Pressure is building to renew the moratorium on discriminatory Internet taxation, Sen. Alexander (R-Tenn.) said Mon. Rather than having language inserted in an omnibus bill “in the dead of night,” the Senate should focus on legislation he and Sen. Carper (D-Del.) introduced (S-2084) to extend the moratorium 2 years. Speaking at the National Governors’ Assn. meeting, he and Carper urged all governors to meet with their congressional delegations and discuss what impact a rival bill by Sens. Allen (R-Va.) and Wyden (D- Ore.), S-150, might have on their state tax revenues.
The FCC opened a comment cycle on a request by Nucentrix Spectrum Resources to assign certain licenses to Nextel. Petitions to deny are due March 22, oppositions April 1, and replies April 8. The companies are seeking FCC permission on the reassignment of MMDS, Wireless Communications Service, microwave and Cable TV Relay Service licenses from Nucentrix to Nextel. Nucentrix in Sept. filed for Chapter 11 protection in U.S. Bankruptcy Court, Dallas. In a court- supervised auction, Nextel submitted a winning bid of $51 million for certain Nucentrix assets, including spectrum and tower leases. “The applicants assert that grant of the instant applications would serve the public interest by allowing Nextel to increase its spectrum capacity and offer new digital wireless services to customers, including those customers in rural areas,” the FCC public notice said. The companies also argued the deal wouldn’t have an adverse effect on competition because Nucentrix and Nextel compete in different product markets. Nucentrix has told the FCC it plans to end its broadband data service in the 2nd quarter, providing customers with at least 90 days’ notice. Nextel has said that “pending the resolution of the Commission’s MDS and ITFS rulemaking proceeding, it will continue to provide the video programming services currently provided by Nucentrix DIP [Debtor in Possession] and by those ITFS licensees that rely on common links,” the notice said.
Public Knowledge (PK) and Consumers Union (CU) warned the FCC to keep broadcast flag rules as narrow as possible. Comments were due Fri. in the broadcast flag and plug-&-play orders. PK and CU said FCC should restrain itself in extending the flag’s copy protection regime to new technologies, such as software-defined radio. “Because the software and hardware components of software-defined radio are inexpensive, modifiable, widely duplicable and universally available, applying the broadcast flag scheme to software defined radio would leave the Commission in a position of regulating every programmer, personal computer, and antenna because the combination of these elements might result in a non-compliant device,” the groups said. The groups said the FCC should drop the “personal digital network environment” concept, because they questioned how that environment would be defined in light of handheld digital video devices that could work such places as the office or on an airplane. On plug-&-play, PK said the FCC should make certain its rules governing devices that will plug directly into digital TV sets don’t harm consumers by reducing TV picture quality. PK said “downrezzing,” or reducing picture resolution, “is simply part of content companies’ ‘wish list’ to transform the consumer electronics marketplace into something they believe is more controllable.” PK Pres. Gigi Sohn warned of the “real possibility that consumers could be worse off” after this Commission rulemaking. “The FCC has to make certain that even as it tries to advance technology that it doesn’t require the industry to produce inferior products to satisfy content providers,” Sohn said. The NCTA, in plug- &-play comments, said it’s important for the FCC to allow downrezzing of non-broadcast programming such as cable sent over non-protected outputs. Studios, NCTA said, have told cable operators they won’t supply content without that kind of protection. NCTA also supports CableLabs’ role in approving products that meet certain standards. NCTA said the technologies and review used to secure plug-&-play should be more rigorous than those for the flag because broadcast content was free over the air. The CEA urged the Commission to rule on the issue of down-resolution with the early DTV adopter in mind. CEA said the MPAA intended to drive consumer purchases toward secure digital interfaces, “only then to seek selectable-output-control (SOC) authority upon their whim.” CEA said down-resolution wasn’t a viable copy protection scheme or a restriction to Internet redistribution. MPAA didn’t return a call for comment. “Down-resolution’s primary effect will be to punish consumers for making an early investment in HDTV displays when only the ‘wrong’ interface was available,” CEA wrote: “To the extent ‘down-resolution’ is justified as punishment for the sins of the manufacturers who sold them these products misses the mark.” CEA said that by allowing HDTV down-resolution, it wouldn’t be disappointing or conferring a disadvantage on all consumers equally -- “only on those who first responded to the Congress’s and the Commission’s promotion of DTV and HDTV.” CEA also cautioned the FCC on unilateral device revocation rules and encouraged a device-specific certification revocation process rather than model line revocation, which could disenfranchise consumers. Rejecting encryption of the digital basic service tier, CEA argued, would simply allow cable multiple system owners to extend their unique and conditional access systems into a home networking backbone system from which all other technologies were excluded.
The debate over the Internet tax moratorium has morphed into a larger discussion of VoIP’s impact on state and local revenue and whether the technology should be taxed. As expected, Sens. Alexander (R-Tenn.) and Carper (D-Del.) introduced a bill Wed. (CD Feb 11 p2), that would revive the expired moratorium 2 years but wouldn’t block as many taxes as another bill, S-150 by Sens. Allen (R-Va.) and Wyden (D- Ore.). At a news conference announcing the bill, Alexander and Carper made clear their intent to prevent tax jurisdictions from losing revenue as voice calls migrate to Internet transmission, because VoIP could be taxed under their bill.
Cable and telecom executives said VoIP had the potential to displace the Public Switched Telephone Network (PSTN) as it operated today. Speaking at a Precursor Group investors conference Tues., Vonage CFO John Rego said he believed VoIP would completely replace PSTN within 20 years. No one on the panel disagreed with his assessment. Verizon Pres.-Network Services Paul Lacouture said he believed traditional circuit switches would be traded out and replaced over the next 2 decades. Consumers already are beginning to make their phone calls over VoIP, but they “just don’t know it” because the technology is invisible to them, he said.
The FCC late Thurs. announced its VoIP proceeding would be on the agenda for its Feb. 12 open meeting, along with a petition by Pulver.com for a ruling that its VoIP offering wasn’t a telecom service. The Pulver item was surprising because the FBI had expressed concern about the FCC’s acting on VoIP classification issues before handling a related CALEA issue (CD Feb 5 p4). The more general VoIP notice of proposed rulemaking is expected to ask for comment on several questions about how VoIP should be treated, but probably won’t make any conclusions.
With the FCC preparing to conduct a comprehensive study of how the federal govt. should regulate VoIP, NCTA for the first time laid out what the cable industry saw as the regulatory regime it would like. In a white paper sent to FCC commissioners and Capitol Hill Mon., NCTA said federal and state policy-makers should be careful not to overregulate this new technology and service and, in fact, should impose minimal regulation. Such an approach to VoIP could have potential implications for the Universal Service Fund (USF) and the Communications Assistance for Law Enforcement Act (CALEA) which are funded under traditional common carrier regulations.
SAN JOSE -- Most state regulators have backed off making VoIP policies pending FCC action, but if they see the forthcoming Notice of Proposed Rulemaking (NPRM) as hostile they could rev back up, Wireless Communications Assn. counsel Paul Sinderbrand said Fri. The issue is the hottest in telecom policy, he told the group’s annual technical symposium here, but answers are few. With the NPRM’s issuance, “we're going to know a lot more real soon,” he said.
The FCC is nearing release of a rulemaking to examine network outage reporting requirements across the board for wireline, wireless and cable providers, sources said. Now only wireline providers face mandatory reporting. Industry observers said they were watching closely how the proposal would address issues such as measuring outages across different kinds of networks. On developing metrics for different services, an industry source said: “It’s going to be very complicated.”
LAS VEGAS -- Satellite operators will press for revisions in the Satellite Home Viewer Improvement Act (SHVIA) that would allow them to provide DTV signals where none were available from local stations, despite the Grade B contour, DBS executives said at the CES here late last week. The Grade B contour for analog signals often doesn’t indicate where DTV is available, DirecTV Chmn. Eddy Hartenstein said, but DBS can’t provide DTV inside the contour even if DTV signals aren’t available.