Thursday, August 4, 2005

FCC Eliminates Mandated Line Sharing for DSL

The FCC voted 4-to-0 to eliminated the line sharing requirements on facilities-based wireline broadband Internet access service providers. The decision puts DSL operators on regulatory par with cable operators, who are not required to share their cable modem facilities with independent ISPs following the recent Supreme Court ruling in the Brand X case.

Specifically, the FCC determined that wireline broadband Internet access services are defined as information services functionally integrated with a telecommunications component. In the past, the FCC required facilities-based providers to offer that wireline broadband transmission component separately from their Internet service as a stand-alone service on a common-carrier basis, and thus classified that component as a telecommunications service. With the new ruling, the FCC has eliminated this transmission component sharing requirement, finding it caused vendors to delay development and deployment of broadband services to consumers. To ensure a smooth transition, the Order requires that facilities-based wireline broadband Internet access service providers continue to provide existing wireline broadband Internet access transmission offerings, on a grandfathered basis, to unaffiliated ISPs for one year.

The Order also requires facilities-based providers to contribute to existing universal service mechanisms based on their current levels of reported revenues for the DSL transmission for a 270-day period after the effective date of the Order or until the Commission adopts new contribution rules, whichever occurs earlier. If the Commission is unable to complete new contribution rules within the 270-day period, the Commission will take whatever action is necessary to preserve existing funding levels, including extending the 270-day period or expanding the contribution base.

The Order also allows wireline providers the flexibility to offer the transmission component of the wireline broadband Internet access service to affiliated or unaffiliated ISPs on a common-carrier basis, a non-common carrier basis, or some combination of both. Some rural incumbent local exchange carriers, or LECs, have indicated their members may choose to offer broadband Internet access transmission on a common carrier basis.

FCC Chairman Kevin Martin said "the Order that we adopt today is a momentous one. It ends the regulatory inequities that currently exist between cable and telephone companies in their provision of broadband Internet services. As I have said on numerous occasions, leveling the playing field between these providers has been one of my highest priorities. With this Order, wireline broadband Internet access providers, like cable modem service providers, will be considered information service providers and will no longer be compelled by regulation to unbundle and separately tariff the underlying transmission component of their Internet access service."

FCC Imposes CALEA on VoIP Providers Offering PSTN Interconnection

Responding to a petition from the Department of Justice, the Federal Bureau of Investigation (FBI) , and the Drug Enforcement Agency (DEA), the FCC ruled that certain types of VoIP services must accommodate law enforcement wiretaps. The action was described as "the first critical step to apply CALEA obligations to new technologies and services that are increasingly used as a substitute for conventional services."

The FCC reasoned that VoIP services which essentially replace conventional telecommunications services are subject to the Communications Assistance for Law Enforcement Act (CALEA), which gives law enforcement agencies the authority to conduct court-ordered wiretaps.

The Order is limited to facilities-based broadband Internet access service providers and VoIP providers that offer services permitting users to receive calls from, and place calls to, the public switched telephone network. These VoIP providers are called interconnected VoIP providers.

The Commission found that the definition of "telecommunications carrier" in CALEA is broader than the definition of that term in the Communications Act and can encompass providers of services that are not classified as telecommunications services under the Communications Act. CALEA contains a provision that authorizes the Commission to deem an entity a telecommunications carrier if the Commission "finds that such service is a replacement for a substantial portion of the local telephone exchange."

Because broadband Internet and interconnected VoIP providers need a reasonable amount of time to come into compliance with all relevant CALEA requirements, the FCC established a deadline of 18 months from the effective date of this Order, by which time newly covered entities and providers of newly covered services must be in full compliance.

The FCC also adopted a Further Notice of Proposed Rulemaking that will seek more information about whether certain classes or categories of facilities-based broadband Internet access providers -- notably small and rural providers and providers of broadband networks for educational and research institutions -- should be exempt from CALEA.

FCC Modifies 90 MHz AWS Spectrum Plan

The FCC modified the band plan, and licensing and service rules -- originally adopted in October 2003 -- for the 90 MHz of Advanced Wireless Service (AWS) spectrum at 1710-1755 MHz and 2110-2155 MHz.

The original band plan for this spectrum adopted by the FCC in October 2003 included a mixture of license sizes and geographic areas in order to accommodate the needs of wireless providers of various sizes serving a range of different geographic areas. Today's Order maintains such a mixture but increases the amount of spectrum licensed on a small geographic area basis (Cellular Market Areas, or CMAs) from 10 MHz to 20 MHz in order to provide greater opportunities for smaller rural or regional providers to obtain access to this spectrum at auction. The Order also provides for an additional 10 MHz of spectrum licensed by Economic Areas (EAs).

FCC Adopts Policy Statement on Broadband Internet Access

The FCC adopted a policy statement that outlines four principles to encourage broadband deployment and preserve and promote the open and interconnected nature of public Internet:

  • (1) consumers are entitled to access the lawful Internet content of their choice

  • (2) consumers are entitled to run applications and services of their choice, subject to the needs of law enforcement;

  • (3) consumers are entitled to connect their choice of legal devices that do not harm the network;

  • (4) consumers are entitled to competition among network providers, application and service providers, and content providers.

The FCC has not adopted formal rules to enforce these principles, but said it would incorporate these principles into its ongoing policymaking activities. The FCC's policy statement also noted that "all of these principles are subject to reasonable network management."

In a separate statement, FCC Chairman Kevin Martin said "Cable and telephone companies have led the way in bringing broadband to millions of Americans. The evidence today is that their internet access consumers have the ability to reach any internet content. Indeed, cable and telephone companies' practices already track well the internet principles we endorse today. I remain confident that the marketplace will continue to ensure that these principles are maintained. I also am confident, therefore, that regulation is not, nor will be, required."http://www.fcc.govIn February 2004, the previous FCC Chairman, Michael K. Powell, issued a challenge to high-speed Internet providers to adopt a set of four voluntary “Net Freedom�? principles:

  • Freedom to Access Content. Consumers should have access to their choice of legal content.

  • Freedom to Use Applications. Consumers should be able to run applications of their choice.

  • Freedom to Attach Personal Devices. Consumers should be permitted to attach any devices they choose to the connection in their homes.

  • Freedom to Obtain Service Plan Information. Consumers should receive meaningful information regarding their service plans.

“I would emphasize that consumers also have a role in this challenge to preserve ‘Net Freedom,'�? said Powell. “I encourage consumers to challenge their broadband providers to live up to these standards and to let the Commission know how the industry is doing.�?

Shaw Signs VOD Deal with Paramount Pictures

Shaw Communications signed a Video On Demand agreement with Paramount Pictures, providing access to the Paramount film library to its customers across western Canada.

BellSouth and CWA Reach Settlement

BellSouth and the Communications Workers of America (CWA) have reached a five-year tentative agreement covering approximately 500 employees of BellSouth Internet Services. The previous contract was set to expire at midnight on Aug. 6, 2005.

"We are pleased that once again the company and CWA have been able to work together successfully to find solutions to the complex issues facing our business," said Dick Sibbernsen, vice president of Human Resources for BellSouth. "This agreement allows BellSouth to effectively compete in the marketplace and continue to provide customers with high-quality products and services."

Industry Reaction to FCC DSL Ruling

Verizon: "This is an important step toward a national broadband policy that allows consumers to enjoy the full benefits of competition. At last, regulations are catching up to where consumers and technology have been for some time. This decision will help accelerate deployment of broadband networks, enabling greater choice and increased access for consumers." Susanne A. Guyer, Verizon senior vice president for federal regulatory affairs

Earthlink: "Today's FCC ruling effectively preserves DSL access for the next year. Beyond that, we are confident that we will extend our existing commercial agreements with the Bells so that we can continue to deliver DSL services. EarthLink will continue to work with our cable partners and explore next generation broadband alternatives to give consumers competitive alternatives for their high-speed Internet service." Dave Baker, vice president, law and public, EarthLink

Covad: "While the full text of today's FCC order is not yet available, based on statements made at the meeting the order does not impact Covad's ability to provide broadband and VoIP services. Covad strongly believes that having open networks promotes broadband growth in the U.S., and that requiring broadband service access for independent ISPs has led to lower prices, more innovation and greater consumer choice. In light of this decision, it is clear that Covad offers the only national alternative broadband network to ISPs and VoIP providers. With the nation's largest DSL footprint, Covad is uniquely positioned to offer the ISPs an alternative for connections to their customers." James A. Kirkland, Covad senior vice president and general counsel.

CEA: "We applaud today's action by the FCC creating regulatory parity among all broadband service providers. More importantly, we commend the Commission's endorsement of principles ensuring that Americans retain their freedom to access content, use applications and connect devices of their choice to high-speed Internet networks. Adherence to these principles is vital to ensure the development of new innovative consumer electronic devices that depend on unrestricted connection to broadband networks. In the coming days, we will examine the policy statement in full to ensure that it includes the necessary provisions and mechanisms that fully preserve these principles." Michael Petricone, Consumer Electronics Association (CEA) Vice President, Technology Policy.

See also