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Telecom Business Alert -- Vol. IX Issue 29

Date: Jul 16, 2012

Controversial USF Reform

Last week, almost 80 parties filed Comments on proposals to reform the rules governing contributions to the FCC's Universal Service Fund ("USF"). The annual revenue requirement for the USF Program is approaching $9 Billion. During the first six months of 2012, the USF contribution factor exceeded 17 percent. Carriers typically recover their USF contributions as surcharges in customers' monthly bills. The core problem is that the pool of carriers' USF-assessable revenues is dwindling largely due to the migration to high speed Internet access services (Wireline and Wireless) and other IP-based services. For additional information, please see our latest entry at BeyondTelecomLawBlog. Please contact Doug Jarrett (jarrett@khlaw.com; 202-434-4180) for more information.

FCC Reportedly Plans to Revoke Public Safety 700 MHz Waivers

The FCC reportedly is circulating a draft order that will terminate all existing waivers permitting the early build out of public safety networks in the 700 MHz band. In May 2010, the FCC granted 20 waiver requests filed by public safety agencies seeking to deploy statewide or local public safety broadband networks on the 700 MHz public safety broadband spectrum (763-768 MHz and 793-798 MHz) ("Public Safety Spectrum"). Earlier this year, the FCC released a Public Notice seeking comment on whether it should halt further work on some or all of the networks authorized by the waivers. The recently enacted Middle Class Tax Relief and Job Creation Act of 2012 requires the 700 MHz D Block (758-763 MHz and 788-793 MHz) and Public Safety Spectrum to be reallocated to FirstNet, an independent authority to be formed within NTIA to oversee the construction and operation of a nationwide Public Safety broadband network. The Order likely will remove all encumbrances on the spectrum (including the existing Public Safety waivers) and permit it to be reallocated to FirstNet. Please contact Doug Jarrett (jarrett@khlaw.com; 202.434.4180) with questions.

Commission Urged to Protect 900 MHz Unlicensed Spectrum

Earlier this month, the Telecommunications Industry Association ("TIA") urged the Commission to protect unlicensed operations in the 902-928 MHz band from interference, including interference from Progeny's Multilateration Location and Monitoring Service (M-LMS). Late last year, the Commission granted Progeny's waiver request for devices operating in the 902-928 MHz band but noted that several commenters expressed concerns about the potential for interference from Progeny's proposed operations. TIA reiterated those concerns in a meeting with the Commission earlier this month and requested that the Commission condition Progeny's operations on further testing to safeguard Part 15 unlicensed systems. Please contact Greg Kunkle (kunkle@khlaw.com; 202.434.4178) with questions.

Spectrum to be Auctioned in Bankruptcy Proceeding

The 700 MHz licenses held by Pegasus Guard Band, LLC and the 2.5 GHz licenses held by Xanadoo, LLC may be auctioned on August 20 if the companies are unable to secure funding to repay secured lenders approximately $30 million. Pegasus holds 23 licenses in the 700 MHz A Block covering several major cities, including New York, Boston, Philadelphia, Chicago, Detroit, San Francisco, Seattle and Portland. The company paid $96 million for these licenses in 2000 and 2001. Xanadoo holds 40 leases for Educational Broadband Service (EBS) licenses in the 2.5 GHz band primarily in rural areas of Arkansas, Illinois, Kansas, Louisiana, Minnesota, Missouri, Nebraska, Oklahoma and Texas. Parties interest in bidding should submit participation documentation by August 10, 2012. For more information, please contact Wes Wright (wright@khlaw.com; 202-434-4296).

Video Minute: FCC's New ASR Rules Explained

Late last year, the FCC adopted new rules governing Antenna Structure Registrations ("ASR"). The new rules substantially change the ASR process and may add significant delays. Under the new rules, applicants are required to provide local notice of certain structures, file a partially-completed Form 854 with the FCC and wait 30 days before receiving an ASR number. In this week's Video Minute, Keller and Heckman Licensing Specialist Tim Doughty summarizes these new requirements. Please click here for this week's Video Minute. If you are unable to open the video, please feel free to contact Mr. Doughty directly at doughty@khlaw.com; 202.434.4271.

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