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Should the FCC allow for free mooching off of someone’s WiFi

Posted October 31st, 2012 in Broadband, FCC, Government Regulation, spectrum, Wi-Fi, wireless communications and tagged , by Alton Drew

I just read a blog post in The Hillicon Valley that may have some policy and commercial implications down the road. A new coalition of advocacy groups, the Open Wireless Coalition, would like to see and expansion of free, open Wi-Fi networks beyond McDonalds and Starbucks. The group hopes that consumers benefit from a world of free, near ubiquitous access and innovation creates new devices that can be used in this space.

I guess it’s like someone who works their farm and a bunch of people come walking by and decide to snack on fruit for free, sometimes without so much as a howdy do and a thank you.

If there is technology that allows a passerby to slice off enough unused airspace and pay rent for it, it’s all good. That way the earnings from the rent can be reinvested into beefing up security to protect the “landlord” and his other “tenants”. Otherwise, it sounds like mooching and poor policy should the FCC decide to regulate in this space.

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Court of appeals says no to USF refunds

Posted October 31st, 2012 in FCC, Government Regulation, rural, universal service fund and tagged , , by Alton Drew

The United States Court of Appeals for the 11th Circuit held yesterday that a federal district court had no jurisdiction to review an action of the Federal Communications Commission. Only the court of appeals has exclusive jurisdiction to enjoin, set aside, suspend, or determine the validity of all final orders of the FCC. District courts cannot determine the validity of FCC orders.

The ruling came on appeal of a federal district court decision that the court had no jurisdiction to rule on a decision by the FCC to apply, on a prospective basis, an order that required universal service funds be calculated based on a carrier’s interstate and international revenues. Prior to the FCC’s order on recalculating universal service contributions, the FCC had calculated universal service support for rural healthcare providers, and schools and libraries based partially on a carrier’s intrastate revenues.

A 1998 ruling from the United States Court of Appeals-Fifth Circuit had determined that federal universal service support could not be based on intrastate rates. To implement the court’s holding, the FCC issued an order that starting November 1, 1999, universal service support would not be based on intrastate revenues.

Citing the ruling in the Fifth Circuit, an individual plaintiff brought an action in federal district court seeking refunds retroactively of pass through charges she had been assessed for universal service support. The district court found that pursuant to the Communications Act it had no jurisdiction to rule on the validity of the FCC’s prospective order on universal service support. The court of appeals concurred with the district court’s ruling.

Investors should be mindful that neither the 5th or 11th circuits addressed the issue of refunds of universal service contributions made between January 1, 1998 and October 31, 1999. The total amount of contributions made during this period was $1.6 billion. An action could still be brought to recover this amount in refunds. I do not believe that the FCC or the industry would endorse initiatives to identify who these refunds would go to because of the administrative burden that would be imposed. The cost to the FCC and the industry to identify potential recipients and distribute these funds may well exceed $1.6 billion.

Martha Self v. BellSouth Mobility, No. 11-13998, United States Court of Appeals, 11th Circuit

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Clyburn opines on spectrum management

Posted October 24th, 2012 in Broadband, FCC, Government Regulation, spectrum, Wi-Fi and tagged , , , by Alton Drew

Federal Communications Commission member Mignon Clyburn made a couple interesting comments last Tuesday at the Second Annual America’s Spectrum Management Conference. My take-away from her remarks included her recognition that spectrum management should encourage the pace of innovation in wireless broadband especially given the new technologies that are being brought to market. Ms. Clyburn also noted that the old ways of making spectrum available i.e. clearing frequencies and reallocating them-would not be enough to meet the demand for access to the airwaves.

Ms. Clyburn also attributed the success of Wi-Fi networks to their unlicensed and free market characteristics. Anyone can innovate in the Wi-Fi spectrum anytime, said Ms. Clyburn. “You do not need permission. In addition, all sorts of devices and applications share the same spectrum without any difficulty. It’s also worth noting that unlicensed spectrum use requires less government engagement than licensed use.”

For investors considering investing in companies developing products and services that use Wi-Fi, a signal saying that Wi-Fi needs less government engagement may be a welcomed one. Less regulations means lower compliance costs and more earnings going to a company’s bottom-line.

And demand is there. A survey conducted by Devicescape determined that 88% of survey respondents believed that Wi-Fi was a commodity that should be made available anywhere. Sixty-four percent of respondents didn’t care who provided Wi-Fi services, and that 58% of respondents felt that Wi-Fi should be made available in public places including trains and airplanes.

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AT&T and Sirius XM meeting of the minds helped to move broadband adoption along

If AT&T, Inc., and Sirius XM Radio Inc., had any concerns about last week’s Federal Communications Commission Order on Reconsideration, they did not show it in any filings with the U.S. Securities and Exchange Commission. The Order addressed the a revisit to remedies put in place in 2010 to address potential interference issues between Sirius XM’s terrestrial repeaters and AT&T Wireless Communications Services (WCS) base stations and customer premises equipment (CPE).

The highlight of the proceeding was an agreement between AT&T and Sirius to ground power level targets for AT&T’s WCS base and fixed stations. By implementing a self-monitoring mechanism for interference between their devices and components on their networks, both parties, as the FCC acknowledged, have made it easier to deploy mobile broadband services in the WCS spectrum while offsetting potentially harmful interference to Sirius XM’s receivers.

Investors in both companies should not see any negative impact in operations or revenues as a result of the agreement. Consumers of both companies’ services may not see any negative impact either as the agreement again works to ensure uninterrupted services. For the FCC it’s one less headache in their continued quest to identify more spectrum in order to ensure American households have access to mobile broadband services.

It looks like a rare win-win for regulators and industry.

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MCI loses loss-of-use damages case

The United States Court of Appeals-Eleventh Circuit held today that MCI Communications Services, Inc., could not recover loss-of-use damages absent some showing of monetary loss apart from costs of repairs. MCI initially brought a claim that it could recover such damages after having its cable severed during some excavation work being done by CMES. The cut resulted in 568,263 calls being blocked in addition to a number of customer complaints.

Fortunately for the company, the blocked calls did not result in a loss of customers or loss of profits. Also, the company did not issue any customer refunds or credits as a result of the event.

The court of appeals noted in its opinion that there were no cases on point that it could rely on as precedence and also noted that the Georgia Supreme Court had also ruled that as a matter of law in Georgia, there should be a showing of damages if you are going to recover for loss-of-damages.

I think what is also important is what the court of appeals did not say. It did not throw out the loss recovery standard of rental value of substitute cable. This standard was offered by MCI as a basis of recovery.