Plenary: Regulatory Framework PanelThis plenary session panel approached the broadband-wireless regulatory landscape from three different levels—federal, state, and local. Emphasis was on local governments’ opportunities, broadband-wireless plans, and projects. Chaired by Lauren Gelman, Assistant Director, Center for Internet & Society, Stanford Law School, panelists included Alan Scrime, Chief, Policy and Rules Division, Office of Engineering and Technology, FCC; John M. Leutza, Director, Telecommunications Division, California Public Utilities Commission; Abe Kani, Chief Information Officer, City of Atlanta. Each expert discussed his area of regulatory jurisdiction at the federal, state, and local levels with respect to how cities influence outcomes in the successful implementation of municipal broadband-wireless networks. In addition, the panel entertained several questions from the chair and the floor: How are cities looking at their wireless networks? Is broadband wireless a utility? How do we use the RFP process? Federal Communications Commission Alan Scrime gave a “technical regulatory report card” and then went into municipal broadband from a federal perspective. He spoke only for himself and not on behalf of his employer, the FCC. Wi-Fi Overview He confirmed that Wi-Fi operates under unlicensed rules and therefore must accept all interference and cannot interfere with a licensed service. If you will use it for safety, it is not a guaranteed service, and cities must be careful in how they use the service. It was not designed to be robust. The rules governing Wi-Fi encourage low-power devices. The 4.9 MHz spectrum is licensed and was assigned to public safety as a broadband medium. Scrime encouraged use of this spectrum. He said the FCC has made more spectrum available and has “practically doubled” the amount of spectrum available for Wi-Fi. 250 MHz has been added to the 300 MHz that was already there, but it’s not active yet because it’s a government radar band. “Industry, government, and the military are still playing with the rules of engagement for that spectrum, to be finalized early in 2006,” Scrime said. “The devices that operate in that spectrum must sense whether there’s a radar there and get out of the way. There is concern about false positives and devices triggering one another.” Antenna rules have been changed. In the past, antennas were omnidirectional, but today you can use point-to-point link’s to get more power. Today, smart antennas can have multiple beams formed, and the FCC has allowed an 8 dB gain over what was allowed over an omni. “That’s a privilege to go a little further, but recognize that every time you go a little further, you could create more problems. You can interfere with one another, or with yourself. The beauty of Wi-Fi is that it doesn’t go very far and can be used again and again.” He addressed the 802.11n standard—“multiple input and multiple output”: “It’s where a device has a forest of antennas on top of it. The wavelengths aren’t very long, and the antennas can dig more stuff and you can get better range and higher speed with multiple antennas.” WiMAX Overview WiMAX was initially designed to be a point-to-point technology. The 2004 version, the one people are certifying to, is really P2P with an omni antenna to make it go further. The next generation will lead to the ability to talk to multiple devices. “WiMAX was desighed to be a long-range Wi-Fi, if you will. But if you put too many of these big antennas around, they all start to trip over one another, and you can’t get anything through the funnel. I look at WiMAX literally like the cellular equivalent of Wi-Fi. It is a bigger circle. Unless it’s cellularlized and has different sectors so that the frequency can be used again and again, and probably operates in licensed rather than unlicensed space if it’s going to be used in a mobile mode, the chances are it’s not going to be very satisfactory.” Unlicensed WiMAX is probably a pretty good point-to-point technology. In an omni or mobile mode, it probably wants to be licensed spectrum. The space that WiMAX tends to operate in is along a spectrum from 1 to 6 GHz. “The WiMAX sweet spots look at 2.5, 3.6, and 5.8—that’s where people tend to be using it in ulicensed arenas.” Cognitive Radio “Two or three are approved. It’s a technology that will adapt to where it is, which is a big help in making spectrum available in places where it’s important. What if a radio could sense that it’s inside a protection zone and won’t operate there? Some people think that as soon as cognitive radio shows up, we won’t need the FCC. But things won’t change that quickly. You can’t let them run all over the place and assume they’re going to work well.” FCC and Municipal Broadband “The FCC really doesn’t have a dog in this fight. It’s not really important to the FCC whether a municipal service is run by the municipality, or run by Cisco, or run by one of the big ILECs or a CLEC. It’s only important that spectrum be used efficiently and effectively. That being said, it’s still an item of interest. The FCC wants to encourage competition. The FCC is a consumer body at heart. We have some role in pole attachment fairness. We certainly like to prevent cross subsidy from regulated entities. “There are rules on right to enjoy. There’s an over the air receiver—OTARD—where the landlord can’t stop you from putting up an antenna to receive digital service. Basically, the commission looks at all the Internet stuff that should be lightly regulated, something we don’t want to kill on the way to being a successful undertaking. The technical issues: Is it licensed or unlicensed? The FCC doesn’t really care; it makes provision for both. Deliberate interference is illegal. If you’re running a municipal Wi-Fi service and somebody sets up a dish and points it right at your antenna and blows you out of the water, the enforcement bureau will be out there. “The other municipal broadband issues that might come to the fore: digital divide. A fund to support getting it to everybody. E911—that’s got the attention of the commission, and we have laws saying it must be available for VoIP. CALEA will affect this stuff, too. If you’re a muni provider, and it gets voice services over the top of it, the federal government will have an interest that you do the same things that we expect everybody else to do. Why would the municipality be exempt? “Other things to look at: I was delighted to see at this conference that the municipalities that are represented here are actually making good decisions about finding qualified people to design their networks and then finding other qualified people to run their networks. There are a variety of means to take and do that. “Owned, shared—there are different ways to get into that business. But recognize again, if you start services, you are a government entity, it may be a little hard to sue. But common-carrier regulations give them some kind of immunity. If you’re not a common carrier, if you’re just a service provider, you open yourselves up to lawsuits. Even as a municipality, be sure you have solid end-user agreements available to you when you deploy. Make sure you know what you’re doing to stay out of the way of the judge.” California Public Utilities Commission John M. Leutza, Director, Telecommunications Division, California Public Utilities Commission focused on the state perspective and the policies facing federal, state, and local lawmakers and administrators in this incredibly fast-changing and exciting era of telecommunications. Leutza said he spoke as a Commission staffer. “The PUC gets its authority from the 1934 Telecom Act which separated inter and intra state regulatory responsibilities between the federal government and states. California has been very assertive about states' rights in the area of telecommunications regulation. But that traditional policy and the industry we regulated are so different, policy makers look at our roles and see a very different future. We’re chartered to regulate wired telecom services, and while it was extended to wireless, in the 1970s. the FCC has been establishing rules about information services which are largely exempt from state regulatory oversight. And while my commission is interested in promoting the technology, our interest in regulating those kinds of services is not as strong and active as in telecommunications. “So what do state commissions look at in this age? Many of the issues apply to wireless Internet services. And I’m happy to say they synchronize with some of the things that Allan mentioned. My agency is the state representative of the citizens of California: interested in consumer protection and choice. We do have an interest in universal service. California being the fast growth state and technology innovation, is also interested in conserving numbering resources because at least now a lot of connectivity for both and telecom and information services are driven by the North American numbering plan. We also have a public safety concern. “When I look at consumer protection, most state public utilities commissions have a long legacy of protecting consumers in particular disputes about service and billing with providers of service. And in the case of the conventional telecom companies, we’ve performed that role for a very long time. My commission does not intervene for municipal customers of any kind of utility…. To the extent that you work with a commercial provider, at some level and in some way we would be interested to make sure customers are treated fairly. My commission has been working closely with the FCC to weigh in on the California perspective of these issues so that national policies that work for California are in place. “My commission is also committed to consumer choice and access. With the merging of technologies so that voice, data, and video, consumers don’t recognize any distinction between information and telecommunications services because it doesn’t matter so much any more. Our authority over telecommunications services is in the process of becoming confusing with expectations about voice communication over information services. Although we’re not looking to move into the information servidc regulation area, we do see a role educating consumers in California to the various technologies and choice they have in the emerging marketplace. “We’re also committed to making sure intermodal competition drives down costs and provides consumers with ever more choices. And my commission is engaged in regulatory reform proceedings at the commission under our administrative law authority, and in our role as an agency with the California legislature to make sure that state regulatory oversight of competing broadband platforms is technology neutral. The commission is developing policies that will likely recognize that unnecessary regulation should be eliminated. A lot of these regulations stem from our long-time regulatory oversight of large ILECs like SBC and Verizon here in California. And we’re also trying to promote policies that don’t create winners and losers. “The CPUC is also committed to the idea that consumers should have access to standalone DSL services, and we have endorsed the FCC’s policy for Internet freedom. Consumers can access the Internet content and broadband connection of their choice. “In addition to making sure the telecom carriers maximize their access to federal funds for universal service, California is a leader for making our own policies to ensure access for income-eligible Californians. We also have hundreds of thousands of very rural territory in our state that makes us almost as sparsely populated as parts of Wyoming. “We have begun to look at ways that funding mechanisms are adequate to provide universal to those who needs. The commission will embark on a rule making investigation to determin what is universal service in the new digital age. The current standard is plain old telephone service, and not a lot of services available through broadband are part of that. “As voice service migrates off traditional telecom service onto Internet-based networks, policy makers will have to redefine what universal service is and identifying new funding mechanisms will be quite complex. In California, it’s a surcharge on total intrastate billings, and with information services that don’t fall under the definition of telecommunication service, we can see that revenue service declining. Our commission, is considering a flat-rate fee per connection,and we’re intervening with FCC proceedings to explore schemes that will fund universal service regardless of the technology the connection is renderedy by. “In telephone numbering, my commission is a leader to make sure that carriers use numbers efficiently so we’re not faced with area code splits or relays. As recently as 1995, California had 12 area codes, and with the expansion of wireline competition that the telco act of 1996 ushered in, by 2000 we had 24 area codes and the forecast for area code growth in California would have had us with 40. The commission decided carriers were not using area codes efficiently, and we came up with a series of rules so by which people use numbers sequentially, they don’t contaminate them unnecessarily, and they return blocks that aren’t use when their business plans don’t work out the way they thought. And we have only 1 area code change in the 310 Western LA area in the last six years. And the California public appreciates that they don’t change. “In May 2005, the commission developed a broadband report the status of broadband deployment. California leads the nation in broadband connections, with 5.5 million broadband lines. The penetration rate is 15 lines per 100 people, and the commission is committed to making sure the technology is available to the widest possible audience in California. There are challenges in rural communities and among low-income consumers. We also saw a number of barriers existing to the complete buildout of broadband in California. We need to reform the right-of-way process which is slow and expensive for carriers interested in entering markets. We’re looking at the option of standardizing the right of way process across the state, looking at reasonable permit fees, and looking at ways to hold the CPUC out to resolve disputes between the carriers and communities regarding broadband in particular locations. “In California, the environmental quality act is serious and complicated, but also in the report that we issued in May, we’re also reviewing the scope of the environmental quality act and we’re considering supporting legislation that would resolve the process and inconsistency issues between different types of technology in California. “We recently launched a BPL rulemaking committed to encourage BB deployment in a way that doesn’t harm electric rate payers and promotes competitive broadband market in California.” City of Atlanta Abe Kani, Chief Information Officer, City of Atlanta, said the city had some unique situations that hindered its ability to move ahead with its citywide broadband-wireless plan. Atlanta launched its plan two years ago, and used an RFP process to implement different strategic goals. The Hartsfield International Airport had its own Wi-Fi proposal, and the Mayor’s Office of Community Technology had its proposal. “Each was set to establish different strategic objectives,” Kani said. The airport was set to go live with the first of its network in October. It is using its position to establish those local rules of engagement. The second project, for the city, had to change direction and could not proceed. It was a self-funded initiative depending hugely on revenue generated from subscriptions, and it had relied heavily on marketing at the airport. “We were going full speed ahead, working with the vendor to create a marketing plan, and we were ahead of schedule, and we found out that an FAA ruling prohibited us from offering any type of subscription based service at the airport, and take the revenue generated at the airport to try to build the rest of the network. We got the city attorneys involved to look at the regulations and we were not able to do any thing about it. Se we had to terminate the contract. We had some city properties and parks that were going to become Wi-Fi. But the law impacted our wireless plan.” At the airport, the physical infrastructure has been paid for by the airport. The plan has been to leverage the infrastructure and establish a contractual agreement with a WISP to come in and use the infrastructure that is owned by the airport and provide services, Kani said. “As such, we have been able to provide a very unique business model that allows a WISP to come up with a minimum amount of guarantee per year, and we provide some volume discounts in terms of number of connections. The minimum is $100,000, but for any early adopter, the minimum as $50K, and we have a lot of WISPs that are signed up, and there are opportunities for fee-based revenue generation. The city was able to use its position to establish this business model. If you’re involved with any local government, we have the opportunity to leverage franchise agreements, to negotiate the kind of agreements that give us concession to use some of the assets—for instance, telecom service providers, cable service providers.” Kani also addressed right of way as another opportunity to leverage to move forward with some of the city’s plans. “These are things the city is working on, to proceed forward with our wireless plan. Now we’re back to starting the process again, putting out an RFP. It’s disappointing to start again from zero, but a lot has happened over the years. “The last conference that W2i sponsored in Philadelphia demonstrated that there is just so much interest out there. There was a time when everybody was wondering what the silver bullet solution, the ultimate business model where you don’t have to pay for anything, and you get all the revenues out of the initiative. Those are some of the real-life situations that we had to deal with. We had to deal with the impact of regulation or become more creative and leverage our position to achieve our goals.” Discussion and Q&A Panel chair Lauren Gelman made three major points in response to the presentations: 1. “One is the constituents, people who are going to use the network…. When we look at the externalities of these networks, we’ve got to think that we’re building something for schools and libraries. It’s not just about e-commerce and business models, but it’s about people who are not able to take advantage of what’s on the Web right now. It’s something that the incumbents are not providing. People putting clouds over cities—that’s what they’re to accomplish, and regulations should support that goal.” 2. “The second point is innovation, which has sparked so much economic growth. And it has happened on a network that’s an open platform that anybody can plug into and create new stuff. I have a fear of network people are building who say trust us, we’ll innovate within the network and not trust us, we’re building a network that anyone can plug anything into on any edge and use it to create and build. I want us to have networks that have plugs like those that you plug your computer into the wall, so one person’s bits are not prioritized over other people’s bits.” 3. “The third reason I care about this, is because what goes over this network is speech, and as a person who teaches about the 1st Amendment, I see people being able to be speech producers in the same way that was limited to media companies and newspapers and other things in the past. I want to make sure everybody has the opportunity to use these networks for speech. Open spectrum is important because people can use it, nature created it, there’s no intermediary that’s going to say it can or can’t carry it. If incumbent providers were getting this done themselves, there wouldn’t be a need for a lot of cities to step in and say, I’m not getting what I want.”
Question from the floor: “Can you give any comments on the situation in Massachusetts with Continental Airlines and MassPort? The other is the operation mode of DSL residential providers and cable model providers—do they operate as common carriers? And to Mr. Kani: Do your agreements with your WISPs preclude you from having multiple providers, including free operators.” Alan Scrime: “At Logan Airport, American Airlines provided free Wi-Fi service in its president’s lounge. MassPort, which runs Logan, threw down a gauntlet and said it would like to provide service to all the airport. ‘You can provide it in the lounge from our provider.’ Both American and Continental airlines were disappointed with the decision, and they have petitioned the Commission to take some action on that. I can’t comment further, but the record has something in excess of 2,000 comments in it now. We’re still in the comment phase. “Second: Are the ILECs who do DSL and the cable companies common carriers? I’m not really an attorney, and I don’t work in the wireline side of the commission. But I do not think the cable companies are common carriers, and I do not believe that the DSL provided by the ILECs is typically under their common-carriage umbrella. When I was in the telephone company, I was part of an unregulated subsidiary that was offering DSL, and we were looked upon as a separate subsidiary and had a lot of FCC oversight for cross subsidiary, etc. I’m not sure what the answer to that second piece is.” John M. Leutza: “As far as common carriage related to cable modem and telco carrier DSL, they are provided under common carriage but it’s information services, so the rules about them are FCC driver.” Lauren Gelman: “I am an attorney. There was a Supreme Court decision last term that actually dealt with this question of whether cable modems were going to be regulated as common carriers the same way the provision of DSL is. There was a question of interpreting the telecom statue. And the Court said we are not going to have you be regulated, and the FCC moved quickly to not regulate the DSL provider. Currently, nobody is regulated as common carriers. But the Telecom Act is undergoing a major rewrite this year and there’s currently a draft bill on the House and Senate sides addressing this question very differently, going to the question of who is going to be regulated. Will the retail providers of these municipal Wi-Fi’s be regulated or not regulated. It also goes to the question of network neutrality. Will you be forced to let other services in to use your networks. In this rewrite, the first of the Internet Age, and focused on these questions—it will be play.” Abe Kani: “The business model we have put in place allows for multiple service providers to provide services. As long as they meet the terms and conditions of the agreement, which is the minimum annual guarantee and those privileges, fees.” Question: “If I understood you correctly, something like Skype kind of would fall under the ISP, whether municipal Wi-Fi, or regular ISP, is liable to support wiretapping for that?” Alan Scrime: “Let me be circular again because I’m not an attorney. The ruling that came out said the facilities based carriers and interconnected VoIP providers, would be subject to these rules, and there was a notice of proposed rulemaking that went along with that asked more questions and said more to follow.” Lauren Gelman: “There’s going to be a court challenge, I imagine, to this regulation which also has to do with an interpretation of a statute that was written before there was language to adequately describe what’s going on now. Whether you can classify it as a telecommunications service, and whether CALEA—the statute that requires people who provide telecommunications to build them so the FBI can wiretap them—and so the question came up, with VoIP communications, do you also have to build them, and all of broadband, to be wire-tappable. The FCC decided yes, but did the FCC have the jurisdiction to even make this determination, because the statute was written to regulate telecommunications services?” Question: “For a layman, it’s a very busy area of the law. I’m confused by the level of legislation being passed at each level of government. Can you comment specifically on the pending federal pending legislation pro and anti muni Wi-Fi and where will jurisfiction come from?” Lauren Gelman: “I believe the bill in the House [???] explicitly states cities can do Wi-Fi. So this would overrule the 12 states that have said cities can’t do that. There’s a lot of pushback by the incumbents, but I do think at the end of the day cities will be able to do municipal Wi-Fi. Because it’s an interstate commerce kind of thing, the federal government can overrule the states in this area. I think it’s going to come to closure about this time next year before the elections.” John M. Leutza: “That’s an incredibly important prediction, because the Telco Act of 1996 was before Congress for 15 years before it was actually passed. But I think all levels of lawmakers are confused about the variety of laws at all different levels and the inconsistent approach, so the stakes are high enough so that it will happen quickly, and I agree that it will be a federal decision.”
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