain waiver conditions that were granted in 2006 and renewed in 2009 for L-3’s ProVision 100 body scanners.  OET had waived certain sections of Part 15 of its rules to permit the measurement of radio frequency emissions from the ProVision 100 with the frequency sweeping active rather than disabled and to allow peak emissions in excess of the Part 15 limit.  Citing the recent attempted terrorist attack aboard a US-bound flight on Christmas Day, L-3 requested the changes in order to meet urgent homeland security and public safety needs.  The FCC found that exigent circumstances impacting national security justify changing the waiver condition to allow L-3 to make available the number of whole-body scanning security products needed to promote homeland security objectives and to protect the American public.  The FCC also granted an extension of the waiver for an additional year to finalize delivery contracts.

For additional information, please contact Bob Silverman.

The FCC has adopted a First Report and Order (Order) and Further Notice of Proposed Rulemaking (Further Notice) to implement policies designed to promote a Rural Radio Service (RRS).  In the Order, the FCC adopted a Tribal Priority that would give Native American and Alaskan Tribes priority when proposing FM allotments and filing AM and noncommercial educational FM filing window applications.  The FCC clarified that the Tribal Priority will apply only to Tribes, consortia of Tribes, and entities that are majority owned or controlled by a Tribe or Tribes, and not to individual members of Tribes or entities owned by such individuals.  The FCC also adopted assignment and allotment rules, streamlined auction procedures, AM radio application caps, settlement policies and technical procedures applicable to RRS, including a prohibition on downgrading any proposed AM facility that receives a dispositive preference under Section 307(b) of the Communications Act and is not awarded through competitive bidding.  The Further Notice asks for comment on whether the Commission should adopt special bidding credits for tribal applicants and whether the Tribal Priority adopted in the Order should be extended to non-landed tribes.

For additional information, please contact Howard Shapiro.

FCC Chairman Julius Genachowski has sent a letter to various members of Congress that supplements its July 20, 2009 response to a GAO report regarding the FCC's foreign ownership monitoring procedures.  The report recommended that the FCC and other agencies review the sources of information that they currently monitor to detect changes in ownership in U.S. assets held by foreign investors and assess the value of supplementing these sources with information from other government and private data sources on investment transactions.  After meeting with SEC officials to discuss the GAO report, the FCC’s letter affirms that daily monitoring of additional public and private sources of information would be of marginal, if any, benefit to the FCC in carrying out its oversight of foreign ownership.  The FCC already utilizes SEC database access, Nexis and SNL Kagan information services to supplement, when necessary, information obtained from licensees and applicants, their competitors, and the trade press.  The Chairman’s letter states that “FCC applicants and licensees demonstrate a high level of compliance in filing the required applications, notifications, and periodic reports that identify changes in ownership since initial licensing or authorization” and notes that “the consequences of non-compliance can be severe.”  As a result, the FCC found no need to make changes in its current procedures for monitoring foreign ownership or licensees and applicants.

For additional information, please contact Howard Shapiro.

The FCC’s Public Safety and Homeland Security Bureau is seeking comment on the petition for rulemaking by the California Public Utilities Commission (CPUC) requesting that the FCC grant state public utilities commissions direct access to the Commission’s Network Outage Reporting System (NORS) database.  CPUC also informally requests that the FCC act to allow the CPUC password-protected access to the NORS database that is “limited to California-specific disruption and outage data.”  NORS is the web-based filing system through which certain communications providers submit required reports of communications disruptions to the FCC.  Reports of service disruptions filed in NORS are presumed to be confidential, and currently the FCC shares NORS data only with the Department of Homeland Security.  CPUC argues that the sharing of NORS data is consistent with FCC policy, and that because the public health and safety depend on wireline and wireless communications networks, it is critical that the CPUC have access to the same level of service outage detail found in NORS reports to effectively analyze the data.  CPUC also argues that it, like the FCC, is responsible for overseeing the reliability and security of the state’s communications infrastructures.  Acknowledging national security concerns, CPUC also proposes protections to maintain data confidentiality. 

For additional information, please contact Bob Silverman.

The FCC recently released a new telephone subscribership report, based on the November 2009 Current Population Survey conducted by the Census Bureau.  The report shows a telephone subscribership penetration rate of 95.7%, an increase of 0.7% from November 2008. This is the highest reported rate since data collection began in November 1983.  The rate for households with incomes below $15,000 was at or below 94.0%, and the rate for households with incomes over $50,000 was at least 98.2%.  State penetration rates ranged from 90.9% to 99.0%.  The study also found that households headed by younger individuals and those with fewer members had a lower penetration rate than larger households and those headed by older people.

For additional information, please contact Erin Fitzgerald.

***  The FCC has issued an Erratum to clarify deadlines for its Second Further Notice of Proposed Rulemaking (Second FNPRM) proposing to amend its rules governing the Emergency Alert System (EAS) to provide for national testing of the EAS and collection of data from such tests.  Comments are due 30 days after publication in the Federal Register, which has yet to occur.  Reply comments are due 60 days after publication in the Federal Register.  ***

For additional information, please contact Bob Silverman.

The Bennet & Bennet attorneys noted below will be presenting at or attending the following industry meetings.  For more information about a particular meeting, please visit http://www.bennetlaw.com/events.php.

• Stutler Technologies 4th Annual Users Group Conference (February 24-25, 2010):  Carri Bennet
• Law Seminars International Spectrum Management Conference (March 8-9, 2010):  Carri Bennet
• International CTIA Wireless 2010 (March 23-25, 2010):  Carri Bennet and Daryl Zakov
• NTCA PR & Marketing Conference (April 25-27, 2010):  Bob Silverman

For additional information, please contact Bob Silverman.