Miller

1
2005 Regulatory Outlook Municipalities and the
FCC

• Presentation to
• APPA Seminar
• on
• Advanced Communications Services
• Nicholas P. Miller
• February 8, 2005
• Washington, D.C.

2
Overview

• Interests of Local Governments
• The Threat Defined
• Federal Broadband Framework Understanding the
  Domino Effect
• Legislation
• Courts
• Regulation

3
5 Primary Interests of Local Governments

• Promote Economic Development Consumer
  Protection --
• Competition-- yes
• Advanced services-- yes
• Universal Service -- yes
• Unregulated monopoliesno
• Landlord--
• Public trustee of most valuable public asset
• Public infrastructure
• Fair share of tax burden

4
5 Primary Interests of Local Governments

• Largest User of Telco/Cable/Wireless Services
• Public Safety Issues
• User
• Facilitator
• Intelligent Transportation Systems
• Potential Provider of Advanced Services

5
Industrys Primary Interests

• The Industry seeks to maintain its privileges but
  shed its obligations
• 1. Free and unfettered use of public resources
• Escape service (and tax) obligations to all
  segments of community
• Avoid Competition/Yardstick comparison to public
  enterprises

6
Threat

• Using both domino and frontal assaults, the
  industry seeks to
• Renege on its social contract regarding
• Universal Service
• Fair prices
• Non-discrimination
• Escape its obligation to pay fair share of
• Rent for publics assets
• Taxes
• Prohibit Public Provisioning of Advanced Networks
  and Services

7
TRACK THE THREAT

• TAX AND FEE FREEDOM
• Cable modem
• Brand X
• S. 150

• Characterization of advanced services.
• CABLE MODEM
• Broadband over Wireline
• Vonage
• IP Enabled Services Docket
• BellSouth Petition

Advanced Services No Social Contract No Public
Enterprise
Spectrum Refusal to acknowledge superior claims
of public safety
8
The Domino Effect

• Cable Modem
• Wireline Broadband
• VoIP/IP and
• Internet Tax Freedom

9
IDENTIFYING THE DOMINOS

• Here we go again, with bugles blaring, we
  pronounce the classification of a service, but
  leave the hard part, understanding the
  consequences for another day.
• Commissioner Copps
• February 12, 2004

10
Classification of Services
Title 2
Title 6
Title 1
Telecomm
Cable
Information Services
Cable Modem Wireline Broadband VoIP/IP
11
Local Government Wants Consequences of
classification understood (Dominos)

• State and local
• Taxation
• Consumer protection
• Access to services
• Compensation for rights of way
• Non-discrimination
• Public Enterprises

• CALEA
• Universal service
• Back-up power and network redundancy
• E-911 and
• ADA

12
Federal Statutory Framework for Broadband

• Title I--Federal, State, Local Jurisdiction over
  communications
• Title II--Common Carrier Rules for
  Telecommunications Services
• Title II--253(d)--No FCC jurisdiction over ROW
• Title III--FCC Spectrum License Policy
• Title VIFederal/Local Rules for Cable Services
• Including PEG/Institutional Networks

13
Traditional Common Carrier Regulation

• Telecommunications Services
• Non-Discrimination
• Interconnection
• State Regulation of intrastate service
• Federal forbearance
• Universal Service
• Computer II
• Transport regulated
• Content not regulated
• Non-discrimination among content providers

14
Traditional Cable Service Regulation

• Local programmers have right to free carriage
• Must-carry
• PEG channels
• Cable operator selects other content providers
• Rate regulation if no effective competition
• Cable operator may offer telecommunications
  services under Title II rules

15
Fallen Dominoes

• FCC Information service exception to Title
  II/VI rules
• Cable modem
• Pulver/Vonage VoIP
• FCC RBOC fiber not subject to Title II/Computer
  II
• States PROW franchising/Public Ownership weakened
• Florida
• Colorado
• Michigan
• Pennsylvania

16
Dominoes About to Fall

• FCC IPes are information services
• No Universal Service
• No Consumer Protection
• CALEA applies
• FCC BellSouth/Qwest Petitions for Forebearance
• Title II not applicable to IP services/facilities

17
Dominoes About to Fall (contd)

• S.Ct Brand X Cable modem service not subject
  to Title VI or II
• Congress
• CALEA
• Spectrum reallocation
• Universal Service concerns
• Revisit 96 Telecom Act regarding dereg RBOCs?
• 253 Amended re Public Enterprises

18
IN THE COURTS

• Missouri League
• Supreme Court determined local government is not
  a protected entity under 47 U.S.C. Sec. 253(a).
• Brand X
• Question for Supreme Court Is the FCCs finding
  that cable modem is an information service is
  entitled to Chevron deference.
• Santa Cruz
• Supreme Court let stand legislative deference
  afforded franchising authority.

19
2004-5 REGULATORY AGENDA

• VoIP/IP
• CALEA et. Al
• BellSouth/Qwest
• Wireline Broadband
• Cable Rate Regulation
• Wireless demands for access to PROW and to
  residential areas.

20
Local Governments Can Prevail

• Industry Anticipates Local Governments As
  No-Shows.
• Real issues, real impacts, real changes to your
  community.
• S. 150 and the treatment of the Sununu bill
  proves the possible on Capitol Hill.
• 253 PROW compensation proves the possible at the
  FCC.

21
CONCLUSION

• Municipal Interests In Communications Policy Are
  Unchanged BUT NOT Unchallenged.
• We can win, but we will need to work together.
  APPA has to join with the other local government
  associations.
• We will need resources
• Time
• Financial
• Leadership

22
Miller Van Eaton We Assist Local Governments
In AchievingThe Full Benefits Of The
Communications Age For Their Communities
Nicholas P. Miller nmiller_at_millervaneaton.com Mill
er Van Eaton, P.L.L.C. 1155 Connecticut Avenue,
N.W. Suite 1000 Washington, D.C.
20036-4301 phone [phone] fax [phone]