Mixed Signals: How the Telecommunications Act affects you

Human interests spoil Utopia – a familiar scenario, and anyone with a 10-year-old child knows this version: a remote island is populated with dinosaurs living in harmony, where Mr. and Mrs. T. Rex exhibit the parenting skills of Ma and Pa Ingalls. All is rosy until the Greedy Humans invade with their commercial interests, upsetting the delicate balance and setting off a chain of events that unleashes prehistoric havoc on San Diego.

With the Telecommunications Act of 1996, Congress attempted to create its own Lost World within the industry. The act opened up nearly every communications sector to competition and eliminated barriers to entering the market. Cities and counties, backed by powerful congressional allies, secured language in the act that appeared to preserve their jurisdiction in areas such as public rights-of-way and land use, and most felt pretty good about it.

“As written, the act does protect the local units of government and does encourage competition,” says Peter Letzmann, city attorney for Troy, Mich.

But the Greedy Humans soon arrived, and, although the results are far from certain, San Diego will not be the only city feeling the fallout.

“The real question, the cliffhanger, is, how will the act be interpreted and applied by the FCC (Federal Communications Commission)?” Letzmann says.

The act directed the FCC to initiate a plethora of rulemaking proceedings to implement the often vaguely worded act. That sizable task was made more daunting by the imposition of short deadlines, many of them already met.

The lobbying has been intense. Local governments find themselves playing catch-up in an all-out offensive by industry representatives. Localities often are being portrayed as the “bad guys,” and some responsible people at the FCC and in Congress seem to agree.

The industry continues to pour millions of dollars into the lobbying effort. However, “cities don’t do that; we can’t do that,” says Denise Brady, chief of street use and mapping in San Francisco’s public works department.

At the same time, local governments have failed to uniformly and aggressively take advantage of the tools and powers granted them by Congress. Many have not taken a hard look at the impact that the revolutionary changes in the industry will have on themselves and their residents, voters, taxpayers, local businesses and local services. Such inaction puts their rights in jeopardy.

“If we don’t continue to have a strong presence at the FCC rulemaking, then I’m convinced that cities’ interests would not necessarily be made known,” Brady says.

To ensure their concerns are heard, she adds, communities should work closely with their respective state’s league of cities, the National League of Cities, the National Association of Counties and other associations, such as the National Association of Telecommunications Officers and Advisors (NATOA).

The FCC has solicited public comment on the rulemaking, and many local governments and telecommunications companies have responded with petitions on various issues.

In one case, FCC Chairman Reed Hundt said in July that, after studying petitions filed by AT&T and MCI, he supported FCC action to investigate charges that local telephone companies – the Bells and GTE – were impeding competition. Local phone companies, which can enter the long-distance business only after they open their own markets, dismissed the petitions as an attempt to slow their entry into long distance.

Over-the-air antennae One of the first actions taken by the FCC was the adoption of rules that effectively preempt many local laws governing placement of satellite dishes, TV antennae and other types of over-the-air reception antennae. In the same proceeding, the FCC also preempted certain private covenants and restrictions that limited installation of receiving antennae.

NATOA, with city and county officials concerned with communications issues among its members, participated in the drafting of the new rules and helped to preserve some measure of local authority, according to NATOA Executive Director Eileen Huggard.

Local authorities retain limited jurisdiction to regulate location of antennae in historic districts and to address bona fide safety issues, but the fact remains that the federal government has preempted a significant body of local land use law.

Tower siting and rights-of-way Passage of the act coincided with the creation, licensing and start-up of many new wireless communications services, most notably personal communications services (PCS). The FCC authorized these services through auctions, which raised $23 billion for the U.S. Treasury. The cellular radio industry responded with an intense build-out campaign to improve service by adding new cell sites in areas with heavy traffic or poor signal quality.

While the communications industry seeks to rapidly deploy new services, state and local governments must preserve and protect public property for future generations. The FCC, in turn, seeks to follow the mandate of Congress. These interests have collided with a bang on the issue of tower siting. This, according to Huggard, is among the most difficult issues for local officials, and it will be a major topic at NATOA’s annual meeting in Tucson, Ariz., Sept. 6 – 10.

Section 332(c)(7) of the act states that it shall not “limit or affect the authority of a state or local government or instrumentality thereof over decisions regarding the placement, construction and modification of personal wireless service facilities.” It adds that regulations “shall not unreasonably discriminate among providers of functionally equivalent services,” and that they “shall not prohibit or have the effect of prohibiting the provision of personal wireless services.”

Also, Section 253 says “no state or local statute or regulation, or other state or local legal requirement, may prohibit or have the effect of prohibiting the ability of any entityto provide any interstate or intrastate telecommunications service.”

However, state and local governments may impose, “on a competitively neutral basis,” requirements to preserve and advance universal service, protect public safety and welfare, ensure continued quality of telecommunications services and protect the rights of consumers.

Section 253 also says it is not intended to limit or affect the authority of state or local governments “to manage the public rights-of-way or to require fair and reasonable compensation from telecommunications providers, on a competitively neutral and non-discriminatory basis, for use of public rights-of-way.” However, the FCC has expressed concern that, by managing their own rights-of-way, cities might impede competition.

“Access to public rights-of-way is essential to the ability of new entrants to enter the communications marketplace,” Hundt said in a January address to the U.S. Conference of Mayors. “We are concerned, however, that the establishment of hundreds or even thousands of municipal telecommunications regulatory bodies would be inconsistent with the ‘pro-competitive, deregulatory national policy framework’ embodied in the act.”

In an effort to proceed in a competitively neutral and legally responsible manner, some jurisdictions have adopted moratoria on the authorization of new towers, giving them a chance to adopt new rules and procedures. Local governments are drafting broad communications ordinances to deal with a new generation of wireless services and related issues.

Meanwhile, industry organizations and service providers have bombarded the FCC with petitions to, among other things, preempt local ordinances entirely or in part, void moratoria, set aside franchise fee payments and eliminate the need for a local franchise to use public rights-of-way to provide certain services.

One closely watched case involves ordinances adopted by Troy, which is requiring its local cable operator, TCI, to obtain an additional franchise to use public property to provide tele-communications services. The case has attracted national attention, and the FCC has received comments from many local government interests and almost every major industry group.

“It’s going to have fallout in every municipality,” says Letzmann. “Telephone companies are coming into the cities, using our property, and we feel that the cities, towns and counties should have the right to manage their own rights-of-way and that they should have the right to charge at least to break even for that use.

“If the FCC follows the request of TCI, it would literally be putting the hands of the cable industry into the pockets of municipalities,” he adds.

Proponents of industry interests, including some state officials, have maintained that localities have been duped by fee-seeking lawyers into fabricating conflicts, Letzmann says.

The FCC is also reviewing a petition filed in December 1996 by the Cellular Telecommunications Industry Association, which requests all state and local government moratoria on siting wireless facilities be declared in violation of the act. CTIA already had on file a petition asking the FCC to preempt state and local taxes imposed on wireless services.

Additionally, the FCC has established a Local and State Government Advisory Committee to obtain input from government officials concerning tower siting and other topics. The FCC has devoted a significant portion of its World Wide Web site to local government issues.

“Over the past 10 years, communities working with the cellular industry have been able to build a good relationship that benefits both,” observes Mitch Wasserman, town administrator of Clyde Hill, Wash. “This has stopped. It doesn’t work anymore.”

Local government officials worry, with good reason, that the federal government might completely preempt local jurisdiction – in an area in which the federal government has little expertise – and institute a lowest-common-denominator charge of zero for use of public rights-of-way.

Cable TV and open video The 1996 act paved the way for elimination of cable television rate regulation – something Congress had created in 1992. As a federal initiative, cable rate regulation has received mixed reviews. Many local officials have hailed the elimination of rate regulation because they perceive the program as an unnecessarily complex and expensive regulatory failure.

The act nevertheless left intact the cable franchising authority of local governments. This authority gives local officials a powerful tool to affect the nature and quality of service provided by local cable operators.

However, the act also authorized a new form of business known as Open Video Systems (OVS) as an alternative to cable. Initially, Congress envisioned phone companies as the beneficiaries of the OVS provisions. However, the FCC has interpreted the OVS provisions in a manner that allows any interested person, including cable operators, to operate OVS.

The FCC also concluded that many of the powers local franchising authorities held over traditional cable television operators, including certain provisions of franchise agreements, did not apply to OVS. So far, OVS remains something of a novelty, but over time it may prove a viable business form and present new issues for local authorities.

Radio frequency radiation The act explicitly dictated that local governments may not impose on communications companies restrictions concerning radio frequency (RF) radiation that go beyond those set by the FCC. Many in the industry have attempted to interpret this limitation as an outright preemption of local jurisdiction over RF radiation, and industry representatives may have succeeded in convincing some local officials that this is the case.

Although local governments cannot impose tougher restrictions than those set by the FCC, they may participate in the enforcement of those restrictions. Local governments can impose reasonable, non-discriminatory and competitively neutral requirements on communications businesses to make sure that operators comply with the FCC guidelines. Indeed, an argument can be made that local authorities have an obligation to enforce the FCC’s RF radiation requirements, because the FCC cannot possibly monitor compliance by each of the large number of operators.

Municipal networks Additionally, the act states that communities may build and operate their own communications infrastructures, and many are doing just that.

Several states, however, are attempting to limit or prevent municipalities from constructing and operating communication systems.

In one unresolved case, the Texas Public Utility Regulatory Act of 1995 has drawn a number of challenges. The city of Abilene, for one, petitioned the FCC to preempt a provision of the statute that prohibits municipalities and municipally owned utilities from providing, directly or indirectly, certain telecommunications services. The Texas Public Utilities Commission also asked the FCC to rule whether provisions of the statute violate the 1996 act and are thus preempted.

“The Texas law is in direct opposition to the 1996 federal telecom act that prohibits any entity from being barred from offering such service,” asserts Abilene Technology Liaison Cindy Cullen.

The FCC’s decision in the Texas case will likely direct the course of legislation in many other states. Even if state efforts to create barriers to municipal entry into communications are struck down, private interests will likely try to make the information superhighway on-ramp long and bumpy for municipalities.

Nevertheless, for many communities, the construction and operation of a municipal communications infrastructure – even if only to lease unused fiber to a commercial interest-may be the quickest way to deliver advanced communications services to residents and businesses. Outside the largest markets, some communities might otherwise have a long wait before telephone companies, cable television companies or newcomers provide advanced services.

The municipally owned electric utility in Braintree, Mass., for instance, has built and is expanding a fiber-optic communications system throughout the community to connect utility offices, city offices and most of the community’s schools.

The Braintree Electric Light Department (BELD) offers an internal telephone and e-mail system, a data service and access to the Internet, according to Walter McGrath, BELD’s general manager. BELD also leases unused fiber to local banks.

McGrath has begun the second phase of the project – extending the service to each of Braintree’s homes. BELD will install fiber to 33 neighborhood nodes, each of which will relay service to between 300 and 400 homes using coaxial cable. McGrath says he hopes to provide Braintree residents with wired access to utility and local networks, electric load management, security, utility outage, meter reading, Internet services and possibly cable TV.

Braintree’s experience highlights the fact that some services may not be suited to the private sector. For example, Intelligent Transportation Systems (ITS) – regional traveler information centers, traffic signal control systems, freeway/transit/incident management systems and electronic fare/toll payment systems – require significant participation by the state and local governments that control the highways and roads.

Local governments also provide the bulk of elementary and secondary education and so play a critical role in providing wide-area educational services and long-distance learning. Fire, police, rescue and emergency services also benefit from advanced communications systems.

Compromise is the key, says Janet Tutt, assistant county administrator in Marion County, Fla. Local officials must realize that telecommunications companies need to make a profit to survive, she says, and the companies must understand that cities need to protect the interests of their citizens.

The telecommunications act presents local governments with an entire body of law with which they need to acquaint themselves, and petitions filed with the FCC, such as those in Troy and Abilene, will help shape the future of telecommunications for local governments.

“We will evaluate these issues case by case, but our decisions will establish a pro-competitive framework for local regulation of telecommunications services,” Hundt told USCM.

However, whichever side comes up short in the verdicts likely will appeal.

“City attorneys, city managers, planning directors and finance people all have to become familiar with the law,” Letzmann advises. They should then study its short- and long-term impact on their community, and, lastly, conduct a coordinated effort to make their voices heard.

“We are hard-pressed, all cities, for money,” says Brady. “All of a sudden in San Francisco we have 12 telecommunications companies where we used to have one. We embrace the competition and the technology. We want to find ways to do this, but we want to do it sensibly. We want to protect all the stakeholders.”

The author is an attorney with the Washington, D.C.-based firm Duncan, Weinberg, Miller & Pembroke.

For additional information, contact: Federal Communications Commission (888) CALL FCC http:\\www.fcc.gov

National Association of Telecommunications Officers and Advisors (703) 506-3275 http:\\www.natoa.org

National League of Cities (202) 626-3000 http:\\www.nlc.org

National Association of Counties (202) 393-6226 http:\\www.naco.org

Local governments and the communications industry face an unprecedented challenge in providing constituents and customers with cellular service. They must balance demands for better wireless service with equally emphatic cries for less of the “visual pollution” caused by telecommunications towers.

Cities and counties often find themselves embroiled in bitter, protracted debates over the construction of towers. For instance, the zoning board in Wyckoff, N.J., about 15 miles west of New York City, voted against the construction of a cellular transmission tower after 22 months of rancorous discussion.

Even communications industry representatives understand the zoning and siting requirements that local governments impose on tower construction; no one wants to see the landscape blighted by endless rows of transmission towers.

Still, what can be done to balance the need for cellular service with aesthetic considerations?

The answer is at once both simple and complex: The telecommunications industry must become smarter and more innovative when it comes to hiding and disguising sites. Already, companies have come up with methods for disguising antenna arrays as trees and installing sectored arrays within new shopping center signs. In Upland, Calif., for instance, monopoles disguised as palm trees help reduce visual pollution.

Cities and counties also can now have existing utility electrical transmission towers modified to support sectored antenna arrays, thereby reducing the need for new towers and the attendant zoning problems. This solution required engineers to overcome problems of load and interference from electrical power lines.

In the hundreds of areas where these installations are used, carriers report a significant reduction in zoning and siting hassles. In Henrico County, Va., for example, phone companies that were at-tempting to place mono-poles in an affluent residential area met with tremendous opposition. The backlash dissolved, however, when existing utility structures were fitted with sectored arrays.

Government officials report that their constituents often do not even notice the arrays.

When zoning ap-proval is required, most installations have been considered modifications to existing structures, sometimes requiring procurement of special-use permits.

The number of wireless customers more than doubled from 1993 to 1996, and demand shows no signs of diminshing. The industry must either accommodate the public outcry against visual pollution or face the inevitable backlash, which likely would involve harsher governmental regulations and discontent among the very customers who demand wireless service.

This article was written by Roy Moore, vice president of Fort Worth, Texas-based FWT.

Keene, N.H., population 23,000, typifies both the problems and the opportunities that occur when smaller cities build the type of “big time” infrastructure needed to support high-speed data networks aimed at cutting costs, improving services and gaining access to the Internet. Keene wanted to tie together the city’s 154 personal computers, distributed across 11 locations, as well as connect those PCs to the local Internet service provider. First, however, the problem of how to provide high-bandwidth connections had to be resolved.

“We wanted to offer residents the same level of service they expect from any business,” says Keith Damon, Keene’s director of information management services. “Previously, for example, if an outlying department wanted to generate a bill, it would type the bill by hand and deliver the information to City Hall, where someone would re-enter the information into the billing system. Not only was this wasteful, it meant that only one department had a view of the town’s relationship with its customer. Today, with the new network, information can be sent across town in just a few seconds, saving 15 or 20 minutes each time.”

That translates into real dollar savings. With the network, every PC can now talk to every other PC. Damon figures that if a simple application like e-mail gives back just 12 minutes to the average employee’s productive work day, the city saves $130,000 per year. With support from the city manager and all departments, Damon made this argument to the city council to win budget approval for the backbone of the network project.

“The funding was not the most difficult part,” Damon says. “What was more difficult was defining exactly what the network project would consist of.”

For help, Damon and his staff contracted Trellis Communications, a Manchester, N.H.-based consulting firm, which spent a summer developing the detailed drawings and specifications, doing site engineering and measurement s to determine what cable to run, evaluating pole space for attachments, identifying splice points, calculating the optical power budget for each run, doing hardware link attenuation analysis and exploring the other technical issues involved in the design. The one obvious selection was single-mode optical fiber for the cable.

“Fiber is much more reliable than copper and is much easier to build on,” Damon says. “We felt we needed 12 strands of glass to every building, even though we are only using two of the strands for LAN (local area network) applications.” Damon says the fiber would allow a relatively simple upgrade to a faster Ethernet or to Asynchronous Transfer Mode technology. It also allows users to upgrade discrete parts of the network one at a time.

The network, known as Keene-Net, now connects more than 150 PCs to centralized servers at City Hall. Each PC can send e-mail, schedule meetings and share word processing. Keene-Net allows remote departments to analyze spreadsheet files and budgets across the network. The network also allows users to remotely enter and retrieve both financial and purchase order information; helps managers keep track of budgets, schedule and staff snowplow routes and post job openings, bid requests and legal notices; and enables Keene’s public library to give citizens Internet access.

The entire fiber cable project from the initial workup of the RFP through to final installation and test took 18 months and cost $180,000 – or $7.82 for each town resident. Damon says the investment will pay dividends well into the future. “You don’t put in a new road system every year,” he says. “And neither do you install a city-wide fiber network every year. But small towns need to do both, just like the big cities do. Otherwise, you’re not really serving the residents.”

As the federal government shifts more responsibility to localities, cities and counties are increasing their information technology expenditures. The rising use of wide area networks (WANs) and electronic delivery of government services increases reliance on communication over phone lines. To accommodate the growth, telecommunications equipment continues to decrease in size and increase in capability, and city and county governments can thus count on their power requirements and financial investments increasing.

A vast number of factors – including heavy winds, lightning, utility equipment failure and construction or traffic accidents – can place these investments at risk. These factors can lead to basic power-related problems, such as too little or too much power, which in turn can lead to erroneous data transmissions, system lock-up and equipment damage or failure.

Increasing portions of city and county budgets for information systems and services are allocated to electronic delivery and WANs. Currently, according to one privately conducted study, about 34 percent of local and state governments use WANs, and an additional 20 percent are planning to employ the technology or evaluating the possibility. About 12 percent currently deliver government services electronically, while another 25 percent are looking into that option.

Studies by Bell and IBM indicate that power problems occur much more frequently than commonly thought. Bell predicted that 50 percent of its sites could expect 25 significant sags (too little power) and four power failures (total loss of power for approximately one to five minutes) annually. IBM concluded that facilities should expect an average of two events of either type every day.

While it is a crucial element in telecommunications, power distribution is often the last issue to be addressed. With more and more boxes being stacked into the same square footage, telecommunications contractors tend to get creative. Often they plug several commercial outlet strips together, forming a ‘daisy chain.’ Another approach is to mount outlet centers into cabinets using unstable attachment methods.

Such ‘creative’ power distribution methods affect both the quality of the distribution and the protection of the equipment. Loose fittings can lead to noise problems such as voltage drops, while the circuit wire length increases the probability of developing ground loops (differences in potential between two ground points, allowing undesired current to flow), jeopardizing sensitive telecommunications circuitry.

Therefore, power distribution requires the same level of concern as does the overall telecommunications system’s design. Contractors should use power strips sufficient in size to distribute power to all components, without daisy chains. Also, strips can be designed for rack or clip mounting to eliminate unstable fastening. To guarantee stable and secure power distribution, strips can be customized for length, electrical rating and type of protection, incorporating surge suppression, EMI/RFI noise filtering, isolated grounding, voltage regulating and power conditioning.

This article was written by Andy D’Amelio, director of the custom products group at SL Waber, Mt. Laurel, N.J.

Prior to passage of the Telecommunications Act of 1996, most city and county governments had little reason to concern themselves with purchasing local telephone service. In most jurisdictions, local telephone service was not controlled or purchased through a formal purchasing process, and, because virtually no options existed, competitive bidding was unnecessary.

However, with the advent of competitive local telephone service, questions arise over who will be selling local exchange service and how governments will buy it. Local governments must determine how to assure quality service, protect against contractual problems and illegal marketing activities, cope with complex billing issues, deal with marketing pressure and ensure that sellers compete on a level playing field.

The resale provisions in the act are intended to encourage development of entrepreneurial businesses and quickly bring competition into the local telephone business. With no up-front capital investment required and the availability of service bureaus for billing and customer support, entrepreneurs will be able to enter the resale business quickly and with minimal investment. The returns could be substantial. With these ripe entrepreneurial conditions, numerous local, state, regional and national companies inevitably will offer “local” telephone service. Unless properly prepared with formal purchasing procedures, localities may find it difficult to deal with requests to provide local telephone service.

Each reseller will need to have a business relationship with the local exchange carrier (LEC), and full disclosure in that relationship is critical. In the event that a jurisdiction is paying its bill to the reseller but the reseller defaults to the LEC, does the jurisdiction lose its telephone service? Does it have to pay its portion of the bill to the telephone company, thereby paying twice, and does it have to pay a reconnection charge? Is it liable for a portion of all of the reseller’s outstanding obligations to the LEC? Recourse against a reseller could be difficult because many resellers will own no equipment.

The accuracy of billing records and the handling of public records are also areas of concern. Responsibility for billing errors will have to be settled by the LEC, the reseller and the third-party billing company. Installation and disconnection of telephone service may also pose a serious problem, as service restoration is key to jurisdictions. In the event of a disaster, the LEC’s main customers and the reseller’s customers will compete for priority service. Governments must determine if they can contractually provide for priority restoration service and whether they can enforce those contracts on the LEC.

Local governments should move quickly to find out who is “buying” their jurisdiction’s service, obtain a detailed local phone bill and review it carefully for line charges, services and equipment items. This procedure can be handled by telephone auditing firms, but an audit by an LEC or a potential competitive provider is not recommended. Lastly, officials should establish a formal procedure for bidding, evaluating and procuring local telephone service. Requiring that the local council or commission approve a formal document submission in the final procurement procedure will guard against undue outside influence and political marketing efforts.

Given the coming competitive market, local governments might benefit from spreading the local service business around among several providers. This approach is especially valid early on, as there will likely be a significant shake-out among companies offering service.

This article was written by Eugene Webb, assistant director of information and communications services for St. Petersburg, Fla.