Federal Communications Commission (FCC)

Fifty executives from telecom, mass media and high-tech companies were among the 200 executives that publicly endorsed Sen. Kerry (D-Mass.) for president Wed. Kerry made the announcement in Davenport, Ia., a state then-Vice President Gore won by 4,144 votes (0.3%) in 2000; as it happens, President Bush was holding a rally mere blocks away. Kerry spoke with several executives in attendance, including News Corp. COO Peter Chernin and Oracle Pres. Charles Phillips. Most of the 50 executives have a long history of support for Democrats, although 6 have given to Bush, during the 2000 Presidential campaign or more recently. Many supported other Democratic candidates in the primaries.

The FCC tentatively concluded Wed. that CALEA applies to facilities-based providers of “any type of broadband Internet access service -- including wireline, cable modem, wireless and powerline -- and to managed or mediated [VoIP] services.” This was the wording of a rulemaking launched to determine the appropriate legal and policy framework for implementing CALEA, particularly regarding broadband access and services. The agency said the tentative conclusions were based on its proposal that such services fall under CALEA as “a replacement for a substantial portion of the local telephone exchange service.” But FCC officials said CALEA wouldn’t apply to “non-managed” P2P VoIP services such as those provided by Pulver.com or Skype. FCC Comrs. Copps and Adelstein concurred.

Little would change for Cox in terms of FCC reporting requirements if the company were to go private, officials told us. Cox Enterprises (CEI) announced it was proposing to take the company private by buying out the publicly held minority interest (38%)for $32 per share, or about $7.9 billion. Cox CEO James Robbins and other top industry officials have been saying for some time that cable stocks are trading at depressed levels. CEI said in a statement that it wanted to make additional infrastructure investments as the business grows increasingly competitive, and many on Wall St. would prefer immediate returns to more investment and possibly delayed returns.

House Commerce Committee Chmn. Barton (R-Tex.) pledged legislation next year to improve the administration of the federal E-rate program, beset by scandal at the local level. Speaking at a subcommittee hearing Thurs. that delved into fraud in E-rate funding in San Francisco, Barton told the audience “we're going to make structural changes in this program statutorily, probably in the next Congress… to make sure this doesn’t happen again.” The hearing before the Subcommittee on Oversight & Investigations was run by Rep. Walden (R-Ore.) because Subcommittee Chmn. Greenwood (R-Pa.) announced his retirement Thurs.

SAN FRANCISCO -- VoIP could drain Cal.’s universal service coffers of $400 million in 2008 as it grabs 43% of the state’s voice business, predicted the staff of the state PUC. The so-called High Cost Funds A & B -- to promote service in high-cost areas through subsidies to SBC, Verizon and 17 small companies -- are expected to lose $114-$253 million, said Jack Leutza, the PUC’s Telecom Div. dir. The Universal Lifeline Fund, providing subsidies to low-income users, is seen losing $48-$107 million, the Deaf & Disabled Communications Fund $13-30 million and the Cal. Teleconnect Fund for school, library and rural medical and community- based organizations $8-$17 million, he said on a Tues. night VoIP panel here organized by Women in Telecom.

Regulatory parity isn’t as easy to achieve as some might think and sometimes the only solution is “common sense and a case-by-case analysis,” according to an article by Sherille Ismail, senior counsel in the FCC Office of Strategic Planning & Policy Analysis. Writing in the latest issue of the Federal Communications Law Journal (Vol. 56, No. 3), Ismail said regulatory parity is a favorite argument by policy advocates but there are times when the FCC can’t achieve parity because: (1) Disparate treatment is required by statute “such as… the content restrictions that apply to broadcasters but not to cable or DBS operators, the interconnection and unbundling rules that apply to ILECs but not to CLECs.” (2) Laws passed by different jurisdictions -- for example states vs. the federal govt. -- result in different treatment of similar services. “There may be disparities in the licensing fees and entry conditions applicable to DBS operators, who are licensed by the Commission, and cable operators, who are licensed by local franchise authorities,” the paper said. (3) “The most significant barrier to achieving regulatory parity is that it is rarely the case that two types of providers are so alike that they must be treated in exactly the same manner.” Ismail said “trying to achieve parity in these circumstances may induce paralysis in policy-making.” The 47-page paper looked at several types of regulations in telecom, video and data services and concluded: “The lesson from this survey is that the constraints on the Commission’s ability to achieve regulatory parity in communications policy may be underappreciated… A better approach would be to resolve the issues on the basis of specific rules or policies, rather than to seek to eliminate alleged disparities. In legal terms, this suggests a focus on ‘rights’ rather than ‘equality.’ It is unlikely, however, that policy advocates will banish the term ‘regulatory parity’ from their working repertoire. Like the term ‘equality,’ the term ‘regulatory parity’ has a powerful effect on listeners.” Given the difficulty in erasing such disparities, “the strongest arguments are likely to be those that seek to apply a rule to two closely situated parties, in areas where a policy-maker has the discretion to act,” Ismail said: “If the comparison is made between two services that are not closely similar, are regulated by different jurisdictions, or are subject to different laws enacted by Congress, disparities are sure to exist, and policy-makers will likely be unable to eliminate them… Simple rules are not sufficient to solve these complex disputes; there is no substitute for common sense and case-by-case analysis.” The article represented Ismail’s views and “does not necessarily reflect the views of the FCC, any FCC commissioner or other staff.”

Interoperable public-safety communications is still years away, govt. panelists told the House Govt. Reform National Security Subcommittee. The hearing focused on a GAO report released Tues. and featured witnesses who downplayed expectations for interoperability. FCC Wireless Bureau Chief John Muleta told Subcommittee Chmn. Shays (R-Conn.) it would be “significant” if it took just 5 years for the govt. to develop effective planning for interoperability. Shays said 5 years of work on “just planning” would be a “huge failure.”

FCC Comr. Abernathy encouraged minority broadcasters to take advantage of new communications technologies to increase minority business ownership. Opportunities lie “not just in radio or TV, but Wi-Fi, broadband. You don’t need as much capital and it’s kind of a free-for-all right now,” Abernathy said. Abernathy, speaking at the Minority Media & Telecom Council conference Tues., said minority broadcasters shouldn’t look only at existing media companies.

SALT LAKE CITY -- Closing speakers at the NARUC summer meeting here said VoIP, broadband over power lines (BPL) and other promising new telecom technologies and applications will face major development hurdles until federal and state regulators sort out their oversight roles. All major telecom resolutions were unanimously approved by the NARUC board during the convention.

The new FCC all-or-nothing rule adopted last week (CD July 9 p3) is restricted to interconnection agreements approved under Sec. 252 of the Communications Act and doesn’t address how the new rule will apply to new commercial agreements, according to the text released Wed. One reason is that commercial agreements came under scrutiny after the Commission launched the further NPRM revising its interpretation of Sec. 252(i), we were told. The order will apply to all effective interconnection agreements, including those approved and in effect before the date the new rule goes into effect, the Commission said in the order, which will become effective 30 days after publication in the Federal Register. The new rules will equally apply to arbitrated and negotiated agreements, the FCC said. It found that Sec. 252(i) did “not differentiate between negotiated and arbitrated agreements.” It said the primary purpose of Sec. 252(i) was to prevent discrimination, and in the context of arbitrated interconnection agreements, requesting carriers were “protected from discrimination primarily by the arbitration process itself. Continuing to apply the pick- and-choose rule to arbitrated agreements, therefore, is an overly broad means of fulfilling the statutory purpose of protecting against discrimination.” Moreover, the Commission said, maintaining separate regimes for negotiated and arbitrated agreements would be difficult to administer. It stressed, however, that “parties are under a statutory obligation to negotiate in good faith.” The FCC also concluded in the order that it “does indeed have the legal authority” to reinterpret Sec. 252(i). Specifically, it said Congress hadn’t directly addressed the degree to which interconnection, service or network element provisions from a state-approved interconnection agreement must be made available to other requesting carriers. “We reach this conclusion because the plain meaning of the section’s text gives rise to 2 different, reasonable interpretations, and because the Supreme Court expressly recognized that the Commission has leeway to reinterpret section 252(i),” the order said. It also said the language in Sec. 252(i) didn’t limit the Commission to a single construction. On another issue raised by the competitive industry, the FCC said it found that Sec. 252(i) was “ambiguous” from the Supreme Court’s decision in AT&T v. Iowa Utilities Board, which, it said, held that the Commission had the expertise to determine a reasonable interpretation of Sec. 252(i). Several competitors had argued the Commission shouldn’t eliminate its pick-and-choose rule, which according to the Supreme Court “tracks the pertinent language almost exactly,” and is the “most readily apparent reading.” Comr. Copps, who dissented on the order, has also pointed at the highest court pronouncement, saying “this is a strong stuff for a Commission whose policy pronouncements do not always pass muster with the courts of land.” But the FCC said in the order the Supreme Court “did not hold that the Commission’s current interpretation of section 252(i) is compelled by the statute.” It said the Supreme Court had “routinely recognized that government agencies have discretion to change interpretations of ambiguous statutes, and that an agency is not stopped from changing its view.” The Commission also said “the order does not take a position on any issue outside the scope of the FNPRM.” Several parties participating in the proceeding have asked the Commission to address issues beyond those raised in the FNPRM. For example, Verizon has asked for a declaration that agreements governing network elements no longer subject to mandatory unbundling aren’t subject to Sec. 252(i) or the pick-and-choose rule; Birch has proposed structural separation of ILECs into wholesale and retail operations; and T-Mobile has urged the Commission to adopt a procedure for federal arbitration of national interconnection agreements. Those issues weren’t addressed in the order.