Gigabit Communities SummitGigabit Communities SummitKansas City, MissouriKansas City, Missouri

January 13, 2015January 13, 2015

Jim BallerJim BallerThe Baller Herbst Stokes & Lide, PCThe Baller Herbst Stokes & Lide, PCWashington, DC 20036Washington, DC 20036(202) 833-1144(202) 833-1144Jim@Baller.com

Seven Important Next Steps for Gigabit Communities

DisclaimerDisclaimer

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

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

OverviewOverview

1.1. Protect Yourself from State Barriers to EntryProtect Yourself from State Barriers to Entry

2.2. Comply With All Regulatory RequirementsComply With All Regulatory Requirements

3.3. Take Advantage of E-Rate and Other Funding OptionsTake Advantage of E-Rate and Other Funding Options

4.4. Use Innovative PPPs to Extend Your ServicesUse Innovative PPPs to Extend Your Services

5.5. Make Most of New Infrastructure DevelopmentsMake Most of New Infrastructure Developments

6.6. Consider New Opportunities to Acquire ContentConsider New Opportunities to Acquire Content

7.7. Break Into Multi-Tenant Buildings and Developments Break Into Multi-Tenant Buildings and Developments

1. Protect Yourself From State Barriers to Entry1. Protect Yourself From State Barriers to Entry

• About 21 states currently have restrictionsAbout 21 states currently have restrictions

• New barrier proposed in Missouri, others possibleNew barrier proposed in Missouri, others possible

• Barriers often follow first or significant fiber project Barriers often follow first or significant fiber project

• New proposed barriers may affect PPPs – e.g. KansasNew proposed barriers may affect PPPs – e.g. Kansas

• Chattanooga and Wilson proceedings before the FCCChattanooga and Wilson proceedings before the FCC

• Please file comments!Please file comments!

• Join/Support Coalition for Local Internet Choice Join/Support Coalition for Local Internet Choice ((www.localnetchoice.com) )

2. Comply With Regulatory Requirements2. Comply With Regulatory Requirements

• Depending on services provided, GC’s must comply with numerous federal Depending on services provided, GC’s must comply with numerous federal and possibly State requirementsand possibly State requirements

• BHSL Federal Communications Law Compliance MemoBHSL Federal Communications Law Compliance Memo

• Key requirements:Key requirements:

• Universal Service Fund – up to 16.8% of end user revenues at risk! Also, Universal Service Fund – up to 16.8% of end user revenues at risk! Also, Enforcement Task ForceEnforcement Task Force

• CALEACALEA

• Special Access Data CollectionSpecial Access Data Collection

• PrivacyPrivacy

•

3. Take Advantage of Funding Opportunities3. Take Advantage of Funding Opportunities

• $7.2 Billion in Federal Broadband Stimulus funding no longer $7.2 Billion in Federal Broadband Stimulus funding no longer available, but there are many other funding opportunitiesavailable, but there are many other funding opportunities

• Examples:Examples:• FCC: Recently expanded E-Rate Program for Schools and FCC: Recently expanded E-Rate Program for Schools and

Libraries, Health Care Support, Connect America Fund Libraries, Health Care Support, Connect America Fund • USDA Community Connect Broadband Grants ($100,000 -USDA Community Connect Broadband Grants ($100,000 -

$3 million) (Feb 17, 2015)$3 million) (Feb 17, 2015)• Department of Commerce economic development grantsDepartment of Commerce economic development grants

4. Consider Public-Private Partnerships4. Consider Public-Private Partnerships

• Many private entities are eager to explore partnerships with GC’s, creating opportunities to expand Many private entities are eager to explore partnerships with GC’s, creating opportunities to expand services, footprintservices, footprint

• PPPs come in many shapes and sizes PPPs come in many shapes and sizes

• Examples: Google/KC, Provo, Austin, etc.; C-Spire/Mississippi Communities; UC2B/iTV3; Examples: Google/KC, Provo, Austin, etc.; C-Spire/Mississippi Communities; UC2B/iTV3; Macquarie/Kentucky; OnLight Aurora/City of Aurora, IL; Ting/Westminster, MDMacquarie/Kentucky; OnLight Aurora/City of Aurora, IL; Ting/Westminster, MD

• Key issues:Key issues:

• Impact of state laws (including special PPP laws)Impact of state laws (including special PPP laws)

• Allocation of financial obligations, risks, rewardsAllocation of financial obligations, risks, rewards

• Allocation of operating responsibilitiesAllocation of operating responsibilities

• Enforcement of commitments and remediesEnforcement of commitments and remedies

• Exit strategiesExit strategies

5. Consider Potential Benefits of New 5. Consider Potential Benefits of New Developments Concerning InfrastructureDevelopments Concerning Infrastructure

• Pole attachmentsPole attachments

• Federal law provides access rights and rate protection only to Federal law provides access rights and rate protection only to “telecommunications carriers” and “cable television systems” – not to “telecommunications carriers” and “cable television systems” – not to pure Internet access or fiber providers Result: covered beneficiaries get pure Internet access or fiber providers Result: covered beneficiaries get faster, cheaper make ready and far lower ratesfaster, cheaper make ready and far lower rates

• If FCC reclassifies Broadband Internet Access Service as a Title II If FCC reclassifies Broadband Internet Access Service as a Title II “telecommunications service,” providers may qualify for pole attachment “telecommunications service,” providers may qualify for pole attachment benefitsbenefits

• Also new FCC rules on tower siting and wireless small cells and distributed Also new FCC rules on tower siting and wireless small cells and distributed antenna systems – multiple impactsantenna systems – multiple impacts

6. Explore New Options For Access to Video 6. Explore New Options For Access to Video Programming and Other ContentProgramming and Other Content

• Today, fiber system operators acquire video content in 2 main ways: (1) for Today, fiber system operators acquire video content in 2 main ways: (1) for broadcast signals, enter into must carry/retransmission consent agreements broadcast signals, enter into must carry/retransmission consent agreements with broadcast stations, and (2) for other video programming, contracts with with broadcast stations, and (2) for other video programming, contracts with programming distributors via co-ops (NCTC), content aggregators, or programming distributors via co-ops (NCTC), content aggregators, or individual negotiationsindividual negotiations

• In STELAR, Congress recently expanded an FCC ban on joint negotiations In STELAR, Congress recently expanded an FCC ban on joint negotiations by broadcastersby broadcasters

• FCC currently considering giving non-cable systems programming access FCC currently considering giving non-cable systems programming access rightsrights

7. Break Into the Multi-tenant Market7. Break Into the Multi-tenant Market

• Multi-tenant buildings and developments often constitute 25-Multi-tenant buildings and developments often constitute 25-33% of a potential market – or even more33% of a potential market – or even more

• Incumbent service providers often attempt to tie up multi-tenant Incumbent service providers often attempt to tie up multi-tenant environments through exclusive agreements of various kinds – environments through exclusive agreements of various kinds – e.g., exclusive right to market, exclusive right to provide e.g., exclusive right to market, exclusive right to provide service, exclusive use of inside wiring, exclusive easements, service, exclusive use of inside wiring, exclusive easements, take-or-pay bulk service agreements, etc.take-or-pay bulk service agreements, etc.

• The FCC has prohibited exclusive cable service agreements The FCC has prohibited exclusive cable service agreements and exclusive easements, but it has upheld other forms of and exclusive easements, but it has upheld other forms of exclusivityexclusivity

• State laws, including unfair competition laws, may help State laws, including unfair competition laws, may help

Thanks!Thanks!

Jim BallerJim BallerBaller Herbst Stokes & Lide, PCBaller Herbst Stokes & Lide, PC

2014 P Street, NW2014 P Street, NWWashington, DC 20036Washington, DC 20036

(202) 833-1144(202) 833-1144Jim@Baller.comJim@Baller.com