| Martin Out, Genachowski In for FCC Chair |
FCC Chairman Kevin J. Martin has announced his resignation from the Commission,
effective January 20th. Although President-elect Obama has yet to name a successor,
by all accounts he is expected to name Julius Genachowski as the next Chairman.
Martin leaves the FCC after 8 years of service and will now serve as a Senior
Fellow at the Aspen Institute in Washington, D.C. Genachowski, no stranger to
the FCC, is the former senior legal advisor to Reed Hundt, who himself was the
FCC Chairman under President Clinton. A friend and former Harvard Law classmate
of President-elect Obama, Genachowski first made a name for himself as the architect
of Obama’s technology policy platform and his successful Internet-centric Democratic
Primary and Presidential campaigns. Genachowski has experience in both the private
sector and government. After clerking for two U.S. Supreme Court Justices and
a Federal Appeals Court judge, Genachowski worked for a variety of technology-based
companies, including IAC/InterActiveCorp, the parent company to Ticketmaster and
CitySearch. The biggest immediate challenges facing Genachowski will be a successful
DTV transition and boosting FCC employee morale after a rocky tenure under Martin.
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For additional information, please contact Daryl Zakov.
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| House Economic Recovery Bill Includes $6 Billion for Rural Broadband |
Democrats in the House of Representatives have released a draft version of the
economic stimulus bill, officially titled the American Recovery and Reinvestment
Act of 2009, which will provide the country with $825 billion in spending and
tax cuts. Specifically, $6 billion of that total amount is earmarked towards
providing broadband and wireless services in underserved and unserved areas of
the country. The $6 billion will be distributed through broadband and wireless
grants, which according to the House Appropriation Committee, are intended to
strengthen the economy, create jobs, and bring benefits to e-commerce, education
and healthcare. The Rural Utilities Service rural broadband program will receive
$2.825 billion of that grant money and apply it towards providing broadband service
in unserved areas with the hopes of generating $5.5 billion in additional direct
investment from the private sector. An additional $2.825 billion in grants is
to be awarded as well, with $1 billion in wireless grants and $1.825 in broadband
grants. Recipients of those grants will have build-out requirements and open
access obligations. Additionally, $650 million has been allocated for sustaining
the digital TV converter box coupon program, which quickly exhausted its original
budget of $1.34 billion. Finally, the bill also proposes $350 million in state
broadband data and improvement grants to be administered by NTIA.
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For additional information, please contact Daryl Zakov.
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| Congress and FCC Scramble Ahead of Looming DTV Transition Deadline |
With the transition to digital television scheduled to occur on February 17,
2009, both Congress and the FCC are scrambling to avoid what some have characterized
as a potential train wreck when television viewers lose their analog television
signals on the transition date. The FCC has now adopted rules to implement the
recently enacted Short-term Analog Flash and Emergency Readiness Act (also known as the “Analog Nightlight Act”). The primary purpose of this law is to provide a temporary safety net by allowing television broadcasters to
continue to broadcast public safety and DTV transition information on an analog
signal for a period of 30 days following the DTV transition to ensure that at
risk groups do not lose access to critical public safety information while the
transition occurs. The FCC has identified and pre-approved 826 eligible stations,
covering 47 states, Puerto Rico, and Washington, D.C. to participate in this voluntary
program and has established rules to expedite approval of additional stations
that wish to participate.
Meanwhile, Congress has been busy trying to provide additional funding for the
DTV Converter Box coupon program administered by NTIA which has reached its appropriations
limit, but still has a backlog of converter box coupon requests pending. The
problem is that even if Congress were willing to act now to appropriate additional
funds to accommodate the backlog, there is insufficient time before the DTV transition
on February 17, 2009 for NTIA to issue new coupons and get the required converters
into the homes of all coupon participants. Accordingly, members of Congress are
attempting to solve the timing problem. Representative Bruce L. Braley (D-Iowa)
has introduced a bill (H.R.508) to allow a refundable credit against Federal income
tax for the purchase of digital-to-analog converter boxes for taxpayers who did
not use coupons. This would allow taxpayers to go out and purchase the necessary
converters without having to wait for NTIA-issued coupons. The bill has been
referred to the Committee on Ways and Means and the Committee on Energy and Commerce.
There has also been discussion of postponing the DTV transition for 90 to 180
days in accordance with the recent recommendation of President-elect Obama’s transition team. FCC Commissioners Copps and Adelstein have sent a letter to ranking members
of key committees both in the House and the Senate asking them to consider legislation
that would delay the DTV transition.
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For additional information, please contact Howard Shapiro.
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| Qwest and Others Go to Court to Force an FCC Non-Rural USF Decision |
Qwest Corp., the Maine Public Utilities Commission, the Vermont Public Service
Board, and the Wyoming Public Service Commission have asked the U.S. Court of
Appeals for the Tenth Circuit to force the FCC to issue a final Order on universal
service fund (USF) rules for non-rural telecommunications providers. Qwest and
company have asked the court to set a 90-day deadline for the FCC to address non-rural
high cost support which, according to Qwest, the FCC has abandoned since a 2005
rulemaking.
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For additional information, please contact Ken Johnson.
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| AT&T Pays Government $4 Million to Settle Dobson Antitrust Disputes |
After facing a civil suit by the Department of Justice (DOJ), and a companion
investigation by the FCC's Enforcement Bureau, AT&T has agreed to settle both
matters stemming from alleged anticompetitive practices in violation of the AT&T-Dobson
merger Order and Consent Decree. As part of the settlement, AT&T is required
to pay the DOJ $2,050,000, an amount which includes reimbursement for the United
States’ investigation. Additionally, AT&T has agreed to make a “voluntary
contribution” of $2,380,000 to help put to rest the FCC’s investigation. After
acquiring Dobson for $2.8 billion in 2007, AT&T was required to divest certain
Dobson markets. According to DOJ, AT&T failed to fulfill its obligations
to separate confidential customer account information in the divested businesses
from its own records. Based on this information, DOJ alleges that AT&T obtained
unauthorized access to this sensitive information and used the data to solicit
and win back customer accounts in the divested markets.
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For additional information, please contact Daryl Zakov.
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| AT&T Will Pay $10 Million to Terminate FCC Proceeding Involving CPNI and USAC Violations |
The FCC issued an Order adopting a Consent Decree entered into with AT&T
and its affiliates to terminate a proceeding concerning alleged violations of
the CPNI rules and USAC rules. AT&T agreed to voluntarily pay $10,080,600
to resolve the matters. The alleged violations concerned failures in AT&T’s
opt-out mechanisms, including the failure to restrict use of CPNI during the opt-out
period resulting in use of CPNI of customers who had elected to restrict use of
their CPNI, e-mailing opt-out notices that did not allow customers to reply, and
sending opt-out notices with a toll-free number to reply that did not work. In
addition, AT&T, through several companies, recovered federal USF contribution
costs from end-users in excess of amounts permitted.
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For additional information, please contact Marjorie Spivak.
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| Nortel Goes Bankrupt |
Canadian-based Nortel Networks Corp. has filed for bankruptcy protection from
creditors in Canada, the United States and Europe. Trading of Nortel shares on
the Toronto Stock Exchange was halted after dropping down to $0.12 per share.
This is in stark contrast to when Nortel once commanded a market capitalization
of over $100 billion at the height of the telecommunications sector bubble in
2000. For several years, Nortel has struggled with both its identity and a viable,
long term strategy, all while battling stiff competition from Ericsson, Nokia
and upstart Huawei. Eroding profit margins, combined with consolidation in the
operator marketplace, further exacerbated Nortel’s financial problems. Nortel’s
problems began over a decade ago when it purchased fiber and networking companies
that were highly overvalued. The slow decline continued after accounting missteps
and the company’s ill-conceived departure from the UMTS (3G) marketplace. Nortel
enters Chapter 11 bankruptcy protection with several options, which include a
streamlining of core operations, a sale of high-value units in order to generate
operating cash, or an outright merger with a larger rival. According to Mike
Zafirovski, CEO and President of Nortel, filing for bankruptcy now has allowed
the company to keep approximately $2.4 billion of cash on its books. Without an immediate restructuring of its finances, Nortel was expected
to burn almost $1 billion in cash by mid-summer.
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For additional information, please contact Daryl Zakov.
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| Dingell Bill Reintroduced to Change FCC Forbearance Process |
Congressman John D. Dingell (D-MI) has reintroduced legislation to address what
he deemed a “significant procedural problem” in the forbearance process at the
FCC. Currently, the Communications Act of 1934, as amended (Act), provides for
the automatic grant of a telecommunications carrier’s petition for forbearance
(i.e., to forbear from applying certain statutory or regulatory requirements to
it) if the petition remains pending at the Commission beyond the statutory deadline
(generally one year, unless extended by the FCC). The proposed bill, known as
the “Protecting Consumers through Proper Forbearance Procedures Act,” would modify
the Act by eliminating the automatic grant provision. The bill was originally
introduced in October 2007 in response to a 2006 controversy surrounding a Verizon
petition for forbearance that was granted by statute and later found to be immune
to appellate court review. The 2007 bill, however, was never brought to a vote.
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For additional information, please contact Robert Silverman.
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| Clinton Pushes 2-1-1 Law Before Exit from Senate |
Outgoing Senator Hillary Clinton (D-NY) has introduced legislation into the Senate that would facilitate nationwide availability
of 2-1-1 telephone services. The “Calling For 2-1-1 Act of 2009,” which is not
so ironically designated S.211, has been referred to the Senate Committee on Health,
Education, Labor and Pensions for further deliberation. The purpose of 2-1-1
is to connect citizens with private community service organizations, such as the
United Way,
in a time of need. Currently, only 69 percent of Americans have access to community
assistance organizations through 2-1-1 call centers. If enacted, the law would
empower the Secretary of Health and Human Services, who is likely to be former
Senator Tom Daschle, to grant funds to qualifying states in order to develop capable
2-1-1 systems. Under the legislation, guaranteed funding over a five-year period
would total $6 million.
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For additional information, please contact Daryl Zakov.
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| Republicans Announce Telco Subcommittee Members |
Representative Joe Barton (TX), senior G.O.P. member of the House Energy and
Commerce Committee, has announced the list of those Republicans serving on the
House Subcommitee on Communications, Technology and the Internet. In descending
order of seniority, the Republican members include Representative Cliff Stearns
(FL) who will act as minority leader, Representatives Fred Upton (MI), Nathan
Deal (GA), John Shimkus (IL), John Shadegg (AZ), Roy Blunt (MO), Steve Buyer (IN),
George Radanovich (CA), Mary Bono Mack (CA), Greg Walden (OR), Lee Terry (NE),
Mike Rogers (MI) and Marsha Blackburn (TX). The Ranking Republican on the Commerce,
Trade and Consumer Protection subcommittee is Representative Radanovich. The
G.O.P. lead on the House Oversight and Investigations subcommittee will be Representative
Walden.
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For additional information, please contact Daryl Zakov.
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| Bennet & Bennet Holiday Closings |
In observation of Martin Luther King, Jr. Day and Inauguration Day, Bennet &
Bennet will be closed January 19-20, 2009. Bennet & Bennet will resume regular
operating hours on Wednesday, January 21, 2009.
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For additional information, please contact Traci Quan.
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| Upcoming Meetings |
The Bennet & Bennet attorneys noted below will be presenting at or attending
the following industry meetings. For more information about a particular meeting,
please visit http://www.bennetlaw.com/events.php.
- OPASTCO 46th Annual Winter Convention (January 17-21, 2009): Carri Bennet and
Michael Bennet
- NTCA 2009 Annual Meeting & Expo (February 8-11, 2009): Andy Brown and Dee
Herman
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For additional information, please contact Traci Quan.
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If you have come across the Rural Spectrum Scanner on-line and do not already receive our free weekly e-mailed version, simply e-mail the Editor, Jason Bernstein , by clicking here. Thank you for your interest.
Questions??? Call Rural Spectrum Scanner's Editor Michael Bennet [(202) 371-1500], and refer to Vol. 15, No. 3.
Rural Spectrum Scanner is a weekly digest of regulatory and legislative news affecting rural and independent telecommunications providers. RSS is delivered by e-mail in time for your Monday morning download. For subscription information or to report a lead on regulatory or legislative news that affects rural America, please call/fax/e-mail RSS Editor Michael Bennet at 202-371-1500 or 202-371-1558 (fax).
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