September 22, 2006 Bulletin #110 IN THIS WEEK'S ISSUE: FCC AUCTION - PDF document

September 22, 2006 Bulletin #110 IN THIS WEEK'S ISSUE: FCC AUCTION BRINGS $13.9 BILLION; ATTENTION SHIFTS FCC AUCTION BRINGS TO 700 MHZ BAND $13.9 BILLION; ATTENTION By Ray Kowalski SHIFTS TO 700 MHZ BAND FORMER FCC LAWYER CLAIMS MEDIA The Federal Communications Commission’s (FCC) auction of spectrum to COMPETITION STUDY WAS support the third generation of wireless services came to an end on Monday, HUSHED September 18, after 161 rounds of bidding. The auction raised nearly $13.9 billion for the United States Treasury. The top bidders included existing PASSAGE OF FEDERAL wireless providers, T-Mobile, Verizon Wireless and Cingular. Only 35 licenses TELECOMMUNICATIONS of the 1,122 available licenses remained unsold and these will be re-auctioned OVERHAUL LEGISLATION at some future date. THIS YEAR APPEARS UNLIKELY With that auction in the books, attention now turns to an upcoming auction – not yet scheduled – of spectrum in the upper 700 MHz band and to some SENATE PASSES E911/ possible mid-course corrections for other spectrum in the 700 MHz band. The VoIP MANDATE IN PORT upper 700 MHz band is currently in use by television broadcasters, but the SECURITY LEGISLATION date of February 17, 2009, has been established by Congress as the deadline for those broadcasters to vacate that spectrum and transition to digital Troutman Sanders operations in a different band. Telecommunications The establishment of the transition deadline has brought out numerous Practice Group competing suggestions for the use of the upper 700 MHz band when it is Socket to Me Archive vacated. The commercial wireless operators of course contend the spectrum has always been intended for them. However, a new company called Cyren Call Communications Corp. wants a 30 MHz chunk of it on which to build a Team Leader nationwide, public safety emergency communications network. Another Williams, Robert P. II company, M2Z Networks, Inc., wants 20 MHz of it on which to build a free and 404.885.3438 family-friendly nationwide wireless Internet network. 404.962.6721 Benedict, Thane In the meantime, the FCC is wondering if its present rules for the commercial Hull, Gerit use of so-called “guard bands” in the 700 MHz band are unduly restrictive. Kirsner, Matthew B. The guard bands are intended as a buffer between public safety and Kowalski, Raymond A. commercial uses in the lower 700 MHz band, but little use of them has been Lawhon, Joseph R. made since they became available for use about 5 years ago. FCC has asked for comments in WT Docket 06-150 as to whether some of the rules Ragsdale, Joy M. should be changed, most notably, the prohibition on cellular-type operations in Schwalb, Eric J.. the band. The deadline for comments in that proceeding was recently Still, William R.. extended to September 29. Wilson, David K.

Young, Benjamin L. back to top Zdebski, Charles A.. FORMER FCC LAWYER CLAIMS MEDIA COMPETITION STUDY WAS HUSHED By Eric Schwalb Michigan State University assistant law professor Adam Candeub, a former FCC Media Bureau attorney, alleged late last week that a 2004 study into locality and diversity in broadcast media was hushed by Commission officials because the study’s findings were antithetical to the Commission’s agenda of supporting media consolidation. The study showed that locally owned media outlets produced more local news (up to five minutes more local news and three minutes more of on-location news per broadcast) than network-owned or non-locally owned stations. The study contradicted a study the FCC used a year before to justify an increase of the national media ownership cap, which would allow networks to own more stations. Because the study’s findings were at odds with the Commission’s agenda to allow for more consolidation, Mr. Candeub has claimed, senior management at the Commission ordered all copies of the study to be collected, any further study halted, and any copies to be deleted from computers. A copy of the study has since surfaced in Sen. Barbara Boxer’s office at the time the Senate is undertaking the re-nomination of FCC Chairman Kevin Martin. Sen. Boxer has asked Chairman Martin to investigate why the study was not made a part of the broadcast ownership proceeding at the FCC, and to determine whether anyone at the FCC ordered the study suppressed. Then-Chairman Michael Powell stated this week that he never saw the study, never heard of it, and did not order it to be destroyed. Similarly, Ken Ferree, who headed the Media Bureau at that time, also stated he had no recollection of the study and did not have anything to do with Mr. Candeub’s allegations. Chairman Martin has since noted that he has reviewed the study, finds it relevant, and has made it a part of the ongoing localism and media ownership reviews at the Commission. Also, a second report, entitled “Review of the Radio Industry,” also has surfaced, and Chairman Martin noted it also would be added to the review. In 2003, the FCC voted to ease limits on ownership of television stations and lifted the ban on companies owning a newspaper and television or radio station in the same market. Those regulations were put on hold by an appeals court in June of 2004 after it declared that the FCC had failed to justify the new limits. The FCC again is reviewing whether to relax these limits. back to top PASSAGE OF FEDERAL TELECOMMUNICATIONS OVERHAUL LEGISLATION THIS YEAR APPEARS UNLIKELY

By Thane Benedict Prospects for the passage of federal telecommunications legislation this year, which, among other things, would provide regulatory relief for telephone companies seeking to offer cable television service, appear to be dwindling. Although in June, the U.S. House of Representatives passed the Communications Opportunity, Promotion, and Enhancement (COPE) Act (HR 5252)—which provides that firms can obtain a national franchise to provide video service rather than having to obtain individual franchises from each municipality it wishes to serve—the Senate has yet to vote on its version of the bill. Thus far, Senate Commerce Committee Chairman Ted Stevens (R-Alaska) has failed to obtain commitments from at least 60 Senators needed to negate a likely filibuster from Senate Democrat Ron Wyden (D-Oregon) to a vote on the Senate’s version of the bill, known as the Advanced Telecommunications and Opportunities Reform Act. Senator Wyden has vowed to block the bill unless strong “network neutrality” provisions are added, which are intended to prevent Internet providers from creating “priority lanes” offering certain content owners faster Internet connections in exchange for higher fees. Despite the stalling efforts of federal legislation, telephone companies have been more successful in obtaining statewide video franchising relief: California recently joined Indiana, Kansas, New Jersey, North Carolina, South Carolina, Texas and Virginia in enacting statewide franchising laws. back to top SENATE PASSES E911/VoIP MANDATE IN PORT SECURITY LEGISLATION By Ben Young On September 15, 2006, the U.S. Senate approved a controversial port security bill that included IP-based E911 measures and that will serve to clarify jurisdictional and liability issues surrounding Voice-over-Internet Protocol (“VoIP”) providers’ role in the 911 system. The E911 measure is contained in the “IP-Enabled Voice Communications and Public Safety Act of 2006,” which managed to slip into a proposal to amend the larger “Safe Port Act” just as Senate Republicans and Democrats agreed to stop attempts at adding non-port items to the original bill. The legislation calls for the development of recommendations on technical and operational capability of the national alert system, leading many to believe that the FCC will be forced to shelve further action on new Emergency Alert System guidelines. The bill was also amended to include measures on a new national emergency alert and communications network, in addition to allocating $1 billion for interoperable emergency first-responder equipment, planning and training. The legislation will also provide public safety answering points, VoIP providers, and VoIP customers with similar liability protections given to traditional wireline and cellular services. Given the FCC’s stance that IP services fall under federal jurisdiction, the E911 amendments will allow states to impose and collect 911 fees and will

ensure that VoIP providers have access to the E911 components necessary to offer the E911 services. The legislation is considered a victory for state and local public-safety officials, who have been advocating for a congressional response for some time. back to top FOR MORE INFORMATION The Troutman Sanders LLP Newsletter is intended to provide general information about legal and regulatory utility developments which may be of interest. It is not intended to be comprehensive nor to provide specific legal advice and should not be acted or relied upon as doing so. If you would like further information or specific advice, please contact our office.