FCC Declares Wireless Broadband Is An Information Service

3/23. The Federal Communications Commission (FCC) adopted a Declaratory Ruling (DR) [34 pages in PDF] that declares that wireless broadband internet access service is an information service.

Summary of DR. The FCC adopted this DR at its March 22, 2007, meeting, and released the text on March 23. It states that "we find that wireless broadband Internet access service is an information service under the Communications Act of 1934, as amended (Communications Act or Act)." (Parentheses in original.)

A footnote adds that "We note that this order addresses terrestrial wireless broadband and does not address satellite broadband services."

The DR continues that "We also find that the transmission component of wireless broadband Internet access service is ``telecommunications´´ and that the offering of the telecommunications transmission component as part of a functionally integrated Internet access service offering is not ``telecommunications service´´ under section 3 of the Act."

The DR further states that "we find that neither the Communications Act nor relevant precedent mandates that broadband transmission be a ``telecommunications service´´ when provided to an Internet Service Provider (ISP) as a wholesale input for the ISP's own wireless broadband Internet access service offering, but the provider may choose to offer it as such. Finally, we find that mobile wireless broadband Internet access service is not a ``commercial mobile service´´ under section 332 of the Act." (Footnote omitted.)

The FCC also issued a short release [PDF], and all five Commissioners wrote separate statements.

Prior FCC Classifications. On March 14, 2002, the FCC adopted a Declaratory Ruling and Notice of Proposed Rulemaking [75 pages in PDF] regarding cable modem service. The DR component of this cable item states that "we conclude that cable modem service, as it is currently offered, is properly classified as an interstate information service, not as a cable service, and that there is no separate offering of telecommunications service." On June 27, 2005. The Supreme Court issued its opinion [59 pages in PDF] in NCTA v. Brand X, upholding the FCC's determination that cable broadband internet access service is an information service. See, story titled "Supreme Court Rules in Brand X Case" in TLJ Daily E-Mail Alert No. 1,163, June 28, 2005.

On August 5, 2005, the FCC adopted a Report and Order and Notice of Proposed Rulemaking that classifies wireline broadband internet access services as information services. See, story titled "FCC Classifies DSL as Information Service" in TLJ Daily E-Mail Alert No. 1,190, August 8, 2005. The FCC released this item on September 23, 2005. This wireline item is FCC 05-150 in CC Docket Nos. 02-33, 01-337, 95-20, 98-10, and WC Docket Nos. 04-242 and 05-271.

On November 3, 2006, the FCC adopted a Memorandum Opinion and Order (MOO) that declares that broadband over power line (BPL) enabled internet access service is an information service. See, story titled "FCC Declares that BPL is an Information Service" in TLJ Daily E-Mail Alert No. 1,482, November 3, 2006. This BPL item is FCC 06-165 in WC Docket No. 06-10.

Regulation of Broadband Services. The DR asserts that it provides "regulatory certainty". The FCC's release adds that this "ensures that wireless broadband Internet access services are similarly free from unnecessary regulatory burdens". FCC Chairman Martin wrote in his statement [PDF] that this item "eliminates unnecessary regulatory barriers" and "clarifies any regulatory uncertainty". Commissioner Deborah Tate wrote in her statement [PDF] that "we continue down the path of deregulation".

These statements are perhaps part of what Justice Antonin Scalia referred to in his dissent in NCTA v. Brand X as the FCC's "self-congratulatory paean to its deregulatory largesse".

While the FCC's present DR, like its prior declarations regarding wireline broadband, cable modem, and BPL broadband, relieves the broadband services providers of certain Title II common carrier economic requirements, it maintains other Title II requirements. Moreover, the FCC is proceeding to reapply, on an a la carte basis, some common carrier like regulatory burdens, and certain new burdens not applicable to common carriers, under its assertion of ancillary jurisdiction.

Title II obligations are statutory provisions. Ancillary jurisdiction is merely a concept. There is no enumeration in Title I of the FCC's ancillary powers or service providers' ancillary obligations. The FCC is free to make things up as it goes along.

For example, common carriers have disability access obligations, pursuant to 47 U.S.C. § 255. Under the just adopted DR, wireless broadband internet access service is now classified as an information service, so Section 255 now longer applies. But, the FCC is nevertheless likely to impose disability access requirements on these service providers, pursuant to its assertion of ancillary jurisdiction. However, in reimposing burdens, the FCC will no longer be constrained by the language of Section 255(c).

The FCC hinted in its DR, at ¶ 29, that it "has used its ancillary jurisdiction under Title I to extend accessibility obligations to certain information services in the past, including the wireline broadband Internet access service." It added, "We reiterate our commitment to use our Title I and Title III authority, as necessary, to give full effect to the accessibility policy embodied in section 255."

The DR also provides that certain Title II common carrier statutory provisions still apply in certain situations to providers of a wireless broadband internet access service. These include provisions regarding interconnection requirements, pole attachments, and local zoning authority.

The DR provides, with respect to 47 U.S.C. § 251, that "a carrier providing both CMRS and wireless broadband Internet access service has the same rights and obligations regarding interconnection under section 251 of the Act or section 20.11 of the Commission’s rules that it would have if it were only providing CMRS."

The DR adds that pole attachment requirements of 47 U.S.C. § 224 still apply. The DR states that "where a wireless service provider uses the same pole attachments to provide both telecommunications and wireless broadband Internet access services, section 224 would apply".

The DR also adds that local powers under 47 U.S.C. § 332 still apply. The DR states that "We clarify that section 332(c)(7)(B) would continue to apply to wireless broadband Internet access service that is classified as an ``information service´´ where a wireless service provider uses the same infrastructure to provide its ``personal wireless services´´ and wireless broadband Internet access service."

The FCC may similarly apply to wireless broadband internet access service various common carrier consumer protection provisions. Although, the FCC has not yet done so.

The FCC DR is also silent on the subject of privacy and limiting the dissemination of customer records.

The FCC is relieving broadband service providers of certain common carrier economic regulation. But otherwise, it is constructing, absent statutory guidance, a new regulatory regime for broadband services, that contains some elements of the old common carrier regulatory regime, and some new elements.

The Congress has attempted, but failed, to enact legislation to update the laws affecting new technologies. The FCC is now filling the statutory void by acting in a quasi legislative capacity itself.

FCC Commissioner Michael Copps wrote in his statement [PDF] that "consigning broadband services to an indeterminate Title I regulatory limbo is no substitute for a genuine national broadband strategy. It doesn't give either businesses or consumers the kind of certainty that they are entitled to."

Commissioner Jonathan Adelstein wrote in his statement [PDF] that this DR is based upon "strained legal analysis". He added that "My underlying concern with the reclassification approach has always been that it takes the Commission outside the ambit of those core legal protections and grounding afforded by Congress."

Right to Attach Network Devices. Commissioner Copps also wrote that since wireless broadband internet access service is now an information service, "the right to attach network devices ... now applies to wireless broadband services", pursuant to the FCC's August 2005 Policy Statement [3 pages in PDF].

He added that there is now a "clear and pressing responsibility to open a rulemaking that will clarify how these Title I principles should be applied in the wireless context".

On February 15, 2007, Timothy Wu, a law professor at Columbia University, and leading advocate of network neutrality mandates, wrote a paper titled "Wireless Net Neutrality: Cellular Carterfone and Consumer Choice in Mobile Broadband". See, summary and full text [30 pages in PDF]. See also, story titled "Tim Wu Paper Advocates Network Neutrality Mandates for Wireless Broadband" in TLJ Daily E-Mail Alert No. 1,546, March 5, 2007.

Also, on February 20, 2007, Skype Communications filed a petition [36 pages in PDF] with the FCC requesting that the FCC "declare that wireless carrier services are subject to the Carterfone principle that consumers have the right to attach any non-harmful device of their choosing to the network and that this, by necessity, includes users' rights to run Internet applications of their choosing." See also, story titled "Skype Files Petition Requesting that FCC Declare that Carterfone Principles Apply to Wireless Carriers" in TLJ Daily E-Mail Alert No. 1,546, March 5, 2007.

More Comments. Commissioner Robert McDowell wrote in his statement [PDF] that this DR is timely because of the forthcoming 700 MHz auction and future deployment in the TV white spaces.

Rep. Joe Barton (R-TX) praised this item in a release. He wrote that "Promoting market forces, rather than regulation, is the best catalyst for competition, innovation and investment in the rapidly evolving broadband market."

He continued that "The auction of wireless broadband spectrum resulting from our digital television legislation last Congress will also present a watershed opportunity for wider deployment of next generation Internet services. Some have claimed that there is too little competition between and among cable and wireline broadband services, that penetration is not increasing fast enough, and that wireless and broadband over power line services are not yet advanced or ubiquitous enough to offer a significant alternative. They are underestimating the vibrancy of the market on all fronts. But even if they were right, the worst thing we could do is impose regulatory burdens."

Steve Largent, head of the CTIA, praised the FCC in a release. He stated that "It is critical that the FCC ensure that regulations are technology neutral and this decision is a welcome step in that direction. Today wireless is a legitimate competitor in the broadband marketplace offering capabilities and speeds comparable to cable and DSL service and today’s order recognizes this important fact."

This Declaratory Ruling is FCC 07-30 in WT Docket No. 07-53.

SEC's Cox Discusses XBRL Tagging of Executive Compensation Data

3/23. Securities and Exchange Commission (SEC) Chairman Chris Cox gave a speech at the University of Southern California (USC) in which he discussed various internet related projects at the SEC.

He said that "we're tapping the power of technology to bring higher-quality information to investors more quickly and more easily than ever before. Our new e-proxy rules will soon make it possible for investors to realize the full potential of interactive data. And in a related area, our ongoing conceptual work to update the proxy rules could pave the way for an Electronic Shareholder Forum in which investors could securely and anonymously share information about their company. That cutting-edge thinking is already spurring private firms to invest in creative new ways for shareholders to use the Internet to communicate with one another."

He also discussed the use of XBRL tags to make the data in SEC filings interactive. He said that "right now only a handful of early adopters are reporting their financial information to the SEC using interactive data. We aim to change that very soon. But even before interactive data becomes the norm for all reporting companies, we're going to tag the executive compensation data for you using XBRL. We're going to do this with at least several hundred of the largest public companies in America. And we expect to have it available in June."

He also gave a live computer demonstration of how XBRL and interactive data will enable users to extract, display, and compare executive compensation data from multiple companies' SEC filings.

He then said that "getting investors the information they need, in a form they can use, is the most basic ingredient of insuring good corporate governance".

FCC Adopts NOI Regarding Broadband Market Practices

3/22. The Federal Communications Commission (FCC) adopted, but did not release, a Notice of Inquiry (NOI) regarding broadband market practices. The FCC issued a short release [PDF], and all five Commissioners wrote separate statements.

The FCC release states that the FCC "seeks comment on whether the Policy Statement should incorporate a new principle of nondiscrimination and, if so, how would ``nondiscrimination´´ be defined, and how would such a principle read."

The FCC adopted its policy statement [3 pages in PDF] on August 5, 2005. See, story titled "FCC Adopts a Policy Statement Regarding Network Neutrality" in TLJ Daily E-Mail Alert No. 1,190, August 8, 2005. The FCC released the text of the Policy Statement on September 23, 2005. See, story titled "FCC Releases Policy Statement Regarding Internet Regulation" in TLJ Daily E-Mail Alert No. 1,221, September 26, 2005.

The FCC's release also propounds four questions. First, "How broadband providers are managing Internet traffic on their networks today". Second, "Whether providers charge different prices for different speeds or capacities of service". Third, "Whether our policies should distinguish between content providers that charge end users for access to content and those that do not". Fourth, "How consumers are affected by these practices".

See, full story.

FCC Adopts Report on State of Competition in Communications Satellite Services Industry

3/23. The Federal Communications Commission (FCC) adopted, but did not release, a First Annual Report to Congress on the state of competition in the communications satellite services industry. The FCC issued a short release [PDF] that describes this item, and three Commissioners wrote statements.

The FCC's release states that this report examines "six wholesale and two retail satellite services markets for the period of 2000 through 2006", and that for these markets, the FCC finds "effective competition".

FCC Commissioner Michael Copps wrote in his statement [PDF] that this report "suffers from insufficient data", as well as reliance on other FCC reports, and the work of the Office of the U.S. Trade Representative.

FCC Commissioner Jonathan Adelstein wrote in his statement [PDF], as did Copps, that this report relies on data collected prior to both the Intelsat/Panamsat and SES/New Skies mergers, so that the effect of these mergers will be covered in the FCC's second report.

FCC Commissioner Deborah Tate wrote in her statement [PDF] that "I hope the industry continues to play a role in the deployment of broadband to more consumers". The FCC's Declaratory Ruling (DR) [34 pages in PDF] that wireless broadband internet access service is an information service, also adopted on February 22, 2007, does not address satellite broadband services.

This report is FCC 07-34 in IB Docket No. 06-67.

FCC Adopts MDU Forced Access NPRM

3/22. The Federal Communications Commission (FCC) adopted, but did not release, a Notice of Proposed Rulemaking (NPRM) regarding exclusive contracts for the provision of video services to multiple dwelling units (MDUs) and other real estate developments.

The FCC issued a short release [PDF] describing this NPRM that states that the FCC "tentatively concludes" that it has "authority to regulate exclusive contracts for the provision of video services to MDUs or other real estate developments where it finds that such contracts may impede competition and impair deployment of those services."

The five FCC Commissioners each wrote a statement in support of this item. See, statement [PDF] by Chairman Kevin Martin, statement [PDF] by Commissioner Michael Copps, statement [PDF] by Commissioner Jonathan Adelstein, statement [PDF] by Commissioner Deborah Tate, and statement [PDF] by Commissioner Robert McDowell.

While the FCC's release states that the FCC tentatively concludes that it has authority, the release does not state that the FCC seeks comment on that authority.

The FCC may wish for lower prices for video services in MDUs, and the FCC and video providers may wish to limit the power of owners of MDUs to negotiate contracts regarding, or restrict access to, their property. But, privately owned MDUs are real property. Owners of real property pursue rents. Owners of real property have property rights.

Under the takings clause of the Fifth Amendment, the FCC cannot take private property for public use without just compensation.

The June 30, 1982, opinion of the Supreme Court in Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, for example, may present an obstacle to FCC enforcement of any rules that purport to regulate MDU owners. See also, story titled "House Subcommittee Considers FCC Authority to Take Property", Tech Law Journal, March 22, 2000.

Commissioner McDowell questioned "whether the Commission has the authority to craft such regulations."

USTelecom General Counsel Jonathan Banks stated in a release that "As new providers are striving to bring video choice to consumers across the country, millions of Americans who live in apartments and condominiums are held hostage to these long-term exclusive cable contracts that force them to go with one video provider or none at all. USTelecom and its member companies believe that these types of cable contracts stifle competition and most importantly -- harm consumers. We applaud the Commission for its action today and look forward to working with the FCC to develop a speedy solution that will provide consumers the benefits of a truly competitive market for video programming."

This item is FCC 07-33 in Docket 07-51.

More FCC News

3/22. The Federal Communications Commission (FCC) adopted, but did not release, a Second Report and Order, First Order on Reconsideration, and Second Further Notice of Proposed Rulemaking regarding digital radio services. The FCC issued a short release that describes this item, and all five Commissioners wrote statements. See, statement [PDF] by Chairman Kevin Martin, statement [PDF] by Commissioner Michael Copps, statement [PDF] by Commissioner Jonathan Adelstein, statement [PDF] by Commissioner Deborah Tate, and statement [PDF] by Commissioner Robert McDowell. This item is FCC 07-33 in MM Docket No. 99-325.

3/22. The Federal Communications Commission (FCC) adopted, but did not release, three items that grant requests for review of a total of 182 decisions by the FCC's Universal Service Administrative Company (USAC) that either reduced or denied e-rate subsidies to schools or libraries that failed to comply with the applicable rules of the FCC. The FCC issued a short release [PDF] that states that "rigid adherence to the rules in these cases resulted in outcomes conflicting with the statutory goal mandated by Congress of ensuring that schools and libraries have access to advanced telecommunications services." These items are FCC 07-35, 07-36 and 07-37 in Docket No. 02-06.

3/22. The Federal Communications Commission (FCC) adopted, but did not release, a Notice of Proposed Rulemaking (NPRM) regarding modification of Part 101 of the FCC's rules to permit the installation of smaller antennas by Fixed Service (FS) operators in the 10.7-11.7 GHz band in response to a petition for rulemaking [14 pages in PDF] filed by FiberTower, Inc. (FTI) on May 26, 2004. The FCC issued a short release [PDF] that states that "Although the rules do not mandate a specific antenna size, they do specify certain technical parameters – including maximum beamwidth, minimum antenna gain, and minimum radiation suppression – that, given the current state of technology, limit operators to a minimum antenna size of four feet. FiberTower’s Petition proposes changes to the technical parameters that would permit the use of smaller Fixed Service antennas with reduced mainbeam gain, increased beamwidth, and modified sidelobe suppression in the 11 GHz band. Today's Notice seeks comment on those proposed changes." This NPRM is FCC 07-38 in WT Docket No. 07-51.

8th Circuit Denies Petitions for Review of FCC's Vonage VOIP Order

3/21. The U.S. Court of Appeals (8thCir) issued its opinion [PDF] in MPUC v. FCC, denying several consolidated petitions for review of the Federal Communications Commission's (FCC) November 9, 2004, Memorandum Opinion and Order [41 pages in PDF] (MO&O) that preempted an order of the Minnesota Public Utilities Commission (MPUC) that applied its traditional telephone company regulations to Vonage Holding Corporation's DigitalVoice service, which provides voice over internet protocol (VOIP) service.

However, the Court of Appeals also concluded that the issue raised in the petition filed by the Public Service Commission of the State of New York regarding fixed VOIP service "is not ripe for review".

See, full story.

More News

3/21. The U.S. Court of Appeals (7thCir) issued its opinion in JCW Investments v. Novelty, a copyright case involving dolls. JCW makes a line of dolls, including one that makes rude noises and tells rude jokes. Novelty then imitated some of these dolls. JCW filed a complaint in U.S. District Court (NDIll) against Novelty alleging copyright infringement, trademark infringement, and unfair competition. JCW prevailed on all claims. The District Court awarded $116,000 based on lost profits resulting from the copyright infringement, $125,000 in lost profits attributable to trademark infringement, $50,000 in punitive damages based on state unfair competition law, and $575,099.82 in attorneys' fees. The Court of Appeals affirmed in full. The opinion covers the elements of copyright infringement, copyrightable subject matter, substantial similarity, and ideas versus expressions. The opinion also addresses federal preemption in the context of the Lanham Act. Finally, the opinion addresses attorneys fees. This case is JCW Investments, Inc. v. Novelty, Inc., U.S. Court of Appeals for the 7th Circuit, App. Ct. No. 05-2498, an appeal from the U.S. District Court for the Northern District of Illinois, Eastern Division, D.C. No. 02 C 4950, Judge Robert Gettleman presiding.

3/21. The Progress and Freedom Foundation (PFF) released a paper [33 pages in PDF] titled "Social Networking and Age Verification: Many Hard Questions; No Easy Solutions". The author is the PFF's Adam Thierer. The paper argues that "Proposals to impose age verification mandates on social networking websites raise many sensitive questions with potentially profound implications for individual privacy and online freedom of speech and expression. That's especially the case in light of the definitional ambiguities associated with ``social networking.´´" It adds that "age verification would not necessarily solve the problem it is meant to address. Perfect age verification is likely impossible, and history has shown that no technological control is foolproof. Consequently, there is a very real danger that age verification regulations will create a false sense of security", or create "incentives for children to evade online controls and might even encourage them to seek out offshore sites". The PFF will host a panel discussion titled "Age Verification for Social Networking Sites: Is It Possible? And Desirable?" at 12:00 NOON on Friday, March 23, in Room 2322 of the Rayburn Building on Capitol Hill. The speakers will be Thierer, John Cardillo (Sentinel), Tim Lordan (Internet Education Foundation), and Jeff Schmidt (Authis). See, notice and registration page.

Go to News from March 16-20, 2007.