Facebook App Offers Free Phone Calls Over Wi-Fi

By J. Bradford Currier and Marc Martin

In a move likely to further disrupt the voice services market, Facebook recently announced that it will offer free calls via Wi-Fi for users of its Messenger app on Apple devices in the United States. The Messenger calling feature, tested in Canadian markets earlier this month, allows users to “call” their Facebook friends who have installed the Messenger app and linked their mobile number with Facebook by clicking their contact information. While data charges will still apply for Messenger calls made over a wireless carrier’s 4G or 3G network, there will be no separate charge for calls made over a device connected to the Internet via a Wi-Fi connection. Facebook’s announcement marks another example of the growing trend of using mobile apps to end-run traditional public switched telephone network (“PSTN”)-based voice services.

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FCC Eases Licensing for Broadband Access on Planes

By J. Bradford Currier and Marty Stern

Internet access on commercial and private aircraft will likely become more widespread under a recent Order and Notice of Proposed Rulemaking released by the Federal Communications Commission. The FCC’s action creates new technical and licensing rules for what it terms “Earth Stations Aboard Aircraft” (“ESAA”), small aircraft-mounted antennas that communicate with satellites tied to ground-based Internet access networks allowing for the provision of broadband Internet access on-board aircraft. The new ESAA licensing procedures, which include detailed technical requirements for ESAA systems intended to prevent radio interference among ESAA systems and existing satellite systems, will replace an ad hoc approval process for in-flight satellite-based Internet services in place since 2001. The FCC expects that the new rules will allow it to process ESAA apllications up to 50 percent faster and meet growing consumer demand for Internet access while traveling.

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FCC Proposes Reforms to USF Contribution System

By Marty Stern and J. Bradford Currier

The Federal Communications Commission has proposed to reform the Universal Service Fund contribution system, finding that it is fraught with “uncertainty, inefficiency, and market distortions.” The proposed reforms would affect how provider USF contributions are assessed, collected, and recovered from customers. The Further NPRM follows sweeping reforms to the USF system adopted in 2011 designed to improve broadband investment and deployment in rural, underserved areas. The reforms proposed in the USF Contribution FNPRM would not increase the size of USF, but would instead change the entities that contribute, the services that are covered, and how contributions are assessed. It remains to be seen whether the FNPRM will meet the same level of resistance as the FCC’s most recent USF reforms. 

Comments on the proposed reforms will be due 30 days after the publication of the FNPRM in the Federal Register, with reply comments due 60 days after publication.

Below, we summarize the four key questions on which the FNPRM seeks comment:

(1)        Who Should Contribute to USF?

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FCC Adopts Sweeping USF and ICC Reforms

By Marc Martin and Marty Stern

The Federal Communications Commission adopted what FCC Chairman Julius Genachowski termed a “once in a generation” reform to the Universal Service Fund (“USF”) and Intercarrier Compensation system (“ICC”) at its recent open meeting

The USF is a longstanding system by which fees are collected from traditional landline, mobile wireless and interconnected voice-over-internet-protocol (“VoIP”) providers, among others, (which, in turn, collect USF surcharges from their customers) to subsidize the provision of telecommunications services in high-cost areas, among other purposes, as authorized by statute and the FCC’s rules. The ICC is the system by which carriers compensate each other to originate, terminate or transport telecommunications traffic as it travels from points of origin to termination. Under the new rules, all eligible telecommunications carriers that receive USF funding would be required to offer broadband services to their customers. The proposed reforms are intended to expand broadband coverage to 7 million customers in underserved areas.

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FCC Proposes to Extend Outage Reporting Rules to Internet-based Services [Updated: 6/9/11]

Update [6/9/11]:  The FCC's Notice of Proposed Rulemaking extending outage reporting requirements to interconnected VoIP and broadband-based services was published in today's Federal Register.  Comments are due by AUGUST 8, 2011 and reply comments are due by OCTOBER 7, 2011.  As we previously noted, the proposed rules raise a number of the same jurisdictional issues as the FCC's net neutrality order and other Commission initiatives extending various regulatory requirements to IP-based services, and will likely be hotly contested. 

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The FCC believes Internet-related outages are a growing problem for which providers lack sufficient accountability and consumers lack appropriate notice. To address these issues, yesterday the FCC adopted a Notice of Proposed Rulemaking which would require interconnected VoIP, broadband Internet, and broadband backbone providers to report service outages lasting longer than 30 minutes. The proposal would impose reporting obligations similar to those currently borne by wireline and wireless carriers, cable operators, and certain satellite providers, and represents the latest example of FCC efforts to layer traditional carrier regulations on VoIP and broadband providers. The Commissioners voted 4-0 in favor of the proposed rules (Commissioner Meredith Baker recused herself following her announced upcoming departure from the FCC to join NBC/Universal). Citing the recent natural disasters affecting Japan and the Midwest and Southern states of the United States, Chairman Julius Genachowski stated the reporting obligations would provide the FCC with the data necessary to rapidly respond to emergency situations.

Leading Internet service and VoIP providers immediately criticized the proposed new rules, arguing that regulations designed for traditional circuit switched phone service are ill-suited for Internet-based technologies. By contrast, public service commissions of states like California and New York hailed the proposal as an effective means of improving local emergency communications.

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House Votes to Overturn FCC's Net Neutrality Order

In a setback to one of the FCC’s key policy proposals, the House of Representative today voted in favor of a Resolution of Disapproval under the Congressional Review Act aimed at invalidating the Commission’s Net Neutrality Order adopted late last year. The vote follows months of heated industry and Congressional debate, including sharply partisan debate  about the Resolution’s merits, court challenges brought by wireless carriers, and procedural delays in bringing the Resolution to the House floor. While the Resolution seeks to overturn the FCC’s new anti-blocking, network management transparency, and traffic discrimination rules, it faces an uphill battle to become law. The Resolution would need to get passed by the Democrat-controlled Senate and get signed by the President. The White House recently said it plans to veto any measure overturning the FCC's Net Neutrality Order.

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Court Dismisses Appeal Against FCC's Net Neutrality Rules

Today the FCC prevailed in the continuing skirmish over Net Neutrality in Washington. The U.S. Court of Appeals for the District of Columbia dismissed the lawsuits filed last January by Verizon and Metro PCS seeking to overturn the FCC’s Net Neutrality order adopted in December. The court found that the two wireless carriers filed their challenges too early and should have waited until the Net Neutrality order was published in the Federal Register. Both wireless carriers have indicated they will re-file their appeals.

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The FCC's Net Neutrality Order: Substance and Status for Mobile Wireless Broadband

On December 21, 2010, a divided Federal Communications Commission adopted its long-awaited, but highly controversial, Preserving the Open Internet order (“Order”), which requires broadband service providers to treat all web traffic equally and protect open access to the Internet for web consumers and other stakeholders. While Congressional and industry opposition continues to ferment, a closer look at the Order reveals that mobile wireless broadband providers will retain considerable flexibility in how they manage their networks when compared to their fixed provider counterparts. 

The Order focused on three primary goals underpinning the Commission’s net neutrality policy: 1) transparency 2) no blocking and 3) no unreasonable discrimination. For “transparency,” both fixed and mobile providers must publicly disclose the network management practices, performance, and commercial terms of their broadband services. By contrast, the application of the “no blocking” condition differs depending on the type of provider. Fixed providers are subject to a broad obligation to not block lawful content, applications, services, or non-harmful devices. Mobile wireless providers are subject to a narrower obligation to not block lawful websites and applications that compete with the provider’s voice or video telephony services. Most importantly, the Order’s “no unreasonable discrimination” provision applies solely to fixed providers, leaving mobile operators free to favor or disfavor certain types of network traffic. According to the Commission, these new rules for mobile wireless providers will not harm customers because most consumers have more choices for mobile wireless service than for fixed broadband. The Commission also noted favorably the mobile industry’s recent moves towards openness, including the introduction of open operating systems like Android. As a result, when the rules finally go into effect, mobile wireless broadband providers will be exempt from the obligation to manage network traffic in a nondiscriminatory manner.

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K&L Gates Global Government Solutions Report Includes Articles on Key TMT, Privacy and Patent Developments

K&L Gates recently published its Global Government Solutions 2011 Annual Outlook, which contains articles from around the firm on key governmental developments expected in 2011.

The Annual Outlook includes an article addressing developments affecting the Telecom, Media and Technology sector in 2011 by DC partners Marc Martin and Marty Stern, noting that the TMT sector enters 2011 with significant regulatory uncertainty and the FCC facing an uphill battle on many signature regulatory initiatives.

The article reviews the FCC’s net neutrality order and the challenges it faces in court and on Capitol Hill, discusses the recent FCC and Department of Justice approvals of the Comcast/NBCU transaction, and a number of additional issues getting significant focus in 2011. These include retransmission consent battles between broadcasters and cable/DBS providers and the FCC’s expected rulemaking proceeding on this issue, the Commission’s implementation of new communications accessibility requirements under the new 21st Century Communications and Video Accessibility Act, and continued efforts to reform the Universal Service Fund and make it broadband-centric.

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CALEA II - Bigger and Badder?

Recent leaks to the New York Times, as reported in September and October, indicate that the Obama administration will next year be pushing for sweeping expansions of the Communications Assistance for Law Enforcement Act (CALEA).  CALEA facilitates government surveillance by, among other things, requiring companies subject to the law both to design their systems so that the government can easily plug in and intercept communications in real-time and to provide assistance to the government in these efforts. 

 

A task force comprised of representatives from DOJ, Commerce, the FBI, and other agencies, are discussing amendments to the law.  These changes would greatly expand the reach of CALEA, would significantly increase the costs of non-compliance for covered companies, and would include other requirements which may fundamentally change business models for companies promising encryption and decentralized communication services.    

 

 

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New Disability Access Requirements for Advanced Communications and Video

By Marty Stern (Washington, DC), Carol Lumpkin (Miami) and Stephanie N. Moot (Miami).

The President signed the 21st Century Communications and Video Accessibility Act of 2010 on October 8, 2010 (the “ComVid Accessibility Act” or “Act”). The ComVid Accessibility Act expands various disability access requirements to VoIP phones, browser-enabled smart phones, text messaging, Internet-enabled video devices, on-line video of TV programming, TV navigation devices, and programming guides and menus, among other things. 

Karen Peltz Strauss, who has the lead at the Federal Communications Commission (“FCC” or “Commission”) on implementing the ComVid Accessibility Act, appeared on a recent live program on Internet TV channel Broadband US TV and discussed the FCC's "enormous mandate" to implement the new Act.  Click here for a clip of Ms. Peltz Strauss' comments on the program.  (with permission from TV Worldwide).[1]  According to Ms. Peltz Strauss, “Every segment of the industry that has anything to do with broadband, television, including cable, satellite or broadcast, Internet-based television, as well as . . . Internet-based providers, traditionally regulated [telephone] companies, wireless companies” needs to be paying attention to the new Act.   “Virtually every segment that has anything to do with communications or video programming is covered.” 

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