BROADBAND COMMUNITIES BROADBAND COMMUNITIES SUMMIT 2014 SUMMIT 2014

APRIL10, 2014APRIL10, 2014

Sean Stokes (sstokes@baller.com)Sean Stokes (sstokes@baller.com)Casey Lide (casey@baller.com)Casey Lide (casey@baller.com)The Baller Herbst Law Group, PCThe Baller Herbst Law Group, PCWashington, DCWashington, DC(202) 833-5300(202) 833-5300www.baller.com

KEY LEGAL AND REGULATORY ISSUES KEY LEGAL AND REGULATORY ISSUES AFFECTING COMMUNITY BROADBAND PROJECTSAFFECTING COMMUNITY BROADBAND PROJECTS

DisclaimerDisclaimer

This presentation does not constitute legal advice and This presentation does not constitute legal advice and should not be interpreted as such. should not be interpreted as such.

For advice on federal, state or local law, please consult For advice on federal, state or local law, please consult qualified legal counsel.qualified legal counsel.

OverviewOverviewFocus today: Legal and regulatory issues affecting service Focus today: Legal and regulatory issues affecting service providersproviders, as , as such:such:

I.I. Community BroadbandCommunity Broadband

II.II. Federal Universal Service Program Federal Universal Service Program

III.III. Poles & InfrastructurePoles & Infrastructure

IV.IV. MDU AccessMDU Access

V.V. Access to ProgrammingAccess to Programming

VI.VI. Federal Compliance ReviewFederal Compliance Review

VII.VII. CAF/RUS: Rural Broadband ExperimentsCAF/RUS: Rural Broadband Experiments

I.I. Community Broadband:Community Broadband:State Barriers To Public EntryState Barriers To Public Entry

Nixon v. Missouri Municipal LeagueNixon v. Missouri Municipal League (2004): (2004):• ““No State or local statute or regulation, or other State or local legal No State or local statute or regulation, or other State or local legal

requirement, may prohibit or have the effect of prohibiting the ability requirement, may prohibit or have the effect of prohibiting the ability of of any entityany entity to provide to provide any any interstate or intrastate telecommunications interstate or intrastate telecommunications service.” Telecom Act § 253(a) service.” Telecom Act § 253(a)

• ““any entity” in § 253(a) not clear enough to preempt state barriers any entity” in § 253(a) not clear enough to preempt state barriers with regard to political subdivisions, butwith regard to political subdivisions, but

• Not a ruling on the merits of public entryNot a ruling on the merits of public entry

• Municipalities have “respectable position” Municipalities have “respectable position”

• FCC “minced no words” in “denouncing” MO law FCC “minced no words” in “denouncing” MO law

• Does not apply to private entities, including coops Does not apply to private entities, including coops

Barriers To Public EntryBarriers To Public Entry

State “barriers” today (not necessarily “prohibitions”): State “barriers” today (not necessarily “prohibitions”): ALAL, , ARAR, ,

CACA,, COCO, , FLFL, , LALA, , MIMI,, MN MN, , MOMO, , NC, NE, NV, PANC, NE, NV, PA, , SCSC, , TNTN, , TXTX, ,

UTUT, , VAVA, , WAWA, , WIWI

• Broad based public-private sector support has helped recast the Broad based public-private sector support has helped recast the

debate away from public v privatedebate away from public v private

• From 2005-2010 most efforts at barriers defeated, 2011-2013 From 2005-2010 most efforts at barriers defeated, 2011-2013

laws in NC and SC but defeated in GAlaws in NC and SC but defeated in GA

• 2014 new efforts KS, IN, UT, but pro bill in TN2014 new efforts KS, IN, UT, but pro bill in TN

• Section 706 – Verizon “net-neutrality decision has opened up Section 706 – Verizon “net-neutrality decision has opened up

possible new opportunity at federal preemptionpossible new opportunity at federal preemption

Community Broadband: Authority IssuesCommunity Broadband: Authority Issues

Barriers v. AuthorityBarriers v. Authority

•Federal law encourages, but does not authorizeFederal law encourages, but does not authorize

• National Broadband Plan – encourages community broadband National Broadband Plan – encourages community broadband

•Public entities must have state/local authority Public entities must have state/local authority

• State laws, interpretations, procedures differ widelyState laws, interpretations, procedures differ widely

• Dillion’s Rule v. Home RuleDillion’s Rule v. Home Rule

• Service-by-service (cuts both ways)Service-by-service (cuts both ways)

• Charters, ordinances, finance laws and instruments, pole Charters, ordinances, finance laws and instruments, pole

agreements, franchises, contracts, tax issues, etc.agreements, franchises, contracts, tax issues, etc.

Service Specific RegulationsService Specific Regulations

• Communications Act and State counterpartsCommunications Act and State counterparts

• Separate “silos” for telecom, cable, wireless, and Separate “silos” for telecom, cable, wireless, and “enhanced” or “information services” “enhanced” or “information services”

• Each has its own history, policies, definitions, benefits, Each has its own history, policies, definitions, benefits, burdens, FCC rulings, court decisions, constituenciesburdens, FCC rulings, court decisions, constituencies

• Convergence: Technological + Corporate + MarketConvergence: Technological + Corporate + Market

For authority and compliance, it’s critical to know how an For authority and compliance, it’s critical to know how an activity is classified for regulatory purposes.activity is classified for regulatory purposes.

Business ModelsBusiness Models

Range of business models extends from infrastructure provider to retail Range of business models extends from infrastructure provider to retail

service provider, each with escalating costs/ rewards and regulatory service provider, each with escalating costs/ rewards and regulatory

compliance obligationscompliance obligations• Pure infrastructure -- Poles, street lights, towers and dark fiber Pure infrastructure -- Poles, street lights, towers and dark fiber • Governmental entitiesGovernmental entities• Private carriagePrivate carriage• BroadbandBroadband• Wholesale carriage (private or common carrier)Wholesale carriage (private or common carrier)• Video ServicesVideo Services• Telecommunications Services Telecommunications Services • Public/Private ventures both insolate and create more challenges Public/Private ventures both insolate and create more challenges

Incumbent ChallengesIncumbent Challenges

• Whatever services/model is chosen, anticipate a challenge Whatever services/model is chosen, anticipate a challenge

• CasesCases

Bristol, VA (telecom) -- VictoryBristol, VA (telecom) -- Victory

Bristol, VA (cable) -- Bristol, VA (cable) -- LossLoss (but then corrective state law) (but then corrective state law)

Lafayette, LA – VictoryLafayette, LA – Victory

Portland, OR -- VictoryPortland, OR -- Victory

North Kansas City, MO -- VictoryNorth Kansas City, MO -- Victory

Truckee-Donner PUD, CA – Victory Truckee-Donner PUD, CA – Victory

Chattanooga, TN -- Victory Chattanooga, TN -- Victory

UTOPIA, UT – SettledUTOPIA, UT – Settled

• Anticipate anticompetitive practices Anticipate anticompetitive practices

II.II. Federal Universal Service ProgramFederal Universal Service Program

Why You Should Care:Why You Should Care:

• ~17% (!) of gross revenues~17% (!) of gross revenues• Private carriage vs. common carriagePrivate carriage vs. common carriage• Exemptions may be available, some depend on customer Exemptions may be available, some depend on customer

basebase• Counterintuitive and sometimes illogicalCounterintuitive and sometimes illogical• FCC enforcementFCC enforcement

USP: The BasicsUSP: The Basics

• Providers of “interstate” and “international” Providers of “interstate” and “international” “telecommunications,” “telecommunications service,” or “telecommunications,” “telecommunications service,” or “interconnected VoIP” must pay a universal service “interconnected VoIP” must pay a universal service “contribution” based on % of assessable gross revenues “contribution” based on % of assessable gross revenues from the provision of such services to “end users.”from the provision of such services to “end users.”

• Contribution factor announced each quarter, ranging from Contribution factor announced each quarter, ranging from 12% - 17%.12% - 17%.

USP: The BasicsUSP: The Basics

• Must file Form 499-A by April 1 each yearMust file Form 499-A by April 1 each year• Also used for LNP/NANPA/TRS (“telecom. service” Also used for LNP/NANPA/TRS (“telecom. service”

and VoIP only)and VoIP only)

• Providers that owe contributions must file Providers that owe contributions must file quarterly 499-Qquarterly 499-Q

• Providers can pass through USP payments to Providers can pass through USP payments to customerscustomers

Key Concepts: “Interstate” vs. “Intrastate”Key Concepts: “Interstate” vs. “Intrastate”

• Nature of the traffic, Nature of the traffic, notnot the location of the line the location of the line• ““End to end” principleEnd to end” principle• Internet traffic = “interstate”Internet traffic = “interstate”• Interconnected VoIP: 64.9%Interconnected VoIP: 64.9%• ““10 Percent Rule”10 Percent Rule”

• USAC’s “interstate” presumptionUSAC’s “interstate” presumption

““Telecommunications” & Telecommunications” & “Telecommunications Service”“Telecommunications Service”

“The term “telecommunications” means the transmission, between or among points specified by the user, of information of the user's choosing, without change in the form or content of the information as sent and received.”

“The term “telecommunications service” means the offering of telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used.”

47 C.F.R. 54.5

““End User”End User”

• USP contributions assessed on revenues from “end users”USP contributions assessed on revenues from “end users”

• In USP-land, “end user” is not necessarily the last In USP-land, “end user” is not necessarily the last purchaser in a chain of distribution.purchaser in a chain of distribution.

• ““End user” includes purchasers of covered service (i.e., End user” includes purchasers of covered service (i.e., telecom, telecom service, VoIP) that does not itself make telecom, telecom service, VoIP) that does not itself make USP contribution, because they are exempt or have failed USP contribution, because they are exempt or have failed to comply.to comply.

““End User” (cont.)End User” (cont.)

Examples:Examples:

•““Telecommunications” sold to cable company to provide Telecommunications” sold to cable company to provide exempt cable service: cable company is “end user”exempt cable service: cable company is “end user”

•““Telecommunications” sold to ISP to provide exempt Telecommunications” sold to ISP to provide exempt Internet access service: ISP is “end user”Internet access service: ISP is “end user”

•““Telecommunications” sold to telephone company to Telecommunications” sold to telephone company to provide telephone service: telco is provide telephone service: telco is not not “end user” b/c telco “end user” b/c telco itself must pay into USP.itself must pay into USP.

Revenue from ResellersRevenue from Resellers

• Wholesale providers’ revenue from services sold Wholesale providers’ revenue from services sold to resellers is exempt from USP, to resellers is exempt from USP, if “if “affirmative affirmative knowledge” or “reasonable expectation” that the knowledge” or “reasonable expectation” that the reseller or its customers are subject to USP.reseller or its customers are subject to USP.

•““reasonable expectation” demonstrated by obtaining reasonable expectation” demonstrated by obtaining annual certification from reseller customers annual certification from reseller customers

•Revenue must still be reported on Form 499-A (Block 3), Revenue must still be reported on Form 499-A (Block 3), but not used to calculation contribution.but not used to calculation contribution.

Internet Access and “Information Services”Internet Access and “Information Services”

• Brand X; Wireline Broadband Brand X; Wireline Broadband OrderOrder

• Internet access service = “telecommunications” + Internet access service = “telecommunications” + “information service”“information service”

• ““Information service = exempt from USPInformation service = exempt from USP

• Internet access service = exempt from USPInternet access service = exempt from USP

Internet Access vs. Internet TransportInternet Access vs. Internet Transport

• Internet Internet transporttransport = “telecommunications” = “telecommunications”• Ask whether providing “telecommunications” Ask whether providing “telecommunications”

only, or if also providing “information service” only, or if also providing “information service” along with it. along with it. • DNS lookup? IP addresses? DNS lookup? IP addresses?

• Who is the “ISP,” from the customer’s perspective?Who is the “ISP,” from the customer’s perspective?

Internet TransportInternet Transport

• Internet transport = “telecommunications,” BUT:Internet transport = “telecommunications,” BUT:

• Assessable under USP Assessable under USP only if offered on a “common only if offered on a “common carrier” basis.carrier” basis.

• An illogical relic.An illogical relic.

Private Carriage vs. Common CarriagePrivate Carriage vs. Common Carriage

Relevant Factors:Relevant Factors:

•““Manner in which the provider holds itself out to the public” Manner in which the provider holds itself out to the public” (advertising?)(advertising?)

• Does not need to be the public at large to qualify as a common carrier. Does not need to be the public at large to qualify as a common carrier. See State of Iowa v. FCC; Virgin Islands Tel. Corp.See State of Iowa v. FCC; Virgin Islands Tel. Corp.

•Services offered indiscriminately on same terms and conditions Services offered indiscriminately on same terms and conditions (like a tariff), or individually negotiated?(like a tariff), or individually negotiated?

•Small set of customers, with little/no turnover?Small set of customers, with little/no turnover?

Private Carriage vs. Common CarriagePrivate Carriage vs. Common Carriage

• Remember, private carriers that provide Remember, private carriers that provide “telecommunications” or interconnected VoIP are “telecommunications” or interconnected VoIP are still subject to USP.still subject to USP.

• Common carrier / private carrier inquiry is Common carrier / private carrier inquiry is relevant for Internet relevant for Internet transporttransport revenues. revenues.

Interconnected VoIPInterconnected VoIP

• Not regulated under Title II, but treated much like Not regulated under Title II, but treated much like “telecommunications service.”“telecommunications service.”

• Providers must file Form 499-A, even if would Providers must file Form 499-A, even if would otherwise be exempt (otherwise be exempt (de minimis, etc.)de minimis, etc.)

• 64.9% “interstate” (or traffic study)64.9% “interstate” (or traffic study)

ExemptionsExemptions

• De minimisDe minimis exemption: Providers need not make exemption: Providers need not make payments if contribution < $10,000 (~$70,000 payments if contribution < $10,000 (~$70,000 assessable gross revenue)assessable gross revenue)

• Provider of only “telecommunications” need not file Provider of only “telecommunications” need not file Form 499-A at all.Form 499-A at all.

• Provider of “telecommunications service” and VoIP Provider of “telecommunications service” and VoIP must still file Form 499-A (TRS/NANPA/LNP)must still file Form 499-A (TRS/NANPA/LNP)

ExemptionsExemptions

• Government/public safety exemption:Government/public safety exemption:

• Provider that sells service Provider that sells service only only to government and to government and public safety entities is entirely exempt.public safety entities is entirely exempt.

• Separate entity is an option.Separate entity is an option.

ExemptionsExemptions

• Service Service by by non-profit schools, libraries, health non-profit schools, libraries, health care providers and broadcasterscare providers and broadcasters

• Self-service and system integrators (“entities that Self-service and system integrators (“entities that provide telecommunications only to themselves or provide telecommunications only to themselves or to commonly owned affiliates”)to commonly owned affiliates”)

Break time!Break time!

III. Pole Attachments: III. Pole Attachments: Federal Pole Attachment Regulations -- 47 Federal Pole Attachment Regulations -- 47

U.S.C. § 224U.S.C. § 224

• Regulate rates, terms and conditions of access for Regulate rates, terms and conditions of access for wiredwired and and wirelesswireless attachments to utility poles by attachments to utility poles by telecommunications telecommunications carriers carriers and and cable operatorscable operators

• Rules apply to poles, ducts, conduits and ROW owned by Rules apply to poles, ducts, conduits and ROW owned by investor-owned (private) utilitiesinvestor-owned (private) utilities

• Rates – Two formulas: Cable only (not really); and Telecom. Rates – Two formulas: Cable only (not really); and Telecom. In 2011 the FCC revised Telecom formula to yield essentially In 2011 the FCC revised Telecom formula to yield essentially same rate as Cable formula same rate as Cable formula

• Access – Prescribed timelines for access to polesAccess – Prescribed timelines for access to poles

• Cost causer paysCost causer pays

YupYup YupYup NopeNope

What the Federal Attachment Rules Don’t DoWhat the Federal Attachment Rules Don’t Do

• Federal rules don’t apply in 21 states that have Federal rules don’t apply in 21 states that have “reverse” preempted the FCC and regulate at the state “reverse” preempted the FCC and regulate at the state level. level.

• Federal rules don’t apply to municipal or Federal rules don’t apply to municipal or cooperatively owned utilities -- 47 U.S.C. § 224(a)(1)cooperatively owned utilities -- 47 U.S.C. § 224(a)(1)

• Federal rules don’t provide attachment rights to stand-Federal rules don’t provide attachment rights to stand-alone broadband or dark fiber servicesalone broadband or dark fiber services

• Federal rules don’t apply to utility fiberFederal rules don’t apply to utility fiber

If they want broadband so If they want broadband so bad why don’t the bad why don’t the municipals just get out of municipals just get out of the way and let us build?the way and let us build?

……OHOH

Public Power UtilitiesPublic Power Utilities• View safety, security and reliability of their View safety, security and reliability of their

electric system as top priority electric system as top priority • View poles and conduit as a community asset View poles and conduit as a community asset • Want to encourage broadband deploymentWant to encourage broadband deployment• Want (and have an obligation) on behalf of Want (and have an obligation) on behalf of

their consumer owners to obtain cost recovery their consumer owners to obtain cost recovery • Provide access to all types of service providers Provide access to all types of service providers

– voice, video and data on similar terms and – voice, video and data on similar terms and conditionsconditions

Leveraging Consumer Owned Utility AssetsLeveraging Consumer Owned Utility Assets

• Bring the utility in to the planning process early Bring the utility in to the planning process early

• Don’t assume that utility and municipality have identical Don’t assume that utility and municipality have identical interestsinterests

• Don’t confuse access to ROW with access to assetsDon’t confuse access to ROW with access to assets

• Allow for in-kind consideration and where possible monetize Allow for in-kind consideration and where possible monetize the value of such services the value of such services

• Don’t get tripped up by non-discrimination or level playing Don’t get tripped up by non-discrimination or level playing field clausesfield clauses

IV. MDU AccessIV. MDU Access

Unlawful for a cable operator…to engage in unfair methods of competition or unfair or deceptive acts or practices, the purpose or effect of which is to hinder significantly or to prevent any multichannel video programming distributor from providing satellite cable programming or satellite broadcast programming to subscribers or consumers. -- 47 U.S.C. §§ 548 (a)-(b).

• FCC 2007 Exclusivity Order

•Granting cable operators exclusive access to MDUs is prohibited

•The FCC has argued that the prohibition extends to exclusive easements. Lansdowne on the Potomac HOA v. OpenBand at Lansdowne, (4th Cir 2013)

•Exclusive marketing agreements not prohibited.

•Bulk purchase agreements not prohibited.

V. Access to ProgrammingV. Access to Programming

• The BasicsThe Basics• Retransmission ConsentRetransmission Consent• FCC Program Access ProceedingsFCC Program Access Proceedings• The Future: New Modes, New Models, and What The Future: New Modes, New Models, and What

Is an “MVPD” Anyway?Is an “MVPD” Anyway?

The BasicsThe Basics

• “ “Cable service”:Cable service”:

““[T]he term “cable service” means—[T]he term “cable service” means—(A)(A) the one- the one-way transmission to subscribers of way transmission to subscribers of (i)(i) video  video programming, or programming, or (ii)(ii) other programming service,  other programming service, andand

(B)(B) subscriber interaction, if any, which is required  subscriber interaction, if any, which is required for the selection or use of such video for the selection or use of such video programming or other programming service”programming or other programming service”

The BasicsThe Basics

• ““Cable System”:Cable System”:

• “[T]he term “cable system” means a facility, consisting of a set of closed transmission paths and associated signal generation, reception, and control equipment that is designed to provide cable service which includes video programming and which is provided to multiple subscribers within a community, but such term does not include (A) a facility that serves only to retransmit the television signals of 1 or more television broadcast stations; (B) a facility that serves subscribers without using any public right-of-way …”

The BasicsThe Basics

• ““Cable operator”:Cable operator”:

““[T]he term “cable operator” means any person or group of [T]he term “cable operator” means any person or group of personspersons(A)(A) who  who provides cable service over a cable system provides cable service over a cable system and directly or through one or more affiliates owns a and directly or through one or more affiliates owns a significant interest in such cable system, or significant interest in such cable system, or (B)(B) who  who otherwise controls or is responsible for, through any otherwise controls or is responsible for, through any arrangement, the management and operation of such a arrangement, the management and operation of such a cable system”cable system”

The BasicsThe Basics

• ““Cable operator” must register with FCCCable operator” must register with FCC• Obtain “community unit ID” (cuid), corresponding to Obtain “community unit ID” (cuid), corresponding to

headendheadend

• Designation triggers most program access rights Designation triggers most program access rights and obligations under federal law.and obligations under federal law.

Retransmission Consent and Must-CarryRetransmission Consent and Must-Carry

• Broadcast stations elect to be carried on local cable Broadcast stations elect to be carried on local cable system(s) in one of two ways:system(s) in one of two ways:

• ““Must carry”: operator must carry, station receives no $Must carry”: operator must carry, station receives no $• ““Retransmission consent”: operator under no obligation Retransmission consent”: operator under no obligation

to carry, but station demands $to carry, but station demands $

• Three year election cycle. Election must be Three year election cycle. Election must be uniform throughout broadcast DMA.uniform throughout broadcast DMA.

Retransmission Consent: $$$Retransmission Consent: $$$

2006: $215 million2006: $215 million

2012: $2.4 billion2012: $2.4 billion

2018: $6 billion.2018: $6 billion.

Source: Source: SNL KaganSNL Kagan

Retransmission ConsentRetransmission Consent

• ““Good Faith Negotiation”Good Faith Negotiation”

• The Plight of Small Operators:The Plight of Small Operators:• Gouged for essential programmingGouged for essential programming

• Subject to aggressive “channel tying” demandsSubject to aggressive “channel tying” demands

• Less favorable terms than big MSOs, but no way to Less favorable terms than big MSOs, but no way to prove it due to aggressively enforced NDA termsprove it due to aggressively enforced NDA terms

• ““Good faith negotiation” means little when parties have Good faith negotiation” means little when parties have disparate bargaining power.disparate bargaining power.

Retransmission ConsentRetransmission Consent

• Recent FCC action:Recent FCC action:• March 2014: FCC vote to limit cooperation among March 2014: FCC vote to limit cooperation among

broadcasters in retrans consent negotiations. (Might be broadcasters in retrans consent negotiations. (Might be blocked by STELA reauthorization.)blocked by STELA reauthorization.)

• No reasonable prognosis of meaningful FCC action in No reasonable prognosis of meaningful FCC action in the near term.the near term.

Retransmission ConsentRetransmission Consent

Some cable operators adding “broadcast TV fee” to Some cable operators adding “broadcast TV fee” to subscriber billssubscriber bills• Proceed with caution…Proceed with caution…

FCC Program Access RulesFCC Program Access Rules

• 2012: FCC allowed sunset of 1992 Cable Act rules requiring 2012: FCC allowed sunset of 1992 Cable Act rules requiring cable operators that own programming to make it available to cable operators that own programming to make it available to competitors.competitors.

• Now considered only on a case-by-case basis, with Now considered only on a case-by-case basis, with reference to Section 628(b) (alleging competitive harm) or reference to Section 628(b) (alleging competitive harm) or Section 628(c) (alleging undue influence or discrimination) Section 628(c) (alleging undue influence or discrimination)

• Comcast/NBCU merger condition requires Comcast to make Comcast/NBCU merger condition requires Comcast to make available its ~30 satellite delivered national networks and 14 available its ~30 satellite delivered national networks and 14 satellite-delivered RSNs to competitors until January 2018.satellite-delivered RSNs to competitors until January 2018.

FCC ProceedingsFCC Proceedings

• Open rulemaking proceeding on program access Open rulemaking proceeding on program access rules, ability of “buying group” (such as NCTC) to rules, ability of “buying group” (such as NCTC) to file program access complaints, etc.file program access complaints, etc.

• Open rulemaking (since March 2012) on meaning Open rulemaking (since March 2012) on meaning of “Multichannel Video Programming Distributor” of “Multichannel Video Programming Distributor” (MVPD) and “channel”(MVPD) and “channel”

The Future (???)The Future (???)

• New modes of video delivery, new partnerships:New modes of video delivery, new partnerships:

• Aereo (local broadcast, pure OTT)Aereo (local broadcast, pure OTT)• Verizon/Intel (“virtual MVPD”, managed service)Verizon/Intel (“virtual MVPD”, managed service)• Comcast/AppleComcast/Apple• AmazonAmazon• others…others…

• Not clear what a cable operator of the future will look Not clear what a cable operator of the future will look like, nor whether it will be a “cable operator” as like, nor whether it will be a “cable operator” as currently defined.currently defined.

SportsSports

• L.A. Dodgers / TWC – SportsNet LAL.A. Dodgers / TWC – SportsNet LA

• $7B, 25 year deal$7B, 25 year deal

• Dodger games no longer on free broadcast channels.Dodger games no longer on free broadcast channels.

• Charging other operators $5+ per sub.Charging other operators $5+ per sub.

• ESPN: $5+ per subESPN: $5+ per sub

• Fox Sports 1, Sports 2Fox Sports 1, Sports 2

. . . Cable rates have skyrocketed over the past 5 years.. . . Cable rates have skyrocketed over the past 5 years.

Are Cable TV’s Days Numbered?Are Cable TV’s Days Numbered?

• OTT is great for nonlinear, nonscheduled OTT is great for nonlinear, nonscheduled programming (Netflix, etc.)programming (Netflix, etc.)

• OTT not so great for scheduled programs and events. OTT not so great for scheduled programs and events. (Internet was designed for peer-to-peer, not multicast)(Internet was designed for peer-to-peer, not multicast)

• Delivery of linear, high-demand video programming Delivery of linear, high-demand video programming might be doable as a managed service, as part of a might be doable as a managed service, as part of a subscription involving the broadband provider.subscription involving the broadband provider.

• The more things change….The more things change….

VI. Federal Compliance OverviewVI. Federal Compliance Overview

• Many annual service-specific filing, reporting and Many annual service-specific filing, reporting and record keeping obligationsrecord keeping obligations• The FCC takes these obligations seriouslyThe FCC takes these obligations seriously

• SeeSee 2014 Baller Herbst Federal Communications 2014 Baller Herbst Federal Communications Law Compliance OverviewLaw Compliance Overview

VII. CAF/RUS: Rural Broadband VII. CAF/RUS: Rural Broadband ExperimentsExperiments

• FCC seeking “expressions of interest” for FCC seeking “expressions of interest” for broadband networks in unserved rural areasbroadband networks in unserved rural areas

• Approximately $168 million potentially availableApproximately $168 million potentially available• Last mile services providers Last mile services providers • Must obtain ETC status to serve entities other than Must obtain ETC status to serve entities other than

schools, libraries or rural healthcare schools, libraries or rural healthcare • Over 1,000 expressions of interest filedOver 1,000 expressions of interest filed• FCC now to consider rules and policies to allocateFCC now to consider rules and policies to allocate