FRIDAY, JULY 20, 2012

VOL. 32, NO. 140

TODAYS NEWS
ISP SPEEDS MORE CLOSELY re-

FCC Broadband Speed Test Finds Improvements Across the Board

Broadband customers are getting what they pay for, and theyre getting it faster, a new report said. Thats the big takeaway from this years Measuring Broadband America report. It was released Thursday by the FCC Wireline Bureau using data gathered by contractor SamKnows in collaboration with ISPs with more than 80 percent of U.S. residential broadband subscribers. The report (http://xrl.us/bnhgkk) said broadband providers have significantly improved accuracy in actual versus advertised speeds during the past year, with speeds during peak times rising 9 percentage points to 96 percent of what companies marketed, and consumers are continuing to subscribe to ever-faster speed tiers. But a study released Thursday by the New America Foundation which participated in stakeholder talks on the broadband report cautioned that U.S. consumers are paying higher prices for slower Internet service when compared to similar cities in other parts of the world. More than 60 academics and engineers told FCC Chairman Julius Genachowski Wednesday they strongly oppose a proposal circulating among the FCC and some ISPs to shift away from M-Lab infrastructure. That would transform an open measurement process into a closed one, the letter said. This is the second FCC broadband speed report. The first, released in August, found most ISPs participating in the study were providing, on average, 87 percent of advertised speeds during peak usage periods (CD Aug 3 p2). This weeks report, which measured data collected a little over a year later, found striking across-the-board improvements on key metrics underlying user performance, the report said. Speed promises are more accurate, ISPs are more consistently able to deliver advertised speeds, and consumers are subscribing to faster speed tiers.

semble advertised speeds in 2012 FCC test. Groups worry on future openness. (P. 1)
TV WHITE SPACES will soon see

more use for wireless broadband, but widespread mobile rollout still years away, Knapp says. (P. 4)
911 BREAKDOWNS WIDESPREAD

following June 29 'derecho,' Turetsky says in report to FCC. Backup power requirement to get another look. (P. 5)
HOUSE CYBERSECURITY BILLS

should be considered in Senate if Reid fails to advance a comprehensive bill, McCaul says. (P. 7)
CABLE, BROADCAST DEALS reveal

robust debt markets, investor confidence, executives say. (P. 8)

MAJOR PLAYERS DOMINATE TELECOM still, as smaller entities

fight for inclusion, MMTC panel says. (P. 9)

TEAMS, LENDERS IMPORTANT for new, legacy media business models in an Internet world, panelists say. (P. 10) TELECOM NOTES: Put spectrum auctions on time line, Rosenworcel says ... Unions ask federal agency to mediate dispute with Verizon. (P. 13)

Copyright 2012 by Warren Communications News, Inc. Reproduction or retransmission in any form, without written permission, is a violation of Federal Statute (17 USC101 et seq.).

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Five ISPs now routinely deliver nearly one hundred percent or greater of the speed advertised to the consumer even during time periods when bandwidth demand is at its peak, the report said. That average download speed during peak usage periods are near 100 percent means consumers today are experiencing performance more closely aligned with what is advertised than they experienced one year ago, it said. These improvements were driven by improvements in network performance, not by downward adjustments to the speed tiers offered, the report said. ISPs more consistently deliver advertised speeds. In 2011, wide variances existed between top and bottom performers in terms of meeting advertised speeds. This year saw a 15 percent reduction in the standard deviation for download speed across DSL, cable and fiber meaning ISPs are doing a better job of delivering what they promise their customers today than they did a year ago, the report said. The FCC took some credit, saying there is evidence that our August 2011 Report helped prompt these changes, and had a substantial impact on both the industry and consumer broadband experience. There is still a fairly large difference in delivered speeds over different technologies. During peak consumer usage hours defined as weekdays from 7 p.m. to 11 p.m. DSL-based services delivered download speeds at 84 percent of advertised speeds, cable-based services delivered 99 percent and fiber-to-the-home services delivered 117 percent. Fiber to the home networks "are out-performing other access technologies, giving consumers consistently higher speed broadband service with lower latency, the Fiber-to-the-Home Council said. So much for the conventional wisdom that cable broadband performance suffers during peak periods because the network is shared among many customers, NCTA said (http://xrl.us/bnhgt3). By ISP, average peak download speeds varied from a high of 120 percent of that advertised to a low of 77 percent. This is a dramatic improvement from last year, when Cablevision delivered 54 percent of advertised speed, the report said. The report demonstrates our commitment to delivering more than 100 percent of the speeds we advertise to our broadband customers, the company said. The company said it spent $140 million on recent upgrades to its broadband network. Genachowski commended Cablevision at the FCC meeting as one of this years best performers. Verizon said the findings reaffirm the results from the 2011 report, which found that FiOS provides blazing-fast and sustained upstream and downstream speeds even during peak usage periods. AT&T said the report demonstrates that consumers continue to get the broadband Internet access speeds they are paying for, that the speeds offered to consumers are increasing and that consumers are moving to these faster broadband speed tiers. Overall, it is abundantly clear that American consumers are getting high-quality broadband services from their Internet Service Providers.
Questions Remain

The New America Foundation isnt so optimistic on U.S. broadband services compared to the rest of the world. Its Open Technology Institute released a study Thursday comparing high-speed Internet offerings in 22 cities around the world by price, download and upload speed, bundled services, and other metrics, and found that American consumers lag (http://xrl.us/bnhgng). The Internet download speed Washington DC residents can get for roughly $35 would be over 20 times faster in Hong Kong for around the same price, NAF said. And when ranked for their Triple Play packages Internet, phone, and TV bundles Washington, DC comes out way behind other European and Asian cities. For example, residents of Paris pay the equivalent of $35 a month for basic cable TV, phone service, and Internet with

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download speeds up to 100 mbps. The U.S. needs to re-examine its current policies, and rather than focus on spectrum auctions and the promise of wireless broadband, policymakers need to address the lack of competition in most of the U.S. and how policies can enable new competitors to enter the marketplace, the report said. Genachowski said the higher price point for lower broadband speeds compared to densely populated countries around the world is an issue that we need to continue to make progress on in the US. But the gap is closing, and the FCC is continuing to promote competition using all the different tools we have, Genachowski said in response to our question at a news conference. He pointed out areas where the U.S. leads, such as the widescale deployment of 4G LTE services, and mobile innovation, leading the world in the apps economy, he said. As the commission continues monitoring Internet speeds and other metrics, commissioners and officials from the Office of Engineering and Technology repeatedly promise a commitment to openness and transparency. But dozens of prominent engineers and academics wrote to Genachowski Wednesday to express concern over a proposal they said would replace the Measurement Lab server infrastructure with closed infrastructure, run by the participating ISPs whose own speeds are being measured in the commission's broadband transmission tests (http://bit.ly/Q8cn9J). "We strongly oppose any decision by the FCC to run a closed measurement program," said the letter whose signers included Internet pioneer Vint Cerf of Google and NAF Vice President Sascha Meinrath. "For the scientific process to work, measurement data must be openly available as well as access to methodologies, and explicit cataloging of assumptions is essential if results are to be confirmed and replicated. A switch from an open to a closed infrastructure makes this process impossible or, at best, questionable." FCC officials rejected the assertion they want to replace M-Labs servers. That statement is false, said Chief Technology Officer Henning Schulzrinne. Were not considering replacement of the M-Lab infrastructure. We have enjoyed working with them. The proposal would add redundancy by installing more servers so it becomes easier to detect anomalies, Schulzrinne said: There have been discussions to enhance but not replace. The proposal would change the way whiteboxes test collected data, said a copy of the plan we obtained that's from participants in the FCC's test. Whiteboxes now test their data against an off-net pool of servers servers that measure packets traveling across the public Internet, that are provided solely by M-Lab and an on-net pool, provided solely by the ISP, which measures data that has not yet left the network and gone onto the public Internet. The proposal would allow the off-net pool of servers be either the best research platform server, run by M-Lab or some other entity, or best public ISPprovided server. This would shift the measurement away from M-Labs open platform to measurement servers controlled by the ISPs themselves, said NAF's Ben Lennett, a representative of the lab. Redundancy and the collection of more data makes sense at a high level, but we have offered to integrate the ISPs donated servers into the M-Lab infrastructure, and ISPs haven't taken the offer, he said. The question is really about the credibility of the measurement. M-Lab is completely open with how it runs its servers, but theres no indication that that is going to be the case with ISP-controlled servers, Lennett said. Walter Johnston, chief of the FCC Electromagnetic Compatibility Division, told us any data collected by ISPs as part of the official commission broadband speed test would be made public, and it would be clear who gathered the data. Matthew S. Schwartz

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World is Watching

Super Wi-Fi on TV White Spaces Likely Years Away, Knapp Says

Use of the TV white spaces for mobile broadband likely won't start anytime soon, FCC Office of Engineering and Technology Chief Julius Knapp said Thursday of the technology that's been likened to "super Wi-Fi." Commissioner Robert McDowell, the agency's senior Republican member, warned that delays could be even longer, given continuing questions about changes to the TV band. "We expect that were probably still a couple of years away from seeing white space technology in portable devices because the technical challenges there are greater," Knapp said. The first uses are likely to be fixed, such as broadband to schools, machine-to-machine communications and by local governments, he said. Knapp cited the recently unveiled AIR.U consortium. It plans to use the TV white spaces to provide broadband at colleges in small towns and rural areas (CD June 27 p4). The technology developed for the TV white spaces likely will likely have much broader use, Knapp said, for example in the 1755-1850 MHz band, where the government and industry are exploring the use of "dynamic" sharing between government and commercial users. He disclosed that wireless carriers, equipment makers and NTIA and FCC staff were meeting at Idaho National Labs Thursday "to examine whether that might be a suitable place" for spectrum sharing tests. Knapp highlighted the progress the FCC has made working with industry in the last few years, toward use of the white spaces. "The U.S. leads the world in white spaces technology," he said. "Weve adopted final rules. Weve approved the first devices. Weve approved the first database managers. Weve approved initial tests under experimental licenses. Weve approved the first commercial deployments." The last step is a process for registering wireless microphones, Knapp said. "Were close to comEDITORIAL & BUSINESS HEADQUARTERS 2115 Ward Court, N.W., Washington, DC 20037 Albert Warren Editor & Publisher 1961-2006 Paul Warren . . . . . . . . . . . . . .Chairman and Publisher Daniel Warren . . . . . . . . . . .President and Editor Michael Feazel . . . . . . . . . . . Executive Editor Paul Gluckman . . . . . . . . . Senior Editor Mark Seavy . . . . . . . . . . . . . . Senior Editor Jeff Berman . . . . . . . . . . . . . . . . . . . . . . .Senior Editor Howard Buskirk . . . . . . . . . . . . . Senior Editor Dinesh Kumar . . . . . . . . . . . . . . . . . . . . .Senior Editor Jonathan Make . . . . . . . . . . . . Senior Editor Rebecca Day. . . . . . . . . . . . . . . . . . . . . . Senior Editor Tim Warren . . . . . . . . . . . . . . Assistant Editor Kamala Lane . . . . . . . . . . . . . . Assistant Editor Bryce Baschuk . . . . . . . . . . . . . . . Assistant Editor Matthew Schwartz . . . . . . . . . . . . . . Assistant Editor Brian Feito. . . . . . . . . . . . . . . . . . . . . .Assistant Editor John Hendel. . . . . . . . . . . . . . . . . . . . .Assistant Editor Courtney Crandell. . . . . . . . . . . . . . . . . . . . . . . . Intern Business Brig Easley. . . . . . . . . . . . Exec. VP-Controller Deborah Jacobs. . . . . . . Information Systems Manager Gregory Jones . . . . . . . . . Database/Network Manager Annette Munroe . . . . . . .Dir., Marketing & Circulation Susan Seiler . . . . . . .. . . Content Compliance Specialist Katrina McCray. . .Sr. Sales & Mktg. Support Specialist Greg Robinson . . .Sales & Marketing Support Assistant Loraine Taylor . . .Sales & Marketing Support Assistant

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pleting the final step." Trials and demonstrations have taken place of white spaces technology across the world, he said: Many of the companies active in the white spaces so far say "they certainly are interested in the white spaces model for the TV bands, but they see a great deal of promise in expanding this model, whether it be licensed or unlicensed, to other spectrum." McDowell said he's pushed for the use of the TV white spaces since he became a commissioner six years ago, and FCC work had gotten underway four years before that. Rollout of mobile devices in the white spaces is "at least" several years away given the reshuffling of the TV band tied to the upcoming incentive auction of broadcast spectrum, he said. "Its hard for chip designers to design those chips right now." "It looks like were at a point where we have little or no federal spectrum going to auction in the near term," McDowell said. "The incentive auctions, as we implement that law, thatll take some time. In the meantime its very appropriate for us to talk about imaginative ways to squeeze more efficient out of the airwaves." McDowell said the U.S. had hit a cul-de-sac rather than a dead end in getting more spectrum online for broadband since "well be able to find our way out at some point." "All of this is great news for those Americans who live in sparsely populated rural communities and low-income urban areas," Commissioner Mignon Clyburn said of the report. "To date, licensed communications companies, have not developed profitable business plans to serve these areas, so the successful development of TV white space databases and devices, gives us hope that these underserved communities, will be moving closer to enjoying the affordable advanced communications services, that the vast majority of Americans, already enjoy." Howard Buskirk
'Unacceptable'

911 Problems Extended Beyond Virginia Following June 'Derecho'

911 calling problems were widespread in the wake of the derecho that hit the Midwest and East Coast June 29, Public Safety Bureau Chief David Turetsky said in a report Thursday at the FCC meeting. The agency sought comment on communications breakdowns Wednesday (CD July 19 p15). Turetsky said 911 problems hit parts of country beyond the already well-publicized incidents in northern Virginia. Chairman Julius Genachowski said the FCC will revisit the issue of backup power for telecom facilities. "For communications networks there was good news and bad news," Turetsky said. "The good news is that in many areas communications services held up very well and in most areas where they did not, restoration of service proceeded at pace. But that was not nearly the case everywhere. ... Some isolated 911 facilities were hit especially hard." The FCC has found there were "isolated breakdowns" in Ohio, Kentucky, Indiana and Pennsylvania as well as "systemic failures" in northern Virginia and West Virginia. "A significant number of public safety answering points, or PSAPs, couldn't receive and properly dispatch E911 calls at all," Turetsky said. "Once some connectivity was restored, many PSAPs were partially down for several days. The seriousness and impact of these PSAP outages and impairments is illustrated clearly by what happened throughout much of northern Virginia." In Fairfax County, outages affected both primary and backup facilities, he said. "The result was that the PSAP serving most of the 1.1 million people of Fairfax County couldn't receive any 911 calls for several hours. Even after arrange-

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ments for rerouting 911 calls finally were made, 911 service was significantly degraded for days." West Virginia experienced "serious problems with even more PSAPs knocked out of service completely than in northern Virginia," he said. The FCC got involved as soon as the storm was over, monitoring problems closely, Turetsky said. It granted an emergency special temporary authority so a utility could use certain frequencies to assist in power restoration in Ohio on Saturday, he said. The FCC also issued a set of consumer tips for communicating during an emergency. The Public Safety Bureau also launched an inquiry. "Our focus is to learn all the facts and circumstances of the outages and disruptions in service, including the causes," Turetsky said. "Those not only include the PSAPs, but also cell sites, interconnection switches and other facilities that prevented consumers from using wireless and wired and broadband communications to reach emergency providers at a time when consumers were more likely than ever to need to do so. Our goal is simple to use this information to make people safer." The bureau is also examining its own processes and how it collects information, he said. "Theres no question that things went wrong, during and after the derecho," Genachowski said. Problems "were significant," he said. "They resulted in 911 going dark in a number of different places, much longer than it should." Wednesdays public notice mentioned the possibility of the FCC again imposing backup power rules (http://xrl.us/bnhcmq). "Backup power is one the things that well look up in the course of this investigation and the inquiry," Genachowski said. The FCC embraced a backup power requirement for wireless facilities following Hurricane Katrina, and then retrenched, withdrawing the rules in the face of disapproval by the Office of Management and Budget (CD Dec 2/08 p1) and a challenge by carriers in the U.S. Court of Appeals for the D.C. Circuit. "The public probably doesn't know, but we do have 24/7 operation," said Commissioner Robert McDowell. "The scope and the damage caused by the derecho was simply overwhelming." While upwards of 2.5 million in the greater Washington, D.C., area lost access to 911 service "the exact cause or causes" remain unknown, he said. "That is unacceptable, but you're on it," McDowell said. "We must do all that we can to ensure that such a widespread outage never happens again. Not only must be prepared for unforeseen natural phenomena, but being the capital of the United States we must be prepared for potential terrorist attacks as well and having a hardened and reliable 911 system is absolutely critical to the public interest." Commissioner Jessica Rosenworcel said she visited the Fairfax County PSAP this week. "The head of Fairfax County's Department of Public Safety Communications described an eerie quiet in the aftermath of the storm, as the calls into 911 quickly and implausibly ceased," she said. "This put lives at danger. It put our safety at risk and it deserves our attention." Commissioner Ajit Pai said the storm "exposed a very serious set of issues that deserves the commission's attention." He asked that the report be concluded quickly. "While the FCC already receives information about service outages through our mandatory Network Outage Reporting System (NORS) and voluntary Disaster Information Reporting System (DIRS), given the extent of the outages last month, it is appropriate to learn more about the impact of the storm on emergency and 911 communications networks," said Commissioner Mignon Clyburn. "I also appreciate that the public notice asks questions related to whether Next Generation 911 tools and technologies, could have improved the reliability of communications networks."

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The Association of Public-Safety Communications Officials commended the FCC for quickly seeking public comment on the recent local 911 changes caused by the derecho. "APCO is pleased to see the Commission seek public comment on the recent local 9-1-1 outages, and looks forward to partnering with the FCC and other stakeholders to address the critical questions raised, which will ultimately help prevent future outages from occurring," First Vice President Terry Hall said in a statement. Hall and the incoming APCO president met with Genachowski, Clyburn, staff of the other commissioners, and Turetsky Wednesday to discuss the outages. Howard Buskirk
DHS Should Lead

Lawmakers Working on Cybersecurity Contingency Plan

Rep. Michael McCaul, R-Texas, is working with lawmakers on a contingency plan in case the Senate fails to produce a cybersecurity bill this month, the Congressional Cybersecurity Caucus co-chairman said during an event hosted by the American Foreign Policy Council. It's "highly likely" that Senate Majority Leader Harry Reid, D-Nev., plans to bring cybersecurity legislation to the floor for debate between now and the August recess, his spokesman told us separately, "but we still have to get through the outsourcing and Bush tax cut bills first." If the Senate fails to agree upon a comprehensive cybersecurity bill next week, McCaul said he has a meeting scheduled with several House and Senate lawmakers to discuss a way forward. McCaul plans to recommend to Senate lawmakers that they consider the four House cybersecurity bills as standalone bills, he said without specifying when the meeting will be or who will attend. In April, House lawmakers passed four cybersecurity bills during its so-called cyberweek: the Cyber Intelligence Sharing and Protection Act (HR-3523), the Federal Information Security Amendments Act (HR-4257), the Cybersecurity Enhancement Act (HR-2096), and the Advancing America's Networking and Information Technology Research and Development Act (HR-3834). McCaul expressed his concern that the Senate Cybersecurity Act (S-2105) places undue mandates and regulations on the private sector. "The one thing I learned from the [Stop Online Piracy Act] debate is don't tread on the Internet," he said. Instead cybersecurity legislation should harden federal networks, increase educational awareness of cybersecurity, secure the U.S. IT supply chain and increase information sharing between the public and private sector, McCaul said. Cybersecurity legislation should authorize the Department of Homeland Security (DHS) to take on the lead role if domestic networks came under a cyberattack, McCaul said. "With the NSA, you don't want to militarize [the Web], that's why DHS as a civilian agency is more appropriate as the lead role domestically," he said. "I think it's better to do what we are doing in terms of sharing that cyberthreat information with the private sector through NSA and having DHS working with the NSA and DOD together." McCaul said he was "very disappointed" that House leaders shelved the House Homeland Security Committee's cybersecurity bill, the Promoting and Enhancing Cybersecurity and Information Sharing Effectiveness Act (HR-3624). The bill, which was authored by Committee Chairman Dan Lungren, RCalif., was dropped from consideration despite undergoing major revisions intended to make the bill more palatable to critics in industry (CD April 19 p8). The bill "should have gotten more buy-in from stakeholders" because it would have codified into law the existing authorities granted by the executive branch, McCaul said. Bryce Baschuk

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8.6 Times Cash Flow

Recent Media M&A Shows Debt Markets Strong, Business Good, Executives Say
A series of larger-than-normal transactions involving broadcast and cable assets reveal a healthy market for raising debt and some faith that the media sector is healthy and profitable, said executives we spoke to Thursday. The last few days have seen deals disclosed involving media assets valued at more than $8 billion. They included several transactions that involved the former Clear Channel TV station group, Atlantic Broadbands acquisition by a Canadian cable operator and Suddenlinks $6.6 billion acquisition by BC Partners and CCP Investment Board. Its definitely the strength of the debt markets thats driving this activity, said Gillis Cashman, managing partner at venture capital firm M/C Partners and chairman of cable operator Baja Broadband. Cable is a very consolidated industry, so its unique to see deals of this size, especially on the same day. But there are still a number of smaller regional guys out there, and this will probably spur some activity as well." Multiples are high the $6.6 billion price for Suddenlink represents a valuation of 8.6 times its estimated 2012 cash flow, the company said. Not all smaller operators are interested in selling out. Its always interesting, as an independent operator, to go back to my income statement and say Whats my cash flow times eight? said Bob Gessner, president of Massillon Cable, and vice chairman of the American Cable Association. But were having a good time, were profitable, we provide great jobs for our employees and our community appreciates that. Im not going to get that by swapping stock with Time Warner or Comcast, he said. I hope, and I think, that there are other people who feel that way. Valuations may vary from company to company, said Levi Maaia, vice present of Full Channel TV, a cable operator in Rhode Island with several thousand subscribers. The days of running a formula are sort of over, he said. Each cable company looks different than its cousin." Each of those "systems look very different, their expenses are different, their technology offerings are different," Maaia said. "Trying to lump them all in and say well theyre all cable operators, probably isnt the wisest move financially. The deals also show the value of cable systems, particularly in regions where there's less competition, Cashman said. The video product has been under a lot of pressure, and content costs continue to go up, he said. But going forward if you do have that unique broadband pipe into the home, I see that opportunity on the high speed data side ... far outweighing the risks on the video side, when combined with the opportunity to sell more products to small and medium-sized businesses, he said. Beyond the cable transactions, a series of TV station deals were announced Thursday, primarily involving the former Clear Channel TV group now operated by Newport TV. Sinclair agreed to buy six of Newports stations for about $412.5 million, the buyer said. It expects to finance the deal with cash on hand and through a bank loan, or issuing bonds, it said. The Newport Acquisition is consistent with our focus on adding big four affiliates in mid-sized markets and strengthening our in-market position, said Sinclair CEO David Smith. Sinclair agreed to buy Bay TV, the owner of WTTA-TV Tampa Bay, Fla., for $40 million. It agreed to sell KMYS-TV San Antonio and WSTR-TV Cincinnati to Deerfield Media, subject to Fox TV Stations purchase option on WSTR-TV, Sinclair said.

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Nexstar and Mission Broadcasting said separately they raised $645 million to fund their purchase of 12 Newport stations and refinance some debt. About $285.5 million of the financing will pay for the stations and Newports Inergize Digital business. The Newport transaction is a transformational event for Nexstar, its CEO Perry Sook said. The acquisition significantly expands our revenue and operating base with stations where we can quickly apply our operating and management disciplines to meaningfully improve their performance. Josh Wein
Size Matters

Telecom Playing Field Tilts Against Small Business, MMTC Panelists Say
Challenges remain for women- and minority-owned businesses that seek to compete in telecom, but the larger carriers have expressed a desire for partnership and inclusion as supplier and procurement diversity have become stated goals for many executives, industry executives and lawyers said late Wednesday. Several speakers at the Minority Media and Telecommunications Council conference debated the best ways to create a competitive telecom market. I dont agree you should let the players play, said lawyer Jenell Trigg of Lerman Senter. The situation allows minorities and women to be pushed to the sidelines," she said. Trigg broke down the 2008 $19-billion spectrum Auction 73, in which 84 percent of licenses went to AT&T and Verizon Wireless and 2.6 percent went to minority- and women-owned businesses. Those results lack the "robust opportunity" such auctions need, she said. The implications give a new meaning to white spaces in the spectrum, Trigg said. New market entrants need better incentives and the FCC, which has not recognized the need or importance of women- and minority-owned businesses, has not done enough, Trigg said. We are not owners in this space. The agency has adjusted auction rules on too short a notice in the past and the reality is we need time, she said. Scale and scope matter, replied Verizons Jesse Crawford, a manager of supplier diversity. We have to have players who can compete, he said, despite saying he agreed wholeheartedly with Triggs message. Smaller businesses cant compete longevity-wise, he said. Crawford offered an extended comparison about baseball and the inability of a Little League youth to ascend to Major League Baseball where unbridled enthusiasm doesnt guarantee salvation. I would submit that baseball is not spectrum, Trigg replied. The nature and influence of size and what it can do, for better and for worse became a touchstone of the MMTC discussion. The reality is these industries are so consolidated, said Trigg, that women- and minority-owned businesses are far and few between. Ronald Johnson, MMTC treasurer, said the council has historically addressed precisely these issues and earlier that afternoon had defended the FCCs commitment to diversity (CD July 19 p9). The commission held a workshop on supplier diversity for small businesses owned by minorities and women last week (CD June 14 p9). The underlying concern turned to partnerships and the nature of them between telcos like Verizon, AT&T and Sprint Nextel and smaller suppliers and contractors. Verizon wants a collaborative effort, Crawford said. We dont write a check and step away. Verizon features a Premier Supplier Academy, started in 2011, that offers these mentorship and education components, Crawford explained. The key term for most suppliers to keep in mind is mutually beneficial relationships." Verizon first established a supplier diversity program in 1984 and said it bought $4 billion from diverse suppliers in 2011 (http://xrl.us/bnhgap).

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Verizons top Washington executive noted in an earlier MMTC panel that the companys commitment to diversity makes financial sense (CD July 19 p9). Partnerships have to develop where small business can be owners in spectrum division, Trigg said. Certification is often helpful to forming these partnerships, panelists said. They mentioned the U.S. Small Business Administrations 8(a) certification (http://xrl.us/bnhgff) for small businesses owned and controlled at least 51 percent by socially and economically disadvantaged individuals. Certification is something that gets you in the door, said Joset Wright, president of the National Minority Supplier Development Council. Wright praised telcos as potential partners: They all put their money where mouth is and walk the walk. Suppliers who want to work with Sprint need patience, said Strategic Sourcing Director Marvin Motley. Narrow your focus, he advised those who want to work with the carrier. Certification provides definitely an advantage in working with Sprint and means it doesnt need to worry about financial solvency as much, Motley said, who added his company likes suppliers who are ready to move with us. Verizon sees certification as definitely an advantage and a force that adds validity and eases the telco's reporting and tracking requirements, said Crawford. Measurement is also key to including minorities and women in the supply chain, some panelists said. That which gets measured gets done, said Wright, who encouraged goals, plans and processes as part of a broader mission of intentional inclusion that reflects the demographics of a given community. One concern is not enforcing rules, said Wright, who said theres more enforcement on the private side than the public sector side and suggested punishment for those that do not comply with regulations. Trigg countered that she prefers incentives and the carrot over the stick, partly because there are fewer constitutional issues potentially at play. The FCC "needs to step up, Trigg said. She spoke of the FCC's required submission of triennial reports, outlined in Section 257 of the Communications Act (http://xrl.us/ bnhf5w). These reports have been woefully late and woefully inadequate in some ways, Trigg said. There should be more vigorous reports. John Hendel
Internet, Business Models

Management Teams and Lenders Important for New and Legacy Media Businesses
Management teams and lenders are important components of new and legacy media businesses as they seek to create business models, said panelists at a Minority Media and Telecommunications Council conference. The Internets business opportunities have raised the question of how to create a new business plan in a world in which [traditional medias] function can now be bypassed, said Anna-Maria Kovacs, a senior policy scholar at Georgetown University. The online worlds disintermediation and ability to bypass traditional media has substantially changed the business plans and the risk profiles of the legacy world, she said. The most important thing is team, said Hank Torbert, managing partner at investment firm Avondale Ventures. Everyone has to uniquely understand how to add value to the opportunity. Managing Director David Meier of Gladstone Cos. said businesses need to have a diverse management team that has functional expertise across different categories. Torbert said the team should include a financially focused CEO. Meier and Torbert recommended financial advisers. Sometimes you need help, you need expertise, Meier said. Businesses, whether legacy or new media, should consider the perspective of their

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audience when seeking funding: A senior lender examines the stability and history of a business while a mezzanine lender looks for growth, Meier said. Businesses should consider financing from local banks, he said. The key issue for anyone who is looking for funding is to figure out which of these routes [legacy or new media] do you want to take, and figure out what your business model is, Kovacs said. Meier said disintermediation resulting from the Internet has created a challenge for lenders like myself because we focus on revenue and looking to established businesses. He said the history of a business its demonstrated ability to generate revenue and stable cash flow is more important than whether it uses new or traditional media. Business plans should also consider a variety of media options, Torbert said. Dont fall in love with projects that are me too. Businesses shouldnt pursue social media, digital layout, and mobile app aggregation simply because everyone else is doing it, he said. There are many different types of opportunities in media now and telecom, and I dont want people to ... get caught in the sexy part of it." There are other businesses that are out there that make a lot of sense, he said, mentioning telecom services companies. Courtney Crandell

Comm Daily Notebook

FCC commissioners heard a presentation Thursday on the FCCs use of next-generation mapping. "The breakthrough with maps is that it allows users to visualize data making complex mountains of data accessible, understandable, and actionable," said FCC Chairman Julius Genachowski. He mentioned in particular the National Broadband Map, which the commission developed in coordination with the NTIA. "The map identifies what services and what speeds are available in each community information that is useful to consumers, policy makers, as well as businesses and entrepreneurs," he said. "Its the first of its kind, just the beginning, and holds tremendous promise."

Bandwidth in rural areas is "important," said Jonathan Adelstein, RUS administrator. Businesses are using the Internet in new and innovative ways to expand and grow, he said Thursday at a Minority Media and Telecom Council event in Washington. The private sector plays an important role in helping RUS and the FCC to meet the demand for bandwidth, he added. In terms of broadband, RUS has made a major outreach push for diversity in both businesses that we fund as well as in the areas that are served by our awards, he said. The agency awards about $8 billion a year in loans and grants, he said. We provide affordable financing for capital-intensive projects ... and engineering standards, careful scrutiny and oversight to make sure those funds go where they belong. About 25 of the awards granted through the Recovery Act went to minority and tribal organizations, he said. NTIA is preparing to roll out the First Responder Network Authority, or FirstNet, said Anna Gomez, NTIA deputy administrator. She said she expects opportunities to arrive for network security and maintenance professionals, software developers and other professionals when the system is fully operational, she said. Applications development is going to be very exciting in the public safety field, she said. For FirstNet, NTIA will establish a 15-member board that consists of the Department of Homeland Security secretary, the director of the Office of Management and Budget and 12 members appointed by the Commerce Department secretary, and it will ensure geographical, regional, rural and urban representation on the board, she said: A public safety advisory committee will meet with tribal, regional, state and local jurisdictions to discuss provisions like the placement of towers and the assignment of priority to local users, she added. KL

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Correction: A comment made by Rural Utilities Service (RUS) Administrator Jonathan Adelstein about needing "visibility" for projects funded by RUS loans was incorrectly attributed to FCC Chairman Julius Genachowski (CD July 19 p2).

The first meeting of the Advisory Committee for the 2015 World Radiocommunication Conference will be at 9 a.m. Aug. 9 at FCC headquarters. The WRC-15 Advisory Committees objective is to provide the FCC with advice, technical support and recommended proposals for the WRC-15, the FCC said in a notice (http://xrl.us/bnhfqk). At its initial meeting, the WRC-15 Advisory Committee will consider formation of its Informal Working Groups (IWGs), assignment of WRC-15 agenda items to the IWGs, scheduling and other organizational matters. The FCC has also established a WRC-15 website at www.fcc.gov/wrc-15.

Capitol Hill
Nearly a dozen telecommunications and technology groups urged lawmakers Thursday to require the Department of Justice and FCC to increase transparency in their consideration of the proposed Verizon/SpectrumCo transaction. The groups told lawmakers in a letter that they should be "very concerned" about the competitive impact of the proposed deal and particularly alarmed that there's no transparency in the dealings for the FCC and interested parties to properly review these "unprecedented agreements." The letter was sent to House Communications Subcommittee Chairman Greg Walden, R-Ore., Ranking Member Anna Eshoo, D-Calif., House Competition Subcommittee Chairman Bob Goodlatte, R-Va., Ranking Member Mel Watt, D-N.C., and members of the House Commerce and Judiciary committees. The letter was signed by Access Humboldt, the Center for Rural Strategies, the Computer & Communications Industry Association, the Eastern Rural Telecom Association, the Independent Telephone and Telecommunications Alliance, the National Telecommunications Cooperative Association, Public Knowledge, the Rural Broadband Alliance, the Rural Independent Competitive Alliance, the Rural Telecommunications Group, and the Western Telecommunications Alliance.

House lawmakers slammed the Chinese government for facilitating infringement and theft of U.S. intellectual property online, during a Foreign Affairs Committee hearing Thursday. The Chinese government has "approved and coordinated" theft of U.S. IP and the American government has been "cowardly" in confronting the threat, said Rep. Dana Rohrabacher, R-Calif. "We've been played for suckers over the years, we've been played as fools" as the Chinese government has only become more "brazen in their theft of wealth that should be going to our people." Committee Chairman Ileana Ros-Lehtinen, R-Fla., urged the executive branch to negotiate enforceable agreements with foreign governments that will curb IP theft such as the Trans Pacific Partnership (TPP). The trade agreement would require parties which include the U.S., Australia, Brunei, Chile, New Zealand, Singapore, Peru, Malaysia and Vietnam to ensure they have effective enforcement procedures against online trademark, copyright and other rights infringements. Ranking Member Howard Berman, D-Calif., said the U.S. has an opportunity to successfully negotiate the TPP, which he called an "ambitious agreement" with Asian countries to protect U.S. IP. "It is critical that this agreement reflect and prioritize the contribution of the U.S. IP industries to the U.S. economy by including strong protections for IP and robust enforcement provisions," he said. Heritage Foundation Senior Research Fellow Derek Scissors agreed that the TPP offers a "great possibility" for curbing Chinese IP theft and urged lawmakers to pursue other lines of attack as well. "There are ways for the U.S. to change its laws to make it more difficult and uncomfortable" for Chinese infringers, he said. David Hirschmann, president of the U.S. Chamber of Commerce's Global Intellectual Property Center, said it's crucial to focus

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on the Web where stolen U.S. IP is primarily being distributed. "One thing we can do is to begin to work with the world to find pro-Internet freedom rule of law approaches to address distribution on the Internet," he said. House Oversight Committee Chairman Darrell Issa, R-Calif., and Sen. Ron Wyden, D-Ore., have previously denounced the TPP as a threat to Internet freedom, and Wyden introduced a bill in May to clarify the Office of the U.S. Trade Representative's duty to share trade agreement information with all members of Congress (CD June 12 p6).

Wireline
With less than a week before price-cap carriers must indicate whether they will accept millions of dollars in subsidies for broadband buildout, the FCC clarified rules on how to calculate the amount of support a carrier must return for failing to meet deployment obligations (http://xrl.us/bnhfsr). Carriers that can't meet their obligation must return "$775 multiplied by the number of locations to which the carrier was required to deploy to but did not," a Wireline Bureau order said Thursday. It said accepting funding doesn't mean a carrier is "binding itself to deploy only in those areas, nor is it committing to deploy to every unserved location in those areas." Carriers must accept the funding by July 24.

Wireless
FCC Commissioner Jessica Rosenworcel said Thursday the FCC must establish a "clear timeline" for pending spectrum auctions. Rosenworcel also said more must be done to provide incentives for federal agencies to embrace giving up spectrum for commercial use. "While past efforts to reclaim spectrum from federal users have involved the stick, I think going forward we should explore the carrot," she said. "Today, the Commercial Spectrum Enhancement Act provides funding to federal users for relocation when their airwaves are reallocated for commercial use. It also now provides upfront funding for planning. What is missing is a series of incentives. What if we were to financially reward federal authorities for efficient use of their spectrum resource? What if they were able to reclaim a portion of the revenue from the subsequent re-auction of their airwaves? Would they make smarter choices about their missions and the resources they need to accomplish them? Its an idea worth exploring."

The FCC approved a fourth order on reconsideration on rules for the USF Mobility Fund, which said if a petition for reconsideration simply repeats arguments that were previously considered and rejected in the proceeding, it will not likely warrant reconsideration. The order (http://xrl.us/bnhfr8) affirmed the FCCs earlier adoption of a reverse auction mechanism. But the commission turned down several requests for changes, including requests that the FCC: restrict or prohibit Tier I carriers from receiving Mobility Fund Phase I support; hold applications for eligible telecom carrier status in abeyance pending completion of the auction and then automatically qualify any winning bidder as an ETC; and deem a carrier to be a Lifeline-only ETC to be eligible to participate in the Mobility Fund without first obtaining general ETC status. The FCC also rejected for purposes of the auction of Mobility Fund Phase I support, arguments that the Commission provide for bidding preferences to small or rural entities and extend eligibility for the Tribal lands bidding credit to entities that are not Tribally-owned or controlled.

Early reviews for the Verizon Wireless shared data plan have been great, said Verizon Communications Chief Financial Officer Fran Shammo, during the company's quarterly financial call with ana-

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lysts. He noted that customer adoption of the new Share Everything plans, available since June 28, has met expectations. We are seeing a wide variety of customers and family share accounts opting into Share Everything, including existing smartphone customers with unlimited data plans, Shammo said during an investor call Thursday. Subscribers get unlimited voice minutes and text under the new plans, but pay for a shared pool of data for up to 10 mobile devices. Public interest groups have criticized Verizons plans, as well as the similar Mobile Share plans AT&T announced Wednesday. The company had record wireless profits in the quarter, but saw weak results from its wireline products. Shammo also said Verizon is confident its AWS spectrum license purchase will clear FCC and Justice Department approval and that the deal will be completed this summer. The company is ready to go with the "auction" of its 700 MHz A and B spectrum licenses on the secondary market once the AWS purchase is completed, Shammo said. JP

The Association of Public-Safety Communications Officials released Recommended Best Practices for PSAPs When Processing Vehicle Telematics Calls from Telematics Service Providers (TSPs). The public safety answering point document revises best practices released by the APCO Telematics Taskforce in 2009. It offers clear guidelines for PSAP personnel in the handling of vehicle telematics and Advanced Automatic Crash Notification (AACN) calls from TSPs and updates the information the telematics operator is expected to provide, APCO said. It also contains updated TSP contact information, escalation procedures and a glossary of terms that clarifies new in-vehicle technologies. It does not define local response procedures or protocols, allowing each agency to establish appropriate call handling and dispatch policies. APCO also announced approval of the Vehicular Emergency Data Set (VEDS) for transmission of critical vehicle crash data to PSAPs. APCO developed VEDS in combination with the National Emergency Number Association.

State Telecom Activities

Ohio will be revisiting the details of its Lifeline service thanks to two recent applications, the Ohio Public Utilities Commission unanimously confirmed in its meeting Wednesday. TracFone Wireless and Virgin Mobile USA had both applied on June 22 for a rehearing of the commissions May 23 finding and order, which established certain requirements for the provision of Lifeline service, including those necessitated by the Federal Communications Commission's (FCC's) Report and Order in In the Matter of Lifeline and Link Up Reform and Modernization, Lifeline and Link Up, Federal-State Joint Board on Universal Service, Advancing Broadband Availability Through Digital Literacy Training, the commission said (http://xrl.us/bnhfj9). It judges that TracFone and Virgin Mobile have sufficient reason to question its ruling and now promises further consideration, the commission said. In its June 22 objection, Virgin Mobile called the Ohio commissions Lifeline order unreasonable and unlawful, contrary to the public interest in that it is discriminatory and anti-competitive with respect to prepaid Lifeline service providers, and in requesting a rehearing, added it hopes the commission reverse its finding that reimbursement from USAC to prepaid wireless Lifeline providers is includable for purposes of calculating the 9-1-1 assessment and reverse its order directing the remittance of 9-1-1 fees that would have been collected retroactively to the date of ETC designation (http://xrl.us/bnhfma). In its application for a rehearing, TracFone asserts non-billed, free Lifeline services are not prepaid services and Ohio law imposes no such 911 fee remittance obligations on non-billed free Lifeline services where there is no available mechanism for collecting such fees from qualified low-income consumers of such non-billed free services, and said one subset of ETCs, wireless resellers, shouldnt be singled out for a retroactive obligation for fees that couldnt have been collected.

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Several carriers received approval for interconnection agreement amendments in Idaho Thursday. A total of seven applications were approved, and the companies included CenturyLink QC, Metropolitan Telecommunications of Idaho, Frontier Communications Northwest, Entelegent Solutions, Bullseye Telecom, Ernest Communications, Trans National Communications International, OneEighty Networks and Clarks Electronics. The amendments to the Interconnection Agreement are consistent with the public interest, convenience and necessity and do not discriminate and are consistent with the pro-competitive policies of this Commission, the Idaho Legislature, and the federal Telecommunications Act, the commission said in its final order approving the interconnection agreement amendments (http://xrl.us/bnhfqe).

International Telecom
There has been a big push for a compromise draft proposal on exceptions and limitations for visually impaired and blind people at the World Intellectual Property Organization meeting in Geneva. India, China, Switzerland, the Latin America and Caribbean Regional Group and, for the first time, Australia clearly supported a full-fledged treaty and asked for conclusion of the preparatory work during the 24th Standing Committee on Copyright and Related Rights (SCCR) that runs through Wednesday. "Further convergence in delegations' discussions were possible and a balanced and flexible text was within reach," the European Union said. The U.S. delegation rejected allusions that a linkage could be made between the visually impaired media treaty and the broadcasting treaty. The Brazilian delegate had warned against efforts to link the WIPO efforts on the human rights-oriented print disabilities and the broadcasting treaty. A linkage had led to the failure of earlier SCCR work. "A linkage between the print disabilities effort and an effort for business affairs would be unprincipled, it would be unethical, and the United States will not have any part of it," the U.S. delegate said.

Telecom Notes
The Federal Mediation and Conciliation Service should step in to help in Verizons ongoing contract negotiations with its employees, said the Communications Workers of America and International Brotherhood of Electrical Workers, in a statement Thursday. The parties have struggled to establish a contract for more than a year as Verizon management continues to insist on drastic cuts in benefits and employment security and demonstrates "greed" and creates delays "not only bad for workers, its bad for consumers and bad for our communities," the unions said. CWA held protests in several cities earlier this summer to underscore the problem (CD June 25 p13). Verizon declined to comment on the unions request to the service, a federal government agency.

Broadcast
Arbitron said the Media Rating Council (MRC) accredited the ratings from its Portable People Meter device in five markets: Los Angeles, Tampa-St. Petersburg-Clearwater, Baltimore, Riverside-San Bernardino, Calif., and San Antonio. Riverside-San Bernardino and Tampa-St. Petersburg-Clearwater are seeing their accreditation restored, after it had been withdrawn by MRC in January, Arbitron said. Separately, the company said Q2 revenue increased 9.1 percent from a year earlier to $104.4 million and profit increased 31 percent to $10 million.

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Cable
Cable operators shouldnt be allowed to encrypt their basic service tier without offering a comparable successor to ClearQAM, attorneys for Boxee told FCC Media Bureau officials during a recent teleconference, an ex parte notice shows (http://xrl.us/bnhgkr). Beyond the proposal Boxee and Comcast presented to the agency last month (CD June 29 p8), they discussed cloud based methods for delivery of content by cable operators, the notice said. On its own, a hardware solution would not be a sufficient long-term replacement for ClearQAM, although one could form an interim solution, as suggested in the Boxee and Comcast proposal, the notice said.

Time Warner Cable petitioned the FCC to be let out of local rate regulation in 18 Wisconsin communities (http://xrl.us/bnhgmh). The cable operator said its subject to competition from AT&Ts U-verse service in those areas and therefore meets the local exchange carrier test for determining that it is subject to effective competition.

Mass Media Notes

A group of pay-TV providers pointed the finger at broadcasters for retransmission consent blackouts, hours after NAB criticized three of the coalition's members for being involved in most retrans disputes this year (CD July 19 p21). "NABs offering 'sympathy' for viewers currently subject to blacked-out programming on Time Warner Cable, DirecTV and Dish is dishonest at best," the American Television Alliance said in a news release late Wednesday (http://xrl.us/bnhfqc). "It is the broadcasters, the so-called 'stewards of the public airwaves,' that use outdated government rules to yank their signals from consumers." The coalition didn't dispute that the three multichannel video programming distributors were involved in three-quarters of TV service disruptions in 2012, an NAB spokesman said. "Only 0.3 percent of Americas 5,851 pay TV companies have ever been involved in a loss of broadcast TV service," he said. "This suggests a concerted effort by three of the largest pay TV companies to manufacture a crisis that does not really exist, rather than compete in the marketplace."

Dish Network and West Virginia Media reached a deal that returned four TV stations to the Dish programming lineup. WBOY (NBC, ABC) Clarksburg, WVNS (Fox, CBS) Bluefield, WTRF (CBS, Fox, ABC) Wheeling and CBS affiliate WOWK Charleston confirmed the deal on their websites. The stations went dark for Dish customers July 1 (CD July 3 p14).

A carriage agreement is expected to be reached between Viacom and DirecTV given the profit the programmer would lose without carriage on that DBS provider, Evercore Partners wrote investors Thursday. DirecTV wants to offer the programming as long as DTV can procure it at a fair price, they said. The analysts estimate the subscriber loss breakeven point at 1.15 million subscribers. The potential damage to DirecTVs premium position in the market from not carrying the programming is more difficult to quantify, they said. In the highly unlikely event that Viacom were to lose DirecTV permanently, both sides would have less leverage in future negotiations, they added. This Friday marks day 10 of the stalled carriage agreement, which left DirecTV customers without Comedy Central, TVLand, MTV and other Viacom channels (CD July 12 p10).

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Satellite
The FCC International Bureau adopted changes Thursday to the earth stations on board vessels (ESV) rules, in a second order on reconsideration (http://xrl.us/bnhf8k). The bureaus actions stemmed from Boeing and ViaSat petitions, the bureau said. Its revisions will provide greater operational flexibility for ESVs while continuing to ensure that the FSS operators are protected from harmful interference in the C- and Ku-bands, the order said. It said the aggregate power-density rule will allow ESVs with variable power, co-frequency systems to operate their individual transmitters simultaneously while using varying off-axis equivalent isotropically radiated power-density levels instead of requiring each transmitter within the system to use the same EIRP-density." The order requires variable power ESV systems to operate 1 decibel below the off-axis EIRP-density limits to protect fixed satellite services from harmful interference. Other rule changes involve renumbering the rules to incorporate the variable power ESV provisions ... and incorporating the new requirement to file coordination notifications electronically on the bureau filing and reporting system, the order said. It said the agency doesnt expect a substantial number of small entities to be directly impacted by the rule changes.

Dish Network lost 10,000 net subscribers in Q2, besting some analysts projections of a loss of 119,000, Wells Fargo analyst Marci Ryvicker said in a research note. Dish added 665,000 gross subscribers, bettering analyst estimates of 577,000, she said. Monthly churn was 1.6 percent, against forecasts of 1.65 percent, Ryvicker said. Wells Fargo is projecting a 1 percent increase in average revenue per user, she said. Dish made the disclosures in SEC filing for a senior note debt offering, the size and pricing of which wasnt disclosed. The money raised will be used for "corporate purposes," Dish said.

A decision on the proposal that would allow Dish Network to deploy a terrestrial service could come sooner than some telecom industry professionals expected. A notice of proposed rulemaking on allowing terrestrial use of 2 GHz wireless spectrum was introduced this year (CD March 22 p4). It sounds like the FCCs final draft of the NPRM may be ready to go, Wells Fargo analyst Marci Ryvicker said in a research note recounting a Wells Fargo wireless symposium. We believe that the September timeframe as suggested in several trade reports may actually be correct. Many speakers at the symposium suggested that the higher band spectrum has significant value, she said. This spectrum provides capacity to complement the coverage that many of the wireless carriers currently have through their lower band spectrum, such as the 700 MHz. Symposium speakers also suggested that a potential purchase of Dish by AT&T is unlikely to occur in the near term although this could be the ultimate scenario down the line, she said. In terms of Dish Chairman Charlie Ergen's strategy, its likely that Dish partners with various parties inside and outside the wireless ecosystem to ensure a better place in both the pay-TV and wireless industries, she added. KL

Communications Personals
Paul Sands retires at year's end as president and general manager of Hearst Television's WPTZ Plattsburgh, N.Y., and WNNE Hartford, Vt., being replaced by Kyle Grimes ... Lobbyist registrations: Motorola Solutions, Barbour Griffith and Rogers, effective June 10 ... Virginia state government's Center for Innovative Technology, Franklin Partnership, effective July 1 ... Spectrum Solutions Co., US Strategies, effective July 2.