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wireless messaging newsletter

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FRIDAY - DECEMBER 12, 2008 - ISSUE NO. 339

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BLOOSTON LAW

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BloostonLaw Telecom Update

Published by the Law Offices of Blooston, Mordkofsky, Dickens, Duffy & Prendergast, LLP

[Selected portions reproduced here with the firm's permission.]

www.bloostonlaw.com

   Vol. 11, No. 44 December 3, 2008   

Tower Compliance Manual

BloostonLaw has assembled a compliance manual for all tower/antenna structure owners, as well as any licensee mounting antennas on structures. The manual helps structure owners and licensees to avoid FCC fines, minimize Federal and state approval delays, and minimize or avoid the potential for civil and/or criminal liability that could be associated with tower operations/accidents. The manual includes a detailed explanation of FCC, FAA and other Federal regulatory requirements so that your staff can understand the legal do’s and don’ts associated with tower construction and antenna mounting. We have also developed checklists that can be used by your employees and contractors to (1) make sure that necessary compliance steps are taken and (2) create a paper trail documenting such compliance. There are separate checklists for antenna structure owners and radio licensees that will use such structures. These checklists cover such issues as environmental protection, historic preservation, harmful RF radiation limits, interference protection, aviation safety, and Federal reporting requirements. A sample tower log is included.

In recent years, tower owners have faced million dollar fines and even higher civil liabilities due to rule violations that may contribute to an aviation accident. Similar liability can arise from environmental or harmful radiation violations. Also, many licensees do not realize that, for every antenna mounted in the United States, the licensee must either obtain the prior approval of the applicable State Historic Preservation Officer (SHPO), or establish that the antenna qualifies for an exemption from this requirement. BloostonLaw is offering its antenna structure compliance manual in binder format, with the checklists provided on CD-ROM as well, so that you can print off the appropriate checklist for each new structure or antenna. Please contact the firm for a copy of the manual.

BloostonLaw contacts: Hal Mordkofsky, 202-8285520; and John Prendergast, 202-828-5540.

FCC Extends ICC/USF Reply Deadline Until December 22

Action takes item off Dec. 18 open meeting agenda

The FCC has extended the reply comment deadline from December 3 until December 22 for its Comprehensive Intercarrier Compensation and Universal Service Reform Order and Further Notice of Proposed Rulemaking that Chairman Kevin Martin had hoped to consider at the scheduled December 18 open meeting. Clearly that will not be possible now. Martin’s best hope is to bring the item up at a yet unscheduled meeting in mid-January (before the Inauguration), but that remains uncertain.

In granting the extension request, the FCC noted that numerous parties had weighed in. But the Commission cited the Rural Cellular Association (RCA) and the National Association of State Utility Consumer Advocates (NASUCA). The Commission was persuaded that the complexity of the issues involved and the intervening holidays provided good cause to grant an extension.

As noted previously, this item is a package of three specific proposals regarding intercarrier compensation and universal service reform that are available in the appendices of the FCC’s Order and FNPRM (BloostonLaw Telecom Update, November 12). With respect to these appendices, the first, attached to the order as Appendix

A, is Chairman Martin’s Draft Proposal that was circulated to the Commission on October 15, then placed on the Commission’s agenda for a vote on November 4. This item subsequently was removed from the Agenda on November 3. The second, Appendix B, is a Narrow Universal Service Reform Proposal circulated to the Commission on October 31. The third, Appendix C, is a draft Alternative Proposal first circulated by the Chairman on the evening of November 5. Appendix C incorporates changes proposed in the ex parte presentations attached to the order as Appendix D.

BloostonLaw contacts: Ben Dickens, Gerry Duffy, and Mary Sisak.

Dec. 18 Tentative Agenda Includes AWS-3 Order

Both the intercarrier compensation & universal service reform and 700 MHz D Block items did not make the FCC’s December 18 tentative open meeting agenda, but the advanced wireless services (AWS)-3 item did. As a result, the FCC plans to consider a Report and Order and Order on Reconsideration addressing service rules for fixed and mobile services, including advanced wireless services, in the 2155-2180 MHz band (AWS-3). Other items on the tentative agenda include the following:

Program Carriage and Program Access. A Report and Order modifying the program carriage rules and procedures and a Further Notice of Proposed Rulemaking seeking comment on the practices of programmers and broadcasters.

DTV Translators. A Notice of Proposed Rulemaking proposing a new digital television translator service for analog loss areas.

DTV Consumer Education Notice of Apparent Liability. An omnibus NAL against various companies for apparent violations of the Commission’s DTV consumer education requirements.

E911 Location Accuracy Requirements. A Second Report and Order addressing the geographic area over which wireless carriers must meet the Enhanced 911 (E911) location accuracy requirements.

Regulatory Framework for SDARS and WCS in the 2305-2360 MHz Band. A Report and Order and Second Report and Order and Order addressing the a regulatory framework for the coexistence of licensees in the Satellite Digital Audio Radio Service (SDARS) and the Wireless Communications Service (WCS) in the 2305-2360 MHz frequency band.

Wireless Radio Services (WRS) Renewals. A Notice of Proposed Rulemaking and Order addressing Amendment of Parts 1, 22, 24, 27, 74, 80, 90, 95, and 101 To Establish License Renewal and Discontinuance of Operation Policies and Procedures for Certain Wireless Radio Services; Imposition of a Freeze on the Filing of Competing Renewal Applications for Certain Wireless Radio Services and the Processing of Already-Filed Competing Renewal Applications.

The tentative agenda may change before the meeting and is not affected by the “Sunshine” period prior to the meeting.

BloostonLaw contacts: Hal Mordkofsky, Ben Dickens, Gerry Duffy, and John Prendergast.

Supreme Court To Hear Oral Argument In AT&T-LinkLine “Price Squeeze” Case With Broad Antitrust Implications

Summary: Complaint alleges that AT&T charged high wholesale and low retail prices to undercut its ISP competitors. Invoking precedent from the Trinko case, AT&T said there is no antitrust violation when there is “no duty to deal.” 9th Circuit said Trinko is only “one factor”—the regulatory regime only protects “wholesale” market, not “retail.” Dissenting Judge would have dismissed complaint and applied different standard. LinkLine, in Supreme Court brief, changed its mind and agreed with dissent. American Antitrust Institute moved to dismiss writ of certiorari. Solicitor General, FTC, nine states weigh in with amici curiae briefs.

Next Monday, December 8, the U.S. Supreme Court will hear oral argument in Pacific Bell d/b/a AT&T California v. LinkLine, a “price squeeze” case on appeal from the 9th U.S. Circuit Court of Appeals in San Francisco. The case arises from a complaint brought by LinkLine, an Internet Service Provider (ISP), alleging that AT&T charged anticompetitive wholesale and retail digital subscriber line (DSL) prices. More specifically, LinkLine alleged that AT&T placed a “price squeeze” on its wholesale customers (who were also its retail competitors) by charging relatively high wholesale prices and relatively low retail prices, thus making it difficult for anyone but AT&T to make a profit on retail DSL services.

The case raises antitrust issues. Citing Verizon Communications v. Law offices of Curtis V. Trinko (2004), AT&T sought to dismiss the complaint, complaining it did not state an antitrust violation—that is, there can be no price squeeze claim when a vertically integrated wholesaler/retailer has no antitrust duty to sell its product or services to its retail competitors in the first place. In Trinko, Verizon, which was required to open its network to its competitors under the Telecommunications Act, was accused of failing to do so. In Trinko, the Supreme Court ruled that the subsequent complaint did not state an antitrust violation; it said the mere possession of monopoly power in a wholesale market does not constitute an antitrust violation. The high court also noted that there was in place an extensive regulatory regime for telecommunications that greatly diminished the need for additional antitrust regulation. It also noted that the FCC and the New York Public Service Commission had addressed the complaint through a series of orders.

In LinkLine, however, the 9th Circuit saw “the existence of a regulatory regime” as only “one factor” to consider in determining whether antitrust liability might also lie. “Moreover, the existence of regulation does not always eliminate the danger of anti-competitive harm. The key, under Trinko, is the nature of the regulatory structure at issue,” the court said.

According to the 9th Circuit, at the wholesale level, there are a series of regulatory mechanisms and regulatory agencies charged with assuring fair play. These include the FCC’s Computer Inquiry rules, Comparably Efficient Interconnection (CEI) Plans, separate subsidiary rules, etc.

However, the 9th Circuit said, there is no comparable regulatory attention paid to the retail DSL market. “Any restrictions on pricing at the retail level derive primarily from the antitrust laws. It is unclear at this juncture the extent to which LinkLine is basing its price squeezing theory on wholesale pricing, retail pricing, or both.” In sum, the 9th Circuit said that while the wholesale market might be reasonably protected by a regulatory regime, the retail market must rely on potentially valid claims under Section 2 of the Sherman Act.

Judge Ronald Gould of the 9th Circuit dissented, writing that if the LinkLine complaint was simply a charge of predatory pricing in the retail market, LinkLine should have to satisfy the traditional requirements of a predatory pricing claim, including proof that AT&T’s retail prices were below cost and charged with the intent, and realistic prospect, of recovering the losses after its competitors had been driven out of business. Since the complaint made no such allegation, Judge Gould would have ordered its dismissal.

Gould said that plaintiffs in their “price squeeze” contentions “did not allege that the seller had the market power to set prices for internet connection in the retail market, that [AT&T’s] retail price, contributing to the squeeze, was set below cost, and that losses could later be recouped. Because we have not heretofore held that there must be a showing of market power in the retail market,

nor held that the standards of Brooke Group v. Brown and Williamson Tobacco (1993) (which set limits on what can be considered predatory under antitrust law) must be applied in assessing predation in the retail side of a price squeeze, I do not think it would be correct to dismiss the complaint on the pleadings with prejudice. Instead, after dismissal, plaintiffs should have been free to amend their complaint if they could assert in good faith the allegations that are requisite here, after Trinko, for antitrust liability.”

In its brief to the Supreme Court, LinkLine agreed with Judge Gould, stating: “Respondents now believe that [his conclusion] is a proper disposition of this matter and request that this judgment below be vacated and the case remanded for further proceedings.”

The Commonwealth of Virginia and eight other states—Alabama, Colorado, Florida, Kansas, Nebraska, Oklahoma, Utah, and Washington—submitted an amici curiae brief in support of petitioner AT&T. In general, the states argued that the 9th Circuit’s decision should be reversed because (1) it is contrary to the interest of consumers because it protects competitors rather than competition; (2) it places courts in the ill-suited role of determining what is fair relative to retail pricing; and (3) it is not compatible with Trinko.

Similarly, the U.S. Solicitor General filed an amicus curiae brief in support of the petitioner, stating that the 9th Circuit erred in allowing respondents to proceed on their claims in the absence of an antitrust duty to deal or predatory-pricing allegations. “A claim based solely on the assertedly insufficient margin between a vertically- integrated defendant’s wholesale and retail prices would protect competitors, not competition or consumers,” the Solicitor General said. “Low retail prices benefit consumers, regardless of how they are set, as long as they are above predatory levels. And a monopolist’s high wholesale price is generally not in itself unlawful because, as this Court has recognized, collecting a monopoly profit is part of the free-market system.”

The Federal Trade Commission (FTC), however, disagreed with the Solicitor General and filed a separate statement. “The holding of the 9th Circuit is unquestionably correct, and indeed merely echoes what other courts of appeals have held on the narrow issue presented to the court: that claims of a predatory price squeeze in a partially regulated industry remain viable after Trinko. It bears emphasis that the price-squeeze theory pleaded in LinkLine is not novel. As the court of appeals noted, Trinko ‘took great care’ to preserve ‘claims that satisfy established antitrust standards’.”

Additionally, the FTC said, “There is no real conflict between the narrow decision of the Ninth Circuit and the decisions of the two other courts of appeals that have considered price-squeeze claims in the wake of Trinko or between those two decisions.” Finally, the FTC said it did not believe the LinkLine case was ripe for review by the Supreme Court.

CompTel also filed a brief in support of the 9th Circuit’s decision.

The American Antitrust Institute asked the Supreme Court to dismiss the writ of certiorari “because respondents are no longer asserting a price squeeze claim, and hence the question presented is merely hypothetical. Further, the absence of real facts makes this case a poor vehicle for making sweeping changes to the existing law on price squeezes. If the Court does not dismiss the writ, the Court should decline the Solicitor General’s invitation to decide whether a price squeeze should ever be an independent basis for a violation of [Sherman Act] Section 2. The question presented does not raise that issue; it is only addressed to the viability of a price-squeeze claim when a determination has been made that a regulated firm has no ‘antitrust duty to deal.’ In any event, the well-established rule that a price squeeze may constitute exclusionary conduct under Section 2 is fully consistent with modern antitrust policy and the protection of competition, not competitors.”

Given that Respondent LinkLine has changed its mind and now agrees with the dissenting 9th Circuit Judge Gould, and that the American Antitrust Institute has moved to dismiss the writ, it will be interesting to see how the Supreme Court reacts.

BloostonLaw contacts: Ben Dickens, Gerry Duffy, and Mary Sisak.

LAW & REGULATION

COMMENT DATES EXTENDED FOR RCA PETITION REGARDING EXCLUSIVITY ARRANGEMENTS: The FCC has extended the comment cycle for the Rural Cellular Association’s (RCA’s) request that the FCC initiate a rulemaking to investigate the widespread use and anti- competitive effects of exclusivity arrangements between commercial wireless carriers and handset manufacturers, and, as necessary, adopt rules that prohibit such arrangements when contrary to the public interest (BloostonLaw Telecom Update, October 15 and 29). The anti- competitive impact of exclusivity arrangements have come to the fore as mega-mergers among wireless carriers have given the largest carriers even more leverage with manufacturers. Comments in this RM 11497 proceeding are now due February 2, 2009, and replies are due February 20, 2009. BloostonLaw is drafting comments urging that the FCC regulate handset exclusivity arrangements because of the adverse impact of such arrangements on small and rural wireless carriers. Clients wishing to participate in this effort should contact us at their earliest convenience.

BloostonLaw contacts: John Prendergast, Hal Mordkofsky and Cary Mitchell.

FCC ENDS ACCESS TARIFF PROBE OF PUERTO RICO TELEPHONE, CONSOLIDATED: The FCC has terminated the investigations regarding the access rates (and associated terms and conditions) included in the Common Line, Traffic-sensitive and Trunking baskets filed in the 2008 annual access tariffs of Puerto Rico Telephone Company and the Consolidated Communications Companies and Illinois Consolidated. The Wireline Competition Bureau (WCB) suspended these rates for one day on June 30, and adopted an accounting order. Puerto Rico and Consolidated have filed tariff revisions that address the concerns with the suspended tariffs. Therefore, the FCC has concluded that these access rates are lawful. As part of their conversion from rate-of-return regulation to price cap regulation, Puerto Rico and Consolidated were required to move marketing expenses from the Traffic-sensitive and Trunking Baskets to the Common Line Basket. In addition, sections 69.106 and 69.111 of the Commission’s rules require a greater degree of rate element unbundling for price cap local exchange carriers (LECs) than is required of rate-of-return LECs. Upon review of the initial tariff filings of the two carriers, the WCB found that neither Consolidated nor Puerto Rico established the unbundled rate elements and associated rates, terms, and conditions required of price cap LECs by sections 69.106 and 69.111. Further, the WCB determined that Puerto Rico did not properly move marketing expenses from the Traffic-sensitive and Trunking Baskets to the Common Line Basket. Accordingly, the WCB initiated an investigation and suspended for one day certain access rates and associated terms and conditions contained in the 2008 annual access tariffs of Puerto Rico and Consolidated. On July 30, 2008, Puerto Rico filed tariff revisions under Transmittal No. 70 correcting the deficiencies in its annual access tariff filing. On October 2 and 3, 2008, Consolidated filed tariff revisions under Transmittal Nos. 21 and 140 that corrected the deficiencies in its annual access tariff filing. By addressing the concerns underlying the tariff suspensions, Puerto Rico and Consolidated have obviated the need to continue this tariff investigation, the FCC said. BloostonLaw contacts: Ben Dickens, Gerry Duffy, and Mary Sisak.

FCC GRANTS ADDITIONAL TIME TO MEET M-LMS CONSTRUCTION REQUIREMENTS: The FCC’s Wireless Telecommunications Bureau (WTB) has granted the request of Progeny LMS, and granted in part the request of PCS Partners for additional time to meet the construction requirements that apply to their respective multilateration Location and Monitoring Service (M-LMS) Economic Area (EA) licenses. Further, on its own motion, WTB granted additional time for each of the four other M-LMS licensees in the 902-928 MHz band to meet their construction requirements. Specifically, WTB extended the five-year construction requirement to July 19, 2012, for any license that currently must meet that mid-term requirement on or before July 19, 2012, and the ten-year construction requirement to July 19, 2014, for any license that currently must meet that end-of-term requirement on or before July 19, 2014. WTB acknowledged that M-LMS equipment continues to be unavailable for use in the 900 MHz Band, and found that this circumstance is a substantial factor warranting relief for M-LMS licensees. It said that over the past five years, no M-LMS equipment has been submitted for authorization in the 900 MHz band. In addition, no M-LMS equipment is commercially available for current deployment in the United States, and no M-LMS licensee provides service today. Indeed, as the Commission recognized in initiating the LMS NPRM, the significant restrictions on M-LMS operations in the Commission’s current M-LMS rules may have contributed to the lack of M-LMS equipment and services being developed, WTB said. It also acknowledged the regulatory uncertainty engendered by the pending MLMS rulemaking, which was initiated as a substantial examination of the current rules to determine whether new approaches could facilitate more efficient use of the M-LMS Band. The Commission recently discussed regulatory uncertainty as a factor supporting the grant of an extension request of MariTEL, Inc. in the VHF Public Coast service (MariTEL). In MariTEL, the Commission stated that it, “as a general matter, has denied requests for waivers and/or extensions of compliance deadlines that are based on alleged regulatory uncertainty.” However, in granting MariTEL relief, the Commission stated that “in this unique context, the regulatory uncertainly engendered by the [Notice of Proposed Rulemaking] is a factor warranting an additional extension of MariTEL’s five-year build-out deadlines.” Similarly, the FCC found that the pendency of the LMS NPRM potentially revisiting the M-LMS rules, along with the demonstrated lack of available M-LMS equipment, is a factor warranting a further extension of time for all M-LMS licensees. BloostonLaw contacts: Hal Mordkofsky, John Prendergast, and Richard Rubino.

FCC EXTENDS DEADLINE FOR VERIZON’s FORBEARANCE PETITION: The FCC has extended until February 24, 2009, the date on which the petition requesting forbearance from certain record-keeping and reporting requirements filed by Verizon on November 26, 2007, shall be deemed granted in the absence of Commission action. Generally, Verizon seeks forbearance from certain regulations and statutory provisions with respect to basic property records, continuing property records, and affiliate transaction rules. The Commission released a Public Notice establishing a comment cycle for the petition on December 18, 2007. On September 6, 2008, the Commission addressed in part certain aspects of the Verizon Petition, including the grant of conditional forbearance from cost assignment obligations. Interested parties should reference WC Docket No. 07-273. BloostonLaw contacts: Ben Dickens, Gerry Duffy, and Mary Sisak.

USAC TO HOLD VITELCO’s USF IN ABEYANCE DUE TO HURRICANE DAMAGE: The FCC has directed the Universal Service Administrative Company (USAC) to hold in abeyance until February 28, 2009, any adjustments in universal service fund high-cost loop support for the Virgin Islands Telephone Corporation (Vitelco). On November 19, Vitelco filed an emergency petition for waiver of the Commission’s rules to address, among other things, financial strain resulting from the devastation inflicted by Hurricane Omar on Vitelco’s telecommunications network, and the negative impact of these rules on Vitelco’s universal service high-cost loop support. Vitelco also requested that, while its waiver request remains pending, the Commission instruct USAC to hold in abeyance until February 28, 2009, any adjustments to Vitelco’s universal service high-cost loop support payments. The FCC granted Vitelco’s request. BloostonLaw contacts: Ben Dickens, Gerry Duffy, and Mary Sisak.

OMB REJECTS FCC’s CELL TOWER BACKUP POWER RULES: According to press reports, the Office of Management and Budget (OMB) has rejected the proposed changes by the FCC that would require all U.S. cell phone towers to have at least eight hours of backup power. OMB reportedly said that the FCC failed to get public comment before passing the regulations last year and didn't show that the information required from wireless companies would actually be useful. It also said the FCC hadn't demonstrated that it had enough staff to analyze the hundreds of thousands of pages of documents that the wireless industry said its members would likely have to produce as part of the regulations. A federal appeals court put the rules on hold this summer pending a review by OMB, according to the Washington Post. FCC officials told the Post they were considering their options, which could include changing the proposed regulations or voting to override the OMB's decision. The court would still have to rule before any regulations went into effect. As reported by the Washington Post: The FCC proposed in May 2007 that all cell towers have a minimum of eight hours of backup power, which would switch on in the event a tower lost its regular energy source. The requirement came after an FCC task force pointed out that many cell towers along the Gulf Coast lost power following Hurricane Katrina, contributing to communication breakdowns that complicated rescue and recovery efforts. Wireless companies objected to the regulations, claiming they were illegally drafted and would present a huge economic and bureaucratic burden. They said that adding generators or battery packs to thousands of cell sites would be expensive and, because of local zoning rules or structural limitations, impossible in some places, according to the Post. They also said a blanket requirement of eight hours for all towers tied the industry's hands in planning for natural disasters, such as investing in stronger towers along the coasts or maintaining mobile transmitters that could be rolled into an area to replace or boost the local signal. The FCC agreed in October 2007 that it would exempt cell sites from the rules, but only if the wireless carrier provided paperwork proving the exemption was necessary, the Post said. The FCC would give companies six months from when the rules went into effect to submit those reports and another six months to either bring the sites into compliance or explain how they would provide backup service to those areas through other means. The Post reported that CTIA, Sprint and others asked the U.S. Court of Appeals for the District of Columbia Circuit to intervene earlier this year, saying the exemptions would still leave wireless companies scrambling to inspect and compile reports on thousands of towers; and the appeals court in July put the rules on hold while the FCC submitted the rules to OMB, which must sign off on federal regulations that involve mandating members of the public to collect and submit information. Depending on whether the FCC chooses to forge ahead with the rules or submit something different, the court still must decide on whether the rules go forward.

INDUSTRY

HAWAIIAN TELECOM FILES FOR CHAPTER 11 BANKRUPTCY PROTECTION: Hawaiian Telcom Communications has announced that to continue its balance sheet restructuring process and ensure its long- term financial health, it has filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware in Wilmington. Hawaiian Telcom is seeking relief from the Court that will enable it to continue to operate its business without interruption to customers, employees and other critical constituents. The requests include authority to honor all customer programs such as discounts and rebates, to continue to pay wages and salaries, and to continue various benefits for employees. In addition, the Company will seek authority to use its existing cash collateral to fund operations.

“Our decision to restructure through a Chapter 11 filing allows the Company to reduce its level of debt and reorganize its business, so we can emerge a stronger and more financially secure company better able to compete in the ever-changing communications industry. I strongly believe that the filing provides the right course of action to support what is in the best interests of our customers, employees, suppliers and other valued constituents.” said Eric K. Yeaman, Hawaiian Telcom’s president and chief executive officer.

The company has been working with its creditors since October on a balance sheet restructuring that would be amenable to all parties while protecting the interests of the company’s customers, employees and other constituents. After careful consideration, Hawaiian Telcom determined that a Chapter 11 filing provided the best means to restructure its debt with minimal impact to the business. Hawaiian Telcom’s actions are a result of increased competition in an ever-evolving communications industry, an inability to satisfy its capital expenditure needs while continuing to meet its debt service requirements, a significant downturn in the economy, as well as the difficulties in the transition of certain back office functions from Verizon following the 2005 acquisition.

While operating under Chapter 11, the company plans to continue implementing its strategic plan which is focused on improving its customer service, enhancing processes and systems to rebuild customer and community confidence in the Company, simplifying its existing product offerings while focusing on the introduction of new products, and leveraging its network infrastructure. Hawaiian Telcom has sufficient liquidity to support its ongoing operating expenses in the near future. As of November 30, the Company had approximately $75 million of cash on hand. This cash collateral, the use of which is subject to Court approval, will fund among other things, employee wages, customer programs, payments to vendors and suppliers, and the overall operation of its network.

DEADLINES

DECEMBER 8: PETITIONS FOR RECONSIDERATION OF SPRINT-CLEARWIRE MERGER APPROVAL.

DECEMBER 10: PETITIONS FOR RECONSIDERATION OF VERIZON-ALLTEL MERGER APPROVAL.

DECEMBER 30: FCC FORM 507, UNIVERSAL SERVICE QUARTERLY LINE COUNT UPDATE. Line count updates are required to recalculate a carrier's per line universal service support, and is filed with the Universal Service Administrative Company (USAC). This information must be submitted on July 31 each year by all rate-of-return incumbent carriers, and on a quarterly basis if a competitive eligible telecommunications carrier (CETC) has initiated service in the rate-of-return incumbent carrier’s service area and reported line count data to USAC in the rate-of-return incumbent carrier’s service area, in order for the incumbent carrier to be eligible to receive Interstate Common Line Support (ICLS). This quarterly filing is due December 30 (for lines served as of June 30, 2008; and March 31, 2009, for lines served as of September 30, 2008)), and July 31, 2009, for lines served as of December 31, 2008. BloostonLaw contacts: Ben Dickens, Gerry Duffy, and Mary Sisak.

DECEMBER 31: FCC FORM 525, COMPETITIVE CARRIER LINE COUNT QUARTERLY REPORT. Competitive eligible telecommunications carriers (CETCs) are eligible to receive high cost support if they serve lines in an incumbent carrier’s service area, and that incumbent carrier receives high cost support. CETCs are eligible to receive the same per-line support amount received by the incumbent carrier in whose study area the CETC serves lines. Unlike the incumbent carriers, CETCs will use FCC Form 525 to submit their line count data to the Universal Service Administrative Company (USAC).

This quarterly report must be filed by the last business day of March (for lines served as of September 30 of the previous year); the last business day of July (for lines served as of December 31 of the previous year); the last business day of September (for lines served as of March 31 of the current year); and the last business day of December (for lines served as of June 30 of the current year). CETCs must file the number of working loops served in the service area of an incumbent carrier, disaggregated by the incumbent carrier’s cost zones, if applicable, for High Cost Loop (HCL), Local Switching Support (LSS), Long Term Support (LTS), and Interstate Common Line Support (ICLS). ICLS will also require the loops to be reported by customer class as further described below. For Interstate Access Support (IAS), CETCs must file the number of working loops served in the service area of an incumbent carrier by Unbundled Network Element (UNE) zone and customer class. Working loops provided by CETCs in service areas of non-rural incumbents receiving High Cost Model (HCM) support must be filed by wire center or other methodology as determined by the state regulatory authority. CETCs may choose to complete FCC Form 525 and submit it to USAC, or designate an agent to file the form on its behalf. BloostonLaw contacts: Ben Dickens, Gerry Duffy, and Mary Sisak.

JANUARY 1: CARRIERS MUST NOTIFY CUSTOMERS OF “DO NOT CALL” OPTIONS. The FCC requires each wireline and wireless common carrier (including resellers) offering local exchange service to inform subscribers of the opportunity to provide notification to the Federal Trade Commission (FTC) that the subscriber objects to receiving telephone solicitations. The carrier must inform subscribers of (1) their right to give or revoke a notification of their objection to receiving telephone solicitations pursuant to the national “Do Not Call” database; and (2) the methods by which such rights may be exercised. Beginning on January 1, 2004, and annually thereafter, such common carriers shall provide an annual notice, via an insert in the customer’s bill, to inform their subscribers of the opportunity to register or revoke registrations on the national Do Not Call database. BloostonLaw will provide clients with the wording for an appropriate notice upon request. BloostonLaw contacts: Hal Mordkofsky, Ben Dickens, Gerry Duffy, and John Prendergast.

JANUARY 12: DTV EDUCATION REPORT. New 700 MHz licensees from Auction No. 73 are required to file a report with the FCC concerning their efforts to educate consumers about the upcoming transition to digital television (DTV). Last summer, we explained that the FCC’s Part 27 rules require 700 MHz licensees that won licenses in Auction No. 73 to file quarterly reports on their DTV consumer outreach efforts through the Spring of 2009. However, in an apparent contradiction, the same rules do not impose any substantive consumer education requirements on 700 MHz license holders. This situation has not changed. The reporting rule simply states that “the licensee holding such authorization must file a report with the Commission indicating whether, in the previous quarter, it has taken any outreach efforts to educate consumers about the transition from analog broadcast television service to digital broadcast television service (DTV) and, if so, what specific efforts were undertaken.” Many licensees may not have initiated 700 MHz service as of yet. However, to the extent they are also an Eligible Telecommunications Carrier (ETC) and recipient of federal USF funds, separate FCC rules found in 47 C.F.R. Part 54 (Universal Service) require ETCs to send monthly DTV transition notices to all Lifeline/Link-Up customers (e.g., as part of their monthly bill), and to include information about the DTV transition as part of any Lifeline or Link-Up publicity campaigns until March 31, 2009. BloostonLaw contacts: Hal Mordkofsky and Cary Mitchell.

JANUARY 15: HAC REPORTING DEADLINE. The next Hearing Aid Compatible (HAC) reporting deadline for digital commercial mobile radio service (CMRS) providers (now including carriers that provide service using AWS-1 spectrum and resellers of cellular, broadband PCS and/or AWS services) falls on January 15, 2009. The information provided in reports must be current through the end of the calendar month preceding the filing date (i.e., through December 31), and include historical data for the period since the entity filed its last report. For purposes of this report, service providers must include historical data relating to compliant and noncompliant handset models for the six-month period prior to reporting (i.e., beginning in July of 2008). We have prepared a HAC reporting template to assist our clients in keeping track of their HAC handset offerings, and other regulatory compliance efforts. ALL SERVICE PROVIDERS SUBJECT TO THE COMMISSION’S HAC RULES – INCLUDING COMPANIES THAT HAVE HERETOFORE QUALIFIED FOR THE DE MINIMIS EXCEPTION – MUST PARTICIPATE IN RECORDKEEPING AND ANNUAL HAC REPORTING. To the extent that your company is a provider of broadband PCS, cellular and/or interconnected SMR services, if you are a CMRS reseller and/or if you have plans to provide CMRS using newly licensed (or partitioned) AWS or 700 MHz spectrum, you and your company will need to be familiar with the Commission’s revised rules. With the recent Federal Register publication of the revised HAC rules, the most immediate compliance deadlines for Tier III wireless carriers become effective September 7, 2008. Under the new rules, service providers other than Tier I carriers must offer (for every air-interface, e.g., CDMA, GSM , TDMA) the lesser of 50% or eight (8) handsets that are rated M3-or better, and the lesser of 33% or three (3) handsets that are rated T3- or better. BloostonLaw contacts: Hal Mordkofsky, John Prendergast, Cary Mitchell, and Bob Jackson.

JANUARY 19: FCC FORM 497, LOW INCOME QUARTERLY REPORT. This form, the Lifeline and Link-Up Worksheet, must be submitted to the Universal Service Administrative Company (USAC) by all eligible telecommunications carriers (ETCs) that request reimbursement for participating in the low-income program. The form must be submitted by the third Monday after the end of each quarter. It is available at: www.universalservice.org. BloostonLaw contacts: Ben Dickens, Gerry Duffy, and Mary Sisak.

JANUARY 30: REPORT OF EXTENSION OF CREDIT TO FEDERAL CANDIDATES. This report (in letter format) must be filed by January 30 and July 31 of each year, but ONLY if the carrier extended unsecured credit to a candidate for a Federal elected office during the reporting period. BloostonLaw contacts: Hal Mordkofsky, John Prendergast, and Richard Rubino.

FEBRUARY 2: FCC FORM 502, NUMBER UTILIZATION AND FORECAST REPORT: Any wireless or wire- line carrier (including paging companies) that have received number blocks--including 100, 1,000, or 10,000 number blocks--from the North American Numbering Plan Administrator (NANPA), a Pooling Administrator, or from another carrier, must file Form 502 by February 2. (Normally, this filing is due February 1, but in 2009, February 1 falls on a Sunday, and FCC rules require the filing be submitted the next business day.) Carriers porting numbers for the purpose of transferring an established customer’s service to another service provider must also report, but the carrier receiving numbers through porting does not. Resold services should also be treated like ported numbers, meaning the carrier transferring the resold service to another carrier is required to report those numbers but the carrier receiving such numbers should not report them. Reporting carriers are required to include their FCC Registration Number (FRN). Reporting carriers file utilization and forecast reports semiannually on or before February 1 for the preceding six-month reporting period ending December 31, and on or before August 1 for the preceding six-month reporting period ending June 30. BloostonLaw contacts: Ben Dickens, Gerry Duffy, and Mary Sisak.

FEBRUARY 2: FCC FORM 499-Q, TELECOMMUNICATIONS REPORTING WORKSHEET. All telecommunications common carriers that expect to contribute more than $10,000 to federal Universal Service Fund (USF) support mechanisms must file this quarterly form. (Normally, this filing is due February 1, but in 2009, February 1 falls on a Sunday, and FCC rules require the filing be submitted the next business day.) The FCC has modified this form in light of its decision to establish interim measures for USF contribution assessments. The form contains revenue information from the prior quarter plus projections for the next quarter. Form 499-Q relates only to USF contributions. It does not relate to the cost recovery mechanisms for the Telecommunications Relay Service (TRS) Fund, the North American Numbering Plan Administration (NANPA), and the shared costs of local number portability (LNP), which are covered in the annual form (Form 499-A) that was due April 1. BloostonLaw contacts: Ben Dickens and Gerry Duffy.

MARCH 2: CPNI ANNUAL CERTIFICATION. Carriers should modify (as necessary) and complete their “Annual Certification of CPNI Compliance” for 2008. The certification must be filed with the FCC by March 2. (Normally this filing would be due March 1, but this year March 1 falls on a Sunday; therefore, FCC rules require filing on the next business day.) For 2007, FCC Enforcement Bureau conducted a computerized audit to identify any non-filers, who may face sanctions. Note that the annual certification should include the following three required Exhibits: (a) a Statement Explaining How The Company’s Operating Procedures Ensure Compliance With The FCC’S CPNI Rules to reflect the Company’s policies and information; (b) a Statement of Actions Taken Against Data Brokers; and (c) a Summary of Customer Complaints Regarding Unauthorized Release of CPNI. A company officer with personal knowledge that the company has established operating procedures adequate to ensure compliance with the rules must execute the Certification, place a copy of the Certification and accompanying Exhibits in the Company’s CPNI Compliance Records, and forward the original to BloostonLaw for filing with the FCC by March 1 (March 2, this year). BloostonLaw is prepared to help our clients meet this requirement, which we expect will be strictly enforced, by assisting with preparation of their certification filing; reviewing the filing to make sure that the required showings are made; filing the certification with the FCC, and obtaining a proof-of-filing copy for your records. Clients interested in obtaining BloostonLaw's CPNI compliance manual should contact Gerry Duffy (202-828-5528) or Mary Sisak (202828- 5554).

MARCH 2: FCC FORM 477, LOCAL COMPETITION AND BROADBAND REPORTING FORM. Three types of entities must file this form. (1) Facilities-based Providers of Broadband Connections to End User Locations: Entities that are facilities-based providers of broadband connections – which are wired “lines” or wireless “channels” that enable the end user to receive information from and/or send information to the Internet at information transfer rates exceeding 200 kbps in at least one direction – must complete and file the applicable portions of this form for each state in which the entity provides one or more such connections to end user locations. For the purposes of Form 477, an entity is a “facilities-based” provider of broadband connections to end user locations if it owns the portion of the physical facility that terminates at the end user location, if it obtains unbundled network elements (UNEs), special access lines, or other leased facilities that terminate at the end user location and provisions/equips them as broadband, or if it provisions/equips a broadband wireless channel to the end user location over licensed or unlicensed spectrum. Such entities include incumbent and competitive local exchange carriers (LECs), cable system operators, fixed wireless service providers (including “wireless ISPs”), terrestrial and satellite mobile wireless service providers, MMDS providers, electric utilities, municipalities, and other entities. (Such entities do not include equipment suppliers unless the equipment supplier uses the equipment to provision a broadband connection that it offers to the public for sale. Such entities also do not include providers of fixed wireless services (e.g., “Wi-Fi” and other wireless ethernet, or wireless local area network, applications) that only enable local distribution and sharing of a premises broadband facility.) (2) Providers of Wired or Fixed Wireless Local Telephone Services: Incumbent and competitive LECs must complete and file the applicable portions of the form for each state in which they provide local exchange service to one or more end user customers (which may include “dial-up” ISPs). (3) Providers of Mobile Telephony Services: Facilities-based providers of mobile telephony services must complete and file the applicable portions of this form for each state in which they serve one or more mobile telephony subscribers. A mobile telephony service is a real-time, two-way switched voice service that is interconnected with the public switched network using an in-network switching facility that enables the provider to reuse frequencies and accomplish seamless handoff of subscriber calls. A mobile telephony service provider is considered “facilities-based” if it serves a subscriber using spectrum for which the entity holds a license, that it manages, or for which it has obtained the right to use via lease or other arrangement with a Band Manager. On June 12, 2008, the FCC released a Report and Order (FCC 08-89) and an Order on Reconsideration (FCC 08-148) that together revise the Form 477 filing requirements. BloostonLaw contacts: Ben Dickens, Gerry Duffy, and Mary Sisak.

FCC Meetings and Deadlines

Dec. 8 – Deadline for petitions for reconsideration of Sprint-Clearwire merger approval order.

Dec. 10 – Deadline for petitions for reconsideration of Verizon-ALLTEL merger approval order.

Dec. 15 – Deadline for reply comments on NOI regarding oversight of USF (WC Docket No. 05-195).

Dec. 15 – Deadline for reply comments on NPRM regarding collection of industry-wide data (WC Docket No. 08-190).

Dec. 18 – FCC open meeting.

Dec. 22 – Deadline for reply comments on RTG petition seeking aggregation limit on commercial terrestrial spectrum below 2.3 GHz (RM-11498).

Dec. 22 – Deadline for reply comments on intercarrier compensation and USF reform proposals (WC Docket No. 06-122). Extended from Dec. 3.

Dec. 30 – FCC Form 507, Universal Service Quarterly Line Count Update, is due.

Dec. 31 – FCC Form 525, Competitive Carrier Line Count Quarterly Report, is due.

Jan. 1 – Carriers must notify customers of “Do Not Call” options.

Jan. 12 – Auction 73 winners must file quarterly report covering DTV consumer education outreach efforts for period Oct.-Dec. 2008.

Jan. 12 – DTV Education Report is due.

Jan. 15 – HAC report is due. Note: CMRS resellers and MVNOs that offer two or fewer digital wireless handsets are exempt from the HAC handset requirements but must participate in the January 2009 HAC reporting requirements.

Jan. 19 – FCC Form 497, Low Income Quarterly Report, is due.

Jan. 30 – Report of extension of credit to Federal candidates is due.

Feb. 2 – FCC FORM 502, Number Utilization and Forecast Report , is due.

Feb. 2 – FCC FORM 499-Q, Telecommunications Reporting Worksheet, is due.

Feb. 2 – Deadline for comments on Rural Cellular Association petition regarding exclusivity arrangements between commercial wireless carriers and handset manufacturers (RM-11497). Extended from Dec. 2.

Feb. 20 – Deadline for reply comments on Rural Cellular Association petition regarding exclusivity arrangements between commercial wireless carriers and handset manufacturers (RM-11497). Extended from Dec. 22.

Mar. 2 – CPNI Annual Certification is due.

Mar. 2 – FCC FORM 477, Local Competition and Broadband Reporting Form, is due.

Apr. 10 – Auction 73 winners must file quarterly report covering DTV consumer education outreach efforts for period Jan.-Mar. 2009.

This newsletter is not intended to provide legal advice. Those interested in more information should contact the firm.

Source: Blooston, Mordkofsky, Dickens, Duffy and Prendergast, LLP For additional information, contact Hal Mordkofsky at 202-828-5520 or halmor@bloostonlaw.com

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