Ed’s Telecom Alert

Folks..

SorensonVRS had challenged the FCC of various rulings and the Court rendered its decision.  Bottom line was that SorensonVRS challenged the FCC on 2010-2011 rates and offered rationales why.  

Court Decision

The court came out fairly strong and the language was blunt.   The document by the Court was fairly easy albeit bit long to follow as they were very clear on their positions.  Suggest you click and read.  Here are the highlights.

Cost issues: "Allowable costs include, for example, labor costs, directly attributable overhead, startup expenses, executive compensation, and an 11.25% fixed rate of return on investment."

Note that video products are not allowable cost as the following quote illustrate: "Disallowed costs include a profit mark-up on expenses, research and development costs for enhancements that exceed mandatory minimum requirements, and the cost of providing videophones, software, and technical assistance to VRS users." 

"According to Sorenson, the increased wait times that may result from the lower rates will compromise the functional equivalence required of VRS."

Court observed that:  "Notably, Sorenson does not claim that it will be unable to satisfy the mandatory 80/120 speed-of-answer requirement under the interim rates. Instead, it only claims that its average wait times may increase from ten seconds to twenty seconds."

 Court notes that: "This regulation [TRS] requires VRS providers to “answer 80% of all calls within 120 seconds.”

 Court concludes with:  "Even under Sorenson’s doomsday scenario, its increased wait times fall well-below the 120-second threshold set by the FCC for functional equivalence. Sorenson has failed to show the FCC’s interpretation of “functionally equivalent” is impermissible under the statute. Consequently, it has not established that the interim rates violate the functional equivalence requirement of § 225."

On Availability Mandate: "Sorenson argues the 2010 Order violates this availability mandate because the lower interim rates will undermine its ability to serve its current users and will prevent additional training and outreach to extend VRS to even more hearing and speech impaired individuals."

 Court responded? "We are not persuaded."

On Technology: "Sorenson claims the interim rates violate this provision because they do not compensate providers for the cost of customer equipment, such as videophones, which discourages the deployment of new technology."

Court responded: "Again, Sorenson’s argument fails to persuade us."   

Court reiterated: "As we have already discussed, providing free customer equipment was not an allowable cost for compensation from the TRS Fund even under earlier Orders."

"Just as users of traditional telephone service do not receive their telephones for free, § 225 does not require that VRS users receive free videophones."

SVRS claims:  "Sorenson also claims the 2010 Order is arbitrary and capricious in violation of the Administrative Procedure Act. First, it argues the ratemaking method was irrational because NECA’s proposed rates are unreliable and were nevertheless averaged by the Commission with the prior rates. Second, it contends the tiered structure is irrational."

After a long treatise by the Court of how the FCC did its job well and concluded with "Moreover, the FCC is entitled to substantial deference when adopting interim rates."

Final conclusion by the Court:

"Because the 2010 Order’s interim rate plan for VRS neither violates 47 U.S.C. § 225 nor is an arbitrary and capricious exercise of the FCC’s authority, we DENY Sorenson’s petition for review."

eyes open & thumbs up,

Ed Bosson

Long Link:

http://transition.fcc.gov/Daily_Releases/Daily_Business/2011/db1018/DOC-310452A1.pdf

Folks..

Basically the main issue of the article is:

"Wireless firms are worried about being left out of the FCC's plan to reform a federal fund that subsidizes telecom services to rural areas"

Wireless

Wireless is conveying that the amount set aside for telecomm and wireless "..was out of step with the rising popularity of wireless devices."

Mainly wireless objected to $4.2 billion for wireline, and only $300 million for wireless.  Wireless claims that:

"At this time, when smart phones now place enormous computing power in an average person's hands, when tablets are on the verge of revolutionizing industry and education, and when demand for mobile broadband is exploding in our urban centers, this is not an investment mix that will provide rural Americans with the opportunities they need to compete."

-On the political side:

"Chairman Jay Rockfeller said he spoke with officials from the FCC that were "not thrilled" about the committee holding a hearing on USF reform.  The commission officials, according to Rockefeller, were concerned about the GOP-controlled House deciding to hold its own issue on the hearing.  The FCC is capable of moving forward on USF reform without legislation, but the size of the fund – along with the current budgetary and political climate on the Hill – all but assures the issue will draw substantial interest from lawmakers on the relevant committees."

eyes open & thumbs up,

Ed Bosson

Long LInk: 

http://thehill.com/blogs/hillicon-valley/technology/187155-wireless-firms-want-in-on-usf-reform

Folks..

By now I imagine many of you got this email below as well.

Self explanatory so no comment from me other than that is simply a great idea to see how emergency broadcast works out.

eyes open & thumbs up,

Ed Bosson

*************************************************************

The Federal Communications Commission (FCC) and the Federal Emergency Management Agency (FEMA) are planning the first EAS nationwide test, which will take place at 2:00 PM (EST), on Wednesday, November 9, 2011.  The test will last approximately three (3) minutes.  Normal programming will return following the test.

• The November 9 test will utilize what is called a “live” national alert code, i.e., a coded message that will present itself to viewers as an actual emergency announcement, not a test.  This is necessary in order to allow FCC and FEMA to test the reliability of EAS equipment and the state of readiness of EAS operators and participants.  
• As a consequence, however, while an audio message will announce that the exercise is a “Test Only,” there may not always be a corresponding visual message alerting viewers that this is only a test.
• FCC and FEMA are conducting a public relations campaign utilizing print, broadcast, and other media to prepare the public for the test.
• We kindly request that you assist us in getting word out about the Nov. 9^th test to your constituents and communities, so that they know that the November 9^th event is only a test.  
• The FCC is also working with broadcasters and other television distributors to ensure that audio and video public service announcements will air during the weeks before November 9.  
• Attached is a brief explanation about the test, that you may use in your group’s newsletters, telephone trees, blogs, meeting announcements, or any other way your group uses to communicate important information.   
• Additional information about the test is available at the FCC’s website (www.fcc.gov/nationwideeastest ).

We will send you a reminder about the test 2 weeks before the Nov. 9^th test, 2 days before the test and the day of the test.  We appreciate your consideration of this request. 

Best Regards,

Karen Peltz Strauss                  Gregory Hlibok                        Cheryl King

Folks,

A combined telephone representatives expressed a concern in their letter that I agree.

USF DEBT

I know Congress is desperate to find additional funds to pay off the debt, but this quote scares me.

"Our concern first materialized upon seeing the flawed recommendation in the December 1, 2010 report of the National Commission on Fiscal Responsibility and Reform that identified the private Universal Service Fund (USF) as a source of public debt reduction."

"And in recent days our unease has grown as we have learned that the Joint Select Committee on Deficit Reduction may also be focusing on this ill-advised proposal."

Basically this is saying why not use USF to pay off federal debt.   

"Throughout its long history, the USF has always been maintained outside the U. S. Treasury and managed by a non-governmental entity."

The above quote, I agree.   The sticky problem is whether the USF is a public fund or private fund?   This group responded to this with the following quote:

"..legal precedents and guidance definitively confirm that the USF monies do not constitute “public monies” that are received for the use of the United States, but rather are private funds that are merely derived and distributed at the direction of federal statute. "

Now I admit I am at dilemma.  In this very edsalert, I have maintained that TRS Fund is a public fund.  What I believe is that any private funds contributed into a "public" service now becomes public fund.  However, I am of the opinion that even though TRS Fund is public fund, it is used only for TRS alone and cannot be used for other.  I see the same thing for the USF.   However, I see that this group is concerned that Congress looks for loopholes to use "public fund" to pay off the federal debt.   Their worrisome concern is valid, I think.  

Let me know what you think?  

eyes open & thumbs up..

Ed Bosson

Long Link: https://prodnet.www.neca.org/publicationsdocs/wwpdf/92611ntca.pdf