Key Legal and Regulatory Issues Affecting Community Broadband Projects in the United States in VS .NET

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Key Legal and Regulatory Issues Affecting Community Broadband Projects in the United States
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A provider of a telecommunications service must comply with common carrier requirements to the extent that it is engaged in providing such services, Act, Section 3(44) Title II of the Communications Act spells out numerous additional duties of common carriers, including compliance with rules governing equal access and pricing, tarif ng, record keeping, reporting, participating in the Commission s complaint processes, performing studies prescribed by the Commission, etc The Commission has relaxed some tarif ng requirements on nondominant carriers Under Section 251(a) of the Act, each telecommunications carrier has a general duty (1) to interconnect directly or indirectly with the facilities and equipment of other telecommunications carriers; and (2) not to install network features, functions, or capabilities that do not comply with the guidelines and standards established pursuant to Section 255 or 256, which apply to access by handicapped and disadvantaged persons (NB: the Commission has said that a telecommunications carrier can satisfy part (1) simply by interconnecting with the public switched network; to date, the Commission has not de ned the duties referred to in part (2)) Under Section 254 of the Act, and several implementing orders and decisions, all telecommunications carriers and all other providers of interstate telecommunications must contribute to the federal Universal Service Fund Contributions are based on a contribution factor announced by the Commission each quarter Providers of telecommunications services must also ful ll various privacy requirements under Section 222 The Act also affords telecommunications carrier(s) certain bene ts, including the right to interconnect with the facilities of incumbent local exchange carriers on a just, reasonable and nondiscriminatory basis; the right to participate in negotiations and/or arbitrations framed by the Commission s interconnection rules and the right to receive reimbursement for furnishing services covered by the universal service program Providers of cable services are regulated under the federal cable provisions of Title VI of the Communications Act, and are required to obtain a franchise at either the state or local level, depending on state law An exception to the franchise requirement is that municipallyowned cable systems are not required to obtain a franchise under the federal Cable Act, as amended (NB: as a practical matter, however, many public cable systems subject themselves to obligations that are identical, or substantially similar, to those imposed on private cable companies) Providers of information services are not subject to federal regulation or, in most states, state regulation Up until 2002, the FCC had declined to take a de nitive position as to the regulatory classi cation of cable modem services This uncertainty helped to spawn con icting federal court opinions on the proper classi cation of the service The 9th Circuit in City of Portland, OR v AT&T Corp, 45 FSupp2d 1146 (WD Or 1999), rev d, 216 F3d 871 (9th Cir 2000), concluded that a cable modem service is a type of telecommunications service In contrast, the 11th Circuit, in Gulf Power v FCC, 208 F3d 1263 (11th Cir 2000), held that a cable modem service is neither a cable service nor a telecommunications service, but an information service The Gulf Power decision was overturned by the Supreme Court on other grounds National Cable & Telecommunications Association, Inc v Gulf Power Co, 534 US 327 (2002)
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In March 2002, the FCC released a declaratory ruling in which it found that a cable modem service is an interstate information service and thus not a cable service, In the Matter of Inquiry Concerning High-Speed Access to the Internet Over Cable and Other Facilities Internet Over Cable Declaratory Ruling , GN Docket No 00 185, CS Docket No 02 52, (rel March 15, 2002) The FCC s decision has been appealed to the 9th Court of Appeals The elimination of cable modem services from the scope of the cable service de nition has mixed regulatory, nancial and political implications for municipal utilities It should allow for greater regulatory freedom, but it also eliminates cable modem revenue from the calculation of cable franchise fees payable to local franchising authorities In Brand X Internet Services v FCC, 345 F3d 1120 (9th Cir 2003) (petitions for reconsideration en banc denied, petition for cert expected), the 9th Circuit overturned the FCC s declaratory ruling, holding that the court was bound by the Portland panel s decision that an Internet access service is both an information service and a telecommunications service The FCC has announced that it will seek further review by the Supreme Court In a proceeding related to its cable modem proceeding, the FCC issued a Notice of Proposed Rulemaking to develop a legal and policy framework under the Communications Act, as amended, for access to the Internet provided over domestic wireline facilities, in the Matter of Appropriate Framework for Broadband Access to the Internet over Wireline Facilities , CC Docket Nos 02 33, 95 20, 98 10, Notice of Proposed Rulemaking (rel February 15, 2002) In the NPRM, the FCC proposed to rule that an Internet access service over wireline facilities is also an interstate information service, rather than a cable service or a telecommunications service After examining the statutory de nitions of telecommunications, telecommunications service, and information service, the FCC tentatively concluded in the Wireline NPRM that providers of wireline broadband Internet access services should properly be classi ed as information service providers under the Act, rather than as providers of telecommunications services In its Wireline NPRM, the FCC sought comment on the potential consequences of its tentative legal interpretation Among the areas of concern were whether the FCC s proposed action would signi cantly impair the development of competition, as envisioned in the Telecommunications Act, and whether the ultimate effect of moving an increasing number of services out of the de nitions of telecommunications services or telecommunications would be to bankrupt the federal Universal Service Program The FCC s action also implicated access safeguards, interconnection, security, consumer protection and a host of other important issues The FCC is not likely to complete this rulemaking until the controversy surrounding its cable modem declaratory ruling is nally resolved The regulatory status of Voice over Internet Protocol (VoIP) has created considerable controversy 1 In Vonage Holdings Corp v Minn PUC, 290 F Supp 2d 993 (D Minn 2003), the district court ruled that Vonage s version of VoIP is an information service, and permanently enjoined the State of Minnesota from seeking to regulate that service as a telecommunications service 2 On February 12, 2004, the FCC ruled in Petition for Declaratory Ruling that PulverCom s Free World Dialup is neither Telecommunications nor a Telecommunications Service, WC Docket No 03 45 (rel Feb 5, 2003), that Pulver s form of VoIP, a free, purely peer-to-peer
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