FCC Fires Back Against Cities in Cases That Could Mean Revised

FRIDAY, DECEMBER 21, 2012 VOL. 32, NO. 246

TODAY’S NEWS FCC Fires Back Against Cities in Cases that LEAVE 'CHEVRON' IN PLACE, Could Mean Revised Chevron Doctrine FCC tells Supreme Court in filing in case with broader implications The FCC countered arguments by Arlington, Texas, and for FCC authority. (P. 1) other parties seeking to overturn a decision by the 5th U.S. Circuit Court of Appeals upholding the commission’s 2009 wireless zon- AMAZON IP CAPTIONING COM- PLAINT by deaf groups to FCC cites ing shot-clock decision. The agency said the Supreme Court delay for TV shows. Groups found should follow precedent and not chip away at doctrine dating to a compliance good by others. (P. 2) 1984 case, Chevron U.S.A. v. Natural Resources Defense Council, which requires federal courts to defer to an agency's interpretation ARRIS'S MOTOROLA PURCHASE of a statute, as long as that interpretation is deemed "reasonable." not expected to change companies' policy positions, affect their cus- Industry observers said the court’s decision in Arlington, tomers much. (P. 4) Texas, v FCC could have much bigger implications for the agency and its jurisdiction in such areas as net neutrality (CD Oct 12 p2). VECTORING ISSUES EMERGE in In October, the court agreed to hear the case (CD Oct 10 p15). Europe as demand for faster broadband rises. (P. 5) The Supreme Court is slated to hear the case Jan. 16.

TELECOM NOTES: Frontier, Cen- "For nearly three decades, courts, agencies, and Congress turyLink urge rapid development of have relied on the framework set forth in Chevron ... for reviewing rules for next CAF Phase I fund- agency Interpretations of ambiguous statutory language," the FCC ing ... Qualcomm asks FCC to move said (http://xrl.us/bn7c2q). "Petitioners contend that this frame- ahead on air-ground service rule- work does not apply to Agency interpretations of statutory provi- making ... NPSTC has 800 MHz sions that bear on the scope of an agency’s administrative author- rebanding concerns for Mexican ity. That argument should be rejected." border region ... Oregon PUC flooded with rural call completion "Chevron is based on the recognition that, when Congress complaints. (P. 9) leaves a gap or an ambiguity in a statutory scheme that has been entrusted to an agency’s administration, Congress has implicitly MEDIA NOTES: Public Knowl- delegated to that agency the power to reasonably fill the gap or re- edge backs content companies' stay request in OVD proceeding ... solve the ambiguity," the FCC said. "Chevron also reflects this ACA asks FCC to grant Adams' Court’s understanding that the resolution of open questions under CableCARD waiver request ... a statute often requires the application of technical expertise and Cox, Mediacom tout recent car- the balancing of competing policy interests." There's "no excep- riage deals. (P. 12) tion" to Chevron "for interpretive decisions that involve the scope

Copyright© 2012 by Warren Communications News, Inc. Reproduction or retransmission in any form, without written permission, is a violation of Federal Statute (17 USC101 et seq.). COMMUNICATIONS DAILY—2 FRIDAY, DECEMBER 21, 2012 of an agency’s statutory authority," the FCC argued. "To the contrary, this Court has repeatedly applied the Chevron framework in reviewing agency interpretations of that character."

The FCC has "broad and longstanding authority to administer the Communications Act," the agency argued. "It performs that role through such mechanisms as rulemaking and adjudication, in which it speaks with the force of law." The FCC’s interpretation that it has "authority to administer section 332(c)(7)" of the act and the zoning shot clock order "was correct under any standard of review," the pleading said.

Verizon Wireless said in a recent court filing (http://xrl.us/bn7c4u) the case "presents a particularly important question of administrative law — whether a court should apply the familiar two-step framework of Chevron ... when reviewing an agency’s interpretation of its own jurisdiction, i.e., its substantive authority to regulate in a particular area or with respect to certain entities." Verizon argued that agencies "have no authority save that affirmatively delegated to them by Congress. Thus, although agencies enjoy some judicial deference when they fill in the details of a statutory scheme that Congress has charged them with administering, a 'precondition to deference under Chevron is a congressional delegation of administrative authority.'"

But Verizon said the court should uphold the FCC shot-clock order. "The specific agency action at issue here is well within the FCC’s authority to interpret the substantive provisions of the Communications Act, as established by this Court in AT&T Corp. v. Iowa Utilities Board. ... Ac- cordingly, regardless of how the deference issue is resolved, the judgment of the court of appeals should be affirmed." — Howard Buskirk

82 Percent Compliance

Amazon Slow to Caption Many TV Shows Once Online, Groups Say

Amazon delayed captioning several dozen terrestrial TV shows once they became available to view online for an average of a few days, research by seven groups representing the hearing-impaired said they found. An FCC complaint seeks the maximum fine, a commission injunction requiring the rules be fol- lowed and per-day forfeitures for future violations by the video service. Those groups, in a non-random survey of major video programming distributors, found most other VPDs met FCC Internet Protocol captioning rules (CD Jan 17 p3). There was an overall 82 percent compliance rate for non-live programs, which VPDs and some other companies were required by the FCC to caption starting Sept. 30, when it aired after then.

The IP captioning rules were part of the agency's implementation of the 21st Century Commu- nications and Video Accessibility Act (CVAA), and have been subject to petitions for reconsideration by the hearing disabilities advocates and associations including CEA. Another coming CVAA deadline for the FCC is April 9, and in spring that part of implementation will get attention at the regulator, an agency official noted. That's when the commission must issue rules on using video descriptions to provide audio narration of what's displayed on screen crawls during emergency programming. Indus- try wants some time for such rules to begin, and companies and advocates for the deaf (CD Dec 20 p12), including some of the groups that made the complaint Thursday against Amazon, filed com- ments this week in docket 12-107 (http://xrl.us/bn68ek).

FRIDAY, DECEMBER 21, 2012 COMMUNICATIONS DAILY—3

Of 72 programs that advocates tracked on Amazon, 49 didn't allow rendering of captions when they were initially put on the company's service, the complaint said. It took a median of 2.5 days for the programs to be captioned, said the Association of Late-Deafened Adults, California Coalition of Agencies Serving the Deaf and Hard of Hearing, Cerebral Palsy and Deaf Organization, Deaf and Hard of Hearing Consumer Advocacy Network, Hearing Loss Association of America, National Association of the Deaf, and Telecommunications for the Deaf and Hard of Hearing. "As the Commission has made clear, there is no grace period for captioning for non-archival programming," the complaint said. It said "Amazon’s violations are exacerbated by their apparent willfulness" because the company's a member of the Digital Me- dia Association, which unsuccessfully sought an 18-month delay of the Sept. 30 rules for some VPDs. Amazon and DiMA had no comment.

Programs that researchers tracked from when they aired on TV to when they appeared online on Amazon included: Fringe; CSI: NY; Law and Order: Special Victims Unit; and Revolution. "Each day, at least one and as many as eighteen of these programs were delivered by Amazon without captions," the complaint said. Prof. Christian Vogler of Gallaudet University and Georgetown University's Institute for Public Representation, representing the advocacy groups, tracked programs online. By looking at TV schedules and seeing what shows appeared on services like Amazon, Hulu and Netflix several days later during Oct. 1-7, the researchers attempted to see how much online content in a typical broadcast week got IP captions, Vogler told us. "We basically looked at everything on the television schedules."

"Most providers did really well," Vogler said of his research, done pro bono for the groups and not ongoing. He's head of the Technology Access Program at Gallaudet, a college in Washington with many deaf and hearing-impaired students. The seven groups "were really pleased to see that a lot of folks were complying" with the IP captioning order, said communications lawyer Blake Reid of the institute. "There were not a lot of problems in this testing." Reid declined to disclose what if any communication the groups had with Amazon or other VPDs before filing the complaint and their research at the FCC and also complain- ing to the company. "We don’t think these are going to be a surprise to anyone," he said of the findings.

NBCUniversal's SyFy cable network, Hulu — partly owned by Comcast's NBCU, Disney and News Corp. — and PBS were among the services mentioned by the research as lacking captions on some TV shows that later were put online. "We were unable to locate a single captioned program or caption controls on syfy.com," said the research, filed in docket 11-154. "During the same period, we found captioned versions of Syfy programs delivered by other VPDs, including Google, Hulu, and Amazon." Spokespeople for Hulu and NBCU had no comment by our deadline.

Two of the four PBS programs the research said lacked captions didn't need them, and one hadn't aired on the network, a spokeswoman said. Built on the principle "of universal service, PBS works to ensure that all Americans, including those who are deaf or hard of hearing, have access to our on-air and online content," she said. "A significant percentage of our content is closed captioned and we are actively partnering with our producers and stations to both comply with FCC requirements and expand our closed captioning offerings." Two of the PBS programs, which are captioned on the organization's website and on iOS devices, were seen by researchers on Android-based smartphones, the spokeswoman said: "Mobile platforms are experiencing issues across the industry" in terms of captioning.

"Systemic problems" found in the advocates' research were a "widespread inability of web browsers on mobile devices to render captions," and some captions had low quality, the filing said. Most browsers, smartphones and tablets don't display captions, it said. "While many VPD websites include the ability

COMMUNICATIONS DAILY—4 FRIDAY, DECEMBER 21, 2012 to enable captions when accessed through desktop and laptop computer web browsers, they lack that same ability when accessed via mobile web browsers." The "widespread absence of captions on mobile browsers" appears to be because HTML5 video doesn't support captions, the filing said. — Jonathan Make

TiVo Litigation

Not Much Change Seen in Arris Purchase of Motorola Mobility's Home Division

Arris's agreement to buy Motorola Mobility's home division from Google probably won't change Motorola's policy positions much or have much effect on their cable operator customers, industry officials said Thursday. Arris and Google announced Wednesday night that Arris agreed to buy the home division, which includes its cable set-top box and network equipment businesses, for about $2.35 billion in cash and stock. The deal also includes about 1,000 patents as well as perpetual license agreements for other Mo- torola Mobility patents, executives said during a teleconference Wednesday.

The combination of Arris, which mostly sells broadband equipment to cable operators, and Mo- torola, a major supplier of conditional access and set-top boxes to pay-TV operators, probably won't change the policy positions Motorola has historically taken on FCC issues, a cable attorney said. "I can't see it changing anything," the attorney said. "They're still the same company."

But there is some hope among cable technology executives that new management at Motorola could lead to changes in the way it does business, said Steve Effros, a cable industry attorney and consult- ant. "Motorola in the old days was so dominant and so strong and had no hesitation in flaunting that dominance in terms of their pricing and everything else," Effros said. "Maybe with this new management,

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FRIDAY, DECEMBER 21, 2012 COMMUNICATIONS DAILY—5 who had experienced some of that angst when they were on the other side of table from Motorola, will act a little differently."

The deal includes a provision that will limit Arris's liability in pending patent infringement litigation with TiVo, executives said Wednesday. "Google and Motorola are running the case," said Bob Stan- zione, Arris's CEO. "We're going to help them ... as we are asked. But the exposure to Arris is a very low number," he said. "It's not something to worry about in terms of the financial impact on Arris."

The transaction precedes an expected wave of spending by cable operators on consumer premises equipment, Stanzione said. "There's an aging installed base of set-tops out there," he said. "They're going to be wearing out over time and have to be replaced and there's going to be an evolution toward a new generation of set-tops" that are hybrid IP-video and traditional MPEG video-capable, he said. "Every operator I talk to tells me that in-home devices are not going to go away." — Josh Wein

'Already Dead Copper Lines'

European Incumbent Telcos' Move to Vectoring to Boost Broadband Speeds Worries Rivals, Fiber Proponents

A request by Deutsche Telekom for regulatory permission to use vectoring on its copper network to make high-speed broadband available more quickly has encountered opposition from alternative providers and from fiber-to-the-home proponents worried about its impact on local loop unbundling. DT's application to regulator BNetzA sparked an outcry earlier this month from three German telecom organi- zations, apparently leading the incumbent to offer concessions Wednesday. Advocates of vectoring say the technology, although transitional, may be the best solution for Europe, which has been slow to roll out fiber networks. Fiber proponents, however, say vectoring won't offer the high broadband speeds promised and could hamper investment in new networks.

Vectoring increases the capacity of a DSL service by "bonding" the multiple copper loops that have already been deployed to homes, networking and communications equipment provider Adtran told the U.S. FCC in an Oct. 12 letter. In VDSL technologies, the speed a network can achieve depends on how far away from a copper loop a customer is and on how much interference there is on the line, said Adtran Carrier Ethernet Product Line Manager Robert Conger in an interview. On loops longer than 1 km., loop length is the dominant factor; on shorter loops, the determining factor is the noise level, he said. The "cross-talk" severely affects broadband rates, but vectoring — cross-talk cancellation — gets rid of the noise, he said. On shorter loops, eliminating cross-talk will almost double broadband rates, he said.

The only way to implement vectoring from a practical perspective is to gain access to all sources of cross-talk in a given node, Conger said. Only a single operator can have a digital subscriber line access multiplexer (which connects many customer DSL interfaces to a high-speed communications channel) in a street cabinet for vectoring to work, he said. Regulators in Germany and elsewhere are looking to ban sub- loop unbundling (which gives alternative players access to the copper network) at the remote cabinet and move toward a bitstream model with a sole operator in the street cabinet to allow vectoring, he said.

The U.S. market doesn't have much of a problem with vectoring because there's no requirement for operators to unbundle their networks at remote cabinets, Conger said. Because operators have nodes all to

COMMUNICATIONS DAILY—6 FRIDAY, DECEMBER 21, 2012 themselves, fiber to the cabinet can be widely deployed, he said. In Europe, however, there's less fiber to the cabinet due to economic and other factors, he said. Alternative providers are worried that if sub-loop unbundling is banned, they'll have to go through a single operator, generally the incumbent, for the physi- cal network for higher-speed broadband services, he said. However, he said, one study showed that using VDSL2 and vectoring is substantially cheaper than building out fiber to the home (FTTH).

DT's announcement this month that it will use vectoring exclusively prompted sharp criticism from the Federal Association of Broadband Communication (BREKO), Federation of Fiber Connectors and Associa- tion of Telecommunications and Value-Added Services (VATM). In a joint Dec. 11 position statement, they said vectoring in Germany will only reach its full potential if the new technology can be used by all market participants. They demanded that the regulator maintain access for them at the local loop at the street cabinet.

Just because DT uses vectoring doesn't mean that local loop access throughout Germany should no longer be offered, VATM President Gerd Eickers said. That would create a new infrastructure monopoly, he said. DT's plan unnerves investors, who have put various expansion projects on hold, said BREKO President Ralf Kleint. Already upgraded street cabinets become sunk investment if exclusive vectoring takes places, and agreed development projects can't be put in place, he said.

DT responded Dec. 19, offering concessions it said will protect competitors' investments and allow them to deploy their own vectoring as long as they, like DT, give others open access to the new connec- tions. Belgian and Austrian authorities have already approved the use of the technology with the support of the European Commission, the telecom company said. DT will make a bitstream connection for vectoring available as a wholesale product so rivals can offer their customers double bandwidth, it said. "However, we also expect such an offer from alternative operators," it said.

But the VATM said the concessions aren't enough to resolve all the local loop access problems caused by vectoring. DT has, for example, set various exemptions for competitors' access to the street cabinet, it said. The issue is still far from being resolved, it said.

Vectoring is just another step to extend "already dead copper lines" with quite limited success, FTTH Council Europe Director General Hartwig Tauber said in an interview. The marketing message be- hind vectoring is that broadband speeds can be hiked to 200 Mbps, he said. DT and other incumbents failed to invest in higher speeds, so when a company such as Cable Deutschland announced very high speeds, DT decided to vector, he said. However, the actual speed seems lower unless the customer is on a very short loop, he said. Moreover, DT's bitstream offer means that the bandwidth is all under DT's control, taking quality of service and other factors out of the hands of alternative operators, he said.

Fiber networks are already bringing the possibility of 1 Gbps, Tauber said. Moreover, while up- grading to vectoring appears less expensive than building a fiber network, it's not if one takes into account the entire evolution of networks from their early stages to DSL, ADSL, VDSL and beyond, he said. It's better to go straight from copper to fiber, he said. Tauber's group is particularly worried that take-up of vectoring might slow fiber investment in Europe while the rest of the world upgrades to next-generation access networks, he said.

The decision to go to fiber comes down to the business case, Conger said. If companies can avoid trenching and can use aerial networks, they can make a good pitch to move forward with fiber. If they have to dig everywhere, it's not practical, he said.

FRIDAY, DECEMBER 21, 2012 COMMUNICATIONS DAILY—7

Vectoring is a transitional technology compared to fiber to the home, but there's no VDSL3, just VDSL with vectoring, Conger said. For remote-cabinet VDSL, vectoring is it, he said. Everyone in Europe understands there's no business case for fiber to the home, and that vectoring will be the best Europe will have for a long time unless fiber networks are heavily subsidized or there's a change in the way operators can deploy fiber, he said.

From a regulatory standpoint, the unique nature of the technology requires that deployment be re- stricted to single operators, necessitating the ban on sub-loop unbundling, Conger said. The issue of the func- tional separation of a network from its services arm, akin to what happened in the U.K. with British Telecom and Open Reach, is something regulators and operators will have to address, he said. — Dugie Standeford

Comm Daily® Notebook

U.S. patent law is a “failed system,” Judge Richard Posner of the 7th U.S. Circuit Court of Appeals said Wednesday during a Federalist Society teleforum. The system’s failure lies within both the U.S. Pat- ent and Trademark Office and the federal court system, he said. The USPTO is not adequately staffed or managed to deal with the volume of patent applications it receives, Posner said. And the courts are failing to address the problem because patent trials routinely allow for expert witnesses paid by the parties in a case, as well as lay juries that do not understand all of the intricacies of a patent case, he said. Posner spe- cifically faulted the Federal Circuit Court of Appeals, which handles many of the higher-profile patent cases, because he feels the court has “a tendency to take a promotional view” of the activities it regulates. “I think we have the best patent system on the planet,” said Paul Michel, chief judge on the Federal Circuit Court of Appeals. Michel defended his court’s record on patent cases as being “quite balanced.” He also defended USPTO’s recent record, noting that current office Director David Kappos had instituted reforms that have improved patent examiners’ training and level of experience. Those reforms have resulted in a USPTO that is “much improved” from four years ago, Michel said (http://xrl.us/bn7c2f). —— Qualcomm countered warnings from the Satellite Industry Association about the company’s pro- posal for a Next Generation Air-Ground Service in the 14-14.5 GHz band and asked the FCC to move forward on a notice of proposed rulemaking. SIA warned in a Dec. 11 ex parte presentation that Qual- comm’s proposed service could cause interference for Ku-band satellites (http://xrl.us/bn7cvt). "Updated calculations continue to show that a significant number of operational satellites would be subjected to ex- cessive levels of interference from the Next-Gen AG system," SIA said. "Qualcomm has closely reviewed the interference concerns raised by SIA and once again shows that there is no risk that the Next Genera- tion Air-Ground Service will cause harmful interference to incumbent GSO FSS uplinks, nor is there any risk that the incumbent users of the 14.0 to 14.5 GHz band will cause harmful interference to the Next- Gen AG service," Qualcomm said (http://xrl.us/bn7cxn).

Capitol Hill

The chairman and ranking member of the Senate Commerce Committee reached an agreement Thursday to discharge the renomination of FCC Commissioner Mignon Clyburn and nomination of Joshua Wright to become an FTC commissioner. The committee attempted at least three votes on the nominees this week but was unable to reach a quorum. Chairman Jay Rockefeller, D-W.Va., sought unanimous consent to discharge the nominees, a procedural move that is typically reserved for non-controversial nominees, a com-

COMMUNICATIONS DAILY—8 FRIDAY, DECEMBER 21, 2012 mittee spokesman told us. He said that barring any subsequent objection from lawmakers, the full Senate will vote on Clyburn's renomination and Wright's nomination under regular order. —— House Intelligence Committee members approved the panel's October report on security concerns with the Chinese-based telecom equipment manufacturers Huawei and ZTE, in an unanimous vote Thurs- day. The report strongly recommended that the U.S. government and American companies refrain from doing business with Huawei and ZTE because of what it said were the long-term security risks associated with them (CD Oct 10 p3). Following the vote, the report will now be submitted to the committee record. The vote was closed to reporters and the public because the report contains a classified annex with additional evidence from the investigation, a committee staffer told us. A Huawei spokesman said Thursday in an email statement the company's business has not been impacted by the report as the committee’s investigation was "largely recognized for the political exercise that it was." "For those with a legitimate interest in network reliability and cyber security, such matters are of the highest priority to Huawei and we remain committed to pushing a broader understanding of the true and universal cyber vulnerabilities that impact global networks and the need for real and effective industry-wide solutions to address them," he said. ZTE had no comment. —— Sen. Ron Wyden, D-Ore., sought to standardize Internet data caps and offer consumers more control over their data usage, in a bill he introduced Thursday (http://xrl.us/bn7c28). The goal of the legislation is to ensure that data caps are "designed to manage network congestion rather than monetize data in ways that undermine online innovation," Wyden told lawmakers Thursday following the bill's introduc- tion. "Future innovation will undoubtedly require consumers to use more and more data — data caps should not impede this innovation and the jobs it creates," Wyden said. Under the Data Cap Integrity Act, the FCC would require ISPs to inform consumers about the cost, capacity and limits of their data services, among other provisions. ISPs would be required under the legislation to detail to consumers their legal and privacy policies for their data contracts. The bill would prompt the FCC, the National Institute of Standards and Technology and private sector experts to develop standards to measure household data usage, within one year of the bill's passage. ISPs would then be required to meet such standards in order to implement data caps on their services and give evidence that the provider's data caps are used to "reasonably limit network congestion without unnecessarily restricting Internet use," the legislation said. Wyden's bill would forbid ISPs from providing preferential treatment to data based on the source or the content of the data, like online video or audio content. The legislation would require ISPs to provide consumers with tools to manage their data consumption that permit them to monitor the amount of data up- loaded or downloaded via wireline or wireless devices. If enacted, ISPs who fail to fulfill the requirements of the legislation would be liable for unspecified civil penalties, according to the text of the legislation. A Verizon spokesman would not comment other than to say his company does not limit its consumers' bandwidth use on the FiOS network. Comcast, Time Warner Cable, AT&T, Bright House and Cox Communications did not respond to requests for comment. —— Senate Democrats ratified Sen. Barbara Mikulski, D-Md., as chairman of the Appropriations Com- mittee Thursday, filling the vacancy left by Sen. Daniel Inouye, D-Hawaii, who died Monday. The Asso- ciation of Public Television Stations celebrated the senator's assignment as a victory for public broadcast- ing, in a news release Thursday. —— The Entertainment Software Association sought to distance itself, in a news release Wednesday, from the elementary school shootings in Newtown, Conn., and subsequent legislation proposed by Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., to study the impact of videogame violence on

FRIDAY, DECEMBER 21, 2012 COMMUNICATIONS DAILY—9 children. The group, which represents videogame companies, said any study into the connection between the shootings and videogame violence must include the "years of extensive research that has shown no connection between entertainment and real life violence." Rockefeller's legislation aims to evaluate whether violent videogames and violent video programming cause children to act aggressively, has a dis- proportionately harmful effect on children prone to aggressive behavior, and has a direct and long-lasting impact on a child's well-being, among other provisions (CD Dec 20 p15). Separately, a spokesman for the NAB said that, "given the events of the last week, a scientific study (as suggested in the Rockefeller bill) is appropriate." —— The Telecommunications Industry Association’s Chief Technology Officer Council is developing recommendations to Congress on legislation that would support U.S. businesses’ growing network and data security needs. “Security breaches cost businesses billions of dollars each year, slow innovation and erode consumer confidence,” said Danielle Coffey, TIA vice president-government affairs, Thursday in a news release. “Our goal is to help policymakers understand the connection between security and competi- tiveness, and to encourage the development of policies that help U.S. businesses remain competitive in a global marketplace where security is essential to success.” McAfee Public Sector CTO Phyllis Schneck, who serves on the council, said in the same release: “The Internet has become one giant malware trans- port system, and the costs for businesses are enormous." The CTO Council plans to make its recommendations in January, when the 113th Congress convenes, TIA said. One focus of the council’s recommendations will be the need for government support for technology research and development (http://xrl.us/ bn7co6). TIA President Grant Seiffert sent a letter Tuesday to Speaker John Boehner, R-Ohio, and House Minority Leader Nancy Pelosi, D-Calif., urging them to retroactively extend the research and development tax credit to apply to 2012. “A failure to retroactively extend the credit would result in a significant cur- tailment of research & development activities in the coming months, with follow-on effects that will be felt for years,” Seiffert said (http://xrl.us/bn7cpa). —— Rep. Michael Michaud, D-Maine, urged Agriculture Secretary Tom Vilsack in a letter made public Thursday to modernize the rules that govern the Rural Utilities Service's Community Connect program. Michaud said the grant program, which funds broadband infrastructure projects to rural communities, contains "outdated" broadband eligibility standards in need of revision. The program's definition of broadband transmission services at 200 kbps is no longer accurate because most small businesses require a minimum of 3 Mbps broadband capacity in order to work reliably, the letter said. "Improving this standard will ensure that more struggling rural communities are able [to] expand broadband access for their residents, schools, health care providers, and businesses," the letter said. The agency did not comment.

Wireline

“The judicial branch is our Frodo,” said Fred Campbell, director of the Communications Liberty and Innovation Project at the Competitive Enterprise Institute (http://xrl.us/bn7cpt). Like the people of Middle Earth relied on the defenseless Frodo to protect them from evil by destroying the Ring of Mordor, Americans today rely on the judicial branch to protect them from an overzealous government by applying the First Amendment to mass communications in the Internet era, Campbell said. “Providing ISPs and search engines with First Amendment rights would prevent dangerous and unnecessary government interference with the Internet while permitting the government to protect Internet consumers within Constitu- tional bounds,” he said. Verizon took heavy criticism recently for arguing the net neutrality rules should- n't apply to it because ISPs have First Amendment rights.

COMMUNICATIONS DAILY—10 FRIDAY, DECEMBER 21, 2012

West Kentucky and Tennessee Telecommunications Cooperative (WK&T) asked the FCC for a waiver of the 2011 rate-of-return carrier base period revenue rules (http://xrl.us/bn7crp). A limited waiver would let WK&T include in its FY 2011 base period revenue amounts of transitional intrastate access service that “should have been billed and collected by March 31” but were not “due to a billing omission that occurred during this period,” the telcos said. The USF/intercarrier compensation order envisioned circumstances “similar to the one faced by WK&T,” in which revenues associated with FY 2011 were not collected until after March 31, they said. The fact that the 2011 revenue was collected “without the involve- ment of a court or regulatory agency should in no way preclude the Company from a waiver request to include that revenue in its eligible recovery Base Period Revenue,” they wrote. —— The FCC should rapidly develop rules for the next round of Connect America Fund Phase I fund- ing, Frontier and CenturyLink representatives told aides to FCC commissioners Jessica Rosenworcel and Mignon Clyburn Monday, an ex parte filing said (http://xrl.us/bn7cdh). “Acting expeditiously will ensure that price cap carriers can quickly commence deploying broadband to thousands of unserved locations across America,” Frontier said.

Wireless

The National Public Safety Telecommunications Council said the 30-month period proposed by the FCC for rebanding 800 MHz licensees along the U.S.-Mexico border is unrealistically short, allowing only seven to eight months for “planning, negotiation and mediation” between licensees and Sprint Nextel. The revised bandplan follows an amended protocol agreement signed by the U.S. and Mexico June 8 modifying the international allocation of 800 MHz spectrum in the U.S.-Mexico border region. NPSTC said it con- sulted with licensees along the border. The city of San Diego, for one, told NPSTC the “proposed planning and negotiating timeframe is unrealistic and contradicts the actual experience of the 800 MHz reconfigura- tion in other areas,” said the NPSTC filing (http://xrl.us/bn7b78). “There is already a wealth of experience from multiple regions that indicates more time is often needed,” NPSTC said. “Overall, 800 MHz rebanding is now 7 years into what was originally planned as a 3 year process. Further, NPSTC agrees that implementation in the U.S./Mexican border area will be complex ... given the many factors involved.” The FCC Pub- lic Safety Bureau proposed a timetable for the rebanding in August (http://xrl.us/bn7b8e). —— T-Mobile USA plans to expand its 1900 MHz band coverage into 14 additional markets by year's end. The new markets are: New York City; Newark, N.J.; Boston, Cambridge and Springfield, Mass.; Providence, R.I.; Philadelphia; Detroit and Warren, Mich.; Austin, Dallas, Fort Worth, and San Antonio, Texas; and Tampa, Fla., T-Mobile said Thursday. The upgrades will bring the 1900 MHz band coverage into 37 markets that together contain more than 100 million people, T-Mobile said (http://xrl.us/bn7cwy). —— The FCC rejected the Public Interest Spectrum Coalition’s petition for reconsideration filed in the wake of a 2008 order approving Sprint Nextel’s partnership with Clearwire. PISC supported the transaction, but challenged the FCC’s decision to include 55.5 MHz of Broadband Radio Services (BRS) spectrum in the screen used to evaluate the transaction. “We dismiss the Petition to the extent it challenges the inclusion of BRS into the spectrum screen because PISC lacks standing to raise such a claim in this proceeding given its full support for the Commission’s decision to grant these applications, and because the Petition is not an appropriate procedural vehicle for addressing PISC’s concerns about the application of the spectrum screen to future transactions,” the FCC said (http://xrl.us/bn7b6i). The commission also rejected PISC arguments that the partnership, New Clearwire, should face the “unique burden of reviewing

FRIDAY, DECEMBER 21, 2012 COMMUNICATIONS DAILY—11 its agreements to determine which provisions relate to its open network commitments, and then submit for prior Commission approval changes that affect those provisions, subject to a notice and comment process.” The coalition “advances no factual basis for imposing such a burden on New Clearwire in the competitive circumstances at issue here,” the order said. This week Sprint announced a deal to buy the re- mainder of Clearwire it doesn’t own (CD Dec 18 p7). The FCC launched a notice of proposed rulemaking in September examining how it evaluates mobile holdings when it considers wireless transactions.

Internet

Public Knowledge said it supports a request by various media companies for a stay of a recent FCC Media Bureau order on how online video distributors (OVDs) can access Comcast-NBCUniversal programming. The bureau's order clarified the FCC's order approving Comcast's takeover of NBCU to say that OVDs exploiting the "Benchmark Condition" of the takeover approval must disclose the contents of their licensing deals with media industry peers. The content companies "are non-parties who are rightly alarmed that one of their competitors, Comcast-NBCU, must be given access to their proprietary commercial information," Public Knowledge said (http://xrl.us/bn7c2m). The bureau's order also undermines the purpose of the condition because it could limit companies from working with OVDs and prevent OVDs from licensing Comcast-NBCU programming, it said. "It was designed to promote online video distribu- tion, and if, in the absence of competitors' confidential information, Comcast-NBCU ends up offering an OVD better terms than it was able to obtain from a peer programmer, that purpose is served," it said. It also suggested the commission suspend the time limit of any merger condition "while disputes as to its meaning are being heard."

State Telecom Activities

The Oregon Public Utility Commission has received more than 1,600 complaints about rural call completion problems since June 2011, it said. The PUC has approved a new set of rules to combat the issue by forbidding anyone holding an intrastate telecommunications certificate “from blocking, choking, reducing or restricting traffic in any way” and from misleading or deceiving, the PUC said Wednesday evening (http://xrl.us/bn7b9q), saying it will fine violators up to $50,000. The PUC is responsible for levying the fines, and the Oregon Department of Justice will go to the circuit court to collect them on be- half of the state, a PUC spokesman said. The problem has continued to come up nationally and in other states, but waiting for “a national solution” is “not acceptable,” said Chair Susan Ackerman in a statement: “The Commission cannot stand by and do nothing while Oregonians continue to experience these problems daily.” Service providers will now be liable for their underlying carriers, the PUC added. Compa- nies must “complete long-distance calls to rural areas with the same accuracy at which they complete to urban areas,” according to the new rules. —— Windstream and the state of Oklahoma agreed to dismiss charges of bribery and conspiracy to de- fraud a school district that a state grand jury found in August, the telco said Wednesday (http://xrl.us/ bn7ccr). The case dates back to what Windstream called “a customer event that Windstream hosted at the 2007 NCAA Final Four men’s basketball championship for business customers, including the Broken Ar- row School District.” Windstream “denied any wrongdoing but entered into today’s agreement in the interest of reaching a compromise acceptable to it and to the state” and “pledged to take certain steps affirm- ing its commitment to full compliance with all federal, state and local laws,” the telco said. Windstream will pay the Broken Arrow Public Schools Foundation $100,000, non-deductable, the Wednesday agree-

COMMUNICATIONS DAILY—12 FRIDAY, DECEMBER 21, 2012 ment said (http://xrl.us/bn7ccg). “This agreement provides a fair conclusion to our Multicounty Grand Jury investigation into wrongdoing with Windstream Corporation and Mr. [James David] Sisney during his time as superintendent of Broken Arrow Public Schools,” said Oklahoma Attorney General Scott Pruitt in a statement (http://xrl.us/bn7cck). Sisney had received free lodging, food and beverage, transpor- tation, sports tickets and souvenirs at the 2007 event, the agreement said. Windstream’s conditions to avoid trial will help ensure “this doesn’t happen again,” Pruitt added.

Cable

The American Cable Association urged the FCC Media Bureau to let Adams Cable Equipment sell refurbished set-top boxes with integrated security and navigation functions. It also urged the bureau to adopt a simple process for certifying devices and to clarify that the bureau would grant similar relief to other vendors who want to sell integrated-security refurbished boxes. "These measures will ensure the maximum benefit possible from the availability of refurbished set-top boxes with integrated security in a quick and cost-effective manner," it said (http://xrl.us/bn7c3a). —— Cox said its customers can watch more TV programming on more devices following recent carriage agreements. Expanded access to Disney's networks, the NFL, and CBS bring the total number of Cox's "second screen" network options to more than 90 through its TV Online service, it said. —— Mediacom said it has completed several carriage deals in recent months, including with NBCUni- versal, TBS, Fox and the Big Ten Network. It also reached agreements with Azteca International, Multi- medios and Olympusat to expand its Spanish-language programming options, it said. And it renewed retransmission consent agreements with "Capital, Citadel, Coronet, Local TV, Media General and Sinclair," it said.

Mass Media Notes

The U.K. has a strong copyright regime but it's too rigid, the government said Thursday in a statement (http://xrl.us/bn7cge) on modernizing copyright. Copyright laws must be flexible in order to remove barriers to using protected works so innovation can flourish; modern to deal better with challenges of current and future technologies; and robust in ensuring there are appropriate incentives for creators and rights holders to keep investing in the U.K., it said. Following the May 2011 Hargreaves Review of Intellectual Property and Growth and extensive consultation, officials said some laws get in the way of reasonable use of copyrighted works and must be changed. People should be allowed to make wider use of such works as long as rights owners are protected, the document said. The government will propose legislation next year to, among other things: (1) Allow people to copy content they've bought onto any medium or device they own, strictly for personal use. Content can't be shared with others, but consumers will be able to copy to and from private online cloud services. (2) Make it easier for the education sector to use interactive whiteboards and similar technologies in classrooms to improve distance learning. (3) Create a general permission for quotation in news reporting of copyrighted works for any purposes as long as use of the particular quote is "fair dealing" and its source ac- knowledged. (4) Allow sound recordings, films and broadcasts to be copied for non-commercial research and private study purposes without permission from the copyright owner. The new laws are in-

FRIDAY, DECEMBER 21, 2012 COMMUNICATIONS DAILY—13 tended to become effective in October, the government said. Record labels are digital businesses and want consumers to be free to enjoy their music legally on all their devices, said British Phonographic Industry Chief Executive Geoff Taylor. BPI already licenses a range of online storage services, from Apple, Google, Amazon and others, he said. BPI backs a "sensible updating of copyright for the digital age" and will review the details of the legislative proposals when they emerge to ensure that they support licensing of new services and don't hurt the country's creative sector, he said. —— The FCC Media Bureau granted in part a request by WTNH-TV New Haven, Conn., for a waiver of the FCC's "significantly viewed" rules that limit cable operators from deleting duplicate network programming from nearby stations. The ABC affiliate had asked the bureau to remove WABC-TV New York from the significantly viewed station list for the Connecticut towns of Meriden, Milford, Wallingford and Waterbury. The bureau said WTNH-TV submitted evidence to show WABC-TV is no longer significantly viewed in three of those communities. But the bureau "cannot conclude that WABC-TV is no longer significantly viewed in the community of Milford," an order released Thursday said (http://xrl.us/bn7cze).

Satellite

Inmarsat and in-flight broadband provider Gogo signed an agreement to offer capacity to commercial airline customers using Inmarsat's forthcoming Global Xpress Ka-band network. Through Global Xpress, Gogo will provide "improved capacity, global coverage and significant cost advantages to its commercial airline customers," Gogo said in a news release (http://xrl.us/bn7cin). With the addition of Global Xpress, Gogo has the ability to provide the most complete range of solutions, "which enables us to service the full-fleet needs of our current and future airline partners," it said. —— ViaSat received a $52 million government contract to provide broadband airborne satellite services. The one-year contract is a renewal for services already provided using ViaSat ArcLight technology established in 2009 "to support military missions for the War on Terror," ViaSat said in a news release (http://xrl.us/bn7cyu). The government agency wasn't disclosed. The satellite company's mobile broadband systems provide "high-speed, beyond line-of-sight communications for media-rich ISR [intelligence, surveillance, reconnaissance], C2 [command and control] and other applications," it said. —— Intelsat and ITC Global signed two agreements for broadband capacity. ITC plans to use Intelsat 18 at 180 degrees east "to provide C-band services to its mining customers in eastern Russia," Intelsat said in a press release (http://xrl.us/bn7cdu). Intelsat said ITC will integrate its services into a sophisticated network and incorporate carrier-in-carrier technology. ITC also signed a contract for capacity on Intelsat 906 at 64 degrees east, "enabling broadband service to a major natural resources provider in Western Aus- tralia," Intelsat said.

Communications Personals

Frontier Communications hires John Jureller, ex-General Atlantic, effective Jan. 7, and on Feb. 27, he'll succeed Don Shassian, executive vice president and chief financial officer, who's resigning and will leave company April 1 ... AMC Networks hires Kari-Michele Hauge, ex-AETN International, as vice president-digital sales and marketing ... HSN adds Ann Sarnoff, BBC Worldwide Americas, to board.