Federal Communications Commission (FCC)

The FCC approved a hotly contested order to establish an auction that would “let the market” decide whether the air-to-ground (ATG) market will consist of an exclusive or overlapping licenses to offer broadband on commercial airliners. The Commission also launched an investigation of rules governing the use of wireless phones on airliners.

The FCC asked for comments on progress made by states in prompting E911 solutions for multiline telephone systems (MLTSs). The agency said it had left the problem to the states and wants information and comment about state statutes and regulations. MLTSs -- which serve office buildings, university campuses and other multiple phone sites -- make locating E911 calls difficult, the FCC said in a Dec. 10 notice. That’s because the Public Safety Answering Point (PSAP) that gets the call often can’t identify the specific phone being used by the caller. Instead the call may be attributed to the MLTS’s outgoing trunk. The Commission said it was particularly interested in any state actions “based on model legislation such as that proposed by the National Emergency Number Assn. and the Assn. of Public-Safety Communications Officials.” Comments are due 45 days after the notice is published in the Federal Register.

Judges peppered both sides with questions Fri. without a clear likely winner as the FCC faced off against the Savannah College of Art & Design (SCAD) and the Diocese of Savannah in oral arguments before the Court of Appeals, D.C., over a much-watched ITFS case. Also Fri., a rulemaking on the new ITFS-MMDS regulations approved last summer appeared in the Federal Register setting up a Jan. filing deadline.

The FCC granted AT&T’s complaint against BellSouth, saying the Bell’s transport savings plan (TSP) violated Sec. 272 of the Communications Act. But the Commission denied all AT&T claims concerning BellSouth’s premium service incentive plan (PSIP). AT&T had alleged that BellSouth tried to prevent facilities-based competition by requiring wholesale special access customers to commit at least 90% of their traffic to the carrier’s network. Specifically, it said BellSouth’s optional tariff discount plans for special access services -- TSP and PSIP -- violated Secs. 201(b), 202(a) and 272 of the Communications Act because they “lack cost justification, impede the development of facilities-based competition in the BellSouth region and discriminate in favor of BellSouth’s interexchange affiliate,” according to the FCC order. The FCC agreed with AT&T that BellSouth’s TSP discriminated in favor of that company’s long distance affiliate, in violation of Sec. 272. But it said “in light of this finding, and because the remedy we apply under section 272 grants to AT&T all the relief it would be due under sections 201(a) and 202(b), we dismiss without prejudice AT&T’s claims alleging that the TSP violates sections 201(b) and 202(a).” The Commission also denied AT&T’s claims against the PSIP. “Although the PSIP is somewhat similar to the TSP, it differs in some determinate respect,” the FCC said, because: (1) “The PSIP has and always will have Confidential Information identifying the number of PSIP customers.” (2) “The PSIP contains no evergreen provision, and thus does not have the ‘perpetual’ characteristics of the TSP.” (3) “BellSouth Long Distance does not and cannot subscribe to the PSIP.” “Given these circumstances, we conclude that the PSIP does not unlawfully discriminate in favor of BellSouth Long Distance under section 272, and does not have an unjust or unreasonable effect on the special access market under sections 201(b) and 202(a),” the FCC said. BellSouth dropped both plans in June, before AT&T filed its complaint July 1. But it allowed the customers on the plans to keep them. The FCC ruled last week BellSouth should remove from the grandfathered TSP tariff the provision that allows its customers to renew their subscriptions and terminate it by June 9, 2005. BellSouth Asst. Gen. Counsel & Vp-Regulatory James Harralson said it was “unfortunate that the FCC made this determination in the face of a very competitive marketplace for special access services.” He said BellSouth believed that TSP was “not discriminatory in favor of BellSouth Long Distance, nor anticompetitive.” He said that tariff had been in place since 1999 and many of BellSouth’s wholesale customers, including AT&T, have subscribed to it and “received hundreds of millions of dollars of discounts over the nearly 6 years of its existence.” Those discounts helped those companies to become “more competitive and demonstrated BellSouth’s commitment to competition,” he said. Harralson said BellSouth would “closely review the Commission’s decision and evaluate all of its legal alternatives.” AT&T applauded the Commission for “taking this step to curb BellSouth’s anticompetitive wholesale policies.” AT&T Vp-Law & Dir.-Federal Govt. Affairs Len Cali said the order confirmed that “BellSouth’s special access tariff is unlawful and anticompetitive.” He said the Bell tried to force its wholesale customers to keep nearly all their special access traffic on the BS network to receive “'volume discounts’ from its obscenely high rack rates. This lock- in requirement would prevent the very facilities-based competition that the Bells have long claimed is the only meaningful competition.” Cali also said the Bells’ special access rates were imposing “enormous costs in the information economy.” He urged the FCC to “promptly begin the long-delayed proceeding to review special access rates generally and the state of competition in the wholesale telecom market.”

The U.S. Supreme Court will hear the Brand X cable modem case, according to an order granting certiorari issued Dec. 3 that had been widely expected by the industry. The court will set a schedule for arguments and issue a ruling sometime in the next 6-8 months, said attorneys familiar with the proceedings. At issue is whether cable modem service is an information service or telecom service, which would subject it to common carrier regulations.

The draft TRO remand order circulating among commissioners doesn’t cover a wide area of issues, but rather is limited to concerns raised earlier this year by the U.S. Appeals Court, D.C., FCC Wireline Bureau Chief Jeffrey Carlisle said Thurs. at an FCBA-Practising Law Institute conference. Carlisle told the group that the court basically upheld the impairment standard set in the earlier TRO order “so we're using the upheld standard to review 3 elements” questioned by the court -- local switching, high-capacity loops and transport. “We're not starting from zero and building up an unbundling policy,” he said.

A federal appeals court, ordered the FCC to report in 90 days on the agency’s progress in responding to a 2-year-old court remand of the FCC’s reciprocal compensation rules for ISP-bound traffic (CD Oct 1 p3). The U.S. Appeals Court, D.C., deferred action Nov. 22 on a mandamus petition filed by Core Communications but said it wanted the reports every 90 days until action was taken. The FCC has been struggling to come to agreement on how to devise a plan that will hold up in court. At the same time, the FCC is working to devise an intercarrier compensation regime that would unify the many different types of carrier-to-carrier payments including the ISP-bound traffic compensation. Some companies have urged the agency to delay the ISP-bound rules until it deals with the bigger intercarrier compensation issue, but Core Communications -- which petitioned for mandamus in June -- said that would take too long. “The FCC has been running away from this issue for years,” said Core Pres. Bret Mingo: “Now they have to answer for their actions, or inactions.” He said Core “generally supports” efforts to streamline and unify intercarrier compensation schemes but “there is no excuse for the FCC to not act on the court’s remand,” he said. An FCC spokesman said the agency “takes seriously the court’s remand and we are considering that and other complex intercarrier compensation issues,” which the Commission hopes to address “in the near future.”

As House and Senate staff closed offices for Thanksgiving, the prospects of several telecom bills seemed extremely bleak due to struggles over Senate Commerce Committee Chmn. McCain’s (R-Ariz.) boxing bill. House, Senate and industry sources indicate there don’t appear to be negotiations on the issue. House Commerce Committee Chmn. Barton (R-Tex.) objects to moving the boxing legislation, and sources said McCain will let nothing else pass unless the boxing bill is passed.

The prospects for FCC Comr. Adelstein to be renominated to the Commission appeared bright Thurs. after his hearing before the Senate Commerce Committee. Senators from both parties praised his attention to rural issues and Committee Chmn. McCain (R-Ariz.) told reporters afterwards that he expected Adelstein’s nomination to pass.

Federal regulators told the NARUC convention in Nashville Wed. jurisdiction changes arising from new technology and service concepts in telecom and energy will make it more important than ever for the federal and state govts. to cooperate. FCC Comr. Abernathy said new technologies like VoIP make adherence to old federal-state jurisdiction lines infeasible, but the states will still have a role. She said the FCC and the states “still should work in collaboration on sound public policy. The FCC can’t handle matters like [VoIP] E-911 without the cooperation of state regulators.” She said some new technologies and service concepts require a single national policy, but “details of implementation should still be worked out with the states.” She said the core question is: “What type of regulatory regime best serves to deliver value to consumers?” She said that with VoIP, federal preemption was necessary because IP-enabled packet-switched technologies don’t recognize boundaries: “IP-enabled services only superficially resemble circuit- switched voice,” she said. “But in the IP world, the old end-to-end jurisdictional analysis simply didn’t work” because IP users could call anyone from anywhere and all calls looked the same. She said the Vonage VoIP preemption order didn’t deny the states a supporting role. She said it gave state attorneys general responsibility for addressing broad matters of VoIP consumer protection. She said the FCC had to settle VoIP jurisdiction before taking up other VoIP issues. Patrick Wood, chmn. of the Federal Energy Regulatory Commission (FERC) and a former Tex. regulator, said federal-state cooperation will be crucial in development of policy for broadband over power lines (BPL), which will put the FERC, FCC and state commissions in a regulatory triangle. He said all parties involved must maintain flexible and not lose sight of the fact that they all exist to protect consumers. Hilda Legg, dir. of the Rural Utilities Service, said the states and federal agencies “have to work together and communicate. We need to be willing to listen to each other because we have a common purpose.” She said the telecom and energy infrastructures will remain the foundation of national economic growth despite all the industry changes. She said BPL may present unique circumstances for RUS as a lender. She said RUS could end up lending money to an electric utility that seeks to offer BPL in competition with a phone company that also is an RUS borrower. She said: “It is in the national interest to keep rural America connected. The whole nation benefits from a strong rural economy.” Iowa Comr. Dianne Muns, new NARUC first vp, said no one level of govt. can do all things anymore. “Our discussions need to be about who should be doing what.” She said states have been very effective at resolving wholesale contract disputes and retail consumer complaints and doing public education and information gathering, and they should retain their authority in these areas: “We need to respect each other’s strengths and try to reach agreement on what each should be doing. Both levels are important and have jobs to do.” -- HK