1. TechComm Industry Update
PATTON BOGGS LLP
Patton Boggs TechComm Industry Update
September 27, 2012
FCC to Seek Comment on Three NPRMs at September 28th Meeting
The FCC plans to issue the following Notices of Proposed Rulemaking (NPRM) at its Friday, September 28th
meeting:
• Voluntary Incentive Auctions. An NPRM regarding implementation of a voluntary incentive auction of
broadcast spectrum. According to reports, the NPRM will propose to conduct the “reverse” and
“forward” auctions concurrently. The NPRM reportedly will seek comment on how to design a band
plan for the spectrum, how to conduct the transition during which remaining broadcast operations will
be repacked, and the eligibility requirements for auction participants. The target date for the auctions
is 2014.
• Mobile Spectrum Holdings. An NPRM initiating a review of the agency’s policies governing mobile
spectrum holdings and how much spectrum each wireless company can hold in a market. The NPRM
is expected to ask whether the FCC should continue to apply its “spectrum screen” analysis on a
case-by-case basis when evaluating companies’ spectrum transactions or adopt a more standardized
framework. Because this rulemaking could affect which wireless companies participate in the
upcoming spectrum incentive auctions, reports indicate that the FCC may act on the mobile spectrum
holdings NPRM before finalizing its incentive auction rules.
• Satellite and Earth Station Rules. An NPRM to “update, streamline, or eliminate earth and space station
licensing requirements, reducing regulatory burdens on licensees and accelerating delivery of new
satellite services to consumers.” According to trade press, the NPRM will consider updating certain
technical definitions, easing administrative burdens, reinforcing an emergency reporting contact
requirement, providing greater flexibility to earth station applicants, and codifying the practice of
granting a single earth station authorization to cover multiple antennas located in close proximity.
FTC Business Guide for Mobile Application Developers
The Federal Trade Commission (FTC) released a new Business Guide for mobile application developers,
“Marketing Your Mobile App: Get It Right from the Start.” While the stated intention is to help mobile app
developers observe truth-in-advertising and basic privacy principles, this guide is a helpful primer of
fundamental advertising, marketing and privacy principles applicable to all formats and media. The new FTC
Business Guide also reflects the FTC’s continuing focus on privacy protections in online and mobile
environments. For our Client Alert about the new FTC guide, click here.
This information is not intended to constitute, and is not a substitute for, legal or other advice. You should consult appropriate counsel or other
advisers, taking into account your relevant circumstances and issues. While not intended, this Update may in part be construed as an
advertisement under developing laws and rules.
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FCC Adopts Forbearance Approach for Certain Foreign Ownership of Common Carrier Licenses
The FCC will forbear from applying Section 310(b)(3) of the Communications Act to a certain class of
common carrier licenses. The forbearance will apply to licensees in which foreign governments, individuals,
and/or entities would hold more than 20 percent ownership through intervening U.S. organized entities that do
not control the licensee. The FCC will forbear so long as it determines that such foreign ownership is
consistent with the public interest under the policies and procedures used for assessing foreign ownership
under Section 310(b)(4). An eligible licensee will seek such determination by filing a request with the FCC
before the foreign ownership exceeds the 20-percent threshold. The FCC’s decision will permit all “indirect”
foreign ownership of common carrier licenses to be treated under the same FCC policies and procedures and
be subject to the FCC’s public interest review.
Appeals Court Upholds Injunction Against ivi
The U.S. Court of Appeals for the Second Circuit upheld an injunction issued by the district court against ivi,
Inc. – a company that streams television programming over the Internet without a broadcaster’s consent. The
court concluded that Congress did not intend for the compulsory copyright license statute to apply to the
retransmission of television signals over the Internet and gave deference to similar conclusions made by the
U.S. Copyright Office that Internet transmission services are not cable systems.
NAB Granted Delay in Appeal of Political File Ruless
The U.S. Court of Appeals for the D.C. Circuit granted a request by the National Association of Broadcasters
(NAB) to delay its appeal of the FCC’s new online political file rules until after the elections. The association
left open the possibility of eventually asking the court to dismiss the appeal. The FCC did not oppose NAB’s
motion, in which the association argued that: “Deferring the briefing schedule in this case will allow NAB to
gain experience with the new regulatory requirements at issue and explore possible alternative means of
resolving the issues.”
Court Stays Tennis Channel Decision
The U.S. Court of Appeals for the D.C. Circuit stayed the FCC’s decision regarding the Tennis Channel. The
FCC had upheld an FCC ALJ decision finding that Comcast had discriminated against Tennis Channel, with
respect to terms and conditions of carriage, by placing Tennis Channel in a more expensive viewing tier than
Comcast’s wholly owned sports networks. The FCC ruling favoring Tennis Channel was the first time that the
FCC had ruled in favor of any independent cable network under the Commission’s program carriage rules. As
a result of the stay, during the pendency of the appeal, Comcast will not be required to move Tennis Channel
onto more widely distributed tiers.
FCC Releases Broadband Progress Report and Notice of Inquiry
According to the FCC’s recently released Eighth Broadband Progress Report (Report), 19 million Americans,
most of whom live in rural areas, do not have access to high-speed Internet. In areas where access is
available, only 40 percent of Americans actually subscribe to high-speed fixed broadband service either due
to cost, education or perception issues. As a result, for the third consecutive year, the FCC has “concluded
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3. Patton Boggs LLP TechComm Industry Update
that broadband is not yet being deployed ‘to all Americans’ in a reasonable and timely fashion.” Still, the
Report demonstrates steady progress from last year both in reducing the number of Americans lacking high-
speed access by 7 million and in increasing the deployment of high-speed 4G cellular networks.
Along with the Report, the FCC adopted a Notice of Inquiry (NOI) initiating the assessment for the next
annual broadband report and seeking comment on how to best measure future progress in meeting
broadband goals. Among other things, the NOI asks how “advanced telecommunications capability” should
be defined, whether separate benchmarks for fixed and mobile services should be established, and how to
evaluate mobile broadband availability. Reply comments are due by October 22, 2012.
52 Bidders Qualified to Participate in Mobility Fund Phase I Auction
Fifty-two applicants have qualified to bid in the Mobility Fund Phase I Auction (Auction 901). The auction is
scheduled for Thursday, September 27. The auction will be used to award up to $300 million in one-time
support for the provision of mobile services.
The FCC also announced the availability of updated census blocks eligible for Mobility Fund Phase I support.
The revisions do not change the set of eligible census blocks or biddable items, rather they change the road
miles listed for certain eligible census blocks and their associated biddable items. The changes are designed
to correct eligible road miles that the FCC has found in some instances to be overstated under its initial
calculations. In addition, in an effort to increase data consistency, the FCC has decided to round all road mile
numbers to hundredths of miles (two decimal places). More than 80 percent of the biddable items have either
no change in road miles or a change of less than one mile.
Federal Reserve Banks Release Report on Regulation of Mobile Payments
The Federal Reserve Banks of Atlanta and Boston have released a joint report on the “U.S. Regulatory
Landscape for Mobile Payments.” The report, an outgrowth of discussions of the Mobile Payments Industry
Workgroup (MPIWG) and Federal and State regulators, notes that the use of a mobile phone for payments is
an “emerging channel” and that “currently no one law or government authority oversees mobile payments.”
Regulators have “an interest in ensuring safety and soundness and consumer protection” in this emerging
environment. However, neither the “regulatory agencies nor industry stakeholders see any immediate need
for additional regulations.” The MPIWG plans to develop tools to educate regulators on areas where they
should focus their efforts to ensure that any new guidelines or regulations reflect the multiple modes and
methods of mobile payments.
Enforcement Bureau Issues Advisory on Autodialed and Prerecorded Political Calls
The FCC’s Enforcement Bureau (Bureau) issued an advisory to ensure that political campaigns and
promoters understand the restrictions imposed by the Telephone Consumer Protection Act and associated
FCC rules. As the Bureau explained, prerecorded voice messages and autodialed political calls to cell phones
(including certain text messages) are prohibited except when the calls are made for emergency purposes or
the called party provides prior express consent. The caller has the burden of proving that it has received
consent. Conversely, most prerecorded or autodialed political calls are permitted, subject to certain general
disclosure and technical requirements. Entities that violate these rules may be subject to enforcement action,
including monetary forfeitures.
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4. Patton Boggs LLP TechComm Industry Update
New Trade Associations to Play Active Role in 113th Congress
In the past few weeks, three new trade associations have formally been announced to weigh in on key issues
in the 113th Congress:
• The Internet Association (IA) led by a former senior staffer for Representative Fred Upton, Michael
Becker, will be representing the largest pure-play Internet sites such as Google, Facebook, Expedia,
Yahoo! and many others. The focus of the group will be to educate lawmakers and policymakers
about the importance of the Internet industry to the economy and innovation, and address such
issues as copyright law, tax and Internet architecture issues.
• The i2Coalition was announced shortly after the IA, and its mission will be to represent the backend
Internet architecture and cloud computing companies on issues such as copyright law,
interconnection access and the importance of the Internet to the future growth of the U.S. economy.
The group was formed and will be run initially by the four founding members from the companies:
cPanel, Rackspace, Softlayer and Endurance International Group. The group boasts 42 members
and highlighted its concern with the legislative efforts in the 112th Congress related to the “Stop
Online Piracy Act” and “PROTECT-IP Act.”
• Finally, the Web Enabled Retailers Helping Expand Retail Employment (We R HERE Coalition)was
formed with more than 1,000 small businesses to work against burdensome legislation and
regulations that impede the growth of small businesses in the U.S., at a time of critical need for job
creation and market growth. The coalition will be led by executive director Phil Bond, formerly the
Under Secretary for Technology at the Commerce Department and former President of TechAmerica.
While the group will highlight the importance of small business to the U.S. economy, its primary focus
will be on state sales tax and the streamline sales tax project (SSTP), and legislation currently
pending before Congress.
Congress Introduces Legislation to Increase Green Cards for Highly Skilled Workers
Senator Chuck Schumer (D-NY) and Congressman Lamar Smith (R-TX) introduced legislation to issue more
green cards to graduates of U.S. universities with Science, Technology, Engineering and Mathematics
(STEM) degrees in order to keep these skilled workers in the country. Though the bills differ, they would
create two-year pilot programs to increase the number of available green cards issued. Senator Schumer’s
bill, the “BRAINS ACT,” contains other immigration provisions. Representative Smith’s legislation failed to
pass the House last week due to opposition to its reallocation of visas from the diversity lottery program. Both
bills are unlikely to receive additional consideration in the 112th Congress, however, the bipartisan
commitment to expanding green cards by 55,000 a year for STEM graduates was lauded by the technology
industry, and similar legislation will likely be introduced in the 113th Congress.
FTC Praises New “Do Not Track” Browsers Settings for Consumers
FTC Chairman Jon Leibowitz praised Google and Mozilla for adding “Do Not Track” settings to their Chrome
and Firefox browsers following Microsoft’s lead earlier this summer. The Digital Advertising Alliance (DAA),
the self-regulatory body comprised of a number of leading technology companies, voiced concern about the
precedent this sets in an ad-supported Internet economy. The FTC is working with industry to develop an
Internet privacy program following its report in March. Congress introduced a number of bills in the 112th
Congress to address Internet privacy and consumer tracking online specifically, but there has been no
significant movement on those initiatives. The World Wide Web Consortium (W3C) met in Seattle this
summer to discuss how a “Do Not Track” program could be defined and administered, and the group plans to
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5. Patton Boggs LLP TechComm Industry Update
meet again next month in Amsterdam to continue those discussions. The FTC has been participating in the
discussions despite criticism from some lawmakers about its role in discussions of the W3C.
FCC Takes Steps to Implement the Public Safety Spectrum Act
The FCC has implemented several changes impacting the existing public safety broadband spectrum. The
FCC reallocated the D Block for public safety services, as well as eliminated all of the rules that are
inconsistent with the spectrum use and allocation mandated by the Public Safety Spectrum Act. In their place,
the FCC adopted rules to license both the D Block and existing public safety broadband spectrum to the First
Responder Network Authority (FirstNet), the single public safety wireless network licensee established by the
statute. The FCC is ready to grant a new license to FirstNet under a new call sign as soon as possible after
FirstNet submits its request.
House Energy and Commerce Holds a Hearing on Spectrum Efficiency
The House Energy and Commerce Subcommittee on Communications and Technology held a hearing on the
role the government should play in providing wireless broadband spectrum for the private sector and,
specifically, the tension between sharing spectrum and clearing it. Committee Chairman Greg Walden (R-OR)
and his fellow Republicans agreed with witnesses from T-Mobile and Ericsson that the government should
focus its efforts on clearing spectrum instead of sharing spectrum with private entities. Likewise, the witness
from the Government Accountability Office (GAO) said that spectrum sharing was an unworkable business
model “because of the uncertainty involved.” Conversely, Democratic congresspersons in the hearing were
more inclined to support a sharing approach. Representative Henry Waxman (D-CA) asserted that, because
of the impending spectrum crunch, the government “cannot afford to take any options off the table.”
Mobile Device Tracking Bill Introduced - H.R. 6377
Representative Ed Markey (D-MA) introduced the Mobile Device Privacy Act (H.R. 6377) that would require
mobile device sellers, manufacturers, service providers and app providers to disclose that the device uses or
has monitoring software. Covered entities would be required to disclose the kind of information that is
monitored, who would collect or transmit that information, and how the information would be used. In addition,
under the bill, express consumer consent would need to be obtained before any information may be collected
by the monitoring software. Entities collecting such information would be required to develop information
security policies to protect the security of the information.
Public Interest Groups to File Net Neutrality Complaint Against AT&T
Public interest groups Free Press, Public Knowledge and the New American Foundation’s Open Technology
Institute notified AT&T of their intent to file a net neutrality complaint against the carrier if it does not change
its policy. The public interest groups allege that AT&T plans to block certain users from accessing Apple’s
FaceTime application over the AT&T network, and that such a decision violates the FCC’s Net Neutrality
Rules. AT&T denies that its plans violate either the transparency or blocking restrictions found in the Net
Neutrality Rules. FCC rules require the public interest groups to provide AT&T with 10 days notice before
filing a complaint.
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6. Patton Boggs LLP TechComm Industry Update
FCC Announces Comment Dates for TIA Petition
The FCC requests comments on a Petition for Rulemaking filed by the Telecommunications Industry
Association (TIA). The Petition urges the FCC to give manufacturers the option of electronically labeling
wireless devices rather than physically placing labels on the outside of each device. TIA claims that such
rules would ease technical and logistical burdens on manufacturers while increasing end user access to
useful information. Comments supporting or opposing the Petition are due by October 5, 2012.
FCC Issues New Rules Regarding Medical Devices
The FCC issued final rules to permit development of new Medical Body Area Network (MBAN) devices in the
2360-2400 MHz frequency band. The final rules expand the FCC’s Medical Device Radiocommunication
Service rules and aim to provide a flexible platform for wireless networking of multiple body transmitters used
in the measurement and recordation of patient information that is critical for diagnostic and therapeutic
purposes in a hospital environment. The final rules adopt, in part, recommendations from a joint proposal
submitted by representatives of Aeronautical Mobile Telemetry (AMT) licensees. The AMT licensees
previously expressed doubts that AMT and MBAN operations could successfully coexist in the same
frequency band. The FCC ultimately concluded that the two technologies could coexist without significant
interference issues and found that expansion of MBAN technology is in the public interest.
FAA Proceeding on Passenger Use of Portable Electronic Devices
The Federal Aviation Administration (FAA) seeks comments on current policy, guidance and procedures that
aircraft operators use when determining if passenger use of portable electronic devices may be allowed
during any phase of flight on their aircraft. With the growth of smart phones and other personal electronic
devices, the FAA recognizes that passengers may wish to use their devices during critical phases of flight
(e.g., takeoff and landing), which is currently largely proscribed. The FAA intends to establish an Aviation
Rulemaking Committee to review the comments and make recommendations. The FCC will be a key partner
in this activity working collaboratively with the FAA, airlines and the manufacturers to explore broader use of
personal electronic devices in flight. Comments are due by October 30, 2012.
Markey Circulates Draft Wireless Surveillance Legislation
Congressman Ed Markey (D-MA) has circulated draft legislation that would call on courts and law
enforcement to report on wireless surveillance practices that so far have gone unreported. Representative
Markey released the discussion draft as part of his ongoing investigation that indicated that more than 1.3
million requests were made last year by law enforcement for consumer mobile phone information. In July,
Representative Markey released responses from nine wireless carriers to his inquires about requests made
by law enforcement for consumers’ mobile phone data, including text messages, call records, geolocation and
cell phone tower “dumps.” Representative Markey also sent the Department of Justice a letter asking the
agency about its current mobile phone surveillance activities. Among other issues, Representative Markey’s
discussion draft of The Wireless Surveillance Act of 2012 would require regular disclosures from law
enforcement on the nature and volume of requests they make; discourage information requests such as cell
tower “dumps”; and direct the FCC to limit how long carriers can keep consumers’ personal information.
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7. Patton Boggs LLP TechComm Industry Update
FCC Relaxes Restrictions to Allow Cable Operators to Buy CLECs
The FCC unanimously approved an Order allowing cable operators to buy competitive local exchange
carriers (CLECs). Under Section 652(b) of the Telecommunications Act, a cable operator is precluded from
acquiring more than a 10 percent interest in any local exchange carrier that provides service within its
franchised area unless the FCC grants a waiver or an exception is met. However, the FCC decided to forbear
from applying this statute to acquisitions of CLECs by cable operators because relaxing the requirement will
increase competition. The Order states that forbearance of Section 652(b) “will likely speed the entry of cable
operators into the market for telecommunications services provided to business customers and will foster
increased facilities-based competition for these services.” The FCC also noted that application of the rule to
CLECs is unnecessary to protect consumers, particularly because a transaction would still be subject to a
public interest determination under Section 214, which would allow the local franchising authorities to
comment on the potential impact of the acquisition on consumers.
FCC Issues Third Report on International Broadband Comparisons
The FCC’s International Bureau released its third annual International Broadband Data Report (Report) that
compares rates of broadband adoption, speeds and prices in the United States to those in the international
community. The agency believes that this international data “can serve as useful benchmarks for progress in
fixed and mobile broadband accessibility.” For example, the Report calls the U.S. the “global test bed for
wireless technology and services,” and cites data that lists the U.S. seventh in the world for mobile broadband
penetration on a per capital basis and fifteenth for wired broadband penetration on a per capita basis.
FCC Suspends Special Access Rules on an Interim Basis
The FCC suspended rules regarding pricing flexibility for special access services on an interim basis while the
FCC considers a new approach. The FCC plans to release a comprehensive data collection order soon that
will guide its efforts to promulgate permanent rules. In the meantime, entities may seek interim relief through
the agency’s forbearance process. According to the Report and Order, the change was made “in light of
significant evidence that these rules, adopted in 1999, are not working as predicted, and widespread
agreement across industry sectors that these rules fail to accurately reflect competition in today’s special
access markets.”
Comments Sought on 800 MHz Reconfiguration Plan Along U.S.- Mexico Border
The FCC’s Public Safety and Homeland Security Bureau (Bureau) seeks comment on a reconfigured 800
MHz channel plan along the U.S.-Mexico border (Southern California, NPSPAC Region 5; Arizona, NPSPAC
Region 3; New Mexico, NPSPAC Region 29; Texas – El Paso, NPSPAC Region 50; and Texas – San
Antonio, NPSPAC Region 53). In the plan, for example, the Bureau proposes to “eliminate channel center
offsets in the Sharing Zone and use standard channel centers for all post-band reconfiguration channel
assignments in the Sharing Zone.” The Bureau further proposes a 30-month transition period for the
rebanding process in the broader region. Comments are due by October 1, and reply comments are due by
October 15.
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8. Patton Boggs LLP TechComm Industry Update
Enforcement Bureau Issues Reminder of January 1, 2013 Deadline for Transitioning to Narrowband
Technology
The FCC’s Enforcement Bureau issued an advisory reminding private land mobile radio (PLMR) licensees
operating in the 150-174 MHz and 421-470 MHz frequency bands that they must migrate to narrowband
technology by January 1, 2013. Subject to exceptions, equipment manufacturers must stop manufacturing
and importing equipment that is “capable of operating with only one voice path per 25 MHz of spectrum in the
150-174 MHz and 421-470 MHz bands.” Parties unable to meet the deadline may file for a waiver, but the
Bureau has stated that any waiver request will be held to “high level of scrutiny” and that penalties for non-
compliance with the narrowbanding rules can result in “license revocation, and/or monetary forfeitures of up
to $16,000 for each such violation or each day of a continuing violation, and up to $112,500 for any single act
or failure to act.”
Fifth Circuit Rules “Legal” Challenges to FCC Forfeiture Orders Must be Brought in Federal Appellate
Courts
The U.S. Court of Appeals for the Fifth Circuit held that a legal challenge to an FCC forfeiture order (e.g.,
FCC had no legal jurisdiction over an allegedly illegal “intrastate” radio station) must be brought under Section
402(a) of the Communications Act in the federal appellate courts. The court ruled that Section 504(a) of the
Communications Act, which specifically deals with enforcement of forfeitures by the government through the
federal district courts, only permits defending parties to challenge the forfeiture in those courts based on
factual arguments (e.g., the factual basis for imposition of the forfeiture is not correct). This ruling is contrary
to a 2003 decision by the D.C. Circuit which ruled that the party subject to the forfeiture has a choice to pay
the fine and bring a challenge in the appellate courts under Section 402(a), or wait to be sued for recovery of
the forfeiture amount under Section 504(a) and raise any and all defenses in that forum.
FTC Updates Telemarketer Fees for Access to the Do-Not-Call Registry
The FTC has announced that beginning on October 1, 2012, access fees for the National Do-Not-Call
Registry will be increased. This means that from October 1 to September 30, 2013, telemarketers will pay $58
(an increase of $2) for access to Registry phone numbers in a single area code, up to a maximum charge of
$15,962 for all area codes nationwide (an increase from the $15,503 maximum charge). In addition,
telemarketers will pay $1 more per area code for numbers they subscribe to receive during the second half of
the 12-month subscription period, for a total of $29 per area code. The first five area codes will remain free,
and organizations that are exempt from the Do-Not-Call rules may still obtain the entire list for free.
****
If you have questions regarding any of the items discussed above, or if you are interested in filing comments
or receiving copies of filed comments in any of the FCC proceedings mentioned, please contact the Patton
Boggs TechComm practice group. More information about our team can be found
at www.pattonboggstechcomm.com.
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9. Patton Boggs LLP TechComm Industry Update
If you have any questions about the foregoing or if you require additional information, please contact:
PATTON BOGGS TECHCOMM PROFESSIONALS - http://www.pattonboggstechcomm.com/professional/
Jennifer L. Richter Carly T. Didden
202-457-5666 202-457-6323
jrichter@pattonboggs.com cdidden@pattonboggs.com
Paul C. Besozzi Jennifer A. Cetta
202-457-5292 202-457-6546
pbesozzi@pattonboggs.com jcetta@pattonboggs.com
Deborah M. Lodge Benjamin Bartlett
202-457-6030 202-457-7631
dlodge@pattonboggs.com bbartlett@pattonboggs.com
Michael E. Drobac Gregory M. Louer
202-457-7557 202-457-6418
mdrobac@pattonboggs.com glouer@pattonboggs.com
Mark C. Ellison Maria C. Wolvin
202-457-7661 202-457-6568
mellison@pattonboggs.com mwolvin@pattonboggs.com
Monica S. Desai
202-457-7535
mdesai@pattonboggs.com
Ryan W. King
202-457-5312
rking@pattonboggs.com
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