The Independent Telephone & Telecommunications Alliance urged the FCC to immediately reform the retransmission consent process. The commission should adopt a standstill provision “to prevent signal loss for consumers during retransmission consent negotiation impasses,” said ITTA in an ex parte filing in docket 10-71 (http://bit.ly/15epHTx). Certain behavior, like attempts by parties to deny customer access to significantly viewed out-of-market signals, should be clarified as constituting a “per se violation of the statutory duty to negotiate in good faith,” it said. ITTA said it’s hopeful that, under new leadership, the FCC “will promptly proceed with much needed reforms that would help restore balance to the video distribution marketplace.”
Customs Duty
A Customs Duty is a tariff or tax which a country imposes on goods when they are transported across international borders. Customs Duties are used to protect countries' economies, residents, jobs, and environments, by limiting the flow of imported merchandise, especially restricted and prohibited goods, into the country. The Customs Duty Rate is a percentage determined by the value of the article purchased in the foreign country and not based on quality, size, or weight.
Difficult customs procedures are among the notable impediments to digital trade, or trade via the Internet, said a U.S. International Trade Commission report, Digital Trade in the U.S. and Global Economies Part 1 (http://1.usa.gov/15OPkTV). “Customs duties and complicated document preparation and processing can increase the costs associated with small online retail transactions, making it more difficult to conduct online business” especially for small- and medium-sized businesses, it said. The report noted that industry has pointed to low de minimis levels -- the value of an import shipment below which a company does not have to prepare customs documents -- as among the difficulties. Trade in products and services delivered via the Internet is on the rise globally and constitutes a growing portion of the U.S. economy, said the ITC. U.S. exports of digitally enabled services increased from $282.1 billion in 2007 to $356.1 billion in 2011, said the ITC findings. The report predicted U.S. and global companies will increase participation in digital trade sectors that include communication services, entertainment, social networking, information search/retrieval, productivity enhancement and e-commerce. All types of online content continue to grow in volume, including music, games, videos and books, said the report. It said several industries, such as retail, logistics, financial, professional, healthcare and education services, benefit from lower costs and higher efficiency potential provided by Internet technologies. The digital trade barriers and impediments to digital trade include localization requirements, divergent data privacy and protection rules, inadequate intellectual property protection and unclear legal frameworks, growing online censorship and traditional impediments, in addition to burdensome customs procedures. The report was published in July and publicly released Thursday. Part 2 is slated for publication in July 2014. The Senate Finance Committee requested the ITC to report on the digital trade role in both U.S. domestic and international commerce.
Response to Verizon’s petition to discontinue copper service on Fire Island, N.Y., highlighted a longstanding divide between incumbents and competitive providers. ILECs unanimously supported the request, which they said was a reasonable and cost-effective way to replace an obsolete technology damaged by Superstorm Sandy. CLECs worried that if the FCC grants the request, it could prejudge issues involved in the overall IP transition and put the competitive providers at a disadvantage. State public utility commissions and consumer advocates raised questions about the suitability of Verizon’s planned Voice Link fixed wireless service as a replacement for its traditional copper landline.
The telecom industry is deeply divided on the potential scope of the FCC’s Internet Protocol transition trials. In comments filed Monday in docket 13-5, some opposed the trials because they went too far; some opposed the trials because they didn’t go far enough. Many CLECs, expressing resentment at what they called an ILEC refusal to interconnect in IP, encouraged the FCC to skip the trials in favor of mandating IP interconnection. Other stakeholders urged the FCC to stay out of it, and let businesses decide the best way to interconnect in an IP world.
Commissioner Joshua Wright outlined his agenda for his time at the FTC, including a focus on encouraging the agency to issue a policy statement on unfair methods of competition, at an American Bar Association meeting Thursday. During the second day of the three-day conference, former FTC Chairman Jon Leibowitz spoke about the role of politics in the agency, and Division of Privacy and Identity Protection Associate Director Maneesha Mithal told attendees about consumer protection responsibilities when user-facing companies employ cloud service providers.
Level 3 will pay nearly $1 million and must meet call completion benchmarks in response to an investigation by the FCC Enforcement Bureau into the company’s completion of long-distance phone calls to rural areas. Level 3 agreed to complete the calls to rural ILECs at a rate within 5 percent of that in non-rural areas. Rural telco representatives told us they're pleased the commission is stepping up enforcement, but are stumped by the 5 percent benchmark that could lead to many more missed calls.
Minnesota may create an office of broadband development. Six legislators in the Minnesota House introduced a bill, HF-1255 (http://bit.ly/10m6pZ6), this week proposing such an office. The bill outlines several duties the office would be responsible for, effective immediately upon passing. The broadband office would help oversee effective management and deployment of broadband infrastructure, including efforts with the “dig once” initiative, which makes use of the 811 number to coordinate companies’ construction efforts. “The Office of Broadband Development shall conduct research and produce a report recommending a set of programs and strategies the state can pursue to promote the improvement, more efficient and effective use, and expansion of broadband services in ways that will have the greatest impact on the state’s economic development, by which is meant enhancing the ability of Minnesota citizens and businesses to develop their skills, to expand businesses to new markets, develop new products, reach more customers, and lower costs,” according to the bill, noting the office’s report “must consider broadband as an economic development tool.” The office would have to submit its first report to the Legislature by Jan. 15, the bill said. Minnesota’s Blandin Foundation consultant Ann Treacy suspects the bill will be “one big topic” at Thursday’s Telecommunications and Information Society Policy Forum at the University of Minnesota in Minneapolis, she wrote on the foundation’s blog Thursday (http://bit.ly/10m7mjX). Minnesota has actively focused on fostering broadband deployment, instituting a statutory goal as well as creating a broadband task force (CD Dec 13 p15).
Liberty Global agreed to buy Virgin Media in a cash and stock deal, the companies said. Virgin Media shareholders will get $17.50 cash for each share they hold, plus a fraction of a share in Liberty Global’s Class A and Class C stock, they said. The deal puts Virgin Media’s enterprise value at $23.2 billion, or about $47.87 a share, they said. The transaction will create the world’s largest cable operator, adding Virgin’s 4 million video customers to Liberty’s 18 million. The combined entity will pass 47 million homes, mostly in western Europe, and sell at least one product to 25 million households (http://xrl.us/boe8y6). The companies see additional growth prospects in selling mobile phone services, which account for just 14 percent of current Virgin sales and 2 percent of Liberty Global sales. Plus, they said the deal could save both companies $180 million from the buying power that comes with increased scale. Savings could come from the ability to buy cheaper mobile handsets and network equipment, plus increased leverage in programming rights negotiations, Evercore Partners analyst Bryan Kraft wrote in a note to investors. If the transaction closes, current Virgin shareholders will hold about 36 percent of the stock in the new company, representing about 26 percent of the vote, ISI analyst Vijay Jayant wrote in a note to investors. He said he expects the combined company to accelerate share repurchases after the deal closes. Liberty had already announced a $1 billion buyback plan for 2013 and Virgin said it would buy back up to $1.75 billion a year for two years after closing. A law firm in New York said it was recruiting Virgin Media shareholders as plaintiffs to potentially sue the company’s board over the deal. The firm of Levi & Korsinsky said it will investigate whether Virgin’s board breached its fiduciary duty to shareholders by not shopping the company around to other potential buyers before agreeing to sell to Liberty.
NARUC telecom committee commissioners voted Tuesday to ask the FCC to safeguard against the possibility of unacceptable spectrum interference. The question of such possible interference from a company called Progeny dominated NARUC the last several days as the association weighed a resolution pushing for more testing. Progeny CEO Gary Parsons defended the public safety service, poised to launch in about 40 markets and promising to deliver better technology for locating 911 callers, down to within about 25 meters and to the floor of the building the caller is on, Parsons told regulators.
Should telcos have to file IP-to-IP interconnection agreements with state regulators? Several competitive carriers say yes. In a Thursday petition, they question Verizon’s undisclosed potential IP-to-IP interconnection agreements and ask the Massachusetts Department of Telecommunications and Cable to remedy the situation. They pointed to February 2012 statements from Verizon that it had one such agreement in place for its FiOS VoIP service and is “negotiating others.” The group of CLECs, which includes EarthLink Business, Cbeyond Communications and tw data services, don’t view the action as legal or fair, according to the petition. The “failure of Verizon” has prevented state regulators from their “statutory duty,” the carriers said.