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Global Telecommunications Regulation TCOM 5173

Global Telecommunications Regulation TCOM 5173. The Telecommunications Act of 1996 Outstanding Issues-Role of the States 20 February 2000 (Originally Scheduled for 18 February) Charles G. Gray. FCC Implementing Orders (1). Video programming accessibility Telecommunications Development Fund

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Global Telecommunications Regulation TCOM 5173

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  1. Global Telecommunications RegulationTCOM 5173 The Telecommunications Act of 1996 Outstanding Issues-Role of the States 20 February 2000 (Originally Scheduled for 18 February) Charles G. Gray (c) 2004 Charles G. Gray

  2. FCC Implementing Orders (1) • Video programming accessibility • Telecommunications Development Fund • Eliminate barriers to market entry • Modify regulations on media ownership • Broadcast license renewal procedures • Create Federal-State Joint Board on Universal Service Definition • Rules of open video systems (c) 2004 Charles G. Gray

  3. FCC Implementing Orders (2) • HDTV spectrum licenses • Television violence rating system • CDA declared unconstitutional - FCC avoided several tasks • FCC reforms – eliminate functions and regulations • Radio frequency emission standards • Interconnection regulations (c) 2004 Charles G. Gray

  4. FCC Implementing Orders (3) • Prevention of unfair billing practices. • Regulations for pay phone per-call compensation • Infrastructure sharing rules for ILECs • Collocation • Rules for “exempt telecommunications companies” • Regulations for pole attachments (c) 2004 Charles G. Gray

  5. FCC Implementing Orders (4) • Rules on alarm monitoring services • Rules on numbering administration • Procedures for preempting state’s jurisdiction in dispute settlement • Rules for interconnection coordination • Rules to prohibit “slamming” • Rules for compelling a carrier to provide universal service (c) 2004 Charles G. Gray

  6. FCC Implementing Orders (5) • Procedures for BOC entry into interLATA services • Regulations for BOC manufacturing • Equal access for cell phone subscribers • Establish the Telecommunications Development Fund • Local Competition Order • Line Sharing Order (c) 2004 Charles G. Gray

  7. Court Rulings on FCC Orders • Washington, DC Circuit Court • Eighth Circuit Court – Iowa Utilities Board vs. FCC (1997 and 2000) • US Supreme Court (24 May 2002) • Meaning of “Impairment”, “proprietary”, and “necessary” • National uniform standard too broad • Remanded both the Line Sharing Order and the Local Competition Order to the FCC (c) 2004 Charles G. Gray

  8. Courts Replace the FCC as “de facto” Regulator • Literally hundreds of cases filed in the 8 years since TA 96 • A number of them have gone all the way to the Supreme Court • We will consider only a very few of the issues (c) 2004 Charles G. Gray

  9. (c) 2004 Charles G. Gray

  10. Triennial Review - 2003 • Adopted 20 February 2003 • Released 21 August 2003 • Unusual delay (usually released in three months) • 485 pages, plus another 100 for appendices and dissenting statements from Commissioners • Suits began immediately • US Court of Appeals in Washington, DC • Judges asked “very painful” questions (Feb 04) • Most observers expect remand to the FCC • Ultimate decision by the US Supreme Court (c) 2004 Charles G. Gray

  11. Triennial Review - Unbundling • Mass market loops • Access to copper loops (narrow and broadband) • Not required to unbundle broadband only • If copper replaced by fiber, narrowband only • Enterprise market loops • Not required to unbundle OCn loops • Maximum of 2 loops per carrier per customer location • Must unbundle dark fiber, except where states have found no “impairment” (c) 2004 Charles G. Gray

  12. Unbundling (2) • Subloops for access to multiunit customer premises • Network Interface Devices (NID) • Switching for enterprise market (DS1 and above) • CLECs not “impaired” • States are final arbitrators (c) 2004 Charles G. Gray

  13. Unbundling (3) • Switching for mass market (DS0) • CLECs “impaired” without access to local switching • States must make determination • Packet switching • ILECs not required to unbundle packet switching routers or DSLAMs (c) 2004 Charles G. Gray

  14. Unbundling (4) • Signaling networks • Unbundling only when CLEC is also buying unbundled switching • Includes signaling links and signal transfer points • Call-related databases • Only when CLEC buys ILEC switching • If CLEC provides its own switching, then • No access to LIDB, toll-free calling, LNP, calling name, operator services, directory assistance, or AIN (c) 2004 Charles G. Gray

  15. Service Eligibility • CLEC must be certified by the state to provide local voice service • CLEC must demonstrate that it actually provides a local voice service over every DS1 • Provide 911/E911 capability to each circuit • Certify additional “architectural safeguards” (network related stuff) (c) 2004 Charles G. Gray

  16. Remaining Issues • Clarification of TELRIC rules • FCC will open a separate proceeding • “Fresh Look” • CLECs cannot avoid any contractual liability • Transition period • The FCC will not intervene in pending contract negotiations • Duty to negotiate in good faith • Bring in line with the “Local Competition Order” (c) 2004 Charles G. Gray

  17. TELRIC • Total Element Long-run Incremental Cost • The cost a new company using completely new technology would incur • Bears no relationship to the actual real-world cost of anything • Is it a “taking” under the US Constitution? • Fifth Amendment prohibits taking private property without “just compensation” • US Supreme Court approved May 2002 (c) 2004 Charles G. Gray

  18. FCC Media Ownership Ruling • Allowable TV audience coverage increased from 35% to 45% • CBS and Fox already exceeded limit at 39% • NBC 34% • ABC 24% • No change in radio rules • Clear Channel owns 1,270 stations • Allows cross-ownership between radio, TV and newspapers (c) 2004 Charles G. Gray

  19. The Big Media Players • Murdoch-FoxTV-HarperCollins-Weekly Standard-New York Post-London Times-DirectTV • GE-NBC-Universal-Vivendi • Time-Warner-CNN-AOL • Disney-ABC-ESPN • Comcast (biggest cable company) • NY Times-Boston Globe, 22 newspapers, 8 TV stations, and 3 golf magazines (c) 2004 Charles G. Gray

  20. Public Reaction (Outrage) • Over one million comments to the FCC and Congress (largest response ever on any issue) • Multiple organizations opposed (loudly) • Consumer groups, labor unions, civil rights groups, NRA, Parents TV Council, etc. • Flawed “diversity index” • Multicultural Radio Corp. comes out ahead of the NY Times as a “meaningful source” of news • Ignores audience size • FCC acted with little or no prior public input (c) 2004 Charles G. Gray

  21. The Courts and Politics • Federal Appeals Court in Philadelphia issued a blocking order • Denied the FCC’s request to move to DC Court • US Senate blocked implementation • Final compromise was for 39% maximum TV coverage • “Protected” Fox and CBS current reach (c) 2004 Charles G. Gray

  22. Re-write of TA 96 ? • Start in the House Subcommittee on Telecommunications and the Internet • Met on 4 February 2004 • Expect “many” hearings on policy reform this year • USTA President and other industry leaders testified • Expect results in 2006-2010 timeframe (c) 2004 Charles G. Gray

  23. House Energy and Commerce Committee • Billy Tauzin resigned as chairman • 16 Feb 04 • Entering the “revolving door” at end of term • Replaced by Joe Barton (R. Tex) • Former petroleum engineer • Friendly to Bells, but not passionate (like Tauzin has been) • Thinks UNE-P (unbundled switching) is unfair to ILECs • VoIP is a major issue (c) 2004 Charles G. Gray

  24. States’ Responsibilities • States viewed as more favorable venue for keeping the status quo (per NARUC) • Best chance of keeping unbundled switching • Establish collocation rules and rates • “Impairment” decision left to each state • 51 jurisdictions, 12 Federal Courts • Not “impaired” if 3 CLEC switches or 2 wholesalers are in the market (none at this time) • CLECs “buying” rather than “building” • Moving existing lines from their own switches (c) 2004 Charles G. Gray

  25. “Economic Impairment” • Possible sources of impairment • Purchase and installation cost of a switch • Collocation cost • Operations Support Systems (OSS) • Signaling and other services and equipment • Backhauling traffic • Cost of customer transfer • Etc. etc., etc. (Per Chairman Powell) (c) 2004 Charles G. Gray

  26. Conclusions • It could take 4 years to work through state unbundling and collocation issues • Expect the third (and maybe fourth) remand of the Triennial Review by Circuit courts or the US Supreme Court • VoIP may moot many issues before the FCC can even act (c) 2004 Charles G. Gray

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