SENATE COMMERCE MOVES VOIP, SHVIA AND OTHER LEGISLATION

VoIP Legislation Passes With States Rights Preserved

The Committee approved Sen. Sununu’s (R-N.H.) VoIP bill (S-2281), but not before adding an amendment from Sen. Dorgan (D-N.D.) that would preserve states’ rights to regulate intrastate access charges and allow states to collect universal service fund charges on VoIP. Sununu said the amendment would “gut” his bill, but it passed 12-10, with several senators emphasizing the need to protect USF.

The Dorgan amendment left many lobbyists unsure of how to react to the bill. The amendment was considered a victory for NARUC and rural LECS and a defeat for long distance providers. One source said the VoIP measure as passed was helpful to the cable industry. USTA expressed reservations, saying the bill created “more questions than answers” and CompTel/ASCENT said applying the regulatory fees to VoIP could undermine the technology before it develops.

Sununu pushed a substitute of his bill, which was endorsed by Senate Appropriations Chmn. Stevens (R-Alaska) and Sens. Cantwell (D-Wash.) and Lautenberg (D-N.J.) Among the changes, VoIP wouldn’t be treated as an information service when approached by law enforcement, which would presumably open VoIP to more CALEA requirements. Sununu said the bill wouldn’t preempt states on taxes and wouldn’t violate the Internet tax moratorium. States would also be allowed to maintain consumer protection regimes with regard to VoIP service, Sununu said, but NARUC said the consumer protection provisions caused some concern. The bill would preempt state regulation of VoIP 3 years.

But hurried drafting of the bill, finished by staff about 3 a.m. Thurs., left some senators questioning what was in the bill. Dorgan expressed concerns about preemptions and asked Sununu for more specifics. Sununu’s response didn’t seem to satisfy Dorgan, who voted against the bill despite the fact that his amendment was approved. Sununu stressed that while the final language was drafted late, staffs for all Committee members had been working on the details for weeks and it was wrong for Dorgan to characterize the amendment as having been written “in the middle of the night.”

The Dorgan amendment didn’t have the support of Senate Appropriations Chmn. Stevens (R-Alaska), a vocal supporter of USF and advocate of expanding USF obligations to other services, such as cable modems. However, Stevens said the Dorgan amendment “goes too far” and could kill the nascent technology by allowing states to apply “extensive charges” that would hamper its development. Senate Commerce Committee ranking Democrat Hollings (S.C.) supported the Dorgan amendment, saying USF “is gone” unless the measure was approved. Sen. Ensign (R-Nev.) said he didn’t support the amendment, but did say more clarification was needed on access charges and USF support.

The bill also included an amendment from Sens. Burns (R- Mont.) and Nelson (D-Fla.) that would preserve 911 obligations for VoIP. Sununu said 911 wasn’t included in the underlying VoIP bill, partly because he was looking for industry to agree more on the issue. Stevens said other parts of the industry don’t have 911 obligations and he wondered why they were being applied to a technology that was “in its infancy.” But Sen. Boxer (D-Cal.) said she couldn’t support a VoIP bill that didn’t have 911 protections and the committee approved the amendment.

Several industry sources said the fighting over how to preempt the states showed that the bill wasn’t ready to move in the full Senate and was unlikely to pass this year. An agreement among Stevens, McCain and Sununu on Wed. evening to ensure a markup of the bill had some worrying that the bill would be sent to the floor once it passed committee. But some said the Dorgan amendment showed there wasn’t a consensus, which made passage unlikely. However, Sununu said late Thurs. he was still excited about the bill -- despite the amendments -- and would continue to work with Rep. Pickering (R-Miss.) to pass the bill. “Congress does not want states implementing new regulations that will inhibit this emerging technology,” Sununu said.

Committee Moves SHVIA, Gives DBS Access to White Areas

The Committee also passed the Satellite Home Viewer Improvement Act (SHVIA) legislation(S-2644) from Sen. Ensign (R-Nev.), which would let DBS providers send a distant digital signal to viewers in markets where broadcasters don’t provide DTV coverage. Under the legislation, DBS must first offer an analog version of the local signal and once broadcasters extend the digital signal, DBS must not cease to offer the distance digital signal. The bill passed unanimously and has several differences from legislation approved by the House Commerce Committee, which only authorized an FCC study of digital white area.

The bill also set an end to EchoStar’s 2-dish policy. Like the House bill, EchoStar must end its policy of carrying some local signals on a 2nd dish. EchoStar may still use a 2nd dish, but all local stations must be on the same dish. The bill also gives the FCC one year to develop a digital predictive model for over-the-air DTV broadcasts. Senate Communications Subcommittee Chmn. Burns (R-Mont.) withdrew an amendment that would require just a study by the FCC. Senate sources said the amendment was an attempt to gut the bill, but Burns didn’t pursue the amendment.

DBS providers said they were very pleased with the Committee’s action. SBCA said it was a “pro-consumer” bill. “Congress is not only ensuring that all consumers have access to a digital quality signal, but also helping speed along the digital transition in the United States,” SBCA said. EchoStar also supported the bill, saying: “Millions of Americans will benefit, particularly in rural parts of our country.” While EchoStar fought to retain its 2-dish policy, it said the Senate’s version of the bill was still more favorable than the House Commerce Committee version. The Digital Transition Coalition, which has advocated allowing DBS to broadcast to digital white areas, also praised the bill. Univision, Telemundo, Consumers Union and Religious Voices in Broadcasting also supported the bill.

NAB applauded Senate’s action on SHVIA. We applaud the bill’s recognition that EchoStar’s discriminatory two-dish policy must end and look forward to working with Congress to complete the SHVIA reauthorization legislation,” NAB Pres. Eddie Fritts said in a statement.

SHVIA has now passed all 4 relevant committees: House and Senate commerce and judiciary committees. But Senate Judiciary Committee ranking Democrat Leahy (D-Vt.) also raised concerns about the Senate Commerce Committee version of the bill. The bill expands the compulsory license for distant network signals to digital broadcasts, and Senate legal staffers told the Commerce Committee that the Judiciary Committee members believed extension of that license was the jurisdiction of the Judiciary Committee. McCain said that there have been examples of the Judiciary Committee encroaching on Commerce Committee jurisdiction, but pledged to work closely with the Judiciary Committee to resolve the dispute.

Low Power FM Bill Passes Without Attempts to Bolster FCC Study

The Committee passage of Low Power FM (LPFM) legislation (S-2505) was the first ever loss for the NAB in the Senate Commerce Committee, Chmn. McCain (R-Ariz.) said Thurs. McCain used more fiery rhetoric to denounce broadcasters, then appeared surprised when efforts to water down the LPFM bill were defeated. Bcstrs. opposed the LPFM bill, which would allow more LPFM stations to receive licenses from the FCC. Broadcasters raised concerns that the FCC didn’t properly study interference concerns and that the proximity of LPFM stations to broadcasters would cause interference.

In preparing the Committee for the bill, McCain said the NAB was fighting “Hispanics, minorities and community organizations” by opposing the bill. He said NAB would obviously “prevail over people who are without a voice.” After bringing up the bill, which McCain introduced, he then recognized Senate Communications Subcommittee Chmn. Burns (R- Mont.) for an amendment to kill the bill. Burns’ amendment would require more FCC study of interference issues. But the amendment failed 12-10, with Sens. Brownback (R-Kan.) and Fitzgerald (R-Ill.) voting with Democrats. McCain said it was the first time in the Committee’s history “NAB has not prevailed.” NAB didn’t comment.

Clear Channel said it was disappointed by the vote. “The best engineers say these stations will cause harmful interference. That’s why Congress told the FCC to do a real world study -- but, when the FCC ran their tests, they never set foot outside the lab. We're disappointed because it will be America’s millions of radio listeners who will suffer irritating static or unintelligible crosstalk when they try and tune in their radios,” a Clear Channel spokesman said.

NAB said it was disappointed with the LPFM decision, reiterating its claim that LPFM will cause interference. “It’s unfortunate that local radio listeners will be the unintended victims of the inevitable interference that would result from shoehorning more stations onto an already overcrowded radio dial,” said NAB Pres. Eddie Fritts.

The Benton Foundation said the LPFM decision creates opportunities for new voices on the airwaves, allowing local groups and community organizations to provide local interest content. “By tuning into the public’s needs, Low Power FM has finally won out over high power politics,” said Benton’s Chmn. Charles Benton.

CPB, Junk Fax Passes, but No Amendments Considered

Legislation to loosen FCC fax rules and reauthorize the Corp. for Public Bcstg. (CPB) passed Thurs., but Wyden’s procedural motion prevented consideration of amendments to the bill. Several senate sources said Thurs. they were confused by the outcome and weren’t sure whether the bills actually passed, since there was no method to offer amendments. Senate Commerce Committee Chmn. McCain’s (R- Ariz.) spokeswoman said the bills indeed passed. One source said the CPB bill (S-2645) had several proposed amendments, including one to require more local participation on the CPB board.

The Junk Fax bill (S-2603), from Sen. Smith (R-Ore.), is similar to legislation (HR-4600) that passed the House on Wed. It would reestablish the “existing business relationship” (EBR) clause in FCC fax rules to allow business to maintain the right to fax to customers. Like the House bill, it would require GAO and the FCC to study and report to Congress on junk fax enforcement efforts. One source said an amendment was planned to limit the EBR to 3 years.

CPB legislation, from McCain, would: (1) Provide CPB explicit authority to award grants for production and acquisition of local programming and allow stations to use CPB funds to support DTV transition. (2) Expand the definition of public telecom services to include services public broadcasters are providing through their web sites and digital multicasting. (3) Let CPB recoup some federal funds provided to a public broadcast station if the board sells the station to an entity that doesn’t offer public broadcasting services.

Commerce Committee to Send Letter on Adelstein’s Behalf

Responding to complaints from Sen. Dorgan (D-N.D.), McCain (R-Ariz.) said the entire Committee would sign a letter to President Bush urging the renomination of Jonathan Adelstein for his FCC seat be sent to the Committee. Adelstein’s nomination has languished at the White House, which has delayed more than a year sending his renomination to the Senate. If he’s not reconfirmed by the end of the congressional session, Adelstein’s term will expire. Dorgan said it was “unjust, unfair and arrogant” for the White House to delay sending the nomination. “It’s not the White House’s seat, it’s the Democrats’ seat,” Dorgan said. McCain and Sen. Lott (R-Miss.) both said they agreed with Dorgan and Lott wondered why his nomination hasn’t been included in a legislative package. McCain said a letter would be sent soon, possibly on Thurs., with all members signatures, urging the nomination be sent to the Committee. No members voiced objections to the letter.