Washington Post 2010 Annual Report Download - page 33

As part of the American Recovery and Reinvestment Act of 2009 (“ARRA”), the federal government has implemented
a program pursuant to which a total of approximately $7.2 billion in grants and loans has been distributed to fund
investment in the development of broadband networks throughout the U.S., mostly to facilitate the deployment of
broadband Internet access services in rural and remote regions that do not already enjoy such services. The ARRA also
required the FCC to develop a National Broadband Plan to guide U.S. policy in the area of domestic broadband
deployment. In March 2010, the FCC submitted its National Broadband Plan to Congress and announced its intention to
initiate approximately 40 rulemakings addressing a host of issues related to the delivery of broadband services. Several
of these rulemakings have already been initiated. The broad reach of these rulemaking proceedings could ultimately
affect the environment in which Cable ONE operates. The National Broadband Plan, which the FCC delivered to
Congress on March 16, 2010, did not contain self-effectuating provisions, but it is serving as a blueprint for broadband
regulatory policy in the U.S. and, therefore, could have a material effect on Cable ONE and other providers of
broadband Internet access services.
Providers of broadband Internet access services are subject to many of the same federal and state privacy laws that
apply to other providers of electronic communications, such as cable companies and telephone companies, including
the Electronic Communications Privacy Act, which addresses interceptions of electronic communications that are in transit;
the Stored Communications Act, which addresses acquisitions of electronic data in storage; and the Communications
Assistance for Law Enforcement Act (“CALEA”), which requires providers to make their services and facilities accessible
to law enforcement for purposes of surveillance. Various federal and state laws also apply to Cable ONE and to others
whose services are accessible through Cable ONE’s broadband Internet access service. These laws include copyright
laws, prohibitions on obscenity and requirements governing unsolicited commercial email.
Voice Services
Voice Over Internet Protocol (“VoIP”). Cable companies, including Cable ONE and others, offer voice service using
VoIP technology, which permits users to make phone calls over broadband communications networks, including the
Internet. Federal law preempts state and local regulatory barriers to the offering of voice service by cable companies and
others, and the FCC and federal courts generally have preempted state laws that seek to regulate or reclassify VoIP.
The FCC has held that VoIP services are IP-enabled services, which are interstate in nature and thus subject exclusively to
the FCC’s federal jurisdiction. This decision was upheld on appeal, although the FCC has an ongoing proceeding to
consider whether VoIP services provided by cable companies and others are properly classified as an “information service,”
“telecommunications service” or some other new category of service. This determination, once made, could have numerous
regulatory implications for cable companies that provide VoIP services, including Cable ONE. Although the FCC has yet
to ascribe a regulatory definition to VoIP services, the FCC nevertheless has imposed a number of obligations on some
types of VoIP providers known as interconnected VoIP service providers, some of which are discussed more fully below.
In the absence of a definitive FCC decision, several states (including several in Cable ONE’s service territory) also have
attempted—and are expected to continue to attempt—to regulate VoIP services like traditional telephony service and
impose certain fees and taxes on the provision of VoIP services. While Cable ONE and other VoIP service providers are
actively challenging state attempts to regulate and classify VoIP services, these state actions could have an adverse effect on
Cable ONE’s business by increasing its costs to provide VoIP services. Legislation from time to time has been introduced in
Congress to address the classification and regulatory obligations of VoIP providers. The prospects for passage of any such
legislation are uncertain.
Emergency 911 Services. The FCC has ruled that an interconnected VoIP service provider that enables its customers to
make calls to and from persons who use the public switched telephone network must provide its customers with the same
enhanced 911 (“E911”) features that traditional telephone and wireless companies are obligated to provide. This
requirement was upheld on appeal. The FCC is currently assessing whether additional rules related to the provision of
E911 services by interconnected VoIP service providers should be adopted.
CALEA. FCC regulations require providers of interconnected VoIP service to comply with the requirements of CALEA,
which requires covered entities and their equipment suppliers to deploy equipment that law enforcement officials can
access readily for lawful wiretap purposes.
Universal Service. The FCC has determined that interconnected VoIP service providers must contribute to the federal
universal service fund. The amount of a company’s universal service fund contribution is based on a percentage of
revenues earned from end-user interstate and international interconnected VoIP services. Cable ONE is permitted to
recover these contributions from its customers. This percentage figure changes from time to time and generally has been
increasing, prompting Congress and the FCC to consider ways in which the universal service fund and the payment
obligations of fund contributors should be reformed. Cable One cannot predict whether and how such reform will occur
and the extent to which it may affect providers of VoIP services, including Cable ONE. In November 2010, the FCC also
2010 FORM 10-K 17