Posted By: Adrian Herbst, The Baller Herbst Law Group, P.C.
A bill that would ban new “discriminatory” taxes on mobile phone services and property has been reintroduced in Congress. The Cell Tax Fairness Act of 2009, a version of which was introduced but failed to pass in both 2008 and 2007, would impose a five-year moratorium on the enactment of any new “discriminatory tax” by local or state governments on “cell phones services, providers, or property.” It was reintroduced just last week as H.R. 1521 by Reps. Zoe Lofgren (D-CA) and Trent Franks (R-AZ). A companion bill was also introduced in the Senate.
The Act apparently does not preempt existing state or local tax measures applicable to mobile telephony services. It only would affect new taxes to the extent that they are “discriminatory,” that is, not imposed generally, or imposed at a lower rate, for other tangible personal or commercial property or for “persons that are engaged in businesses other than the provision of mobile services.” According to Rep. Lofgren, “The Cell Tax Fairness Act does not take away any existing revenue for state or local governments, it simply calls for a period of tax stabilization.”
The bill defines “tax” as “any charge imposed by any state or local government for the purpose of generating revenues for governmental purposes.”
The bill was referred to the House Judiciary Committee.
While the bill is obviously supported by the cell phone industry – and its powerful lobby – we expect the bill to face opposition from a wide variety of parties, likely including state and municipal governments and their representative organizations. Interested representatives of communities who would like to have further information or updates concerning this legislation are encouraged to contact us. We will continue to monitor this legislation, assist municipalities desiring to participate in the deliberation process, and otherwise provide updates as may be requested.
Click the following link for text of the Bill: http://www.opencongress.org/bill/111-h1521/show
Click the following links for recent articles:http://www.cnet.com/8301-17918_1-10200106-85.html; http://arstechnica.com/telecom/news/2009/03/5-year-ban-on-higher-cell-phone-taxes-proposed-again.ars
Posted by: John Pestle, Partner – Varnum, Riddering, Schmidt & Howlett, LLP
PEG channel disputes have now moved (literally) to a new level. Historically, these were handled on a local level. Now as a new FCC case on PEG matters exemplifies, they are increasingly “federalized,” i.e., being shifted to the federal level. This post will briefly describe the reasons for this shift, put it in historical perspective, and note the related point that municipalities wishing to preserve PEG channels as they have traditionally been provided should file comments with the FCC by March 9.
Traditionally, local franchises have set forth the specifics on channels for public, education or governmental (PEG) use – - for example, the number of channels to be provided, funding for them, who would operate them, where a studio might be located, and so on.
Several things have changed to upset this situation: First, in some major states (such as Texas, California and Florida) franchising has been shifted to the state level with statutory provisions and franchise terms which discourage PEG channels. Second, cable operators have taken actions that discourage (and sometimes lead to the elimination of) PEG channels such as not agreeing to new channels, eliminating or consolidating existing channels, decreasing or eliminating PEG funding, and eliminating studios and other “in kind” support for PEG channels. A cynic might note that PEG channels take up space which otherwise might be used by programmers who would pay the cable company to have their channels carried (more shopping channels anyone?).
In a more recent action affecting PEG channels, Comcast (and other cable companies) have attempted to conserve channel space by providing PEG channels (but only PEG channels) solely in a digital format (digital channels take up less space on a cable system than older analog channels). However customers with older analog TV sets will have to get (and in many cases, pay the cable company for) a converter box in order to get PEG channels and, for example, see their city council meeting and the like. This converter box is different from the one necessary for older TVs to continue working with rabbit ears. Comcast has also proposed to put PEG channels into what some have viewed the “digital desert” (i.e., channels in the 900 range).
Concurrently, AT&T has attempted to put PEG channels on a separate and inferior video delivery system from that used for all its other channels. In essence, on AT&T systems, PEG signals are provided in a manner that makes them hard to access (hundreds of PEG channels located on “Channel 99,” with individual channels accessed slowly by a click-through menu), the actual picture is in a “You-Tube” internet type format and lacks the functionality (compatibility with digital video recorders, closed captioning and the like) of all other channels.
The upshot are three Petitions to the FCC relating to PEG channels: Two (by the City of Lansing and the Alliance for Community Media) challenge under federal law AT&T’s provision of PEG channels in a manner different and inferior to that of other channels. The third petition (Dearborn et al.) challenges Comcast’s actions as violating federal requirements that PEG channels be part of the “basic service tier” and other requirements.
In early February, the Obama FCC combined these three cases into one and solicited comments from all interested parties by March 9. As is perhaps obvious, this “federalization” of PEG channel matters follows somewhat naturally from the state cable legislation that is generally harmful to PEG and takes away the prior local forum for resolving PEG channel issues. Cities and PEG advocates are thus left only with the Federal Cable Act and Federal forums (FCC, Federal Courts) to defend PEG channels.
From a broader perspective, PEG Federalization bears some relation to the 2007 decisions by the Bush FCC towards federalizing the cable franchising process by setting standards for cable franchise grants and renewals, especially those involving phone companies seeking cable franchises. The FCC decisions asserted broad jurisdiction by the FCC over what heretofore had been viewed as purely local franchising matters, a position generally upheld by the Sixth Circuit Court of Appeals in 2008.
Viewed from a historical perspective, such federalization of cable matters follows classic patterns in utility regulation: Although we do not focus much on it these days, regulation of the classic utilities such as telephone, gas, and water at its inception was exclusively local through so-called “franchise regulation.” But as those utilities expanded to cover multiple franchise areas and then multiple states, regulation shifted from the local municipality to the state and often thence to the federal level. The specifics here are different but viewed from the sweep of the past 150 years the result is much the same – - the federalization of what had been previously largely local issues.
To come back to the immediate point, if a municipality is interested in preserving its PEG channels as they have traditionally been provided – - each on its own channel number, easily accessible, in high quality, and generally the same in accessibility, quality and features as local TV stations on cable – - make sure to file comments at the FCC by March 9. The relevant FCC documents, including information from its Public Notice on how to file, are available, among other places, on our web site at http://www.varnumlaw.com/serviceGroups/cableTV/cableFranchising/
Posted By: Nick Miller, Partner, Miller & Van Eaton
The federal stimulus bill contains $7.2B for broadband projects to “unserved” and “underserved” populations.
You should push your IT and City management to apply for this money. This race will go to the swift. All local governments are defined as eligible entities for grants, either directly in combination with others in a joint application.
The money is split $4.7B in grants by the Department of Commerce, National Telecommunications and Information Administration (NTIA), and $2.5 B in grants, loans and loan guarantees by Department of Agriculture, Rural Utility Service (RUS).
The statutory mandates are different for the two agencies, with RUS money limited to projects that serve at least 75% “rural” areas, and NTIA grants intended to address “unserved” and “underserved” areas which don’t overlap with areas receiving RUS funds.
The NTIA money specifically is available to
1. Provide broadband education, awareness, training, access, equipment, “support” to schools and libraries, healthcare providers or “other community support organizations”; or
2. Facilitate greater use of broadband service by low-income. unemployed, aged, or “otherwise vulnerable populations; or
3. Improve access to, and use of broadband service by public safety agencies; or
4. Stimulate demand for broadband, economic growth and job creation
NTIA (not RUS) must award all of its money by September 30, 2010. And the NTIA projects must be completed within 2 years of grant award.
NTIA and RUS both anticipate working with the States to identify priority of the competing proposals.
On March 10, at 10 AM EST; Obama Administration officials plan a public meeting to discuss details and plans for seeking grant and loan proposals from eligible entities. The meeting will be streamed live over the internet.
More information is available at
http://www.pti.org/index.php/ptiee1/more/451/
If you download that presentation, you will see a full page of useful links for more information.
So get your folks going now, coordinate with your governor’s office, and be the first in line.
Posted By: Adrian Herbst, The Baller Herbst Law Group, P.C.
I. INTRODUCTION
Over the past few weeks Congress has debated the prospect of delaying the mandatory shutoff of analog television broadcast, originally set to occur February 17. Following a vote by the House on February 5 to delay the transition date to June 12, and with President Obama’s stated intention to sign such a bill, it is now safe to conclude that DTV transition will in fact be delayed. We have drafted this brief memorandum to highlight a few key points relating to the DTV transition postponement.
II. BACKGROUND
The need for the delay apparently lies in several problems. The first relates to the federal converter box subsidy, administered by the National Telecommunications and Information Administration (NTIA). In the fourth quarter of 2008, it came to light that the converter box subsidy — by which every American could obtain two $40 coupons toward the purchase of equipment enabling them to receive digital broadcast signals and view them on an analog TV — was apparently running out of funds. In response to an inquiry from Rep. Markey (D-MA), NTIA in December 2008 stated that the original estimate of 51.5 million coupons was too low, and that it expected to receive 60 million coupon requests through March 2009. The NTIA started a waiting list as of January 4, 2009, meaning that many consumers would be unlikely to receive their vouchers before February 17.
Second, retailers reported a possible shortage of the converter boxes themselves. NTIA reported that 17 million coupons had been redeemed by December 17, 2008, but only 11 million boxes were anticipated to be available to consumers through June 2009.
Finally, the FCC stated that, based on experience with an early transition trial in Wilmington, Delaware, the FCC’s call center may not be adequately staffed to handle the anticipated flood of calls relating to the transition.
As a result, in January 2009, President Obama asked Congress to consider postponing the DTV transition, and Senate Commerce Committee staff began working on a draft bill.
Opposition emerged immediately, in particular led by Rep. Barton (R-TX), as well as Verizon (Verizon later changed its stance and ultimately supported the bill). Nevertheless, the Senate and House both passed similar versions of the bill, and its next stop is President Obama’s desk.
III. DTV DELAY ACT
The DTV Delay Act (S.352, text available at http://www.whitehouse.gov/briefing_room/dtv_delay_act/ formally moves the DTV transition date from February 17 to June 12, and allows people with expired converter box coupons to apply for new ones. The term of the NTIA coupon program is extended, but additional funding for NTIA to address the converter box coupon shortfall is included not within the DTV delay bill, but in the economic stimulus bill, which is not expected to be signed anytime soon.
IV. EARLY ANALOG SHUTOFF
The DTV Delay Act permits broadcasters to switch from analog to digital prior to June 12, if they wish (consistent with the original DTV transition law and rules), but such stations must follow certain FCC procedures prior to doing so. The FCC is empowered to deny a broadcaster’s request for early transition based on interference or other concerns. The FCC has said that approximately 61% of broadcasters could conceivably transition early and would face no problems with regard to interference. The FCC has informed broadcast stations that want to switch from analog to digital as of the original February 17 date to notify the Commission by February 9.
The major networks – ABC, CBS, NBC and FOX – stated on February 5 that their owned‑and‑operated stations will not switch early, and will wait until June 12. The extent to which affiliate stations and other broadcasters will follow their lead is unclear at this time.
V. RECOMMENDATIONS AND RESOURCES
As the original transition date of February 17 approaches, we expect local government officials be presented with an increasing number of inquiries from citizens on this topic. In addition to sharing information about the delay, as outlined above, we suggest that local officials consider contacting all local broadcasting stations to determine whether any or all of them might intend to shut off analog prior to June 12. In such case, the broadcaster(s) and local government could most effectively prepare area viewers by working together to educate them about timing, ramifications, etc.
In addition, we suggest directing consumer inquiries to the following federal government resources (note, though, that they are unlikely to be updated until President Obama signs the DTV Delay Act into law):
For more information, refer to the federal TV Converter Box Coupon Program website: https://www.dtv2009.gov/
Posted By: Joesph Van Eaton, Partner, Miller & Van Eaton, PLLC
AT&T’s entry into the video market has not been smooth. Unlike Verizon, which is building fiber to the home, AT&T is by and large upgrading its old copper wire system so that it can be used to provide video. Its design required it to place refrigerator-sized cabinets throughout communities – a move that forced many communities to develop new siting standards (it didn’t help that some of the cabinets exploded).
Now two challenges have been filed at the Federal Communications Commission, claiming that manner in which AT&T provides public, educational and government access violates the law. One challenge was filed by the City of Lansing, Michigan. A more detailed challenge was filed by a consortium of organizations that promote access, community colleges, local governments, and local government organizations. The lead petitioner is the Alliance for Community Media (“ACM”). The petition was filed by the law firm of Spiegel & McDiarmid.
As the ACM petition points out, AT&T does not really provide PEG channels. It provides what it calls a PEG “application” or “platform.” The PEG application does not function like a normal, commercial channel on the AT&T system: AT&T cannot pass through closed captioning for example. One of the reasons some community colleges joined in the FCC petition was because they are required to deliver programming with closed captioning. AT&T won’t deliver secondary audio signals (used to deliver programming in a second language) on PEG channels. A viewer cannot surf between commercial and PEG channels; PEG channels can’t be recorded while viewing another channel. There are significant quality issues as well. The FCC will now decide whether these deficiencies violate federal law.
The ACM petition raises only federal claims. More challenges may be on the way: the Illinois Attorney General has announced that AT&T provision of PEG access is under investigation by the state. Many communities could raise (and are considering raising) independent claims under state laws. Lansing filed a state court claim at the same time it filed its FCC claim.
These cases are serious, and at the very least should raise a red flag for attorneys in communities that plan to provide access programming to AT&T systems. It will be important to review any programming arrangements carefully to be sure that rights are not lost.
