Broadband Law Advisor Blog : Broadband Lawyers & Attorneys : Davis Wright Tremaine Law Firm : National Broadband Plan Adoption & Infrastructure Updates

You would be forgiven if you thought the status of exclusive agreements for exclusive broadband cable service to “multiple dwelling units” such as condominiums and planned communities (MDUs) was settled. In 2007, the Federal Communications Commission (“FCC”) issued a ruling broadly declaring that such exclusivity agreements are “null and void,” and adopted a rule that prohibits the enforcement or execution of “any provision in a contract that grants to it the exclusive right to provide any video programming service (alone or in combination with other services) to a MDU.” We detailed the FCC’s exclusivity orders in previous posts here and here, and the court’s decision upholding the FCC on appeal here.

Despite the seemingly straight-forward application of this rule to ban exclusive MDU service, conflicts over broadband service to MDUs persist. The issue continues to surface both in negotiation of expiring agreements (where MDU management tends to demand compensation in exchange for exclusivity or simply tells the existing provider to leave and enters into a “non-exclusive” agreement with another provider) and in court disputes. At a recent FCC workshop promoting so-called gigabit networks, investors and service providers told the FCC that access to MDUs continues to be an obstacle to broadband deployment and investment.

Most recently, on April 5, 2013, in Lansdowne on the Potomac Homeowner’s Association v. OpenBand at Lansdowne, the United States Court of Appeals for the Fourth Circuit affirmed an order of the district court striking down an arrangement that gave a broadband service provider the exclusive right to provide video, voice, and Internet service to a large planned development. Exclusivity was assured through a convoluted series of entities and agreements designed to insulate the exclusive service rights from potential challenges under the FCC’s rule, which had been a proposal but not a rule when the agreements were structured.

The court concluded that the provider had “engaged in what amounts to an elaborate game of regulatory subterfuge featuring an array of procedural defenses, the use of various corporate entities to escape the definition of an OVS operator, and an artifice to evade the FCC order by structuring its exclusive arrangement using a web of sub-agreements.” The court declared the exclusivity provisions null and void as required by the FCC’s rule, and issued an injunction prohibiting their enforcement against the homeowners’ association and the homeowners themselves.

The Lansdowne case may discourage some developers and service providers from entering agreements designed to circumvent the FCC’s prohibition on exclusive service agreements. But because exclusive service is extremely profitable for the provider and affiliated developers, disputes are unlikely to disappear altogether.

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 Throughout the nation, wireless carriers attach their facilities to electric transmission towers, despite the fact that they do not have statutory rights to do so. The rights of wireless carriers to attach to electric facilities generally stems from the federal Pole Attachment Act, as amended by the Telecommunications Act of 1996 (“the Act”), codified at 47 U.S.C. § 224. While wireless carriers have rights to attach under the Act, carrier rights do not extend to transmission towers. Southern Company v. Federal Communications Commission, 293 F.3d 1338, 1343-46 (11^th Cir. 2002). This lack of rights gives transmission tower owners significant bargaining power over wireless carriers and often results in unbalanced license agreements heavily skewed in favor of the tower owner.

For example, license agreements typically subordinate the wireless attacher’s use of space on transmission facilities to the needs of the tower owner. It is not uncommon to find provisions requiring an attacher to remove or relocate its equipment upon 90 days’ notice from the tower owner when the owner needs the space for its own use or planned future uses. Removing wireless facilities in such a short time frame can severely hamper a wireless carrier’s ability to locate, secure, obtain permitting for and construct an alternative site in order to ensure continuous coverage.

Wireless carriers in New Jersey were forced into such a situation just last year when Public Service Gas and Electric Company (“PSE&G”) sent 90 day removal notices to wireless attachers along a transmission path that had been slated for replacement. PSE&G had no plans for temporary or permanent relocation of the wireless attachments on other PSE&G facilities. Given the timeframes for local zoning and permitting, the wireless carriers had no reasonable means for ensuring that coverage and service (including access to emergency services) would not be compromised. The wireless attachers were compelled to raise the issue with the New Jersey Board of Public Utilities, which in turn led to a settlement in which PSE&G agreed to cooperate with the wireless attachers to ensure wireless coverage would not be interrupted.

There is a relatively simple way for wireless attachers to ensure they are not caught off guard in such situations. In order to better anticipate a transmission tower owner’s future planned use of facilities to which they are attached, wireless carriers should monitor the planning processes of the Regional Transmission Organizations (“RTOs”). RTOs are entities approved by the Federal Energy Regulatory Commission (“FERC”) to both operate transmission networks in centrally dispatched control areas, and maintain reliability within established reliability standards. Most electric companies across the country have turned over the operational control of their electric transmission systems to RTOs. In order to ensure the transmission system will continue to meet reliability standards, the RTOs will typically engage in regional transmission planning processes to determine when transmission facilities will need to be upgraded and/or replaced. These planning processes are open to the public. Wireless attachers can and should monitor these planning processes in order to know in advance when an RTO will require transmission tower owners to replace facilities. In this way wireless attachers will be in a better position to work with tower owners in advance of receiving removal/relocation notices.

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By Randy Lowe and Michael Sloan

Many healthcare providers (HCPs) do not have access to broadband facilities that are capable of supporting bandwidth-hungry telemedicine applications – either because it is simply unavailable or too expensive. Congress recognized this problem when it created the Health Care Support component of the Universal Service Fund. In December 2012, the FCC changed the program to make it more useful to HCPs seeking to expand their telemedicine offerings. Specifically, the FCC created the Health Care Connect Fund (HCF), which aims to distribute $400 million annually to rural HCPs and their non-rural partners.

The purpose of the HCF is to expand broadband access to HCPs and to encourage the development of state and regional broadband networks for telemedicine. The HCF will support the cost of (1) broadband and other advanced services; (2) upgrading existing facilities to higher bandwidth; (3) equipment necessary to create HCP networks or use broadband services; and (4) HCP-owned infrastructures where shown to be the most cost-effective option.

The HCF will allow eligible HCPs the option of purchasing services or designing and building networks if they can demonstrate that their choice is the most cost-effective option (the option for building new networks is available only to members of a consortium). Infrastructure funding, which is capped at $150 million each year, may be used in combination with services purchased from commercial service providers. Only consortia will be permitted to receive support for new infrastructure builds. Urban HCPs will be permitted to participate in those consortia with Rural HCPs so long as the Urban HCPs are not a majority of the participants. The HCF will pay 65 percent of eligible costs, with the participating HCPs required to pick-up the remaining 35 percent. While the HCP contribution obligation is not insignificant, the FCC specifically approved a variety of creative ways for HCPs to finance their 35 percent share of the costs.

Participants in the precursor to the HCF, the Rural Healthcare Pilot Program, can seek HCF funding beginning July 1 of this year. The FCC is expected to finalize the applications for the HCF by the end of the summer and funding will begin for new participants on January 1, 2014.

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Earlier this month, the Video Programming Accessibility Advisory Committee (VPAAC) released its Reports on Video Description, Access to Emergency Information, and User Interfaces, Video Programming Guides and Menus.  These reports respectively summarize the VPAAC's investigation and recommendations regarding these topics.

This week, the FCC announced that it is seeking the public's general reactions to these reports. 

With respect to access to emergency information and video description, the FCC has asked for general feedback:

We seek comment on the portions of the VPAAC Second Report that address access to emergency information and device capabilities with respect to the provision of video description and emergency information. How should these portions of the VPAAC Second Report inform our forthcoming rulemakings? In particular, we ask commenters to indicate whether they agree with the pertinent recommendations in the VPAAC Second Report, and if so, why. Are there additional issues that the Commission should consider as it prepares to commence these rulemakings?

Initial comments are due May 24.  (Full press release availabler here.)

 The FCC's request for comment on the VPAAC's report related to user interfaces, video programming guides and menus is essentially the same:

We seek comment on the portion of the VPAAC Second Report that addresses the above
issues pertaining to making user interfaces, video programming guides, and menus accessible on video programming apparatus and navigation devices. How should this portion of the VPAAC Second Report inform our Notice of Proposed Rulemaking about user interface, video programming guide, and menu accessibility? In particular, we ask commenters to indicate whether they agree with the pertinent recommendations in the VPAAC Second Report, and if so, why. Are there additional issues that the Commission should consider as it prepares to commence this rulemaking?  

Initial comments are also due May 24.  (Full press release available here.)

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By Maria Browne

Last week, the Federal Communications Commission’s proceeding to  consider proposed improvements to the structure and efficiency of the video relay service (“VRS”) program was published in the Federal Register, thus setting the deadline for initial comments by March 2, 2012, and replies  by March 19, 2012.

VRS allows persons with hearing or speech disabilities or who are deaf-blind to use American Sign Language to communicate in near real time through a communications assistant, via video over a broadband Internet connection. The stated goal of the FCC’s proposals is “to ensure that VRS provides functionally equivalent communications services to its users – particularly given advances in commercially-available technology – and remains immune from the waste, fraud, and abuse that has threatened its long-term viability.”

The FCC identified two fundamental flaws with the existing VRS program: (1) no real opportunity for VRS providers to compete for other providers’ VRS users, and (2) VRS users’ lack of access to off-the-shelf VRS access technology. The FCC has proposed numerous options to address these problems including

• Using the TRS Fund to provide discounted broadband Internet access to the VRS user community;
• Revising the compensation structure for marketing of VRS services;
• Creating VRS access technology standards that are conceptually similar to the part 68 standards for traditional CPE;
• Mandating off the shelf VRS technology;
• Funding iTRS access technology with TRS fund;
• Changing the current compensation mechanism to reduce incentives for fraud and abuse; and
• Establishment of a VRS user database.

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UPDATE: Our DWT Advisory on the IP Closed Captioning Report and Order is now available here.

This afternoon, the FCC released its long-anticipated Report and Order that sets forth the Commission’s new closed captioning rules for IP-delivered video programming, pursuant to the 21st Century Communications and Video Accessibility Act (CVAA). As we explained when the rules were first proposed in September, the CVAA had directed the FCC to establish how and when certain IP-delivered video programming must be captioned, as well as the closed captioning capabilities for devices used to view video programming. The R&O adopts closed captioning requirements for owners, providers, and distributors of IP-delivered video programming; a safe harbor technical standard and delivery format for IP video captions; a staggered compliance schedule; complaint rules; and requirements for manufacturers of devices used to view the video programming at issue.

We are currently reviewing this comprehensive rulemaking, and will post our in-depth review next week, both here and on our DWT Advisories page.

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