TELECOM ISSUES OF INTEREST TO CITIES

1. 1333 New Hampshire Avenue, NWWashington, DC 20036 202.879.4022tim.lay@spiegelmcd.com www.spiegelmcd.com TELECOM ISSUES OF INTEREST TO CITIES 2011 National League of Cities Congressional City Conference ITC Steering Committee Meeting March 13, 2011 by Tillman L. Lay

2. RIGHT-OF-WAY ISSUES • RIGHT-OF-WAY ISSUES. • FCC Level 3 proceeding. • Forthcoming FCC NOI on ROW Issues – likely adopted at April 7 meeting. • Likely to be very unfavorable to local governments. • FCC’s proposed “ROW Task Force” in NBP has been supplanted by industry-dominated Technical Advisory Committee.

3. TELECOM TAX-RELATED ISSUES • TELECOM TAX-RELATED ISSUES. • More GOP-dominated Congress increases the risk of enactment of federal legislation preempting state and local telecom tax authority. • Possible legislation - • Making ITFA permanent. • Cell tax moratorium legislation. • Digital goods and services tax “fairness” legislation. • More general telecom tax “reform” legislation. • SSTP legislation. • DBS tax preemption legislation. • BAT legislation.

4. FCC CELL TOWER “SHOT CLOCK” RULING • WIRELESS SITING • Appeal of FCC “Shot Clock” Ruling pending in 5th Circuit. • Argument likely in Spring 2011. • Decision by year-end. • Outcome is important not only for local zoning authority, but also for §253 ROW authority. If FCC’s cell tower “shot clock” ruling is allowed to stand, that opens the door wider for adverse ruling in Level 3 proceeding and forthcoming FCC ROW NOI proceeding. • Forthcoming Hutchison wireless legislation may couple D Block reallocation to public safety (good) with further preemption of local cell siting authority (bad).

5. D-BLOCK • 700 MHz PUBLIC SAFETY BROADBAND. • THE FCC. • Current law provides for D-block re-auction, but FCC will wait for Congress. • Pending FCC rulemaking on 700 MHz Interoperability and Technical Requirements. • THE HILL. • Possible reallocation of D-block to public safety … or not. • Funding remains a question mark.

6. PEG ISSUES • PEG ISSUES. • The FCC. • ACM Petition (DN 09-13) • Comcast – NBCU merger conditions (see above).

7. PEG ISSUES (cont’d) • The Hill. • CAP Act redux – bill would: • Allow PEG fees to be used for any PEG-related purposes without being offset against the 5% franchise fee. • Require PEG channels to be carried in the same manner, functionality, accessibility and quality as local broadcast channels. • Require the FCC to study the effect that new state video franchise laws have had on PEG channels, and require operators to provide the greater of (i) the support required under those new state laws, or (ii) the support historically provided to PEG under local franchising. • Make cable television-related laws and regulations applicable to all landline video service providers.

8. Net Neutrality/Open Internet • NET NEUTRALITY/OPEN INTERNET. • FCC Rulemaking (DN 09-191). • Order adopted at 12/21/10 FCC open meeting. • Requirements: • For Landline - • Transparency. • No blocking of lawful content and connection of non-harmful devices.

9. Net Neutrality/Open Internet (cont’d) • No unreasonable discrimination (much is buried in “unreasonable”). • Allow reasonable network management (case-by-case), including usage-based pricing. • For Wireless - • Transparency. • No blocking. • FCC relied on Title I (ancillary) authority rather than reclassification under Title II (a shift from the FCC’s initial “3rd Way’’ proposal). • Two GOP Commissioners dissented.

10. Net Neutrality/Open Internet (cont’d) • Court Appeal. • Certain. • The Hill. • Oversight hearings. • Resolution overturning ruling has been introduced; passage possible, but veto almost certain. • House-passed Continuing Resolution would de-fund FCC efforts to enforce or implement the Ruling; what Senate will do is unclear. • Legislation overturning FCC decision and amending Act has been introduced; enactment prospects less clear.

11. COMCAST – NBCU MERGER • COMCAST – NBCU MERGER (DN 10-56). • FCC Approved with Conditions on 1/20/11. • PEG conditions – less than what PEG interests sought, but more than what Comcast offered. • Absent a locality’s consent, Comcast won’t migrate PEG to digital until system goes all digital. • If moved to digital, PEG must be carried on a tier that reaches 85% of subscribers.

12. COMCAST – NBCU MERGER (cont’d) • Comcast cannot implement a change in PEG that results in material degradation of signal quality or viewer reception of PEG vis-à-vis broadcast channels. • Comcast will conduct PEG VOD/Online trials in 5 markets (Fresno, CA; Hialeah, FL; Peterborough, NH; Philadelphia, PA; and Houston, TX). • Other conditions. • Competing MVPD and ISP access to Comcast/NBCU programming. • Online video. • Unaffiliated programmer access to Comcast platforms.

13. FCC POLE ATTACHMENT PROCEEDING • FCC POLE ATTACHMENT PROCEEDING (DNs 07-245 & 09-51). • FCC’s proposed rules largely pro-attacher, anti-pole owner. • Risk of adverse spillover effect on muni utilities. • Muni broadband attachment concerns. • FCC will adopt order at April 7 meeting. • Possible legislation (federal and state).

14. Questions? Tillman L. Lay Spiegel & McDiarmid LLP 1333 New Hampshire Avenue, NW Washington, DC 20036 202.879.4022 tim.lay@spiegelmcd.com www.spiegelmcd.com