A coalition of communications companies that compete with the old Bell companies filed a petition Monday calling on the FCC to adopt rules that supporters say is aimed at boosting competition in the telecom and broadband markets. The coalition maintains that the FCC has been too lax in enforcing rules put in place by the 1996 telecommunications act requiring the Bell operating companies to open their networks to competitors. At the same time, they say the federal courts have barred the states from addressing the problem. The Bells "have taken advantage of this vacuum," said Genevieve Morelli, a partner at the Kelley Drye & Warren law firm who spoke on behalf of the coalition. She said the Bells have essentially ignored their obligations in recent years to provide competitors with access to the Bells' networks at just and reasonable rates. The petition provides "a framework to remedy the situation."
While the Obama administration has been working to increase broadband deployment, the coalition argued that their members' ability to offer broadband is being hampered by their limited access to the Bells' networks. Morelli noted that a recent draft study on broadband from Harvard's Berkman Center for Internet and Society found that access to unbundled elements "is critical to first generation and next generation broadband deployment."
Section 251of the telecom act required the Bells to provide access to unbundled elements of their network to competitors who couldn't adequately compete without such access, while section 271 imposed additional unbundling obligations on the Bells in exchange for allowing them to provide long-distance and information services in their markets, Morelli noted. The coalition's petition calls on the FCC to craft rules that propose "clear requirements for access to each network element specified in Section 271" of the 1996 telecom act and provide "a clearer definition for the 'just and reasonable' rate standard the FCC has previously determined applies to these elements," according to a news release.
In response to the petition, Jon Banks of the U.S. Telecom Association, which represents the Bells, said "given that the FCC and state commissions have put in place extremely detailed requirements about compliance through hundreds of thousands of pages of orders, it's hard to believe that any additional regulation could be required. Consumers, the FCC and the communications industry's efforts to invest in building the broadband networks of the future and creating the jobs that go with it would all best be served by looking forward and not re-fighting what are now long irrelevant battles."
A long list of colleges and universities want Congress to fix what they believe is an outdated Internal Revenue Service record-keeping requirement governing use of employer-provided cell phones and other electronic communication devices. Current IRS rules impose an onerous burden on higher education and other employers across the country, they wrote in recent letters to leaders of the House Ways and Means Committee and Senate Finance Committee, which have bills to overhaul the policy pending before them.
Reps. Earl Pomeroy, D-N.D., and Sam Johnson, R-Texas, and Sens. John Kerry, D-Mass., and John Ensign, R-Nev., introduced the legislation to change the regulation, which treats employer-provided phones as a taxable fringe benefit. A similar proposal was approved by the House in April 2008 but was never enacted. When Congress created the rule in 1989, cellular technology was in its infancy and devices were "big and bulky, expensive and rarely used," they wrote. Now they are "practically an appendage."
The IRS recently began enforcing the rules requiring employees to maintain detailed records of their business and personal use of phones, BlackBerrys and similar devices but has also acknowledged the law is burdensome. In June, IRS Commissioner Doug Shulman said he would work with Treasury Secretary Timothy Geithner to urge Congress to repeal current law.
In a big win for companies like Skype, AT&T announced Tuesday that it has taken the steps necessary so that Apple can enable voice over Internet protocol (VoIP) applications on iPhone to run on AT&T's wireless network. Previously, VoIP applications on iPhone were enabled only for Wi-Fi connectivity but AT&T has offered a variety of other devices that allow VoIP applications on 3G, 2G and Wi-Fi networks. AT&T Mobility & Consumer Markets President Ralph de la Vega said the decision was made after evaluating customers' expectations and use of the iPhone compared to dozens of other products offered to subscribers.
Telecom analysts Rebecca Arbogast and David Kaut said the announcement was not only good for Skype but also for AT&T's "political and rhetorical position as the FCC attempts to write network neutrality rules, including for wireless broadband providers." The AT&T move is noteworthy, but not a surprise, in light of the AT&T August response to FCC questions about Apple's decision not to allow Google Voice to be carried on the iPhone through the App Store, the wrote. The announcement does not change Apple's position on Google Voice -- a situation the company said it was still "pondering."
FCC Chairman Julius Genachowski issued a statement late in the day commending AT&T for its action. "Opening wireless services to greater consumer choice will drive investment and innovation in the mobile marketplace," he said.
Legislation that would let states to petition to operate wireless jamming devices in particular correctional facilities won unanimous Senate approval on Monday. The measure, sponsored by Senate Commerce ranking member Kay Bailey Hutchison, would require the FCC to conduct a rulemaking on the topic and establish rules and criteria for the approval of jamming systems and devices. Amid fears of signal interference in nearby areas, the bill also requires the FCC to conduct field testing of all devices submitted for approval and requires approved devices operate at the lowest possible power output necessary. Rep. Kevin Brady, R-Texas, sponsored a companion bill in the House.
"This legislation will disconnect the communications networks that prisoners and criminal enterprises have patched together using smuggled cell phones," Hutchison said in a press release. "With innocent lives on the line, Congress has a responsibility to give the nation's law enforcement community the tools necessary to effectively fight this growing problem." In 2008, corrections systems nationwide reported large numbers of confiscated phones. California reported nearly 3,000 phones found with inmates, while Mississippi had nearly 2,000. The Federal Bureau of Prisons reported the confiscation of more than 1,600 phones.
Legislation that would ban inmates in some prisons from using smuggled cellular phones took a step toward the Senate floor Wednesday when the Commerce Committee approved the measure sponsored by ranking member Kay Bailey Hutchison. Her bill would allow the Federal Bureau of Prisons, a governor or a governor's designee to petition the FCC for a wireless jamming device for a correctional facility. Hutchison's bill includes safeguards to ensure that jamming does not impair the ability of public safety officials or legitimate commercial mobile radio services outside a prison's walls.
"Imprisoned convicts are using contraband cell phones to coordinate murders, plot extortion schemes, and run drug trafficking, credit card fraud, and identity theft enterprises," Hutchison said in a statement. "Prisons are meant to stop the commission of crimes, but cell phones inside prisons mean business as usual for dangerous felons. With innocent lives on the line, Congress has a responsibility to make available all technologies that can prevent the illicit use of cell phones in prisons."
Wireless industry association CTIA said its members believe policy should favor non-interfering technologies but appreciate Hutchison's willingness to redraft her bill to protect commercial and emergency services from interference. AT&T Executive Vice President Tim McKone said his company supports Hutchison's effort and urged the full Senate to act. Rep. Kevin Brady, R-Texas, has introduced a companion bill in the House. Consumer groups and think tanks have warned the bills could cause more problems then they would solve. Read more here.
CongressDaily's David Hatch writes in TechCentral's latest Issue Of The Week that the iPhone and BlackBerry Storm are at the eye of a political storm in Washington. These and other ubiquitous smart phones have triggered debate over the future of exclusive deals that tether wireless handsets to select carriers. The iPhone is only available on AT&T's network, a problem for consumers outside its coverage area or dissatisfied with its service. The BlackBerry Storm has a similar relationship with Verizon, posing the same set of challenges.
Powerful lawmakers, regulators and watchdogs want to disconnect such deals for good to give consumers more options. "The best handsets are reserved for the largest carriers," complained Harold Feld, legal director for Public Knowledge, an advocacy group that wants to ban these arrangements. For smaller carriers serving rural and less-populated markets, "there's no way they can compete." Critics of the status quo point to Europe and Asia, where many cell phones can be operated on multiple networks and customers switching providers can retain their handsets by using removable SIM cards -- short for "Subscriber Identity Module."
Major wireless carriers that routinely offer handsets under exclusive terms insist the approach spurs innovation by letting them share the risk of introducing cutting-edge products along with manufacturers. "Exclusive handset arrangements have provided U.S. consumers the most advanced devices in the world at distinctly affordable rates," AT&T lobbyist Jim Cicconi argued this month in a letter to Senate Judiciary Antitrust Subcommittee Chairman Herb Kohl, D-Wis. Read more here (subscription required).
The Senate Commerce Committee on Wednesday will hear perspectives on a proposal by ranking member Kay Bailey Hutchison to ban inmates in some prisons from using smuggled cellular phones. Her legislation and a companion bill introduced by Rep. Kevin Brady, R-Texas, would allow the Federal Bureau of Prisons, a governor or a governor's designee to petition the FCC for a wireless jamming device in a particular correctional facility. Under the measures, which were introduced in January, the FCC would have to consider whether the jammer would interfere with emergency or public safety communications outside the prison's walls. Current law prevents interference with wireless services.
According to news reports in Texas, death row inmate Richard Tabler used a smuggled phone to make threatening calls to a state senator. Tabler's phone was found in the ceiling above a shower and officers found 11 additional phones belonging to other death row inmates while looking for it. "This legislation will fight criminal enterprises behind bars and protect innocent victims and public officials from harassment and threats from criminals," Hutchison said in press release. Corrections officials have reported a surge in phones infiltrating prisons and in some states, the number confiscated phones has doubled in two years.
Sens. Ron Wyden, D-Ore., and Olympia Snowe, R-Maine, plan to reintroduce legislation Thursday that would grant a five-year moratorium on new telecommunications taxes. Currently, telecom services are taxed at a rate that rivals - and in some places exceeds - taxes on tobacco and alcohol. Their Mobile Wireless Tax Fairness Act will also be cosponsored by Sens. Robert Menendez, D-N.J.; John McCain, R-Ariz.; and Kirsten Gillibrand, D-N.Y. The measure stalled in the Senate Finance Committee last year. Related bills were introduced in the 110th Congress by McCain and Reps. Mary Bono Mack, R-Calif., and Zoe Lofgren, D-Calif. Lofgren also reintroduced her legislation in March.
Upon introduction of his identical bill last session, Wyden stressed that it would not impact a single current tax that has been levied by a state or locality nor would it remove a dollar from their communal coffers. "What it will do is guarantee our wireless network providers protection from even greater taxation at a time when we are asking them to implement the largest technology upgrade in history -- an upgrade that will bring economically important, true broadband speeds to wireless customers for the first time," he said. "There are lots of problems with the way federal, state and local taxes are levied on telecommunications services. This legislation addresses only one of those problems, but it is a big one," he said.
Wyden's prior bill won support from CTIA-The Wireless Association and other groups like FreedomWorks, a conservative nonprofit advocacy group led by ex-House Majority Leader Dick Armey, R-Texas. At the time, CTIA CEO Steve Largent called the current taxation regime "unfair and discriminatory" and said that Wyden and Snowe's states are examples of places that have reasonable taxes. He pointed out that the average U.S. wireless customer pays more than 15 percent of his or her monthly bill in taxes and fees -- more than twice the rate imposed on other goods subject to sales tax. "This is an indefensible level of taxation for most any product, let alone one that allows millions of Americans to constantly stay connected with the world around them," Largent said.
As Tech Daily Dose reported last month, Jenner & Block attorney Philip Verveer has now officially been tapped for the impossibly titled position of Deputy Assistant Secretary of State for International Communications and Information Policy in the Bureau of Economic and Business Affairs and U.S. Coordinator for International Communications and Information Policy. Verveer has practiced communications and antitrust law in the government and in private law practice for more than 35 years, according to a White House personnel announcement. From 1969 to 1981, Verveer was a trial attorney in the Justice Department's Antitrust Division; as a supervisory attorney in the Bureau of Competition at the FTC; and as the chief of the FCC's Cable Television Bureau, the Broadcast Bureau, and the Common Carrier Bureau.
Between 1973 and 1977, he served as the DOJ Antitrust Division's first lead counsel in the investigation and prosecution of United States v. American Tel. & Tel. Co., the case that eventuated in the divestiture of the Bell System. As a Bureau Chief at the FCC, Verveer participated in a series of decisions that enabled increased competition in video and telephone services and limited regulation of information services, the bio stated. Since 1981, Verveer has practiced law in the private sector and in 1995 and 1996 he chaired the federal advisory committee that identified spectrum requirements necessary to afford public safety organizations efficient and interoperable wireless communications. He has also served on the Visiting Committee of the University of Chicago Law School and the Executive Committee of the Alumni Board of Governors of Georgetown University.
A handful of major high-tech companies wrote to House Transportation Chairman James Oberstar and ranking member John Mica on Wednesday to voice their opposition to a proposed ban on the usage of wireless telecommunications on U.S. commercial flights. The Consumer Electronics Association, CTIA-The Wireless Association, the Satellite Industry Association, Technology Association of America, and the Telecommunications Industry Association joined passenger rights and business groups that recently complained about a legislative rush to prohibit the activity as part of a Federal Aviation Administration reauthorization bill without meaningful public input. Rather than eliminating the option of using devices on airplanes, CTIA Vice President Jot Carpenter called for a study to determine whether there is consumer demand.
Their letter was also sent to House Energy and Commerce Chairman Henry Waxman and ranking member Joe Barton. "Legislation prohibiting the use of technology is as problematic as legislation mandating the use of technology," CEA lobbyist Michael Petricone said. "An outright ban slipped into an authorization bill is not warranted for a technology that is as safe and widely accepted as voice communications." "An outright ban leaves too many benefits for society on the table without a serious weighing of the facts," TechAmerica lobbyist Joshua Lamel added. The groups point out that airplanes have been equipped with mobile phones for decades and for 18 months, 16 commercial carriers have offered in-flight wireless services on three continents. Those systems have been launched successfully in Europe, Asia and the Middle East and have not posed safety concerns, they wrote.
Surf on over to CongressDaily's TechCentral for a new "Issue of the Week." Here's a taste:
Imagine trying to hand out cartons of cash to passersby on a busy street corner -- yet attracting no takers. That's the paradox the federal government faces as it crafts guidelines for $7.2 billion in incentives for telecommunications companies to extend high-speed Internet service to rural areas with limited or no access. The reason for the apprehension, particularly among dominant telecom and cable firms, is that the money comes with regulatory strings attached. One is a requirement that recipients adhere to the FCC's voluntary guidelines governing "network neutrality" -- the concept of maintaining an open and accessible Internet. Another is that network interconnection rights must be guaranteed to competing broadband providers.
Congress didn't define those terms in President Obama's economic stimulus package, punting instead to the two agencies tasked with distributing the funds -- the National Telecommunications and Information Administration within the Commerce Department, and the Rural Utilities Service within the Agriculture Department. NTIA, which will dole out $4.7 billion in grants and loans, and the RUS, set to distribute $2.5 billion, are hashing out the details now, with an announcement to come in the next month or two. Some of the corporate rhetoric might be brinksmanship aimed at spurring regulators to craft conditions with the lightest possible touch. But experts acknowledge there's a real possibility key players could sit the program out, or not participate as heavily as expected.
Read the full story here.
Satellite television provider DirecTV and Comcast Corp., one of the nation's largest providers of cable and Internet services, have agreed to pay a total of $3.21 million to settle separate FTC charges that they violated the "do not call" provisions of the Telemarketing Sales Rule, according to an agency press release. Among the charges were that the companies or their telemarketers called consumers who specifically had told the companies not to call them again. In addition, a DirecTV telemarketer and its principals have agreed to pay a $115,000 penalty for making prerecorded sales calls to consumers who had asked not to be called.
"In both of these cases, DirecTV and Comcast violated consumers' privacy by calling people who specifically had asked these companies not to call them again," FTC Chairman Jon Leibowitz said in a statement. "What makes DirecTV's actions especially troubling is that it is a two-time offender: DirecTV violated not only the FTC's do not call rules, but also a previous federal court order barring it from exactly this type of conduct." Liebowitz said his agency "won't tolerate firms that disregard consumers' specific requests not to be called, and we will be especially tough on companies that ignore their obligations under prior court orders."
A DirecTV spokesman said the cases pertained to a brief 2007 calling campaign to determine whether the firm had correctly recorded customers' do not call status. He said DirecTV believed the pre-recorded messages were permitted at the time because they were not attempting to sell anything -- but the FTC disagreed. "We're happy to have this behind us," he said. A Comcast spokeswoman pointed out the FTC found her firm's compliance with the national registry to be 99.85 percent and chose not to pursue any claim against them in that area. Their settlement was limited to alleged calls made to those identified on Comcast's internal do-not-call list, where its compliance rate was 99.74 percent.
President Obama announced Monday that he will authorize U.S. telecommunications network providers to enter into agreements to establish fiber-optic cable and satellite telecommunications facilities linking the United States to Cuba. Obama said he wants to promote greater interaction between the U.S. and Cuba and will allow U.S. telecom, radio and television service providers to offer services and enter into agreements with Cuban customers and service providers. The White House also said it will "license persons subject to U.S. jurisdiction to activate and pay U.S. and third-country service providers for telecommunications, satellite radio and satellite television services provided to individuals in Cuba, except certain senior Communist Party and Cuban government officials." The United States will further allow the export or re-export to Cuba of donated personal communications devices so long as national security concerns are recognized. The White House said Obama took these steps to promote the free flow of information to the Cuban people. In May 2008, then-President George W. Bush announced that Americans soon would be allowed to send cell phones to Cubans. Bush also acknowledged reforms the Castro regime had made toward becoming more technology friendly such as allowing Cubans to purchase mobile phones, DVD players and computers. -- Winter Casey
The use of additional spectrum for new wireless Internet and television services in the European Union will provide a boost to the gloomy economy, a top EU official said Tuesday. The spectrum is becoming available as the region switches from analogue to digital television in member states. The transition is expected to be completed across the EU by 2012. "Radio spectrum is a resource of huge economic, societal and cultural value, and it the basis for important services such as broadcasting, mobile communications, wireless broadband, navigation and public safety, " EU Telecoms Commissioner Viviane Reding after a meeting with Radio Spectrum Policy Group Chairman Dániel Pataki.
"As a result of the switchover from analogue to digital TV, tremendous spectrum resources will become available for other uses, especially for wireless broadband ... The digital dividend could allow Europe to extend its leadership in electronic communications services, creating growth and jobs, increasing productivity and giving greater access to broadband services for all Europeans," Reding said in a statement. She added that regulators will play a key role in helping the region make better use of new spectrum. The European Commission will offer recommendations on ways to make the most efficient use of spectrum by the fall. Tech Daily Dose reported in February that the EU said it "is leading the world in switching from analogue to digital television." -- Winter Casey
Tech-savvy Rep. Rick Boucher, D-Va., has a new post as chairman of the House Energy and Commerce Subcommittee on Communications, Technology, and the Internet in the 111th Congress -- and a new flat-screen TV in his office. Tech Daily Dose reported last summer that his giant wall-mounted Samsung was a goner. The TV was an analog set he admitted was "on the edge of obsolescence." On Wednesday, we sat down to discuss his tech and telecom agenda for 2009 and a brand new Panasonic was hanging on the wall. The TV, which is used for occasional videoconferencing, hadn't been set up yet but Boucher said he looked forward to taking it for a whirl.
After serving eight years as U.S. Coordinator for International Communications and Information Policy, David Gross left the State Department on Jan. 20. Richard Beaird is currently serving in his place in an acting capacity. Gross held the title since 2001 when he was nominated by former President George W. Bush. According to the State Department's Web site, Gross led "more U.S. delegations to major international telecommunication conferences than anyone in modern history."
As coordinator, Gross was responsible for the formulation and advocacy of international communications policy for the United States. He had previously been a partner at the Sutherland, Asbill & Brennan law firm, where he specialized in telecommunication issues. He has also served as Washington Counsel for AirTouch Communications, a wireless telecommunications company. In 2000, Gross joined the Bush presidential campaign. Before serving as Gross's deputy, Beaird was an associate administrator at National Telecommunications and Information Administration. Prior to that, he worked for AT&T.
State's International Communication and Information Policy group advocates international policies for expanded access to information and communication technologies and improved efficiency in the international telecommunications market "through increased reliance on free-market forces, and fair opportunities for U.S. companies to participate in this important sector around the globe." A rumor has recently circulated that FCC Commissioner Jonathan Adelstein could be a candidate for Gross's former position.
-- Winter Casey
China's State Council has given the green light to the Ministry of Industry and Information Technology to issue third-generation licenses to operators, China Daily reported Monday. Li Yizhong, head of the ministry, said that three permits will be issued in early 2009. The long awaited permits will enable the recipient companies to legally offer Chinese citizens upgraded mobile services.
Authorities have, however, opted to give China Mobile a license to operate services based on China's homegrown TD-SCDMA technology while China Unicom -- the country's second largest wireless carrier -- will get a license to offer services on WCDMA, which is widely used in the European Union. China Telecom will receive a permit for CDMA2000, which is used in the United States. China Daily said the change could influence the competitive landscape of China's mobile market as firms with the established international standard licenses could have a leg up. -- Winter Casey
The Justice Department will require Verizon Communications to divest assets in 100 areas in 22 states in order to proceed with its $28 billion buyout of Alltel Corp., the agency announced Thursday. The department said the transaction as originally proposed would have substantially lessened competition to the detriment of consumers of mobile wireless telecommunications services in those areas, and likely would result in higher prices, lower quality and reduced network investments.
The divestitures cover the entire states of North Dakota and South Dakota; swaths of the states of Colorado, Georgia, Kansas, Montana, South Carolina, Utah and Wyoming; and portions of the states of Alabama, Arizona, California, Idaho, Illinois, Iowa, Minnesota, Nebraska, Nevada, New Mexico, North Carolina, Ohio and Virginia, a DOJ press release said. The agency's antitrust division, along with attorneys general for several states filed a civil suit in a Washington, D.C. federal court to block the deal and offered a proposed settlement that, if approved by the court, would resolve competitive concerns.
According to the complaint, Verizon and Alltel are rivals and each is the other’s closest competitor for a significant set of customers in 94 cellular marketing areas, as defined by the FCC. The complaint alleges that the proposed transaction would substantially reduce competition for wireless services in each of those areas. The proposed settlement requires divestitures in these 94 areas to eliminate the competitive concerns. Proposed modifications to two existing consent decrees would require Verizon to divest businesses in six additional areas, officials said.
Continue reading DOJ Requires Divestitures In Verizon-Alltel Buyout.
Verizon lobbyist Tom Tauke and National Cable and Telecommunications Association President Kyle McSlarrow traded blows in the blogosphere on Friday. Finally, these characteristically sedate policy blogs are being used for a good, old-fashioned catfight.
Tauke posted an item offering his perspective about the potential impact of the FCC overturning a recommendation by the agency's enforcement bureau to deny the cable industry's complaint against Verizon's "win-back" marketing efforts. He said the rumored action would thwart consumer choice and would impose more restrictions on telecoms' communications with their own customers.
McSlarrow fired back with his own blog post, calling Tauke's talk "a little over the top." "Thwart consumer choice?” C’mon, Tom. This is really about Verizon trying to thwart competition . . . again," he wrote. What's really going on, according to McSlarrow, is that for the first time in history, Verizon's incumbent position in the phone marketplace is being challenged.
Read Tauke's take here and McSlarrow's reaction here.
Update: Ding! Ding! Round two. Tauke takes another swing.
(Photo Credit: jsome1 via Flickr)
The Ad Council is running public-service annoucements aimed at educating people about Wireless AMBER Alerts, text messages that are sent to mobile subscribers as soon as local law enforcers release AMBER Alerts about missing or abducted children. People can get the alerts by registering at www.wirelessamberalerts.org.
Here are two of the ads about the service:
CHICAGO -- The morning session of the NXTComm conference here today was lively and full of humor -- much of it at the expense of the presenters.
Randall Stephenson has been chairman and CEO of AT&T for just more than two weeks now, and he said he has learned a major lesson during that short period of time. "The chairman still has to take out the trash at home and feed the dog," he said. "I learned that the hard way!"
At another point in the conference, Matt Ross, the group chief technology officer at BT, polled attendees about whether they have voice-mail systems on their home telephones, personal mobile phones, work mobile phones and office phones. When nearly 2,000 folks in the audience said yes to all of the above, Ross said, "I suggest counseling."
FCC Chairman Kevin Martin, meanwhile, appeared at the show by live video conference and looked quite haggard . The reason he could not make it to the prestigious event in person? His wife is expected to deliver the couple’s second child today in Washington.
Telecom executives here joked that being the dutiful dad, Martin did not want to miss the "latest rollout" in his family.
-- Gene J. Koprowski, for Technology Daily
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