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Wireless carriers’ networks are subject to recurring capacity constraints, particularly in high density, urban environments.  Owners of buildings and developments in urban areas and operators of major venues—stadiums, arenas and airports, are increasingly dealing with in-building wireless reception challenges.  The same is true for many corporate and college campuses, buildings constructed to LEEDs standards, and properties located in wireless dead zones.

The consistent growth in wireless data requirements and the displacement of wireline service by wireless for voice communications underlie persistent wireless network capacity challenges.  Small cells and heterogeneous networks (“HetNets”) (integrated Wi-Fi and wireless carrier networks) are viewed as technologies potentially capable of alleviating these capacity constraints, as noted in a series of articles in the March 2014 edition of Small Cell Magazine.

For major venue operators, enterprise customers, government agencies, colleges and universities, and owners of MDUs and multitenant commercial buildings (collectively “Property Owners”), “the future is now” for dealing with wireless reception challenges.  Consumer signal boosters recently approved by the FCC do not provide building, venue, or campus-wide solutions.  Wireless carrier engagement and consent are required to implement property-wide solutions.

The principal technologies for addressing in-building coverage gaps are outlined in recent articles by the HetNet Forum and David Chambers, respectively.  A potential game changer is the standalone Wi-Fi networks of the major cable operators which rely on Wi-Fi hotspots.  The Wall Street Journal’s “Heard on the Street” column reports that Sprint is positing the success of Time Warner and Comcast in rolling out Wi-Fi networks as evidence that the wireless broadband market is sufficiently competitive, mitigating antitrust concerns regarding its coveted merger with T-Mobile.  Smaller companies are focused on delivering Wi-Fi solutions to MDUs.  The popularity of Wi-Fi-only iPads, tablets and e-readers underscores the potential for Wi-Fi-enabled, property-wide solutions.

Addressing In-Building Wireless Capacity/Coverage Challenges

Major venue operators tend to secure desired solutions in a timely manner.  Apparently, the desire to avoid negative publicity associated with reports of bad coverage at major sporting events motivates carriers to address coverage and capacity challenges at these venues.  However, the demand for wireless connectivity and personal safety considerations indicate that in-building wireless reception challenges should be addressed in all environments.

Prior to investing in a wireless reception solution, Property Owners typically retain an experienced consultant or systems integrator to conduct a wireless coverage assessment for their property or campus.  In addition to signal strength studies, experienced consultants bring knowledge of the wireless carriers’ local networks and build-out plans and relationships with carrier network engineers.  Occasionally, these assessments result in carriers funding a portion of a project because the in-building solution offloads traffic from capacity-constrained macro networks.

Carriers and consultants typically suggest that property owners or their contractors reach out to the carriers up to one year in advance of planned construction.  This advance notice/discussion period is a non-starter for Property Owners of existing premises experiencing wireless reception challenges.

The top-of-the-line, capex intensive in-building solution is an active DAS system.  These DAS systems can accommodate multiple carriers and, with some exceptions, all wireless carrier frequency bands, Public Safety frequencies, required by a growing number of local ordinances, and the unlicensed frequencies used in Wi-Fi networks.

Over and above the cost and technology considerations, the most daunting challenge for Property Owners can be obtaining the “buy-in” from the wireless carrier(s).  Perhaps due to a lack of resources or skepticism that non-carriers can design effective solutions, wireless carriers often view working with Property Owners on in-building solutions as something to avoid, if possible.

When we review the standard agreements carriers offer Property Owners in order to support or consent to an in-building solution, several points jump out:

  1. The customer-friendly terms and conditions previously provided in signal booster attachments to wireless services agreements have vanished.
  2. The standard wireless macro-site lease provision of a 5-year term with up to four 5-year renewal terms solely at the carrier’s option is a constant carrier demand. This puts Property Owners’ investment in its solution at risk and ignores the reality that Property Owners are “involuntary aggregators” of the carriers’ customers trying to implement a solution benefitting the carriers’ customers.
  3. Wireless carriers reserve the right to decline to approve a proposed solution for any reason and some demand the right to terminate their consent at any time upon 30 days notice.
  4. Carriers’ demands for open-ended indemnities in connection with in-building solutions.

Hopefully, the wireless carriers will reassess current approaches and work with Property Owners as partners in developing and deploying in-building wireless solutions for their common subscribers, tenants, and residents.

For a split second, it looked like hobbyists and specially authorized users would no longer be the only ones using drones.  It seemed entirely possible for the U.S. to catch up to other countries and capitalize on the technology, which is projected to have a positive economic impact of billions of dollars.  No longer would the U.S. lag behind other adopters.

The basis for the excitement was a National Transportation Safety Board (NTSB) administrative law judge (ALJ) decision granting a motion to dismiss a Federal Aviation Administration (FAA) order fining a drone operator alleging that the flight operation was commercial, i.e., for compensation, and was prohibited from flight in the U.S. national airspace.  In Pirker v. Huerta, the NTSB ALJ held that the agency has no enforceable rule applicable to unmanned aircraft system (UAS) and that the agency could not rely on its policy statements because they were non-binding on commercial model aircraft operators since the statements were FAA-internal guidance and had not been subject to the notice and comment process required for public rulemaking.

The sense of victory, however, was short-lived.  The FAA quickly responded to the Pinker decision with an appeal to the full NTSB to stay the decision.  If the appeal fails, it is quite likely that the FAA will issue a final rule prohibiting the commercial use of drones in the national airspace, citing to a safety emergency.

The FAA appears unaffected by increasing pressure from drone manufacturers and other industry stakeholders to adopt UAS technology without first promulgating a full body of regulations to manage commercial flight operations.  Congress seemingly agrees since it set a 2015 deadline mandating that the FAA develop a regulatory framework for the testing and licensing of commercial drones.

Challenges faced by the FAA in the incorporation of drones into the national airspace system include engineering and systems integration of “sense-and-avoid” systems so that UAS do not collide with other aircraft and objects; continued safe flight if the radio link between the drone and the operator is lost; the collaboration required with other government agencies and aviation stakeholders; homeland security; and the protection of privacy.  When asked why the U.S. was behind in adopting this technology advancement, Jim Williams, head of the FAA’s drone office, told the Washington Post that “writing rules for the U.S. is more complex than other nations.  The U.S. has far more air traffic than anywhere else and a greater variety of aircraft, from hot air balloons and old-fashioned barnstormers to the most sophisticated airliners and military and business jets.  At low altitudes, the concern is a small drone could collide with a helicopter or small plane flown by a recreational pilot.”

This is not the first time we have seen FAA’s slow adoption of new technology.  During a January 15 Senate Commerce, Science and Transportation Committee hearing, the question of why the U.S. has been outpaced by other countries was raised.  There is no singular reason, but the high accident rate for UAS, which is worse than all other types of aircraft, and the perceived threat drones pose to our personal privacy factor in greatly.

Unquestionably, the FAA recognizes that unmanned aircrafts are a rapidly emerging technology with great commercial potential and “broad benefits for virtually all Americans,” as described by FAA Administrator Michael P. Huerta.  Nevertheless, the FAA appears to be steadfast in its commitment to adopt this latest advancement in aviation with measured steps.  As stated by John D. Rockefeller, the Senate Committee’s Chairman, in support of the FAA’s slow and methodical pace, “Lives are at stake.”

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A confluence of factors confirms the FCC’s 2013 Wireless Signal Booster Report and Order is best viewed as a “first-step” in addressing wireless in-building reception challenges.

Significant “gaps” in wireless reception within multi-story buildings and large complexes are likely to persist as long as wireless carriers can decide whether and on what terms to allow property owners to install “industrial signal boosters”—operated in connection with in-building distributed antenna systems (DAS) or not—even though wireless carrier discretion and control are central themes of the Report and Order.

Several trends strongly suggest carrier discretion could prove problematic for persons living or working within multi-story buildings.

  • The growing number of individuals under 35 years of age that rely exclusively on wireless for voice communications is unprecedented, as noted in the  Sixteenth Mobile Wireless Competition Report:  “Approximately half of all adults aged 18-24 and aged 30-34 lived in wireless-only households in the first half of 2012, while nearly 60 percent of adults aged 25-29 did so.”
  • In many multi-story buildings (residential and commercial), access to the outside of the buildings is not feasible; terraces are not commonplace in “high rise” developments.  Thus, consumer signal boosters will not be a solution because their antennas are intended to be mounted on the outside of buildings.
  • The commitment of property developers to Leadership in Energy and Environmental Design (“LEED”) materials and practices, including Low-E windows that are both extremely energy efficient and extremely effective in blocking wireless signals.

A “carrier-driven” solution that could overcome these challenges is small cell technology. While internal cabling is still required, the costs and time to deploy small cells reportedly compare very favorably to DAS deployments.  One drawback to small cell technology, which also may be WiFi-enabled, is that this technology likely will be deployed on a carrier-specific basis.  Thus, the so-called “neutral host” DAS may prove preferable for many in-building environments because all carriers can be accommodated by these systems.  This is particularly critical in MDUs and multi-tenant commercial buildings.

Even though the carriers hold many “of the cards” for addressing in-building wireless reception challenges, developers and property owners will have to “ante up,” as well.  These challenges will require their engagement and dollars to deliver viable solutions to their residents and tenants.  The “wild cards” include near-by construction and development that can impair wireless reception at a given property and other changes in the macro wireless environment, requiring flexibility and resources from both carriers and property owners.

For the preferred multi-carrier, in-building solutions, the costs typically run well into six figures or more per property; the design and planning of the solution, securing approval from each wireless carrier, and implementing the solution can take upwards of one year.  Unfortunately, not all carriers agree to participate in every project.  While carrier agreements with property owners and enterprises are terribly one-sided, a threshold concern is that the carriers typically demand these agreements be limited to five-year terms and that they have the unilateral right to renew or not, thereby putting at risk the property owner’s infrastructure investments.

These property-specific negotiations also have broader implications.  FCC proposals to promote the efficacy of wireless handset indoor location accuracy for 9 1 1 calls (text or voice) in multi-story buildings will prove to be an academic exercise if  wireless signals cannot be transmitted from these locations, even if slightly distorted by in-building wireless reception solutions.

The 2013 Report and Order is a positive first step.  Its utility and success are open questions at this time.  If it falls short, the Commission may be compelled to limit carrier discretion in regard to industrial signal boosters and impose an affirmative obligation on wireless carriers to support in-building wireless reception solutions.

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This is the first in a series of entries on Machine-to-Machine (“M2M”) communications.  One definition for M2M is “RF devices associated with/connected to physical assets, communicating information to or from the physical assets and, potentially, directing or controlling operation of the physical assets or processing a transaction.”  Leading M2M consultants include ABI Research and Yankee Group.

Google’s Nest thermostat, utility smart grids, E-readers, residential security services, the GM OnStar service, DOT/ITS Connected Vehicle technology, e-medicine devices, wireless point of sale devices such as Square, some ATM arrangements, and wireless asset tracking services are all examples of Machine-to-Machine (“M2M”) communications

M2M is sometimes used interchangeably with the phrases “Internet of Things” or “Internet of Everything.”  A convenient but imprecise distinction is that M2M relates to communications associated with business (non-consumer transactions and data) and that Internet of Things is more typically associated with consumer devices.  E-medicine and connected vehicle technologies straddle this line.

M2M is the more inclusive term: “Internet of Things” and “Internet of Everything” suggests incorrectly that M2M communications necessarily transit the public Internet.  The major wireless carriers offer customers the choice of routing M2M communications from the carriers’ wireless access networks to the customer’s data center via the customer’s MPLS or private line service, as well as the public Internet.

While M2M is often associated with commercial wireless service, this is not always the case.  Many smart grid and pipeline telemetry networks utilize privately licensed or unlicensed spectrum due to concerns over commercial wireless service reliability and availability. Satellite-based M2M offerings have a noticeable market presence, as well.

The major elements of M2M arrangements may be summarized as follows:

  1. RF devices attached to physical assets/devices;
  2. Device management (provisioning and monitoring of devices).  If transmitting over a wireless carrier’s network, the RF devices are certified but rarely subsidized by the carrier;
  3. Wireless connectivity to the remote RF device via a (i) wireless carrier, possibly through a mobile app (on a smartphone, iPad or tablet), (ii) unlicensed spectrum, or (iii) licensed spectrum, or (iv) a combination of spectrum resources;
  4. Wireline backhaul service (from a wireless aggregation point to the data processing center);
  5. Cloud-based or customer managed data processing that manages the M2M data, generates reports or other outputs, processes the POS transaction, or causes or directs the physical asset (via its associated RF device) to act;i.      The M2M provider (including self-providers) may employ data analytics to derive other trends or information from the data collected from M2M devices.
  6. Security for wireless and wireline transmission (encryption); and,
  7. Intellectual property rights associated with M2M service (wireless technology, data processing software, and devices), privacy rights in and security of the data, and applicable restrictions on the transfer of data, including location-based information, to 3rd parties for behavioral advertising or other uses.

A single provider may offer an end-to-end M2M service, including approved RF devices and data processing software.  This is common among critical infrastructure companies such as utilities and oil and gas pipeline operators and for some consumer-based verticals.

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The real surprise of the D.C. Circuit’s opinion in Verizon v. FCC was not that the anti-discrimination and anti-blocking rules of the Open Internet Order were vacated, but that the court found the FCC has jurisdiction to regulate Internet access services providers under Section 706 of the Act.  Chairman Wheeler has made clear the FCC will exercise this authority as required, though the manner for so doing remains an open question.  Legislation has been introduced to resuscitate the largely vacated order, but the odds for enactment are slim.

A primary motivation underlying the Open Internet Order is that a handful of services providers deliver high speed Internet access service to the vast majority of businesses (enterprises and SMBs), all levels of government, schools and libraries, and residential customers: the major cable operators and the price cap ILECs.  Today, the best case scenario for many customers is a duopoly of landline broadband services providers.  Moreover, the two largest price cap ILECs are the two largest wireless carriers.

In many areas of the country, high speed Internet access service is not available.  In these communities, net neutrality is an abstract concept of limited value, a point not lost on the FCC leadership.   In its future networks/IP migration proceeding, the FCC has proposed a program to fund “rural broadband experiments” to deliver last mile broadband connectivity to communities that lack baseline broadband service by re-purposing some CAF funds, calling for “expressions of interest” in early March.  Chairman Wheeler has outlined a series of steps to re-focus the E-Rate program funds to support broadband connectivity to unserved schools and libraries.

For the balance of the country, the Commission could “move the needle” on broadband competition by resolving two matters.  The first is the special access proceeding.  The second is a relatively obscure USF contribution issue.

As special access services become available at market-based rates, 2nd tier and 3rd tier ISPs can access these “last mile” connections and deliver a highly commoditized service to a broad range of customers at far better price points.  The so-called “private cable operators” that struggle in the MDU market to compete with the triple play offerings of the local cable operator and price cap ILEC, could offer MDU residents a far more competitive offering for which high speed Internet access service is rapidly becoming the pre-eminent component.

The second item is parity in USF contribution obligations for providers of high speed Internet access services.  By virtue of the Cable Modem and Wireline Broadband proceedings, the telecommunications component of facilities-based, high speed Internet access services of cable operators and local telcos is “inextricably linked” with the Internet access component, is not a standalone telecommunications service, and is not subject to USF contribution obligations.

Conversely, the wholesale telecommunications services component – special access service—acquired from ILECs by unaffiliated ISPs is subject to USF contribution obligations. (Nominally this is the ILEC’s USF contribution obligation, but the ILECs can and do recover this surcharge from their ISP customers.) With the USF contribution factor at 16.4%, ISPs that must secure “last mile” wholesale telecommunications services are seriously handicapped in competing with the major cable operators and price cap ILECs.

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As widely reported and commented upon, in Verizon v. FCC decided on January 14, 2014, the U.S. Court of Appeals for the District of Columbia vacated the anti-blocking and anti-discrimination rules adopted in the FCC’s Open Internet Order, but declined to vacate the network disclosure rules (pertaining to Internet access services providers’ network management practices).

The court vacated these rules on the basis that inasmuch as the FCC has classified  and continues to maintain that facilities-based, high speed Internet access services providers are “information services providers,” as distinct from “telecommunications carriers,” the Commission cannot impose common carrier obligations—principally the nondiscrimination obligations of Title II of the Act—upon information services providers.

On the other hand, and almost as important, the court rejected Verizon’s primary argument that Section 706 of the Act does not provide the FCC with substantive authority to regulate high speed Internet access providers.  This aspect of the court’s opinion was the focus of Judge Silberman’s dissent, explaining that both the majority opinion and the FCC’s arguments cannot be squared with the text of Section 706:

So much for the terms [in Section 706(a)] “promote competition in the local telecommunications market” or “remove barriers to infrastructure investment.” Presto, we have a new statute granting the FCC virtually unlimited power to regulate the Internet. This reading of § 706, as we said in Comcast Corp. v. FCC, “would virtually free the Commission from its congressional tether.”

The significance of the court’s decision regarding Section 706 was duly noted by Chairman Wheeler in his brief statement that was coupled with the obligatory rejoinder  that the agency will be considering “all available options, including those for appeal,” even though Republican Commissioners Pai and O’Rielly urge the FCC to refrain from further attempts to regulate Internet services providers absent a clear grant of authority from Congress.

Next Steps.  While the FCC may have lost this challenge, however significant, it secured an affirmation of its authority to regulate Internet access services providers under Section 706.  The FCC might be better advised to accept this affirmation and determine how to exercise this authority in connection with industry practices that run roughshod over the intent and spirit of the anti-blocking and anti-discrimination rules.  As Farhad Manjoo maintains, in the absence of such rules, the potential exists for the major Internet access services providers to impair the ability of the next Facebook or Netflex to gain traction in the online environment.

One path the agency could pursue, however challenging, is the approach taken in the Data Roaming Order:  adopt rules, guidelines and policies that address anti-competitive practices while avoiding Title II implications.

The more controversial option is to revisit the classification of Internet access service as an “information service” and thereby eliminate arguments that the anti-blocking and anti-discrimination rules can only be applied to telecommunications carriers.  The FCC considered and rejected this option in 2010.  This is not viable when viewed in terms of (i) the likely “no-holds barred” opposition from the major cable and telecom services providers, or (ii), as noted by former Commissioner McDowell, the efforts of the United States and other countries resisting the push of many developing nations and autocratic regimes to regulate the Internet under the guise of the ITU’s telecommunications regulatory framework.

Either a hearing en banc before the D.C. Circuit or review by the Supreme Court could lead to an even less favorable outcome for the FCC.  As noted by Verizon (recall the “triple-cushion shot”) and Judge Silberman, the strained logic and Chevron-based deference underlying the Commission’s substantive Section 706 authority are readily assailable.  Such an appeal could fail squarely within the crosshairs of Chief Justice Roberts’ dissenting opinion in City of Arlington v. FCC that emphasized the courts, not the agency, are the final arbiters of the scope and extent of an agency’s jurisdiction.

 

When it first aired in 1962, The Jetsons seemed unbelievable. The premise was too farfetched and no one really believed that at some point in time, everyday life would include so many robotic contraptions.  Yet, fifty years later, computers, the Internet, and automation dominate our lives.  While we still do not have the perfect robotic help mate like Rosie, we do have the iRobot vacuum cleaner, and we are on the brink of a Jetsons-like transportation system.  Unmanned aircraft, or drones, are taking to the skies and it is predicted that they will crowd our air highways within just a few years.

Drones, drones, and more drones – when, how and who can use drones, also known as unmanned aircraft systems (UAS) – is the current topic in the aviation community.  Drones are familiar to most Americans, but they are typically associated with military and special operation applications.  In fact, the Pentagon relies on a family of more than 10,000 drones, and its “Unmanned Systems Integrated Roadmap” establishes a future of even greater drone use in the next quarter of the century.

As reported in the PBS documentary, “Rise of the Drones,” “these aerial robots are replacing manned planes; they’re revolutionizing warfare by allowing us to see and kill from half a world away, and they’re making science fiction a reality.”  But drones are not just about warfare anymore; drones are becoming more prevalent for other missions as well, including law enforcement and search and rescue.  Amazon has the lofty goal of using drones to deliver its packages in just a couple of years, and pizza delivery will have a new meaning if Domino’s Pizza’s aspirations come true.

UAS commercial operations, as contemplated by Amazon and Domino’s, however, are not yet allowed in the U.S.  Operators of model aircraft can freely fly UAS for recreational purposes, but anyone else has to obtain a Certificate of Authorization (for public aircraft) or an Special Airworthiness Certificate-Experimental Category (for civil aircraft engaged in research and development, market survey or crew training).  Presently, the FAA has authorized over 106 federal, state and local entities to fly UAS for public safety and research missions.  Local law enforcement agencies are drone proponents because it allows them to conduct police work by air at a more affordable cost than helicopters.

The FAA, however, is under a statutory mandate to provide a pathway for the more ubiquitous use of drones, particularly in the commercial context, and in the last year, the FAA has made significant strides towards that goal.  In July 2013, pursuant to the FAA Modernization and Reform Act of 2012, the FAA issued its first aircraft type certificates to the Boeing’s Insitu Scan Eagle X2000 and AeroVironment’s PUMA to operate in the Arctic in order to test commercial UAS operations.  Then, on November 10, 2013, the FAA released a roadmap outlining an implementation plan for UAS civil and commercial applications including cargo transport, critical infrastructure monitoring, disaster response, and aerial mapping and chartering.

Most recently, on December 30, 2013, the FAA announced the selection of six test sites for UAS operations.  The six sites were chosen based on a number of factors, including geography, climate, airspace use, safety, aviation and risk.  The FAA’s objective is to test UAS operations under a diverse set of conditions so that information can be gathered on how to eventually integrate UAS into the national airspace (NAS).  In early 2014, the FAA is expected to propose a rule that would allow small UAS (less than 55 pounds) to operate in the NAS.  By statute, the FAA is required to promulgate the final rule by no later than September 30, 2015.

UAS issues are complex and impact more than just air traffic—there also are privacy, security, technology, communications and environmental implications—so the FAA’s rulemaking will be controversial.  Indeed, the an anti-drone movement is gaining momentum as many individuals and  state and local governments have expressed concerns that privacy and civil liberties are compromised with the use of domestic drones for surveillance.  In fact, nine states have enacted laws restricting the use of drones, and localities, such as Charlottesville, VA, have passed resolutions urging their states to take a hard look at the use of drones.

The privacy and moral questions raised by drone operations are overshadowing the value and advantages of drones.  Consider that with the use of drones, victims of accidents and natural and manmade disasters may be searched out more quickly; critical infrastructure, such as bridges, pipelines, and railroad corridors, can be inspected and monitored more frequently and thoroughly; military personnel in combat aircraft can be relieved of duty; and drones are less costly to fuel and operate than military aircraft.  It is for these reasons, and many more, that it is inevitable that drones will become a greater part of our lives.  The question is only when.

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As widely reported, CTIA responded positively in most respects to FCC Chairman Tom Wheeler’s November 14 letter requesting CTIA revise its Code of Conduct to incorporate five principles for unlocking wireless handsets, including the 3rd principle that calls for the wireless carriers to “affirmatively notify customers when their devices are eligible for unlocking and/or automatically unlock devices when eligible, without an additional fee.” The FCC “accepted” CTIA’s offer, per Chairman Wheeler’s press release.

In its response, CTIA noted that it, the four major carriers and U.S. Cellular will recommend adoption of the FCC’s principles, as restated in CTIA’s commitment letter, “for inclusion into the CTIA Consumer Code for Wireless Service (“Consumer Code”), in accordance with CTIA’s bylaws. Upon adoption, these companies will move quickly to implement these principles, committing to implement three of these principles within three months and the remainder within 12 months.”

A substantive difference between CTIA’s response and Chairman Wheeler’s letter is that CTIA proposes devices associated with prepaid plans be unlocked “no later than one-year after activation, consistent with reasonable time, payment and usage requirements.” The Chairman’s November 14 letter did not explicitly address handsets with prepaid services.

Routine unlocking (of eligible handsets) could provide a much-needed boost to the domestic MVNO market, which is just beginning to gain momentum according to Sue Marek. This optionality also supports rural carriers’ efforts to offer more sophisticated wireless handsets, as noted earlier this year by the Competitive Carriers’ Association.

Today’s smart phones and tablets can store substantial quantities of data and host countless apps, creating an incentive for persons to hold on to and use their devices for more than the standard two-year replacement cycle.   As enhancements in future releases of popular handsets become less substantial, lower-priced, prepaid plans could become far more compelling.

As compared to other countries, the MVNO market in the United States today is relatively underdeveloped, notwithstanding TracFone’s noteworthy success.  From a policy perspective, a robust MVNO market could provide more meaningful opportunities for firms lacking the resources of Dish or Google to compete effectively with the major facilities-based wireless carriers (regardless of whether Sprint and T-Mobile eventually merge).

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Last week, I escaped from D.C. to NTCA’s TelcoVisions Conference in Las Vegas. Great Content.  Well managed and well-attended.  All Keynotes were top-notch.

The big takeaway is the emphasis NTCA members place on exceeding customer expectations in delivering a range of community-focused services:  the triple play, wireless and more.   Additional revenue opportunities that were highlighted in the conference sessions include Globalstar’s proposed Terrestrial Low Power Service (TLPS), (a potential “Super WiFi” service), Content Delivery Network (CDN) Federations, and M2M services.

I moderated one session and participated in another.

One theme of the panel “Utilities and Rural Service Providers: A Multi-Faceted Opportunity” was that rural electrics’ smart grid data communications are driving expanded investments in fiber and wireless, and that partnering with the rural Services provider in these investments can deliver substantial benefits to both providers and their members.   From the industry, Ryan Bewley, Director of Engineering for electric and telco operator NineStar Connect, highlighted the numerous synergies and benefits of a unified telco and electric engineering staff.  Shannon Clark, CEO and General Manager of Richland Electric Cooperative, explained how his electric cooperative and the rural Services provider realized the importance of delivering high-speed Internet access to their community and took the steps to deliver the same.  Shannon emphasized that straight-forward, member-focused communications between the rural electric and rural Service provider can deliver substantial benefits.

Consultants Mark Momerak of NISC Coop and Steve Senne of Finley Engineering Company provided their perspectives.  Mark emphasized how shared CSR, billing and other back-office software and hardware create and facilitate shared operations and substantial cost savings.  Steve explained how substantial physical plant investments on the electric side support shared investments by both the electric cooperative and rural Services provided.  Steve echoed the theme of his co-panelists that sharing infrastructure investments benefits the rural Services provider and rural electric’s shared memberships.  Another theme discussed, more fully among ourselves, was that significant CLEC opportunities remain in areas adjacent to the rural Services providers’ service territories largely because the major ILECs, to date, have declined to make substantial investments in network upgrades in these predominantly rural areas.

Moderator Brian Partridge of the Yankee Group and Abe Levine of Vistracks (an M2M application services provider) and I spoke on M2M service opportunities.  Brian stressed the success of MVNOs (as opposed to the facilities-based wireless carriers) in the U.S. in rolling out M2M services.  Abe emphasized the value of selling an M2M end-to-end service (such as asset management/tracking) rather than simple wireless connectivity, emphasizing the widely shared view that there is no real money in selling kilobytes per month.

Brian provided the macro view of M2M in the United States and Abe set out the business case for offering end to end M2M applications, as opposed to simply reselling kilobytes of data.  The author echoed several points, noting that with the exception of VisTracks and maybe one or two other entities, there is limited availability of end-to-end M2M applications that rural carriers can deliver to their customers.

Again, kudos to NTCA on a great conference.

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As the Federal Government shutdown concludes and Congress takes the necessary steps to avoid a default on the Federal Government’s debts, the Senate is expected to confirm Thomas Wheeler as FCC Chairman and Michael O’Rielly as the Republican replacing former Commissioner Robert McDowell.

With substantial experience in Washington policy and legislative circles, it is anticipated that the pace of agency decision making will improve as Thomas Wheeler becomes Chairman.  Apart from multiple decisions to be made in connection with incentive auctions, the new Chairman will have ample opportunity to promote competition.  The major issues are already teed-up.

The most important is the omnibus Special Access proceeding initiated in 2012. The Wireline Competition Bureau recently clarified the scope of services providers’ data submissions, noting that due dates will be set as OMB grants its approval under the Paperwork Reduction Act.  While the telecommunications industry has changed dramatically since 1996, special access services (Ethernet or TDM-based) from the price cap ILECs remain indispensable for interexchange carriers looking to provide service to customers, particularly to customer locations outside of core metropolitan areas. Even as wireless carriers diversify backhaul technologies, special access remains the dominant/default option.

As long as AT&T and Verizon, the two largest interexchange carriers and wireless carriers, benefit from above-cost rates for special access services of their affiliated price-cap ILECs (whether they or their competitors acquire special access services from these affiliates), the markets for wireless and interexchange wireline services remain tilted in their favor.

An equally critical matter is USF contribution reform. As highlighted by the comments filed in response to the FCC’s 2012 NPRM, there is no consensus on a path forward.  Yet, it is apparent that the FCC’s reclassification of facilities–based Internet access services as information services, the ease with which IP-based services fall within the statutory definition of “information services,” and the migration to IP services will continue to drive the USF contribution factor up to and beyond 15%.

Another high profile item is judicial review of the Open Internet Order.  Based on assessments of oral arguments in Verizon v. FCC  by Scott Cleland  and Bryce Baschuk, the D.C. Circuit Court judges are concerned that former Chairman Genachowski’s legacy decision imposes Title II-like “nondiscrimination obligations” on broadband providers that the Commission and the same court emphasized could not be imposed on wireless data services providers in the  Data Roaming Order.

As President Obama’s nominee, the new Chairman likely will implement the FCC’s landmark decision if it is affirmed or push for Supreme Court review if the D.C. Circuit rejects major elements of the Open Internet Order.  In light of the virtual carte blanche discretion conferred on agencies to  determine the scope of their statutory authority in City of Arlington v. FCC, despite the compelling dissent of Chief Justice Roberts, the ultimate resolution of Verizon’s appeal of the Open Internet Order could have broad implications regarding the scope of judicial review of all Federal agencies’ decisions.