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[Commentary] The Federal Communications Commission's recent Second Report and Order on data roaming obligations of facilities-based operators offers two fascinating insights, only one of which will receive much attention.
Scholars and practitioners alike will concentrate on the FCC’s use of Title III spectrum management as the basis for mandating data roaming negotiations, backed up by formal complaint resolution. Analysts will marvel at how the Commission has managed to impose an interconnection regime without convincingly addressing how information service providers lawfully bear such duties. Additionally the Commission does not fully explain how the duty to negotiate on commercially reasonable terms and conditions does not constitute common carriage and a “duty to deal.” This document is very, very important, because the FCC clearly identifies instances where the nature and type of wireless competition is inadequate to guarantee data roaming agreements between the major national carriers, such as AT&T and Verizon, and just about any other carrier. Only AT&T and Verizon opposed a data roaming obligation, because, as noted by the Commission, these carriers have refused to deal and market consolidation “has reduced the number of potential roaming partners for some of the smaller, regional and rural providers” while also reducing the need for AT&T and Verizon to secure reciprocal roaming agreements. Such candor coming from an agency that never saw a wireless merger it could not approve and has never disputed industry claims regarding how tirelessly they have to compete.
News Flash! FCC Identifies Market Failures in Wireless Marketplace
More than 3,000 health information technology professionals will graduate this month from 82 community-college programs funded by the Department of Health and Human Services' Office of the National Coordinator for Health Information Technology (ONC). This first wave of graduates, composed mainly of mid-career professionals, will be "equipped to facilitate the implementation of electronic health records, ideally in rural healthcare settings, where implementing EHRs is particularly problematic, largely due to a lack of expertise and a limited pool of HIT trained professionals," according to an ONC announcement. According to the ONC, the Community College Consortia, which is part of its Health IT Workforce Development Program, will help train more than 10,000 new health IT professionals annually by the end of 2012.
HHS community-college program sees first graduating class
The Federal Communications Commission ruled last week supporting AT&T in a case against MagicJack, which sells a $39.95 USB dongle that provides a full year of local and long-distance phone service without any additional charges (You can buy an additional year’s of service for $19.95. You plug a phone into the jack, and calls are carried over your broadband Internet connection. The basic service allows you receive calls at a regular phone number supplied by the company; you can also make unlimited domestic calls to wired and mobile numbers.)
The company, which was acquired last year by the Israeli voice over IP equipment provider Vocaltec, makes at least some of its cash from a related CLEC called YMax. Among other things, YMax generated revenue by collecting call termination fees from other carriers. AT&T asserted in a complaint to the FCC that the company was not entitled to those fees. And the Federal Communications Commission agreed, finding that AT&T did not have to pay YMax termination fees either for calls made by AT&T customers to MagicJack numbers, or for calls made from MagicJack users to toll-free numbers hosted by AT&T. While the ruling applied specifically to AT&T, you would think other carriers would follow the ruling and stop paying those same fees to YMax, which as the FCC ruling notes generates basically all of its traffic from MagicJack users.
FCC Finds MagicJack Can't Collect Access Charges From AT&T
The Vermont Senate has advanced a bill designed to expand broadband Internet and cellular phone service in the state. Senate action came on a voice vote on a bill that would speed permitting for communications facilities in the state. Sen. Vincent Illuzzi, a key sponsor of the bill, says that between federal and state money and private-sector investment, the bill should trigger $400 million in telecommunications investment in the next few years.
Vermont Senate advances bill to ease broadband
Consumers Union sent a letter on to members of Congress warning of the potential impact of AT&T’s proposed acquisition of T-Mobile.
“It is critical to look at the effect this merger would have on consumers’ pocketbooks, choice and service,” said Parul P. Desai, policy counsel for Consumers Union, in a statement about the move. “Ultimately, it does not appear to be in their favor.” The group said its main concern is the pricing differences between AT&T and T-Mobile wireless plans. The group found that T-Mobile plans were more affordable, charging from $15 to $50 less each month than comparable offerings from AT&T. On average, the group found, AT&T charged $200 more per year than T-Mobile for similar plans. “We are concerned that T-Mobile’s departure from the wireless market would eliminate a relatively low-cost carrier as an option that many consumers need access to in order to afford quality wireless service,” Desai said. In addition, on average, people tended to be less satisfied with AT&T’s customer service than T-Mobile’s, the group found.
Consumers Union Warns Congress About AT&T Deal Consumers Union warns Congress about disappearance of low prices in AT&T merger (The Hill) AT&T/ T-Mobile merger means higher prices (press release)
On April 8, AT&T filed its application for an antitrust review of its proposed acquisition of T-Mobile at the Justice Department. The company said it aims for April 21 to file its applications for a public interest regulatory review at the Federal Communications Commission.
Experts say the reviews could take one year to 18 months. The merger appears to be a clear horizontal deal that initially looks hard to pass. Justice has approved Google’s purchase of ITA and Comcast’s joint venture with NBC Universal, but those were so-called vertical mergers without significant overlapping businesses. A source at the FCC said the merger will be an uphill battle for AT&T. But James Cicconi, AT&T’s executive vice president of external affairs, is arguing that the deal will still leave plenty of competition and that a market-by-market analysis performed by Justice will prove it.
AT&T, T-Mobile file merger application
A freelance writer who successfully sued newspapers and magazines for copyright infringement filed a class-action lawsuit against the Huffington Post and AOL on that seeks compensation for hundreds of unpaid contributors to the online publication.
Jonathan Tasini is the lead plaintiff in the suit against the news site, which AOL bought for $315 million in February. His suit, which he filed in a New York court, seeks $105 million in damages in behalf of bloggers and other Huffington Post writers who submitted work for which they weren't paid. Since its founding by liberal activist and author Arianna Huffington in 2005, Huffington Post has grown into one of the most successful and heavily visited news and information sites on the Internet. But its practice of soliciting commentaries and other articles, some from celebrity authors such as Alec Baldwin, without paying for them has irritated some writers. Tasini, in an interview, said HuffPost was engaging in breach of contract with its contributors because of an “implied promise” of compensation. “Some people were given some promises about future payments,” he said, declining to provide specifics.
Freelancer to file class-action suit against HuffPost and AOL over compensation
Federal Communications Commission member Mignon Clyburn told the American Cable Association that she is on the lookout for market failure when it comes to retransmission consent negotiations.
These negotiations set the fees pay-TV providers must pay to broadcasters to play their content. Fee disputes can lead to TV blackouts. Commissioner Clyburn said: "I fully understand the intent of the retrans rules, and that market forces should be allowed to work. But I am on the lookout for the consumers in this country, and if the market isn't working, we need to consider taking appropriate steps. We'll carefully look through the comments and replies that come in as a result of questions we asked last month, and I'll continue to work with your D.C. team on your concerns. While I can't stop all of you all from working with NASA to build a time machine set back to 1992 so you can improve the retrans language before the Cable Act passes, I hope you'll trust me to keep your interests in mind as we move forward."
Commissioner Clyburn on watch for market failure in retransmission negotiations Clyburn: ACA Members Are 'Little Engines That Run Country' (B&C)
Rep Cliff Stearns (R-FL) called for major reforms at the Federal Communications Commission, saying the agency is ruled by "Byzantine regulatory processes" and is in dire need of an overhaul to increase transparency and streamline interactions with industry.
"Secrecy breeds both inefficiency and distrust," he said. "The FCC already has both." Rep Stearns said FCC processes haven't kept pace with technological change and stand to hamper innovation. He said the public comment period on FCC proposals should come after proposals are released so stakeholders can be better informed about what they are commenting on. The FCC’s comment periods now come before proposals are unveiled to the public. He also called on the FCC to address the backlog in licensing requests. The FCC is "widely expected to change its mind between decision and regulation," Rep Stearns said. He endorsed legislation from Communications subcommittee ranking member Anna Eshoo (D-CA) that would allow two commissioners to meet privately, subject to certain disclosure rules. Such meetings are not barred for transparency reasons.
Rep Stearns calls for overhaul of ‘byzantine’ FCC processes
The Federal Communications Commission has approved the sale of two ACME stations in Wisconsin and Ohio to LIN and to an owner whose station is being run by LIN.
The FCC April 8 approved the sale of CW affiliates WCWF(DT) Green Bay-Appleton (WI) and WBDT(DT) Dayton (OH) to LIN. The first to LIN under a failing station waiver -- LIN has already been operating it under a shared services agreement -- and the second to WBDT Television, LLC, which LIN has also been running under a shared services agreement and where LIN already own WDTN. TWC had argued, in part, that the deals should not go through because the resulting duopoly and combination of ownership and management would give LIN too much leverage in retrans agreements, since LIN had signaled it planned to combine retrans negotiations for the paired stations. In addition, WCWF and WBDT had previously been must-carry stations. The FCC concluded that WCWF had met the FCC definition of failing station, and that bargaining collectively for the station's retrans payments did not violate FCC rules. It also concluded that the WBDT sale broke no FCC rules, and that TWC's claims of potential harm from the combined negotiation as speculative. "Despite its claims to the contrary, it is apparent that TWC's real concern is its desire for reformation of the must-carry and retransmission consent process."
FCC Grants Sale of ACME Stations, Denies TWC Petitions