Federal Communications Commission (FCC)

NASHVILLE -- Telecom makes investors nervous because it has regulatory and technological uncertainties that don’t exist in other industries competing for capital, said NARUC panelists at the group’s annual meeting here Mon. The advent of paradigm-breaking new technologies like VoIP and the prospect of a major rewrite of the federal Telecom Act next Congress have led many telecom investors to move to the sidelines and wait out the stormy times, panelists said.

Several important communications-related items could pass Congress this week as it returns for a brief lame- duck session, industry and congressional sources said. The loudest buzz is on the universal service fund (USF) and the controversy over the FCC’s change in accounting mechanisms that could slow some E-rate payments and possibly lead to a rise in contributions, and several sources expected some efforts to push a legislative solution.

More indications emerged Wed. that FCC Comr. Adelstein could be part of a lame-duck session effort to move a slate of pending nominations in the Senate (CD Nov 10 p4). Judicial nominations are at the center of the effort, sources have said, and the Senate Judiciary Committee announced there would be a hearing Nov. 16 on judicial nominees (at 9:30 a.m. in Rm. 226 Dirksen Bldg.). Also, a Senate Commerce Committee spokesman said the committee planned to hold a hearing on nominations on Thurs., Nov. 18. The spokesman couldn’t confirm any of the hearing witnesses, but Communications Daily obtained a list of potential witnesses that included Adelstein. Other witnesses included Claudia Puig, Gay Gaines and Ernest Wilson of the Corp. for Public Broadcasting (all 3 received recess appointments). The list also included candidates for other commissions, including the Federal Maritime Commission.

Vonage’s DigitalVoice VoIP service is interstate so it can’t be regulated by state PUCs, the FCC ruled Tues. The ruling, which asserts federal jurisdiction over Vonage-like services, came in response to a preemption petition filed last year by Vonage. Although referring to Vonage service, the decision applies to other types of IP- enabled services, the Commission said.

Carriers remain split on a proposed FCC rule to apply federal wiretap requirements to VoIP and broadband service. In comments on the Commission’s CALEA proceeding, a broad array of lobbying groups drew lines in the sand on the role of CALEA on a new generation of IP- based communications products.

Nearly 5 months after it was adopted, the FCC is about to publish in the Federal Register its long-awaited order promoting provision of wireless broadband on spectrum previously set aside for educational channels. The FCC approved the ITFS-MDS rebanding order June 10 amid much fanfare. The Commission last week approved an erratum sought by the Wireless Communications Assn. making clarifications and launching the rebanding process.

NAB renewed its push at the FCC to craft emergency alert system (EAS) regulation that would make cable operators better protect local broadcasters’ emergency signals. In comments filed with the FCC on EAS, NAB proposed a selective override in which the FCC mandates that cable operators use a filter system enabling a cable operator to replace certain channels selectively during an EAS interruption.

CableCARD-ready TV products are “indispensable” to a successful conclusion of the DTV transition, and thus “the proper function of CableCARDs is critical,” Thomson and Mitsubishi executives told the FCC in meetings last week. Consumers are experiencing “numerous technical implementation problems with CableCARDs “resulting in improper operation or failed operation,” they said. “These include persistent problems with CableCARDs or their headend support, erroneous software or firmware fixes, inability of authorized subscribers to acquire some channels that offer encrypted content and erroneous and overly restrictive copy protection outcomes.” They urged the Commission to resist cable industry pressure to eliminate or extend the established July 1, 2006, date by which cable operators no longer will be permitted to sell or lease integrated cable set-tops “and therefore must rely on the same security solution made available to competitive entrants.” Keeping the July 1, 2006, deadline “is absolutely essential” to ensuring that the CableCARD problems that have emerged in the field “would be rectified and would not multiply,” Thomson and Mitsubishi said. “The necessary level of commercial and user confidence in CableCARD-reliant products depends on the cable industry having the same level of commitment to such products as consumer electronics manufacturers. Absent a requirement that the cable industry also rely on CableCARDs for system security, there is simply insufficient incentive to ensure a robust market for integrated digital cable-ready television products as envisioned” when the Commission adopted its plug-&-play rules, they said. David Arland, Thomson vp- communications, who participated in the meetings, told us “our point in going in was not to say, ‘Oh my God, it’s a disaster.’ Our point in going in was to say there are these issues, A, you need to be aware of it, B, we're managing it, but C, it would be great if cable had the same interest in solving them on their own boxes as we have on our own products.” The filing was meant to convey the point “let’s play by the same rule, which by the way, is the federal rule today.”

The FCC released the text of its BPL order Thurs., and Bruce Romano, assoc. chief of the Office of Engineering & Technology, said “there are no surprises.” The FCC had provided outlines of the BPL order at the Oct. 14 Commission meeting. While the industry welcomed the thrust of the announcement, it still harbored apprehensions, saying the devil remained in the details. At a Power Line Communications Assn. (PLCA) conference in Alexandria, Va., Romano told utility executives “clouds” of uncertainty had been removed. He said BPL would continue to operate as an unlicensed device under Part 15 rules and emission limits would remain intact. The American Radio Relay League (ARRL) had lobbied heavily at the last minute for reducing the emission limits. Besides requirements for minimizing interference to amateur radio and certain exclusion zones and frequencies, the order sets new rules for certification of BPL equipment. Under the rules, Romano said, “certification has to be achieved at the FCC” before equipment is widely manufactured and distributed. In the short term, he said, the FCC will be in full control of the process. The rules will go into effect 30 days after publication in the Federal Register in 2-3 weeks, he added. There will be an 18 month “transition period” for certification of equipment, unless there are interference problems, Romano said. BPL providers will have to coordinate with public safety and other federal agencies 45 days after the rules take effect. The BPL public database, listing the operator, location, frequencies used and contacts, will have to be set up within 180 days, he said. One of the remaining concerns with BPL is use of high frequencies (HF), said Tom Sullivan, chief of NTIA Spectrum Engineering Branch. HF is a very important part of the spectrum for radio users, he added, so there’s reluctance to adopt BPL widely in Europe. He said unlike the FCC, Europe doesn’t have a track record of working with unlicensed devices or counterparts to the Commission’s Part 15 rules. The U.S., which ranks 11th in broadband deployment worldwide, has a lot of pent-up demand, unlike many Asian countries, Sullivan said. Pointing out that federal regulators have widely supported BPL, he said he wouldn’t be surprised if some states required utilities to roll out BPL. PLCA Pres. Alan Shark said 2005 would be a “pivotal year” for BPL, with a lot of utilities moving from trials to commercial deployments. He said lack of standards is a challenge for the industry. The order is available at www.fcc.gov.

The FCC released an order early Tues. conditionally approving the merger of Cingular and AT&T Wireless. However, Comrs. Copps and Adelstein issued vigorous partial dissents, saying the order fails to address the effect on intermodal competition between wireline and wireless markets.