Washington Monitor
Volume XVII, No. 21 November 19, 2009

RCA PARTICIPATES IN HOUSE SUBCOMMITTEE HEARING ON DISCUSSION DRAFT OF USF REFORM

In testimony before the House Committee on Energy and Commerce Subcommittee on Communications, Technology and the Internet, RCA stressed that any Universal Service Fund (USF) reform measures must be competitively neutral.

The November 17 hearing included testimony from a panel of witnesses, including Eric Graham, Vice President of Government Relations for Cellular South, Inc., an RCA member, and representatives from the Oregon Public Utility Commission, the National Telecommunications Cooperative Association, the National Cable & Telecommunications Association (NCTA) , the Organization for the Promotion and Advancement of Small Telecommunications Companies (OPASTCO), Academia, Telemedicine, Windstream Communications, Verizon, and AT&T.

The hearing was based on a draft bill recently released by Subcommittee Chairman Rick Boucher (D-VA) and Congressman Lee Terry (R-NE) that would reform the USF (For more complete analysis of the Universal Service Reform Act of 2009, please see the November 6 Washington Monitor Special Regulatory Update, available here).

Broad consensus was present amongst both the members of the subcommittee and the panel of witnesses that USF support should be used to deploy and enhance current broadband service offerings, particularly in rural America. Witnesses took differing positions on the appropriate broadband speed requirements for ETCs.

RCA emphasized the role that universal service funding plays in ensuring robust coverage in rural areas. To be competitively neutral, USF support distribution mechanism should be tied to consumers served, without artificially limiting the number of supported providers in any particular market, whether through reverse auctions or another mechanism.

Legislators and witnesses also debated whether support should still be provided, reduced or eliminated to wireline providers who currently face unsubsidized competition in the same market.

RCA remains engaged on the USF reform initiatives and will continue to work with Chairman Boucher, Congressman Terry, and the committee as legislation moves forward.

FCC ADOPTS DECLARATORY RULING TO STREAMLINE TOWER SITING PROCESS

On November 18, the FCC adopted a Declaratory Ruling to speed state and local zoning review of tower proposals. Under the ruling, zoning authorities will now have 90 days to issue decisions on collocations and 150 days to decide new construction and other tower applications. If the authority fails to meet that deadline, the tower proponent may ask a court to mandate action from the zoning authority.

Under Section 332(c)(7) of the Communications Act, Congress requires that state and local authorities act “within a reasonable period of time” on requests for tower siting. In its decision, the FCC interprets a “reasonable period of time” as 90 days for collocations and 150 days for all other towers. If a jurisdiction “fails to act” on the application within this reasonable time period, applicants may file a claim for relief in court within 30 days of the failure to act. The court will then decide what action to take based on all the facts of the case. The FCC’s decision does not dictate substantive outcomes, such as “automatic grant” of requests untimely acted upon, nor does it limit State and local governments’ fundamental sovereignty over local land use.

As part of its ruling, the FCC announced that it is a violation of the Communications Act for a State or local government to deny a wireless service facility siting application because service is available from another provider. According to the FCC, such decisions unlawfully prohibit or have the effect of prohibiting the provision of personal wireless services. In addition, the FCC denied CTIA’s request to find that it is a violation of the Communications Act for a State or local regulation to require a variance or waiver for every wireless facility siting. The FCC stated that it lacked enough factual context on which to base a broad exemption of blanket variance ordinances.

See Petition for Declaratory Ruling to Clarify Provisions of Section 332(c)(7)(B) to Ensure Timely Siting Review and to Preempt Under Section 253 State and Local Ordinances that Classify All Wireless Siting Proposals as Requiring a Variance, Declaratory Ruling, WT Docket No. 08-165, FCC 09-99 (rel. Nov. 18, 2009).

RCA PARTICIPATES IN FCC WORKSHOP ON DISTRACTED DRIVING

RCA member Holly Henderson, Manager of Legal and External Affairs for SotuhernLINC Wireless, took part in a Federal Communications Commission (FCC) workshop on distracted driving on November 20, 2009 that included input from vendors, associations, nonprofits, carriers, and other stakeholders. During the panel discussion, Henderson stressed the connection that RCA members have with their communities and how they can effectively use that relationship to communicate the risks that can be associated with distracted driving. Additional panelists also commented on the important role education plays in reducing the risks of distracted driving, particularly when education is complemented by the appropriate state and Federal legislation and enforcement.

The workshop also showcased several applications and other emerging technologies that may be used both by networks, customers, or a combination of both that may help reduce the risks of distracted driving.

The FCC has launched a website dedicated to distracted driving, which can be found here. A full recording of the session will be made available shortly.

HOUSE SUBCOMMITTEE HOLDS HEARING ON RURAL BROADBAND PROGRAMS

On November 19, the House Committee on Agriculture Subcommittee on Rural Development, Biotechnology, Specialty Crops, and Foreign Agriculture held a hearing to review rural broadband programs funded by the American Recovery and Reinvestment Act (ARRA), popularly known as the stimulus. The hearing, led by Subcommittee Chairman Mike McIntyre (D-NC), abbreviated in order to accommodate votes on the floor of the House, featured testimony from the Honorable Jonathan S. Adelstein, Administrator, Rural Utilities Service (RUS) and the Honorable Lawrence E. Strickling, Assistant Secretary for Communications and Information, National Telecommunications and Information Administration (NTIA).

Opening the hearing, Chairman McIntyre and Ranking Member K. Michael Conaway (R-TX) commented on the importance of broadband for rural communities and how funding from ARRA must be appropriately allocated to effectively bring broadband service to unserved and underserved rural communities. As the first round of funding is being awarded and the second and third proposed rounds will be condensed into one final round, debate covered whether applicants were qualified to receive funding, the appropriate definitions of terms such as remote and rural, what changes should be made to the application process for the final round, and how that information will be communicated with potentially qualified applicants.

In discussion on applicants for the first round of funding, Adelstein clarified that 60% of applications had a wireless component, but that the 60% figure did not reflect purely wireless applications. Further discussion covered the effectiveness of wireless technologies to reach remote locations, while potentially being less expensive than fiber options.

As the hearing was shortened to accommodate floor votes, several members indicated additional questions and testimony would be offered for the record. RCA will provide update as appropriate once the record is complete.

To view each witness’s full written testimony, please click the respective hyperlinked name in the first paragraph of this article.

FCC SEEKS COMMENT ON THE ROLE OF USF AND INTERCARRIER COMPENSATION IN THE NATIONAL BROADBAND PLAN

On November 13, the FCC released a Public Notice seeking comment on its universal service and intercarrier compensation policies and to explore various policy options that would further the goal of making broadband universally available to all Americans as part of the FCC’s National Broadband Plan.

The Public Notice touches on a number of issues within the USF portfolio, including USF fund size, appropriate contribution methodology, transitioning the current universal service high-cost support mechanism to support advance broadband deployment, the impact of changes in current revenue flows, the principle of competitive neutrality and perceived regulatory discrepancies in “Carrier of Last Resort” obligations, appropriate high-cost funding oversight and accountability mechanisms, and whether to extend low-income support to establish a Broadband Lifeline/Link-Up program and to structure such a program.

Comments on the Public Notice are due December 7, 2009. See Comment Sought on the Role of the Universal Service Fund and Intercarrier Compensation in the National Broadband Plan, Public Notice NBP Notice #19, GN Docket Nos. 09-47, 09-51, 09-137.

FCC CONDITIONALLY GRANTS APROVAL OF AT&T ACQUISITION OF CENTENNIAL

On November 5, the FCC conditionally granted AT&T’s acquisition of Centennial. The FCC conditioned its approval on several matters highlighted by RCA in written pleadings filed with the FCC.

With regard to roaming, as a condition of its consent to the acquisition, the FCC required AT&T to honor Centennial’s existing agreements with other carriers, and required AT&T to continue the rates, terms, and conditions in the Centennial agreements (as of the merger closing date) for the full term of the existing agreements. In addition, the FCC conditioned approval of the deal on a requirement that AT&T allow any carrier with less than 10 million subscribers that has a roaming agreement in effect with Centennial (as of the merger closing date) to elect to continue to obtain roaming services under that agreement (in those areas where the agreement applied as of the merger closing date), for the later of: (1) a period of 48 months after the merger closing date; or (2) the full term of the carrier’s agreement with Centennial.

The roaming conditions do not apply to: (1) any properties other than those AT&T is acquiring through the Centennial merger; and (2) any properties that must be divested. In addition, the conditions do not limit AT&T’s ability to reasonably manage its networks to support the provision of 3G or 4G services to customers, and the commitment cannot be interpreted to restrict AT&T’s ability to modify, upgrade, or sunset Centennial’s existing network, features, or functionalities, as AT&T implements its network technology of choice in areas covered by Centennial’s roaming agreements.

With regard to spectrum divestitures, the FCC required AT&T to divest of Centennial’s wireless operations in the following areas: Lafayette, LA (CMA174), Alexandria, LA (CMA205), Louisiana 3 – De Soto (CMA456), Louisiana 5 – Beauregard (CMA458), Louisiana 6 – Iberville (CMA459), Louisiana 7 – West Feliciana (CMA460) and Mississippi 8 – Claiburne (CMA500). The Department of Justice had already required divestitures in these same markets as a result of its review of the transaction, as well as in Mississippi 9 (CMA501).

As another condition of the deal, the FCC required AT&T to operate and maintain a CDMA network in Puerto Rico and the U.S. Virgin Islands for 18 months after the merger closing date, after which AT&T will have no obligation to operate or maintain a CDMA network in those territories.

In addition, the FCC imposed certain limitations on AT&T’s participation on the Board of Directors of, and services provided to, América Móvil, S.A.B. de C.V. (“América Móvil”), including restrictions on its participation in the business and operations of América Móvil in the United States (including Puerto Rico and the U.S. Virgin Islands). América Móvil, AT&T, and Centennial currently compete in the provision of wireless services in Puerto Rico and the U.S. Virgin Islands.

See Applications of AT&T Inc. and Centennial Communications Corp. For Consent to Transfer Control of Licenses, Authorizations, and Spectrum Leasing Arrangements, Memorandum Opinion and Order, WT Docket No. 08-246 (rel. Nov. 5, 2009).

RCA FILES REPLY COMMENTS WITH FCC ON USAC REQUESTS FOR GUIDANCE

On November 12, RCA filed comments on a number of USF-related issues on which the USAC sought Commission guidance. Among other things, RCA urged the FCC to clarify that USF Document Retention Rules apply on a going-forward basis only – that is, only to documents created or collected by carriers on or after the effective date of those rules. RCA also stated that the FCC should also vacate any audit findings that are grounded in the application of those rules to documentation created or collection prior to that date.

RCA argued that the FCC should clarify that USF rules do not require ETCs to list each supported service and functionality. RCA explained that because the Communications Act and the FCC rules do not explicitly state that each service and functionality must be listed, enforcement of a separate listing requirement would unfairly punish carriers under a standard of which they could not reasonably have been aware.

RCA also stated that if the FCC determines that the carrier-specific caps applicable to AT&T and Alltel should be implemented retroactively to the periods preceding the effective date of the industry-wide cap, the FCC should to do so in a manner that avoids harm to other carriers and their customers. RCA stated that retroactive implementation of the carrier-specific caps would significantly reduce the total support available to competitive ETCs in several states in March 2008, which served as the baseline from which capped statewide amounts are calculated under the interim cap.

RCA explained that such regulatory action would have the effect of further reducing the support available to competitive ETCs under the cap, resulting in large negative adjustments to current and prior-period support and would be unfair because these support reductions would be visited upon carriers that were not privy to the transactions approved in the AT&T and ALLTEL merger orders. RCA stated that unlike AT&T and ALLTEL, these carriers did not negotiate the support reductions in exchange for the benefits of merging. As such, they should not be subjected to “collateral damage” from the conditions negotiated by AT&T and ALLTEL.

NTIA AND RUS RELEASE JOINT REQUEST FOR INFORMATION

On November 10, RUS and NTIA announced that they are streamlining the American Recovery and Reinvestment Act’s broadband grant and loan programs by awarding the remaining funding in just one more round, instead of two rounds. Initial funding awards are expected to be announced in December 2009.

The agencies also announced the release of a joint Request for Information (“RFI”) seeking public comment on certain issues relating to the implementation of the BIP and BTOP programs. The agencies believe the RFI will strengthen the programs, although the input expected from this process is intended to affect only the second round of funding. Comments are requested under the two broad categories and several subcategories described below.

The Application and Review Process

RUS and NTIA have asked for input on ways to streamline the application process to reduce the burden on applicants, while still obtaining the requisite information to fulfill the statutory requirements set forth in the Recovery Act. RUS and NTIA have also been considering whether they should permit greater public access, consistent with applicable Federal laws and regulations, to certain applicant information. The agencies are looking for opinions on what data should be made publicly available and what data should be considered confidential or proprietary.

The agencies are looking for feedback on what methods of support and outreach was most effective to applicants and what improvements need to be made. In addition, NTIA seeks comment on whether or not it should continue to rely on unpaid experts as reviewers.

Policy Issues

RUS and NTIA also seek comment on the following specific proposals:

Whether RUS and/or NTIA should focus on or limit Round Two funding on projects that will deliver middle mile infrastructure facilities into a group of communities and connect key anchor institutions within those communities?
Whether RUS and/or NTIA should allocate a portion of the remaining funds available under the BIP and BTOP programs to promote a regional economic development approach to broadband deployment?
Whether RUS and NTIA should allocate a portion of the remaining funds to specific population groups?
To what extent RUS and/or NTIA should target the funds to a particular type of project or funding proposal, how if at all, should they modify their evaluation criteria?

The agencies are looking for input on adopting more objective and readily verifiable measures for defining the terms “unserved area,” “underserved area,” and “broadband” and what those measures should be. Specifically, should the definition of broadband include a higher speed and should the speeds relate to the types of projects. Comment is also requested on the definition of “remote area” as well as whether this concept should be a factor in determining award decisions.

Some stakeholders have suggested that the rule limiting the sale of project assets is overly restrictive and is a barrier to participation in BIP and BTOP. NTIA and RUS are requesting comment on this section should be revised to adopt a more flexible approach toward awardee mergers, while still ensuring that awardees are not receiving unjust enrichment from the sale of award-funded assets for profit. NTIA and RUS are also looking for suggestions on how to assess the cost effectiveness or cost reasonableness of a particular project as well as any other substantive changes that interested parties think should be made to the NOFA.

Comments on the RFI are due November 30, 2009. See RUS and NTIA Joint Request for Information, Docket No: 0907141137-91375-05 (rel. Nov. 10, 2009).

RCA MEETS WITH FCC COMMISSIONERS CLYBURN AND ATTELL BAKER ON ISSUES OF CONCERN TO RCA MEMBERS

In mid-November, RCA representatives met with FCC Commissioners Mignon Clyburn and Meredith Attwell Baker, as well as legal advisors to FCC Chairman Julius Genachowski and FCC Commissioner Robert McDowell to encourage the FCC to take action on RCA’s Petition for Rulemaking in the FCC’s exclusive handset proceeding, to adopt rules that would extend automatic roaming obligations to data services and eliminate the in-market exception, and to discuss the Petition for Rulemaking filed by the 700 MHz Block A Good Faith Purchasers Alliance.

On the issue of exclusive handset arrangements, RCA representatives provided FCC staff with recent data showing that, in September 2009, 46 of the 50 top-selling handsets in the United States were subject to exclusive handset arrangements involving one of the nation’s four largest carriers. RCA encouraged Bureau staff to move forward expeditiously with a Notice of Proposed Rulemaking to investigate the widespread use and anticompetitive effects of exclusivity arrangements between commercial wireless carriers and handset manufacturers, and, as necessary, adopt rules that prohibit such arrangements when contrary to the public interest. RCA representatives also discussed the consumer and competitive harms being caused from the growing use of exclusive handset arrangements by the nation’s largest carriers.

On data roaming, RCA representatives encouraged the Bureau staff to promptly take action that would extend the FCC’s automatic roaming rules to data services. RCA representatives explained that the ability for rural consumers to have access to data services while roaming is a critical service offering to consumers and communities, and essential to the competitive viability of regional and rural carriers. RCA representatives also made clear that the expansion of automatic roaming obligations to include data is a basic and fundamental building block of achieving the Administration’s goal of providing broadband to rural America, consistent with the Commission’s stated goals in developing its National Broadband Plan. RCA representatives explained that there will be a detrimental impact to broadband deployment in rural America if automatic roaming obligations are not extended to data services.

On the issue of the Petition for Rulemaking filed by 700 MHz Block “A” Good Faith Purchasers Alliance, RCA explained how Verizon Wireless and AT&T are collaboratively establishing self-serving “band classes” for 700 MHz mobile equipment in coordination with the LTE Standards Group, 3GPP, that will allow only these two dominant carriers to have economic and near-term access to 700 MHz equipment. RCA stated that the clear intentions of Verizon Wireless and AT&T are to block the development of equipment for 700 MHz Lower “A” Block licensees, thereby impeding competition and harming consumers. RCA encouraged the Commission to initiate a rulemaking to investigate the issues raised in the Petition.

FCC RELEASES PUBLIC NOTICE SEEKING TO REFRESH THE RECORD ON WIRELESS E911 LOCATION ACCURACY REQUIREMENTS

On November 6, the FCC’s Public Safety and Homeland Security Bureau (Bureau) released a Public Notice seeking to refresh the record on location accuracy standards for wireless E911 calls. The Bureau explains that “[i]n light of the passage of time since the most recent activity in this docket, [it] seeks comment on whether subsequent developments in the industry and technology may have affected parties’ positions on the issues raised.”

The Bureau highlights recent developments in the proceeding, including the vacatur and remand of the Commission’s 2007 Report and Order in the proceeding, the submission by the Association of Public Safety Communications Officials-International (APCO), the National Emergency Number Association (NENA), Verizon Wireless, Sprint Nextel Corporation, and AT&T of written ex parte letters recommending new E911 accuracy requirements for both handset-based and network-based technologies in order to achieve E911 accuracy compliance at the county-level, the Bureau’s September 2008 Public Notice seeking comment on these proposals, as well as the subsequent voluntary commitments by Verizon Wireless and Sprint Nextel to implement their proposed accuracy standards in connection with separate transactions approved by the Commission in 2008.

The Bureau states that it also seeks to refresh the record given that in response to the Bureau’s September 2008 Public Notice, several parties proposed alternative timeframes for implementation of revised location accuracy standards, and approximately a year has passed since some of those proposals were made. The Bureau notes, for example, that in addition to the timetables proposed by APCO, NENA, Verizon Wireless, Sprint, and AT&T, T-Mobile and the Rural Cellular Association suggested that several of the benchmarks proposed by AT&T should be extended by two years. The Bureau requests that interested parties refresh the record on these proposed timeframes for implementation in light of the passage of time and any other relevant developments in the industry or economy.

See Public Safety and Homeland Security Bureau Seeks to Refresh the Record Regarding Service Rules for Wireless Enhanced 911 Phase II Location Accuracy and Reliability, Public Notice, PS Docket No. 07-114, DA 09-2397 (rel., Nov. 6, 2009).

UPCOMING REGULATORY DEADLINES

November 20, 2009 – Comments due on FCC Public Notice seeking comment to refresh the record on wireless E911 location accuracy requirements. See Public Safety and Homeland Security Bureau Seeks to Refresh the Record Regarding Service Rules for Wireless Enhanced 911 Phase II Location Accuracy and Reliability, Public Notice, PS Docket No. 07-114, DA 09-2397 (rel., Nov. 6, 2009).
November 24, 2009 – Comments due on FCC Order and Notice of Proposed Rulemaking addressing the effect of line loss on universal service Local Switching Support received by incumbent local exchange carriers that are designated as ETCs. See Coalition for Equity in Switching Support Petition, Order and Further Notice of Proposed Rulemaking, WC Docket No. 05-337, FCC 09-89 (rel. Oct. 9, 2009).
November 30, 2009 – Comments due on NTIA & RUS Request for Information on second round of broadband funding. See RUS and NTIA Joint Request for Information, Docket No: 0907141137-91375-05 (rel. Nov. 10, 2009).
December 1, 2009 – Reply comments due on FCC Order and Notice of Proposed Rulemaking addressing the effect of line loss on universal service Local Switching Support received by incumbent local exchange carriers that are designated as ETCs. See Coalition for Equity in Switching Support Petition, Order and Further Notice of Proposed Rulemaking, WC Docket No. 05-337, FCC 09-89 (rel. Oct. 9, 2009).
December 4, 2009 – Reply comments due on FCC Public Notice seeking comment to refresh the record on wireless E911 location accuracy requirements. See Public Safety and Homeland Security Bureau Seeks to Refresh the Record Regarding Service Rules for Wireless Enhanced 911 Phase II Location Accuracy and Reliability, Public Notice, PS Docket No. 07-114, DA 09-2397 (rel., Nov. 6, 2009).
December 7, 2009 – Comments due on FCC Public Notice requesting comments on universal service and intercarrier compensation (ICC) policies, including policy options that would further the goal of making broadband universally available throughout the United States. See Comment Sought on the Role of the Universal Service Fund and Intercarrier Compensation in the National Broadband Plan, Public Notice NBP Notice #19, GN Docket Nos. 09-47, 09-51, 09-137.
January 14, 2010 – Comments due on FCC “Net Neutrality” Notice of Proposed Rulemaking proposing six enforceable “net neutrality regulations applicable to providers of broadband Internet access services. See Preserving the Open Internet; Broadband Industry Practices, Notice of Proposed Rulemaking, GN Docket No. 09-191, WC Docket No. 07-52, FCC 09-93 (rel. Oct. 22, 2009).
March 5, 2010 – Reply comments due on FCC “Net Neutrality” Notice of Proposed Rulemaking proposing six enforceable “net neutrality regulations applicable to providers of broadband Internet access services. See Preserving the Open Internet; Broadband Industry Practices, Notice of Proposed Rulemaking, GN Docket No. 09-191, WC Docket No. 07-52, FCC 09-93 (rel. Oct. 22, 2009).
TBD – Comment and reply comment deadlines on FCC Public Notice seeking comment on an appropriate analytical framework for examining the various issues raised in FCC’s January 2005 Special Access NPRM which launched a review of rules for setting the rates charged for interstate special access services by ILECs subject to price cap regulation. Comments are requested 45 days and reply comments 75 days after publication of the Public Notice in the Federal Register.

The Washington Monitor is published by the Rural Cellular Association (RCA). The Washington Monitor is not intended to provide legal or business advice and may, despite good intentions, contain errors and omissions.

Disclaimer: RCA members should determine the applicability of all Federal Communications Commission rules and policies, as well as other information contained herein, to their own operations and consult their own counsel as may be appropriate. RCA assumes no responsibility for errors or omissions in The Washington Monitor.

Washington Monitor Volume XVII, No. 21 November 19, 2009