TELECOM Digest OnLine - Sorted: The Front Lines - September 26, 2005

The Front Lines - September 26, 2005

Jonathan Marashlian (
Mon, 26 Sep 2005 15:16:58 -0400 The FRONT LINES

Advancing The Cause of Competition in the Telecommunications Industry


On August 5, 2005, the FCC announced the adoption of rules extending
the application of the Communications Assistance for Law Enforcement
Act (CALEA) to providers of certain broadband and other information
services. On September 23, 2005, the FCC released the text of its
Order and adopted a Further Notice of Proposed Rulemaking.

In its Order, the FCC concludes that CALEA applies to facilities-based
broadband Internet access providers and providers of interconnected
voice over Internet Protocol (VoIP) service. The FCC stated that its
Order is the first critical step to apply CALEA obligations to new
technologies and services that are increasingly relied upon by the
American public to meet their communications needs.

Of particular note, the FCC found that facilities-based providers of
any type of broadband Internet access service, including but not
limited to wireline, cable modem, satellite, wireless, fixed wireless,
and broadband access via powerline, are subject to CALEA.

The FCC also announced that, "[i]n the coming months, [it] will
release another order that will address separate questions regarding
the assistance capabilities required of the providers covered by [its]
Order pursuant to section 103 of CALEA. This subsequent order will
include other important issues under CALEA, such as compliance
extensions and exemptions, cost recovery, identification of future
services and entities subject to CALEA, and enforcement."

The FCC is taking a two-step approach in order to focus debate on the
implementation rather than the applicability of CALEA to providers of
broadband Internet access services and VoIP services. By clarifying
the applicability of CALEA to these providers now, the FCC's goal is
that affected providers will begin planning to incorporate CALEA
compliance into their operations. Another FCC goal is to ensure that
the appropriate parties become involved in ongoing discussions among
the Commission, law enforcement, and industry representatives to
develop standards for CALEA capabilities and compliance.

Acknowledging that providers need a reasonable amount of time to come
into compliance with all relevant CALEA requirements, the FCC
established a deadline of 18 months from the effective date of its
Order, by which time newly covered entities and providers of newly
covered services must be in full compliance.

The FCC also issued a Further Notice of Proposed Rulemaking seeking
comment on two aspects of the conclusions reached in its Order.
First, with respect to interconnected VoIP, the FCC seeks comment on
whether it should extend CALEA obligations to providers of other types
of VoIP services, such as "managed" VoIP service. Second, the FCC
seeks comment on what procedures, if any, the Commission should adopt
to implement CALEA's exemption provision to exempt certain entities or
classes of entities from the requirements of its Order.


On September 26, 2005, the FCC released a Public Notice requesting
comments on Petitions filed by SBC and VarTec. Both Petitions request
clarification regarding the application of access charges to certain
providers of wholesale transmission using Internet Protocol (IP). As
described below, SBC and VarTec take contrary positions on the issue.

On September 21, 2005, SBC filed a petition for declaratory ruling
that wholesale transmission providers using Internet protocol (IP)
technology to transport long distance calls are liable for access
charges. SBC filed its petition after the United States District
Court for the Eastern District of Missouri dismissed without prejudice
SBC's claims seeking payment of access charges for long distance calls
that were transported using IP technology. The court found it
appropriate to defer the issues raised by SBC to the primary
jurisdiction of the FCC.

In its Petition, SBC seeks a declaratory ruling that wholesale
transmission providers using IP technology to carry long distance
calls that originate and terminate on the public switched telephone
network (PSTN) are liable for access charges under section 69.5 of the
Commission's rules and applicable tariffs. SBC seeks a ruling that
providers meeting these criteria are interexchange carriers.

VarTec filed a petition for declaratory ruling on related issues.
Specifically, VarTec seeks a declaratory ruling that it is not
required to pay access charges to terminating local exchange carriers
(LECs) when enhanced service providers or other carriers deliver calls
directly to the terminating LECs for termination.

VarTec also seeks a declaratory ruling that such calls are exempt from
access charges when they are originated by a commercial mobile radio
service (CMRS) provider and do not cross major trading area (MTA)
boundaries. VarTec also seeks a declaratory ruling that terminating
LECs are required to pay VarTec for the transiting service VarTec
provides when terminating LECs terminate intraMTA calls originated by
a CMRS provider.

Interested parties may file comments on or before November 10, 2005,
and reply comments on or before December 12, 2005.


On August 5, 2005, the FCC announced the adoption of an Order to
re-classify wireline broadband Internet access as an "information
service," consistent with the Supreme Court's NCTA v. Brand X
decision. Generally, this affects Digital Subscriber Line services
offered by incumbent local exchange carriers. On September 23, 2005,
the FCC released the text of its Order.

A summary of the actions taken in the Order follows:

* Consistent with the Supreme Court's opinion in NCTA v. Brand X, we
determine that facilities-based wireline broadband Internet access
service is an information service.

* Facilities-based wireline broadband Internet access service
providers are no longer required to separate out and offer the
wireline broadband transmission component (i.e., transmission in
excess of 200 kilobits per second (kbps) in at least one direction) of
wireline broadband Internet access services as a stand-alone
telecommunications service under Title II, subject to the transition
explained below. In addition, the Bell Operating Companies (BOCs) are
immediately relieved of all other Computer Inquiry requirements with
respect to wireline broadband Internet access services.

* Facilities-based wireline carriers are permitted to offer broadband
Internet access transmission arrangements for wireline broadband
Internet access services on a common carrier basis or a non-common
carrier basis.

* Facilities-based wireline Internet access service providers must
continue to provide existing wireline broadband Internet access
transmission offerings, on a grandfathered basis, to unaffiliated ISPs
for a one-year transition period.

* Affirm that neither the statute nor relevant precedent mandates that
broadband transmission be a telecommunications service when provided
to an ISP, but the provider may choose to offer it as such. Determine
that the use of the transmission component as part of a
facilities-based provider's offering of wireline broadband Internet
access service to end users using its own transmission facilities is
"telecommunications" and not a "telecommunication service" under the

The Order also addresses other important areas relating to the
provision of broadband Internet access services including:

* Maintains the status quo for universal service during for a 270-day
period pending resolution of the USF Contribution Methodology

* Ensure no adverse impact on public safety through the continued
requirement that voice over IP (VoIP) providers using wireline
broadband Internet access facilities comply with E911 obligations.

* Confirm that this Order does not affect disability access
obligations the Commission has adopted pursuant to its Title I
ancillary jurisdiction, and we will continue to exercise Title I
authority, as necessary, to give full effect to the accessibility
policy embodied in section 255.

* Nothing in the Order changes requesting telecommunications carriers'
rights to access unbundled network elements (UNEs) under section 251
and related implementing rules.

Finally, the FCC adopted a Notice of Proposed Rulemaking seeking
comment on the need for any non-economic regulatory requirements
necessary to ensure that consumer protection needs are met by all
providers of broadband Internet access service, regardless of the
underlying technology.


The Front Lines is a free publication of The Helein Law Group,
providing clients and interested parties with valuable information,
news, and updates regarding regulatory and legal developments
primarily impacting companies engaged in the competitive
telecommunications industry.

The Front Lines does not purport to offer legal advice nor does it
establish a lawyer-client relationship with the reader. If you have
questions about a particular article, general concerns, or wish to
seek legal counsel regarding a specific regulatory or legal matter
affecting your company, please contact our firm at 703-714-1313 or
visit our website:

The Helein Law Group
8180 Greensboro Drive, Suite 700
McLean, Virginia 22102

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