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Bar News - September 16, 2015


Environmental, Telecomm, Utilities & Energy Law: How Convergence Is Shaping Telecommunications Law

By:

A generation ago, here’s how you might have acquired and worked with the information you needed to navigate through your day:

Your clock radio would wake you to the sound of news, weather, and traffic reports. As you enter the kitchen, you might also turn on the TV to listen to a morning news show, and then grab the morning paper off the front stoop.

On your way out the door, you would drop some bill payments in your mailbox and then drive (with the radio on) to your office, with its various office machines and phone/data lines.

Arriving back home at the end of the day, you would check the contents of your mailbox, most of which would be advertising or bills. Occasionally, there would be a card or letter from a relative or friend.

At some point in the evening, the TV would be back on, or you might listen to recorded music on the home stereo, or read a book that you borrowed from the library or purchased at the bookstore. Some evenings you might watch a broadcast television show or movie, or pop in a tape from the video store, or even go out to the movies.

And, of course, all through the day you would have had numerous telephone conversations with friends, family, and business associates.

Each one of these forms of “information transfer” would have occurred using a separate device, a separate method, and a separate transmission or transportation technology. Today, however, these activities can be conducted with a single device – smartphone, tablet, laptop – over a single broadband connection, and all concurrently. In fact, some transactions can only be conducted over the Internet now, e.g. college and job applications. Some of today’s applications involving the so-called Internet of Things (IoT) could not have been imagined a generation ago. With IoT, you can use your smartphone to control your thermostat, lighting, home security, fitness monitor, baby monitor, car, and a host of other electrical devices, from anywhere in the world.

Telecommunications convergence has made broadband connectivity central, if not essential, to modern life. The Federal Communications Commission (FCC) has observed that Americans now turn to broadband Internet access service for every facet of daily life. Accordingly, the FCC has shifted its focus from enforcing competition in landline telecommunications to encouraging wired and wireless broadband deployment and access.

Earlier this year, citing the speeds required for multi-user households to use high-quality video, data, voice, and other broadband applications, the FCC revised its definition of “broadband” speed to 25 megabit per second (Mbps) downloads and 3 Mbps uploads. Most Americans have access to this level of service, but about 17 percent do not, with this number exceeding 50 percent in rural areas. (The respective numbers for New Hampshire are 17 and 36 percent). However, even for those housing units for which that level is available, fewer than half are served by more than one wireline provider.

Generally, broadband services have been very lightly regulated compared to traditional “plain old telephone service” (POTS), particularly in New Hampshire, where Internet Protocol (IP) enabled and Voice over IP (VoIP) applications are exempt from any state public utility regulation at all. However, the essential nature of broadband access, and the market concentration in certain areas, raises questions about whether broadband service offerings should be regulated at the federal level and, if so, to what degree.

Two of the most topical issues related to telecommunications law are net neutrality and spectrum allocation.

Net neutrality

Currently, one of the most contentious issue involves “network neutrality”; that is, the extent to which broadband Internet service should conform to common carrier principles that were traditionally applied to POTS. Many in the industry have argued that the Internet has flourished without burdensome regulation and should remain so. Others are concerned about broadband providers having bottleneck and gatekeeper power over the public’s access to information.

Earlier this year, the FCC issued its Open Internet Order, in which it affirmed the right of users to “go where they want, when they want.” The FCC established three primary rules:

  • Blocking: Broadband providers may not block access to lawful content, applications, services or non-harmful devices.
  • Throttling: Broadband providers may not deliberately target some lawful Internet traffic to be delivered to users more slowly than other traffic.
  • Paid prioritization: Broadband providers may not favor some Internet traffic in exchange for consideration of any kind – in other words, no “fast lanes.”

There is heated rhetoric on both sides of this issue. Those who favor net neutrality see it as essential to the democratic process and to ensuring innovation by content providers. Those who are opposed see net neutrality rules as a barrier to innovation and expansion, and an unprecedented assumption of regulatory power by the FCC to regulate a massive portion of the US economy.

Consequently, opponents have appealed the FCC’s net neutrality rules to the federal DC Circuit Court of Appeals. This will be the third time that these or similar rules have been appealed to the DC Circuit. If and when this issue if finally settled, it will be interesting to see how the various claims and warnings are borne out in practice.

Spectrum allocation

Communications convergence has dramatically increased demands on both licensed (e.g. cellphone) and unlicensed (e.g. WiFi) wireless spectrum.

The FCC has been working to free up spectrum for wireless broadband and facilitate the deployment of wireless networks. One of its latest innovations involves the idea of incentive auctions to encourage current licensees to voluntarily relinquish spectrum usage rights in exchange for a share of the proceeds from an auction of new licenses to use the repurposed spectrum. In this vein, Congress in 2012 directed the FCC to conduct an incentive auction of broadcast television spectrum, a particularly desirable spectrum band.

The spectrum reclaimed through the incentive auction is intended to increase the speed, capacity and ubiquity of mobile broadband service, such as 4G LTE and Wi-Fi networks, and accelerate the mobile revolution. The incentive auction of broadcast television spectrum will have three major pieces: (1) a “reverse auction” in which broadcast television licensees submit bids to voluntarily relinquish spectrum usage rights in exchange for payments; (2) a reorganization of broadcast television bands; and (3) a “forward auction” of initial licenses for flexible use of the newly available spectrum.

The auctions are planned to begin in early 2016. Tens of billions of dollars are expected to change hands. (A recent auction of less desirable spectrum brought in $45 billion.) The result could produce major changes in the broadcast TV business, and the concentration of wireless providers.

Other law

Aside from utility law, there are other areas to watch. The combination of activities that are conducted over broadband generates an astounding amount of personal information that can be compiled into a detailed dossier of a user’s life. This raises privacy and security issues for which laws are still being developed. Meanwhile, we cannot ignore traditional concerns like access to emergency services, i.e. 911, and how to finance carrier of last resort obligations in local service territories that are facing technology transition and competition.

The telephone industry is rapidly evolving away from the public utility laws of the past, but telecommunications convergence raises new public policy issues that make telecommunications law more relevant than it ever has been.


Harry Malone

Harry Malone is a shareholder with Devine Millimet & Branch in its Telecommunica-tions, Energy and Regulated Industries practices. His practice includes state and fed-eral public utility law, with particular focus on telecommunications, including wireline and wireless carriers and Internet service providers.

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