I. Legislative Branch Activity

A. Optimism for Major Telecom Legislation Waning.

As Congressmen settled into the new Congress in January, staffers for Senate Commerce Committee Chairman Daniel Inouye confirmed that he will seek to pass smaller, more targeted communications bills in this session. The key telecom companies such as Verizon, BellSouth, and AT&T, who supported GOP-led legislation, are expected to withdraw support for any major Democratic measures. Inouye has called for a hearing on the state of the telecom marketplace for February 1. All five FCC commissioners will be there to present their testimonies and answer what are expected to be tough questions from Democrats.

In the House, House Energy and Commerce Telecommunications and the Internet Subcommittee Chairman Rep. Edward Markey is planning a series of hearings on net neutrality. In January, Rep. Markey introduced stand-alone legislation on the topic.

B. Legislative Calendar.

The House and Senate will adjourn on February 19 and resume on February 26 due to President’s Day.

II. Federal Communications Commission (FCC) Activity

A. FCC Meeting.

The Commission held an open meeting on January 17, 2007 to hear presentations regarding implementations of the agency’s strategic plan and a comprehensive review of FCC policies and procedures.  Panelists included Chiefs of the Consumer & Governmental Affairs Bureau, the Enforcement Bureau, the Public Safety and Homeland Security Bureau, the Wireless Telecommunications Bureau, the Office of Engineering and Technology, the International Bureau, the Media Bureau, and the Wireline Competition Bureau.

B. Other FCC Activity.

1. FCC Releases Declaratory Ruling Concerning Interstate TRS Fund.

On January 11, the FCC released the Declaratory Ruling concerning IP captioned telephone service (IP CTS).  In December, the FCC had stated that it is a form of telecommunications relay service (TRS) and is therefore eligible for the Interstate TRS Fund. The ruling was in response to a petition filed by Ultratec, Inc., and received widespread support from the disability community.

IP CTS should give consumers the choice of using a computer, PDA, or wireless device to make a call, without having to purchase special telephone equipment.

2. FCC Addresses E-911 Compliance.

The FCC released orders addressing nine Petitions for Waiver from wireless companies concerning the E-911 location-capable handset penetration deadline. The Commission referred four companies, Sprint, Alltel, U.S. Cingular, and Nextel to the Enforcement Bureau. Others, Verizon, Leap, QWest Wireless, and Centennial were warned to come into compliance, but were not referred. Wireless carriers had been ordered to have 95% of customer’s phones contain location-capable handsets by December 31, 2005. Forfeitures from these proceedings, especially for Sprint, are expected to reach millions of dollars.

3. Staff Changes at the FCC.

  • Fred Campbell was named Chief of the Wireless Telecommunications Bureau;
  • Monica Desai was named Chief of the Media Bureau;
  • Catherine Seidel was named Chief of the Consumer and Governmental Affairs Bureau;
  • Deputy General Counsel Eric D. Miller is leaving and will be replaced by Joseph R. Palmore.

C. Next Commission Meeting.

The next Commission meeting is currently scheduled for 9:30 AM on Friday, February 23, 2007. The agenda is not yet available.

III. Antitrust Agency Activity/Deal Announcements

News Corp. Files for Transfer of DIRECTV.

On January 29, News Corp. filed an application with the FCC to ask permission for the transfer of its interest in DIRECTV to Liberty Media. Liberty will also receive three regional sports networks (RSNs) and $550 million in cash. In return, Liberty has agreed to give up its stake in News Corp. and will abide by the program access and RSN conditions that were established when News Corp. acquired is interest in DIRECTV.  The petition argues that the agreement would reduce the vertical integration of DIRECTV by placing them in a company with less ownership in broadcast stations and RSNs.

IV. Litigation

Supreme Court Refuses to Hear Distant Networks Case.

The U.S. Supreme Court refused to hear EchoStar’s appeal over Judge William Dimitrouleas’ decision to block distant network service for over 900,000 customers.  EchoStar had argued that the injunction unfairly shuts off service to 850,000 of its customers. The decision does not impact the customer’s ability to receive signals from an outside company, National Programming Service (NPS). The National Association of Broadcasters has challenged the third-party involvement, stating that EchoStar is attempting to evade the injunction.