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Global Media and Communications Watch

The International Media and Telecoms Law Blog

Posted in Broadcasting, Policy & Regulation, Spectrum, Telecoms & Broadband

USA: Next Steps in the FCC’s Incentive Auction – A Preview of the Seven Near-Term Releases

The Federal Communications Commission (“FCC”) is deep in the midst of planning the world’s first broadcast incentive auction, currently slated for mid-2015.  The auction will give over-the-air television broadcasters an opportunity to sell their valuable spectrum rights in a reverse auction process, and the FCC will then repackage this cleared spectrum and auction it to broadband wireless companies, enabling them to better meet consumer’s exploding demand for wireless data.  The Commission issued initial rules for the auction in its Report and Order in May of this year, but its work is far from over.

In the coming weeks, the FCC has seven different items scheduled for adoption that will further affect the mechanics of the Incentive Auction, and some of these items implicate key policy decisions, including, for example, any minimum price the Commission will set for the spectrum it sells.  The FCC has previously released a summary of these follow-on items, as well as a timeline for their release, targeting third quarter of 2014.  With the third quarter of 2014 coming to a close this month and with only three of the follow-on Incentive Auction items scheduled for a vote at the upcoming September 30th Open Meeting, below is an update regarding all seven of these items based on the further details that have emerged since the Commission’s last official releases earlier this summer. Continue Reading

Posted in Copyright, Policy & Regulation

Spanish Supreme Court refers questions to CJEU on private copying levies

On September 10, 2014, the Spanish Supreme Court referred a question to the European Court of Justice related to the new copyright levy system. The debate has arisen in connection with the procedure for payment of copyright levies set out by the Royal Decree 1657/2012, which now regulates the payments by way of a charge to the general State budget. Despite the fact that the levy is still calculated on the basis of the damage effectively caused, it must be fixed within the limits of the national budget determined for each year.

The novelty of the Royal Decree lies not in the copyright levy regime, but in the method of compensating the relevant right holders. Whereas under the previous system, copyright levies were charged ultimately on the end-users, all taxpayers are now the ones committed to paying copyright levies, regardless of the use that each one has made of the private copy.

The main issue referred to the European Court is to determine if the copyright levy funded by the general budget is in accordance with article 5.2.b) of the InfoSoc Directive (Directive 2001/29). But, if the first question is answered in the affirmative (so the Royal Decree complies with the InfoSoc Directive), the Supreme Court also questions whether or not the final amount required for copyright levies must be fixed within the budget limits set out for each year. Thus, the Supreme Court is considering whether this system would mean a breaking of the “right balance” between the interests of the right holders and the users of private copies.

In conclusion, the copyright levy funded by the general budget, challenged since it was first established and only in place in Spain in Norway, will soon be confirmed or denied by the European Court of Justice.

Posted in Copyright, Policy & Regulation

CJEU rules on digitizing and electronic access to works in public libraries

May public libraries digitize the books they have in their collections? May they display the digitized works? And, if so, is it permissible for the library user to make a copy – either on paper or a storage device? These are interesting questions which the CJEU had to consider in the case of Technische Universität Darmstadt vs. Eugen Ulmer KG (Case Ref.: C-117/13). The ruling came through last week and the Luxembourg judges clearly warmed their hearts for the venerable public library and the aim of safeguarding modern electronic offerings. However, it is now for the German Federal Court to interpret the answers given by the CJEU and to render a decision on the merits of the case.

The CJEU ruling has to be seen against the background of a long-lasting dispute between publishers and public libraries in Germany about how to interpret Section 52b of the German Copyright Act. This section implements  Article 5 (3) lit. n) of the InfoSoc Directive into German law. The case started before the Regional Court of Frankfurt back in 2009 and eventually made  its way to the German Federal Court of Justice in Karlsruhe. There, the proceedings were stayed and, in total, three questions were referred to the CJEU.

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Posted in Policy & Regulation

National Health IT Week at the FCC

This week the Federal Communications Commission’s (FCC’s) CONNECT2HEALTHFCC Task Force, a group formed in March 2014 that is focused on using broadband deployment to accelerate the adoption of advanced healthcare technologies, is joining more than 400 other public and private organizations in recognizing National Health IT Week (NHIT week).  NHIT week is a series of events and activities aimed at increasing awareness of the ability of information technology (IT) to advance healthcare services.  For example, health IT, or electronic health records, can improve healthcare by increasing patient safety, decreasing medical errors, and facilitating better communication between patients and their healthcare providers.  The themes for this year’s NHIT week include patient engagement, advancing interoperability, and clinical quality and safety.

NHIT week began September 15 with the Annual Consumer Health IT Summit hosted by the Office of the National Coordinator for Health IT.  FCC Commissioner Mignon Clyburn delivered the keynote address at the Summit and will also present at the First Annual National Health IT Collaborative for the Underserved Conference on Tuesday, September 16.  The Conference will focus on strategies for using Health IT to eliminate disparities in healthcare and ensure that all patients have and use the tools available to maintain their health and well-being.  Additional NHIT week events include a webinar on new electronic health record certification criteria and a webinar on using health IT to improve the safety of healthcare.

The author wishes to thank Leigh Gusky, an Associate in our Washington, D.C. office, for her assistance in preparing this article.

Posted in Broadcasting, Licensing, Policy & Regulation, Spectrum, Telecoms & Broadband

The new Mexican Federal Telecommunications and Broadcasting Law

As part of the constitutional reform in telecommunications matters published on 11 June 2013 (the Constitutional Reform), the new Federal Telecommunications and Broadcasting Law (the Law) was finally published on 14 July, and went into effect this past 13 August.

The new Law establishes a new regulatory framework in the telecommunications and broadcasting sector in Mexico, which contains the principles based on the Constitutional Reform, whose principal objectives are: the creation of more rights, the promotion of competition, and the provision of better services at lower prices. Additionally, along with the expedition of the Law, many articles of other related laws were reformed for their proper implementation.

A general summary of the most important aspects of the new Law is presented, and it follows the same structure as contained in the Law.

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Posted in Telecoms & Broadband

NextNav closes $70 million Series D funding

NextNav LLC (“NextNav”) closed its US$70 million Series D funding led by venture capital firms New Enterprise Associates and Oak Investment Partners, along with Columbia Capital, Telcom Ventures, and GoldmanSachs Investment Partners. The deal is 2014’s largest venture capital funding to date for a D.C.-area tech company.  Hogan Lovells advised NextNav in the deal.

NextNav, launched by former XM Satellite Radio CEO Gary Parsons, is a leading provider of location services for indoor and urban environments. The financing will be used to extend the commercialization of NextNav’s revolutionary Metropolitan Beacon System (“MBS”) positioning network. MBS provides accurate horizontal and vertical location services inside buildings and in urban areas where satellite-based GPS signals aren’t available or reliable. NextNav is deploying its MBS network much like a cellular network, resulting in wide-area coverage that delivers its location services to every building within its network footprint.

Hogan Lovells corporate partner Richard Becker from the Northern Virginia office led the team, with assistance from Corporate partner Randy Segal, Antitrust partner Michele Harrington, Corporate associate Gabrielle Witt (all Northern Virginia), and Washington, D.C. Tax partner Shawna Tunnell.

 

Posted in Internet, Policy & Regulation, Telecoms & Broadband

Hogan Lovells launches Shanghai Free Trade Zone microsite

Hogan Lovells today announced the launch of its Shanghai Free Trade Zone (“FTZ“) microsite to provide information and resources with respect to the latest developments in the FTZ.  The microsite contains an analysis of the FTZ rules relating to value-added telecommunications services (“VATS“).

The microsite showcases Hogan Lovells’ unique market positioning as the only major international firm on a panel of approved professional service providers for advising on investments in the FTZ. The site will publish key updates on FTZ rules and regulations as they are issued, as well as in-depth write-ups by Hogan Lovells’ lawyers analysing their implications.

The FTZ, officially known as the China (Shanghai) Pilot Free-Trade Zone, was officially launched in September 2013. It is widely seen as a testing ground for economic and financial reforms with support from the Chinese central government. Foreign investors, especially those in heavily regulated or restricted sectors such as medical or telecommunications services, have been quick to demonstrate their interest in the industry-specific liberalisation policies within the FTZ. Other investors have been drawn in by the streamlined approval procedures, particularly for those sectors not included on the Negative List, moving away from the historical and onerous approval system towards a simplified and expedited record-filing system. If successful, the model may be replicated or rolled out elsewhere in China. Companies seeking to be at the forefront of developments in the liberalisation of the Renminbi have also shown interest in the FTZ; China has indicated that the FTZ is where the capital account will be liberalised on a trial basis in due course.

With its abundant on-the-ground experience and resources in China and expertise in all the key sectors, as well as its position on the FTZ panel, Hogan Lovells is uniquely positioned to help both inbound and outbound investors establish and develop their businesses in the FTZ.

Andrew McGinty, Head of Hogan Lovells’ Corporate and M&A practice in Asia, commented:

“Our team has made tremendous efforts on the establishment of this microsite. I believe it will become an extremely helpful reference tool for our international clients to understand the most up-to-date developments as well as considering the values and returns by entering into the Shanghai FTZ.”

Posted in Broadcasting, Policy & Regulation, Spectrum, Telecoms & Broadband

Mexican Telecommunications and Broadcasting Law to enter into effect 13 August 2014

On 10 June 2013, after a fast-track approval, the decree to reform the Mexican Constitution (the “Reform”), mainly in telecommunications matters, was enacted by President Enrique Peña Nieto. The Reform recognized as human rights the access to: (i) information and communications technology, and (ii) broadcasting and telecommunications services, including broadband and the Internet.  Following the Reform, the Federal Telecommunications and Broadcasting Law (the “Law”) was published on 14 July and will enter into effect on 13 August 2014.

The Reform creates the Federal Institute of Telecommunications (“IFT”), a new regulatory agency that enjoys constitutional autonomy in charge of regulating all broadcasting and telecommunications matters, including all economic competition matters related to both sectors. The IFT replaced the former Federal Telecommunications Commission created in 1996, as a subordinated governmental body.

Among other tasks, the IFT is in charge of the regulation, promotion and supervision of: (i) the radio spectrum; (ii) networks; (iii) provision of broadcasting and telecommunications services, and (iv) access to active and passive infrastructure and other essential facilities.

With respect to telecommunications and broadcasting concessions, IFT will be the sole authority in charge of determining: (i) granting; (ii) revocation; (iii) assignments, and (iv) the compensation of its granting, as well as the authorization of the corresponding services, prior opinion of the tax authority. The Reform also provided the creation of specialized judges and courts in broadcasting, telecommunications and economic competition matters, that is expected to bring more certainty in this highly litigated field.

The Reform provides for the implementation of numerous actions within certain timeframes, such as:

  1. direct foreign investment was permitted as of June 12, 2013 up to: (a) 100% in telecommunications and satellite communications, and (b) 49% in the  broadcasting sector subject to reciprocity from the country of the ultimate investor;
  2.  the publication of a new convergent law to jointly regulate the telecommunications and broadcasting sectors on or before December 9, 2013;
  3. once the IFT is created, Must Offer and Must Carry obligations will be valid, except in certain cases;
  4. on or before March 8, 2014, the Institute should have: (a) published the bidding rules for the tender of two new television channels with national coverage, and (b) declared the existence of “preponderant economic agents” (see below) and imposed on them measures in order to avoid adverse effects on competition;
  5. the State will ensure the installation (between 2014 and 2018) of a shared public telecommunications network of wholesale wireless services by mainly using the 700 MHz band, and
  6. the transition to digital terrestrial television (“DTT”) must end on or before December 31, 2015.

 Implementation of the Reform

In August last year, the specialized judges and courts were created and in September the Institute was duly created and published its new organic statute.

In 2014 the Institute began to implement the Reform as follows: (i) it published (prior to a public consultation) the general guidelines to regulate the Must Offer and Must Carry obligations (February); (ii) it declared as preponderant agents and imposed different measures on: (a) Telcel and Telmex in the telecommunications sector, and (b) Televisa in the broadcasting sector, and (iii) it published (prior to a public consultation) the call for a public bidding in order to create two new national television networks in Mexico (March).

Although according to the Reform the convergent law should have been published on or before December 9, 2013, it was not until March 24, 2014 when the President submitted the bill before the Senate.

The new Federal Telecommunications and Broadcasting Law (the “Law”) was published on July 14 and will enter into force as of 13 August  2014. The Law will repeal the Federal Telecommunications Law and the Federal Radio and Television Law.

The new Law

The Law sets forth a new regulatory regime for the telecommunications and broadcasting sectors based on the principles and guidelines of the Reform. Some of the main provisions of the Law are the following:

  1. Telecommunications and broadcasting services are considered as public services of general interest and any discrimination in its provision is forbidden.
  2. The IFT is granted with new powers, functions and institutional design, including specific rules of transparency and contact with the regulated industry.
  3. There is a new concessions regime (not involving spectrum or orbital resources) called “unique concession” that allows the provision of all telecommunications services and is granted through a special procedure, prior request, considering a specific term of 60 calendar days and if the IFT fails to resolve the request, it shall be understood that the concession should be granted. A unique concession can only be granted to Mexican individuals or entities, but there is no limitation with respect to foreign investment for telecommunications services.
  4. The spectrum and orbital concessions are granted through a public bid, but the economic factor (consideration) will not be the sole element to determine the winner of the bid.
  5. Concessionaires may lease only frequency bands that were granted in concession for commercial or private use, private communication purposes, and prior approval of the IFT.
  6. An authorization granted by the IFT is required to: (i) establish a reseller of telecommunications services without being a concessionaire; (ii) install earth stations to transmit satellite signals; (iii) install telecommunications equipment and transmission media that cross the borders of the country, and (iv) exploit emission allowances and receive signals and frequency bands associated  with foreign satellite systems providing services on the country. The requests for authorization are resolved within 30 business days of their submission. After this period without being resolved, it shall be deemed granted.
  7. The Law provides a new kind of public/private network structure, called “public telecommunication networks with public participation.” The concessions for commercial use to public bodies under a public-private partnership scheme have the character of “shared network of wholesaler telecommunications services.” Such networks cannot provide services to final users.
  8. The Law contemplates and regulates the following matters: network neutrality; numbering; access and interconnection services; the use of State goods for the deployment of telecommunications infrastructure; satellite communications; Must Offer and Must Carry obligations; broadcasting services, and pay television/audio services.
  9. The IFT will be in charge of the Public Registry of Telecommunications, composed by the Public Registry of Concessions and the National Information System of Infrastructure.
  10. The Law includes different obligations  for regulated agents in security and justice matters, such as the obligation to give a geographic location in real time of mobile devices as provided in the corresponding laws, among other obligations.
  11. The final users of telecommunications and broadcasting services will have  rights provided in the Law. All telecommunications concessionaires shall observe the federal consumer protection law. There are new and specific rights regarding disabled users.
  12.  The Law provides the right of freedom of information, expression and of receiving content through the public broadcasting service and pay television/audio, which shall not be not subject to censorship or limitation.
  13. The Law provides two main figures which trigger asymmetrical regulation: (i) in the case of preponderant agents, and (ii) in the existence of dominant agents.
  14. Preponderant agents are those who hold a national participation in the telecom or broadcasting sectors that exceeds 50% of users, subscribers, audience, traffic on its networks or used capacity thereof  and are declared by the IFT following a specific procedure and implementing measures provided in the Law.
  15. The IFT is authorized to determine the existence of agents with substantial market power in any of the telecom and broadcasting markets under the Federal Competition Economic Law in which case the IFT is allowed to impose specific obligations in certain matters.
  16. The telecommunications products, equipment, devices or gadgets that can be connected to a telecommunications network or use radio spectrum frequencies, should be approved according with the applicable norms.
  17. The Law provides a new set of rules to limit the cross ownership of telecom and broadcasting concessionaires and other restrictions in the acquisition of spectrum for broadcasting services,  so that in certain market or coverage areas there is no restricted  or limited access to plural information.
  18. The IFT is in charge of the verification and supervision of the fulfillment of the Law, and the obligations established in the concessions and authorizations.
  19. The IFT is in charge of the application of sanctions provided in the Law following the procedure set forth in the Federal Law of Administrative Procedure, except in the following matters: (a) protection of consumers (Federal Consumer Protection Agency), and (b) content and publicity (Ministry of Interior).
  20. The Law introduces a new scheme of sanctions based on percentages of income of the offender.
  21. The general norms, acts or omissions from the IFT can be appealed only with a constitutional trial (amparo indirecto) and there is no injunction. Such trials will be held before the specialized judges and courts.

With thanks to the authors: Federico Hernandez Arroyo, Bernardo Herrerias Franco and Juan Francisco Torres Landa of the Mexican law firm Barrerra Siqueiros Torres Landa which combined with Hogan Lovells on 1 August 2014.

Posted in Policy & Regulation, Telecoms & Broadband

USA: Federal Communications Commission Rewrites E-Rate Rules for Technology Support for Schools

The main telecommunications regulatory body in the United States has adopted new rules governing the administration of the country’s multi-billion dollar education technology fund.  Schools and libraries in the U.S. will want to review the final rules closely to see how changes to this program will affect their future technology procurement plans and budgets, while telecommunications service providers doing business in the U.S. should be aware that the changes could open the door to a future increase in regulatory fees.  The new rules also create a significant new revenue stream for providers of managed Wi-Fi services (and, indirectly, vendors of Wi-Fi equipment), and vendors of caching servers.

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Posted in Copyright, Internet, Policy & Regulation

EU: Copyright Levies and the Cloud

On February 27, 2014, the European Parliament (“EP”) adopted a resolution on private copying levies, finding that a copyright levy regime is relevant in the online environment but that licensing models for streaming services (where no copy can be stored on a device) should have preference. The EP calls on the European Commission to assess the impact of the use of cloud computing technology for private recording and storage of works to determine whether a levy regime should also apply to cloud computing services.  This article looks at the EP’s approach to harmonising private copying levies in the digital age and looks at some of the recent key developments in the U.K., France, Germany and the Netherlands.

Click here to read the full article in our Spring issue of the Global Media and Communications Quarterly