Selected portions of the BloostonLaw Telecom Update, and/or the BloostonLaw Private Users Update — newsletters from the Law Offices of Blooston, Mordkofsky, Dickens, Duffy & Prendergast, LLP are reproduced in this section with the firm's permission.
| BloostonLaw Telecom Update || Vol. 17, No. 8 || February 26, 2014 |
First Rural Broadband Experiment Expressions of Interest Filed
Although expressions of interest in the FCC’s upcoming rural broadband IP experiments program are not due until March 7, 2014 (and will continue to be accepted on a rolling basis thereafter), the first letters have been filed in the proceeding’s docket. Carriers interested in filing their own expressions of interest, which are non-binding, should contact the firm. BloostonLaw has prepared a template expression of interest, and is prepared to tailor it for specific companies.
On February 14, 2014, French Broad Electric Membership Corporation (FBEMC) of Marshall, North Carolina filed a letter expressing interest in proposing an experiment to serve Madison County, North Carolina with fiber-to-the-home services. FBEMC’s contemplated project would install and operate approximately 500 miles of new fiber optic lines serving approximately 4,500 homes, and take advantage of existing middle-mile fiber optic infrastructure. FBEMC estimates the project will cost $10 million.
The same day, the town of Greenfield, Massachusetts also filed a letter, proposing to engineer, design, build, own, and operate its own “Ethernet based hybrid fiber-licensed wireless-unlicensed wireless (WiFi) Metropolitan Area Network” within the town of Greenfield’s 22 square mile footprint. The network would provide municipal, public safety, commercial, and residential services, including VoIP, Internet access, Virtual Private Network, and Wide Area Network. Greenfield expects the project to cost approximately $5 million.
On February 19, the city of Nixa, Missouri filed a letter proposing a city-owned “Gigabit Passive Optical Network (G-PON) system,” a fiber-to-the-premises network with which the city will serve as the ISP and will wholesale bandwidth to telephone and television providers. According to the letter, shared bandwidth by subscribers connected to the same equipment port will have available 2.4 gigs downstream and 1.2 gigs upstream. Nixa estimates the proposal will cost approximately $28.4 million, assuming a 100% take rate among potential subscribers, which includes a $4.6 million local contribution.
Also on the 19th, Cotton Electric Cooperative, Inc. (Cotton) filed a letter proposing to bring high speed broadband service to its service areas in Oklahoma. Cotton does not provide specifics on the technology to be implemented, and estimates a total project cost of $4 million.
On February 20, Eastern Oregon Telecom (EOT) filed a letter proposing to serve the majority of our service area with a fiber-to-the-home service. According to the letter, the project will provide service to 72,987 residents, 26,837 households, in 2,229 square miles, including the majority of the surrounding Tribal land. EOT estimates that the total project cost will be $70 million, including a $10 million local contribution.
Netflix Pays Comcast to “Interconnect” with Customers, Ensure Smooth Streaming
On the heels of recent consumer complaints that Netflix’s quality has been dropping despite being accessed on high-speed connections, multiple news sources are reporting that Netflix and Comcast have entered into an agreement that will ensure smooth streaming of the service for Comcast customers — likely at a cost of several million dollars. Although the companies have so far refused to provide details on the agreement, the gist is that Netflix will pay Comcast for Netflix traffic (i.e., streaming video services) sent to Comcast customers.
According to an article on Telecompetitor, a source familiar with the matter said that Netflix has been seeking agreements that would allow the company to exchange traffic with the providers at no charge “by putting specialized storage servers in or near broadband provider points of presence (POPs) to store popular content, thereby minimizing the amount of traffic that would have to traverse long distances to reach end users.” Large providers like AT&T, Verizon and Time Warner had refused, maintaining that Netflix should have to pay something for the traffic its service generates and indicating that they “didn't see [specialized storage servers] as a solution to the traffic imbalance issue and did not want to set a precedent of allowing content providers to put servers in their POPs.” Instead, according to Telecompetitior, the new agreement “calls for Netflix and Comcast to interconnect at about a dozen third-party data centers and that Netflix would put storage servers in those data centers.”
Netflix is not the first service providers to agree to pay Internet service providers a premium for access to its customers – according to an article by Silicon Valley, Google and Facebook have both already reached similar deals with Comcast and others. Reuters reports that AT&T has said it is also in talks with Netflix about a possible agreement to improve performance for broadband customers who use the service.
It is unclear whether the arrangement would have violated the now-vacated net neutrality rules, given the lack of specifics of the agreement. On its face, the deal appears to provide a “fast lane” for Netflix traffic, which was exactly the sort of behavior net neutrality was aimed to stop, but according to a statement by Comcast, “Netflix receives no preferential network treatment under the multi-year agreement.” Sources such as Bloomberg Businessweek and Forbes have characterized the agreement as merely cutting out the middle man, having Netflix deal directly with Comcast instead of third party content distribution networks, and thereby not implicating net neutrality.
FCC Proposes New Location Accuracy Rules for Wireless 911 Calls
On February 21, 2014, the FCC released a Third Further Notice of Proposed Rulemaking (FNPRM) aimed at helping emergency responders better locate wireless callers who call 911. The proposed updates to the Commission’s Enhanced 911 rules attempt to improve indoor location accuracy and also strengthen existing E911 rules. The FNPRM also seeks comment on whether to revisit its timeframe for replacing its current handset-based and network-based location accuracy standards with a single standard in light of technological developments. Comments are due 45 days after Federal Register publication; replies due 30 days after initial comments.
The Commission’s current E911 rules require wireless providers to automatically transmit information to 911 call centers on the location of wireless 911 callers within certain parameters for accuracy. These rules, which were adopted in 1996 and underwent their last major revision in 2010, enable wireless providers to meet this accuracy standard based solely on the performance of outdoor wireless 911 calls. However, the FCC recognized that many Americans are replacing landlines with wireless phones, and calling patterns are changing. For example, reports indicate that nearly 73 percent of 911 calls in California are made from wireless phones, and approximately 80 percent of all smartphone use occurs indoors.
The proposed rules thus focus on location accuracy in challenging indoor environments such as large multi-story buildings, where first responders are often unable to determine the floor or even the building from which the 911 call originated. Determining the location of indoor wireless callers is more challenging than determining an outdoor location; but, according to the FCC, innovation and technological developments in this area are making it easier to locate mobile devices wherever they are.
The FCC proposes in the near term that wireless providers meet interim location accuracy metrics that would be sufficient to identify the building for most indoor calls. The FCC also proposes that wireless providers deliver vertical location information that would enable first responders to identify the floor level for most calls from multi-story buildings. In the long term, the FCC stated that it seeks to develop more granular indoor location accuracy standards that would require identification of the specific room, office, or apartment where a wireless 911 call is made. These standards would rely on what the FCC sees as the advancing capabilities of indoor location technology and increasing deployment of in-building communications infrastructure.
In particular, comment is sought on the following proposals, and potential alternatives to these proposals, with respect to indoor location accuracy:
- CMRS providers would be required to provide horizontal location (x- and y-axis) information within 50 meters of the caller for 67 percent of 911 calls placed from indoor environments within two years of the effective date of adoption of rules, and for 80 percent of indoor calls within five years.
- CMRS providers would be required to provide vertical location (z-axis) information within 3 meters of the caller for 67 percent of indoor 911 calls within three years of the adoption of rules, and for 80 percent of calls within five years.
- As is the case under the existing E911 location rules, CMRS providers would be required to meet these indoor requirements at either the county or PSAP geographic level.
- CMRS providers would demonstrate compliance with indoor location accuracy requirements through participation in an independently administered test bed program modeled on the indoor test bed administered by the Communications Security, Reliability, and Interoperability Council (CSRIC), but providers would have the option to demonstrate compliance through alternative means so long as they provide the same level of test result reliability.
- PSAPs would be entitled to seek Commission enforcement of these requirements within their jurisdictions, but only so long as they have implemented location bid/re-bid policies that are designed to obtain all 911 location information made available by CMRS providers pursuant to the FCC’s rules.
The FCC also seeks comment on whether its existing waiver processes are sufficient for purposes of any indoor location accuracy requirements, or whether it should adopt a waiver process that is specific to indoor location accuracy. In the event that commenters believe a specific waiver process should be employed, the FCC seeks comment on how such a specific waiver process would be implemented. Furthermore, the FCC wants to know whether it should establish criteria for a streamlined process for waiver relief.
While seeking comment on its proposals, the FCC also encourages industry, the public safety community, and other stakeholders to work collaboratively to develop alternate proposals for its consideration. The FCC emphasizes that its ultimate objective is that all Americans — whether they are calling from urban or rural areas, from indoors or outdoors — receive the support they need in times of emergency. Our small and rural wireless clients should be concerned as to whether the new mandates will require the purchase and implementation of technology that may not exist by the deadline, or may not be available/cost effective for smaller entities. Please advise us if you wish to participate in comments on this matter.
FCC Backs Off Newsroom Study
In an opinion piece published in the Wall Street Journal on February 10, FCC Commission Ajit Pai stated that last May, the FCC proposed an initiative “to thrust the federal government into newsrooms across the country.” Known as the "Multi-Market Study of Critical Information Needs, or CIN, Commissioner Pai said that under the CIN, the FCC plans to “send researchers to grill reporters, editors and station owners about how they decide which stories to run.” The purpose of the CIN, reportedly, is to obtain information about “the process by which stories are selected” and how often stations cover "critical information needs," along with "perceived station bias" and "perceived responsiveness to under-served populations." A field test was scheduled for Columbia, South Carolina later this year.
According to Commissioner Pai, the FCC selected eight categories of “critical information,” such as "environment" and "economic opportunities," and planned to ask station managers, news directors, journalists, television anchors and on-air reporters about their "news philosophy" and how the station ensures that the community gets critical information. An example: "Have you ever suggested coverage of what you consider a story with critical information for your customers that was rejected by management?"
On February 21, the FCC issued a statement entitled, “Setting the Record Straight About the Draft Study,” in which a spokeswoman stated that, “in the course of FCC review and public comment, concerns were raised that some of the questions may not have been appropriate. Chairman Wheeler agreed that survey questions in the study directed toward media outlet managers, news directors, and reporters overstepped the bounds of what is required.”
As a result, those questions have reportedly been removed entirely, and media owners and journalists will no longer be asked to participate in the Columbia pilot study.
Law & Regulation
Representative Blackburn Introduces Internet Freedom Act
On February 21, 2014, Rep. Marsha Blackburn (R-Tenn.) introduced a bill entitled the Internet Freedom Act , which specifically provides that the FCC’s Open Internet Order “shall have no force or effect.” Further, the bill also provides that the FCC may not “reissue such regulations in substantially the same form, or issue new regulations that are substantially the same as such regulations,” unless the new regulations are specifically authorized by law.
Because the proposed regulation nullifies the FCC’s Open Internet Order in its entirety, it goes further than the U.S Court of Appeals for the D.C. Circuit opinion. As reported in the January 15, 2014 Edition of the BloostonLaw Telecom Update, the court of appeals did not vacate the FCC’s transparency rule, which requires carriers to disclose any network management practices they employ to their customers. On its face, the bill would render this lone requirement ineffective.
Given FCC’s stated intention to revisit the net neutrality issue with an eye toward accomplishing the same goals embodied in the no-blocking and no-discrimination rules that were struck down, the bill would also stand as a direct barrier to that effort.
In a press release announcing the bill, Blackburn criticized the Obama administration for “proving once again that they will stop at nothing to restrict our Internet freedom” by attempting to resurrect the FCC's net neutrality rules.
Windstream to Adopt Compliance Plan and Pay $2.5 Million to Settle Rural Call Completion Claim
Windstream has entered into a consent decree to resolve an investigation by the FCC’s Enforcement Bureau into the company’s rural call completion practices.
Pursuant to the agreement, Windstream has agreed to make a voluntary contribution of $2.5 million to the U.S. Treasury. In addition, Windstream has agreed to a three year compliance plan to ensure compliance with the FCC’s rules. Among other things, Windstream will designate a senior corporate officer to serve as a compliance officer focusing on rural call completion issues; cooperate with the FCC and rural LECs to establish a testing program to evaluate rural call completion performance whenever complaints or data indicate problems; notify intermediate providers that may be causing call completion problems and analyze and resolve such problems as soon as practicable; and cease using intermediate providers that fail to improve their performance.
House Passes Cellphone Unlocking Bill with Dubious Amendment
On February 26 the U.S. House of Representatives passed the Unlocking Consumer Choice and Wireless Competition Act, which would repeal a rule published in October 2012 by the Librarian of Congress that limited the ability of certain owners of wireless telephone handsets to “unlock” their phones and connect them to different wireless networks, once their original contracts expired. Instead, the bill would reinstate an earlier rule that provided broader authority to circumvent such software protections.
According to Capitol Hill news source The Hill , the bill was originally expected to pass easily. The House Judiciary Committee, which is chaired by the bill’s sponsor Rep. Bob Goodlatte (R-Va.), approved the bill in a voice vote last summer. The White House also expressed some support for a petition last year that extended cellphone unlocking freedom, which The Hill suggests could be a sign of the administration’s support for the bill.
However, at the last minute, The Hill further reported that a number of representatives, including Reps. Zoe Lofgren (D-Calif.) and Anna Eshoo (D-Calif.), called for the rejection of the bill based upon additional language that was not present when the committee considered the bill last summer. Since then, language was added that would exempt “bulk unlockers” from the bill’s repeal of the cellphone unlocking limitation, meaning that companies could not go into the “cellphone unlocking business.” According to The Hill, the representatives said exempting bulk unlockers goes against a recent court decision that many see as giving a green light to activities similar to bulk unlocking. Despite this, the bill passed by a narrow margin.
Rep. Goodlatte was content that some progress was better than no progress, noting the importance of at least making sure it's legal for people unlock recently-purchased phones. The bill now moves on to the Senate for consideration.
Senate to Hold Wireless Competition Hearing
The Senate Committee on the Judiciary held a hearing of the Subcommittee on Antitrust, Competition Policy and Consumer Rights entitled "An Examination of Competition in the Wireless Market" on Wednesday, February 26, 2014 at 10:00 a.m. A live webcast of the hearing can be viewed here , by clicking on the “WEBCAST” button.
Witnesses for the hearing include: Eric Graham, Senior Vice President of Strategic Relations at Cellular South, Inc.; Roslyn Layton, Ph.D. Fellow at the Center for Communication, Media and Information Technologies of Aalborg University, Denmark; Randal S. Milch, Executive Vice President & General Counsel for Verizon Communications Inc.; Jonathan Spalter, Chairman of Mobile Future; Thomas J. Sugrue, Senior Vice President of Government Affairs at T-Mobile USA, Inc.; and Matthew F. Wood, Policy Director of Free Press.
Official testimony was not available at the time this article went to press.
Facebook Buys WhatsApp for $19B, May Offer Internet Voice and Text Messaging
On February 19, Facebook announced the purchase of WhatsApp, an Internet messaging service, for $19 billion — $12 billion in Facebook shares, $4 billion in cash, and $3 billion in restricted stock units.
According to Facebook’s press release on the deal, “WhatsApp has built a leading and rapidly growing real-time mobile messaging service, with: Over 450 million people using the service each month; 70% of those people active on a given day; Messaging volume approaching the entire global telecom SMS volume; and Continued strong growth, currently adding more than 1 million new registered users per day.”
Mashable.com reports that at the Mobile World Congress event, Mark Zuckerberg announced his company’s plan for the future in mobile communications: "We want to create a dial tone for the Internet."
"Most people in the world don't have access to the Internet at all," said Zuckerberg. "After Facebook reached its milestone of connecting a billion people, we stepped back and thought, 'how can we change the rest of world?'"
At the same conference, the New York Times’ Bits blog reports that WhatsApp founder and CEO Jan Koum announced that the company would be rolling out a new free voice calling service akin to Skype, and is further planning to launch a mobile brand in a partnership with the German cellphone carrier E-Plus.
Feb. 28 – PRA comments on Rural Call Completion are due.
Feb. 28 – Petitions to Deny T-Mobile/Verizon Spectrum Sale are due.
Mar. 1 – Annual CPNI Certification is due.
Mar. 3 – Copyright Statement of Account Form for cable companies is due.
Mar. 3 – FCC Form 477 (Local Competition & Broadband Reporting) is due.
Mar. 3 – Comments on the Wireline Competition Bureau's VoIP Numbering Trial Report are due.
Mar. 3 – Reply comments on Public Knowledge's Petition for Declaratory Ruling on CPNI are due.
Mar. 7 – Initial expressions of interest in rural broadband experiments are due.
Mar. 7 – Reply comments on NECA 2014 Average Schedule Formulas are due.
Mar. 10 – Oppositions to Petitions to Deny T-Mobile/Verizon Spectrum Sale are due.
Mar. 10 – Electronic filing deadline for Form 497 for carriers seeking support for the preceding month and wishing to receive reimbursement by month's end.
Mar. 11 – Replies to Oppositions to Petitions for Reconsideration on Rural Call Completion Order are due.
Mar. 17 – Reply comments are due on Use of Mobile Wireless Devices on Airborne Aircraft.
Mar. 17 – Replies to Oppositions to Petitions to Deny T-Mobile/Verizon Spectrum Sale are due.
Mar. 31 – FCC Form 525 (Delayed Phase-down CETC Line Counts) is due.
Mar. 31 – FCC Form 508 (ICLS Projected Annual Common Line Requirement) is due.
Mar. 31 – Comments on FCC Process Reform Report are due.
Apr. 1 – FCC Form 499-A (Telecommunications Reporting Worksheet) is due.
Apr. 1 – Annual Accessibility Certification is due.
Apr. 1 – PRA comments on Form 477 (Local Telephone Competition and Broadband Reporting) are due.