May 2010
Cable and Telecommunications Law and Policy Newsletter
In This Issue
FCC CHAIR BROADBAND REGULATION PROPOSAL
MINNESOTA TELECOM LEGISLATION UPDATE
2010 REGIONAL COMMUNICATIONS LAW FORUM!
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FCC CHAIR GENACHOWSKI PROPOSES "MIDDLE GROUND" APPROACH TO BROADBAND REGULATION
 
Responding to the D.C. Circuit Court of Appeals decision in Comcast v. FCC, yesterday FCC Chairman Julius Genachowski issued a proposal for how the FCC should proceed with respect to broadband regulation.  He called for a rulemaking proceeding through which rules would be adopted to implement his proposal.  Genachowski says he seeks to restore the regulatory environment to that which existed "prior to the court decision on the FCC's role with respect to broadband internet services." Genachowski acknowledges the Comcast decision "casts serious doubt" on the legal theory of jurisdiction the FCC asserted in its Comcast-Bit Torrent, or so-called "net neutrality" order.  This theory held the FCC had authority to regulate Comcast's broadband network management practices under its "ancillary authority" to regulate "telecommunications services" as a common carrier service under Title II of the federal Communications Act.  Genachowski worries the Comcast decision creates a serious problem that could stand in the way of implementing many of the FCC's goals in its National Broadband Plan released in March.  Specifically, Genachowski believes the Comcast order clouds the FCC's legal authority to: (a) reform the federal Universal Service Fund to fund broadband deployment; (b) implement customer service and consumer protection regulations related to broadband services; (c) implement regulations to protect broadband subscriber privacy; (d) facilitate access to broadband services by persons with disabilities; (e) implement regulations pertaining to cyber-security; and (f) implement regulations regarding "next generation" 911 services.
 
Genachowski's statement lays out three options for moving forward.  First, Genachowski says the FCC could rely again on its "ancillary jurisdiction" as the basis for moving forward on its national broadband plan agenda. Genachowski summarily rejects this option mainly in light of the Comcast decision. Another option would be for the FCC to reclassify broadband services as Title II "telecommunications services." Genachowski also rejects this option because he believes it would subject broadband to too many onerous Title II broadband regulations such as interconnection and unbundling requirements that were imposed on ILECs under the Telecommunications Act of 1996. Instead of these paths, Genachowski proposes a "middle ground" approach.  Under this approach, the FCC would classify the "telecommunications component" of broadband as a Title II "telecommunications service." 
 
This isolation of the "telecommunications component" of broadband service for the purposes of determining its regulatory classification would depart from FCC precedent going back to the FCC's 1980 Computer II order distinguishing "basic" telecommunications services, which the FCC held should be regulated under Title II common carrier regulation, from "enhanced" services, which the FCC ruled should be an unregulated Title I service.  This parlance evolved into a distinction between "telecommunications services" and "information services" in more recent FCC orders pertaining to the classification of broadband services.  In Nat'l Cable & Telecom. Ass'n v. Brand X, the U.S. Supreme Court upheld an FCC order finding that cable modem service is an "information service" because it integrates a telecommunications component with data processing or the manipulation of the form or content of the message delivered.  As an information service, the FCC (and U.S. Supreme Court) distinguished cable modem service from a "telecommunications service," which the FCC defined as transmission capacity for the movement of information without net change in form or content.
 
Genachowski's proposal would specifically limit the application of Title II to only certain sections - Sections 201 (providing jurisdiction over common carrier rates and service), 202 (non-discriminatory common carrier rates and service), 208 (authorizing complaints against common carriers), 222 (protecting common carrier customer proprietary network information or "CPNI"), 254 (universal service), and 255 (access to services by persons with disabilities). 
MINNESOTA TELECOM LEGISLATIVE UPDATE
 
Activity related to cable and telecommunications at the Minnesota Legislature is winding down for the 2009-2010 session.  Below is an update on the status of telecommunications-related bills considered by the Legislature this session:
 
Senate File 2532/House File 2629 (Municipal ownership of phone systems)

 Chief Authors:
Senate:  Tom Bakk (DFL District 6)
House:  David Dill (DFL District 6A)
Status:  Did not pass.
 
The Senate version of the bill would have lowered the threshold that must be achieved in referenda in which municipalities seek to offer telephone services.  Current law requires a 65% supermajority in a municipal referendum to authorize a municipality to own and operate a telephone exchange.  The Senate bill would have lowered this threshold to require only a majority of those voting in the election to approve.  After passage by the Energy, Utilities, Technology and Communications Committee on February 18, 2010, the bill was substantially amended in the Senate State and Local Government Operations Oversight Committee to include provisions that (a) prohibit municipalities from cross-subsidizing municipal phone systems with general operating funds; (b) require municipalities to conduct a feasibility analysis prior to holding a referendum; (c) prohibit municipalities from discriminating in favor of their own systems with respect to issues such as right-of-way use; and (d) require municipalities to use competitive bidding in developing feasibility studies, and the construction or acquisition of a phone system.  The House version of this bill would only lower the referendum percentage required for passage for Cook County, Minnesota.
 
 
Senate File 2254/House File 2907 (Broadband Advisory Group)
 
Chief Authors:
Senate:  Yvonne Prettner-Solon (DFL District 7)
House:  Sheldon Johnson (DFL District 67B)
Status:  Enacted into law April 26, 2010.
 
This law codifies goals for broadband deployment and access established by the Minnesota Broadband Task Force in its October 30, 2009 report.  The statute establishes a state goal that by 2015 all residents and businesses in the state have access to broadband service at speeds of 10 to 20 Mbps downstream and 5 to 10 Mbps upstream.  The statute also establishes "benchmark" goals for the state that by 2015 Minnesota will be in the: (a) top 5 states in the U.S. with respect to broadband speeds universally available to residential and business customers in Minnesota; (b) top 5 states for broadband access; and (c) top 15 when compared to other countries for broadband penetration.  The law also requires the Commissioner of Commerce to report on progress toward these goals by February 15 each year through 2015.
 
 
Senate File 2535/House File 2852 (Telephone company video franchise service area)
 
Chief authors:
Senate:  Scott Dibble (DFL District 60)
House:  Sheldon Johnson (DFL District 67B)
Status:  Enacted into law April 15, 2010 (merged with SF 2616 Private Shared Services)
 
The law amends Minnesota Statutes section 238.08, and prohibits local cable franchising authorities from requiring a telephone company to build out plant beyond its MPUC certificated service area where the municipal boundaries and telephone exchange boundaries are incongruous.  The law does not become effective until August 1, 2010.  The law also does not impact pending litigation.  Thus, the law specifically will not impact the pending appeal of the City of Prior Lake's decision to grant Integra Telecom a franchise limited to Integra's MPUC certificated telephone service area.
 
 
Senate File 2616/House File 3097 (Private Shared Services)
Chief authors:
Senate:  Kathy Sheran (DFL District 23)
House:  Al Juhnke (DFL District 13B)
Status: Enacted into law April 15, 2010
 
This law require landlords and other owners of multiple tenant buildings to allow competitive providers of private shared phone, video, or broadband services to access tenants within such buildings.  The bill also requires property owners to facilitate such access within their buildings.
 
 
Senate File 2470/House File 2639 (requiring wireless carriers to provide call location information to authorities in emergency situations)
Status:  Conference committee report issued May 6, 2010.
 
MSBA COMMUNICATIONS LAW FORUM JUNE 9, 2010!
 
The Minnesota State Bar Association Communications Law section has put its best Communications Law Forum ever together this year.  The all-day conference will be held June 9, 2010.  The conference is delighted to welcome Adam Scott, a Member of the United Kingdom's Competition Appeal Tribunal, and a 20-year veteran of the European telecommunications industry.  Adam will provide an overview of the EU's telecommunications regulatory structure, and discuss how the EU is handling issues pertaining to broadband deployment and regulation of IP-enabled services.  The Forum will also feature an expert panel regarding policy and legal implications of on-line distribution of video programming.  We'll hear about the legal and policy implications of Google Voice.  An expert panel will also review the contents of the FCC's "National Broadband Plan" released in March 2010.  Finally, you can receive a 1.0 ethics credit for attending the panel discussion on multi-jurisdictional practice.  6.25 CLE credits (including the 1 hour of ethics credit) have been applied for.  Don't miss this amazing opportunity to get updated on the hottest topics in communications law!  You can register for the conference by clicking on the following link: 2010 Minnesota Communications Law Forum.