November 2004 - Fletcher, Heald & Hildreth
Contents
1. FLETCHER HEALD amp HILDRETH P L C FHH Telecom Law Current Issues in Telecommunications Law and Regulation November 2004 T Creative outlet O FCC OKs IP over AC C1 Mitchell Lazarus 703 812 0440 lazarus fhhlaw com B roadband over Power Lines BPL is the new est alternative to DSL and cable for high speed Internet service at home Customers seem to enjoy having two way high speed access at every electric out let in the house Just like plugging in an appliance they say Or plug in a Wi Fi unit in stead and take your laptop out on the deck The FCC has resolved a years long hard fought proceeding in which licensed radio users mostly ama teur radio operators vigorously opposed BPL They feared the ra dio frequency signals used to carry broadband information would leak off the power lines causing interference to radio communications The docket filled with dueling filings between the amateurs who predicted BPL would turn a city s power distribution system into a giant transmitting antenna and BPL providers who claimed their equipment was no more interfering than ordinary household digital devices The new rules will let BPL go forward But they also set up extraordinary measures intended to prevent in terference and mitigate it if it occurs Among these H BPL providers must consult on frequency usage with public safety agencies and certain govern ment and aeronautica2. be remote controllable to exclude fre quencies that cause interference at par ticular locations H BPL providers must establish a publicly accessible database of their installations to facilitate resolving interference issues In addition the FCC established new technical procedures for measuring radio frequency emis sions from BPL devices Most observers doubt the proceeding is over At least some licensed radio users are likely to challenge the FCC s decision And BPL provid ers may well dispute some of the new provisions But we expect they will be deploying in the meantime Broadband to the people November 2004 FCC Telecom Law pagea Tomorrow and tomorrow and tomorrow creeps 3G Crawls Forward Lee G Petro 703 812 0453 petro fhhlaw com he FCC continues efforts to pry loose 110 MHz for third generation 3G wireless ser vices more formally known as Advanced Wire less Services AWS which promise to bring high speed Internet access video programming and other advanced applications to mobile users Hav ing earlier allocated 1710 1755 and 2110 2155 MHz bands for 3G the FCC has now found another home for the Government opera tions that presently use 1710 1755 aS MHz Nineteen Department of Defense sites will be moved to the 2025 2110 MHz band and have protection from Broadcast Auxiliary licensees while aeronautical mobile flight test telemetry operations will be m
3. ID or social security numbers so an applicant cannot avoid the red light just by opening a new FRN Debts owed to the Universal Service Fund the TRS Fund and other FCC mandated funds will all come under the delinquent debt umbrella along with annual regulatory fees and application fees On the positive side delinquent applicants will receive a notice of their delinquency so that they can cure it with appropriate penalties in time to get an application eranted The notice will go only to the person listed as a contact on the CORES account so it wise to make sure the contact information is current The FCC also has a resource on its website called Red Light Check that enables an entity to determine instantly whether it is sub ject to a red light for any reason Access requires the en tity s FRN and passcode Think the FCC isn t serious about holding delinquents responsible One applicant took out a 2 240 govern Confidentiality continued from page 6 3 Permanent Confidentiality On proper request the FCC will with hold a smaller category of exhibits from the public on a permanent basis These include the block diagram schematics parts list tune up proce dures and operational description The FCC assumes that information contained in other parts of the applica tion internal and external photos manual etc is not confidential under the FOIA statute inasmuch as it becomes available to anyone purc
4. further blow to the competitive local exchange carrier industry The decision is likely to stand nonetheless barring a significant change in the membership of the FCC or an appeal to a court other than the D C Circuit which recently upheld the FCC s FTTH policy In a separate action the FCC extended a previous rul ing that forbore from requiring the Regional Bell Oper Continued on page 3 Page 2 FHH Telecom Law November 2004 fter years of what Chairman Michael Powell called the most ruthless lobbying he had ever seen last July it ap peared the FCC had finally decided not only how to reshuffle the 800 MHz band but also who would pay for the changes The public safety community had long complained that their 800 MHz transmissions were interfered with by commercial SMR operations on the interleaved adjacent channels mostly owned and operated by Nextel Nextel proposed to solve the problem and also to cure its own lack of 2 GHz PCS spectrum by giving up its 800 MHz channels paying to relocate the public safety community to those channels and relocating itself to 10 MHz of prime spectrum at 1910 1915 and 1990 1995 MHz which it asked the FCC to give it in exchange Although Nextel offered to pay 850 million toward the relocation costs cellular competitors howled that the 1900 MHz spectrum was worth closer to 6 billion resulting in a huge windfall to Nextel The lead opponent of the deal Verizon Wireless at one poin
5. manufacturers and im retailers and prepare for marketing This option is useful because ship ment to retailers or anywhere else is prohibited prior to the grant of cer tification which ordinarily triggers disclosure Like a delayed grant delayed disclo sure must be requested in the original filing of Form 731 There is an additional charge The de lay can be extended for a second 45 days but the extension request must reach the FCC at least seven calendar days before the first 45 days expires There is no additional charge for the extension Delayed disclosure comes with an obligation The certification grantee must notify the FCC or TCB promptly if it engages in public marketing activi ties or otherwise publicizes the device The FCC will then post the complete application on its web site except for materials withheld permanently as below Continued on page 7 November 2004 FHH Telecom Law Page 7 Before we look at your application let s he FCC has adopted new rules in an effort to crack down on deadbeat licensees and applicants By comparing the applicant s FCC Registration Number FRN with a roster of FRNs showing delinquent debts to the agency the FCC can put a red light on the proc essing of any application filed by deadbeats The FCC will cross check not only FRNs for unpaid debts but also the underlying Taxpayer Identification Numbers employer
6. 2004 is oee Will three be the charm y PCS Re Auction D j Vu R J Quianzon 703 812 0424 quianzon fhhlaw com Ne on its third try the FCC will once again re auction certain PCS spectrum across the nation Most of the spectrum at issue was ini tially won at auction during the 1990s by NextWave Personal Communication After NextWave declared bankruptcy the FCC auc tioned the licenses again in 2000 2001 But the U S Supreme Court ruled the FCC lacked au thority to do that while NextWave operated un der the protection of the Bankruptcy Code and returned the licenses to NextWave Now the FCC will take another shot The 242 licenses range from 1850 1990 MHz in relatively small economic areas typically a city and a few neighboring counties About half will be available only to entrepreneurs z e entities that together with their controlling interests have less than a half billion dollars in total assets and average annual revenues of less than 125 000 000 The other licenses are available to anyone but small businesses will receive a dis count Bidders with less than 40 million in an nual revenue will get 15 off and those bidders with less than 15 milion 25 off Potential bidders must apply by November 30 Upfront payments refundable earnest money required to participate must be submitted by December 29 Bidding begins on January 26 2005 Streamlined Tower Review On the Horizon Mich
7. ael Richards 703 812 0456 richards fhhlaw com he wired nation is going wireless More wireless means more towers which means more disputes over tower construction Propos ing a tower in or around an historic site can add extra processing delays And indeed the FCC reports an exponential increase in the number of environmental and historic preservation re views These create case backlogs additional pa perwork and delays in deploying needed infra structure The FCC s remedy is to standardize the review process from application to approval so that state federal Indian tribal and Hawaiian native organizations charged with protecting heritage sites can all get their reviews done as quickly as possible New standardized forms are in the works The same form will work whether sub mitted to the FCC or to any other historic preser vation office Although pending applications filed on older forms will still be valid parties that wish to resubmit a tower proposal on the new forms will be able to do so The new procedures specifically exclude certain tower work from the review process enhance ments to existing towers replacement and tem porary towers and certain towers constructed on industrial and commercial properties or in utility corridor rights of way The new historic preservation review procedures and forms should be available around the turn of the year Broadband over Power Lines continued from page 1
8. e tains the right to approve any change in control resulting from licensees defaults The PCC will allow commercial and private terrestrial wireless service Licensees to grant security interests in a license but only to the Department of Agriculture s Rural Utilities Service Also the FCC ended the remaining components of the cellular cross interest rule applicable to rural licen sees replacing the general prohibi tion of certain cross ownerships with case by case analyses It estab lished safe harbor standards for carriers subject to construction benchmark requirements It in creased the power limits for rural area wireless base stations so that larger areas can be covered with fewer facilities And it eased its position on infrastructure sharing agreements between and among licensees This last shift in policy will encourage licensees to en ter into economically effective facility sharing agree ments and thus reduce the overall cost of providing setvices to rural areas Fiber to the Curb continued from page 1 ating Companies to unbundle broadband networks used to provide FTTH FITC and certain other functions Where the earlier ruling applied to Section 251 of the Telecommunications Act of 1996 which governs local competition the recent action extends the same relief under Section 271 which governs the Bell Companies entry into long distance markets FHH Telecom Law November
9. hasing the product But the FCC will also withhold other exhibits on a showing that the information they contain cannot easily be obtained or reverse engineered from the product have a chat about that money you owe us FCC Implements New Debt Collection Procedures Applications dismissed if old bills not paid 3d o Donald J Evans 703 812 0430 evans fhhlaw com ment backed student loan in 1985 and defaulted but by 1992 had paid up with interest Fast forward to now when an auction participant must pay 50 more up front if it previously defaulted on any non tax debt owed to any Federal agency The applicant voluntarily fessed up to his long since corrected delict and noting the default was cured more than a decade ago asked for a waiver of the 50 premium Sorry said the FCC The rules and the integrity of the competitive bidding process are best served by applying the upfront payment requirement in a fair and consistent manner The Government never forgets Your Euros Or Your Life SL Vous Plast The FCC has opened a preliminary inquiry into whether termination charges levied by foreign carriers on U S mobile customers traveling abroad are reasonable and fair Concerned about anecdotal reports of exorbitantly high foreign termination rates the FCC has begun gath ering facts about existing agreements between carriers on such charges the level of charges and how foreign regulators handle this issue Al
10. l stations oO r 7 E BPL must avoid certain frequencies everywhere and certain other frequencies near specific sites H Individual BPL devices on the power lines must Continued on page 4 The FCC On The High Wire Wire the ILECs smiling FCC Drops Unbundling for Fiber to the Curb Paul J Feldman 703 812 0403 feldman fhhlaw com he FCC has eased incumbent local exchange car riers obligations to unbundle certain elements of their broadband networks Previously the FCC had ruled that the incumbents need not offer their competitors access to newly constructed fiber to the home FTTH loops The FCC has now extended that relief to newly con structed fiber to the curb FTTC loops as well The FCC defines FTTC as a fiber transmission facility that connects to a copper distribution plant not more than 500 feet from the customer premises As in the previous decision on FTTH the FCC relieved incumbent local ex change carriers of the requirement to provide unbun dled access to FTTC loops that connect to new cus tomer premises In cases where new fiber replaces cop per loops to an existing customer premise incumbents must make either a copper loop or a 64 kbps fiber transmission path available to competitors While a majority of FCC Commissioners agree this pol icy will promote construction of broadband networks and encourage competition Commissioner Copps be lieves the approach is a
11. ll post the entire application on its website in cluding all of the exhibits and correspondence If the FCC denies an application the application never becomes public An applicant can seek to alter the automatic disclo sure in three different ways These can be used in dividually or in any combination 1 Delayed Grant On proper request the FCC will postpone grant of certification and hence disclosure of the applica The FCC always treats a certification application as confidential until it is granted porters time to deliver the product to Unless the applicant requests otherwise on the day of the grant the PCC will post the entire application on its website Will the FCC Keep Your Secrets Mitchell Lazarus 703 812 0440 lazarus fhhlaw com tion until a date specified by the applicant Typi cally this is the date the product will be announced An applicant makes the request by ticking off the appropriate box on Form 731 certification applica tion There is no additional charge The FCC can decline to honor requests that made after the appli cation is filed 2 Delayed Disclosure On proper request the FCC will delay disclosure of certain application exhibits for 45 days following grant of the certification These include the exter nal and internal photos test setup photos block diagram schematics user s manual parts list tune up procedures and operational description The delay is meant to give
12. oved to the 2360 2395 MHz band The FCC had earlier re designated another 20 MHz for 3G 1915 1920 MHz paired with 1995 2000 MHz and 2020 2025 MHz paired with 2175 2180 These allocations require some way to reim burse unlicensed PCS users at 1915 1920 MHz and Meanwhile back in the 20th Century In nearby 2G spectrum the FCC has modified its rules for the 1920 1930 MHz band to provide additional uses of voice based systems for unli censed personal communications services Specifi cally the Commission removed certain channeliza tion requirements deleted the packing rule and will permit asynchronous operation in the band The Commission believes these changes will result in more robust use of the block by wireless PBX systems Broadcast Auxiliary Service BAS licensees at 1995 2000 and 2020 2025 MHz A proposal is pending whereby Nextel would clear these BAS frequencies in addition to others that Nextel would acquire in exchange for its 800 MHz spectrum See related story on page 2 If that pro posal goes forward and Nextel has in fact cleared 1995 2000 and 2020 2025 MHz before the FCC auctions these frequencies for AWS then the new licensee will be spared any additional re imbursement payments otherwise the AWS licen see will be responsible for the BAS relocation In any event the AWS licensee will have to relocate the incumbent users from 2175 2180 MHz The FCC issued a Notice of Proposed R
13. rvice areas based on county lines or other fixed boundaries the FCC prefers to consider each service and technology separately and to adopt different service areas based on the particular nature of each in hopes this will cre ate flexibility and opportunities for rural carriers and encourage efficient use of spectrum The FCC also wants more time to explore the use of secondary mar kets mechanisms to redistribute unused spectrum in areas that were previously licensed but for which the licensees failed to timely construct facilities But less than a year has gone by since the secondary mar ket leasing rules went into effect not enough time to determine their effectiveness To facilitate access to capital the FCC relaxed a long standing barrier to wireless carriers securing loans Previously licensees could mortgage their company stock accounts receivable etc but not their licenses hear me now 5 FCC Promotes Rural Wireless Steve Lovelady 703 812 0517 lovelady fhhlaw com Now the FCC will allow commercial and private ter restrial wireless service licensees to grant security inter ests in a license but only to the Department of Agri culture s Rural Utilities Service not to any other lender In the Commission s view this should open up a major source of capital for companies interested in acquiring spectrum and building facilities to bring new wireless services to rural areas But the FCC still r
14. t threatened the FCC Commissioners with personal criminal prosecution if they proceeded with the deal The tactic backfired causing a bitterly divided FCC to coalesce behind the Nextel plan albeit in altered form The FCC s July decision valued the 1 9 GHz going to Nextel at 4 8 billion Af pietene meaa S riaret ter a credit of 1 6 billion for the frequencies Nextel will vacate plus credit for Liability Company the actual cost of relocating the public safety community the FCC proposed to bill Nextel for the remaining 2 35 billion 1300 N 17th Street 11th Floor Arlington Virginia 22209 Tel November 2004 FHH Telecom Law Page 3 C Can you a d he FCC has released long awaited rules to help spread wireless services to rural areas aug mented with a Further Notice of Proposed Rulemak ing on unresolved issues The FCC defined rural area as a county with an aver age population density of 100 persons or less per square mile based on current census data This crite tion makes 2 331 counties rural areas with a population of 60 mil lion 71 of the U S counties with 21 of the population But the FCC considers the new defini tion to be only a presumption that can be altered to fit specific cir cumstances The FCC also responded to carri ers complaints about their inabil ity to gain access to spectrum in rural markets But rather than adopt a specific policy of establishing se
15. though no specific action is proposed at this time the FCC is encouraging inter ested parties to aid it in developing the record Com ments may be filed in Docket No IB 02 324 This category of confidentiality also must be requested on the original Form 731 and incurs an additional charge The FCC s initial determination to withhold a particular exhibit is only provisional If the FCC receives a re quest under FOIA for such an exhibit it notifies the certification grantee and only then litigates whether the exhibit qualifies to be withheld If it determines to dis close the exhibit it will delay doing so for a short time so the grantee has an opportunity to appeal the disclo sure in court Other questions Give us a call
16. ulemaking on auction rules technical rules and allocation of relocation costs for this 20 MHz Comments are due on November 23 2004 and reply comments on January 7 2004 It s almost 2005 Do you know where your proceedings are Due dates for filings in FCC proceedings are subject to last minute change Call us any time for current information Page 6 FHH Telecom Law November 2004 FOIA information W e get questions on how the FCC handles confidential information in certification applications Here are some answers Legal Basis The Freedom of Information Act FOIA gener ally requires federal agencies to disclose their re cords on request Agency records include most documents submitted to the agency by members of the public That makes an FCC certification appli cation together with all of its exhibits and corre spondence an agency record for FOIA purposes and hence presumptively subject to disclosure But FOIA also permits an agency to withhold from the public trade se crets and commercial or financial in formation obtained from a person and privileged or confidential Un der this provision the FCC can law fully keep certain parts of a certifica tion application from public disclo sure Default Rule The FCC always treats a certification application as confidential until it is granted Unless the applicant requests otherwise on the day of the grant the FCC wi
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