TechComm Industry Update ~ September 27, 2012


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TechComm Industry Update ~ September 27, 2012

  1. 1. TechComm Industry Update PATTON BOGGS LLPPatton Boggs TechComm Industry UpdateSeptember 27, 2012 FCC to Seek Comment on Three NPRMs at September 28th Meeting The FCC plans to issue the following Notices of Proposed Rulemaking (NPRM) at its Friday, September 28th meeting: • Voluntary Incentive Auctions. An NPRM regarding implementation of a voluntary incentive auction of broadcast spectrum. According to reports, the NPRM will propose to conduct the “reverse” and “forward” auctions concurrently. The NPRM reportedly will seek comment on how to design a band plan for the spectrum, how to conduct the transition during which remaining broadcast operations will be repacked, and the eligibility requirements for auction participants. The target date for the auctions is 2014. • Mobile Spectrum Holdings. An NPRM initiating a review of the agency’s policies governing mobile spectrum holdings and how much spectrum each wireless company can hold in a market. The NPRM is expected to ask whether the FCC should continue to apply its “spectrum screen” analysis on a case-by-case basis when evaluating companies’ spectrum transactions or adopt a more standardized framework. Because this rulemaking could affect which wireless companies participate in the upcoming spectrum incentive auctions, reports indicate that the FCC may act on the mobile spectrum holdings NPRM before finalizing its incentive auction rules. • Satellite and Earth Station Rules. An NPRM to “update, streamline, or eliminate earth and space station licensing requirements, reducing regulatory burdens on licensees and accelerating delivery of new satellite services to consumers.” According to trade press, the NPRM will consider updating certain technical definitions, easing administrative burdens, reinforcing an emergency reporting contact requirement, providing greater flexibility to earth station applicants, and codifying the practice of granting a single earth station authorization to cover multiple antennas located in close proximity. FTC Business Guide for Mobile Application Developers The Federal Trade Commission (FTC) released a new Business Guide for mobile application developers, “Marketing Your Mobile App: Get It Right from the Start.” While the stated intention is to help mobile app developers observe truth-in-advertising and basic privacy principles, this guide is a helpful primer of fundamental advertising, marketing and privacy principles applicable to all formats and media. The new FTC Business Guide also reflects the FTC’s continuing focus on privacy protections in online and mobile environments. For our Client Alert about the new FTC guide, click here.This information is not intended to constitute, and is not a substitute for, legal or other advice. You should consult appropriate counsel or otheradvisers, taking into account your relevant circumstances and issues. While not intended, this Update may in part be construed as anadvertisement under developing laws and rules. This Update can be accessed at: may receive this Update from other people, which often occurs. To SUBSCRIBE or change your address, To UNSUBSCRIBE or OPT-OUT, simply e-mail with "UNSUBSCRIBE" in thesubject line.
  2. 2. Patton Boggs LLP TechComm Industry UpdateFCC Adopts Forbearance Approach for Certain Foreign Ownership of Common Carrier LicensesThe FCC will forbear from applying Section 310(b)(3) of the Communications Act to a certain class ofcommon carrier licenses. The forbearance will apply to licensees in which foreign governments, individuals,and/or entities would hold more than 20 percent ownership through intervening U.S. organized entities that donot control the licensee. The FCC will forbear so long as it determines that such foreign ownership isconsistent with the public interest under the policies and procedures used for assessing foreign ownershipunder Section 310(b)(4). An eligible licensee will seek such determination by filing a request with the FCCbefore the foreign ownership exceeds the 20-percent threshold. The FCC’s decision will permit all “indirect”foreign ownership of common carrier licenses to be treated under the same FCC policies and procedures andbe subject to the FCC’s public interest review.Appeals Court Upholds Injunction Against iviThe U.S. Court of Appeals for the Second Circuit upheld an injunction issued by the district court against ivi,Inc. – a company that streams television programming over the Internet without a broadcaster’s consent. Thecourt concluded that Congress did not intend for the compulsory copyright license statute to apply to theretransmission of television signals over the Internet and gave deference to similar conclusions made by theU.S. Copyright Office that Internet transmission services are not cable systems.NAB Granted Delay in Appeal of Political File RulessThe U.S. Court of Appeals for the D.C. Circuit granted a request by the National Association of Broadcasters(NAB) to delay its appeal of the FCC’s new online political file rules until after the elections. The associationleft open the possibility of eventually asking the court to dismiss the appeal. The FCC did not oppose NAB’smotion, in which the association argued that: “Deferring the briefing schedule in this case will allow NAB togain experience with the new regulatory requirements at issue and explore possible alternative means ofresolving the issues.”Court Stays Tennis Channel DecisionThe U.S. Court of Appeals for the D.C. Circuit stayed the FCC’s decision regarding the Tennis Channel. TheFCC had upheld an FCC ALJ decision finding that Comcast had discriminated against Tennis Channel, withrespect to terms and conditions of carriage, by placing Tennis Channel in a more expensive viewing tier thanComcast’s wholly owned sports networks. The FCC ruling favoring Tennis Channel was the first time that theFCC had ruled in favor of any independent cable network under the Commission’s program carriage rules. Asa result of the stay, during the pendency of the appeal, Comcast will not be required to move Tennis Channelonto more widely distributed tiers.FCC Releases Broadband Progress Report and Notice of InquiryAccording to the FCC’s recently released Eighth Broadband Progress Report (Report), 19 million Americans,most of whom live in rural areas, do not have access to high-speed Internet. In areas where access isavailable, only 40 percent of Americans actually subscribe to high-speed fixed broadband service either dueto cost, education or perception issues. As a result, for the third consecutive year, the FCC has “concluded Page 2 of 9
  3. 3. Patton Boggs LLP TechComm Industry Updatethat broadband is not yet being deployed ‘to all Americans’ in a reasonable and timely fashion.” Still, theReport demonstrates steady progress from last year both in reducing the number of Americans lacking high-speed access by 7 million and in increasing the deployment of high-speed 4G cellular networks.Along with the Report, the FCC adopted a Notice of Inquiry (NOI) initiating the assessment for the nextannual broadband report and seeking comment on how to best measure future progress in meetingbroadband goals. Among other things, the NOI asks how “advanced telecommunications capability” shouldbe defined, whether separate benchmarks for fixed and mobile services should be established, and how toevaluate mobile broadband availability. Reply comments are due by October 22, 2012.52 Bidders Qualified to Participate in Mobility Fund Phase I AuctionFifty-two applicants have qualified to bid in the Mobility Fund Phase I Auction (Auction 901). The auction isscheduled for Thursday, September 27. The auction will be used to award up to $300 million in one-timesupport for the provision of mobile services.The FCC also announced the availability of updated census blocks eligible for Mobility Fund Phase I support.The revisions do not change the set of eligible census blocks or biddable items, rather they change the roadmiles listed for certain eligible census blocks and their associated biddable items. The changes are designedto correct eligible road miles that the FCC has found in some instances to be overstated under its initialcalculations. In addition, in an effort to increase data consistency, the FCC has decided to round all road milenumbers to hundredths of miles (two decimal places). More than 80 percent of the biddable items have eitherno change in road miles or a change of less than one mile.Federal Reserve Banks Release Report on Regulation of Mobile PaymentsThe Federal Reserve Banks of Atlanta and Boston have released a joint report on the “U.S. RegulatoryLandscape for Mobile Payments.” The report, an outgrowth of discussions of the Mobile Payments IndustryWorkgroup (MPIWG) and Federal and State regulators, notes that the use of a mobile phone for payments isan “emerging channel” and that “currently no one law or government authority oversees mobile payments.”Regulators have “an interest in ensuring safety and soundness and consumer protection” in this emergingenvironment. However, neither the “regulatory agencies nor industry stakeholders see any immediate needfor additional regulations.” The MPIWG plans to develop tools to educate regulators on areas where theyshould focus their efforts to ensure that any new guidelines or regulations reflect the multiple modes andmethods of mobile payments.Enforcement Bureau Issues Advisory on Autodialed and Prerecorded Political CallsThe FCC’s Enforcement Bureau (Bureau) issued an advisory to ensure that political campaigns andpromoters understand the restrictions imposed by the Telephone Consumer Protection Act and associatedFCC rules. As the Bureau explained, prerecorded voice messages and autodialed political calls to cell phones(including certain text messages) are prohibited except when the calls are made for emergency purposes orthe called party provides prior express consent. The caller has the burden of proving that it has receivedconsent. Conversely, most prerecorded or autodialed political calls are permitted, subject to certain generaldisclosure and technical requirements. Entities that violate these rules may be subject to enforcement action,including monetary forfeitures. Page 3 of 9
  4. 4. Patton Boggs LLP TechComm Industry UpdateNew Trade Associations to Play Active Role in 113th CongressIn the past few weeks, three new trade associations have formally been announced to weigh in on key issuesin the 113th Congress: • The Internet Association (IA) led by a former senior staffer for Representative Fred Upton, Michael Becker, will be representing the largest pure-play Internet sites such as Google, Facebook, Expedia, Yahoo! and many others. The focus of the group will be to educate lawmakers and policymakers about the importance of the Internet industry to the economy and innovation, and address such issues as copyright law, tax and Internet architecture issues. • The i2Coalition was announced shortly after the IA, and its mission will be to represent the backend Internet architecture and cloud computing companies on issues such as copyright law, interconnection access and the importance of the Internet to the future growth of the U.S. economy. The group was formed and will be run initially by the four founding members from the companies: cPanel, Rackspace, Softlayer and Endurance International Group. The group boasts 42 members and highlighted its concern with the legislative efforts in the 112th Congress related to the “Stop Online Piracy Act” and “PROTECT-IP Act.” • Finally, the Web Enabled Retailers Helping Expand Retail Employment (We R HERE Coalition)was formed with more than 1,000 small businesses to work against burdensome legislation and regulations that impede the growth of small businesses in the U.S., at a time of critical need for job creation and market growth. The coalition will be led by executive director Phil Bond, formerly the Under Secretary for Technology at the Commerce Department and former President of TechAmerica. While the group will highlight the importance of small business to the U.S. economy, its primary focus will be on state sales tax and the streamline sales tax project (SSTP), and legislation currently pending before Congress.Congress Introduces Legislation to Increase Green Cards for Highly Skilled WorkersSenator Chuck Schumer (D-NY) and Congressman Lamar Smith (R-TX) introduced legislation to issue moregreen cards to graduates of U.S. universities with Science, Technology, Engineering and Mathematics(STEM) degrees in order to keep these skilled workers in the country. Though the bills differ, they wouldcreate two-year pilot programs to increase the number of available green cards issued. Senator Schumer’sbill, the “BRAINS ACT,” contains other immigration provisions. Representative Smith’s legislation failed topass the House last week due to opposition to its reallocation of visas from the diversity lottery program. Bothbills are unlikely to receive additional consideration in the 112th Congress, however, the bipartisancommitment to expanding green cards by 55,000 a year for STEM graduates was lauded by the technologyindustry, and similar legislation will likely be introduced in the 113th Congress.FTC Praises New “Do Not Track” Browsers Settings for ConsumersFTC Chairman Jon Leibowitz praised Google and Mozilla for adding “Do Not Track” settings to their Chromeand Firefox browsers following Microsoft’s lead earlier this summer. The Digital Advertising Alliance (DAA),the self-regulatory body comprised of a number of leading technology companies, voiced concern about theprecedent this sets in an ad-supported Internet economy. The FTC is working with industry to develop anInternet privacy program following its report in March. Congress introduced a number of bills in the 112thCongress to address Internet privacy and consumer tracking online specifically, but there has been nosignificant movement on those initiatives. The World Wide Web Consortium (W3C) met in Seattle thissummer to discuss how a “Do Not Track” program could be defined and administered, and the group plans to Page 4 of 9
  5. 5. Patton Boggs LLP TechComm Industry Updatemeet again next month in Amsterdam to continue those discussions. The FTC has been participating in thediscussions despite criticism from some lawmakers about its role in discussions of the W3C.FCC Takes Steps to Implement the Public Safety Spectrum ActThe FCC has implemented several changes impacting the existing public safety broadband spectrum. TheFCC reallocated the D Block for public safety services, as well as eliminated all of the rules that areinconsistent with the spectrum use and allocation mandated by the Public Safety Spectrum Act. In their place,the FCC adopted rules to license both the D Block and existing public safety broadband spectrum to the FirstResponder Network Authority (FirstNet), the single public safety wireless network licensee established by thestatute. The FCC is ready to grant a new license to FirstNet under a new call sign as soon as possible afterFirstNet submits its request.House Energy and Commerce Holds a Hearing on Spectrum EfficiencyThe House Energy and Commerce Subcommittee on Communications and Technology held a hearing on therole the government should play in providing wireless broadband spectrum for the private sector and,specifically, the tension between sharing spectrum and clearing it. Committee Chairman Greg Walden (R-OR)and his fellow Republicans agreed with witnesses from T-Mobile and Ericsson that the government shouldfocus its efforts on clearing spectrum instead of sharing spectrum with private entities. Likewise, the witnessfrom the Government Accountability Office (GAO) said that spectrum sharing was an unworkable businessmodel “because of the uncertainty involved.” Conversely, Democratic congresspersons in the hearing weremore inclined to support a sharing approach. Representative Henry Waxman (D-CA) asserted that, becauseof the impending spectrum crunch, the government “cannot afford to take any options off the table.”Mobile Device Tracking Bill Introduced - H.R. 6377Representative Ed Markey (D-MA) introduced the Mobile Device Privacy Act (H.R. 6377) that would requiremobile device sellers, manufacturers, service providers and app providers to disclose that the device uses orhas monitoring software. Covered entities would be required to disclose the kind of information that ismonitored, who would collect or transmit that information, and how the information would be used. In addition,under the bill, express consumer consent would need to be obtained before any information may be collectedby the monitoring software. Entities collecting such information would be required to develop informationsecurity policies to protect the security of the information.Public Interest Groups to File Net Neutrality Complaint Against AT&TPublic interest groups Free Press, Public Knowledge and the New American Foundation’s Open TechnologyInstitute notified AT&T of their intent to file a net neutrality complaint against the carrier if it does not changeits policy. The public interest groups allege that AT&T plans to block certain users from accessing Apple’sFaceTime application over the AT&T network, and that such a decision violates the FCC’s Net NeutralityRules. AT&T denies that its plans violate either the transparency or blocking restrictions found in the NetNeutrality Rules. FCC rules require the public interest groups to provide AT&T with 10 days notice beforefiling a complaint. Page 5 of 9
  6. 6. Patton Boggs LLP TechComm Industry UpdateFCC Announces Comment Dates for TIA PetitionThe FCC requests comments on a Petition for Rulemaking filed by the Telecommunications IndustryAssociation (TIA). The Petition urges the FCC to give manufacturers the option of electronically labelingwireless devices rather than physically placing labels on the outside of each device. TIA claims that suchrules would ease technical and logistical burdens on manufacturers while increasing end user access touseful information. Comments supporting or opposing the Petition are due by October 5, 2012.FCC Issues New Rules Regarding Medical DevicesThe FCC issued final rules to permit development of new Medical Body Area Network (MBAN) devices in the2360-2400 MHz frequency band. The final rules expand the FCC’s Medical Device RadiocommunicationService rules and aim to provide a flexible platform for wireless networking of multiple body transmitters usedin the measurement and recordation of patient information that is critical for diagnostic and therapeuticpurposes in a hospital environment. The final rules adopt, in part, recommendations from a joint proposalsubmitted by representatives of Aeronautical Mobile Telemetry (AMT) licensees. The AMT licenseespreviously expressed doubts that AMT and MBAN operations could successfully coexist in the samefrequency band. The FCC ultimately concluded that the two technologies could coexist without significantinterference issues and found that expansion of MBAN technology is in the public interest.FAA Proceeding on Passenger Use of Portable Electronic DevicesThe Federal Aviation Administration (FAA) seeks comments on current policy, guidance and procedures thataircraft operators use when determining if passenger use of portable electronic devices may be allowedduring any phase of flight on their aircraft. With the growth of smart phones and other personal electronicdevices, the FAA recognizes that passengers may wish to use their devices during critical phases of flight(e.g., takeoff and landing), which is currently largely proscribed. The FAA intends to establish an AviationRulemaking Committee to review the comments and make recommendations. The FCC will be a key partnerin this activity working collaboratively with the FAA, airlines and the manufacturers to explore broader use ofpersonal electronic devices in flight. Comments are due by October 30, 2012.Markey Circulates Draft Wireless Surveillance LegislationCongressman Ed Markey (D-MA) has circulated draft legislation that would call on courts and lawenforcement to report on wireless surveillance practices that so far have gone unreported. RepresentativeMarkey released the discussion draft as part of his ongoing investigation that indicated that more than 1.3million requests were made last year by law enforcement for consumer mobile phone information. In July,Representative Markey released responses from nine wireless carriers to his inquires about requests madeby law enforcement for consumers’ mobile phone data, including text messages, call records, geolocation andcell phone tower “dumps.” Representative Markey also sent the Department of Justice a letter asking theagency about its current mobile phone surveillance activities. Among other issues, Representative Markey’sdiscussion draft of The Wireless Surveillance Act of 2012 would require regular disclosures from lawenforcement on the nature and volume of requests they make; discourage information requests such as celltower “dumps”; and direct the FCC to limit how long carriers can keep consumers’ personal information. Page 6 of 9
  7. 7. Patton Boggs LLP TechComm Industry UpdateFCC Relaxes Restrictions to Allow Cable Operators to Buy CLECsThe FCC unanimously approved an Order allowing cable operators to buy competitive local exchangecarriers (CLECs). Under Section 652(b) of the Telecommunications Act, a cable operator is precluded fromacquiring more than a 10 percent interest in any local exchange carrier that provides service within itsfranchised area unless the FCC grants a waiver or an exception is met. However, the FCC decided to forbearfrom applying this statute to acquisitions of CLECs by cable operators because relaxing the requirement willincrease competition. The Order states that forbearance of Section 652(b) “will likely speed the entry of cableoperators into the market for telecommunications services provided to business customers and will fosterincreased facilities-based competition for these services.” The FCC also noted that application of the rule toCLECs is unnecessary to protect consumers, particularly because a transaction would still be subject to apublic interest determination under Section 214, which would allow the local franchising authorities tocomment on the potential impact of the acquisition on consumers.FCC Issues Third Report on International Broadband ComparisonsThe FCC’s International Bureau released its third annual International Broadband Data Report (Report) thatcompares rates of broadband adoption, speeds and prices in the United States to those in the internationalcommunity. The agency believes that this international data “can serve as useful benchmarks for progress infixed and mobile broadband accessibility.” For example, the Report calls the U.S. the “global test bed forwireless technology and services,” and cites data that lists the U.S. seventh in the world for mobile broadbandpenetration on a per capital basis and fifteenth for wired broadband penetration on a per capita basis.FCC Suspends Special Access Rules on an Interim BasisThe FCC suspended rules regarding pricing flexibility for special access services on an interim basis while theFCC considers a new approach. The FCC plans to release a comprehensive data collection order soon thatwill guide its efforts to promulgate permanent rules. In the meantime, entities may seek interim relief throughthe agency’s forbearance process. According to the Report and Order, the change was made “in light ofsignificant evidence that these rules, adopted in 1999, are not working as predicted, and widespreadagreement across industry sectors that these rules fail to accurately reflect competition in today’s specialaccess markets.”Comments Sought on 800 MHz Reconfiguration Plan Along U.S.- Mexico BorderThe FCC’s Public Safety and Homeland Security Bureau (Bureau) seeks comment on a reconfigured 800MHz channel plan along the U.S.-Mexico border (Southern California, NPSPAC Region 5; Arizona, NPSPACRegion 3; New Mexico, NPSPAC Region 29; Texas – El Paso, NPSPAC Region 50; and Texas – SanAntonio, NPSPAC Region 53). In the plan, for example, the Bureau proposes to “eliminate channel centeroffsets in the Sharing Zone and use standard channel centers for all post-band reconfiguration channelassignments in the Sharing Zone.” The Bureau further proposes a 30-month transition period for therebanding process in the broader region. Comments are due by October 1, and reply comments are due byOctober 15. Page 7 of 9
  8. 8. Patton Boggs LLP TechComm Industry UpdateEnforcement Bureau Issues Reminder of January 1, 2013 Deadline for Transitioning to NarrowbandTechnologyThe FCC’s Enforcement Bureau issued an advisory reminding private land mobile radio (PLMR) licenseesoperating in the 150-174 MHz and 421-470 MHz frequency bands that they must migrate to narrowbandtechnology by January 1, 2013. Subject to exceptions, equipment manufacturers must stop manufacturingand importing equipment that is “capable of operating with only one voice path per 25 MHz of spectrum in the150-174 MHz and 421-470 MHz bands.” Parties unable to meet the deadline may file for a waiver, but theBureau has stated that any waiver request will be held to “high level of scrutiny” and that penalties for non-compliance with the narrowbanding rules can result in “license revocation, and/or monetary forfeitures of upto $16,000 for each such violation or each day of a continuing violation, and up to $112,500 for any single actor failure to act.”Fifth Circuit Rules “Legal” Challenges to FCC Forfeiture Orders Must be Brought in Federal AppellateCourtsThe U.S. Court of Appeals for the Fifth Circuit held that a legal challenge to an FCC forfeiture order (e.g.,FCC had no legal jurisdiction over an allegedly illegal “intrastate” radio station) must be brought under Section402(a) of the Communications Act in the federal appellate courts. The court ruled that Section 504(a) of theCommunications Act, which specifically deals with enforcement of forfeitures by the government through thefederal district courts, only permits defending parties to challenge the forfeiture in those courts based onfactual arguments (e.g., the factual basis for imposition of the forfeiture is not correct). This ruling is contraryto a 2003 decision by the D.C. Circuit which ruled that the party subject to the forfeiture has a choice to paythe fine and bring a challenge in the appellate courts under Section 402(a), or wait to be sued for recovery ofthe forfeiture amount under Section 504(a) and raise any and all defenses in that forum.FTC Updates Telemarketer Fees for Access to the Do-Not-Call RegistryThe FTC has announced that beginning on October 1, 2012, access fees for the National Do-Not-CallRegistry will be increased. This means that from October 1 to September 30, 2013, telemarketers will pay $58(an increase of $2) for access to Registry phone numbers in a single area code, up to a maximum charge of$15,962 for all area codes nationwide (an increase from the $15,503 maximum charge). In addition,telemarketers will pay $1 more per area code for numbers they subscribe to receive during the second half ofthe 12-month subscription period, for a total of $29 per area code. The first five area codes will remain free,and organizations that are exempt from the Do-Not-Call rules may still obtain the entire list for free. ****If you have questions regarding any of the items discussed above, or if you are interested in filing commentsor receiving copies of filed comments in any of the FCC proceedings mentioned, please contact the PattonBoggs TechComm practice group. More information about our team can be foundat Page 8 of 9
  9. 9. Patton Boggs LLP TechComm Industry UpdateIf you have any questions about the foregoing or if you require additional information, please contact:PATTON BOGGS TECHCOMM PROFESSIONALS - Jennifer L. Richter Carly T. Didden 202-457-5666 202-457-6323 Paul C. Besozzi Jennifer A. Cetta 202-457-5292 202-457-6546 Deborah M. Lodge Benjamin Bartlett 202-457-6030 202-457-7631 Michael E. Drobac Gregory M. Louer 202-457-7557 202-457-6418 Mark C. Ellison Maria C. Wolvin 202-457-7661 202-457-6568 Monica S. Desai 202-457-7535 Ryan W. King 202-457-5312 Page 9 of 9