Congress Returns to Washington August 26th, 2008

As an unseasonably cool August comes to a close in Washington, there are a number of telecom and Internet related hearings tentatively scheduled for September.  The Senate Commerce Committee has rescheduled a hearing on S.2998, the Prepaid Calling Card Consumer Protection Act, for September 10, and we’re also expecting the announcement of hearings on broadband demand and mapping, wireless issues, and the upcoming DTV transition.  As always, USTelecom will be sure to keep you posted on hearings, legislation, and other developments in the industry here on the USTelecom blog.

Jon Banks on Multichannel News July 29th, 2008

Multichannel News has published a pretty hefty excerpt of USTelecom’s Jon Banks’ testimony before the House Subcommittee on Telecom and the Internet from last week.

The last several years have brought the once-separate worlds of telecom, media, and technology together, where the health of each segment—its ability to innovate and invest—has a ripple effect on the health of the others and their capacity to deliver new choices to consumers and to our economy.

Telecom, media, and technology—the TMT sector—is a linchpin of our economy. TMT is the fourth-largest contributor to our GDP, and it is the leading driver of growth and productivity in our economy. About one-half of our economy’s productivity growth comes from this sector. In addition, the TMT sector generates over 10 million jobs, providing 8% or more of non-farm employment. Many of these jobs are high-wage jobs in high-growth areas.

The key to the vitality of this sector, and the jobs, economic growth, and innovation it creates, is ongoing and robust investment. Over the last five years, investment in this sector has returned to the levels reached during the heights of the Internet boom. Today, the TMT industry is investing about $400 billion in software and equipment on an annual basis accounting for about 40% of total U.S. non-structural investment. That is, leaving out investment in things like buildings and bridges, the technology, media, and telecom industries are responsible for 40 cents of every dollar invested in our economy.

You can read the whole thing here.

Changes to the Forbearance Process Should Keep Sight of the Goal July 24th, 2008

On Tuesday, I testified before the House Subcommittee on Telecommunications and the Internet at a hearing on “Issues in Telecommunications Competition.” The hearing focused largely on two things: H.R. 3914, the “Protecting Consumers through Proper Forbearance Procedures Act,” and number porting.

H.R. 3914, introduced in the House by Rep. John Dingell (D-Mich.), would amend the forbearance section of the ‘96 Telecom Act to remove a provision stating that if the FCC fails to act on a forbearance petition within a one year period (plus a possible 90-day extension), the petition is “deemed granted.” In effect, the bill would remove any statutory consequences for inaction by the FCC within the designated time frame. Congress put this provision in the ’96 Act recognizing that the pace of change in communications required the creation of a path to get quicker review of outdated rules. Traditional carriers use this process, as do newer competitors and wireless companies. Now, with 55 million broadband subscribers, a cable company predicting that it will become the third largest voice company by the end of the year, and people continuing to tradeoff fixed and mobile services, there isn’t any reason left to presume that old regulations serve competition and innovation.

As I told the subcommittee, USTelecom and its members certainly support the goal of improving the forbearance process,[ both through the FCC’s current forbearance proceeding and through the committee’s work]. Everyone wants to ensure that the process achieves its goal of removing regulatory burdens as they become obsolete in the rapidly changing marketplace, while providing competitors and the public with the clarity and transparency they deserve. The subcommittee members were clearly uncomfortable with the possibility that forbearance could be “deemed granted” based on a tied 2-2 vote, as it was on a petition filed by Verizon; they were equally concerned with the lack of transparency and lack of an Order provided by the FCC in that particular case.

The pace of change in communications continues to accelerate in our broadband world. Because of that rapid change, there must be some means for obtaining relatively quick review and elimination of rules and regulations that stand in the way of competition and the public interest; the FCC should have a compelling incentive to act expeditiously on petitions, whether it’s through a deemed granted provision or some other equally effective mechanism. We will work with the subcommittee to address that concern and as well as suggest other improvements to the forbearance process.

You can read my complete written testimony—which includes discussion of pole attachments, phantom traffic, retention marketing, and number porting—here.

Jonathan Banks Testifies on Competition and Forbearance July 22nd, 2008

USTelecom Senior Vice President for Law and Policy Jonathan Banks is testifying now at a hearing before the House Telecom and Internet Subcommittee on “Issues in Telecommunications Competition.” It’s also a legislative hearing for a pending bill on forbearance, H.R. 3914, the “Protecting Consumers through Proper Forbearance Procedures Act.” Jon’s written testimony, available here, includes discussion on several things related to competition in addition to some comments on the forbearance bill, including pole attachments, phantom traffic, retention marketing, and number porting. We’ll have an update on the hearing this afternoon here on the USTelecom blog.

Why Copyright Matters to ISPs July 17th, 2008

We’ve written before about the importance of intellectual property law to ISPs, especially as more and more copyrighted works become available in digital format. In a recent vidcast on the subject, my colleague Kevin Rupy used the example of Cablevision, a New York-based cable company that was accused by broadcasters of copyright infringement when the company introduced an innovative DVR solution for its customers that didn’t require a set-top box; customers’ recorded programming would be stored instead on Cablevision’s servers. Broadcasters and content owners claimed that this amounted to “re-broadcasting” their proprietary content. Even though from a user perspective Cablevision’s solution operated exactly the same as a set-top DVR, the content owners were victorious over Cablevision in US District Court. (For more complete coverage, see this piece from last year in Ars Technica.)

But copyright is growing more important to ISPs for another reason as well: copyright holders want to enlist the help of ISPs to crack down on users distributing digital copyrighted works illegally. At a Senate Finance Committee hearing this week, Andrew Lack, the chairman of Sony BMG Music Entertainment observed in his written testimony that “this past year has witnessed a virtual explosion of global public interest in developing structures in which Internet Service Providers (ISPs) can enhance their role in addressing the unauthorized transmission of copyright content.” Lack also called for the “U.S. and foreign governments to make the Internet safe for e-commerce in copyrighted material by encouraging marketplace solutions to take hold.”

The takeaway is clear: copyright owners are increasingly calling on the ISPs–and Congress–to do something. Despite the fact that existing law is more than sufficient (specifically the many steps involved in qualifying for the safe harbor provisions of the Digital Millennium Copyright Act), various members of Congress have suggested that attempts to enact legislation holding ISPs responsible for the content distributed on their networks may be in store in the future. One way or another, ISPs should be on notice that developments in copyright and intellectual property law are certainly worthy of their attention.

USF Hearing Raises Questions June 26th, 2008

On Tuesday, I attended the House Telecom Subcommittee hearing on universal service, where a notable witness-filmmaker George Lucas-came to testify on the benefits of broadband for education.  Lucas, whose George Lucas Educational Foundation works to integrate technology in education, told the subcommittee that “access to modern telecommunications tools for education should be viewed as a digital civil right.”

Chairman Ed Markey (D – Mass.) noted that there are a lot of questions related to universal service that need to be tackled in reforming the program, including the big question of whether or not the universal service system should be used to support broadband service.  The representatives in attendance at the hearing-and the witnesses-were divided on the issue of using USF dollars for broadband.

Two Congressmen who are not divided on the broadband issue, Reps. Joe Barton (R – Texas) and Cliff Stearns, (R – Fla.), introduced legislation yesterday to reform universal service.  Their bill would limit USF support to voice services only (closing the door on the broadband debate) and it includes some substantial belt-tightening measures, including a hard cap on funding, stricter eligibility requirements for areas qualifying for assistance, and reverse auctions.