Legislative Report - June 2011
NATOA’s staff, leadership, and P&L Committee have been working hard on many critical projects for our members. Following are reports on Congressional, FCC, and state legislative activities. While the report appears daunting, please skim to your topic of interest for a review of that subject. Feel free to use this report to update your board, council, or commission on the important work that NATOA is doing for its members. I call your special attention to:• CAP Act
• FCC Further Notice on Video Competition
• FCC Notice of Inquiry on Broadband Deployment and Rights of Way Management
• Digital Broadcasting OVS application for 50 largest markets in U.S.
• FCC Definition of Broadband
CONGRESSIONAL UPDATES
CAP Act
At the March 2nd meeting we announced that Rep. Steven LaTourette (R-OH) was going to co-sponsor the bill. We wanted to give the bill authors the privilege of announcing their introduction of the bill themselves. Dan Cano is Rep. LaTourette’s lead staff member and can be contacted for information on the bill. The sponsors were having a co-sponsor drive prior to the bill’s introduction. NATOA, ACM, and ACT members should work hard to reach out to get more co-sponsors, especially Republicans. It was reported that the current draft bill is improved over last year’s version. NATOA members should be pleased with the financing provisions.
At the April 6th meeting we were told that the bi-partisan sponsors of the bill (LaTourette and Rep. Tammy Baldwin (D-WI)) continue to work on text. Between the government shutdown and net neutrality issues, there had been many distractions. Rep. Baldwin is being assisted by staffer Amber Shipley. There had been a lot of lobbying action by industry on the CAP Act. It is believed many of their amendments were dismissed, but there is no final bill yet. ACM, ACT, and NATOA continue to work hard meeting with Democrat and Republican offices.
On the May 4th call we learned that the CAP Act would be introduced very soon, and we received breaking news that its authors would not change its name, even though an unrelated bill had been recently introduced with a very similar nickname. Details of the Hill briefing planned for May 20th were discussed.
A special free webinar was offered May 16th on the CAP Act with the two Congressional staff members Dan Cano and Amber Shipley summarizing the bill and answering questions.
June 1st it was reported that we now have a one page fact sheet and a FAQ sheet on the NATOA web site. Ken Fellman flew in for the May 20th Hill briefing; there was a good turnout; the majority of staffers who came were from R offices. Members should continue to help recruit co-sponsors for the bill.
Passage of the CAP Act is a marathon not a sprint. Ken Fellman encouraged members to have our Republican delegates contact Daniel Cano in LaTourette’s office; they want more Republican cosponsors on the bill.
D-Block/Public Safety Broadband Bills
As of March 2, two major public safety network bills had been introduced: S. 28 by Sen. Rockefeller (D-WV), and HR 607 by Rep. King (R-NY). White House is now in favor of reallocating the D Block to public safety. Big issue is how the network is financed. On Friday March 4, the FCC would hold an all-day forum on public safety communications, which was to be available on the FCC web site.
At the April 6th meeting it was reported that Ray Baum, senior policy adviser to Rep. Walden (R-OR) of Oregon, chair of the House Subcommittee on Communications and Technology, was not sure that the D Block should be allocated to public safety. Rather, the spectrum should be auctioned with the proceeds directed for deficit reduction. Baum indicated the focus of the subcommittee would be spectrum.
A rumored public safety bill sponsored by Sen. Hutchison (R-TX) was not yet introduced as of our March 2nd call. Nicknamed WISE, the Wireless Innovation Spectrum Enhancement Act might have some ROW or compensation problems for local governments. It was reported to be based on S. 1447 (2010 Congress) - the Connect America Act – section 5, dealing with facilities modification and a fast track approval process for collocation applications.
On May 4th both the Rockefeller and the King bills were still at committee levels. Barry Fraser, chair of Public Safety Committee, reported that the bills would be discussed at their May 9th meeting.
On June 1st we learned that Rockefeller’s bill is the only one getting much attention. There is resistance in the House because if the D-Block is sold at auction it could bring in $3 billion that could be used for deficit reduction. Continuing fights over budget and deficit reduction will influence how this bill proceeds.
BTOP/BIP Oversight B ill
HR 1343 was reported at the April 6th meeting as approved by the House Commerce Committee yesterday. NATOA filed a letter supporting the goals of the bill without supporting the bill itself. It is a bill to clarify NTIA and RUS responsibility to return reclaimed stimulus funds to the U.S. Treasury.
NTIA’s Larry Strickling testified at the House hearing that NTIA already follows the procedure required by the bill and is probably unnecessary. The bill is probably going nowhere in the Senate.
SHLB (Schools Hospitals Libraries Broadband) Coalition BTOP Summit – March 28-29th
NATOA is a member of the SHLB Coalition (www.shlbc.org), which advocated for the use of E-rate for community broadband networks. NATOA helped plan a conference session to highlight the benefits of the BTOP and BIP programs and that the money is being well spent. Joanne Hovis would be a moderator for one of the panels. NATOA member Sean McLaughlin has been the liaison to PEG organizations. Members were encouraged to keep NATOA staff updated about progress of projects so we can put them on our website.
At the April 6th meeting a report on the SHLB Coalition Summit was very positive. One panel moderated by Joanne Hovis included a panel of NATOA members, including: Mike Smeltzer, Champaign-Urbana, IL; Lisa Blair, Advisor to two Florida BTOP projects; David Soloos, Clackamas County, Oregon; and Lori Sherwood of OneMaryland. The speakers gave examples of BTOP/BIP projects and represented the importance of these projects to the local communities and anchor institutions. Afterward, NATOA members went to meet with their Congressional representatives, Tom Power at the NTIA, and FCC staffers.
TAX-Related Topics
A House Subcommittee hearing on cell phone tax bill scheduled for March 29th was moved forward to March 15th. It was a bit of a scramble to get witnesses to testify. We are working on the bill as a coalition partner with NACo, NLC, USCM, and GFOA.
At our May 4th meeting it was reported that this bill would likely be marked up by the full House committee sometime this month. That would be the farthest this bill has gone so far. Usually it gets stuck at subcommittee level.
June 1st we heard that the “Wireless Tax Fairness Act” was supposed to be marked up tomorrow by full house energy and commerce committee, but was delayed until the next mark-up session later this month. Latest count is 233 cosponsors. The bill has always had a lot of support but never moved as far as it has this session. A companion bill in the Senate has been introduced Sen. Wyden (D-OR) and has 7 co-sponsors.
Multistate Tax Commission
Model legislation for local administration of locally imposed telecom taxes is being discussed. We had just learned of this on Feb. 28th; there was a conference call March 1st. NATOA staff would get more information. Concept is a centralized collection agency in each state. USCM, NACo and GFOA are the lead organizations following this issue.
Internet Tax Freedom Act
As of March 2nd the Ensign legislation (S. 135), introduced Jan. 25, to make the ITFA permanent had been sent to the Senate Finance Committee. But there is no need for fast action because the current moratorium does not expire until 2014.
Streamline tax bill—“Main Street Fairness Act”
At our April 6th meeting it was reported that many people really want to see this bill pass, which would provide new tax revenues. The bill is designed to create a level taxing field for brick and mortar stores and online retailers. However, telecom tax issues were raised, creating problems for local governments due to centralized collection of the revenues. Bill may have a hard time gaining traction because it is seen as a tax increase or a new tax on the Internet.
The bill was still not introduced as of the May 4th meeting.
FCC UPDATES
Renewed Push for Intergovernmental Agency Committee at FCC
This committee was re-chartered by the FCC in December 2009, but has not been reactivated as of March 2nd. The national organizations are joining efforts and have had meetings with the FCC. FCC Chairman’s staff asked NATOA to work with the other national organizations to present candidates. A conference call was scheduled for March 3rd to discuss names to be submitted, with some possible overlap with the names suggested for the recent Rights-of-Way Task Force. We presented a joint letter to the Chairman asking that these representatives (elected officials) be allowed to bring staff from the national organizations to the meetings.
At the April 6th meeting it was reported that names were submitted by NATOA and other organizations. Public notice was expected that week.
At our May 4th meeting final names would be submitted by organizations in the next few days. IAC provides for city, county, and city/county attorney representatives. Ken Fellman has support as a city attorney representative. Gary Resnick is also being suggested; he was a former member on this Committee. New York City also has an interest to take one of the designated municipal elected officials’ spots, suggesting Mayor Bloomberg.
It was also mentioned that we have a nomination for the FCC Advisory Committee on Diversity, Tony Perez of Seattle, and we nominated Andrew Afflerbach of CTC in Washington, DC, to an FCC Committee on Interoperability. As of April 6th we had not heard anything on the status of these nominations.
June 1st we learned that our IAC nominations were submitted by the May 18th deadline. However, the deadline was extended to June 20th. No reason given for the extension. There are also spots available for tribal and state representatives.
Notice of Inquiry (“NOI”) on Broadband Deployment, Local Rights of Way Management and Tower Siting
NATOA had discussions with FCC staffers regarding the proposed NOI on rights of way management. We feared that this NOI would be a “broad brush” review of rights of way, with the same old cliché about removing obstacles and barriers to entry. We feared vague generalities with no specifics. FCC staffers were not overly receptive to the idea that industry must be specific in their accusations. We asked whether they will be addressing compensation (rates and fees charged for access to the rights of way). There would be a follow up conference call March 3rd with our colleague organizations to plan a letter to urge the Commission not to include these questions in the NOI. Members were warned to prepare for an assault on the fees that municipalities charge for rights of way usage.
We discussed looking at national maps to see if there is a correlation between broadband deployment and taxes and fees. The summer is going to be very busy with ROW issues so get ready. We discussed the national broadband map—do our members think it is accurate? It was agreed there are many problems with the maps.
On our April 6th call it was reported that the FCC NOI on Broadband Deployment (aka local government “barriers & obstacles”) was to be released the next day, April 7th. In the prior week NATOA staff and leadership had met with several FCC staffers, and members from around the country were with them. Sharon Gillett, head of FCC Wireline Competition Bureau, spent a generous amount of time with us. Commissioner Clyburn’s staff requested specifics on citations and polishing the tone. Between NATOA and our colleague national organizations we got a lot of input into the NOI. They probably won’t require the names of cities used in examples be served with a copy of the Comments. We will have to carefully monitor the Comments coming in.
NATOA, NLC, and NACo co-hosted a webinar April 14th to inform our members about the NOI and encouraged cities and counties to respond. Commissioner Clyburn wants to hear from all sizes of jurisdictions, not just the big cities that can afford attorneys. The webinar would handle up to 1,000 participants and was FREE for members.
The national organizations have worked very hard to help craft the tone of the NOI. Local governments must provide the FCC with good data. Coalition organizations will work on template documents and other informational pieces to help people to file Comments. The theme is for local governments to tell our stories.
As of the May 4th meeting the NOI had not yet been published in the Federal Register.
The national organizations (NATOA, NLC, NACo, USCM, IMLA, and GFOA) are communicating and will hold weekly meetings to discuss the progress of the NOI. We have a high degree of interest and motivation on this issue. We need to spend the next couple of weeks engaging local governments in relating stories in what their experiences have been.
IMLA conducted a webinar for their members.
The national organizations sent a letter to the FCC Chair requesting the Commission to refrain from taking any action in this NOI until the NOI proceeding is completed, and until the IAC has been formed. Specifically, the Technical Advisory Council, made up of industry members, has submitted some recommendations. Our letter stems from a footnote in the NOI stating that the FCC may act on TAC recommendations prior to the conclusion of the NOI Docket. NLC, USCM, and NACo are together on the letter.
USCM is putting together a lobbying kit for folks who go to the Hill to address why this isn’t in the FCC’s jurisdiction.
The deadline for Comments is July 18th and Reply Comments is August 30th.
FCC Definition of Broadband
At the June 1st meeting Sherry McCuller presented a summary of the issue:
The FCC wants to release $1 Billion for underserved areas in 2012. If the money goes out, the definition of broadband and how the FCC identifies underserved areas could have a huge impact on rural, urban, or suburbs in qualifying for money.
When asked whether members believe broadband maps are accurate, the general consensus is- NO! The concern is that the FCC is going to use the national broadband maps to identify underserved areas and define broadband at possibly 5 Mbps. Currently tier one is 1.5 Mbps downstream and 768 Kbps upstream—anyone who’s looked at internet TV’s knows this isn’t going to work; 50 Mbps is optimal, 25 Mbps is good. Commissioner Copps agreed the NBP uses 5 Mbps in its definition, but it’s time for that to be reviewed. Allocation of $1 Billion to underserved areas could rely upon this.
This was a key in the NC municipal bill. The industry wanted 768 Kbps downstream and 256 Kbps upstream. We got it increased to 1.5 Mbps down and 768 Kbps up.
If the definitions are not fixed, the dollars will go to AT&T and Verizon for their own infrastructure rather than underserved areas. That is a big concern for underserved areas. The stimulus money is over; this is the next step—hopefully in 2012.
Last year the RUS said that 5 Mbps was the minimum for economic development. Now the TV manufacturers are making equipment that needs 10 Mbps. The devices that are coming into the market are resetting the FCC’s perception of what broadband really is.
It was decided that NATOA’s Broadband Committee would discuss this on June 3rd, and then sent it back to the P&L Committee before any recommendations go to the NATOA Board. Sherry McCuller also has a memo for background and information.
Digital Broadcasting Request for OVS Certification
On June 1st it was reported that this company applied to the FCC for an OVS permit to serve the top 50 markets. However, copies of the application were not served to all affected LFAs; only to the biggest city in each market; for example, New York, Chicago, Minneapolis, etc. One concern raised was mentioned in an interview in Communications Daily with the CEO in which he talked about rolling out in the next 120 days – even though the company has not reached out to local governments or PEG entities. PEG is an obligation of an OVS provider, as is a contract and a fee in lieu of franchise fees.
It is unclear what infrastructure are they using. It is also unclear whether they technically qualify as an OVS provider. It was suggested that NATOA write a letter to the FCC stating our concerns and asking how they are addressing these issues. The five-day period for filing an objection ended yesterday. It didn’t appear in the FCC daily digest until yesterday, with comments due that day.
Members requested a letter from NATOA stating that it represents a significant number of the 50 communities and we have not been served. For those that were served, the service was defective in terms of time and obligation that they be told how to object. Furthermore we have questions about the publicly stated roll out of the service without understanding what federal and local obligations may be in place.
NATOA sent the letter on June 2nd, and on June 3rd the FCC denied the initial OVS application, stating that the substantive issues raised had not been addressed, but the application was denied due to improper service of information to the local governments. It is assumed that the company will reapply and the FCC will accept further Comments on the substance of the application.
Appeal of the “Shot Clock” (Tower Siting) Order
At the April 6th meeting we learned that it is set for argument in New Orleans on June 8th at 9 a.m. central. The City of Arlington, TX, filed the appeal and San Antonio filed a request for reconsideration; both are consolidated in 5th Circuit.
In the interim T-Mobile is in a fight with Fairfax County, VA. Fairfax County won, T-Mobile appealed in the 4th Circuit; the name of the case is T Mobile NE v. Fairfax County Board of Supervisors. Maybe an end run around the 5th Circuit?
At our June 1st meeting it was reported that Joe Van Eaton will be arguing for Arlington and San Antonio. Several NATOA experts have been assisting Joe to prepare for court on June 8th.
Need For Massive Cell Tower Expansion
At the April 6th meeting it was reported that the wireless community commented that one company alone would deploy ¼ million to a million new towers in the next year or two. The primary motivating factor is that there are going to be a whole lot more. There will be an avalanche of new applications. Asking to allow them to modify existing with no shot clock, collocate with no local approval. Preempt any local ordinance that is in a residential district or a historical district, any zoned area. If you go on the FCC web site Technology Advisory Council—referenced by the chair in his Broadband Initiative Report— industry says many negative things about local ROW and local cell tower citing.
PEG Order
At our March 2nd meeting ACM had just issued a press release calling for the FCC to take action. In Macon, GA, Cox was another company taking advantage of this. The Order had been pending 25 months. In 24 months FCC had processed 60 orders for industry asking for relief in 800+ communities. In five months the FCC took a request from Time-Warner all the way from NOI to Order. And yet they will not act on our Petition.
We discussed the unfortunate situation in Macon, GA and how important PEG access was in those communities. There, as in many communities, the industry successfully drove a wedge between municipal interests and PEG. Communities should not have to choose between broadband and PEG. In those Georgia communities PEG funding goes away next year.
On May 4th it was reported that AT&T has a new demo video and met with the FCC Media Bureau. The Chicago Access video would be presented and there would be more ex parte meetings with the Bureau. The Chicago Access video was featured on the NATOA web site.
Further Notice of Inquiry on Assessment of Video Programming Competition
The FCC just put this out with questions on PEG channels. We created a template that would be on our web site later that day. Comments are due June 8th with reply comments due July 8th. Montgomery County has also included price increases and the cost of equipment on similar Comments in the past, to show that competition is not driving down rates. Also complaints that people have with the cable companies, to show that regulation has an appropriate role. Competition doesn’t solve everything. Deregulation has not been good for consumers in the way the promoters had claimed.
Network Neutrality “Open Internet”
At our March 2nd meeting it was reported that the Order itself was released on December 23rd but doesn’t become law until 60 days after publication in the public register. It was still not published as of March 2nd. There were three legislative strategies being pursued to overturn net neutrality, and a possibility of a legal approach, with Verizon potentially filing an appeal. The FCC appeared in no rush to put it in the Federal Register.
Universal Service Fund (“USF”) Reform/Lifeline & Link Up
At our May 4th meeting NATOA staff reported that our position is that USF funds should be used for broadband services. Lifeline and Link Up provide relatively small funding. The programs should be expanded to include bundled services. FCC should proceed with its trial period. We worked with Benton Foundation and New America Foundation on our Comments.
STATE FRANCHISE & BROADBAND LEGISLATION UPDATES
Indiana— as of the March 2nd meeting the Legislature might just shut down early. All bills would be held over to next session. The bill may evolve to a study. There are people in Indiana who can help influence the study.
Washington State— they are doing an interim report to understand if they are headed in the right direction. Students are recommending not going to statewide franchising. They don’t see advantages to the state. Looking at standardized pole attachments based on Seattle’s rate. Telecomm people thought that was too high. Final report still not due until December 2011.
New Jersey— at the March 2nd meeting the bill was in the State Senate; a lot of the negative portions had been fixed; it is not perfect, state municipal league and PEG organizations are working hard to try to get fixes. The bill is far improved. NJ has always had state franchising but the locals got to negotiate and the state affirmed it. A couple of years ago created a state franchise for Verizon. Had a low franchise fee on a limited definition of gross revenues. Of all the states, NJ in changing the law, did in fact improve payment and PEG support somewhat. The original bill would’ve brought SC terms to NJ, so it is much improved.
At the April 6th meeting it was reported to be sort of in limbo- NJ League Mayor Brian Waller had helped slow it down. In NJ issues are different. Recognition of services, in-kind services value- perhaps driven by tight budgets in NJ, I-Nets, free services to schools and libraries are especially important with tight budgets. There had been a great number of fixes. It was stated that we need to learn from the lesson of NJ; things we took for granted historically will be challenged and taken away.
Illinois— on March 2nd members were tracking several bills, some of which included franchising aspects, or curtailed municipal authority over broadband. On April 7th a hearing would be held on use of state and local funds for telecomm projects where the private sector has already made an investment.
Idaho— reported March 2nd to be defeated in committee 10-9. April 6th it was reported that the bill, pushed by Qwest, would have gutted PEG. Pocatello and Boise made a big effort and got help from NATOA member Jim Horwood, and the bill is dead for this session.
North Carolina— At our March 2nd meeting we learned that a bill pre-empting municipal ownership went through public utilities committee on that morning and was approved; the chair cut off discussion and called for a vote. Now it moves to the finance committee that has Rs and Ds that have criticized the bill. SEATOA is heavily involved. Time Warner is behind it. Public utilities and finance committees are combined house and senate. There are many unserved rural areas. Projects in unserved areas would be stymied by this bill. We have recipients of BTOP and BIP grants that would be stopped in their tracks with this bill.
We discussed what members outside NC could do to help, including press, letters of support from industry officials or government officials. NATOA sent a letter yesterday. The SHLB Coalition would be interested as well.
We need examples of success stories, to combat the myth of all the failures. Progressive States Networks, Chris Mitchell Institute for Self Reliance, Fiber to the Home Council might be good sources.
CenturyLink has joined the fray with Time Warner. The two legislators that defeated this bill last year in NC, the industry came after them with slanderous vicious attacks and neither of them was reelected. It would really help if we had a primer for newly elected legislators. It was mentioned that in the Cape Cod area a coalition with chamber of commerce and other groups does a conference once each year targeting legislators to attend and tour the projects, to educate them, “Smarter Cape Cod Summit.”
At our April 6th meeting Commissioner Clyburn’s Statement on Municipal Ownership had just been distributed. It was a strong message against the North Carolina legislation. A letter drafted by NATOA and sent to the state of NC was quoted by Commissioner Clyburn. We put out a press release applauding her activities.
Unfortunately members reported that the votes seem to be there for it to pass the NC Senate on April 12th. There was a major effort by the cities and the NC League to respond with a counter proposal. The jury was still out on the Senate. Like all bad viruses, they tend to spread; we learned that a similar bill has now been introduced in South Carolina.
[Unfortunately the bill passed. According to Government Technology, “A bill that handcuffs municipalities from building their own broadband networks has become law in North Carolina. Gov. Bev Perdue refused to sign or veto the controversial legislation, House Bill 129, instead leaving the measure’s fate to the state’s General Assembly. Without her signature and any further changes, the bill was officially enacted on May 21, effectively preventing local governments from dipping into the consumer broadband provider business. The bill places deployment restrictions and imposes tax burdens on cities seeking to create their own high-speed networks.”]
Texas— It was reported April 6th that two bills were banging around; one to completely get rid of remaining local franchises, which would include I-Nets. But it was tacked on to a tax on dish networks to give 75% to state and 25% to locals. 6.25% designed to equal the 5% franchise fee and 1% PEG fee that landline cable providers are paying. Straight excise tax that cable operators would get a credit for because they pay the franchise fees, etc. Price locals would pay is centralization. The “we promise you’ll be made whole” thing never happens. Whenever you give up local control you will never make as much money.
May 4th it was reported that the legislature had a bill that was moving quickly to eliminate all state public utility regulations on VOIP making it very possible for ATT to claim exemption for city franchise fees. City of Houston and others got a floor amendment to clarify that did not exempt any video provided over internet protocol.
June 1st we learned that the TX legislature did pass S.1087 allowing incumbents to opt out of their franchises earlier with a couple of carve-out cities. For the 1% PEG Franchise Fee, cities have to keep a separate account and track the use of it to the cable company and the state franchise holder annually. I-Net capacity and cable drops provided after termination at an incremental cost—narrow definition. Time Warner wanted to get out of their municipal franchises early, tried unsuccessfully with litigation and lost, so got the legislature to do it.
Massachusetts—had an extremely well attended hearing in May on Beacon Hill with city and Peg participants, and we are still monitoring but the general tenor was that Verizon’s special interest bill should be put to study (meaning to death).
AT&T/T-Mobile MERGER
On April 6th one member reported that tax contacts for both companies said it will take several months before we would see any name changes. Companies will remit telecom taxes separately for a few months. Another member reported this one may involve some swapping of properties, and NATOA may want to notify members regarding transfer clauses.