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Text Box: BY GREGORY E. KUNKLE LAW OFFICES OF THOMAS K CROWE For this issue’s update, LINES asked Greg to look at the year ahead from a legal and regulatory perspective. Ed. Judging by the way 2004 ended, 2005 stands to be a dynamic year for regulation in the telecommunications industry. New laws affecting E9-1-1 and Universal Service, discussed be-low, should take effect as the new year begins. Additionally, expect to see the FCC issue an order in the rulemaking proceeding regarding regulation of VoIP and other IP-enabled services during 2005. An FCC Order issued November 9, 2004 holding that fed-eral law preempts state attempts to regulate certain IP-enabled services will only serve to increase the impact of that expected decision. Also, as 2004 came to a close, the FCC once again adopted revised rules governing the network unbundling ob-ligations of incumbent local carriers. Don’t be surprised to see a renewed court battle over these rules in 2005. Other areas may not see much change. Expect little, if any, variation in the Department of Justice’s (“DOJ”) push for expanded authority to conduct surveillance on IP-enabled services through reliance upon the Communications Assistance for Law Enforcement Act (“CALEA”). While the current head of the DOJ, Attorney General John Ashcroft, has announced he is stepping down, signs indicate that his replacement, Alberto Gonzales, can be expected to follow his predecessor’s course with respect to CALEA enforcement.

Text Box: Gonzales was an early supporter of the Patriot Act and has drawn much at-tention for his advice to President Bush regarding the rights that terror suspects should be afforded under the Geneva Convention and U.S. law. Look for one of the most controversial aspects of Gonzales’ confirmation hearings to in-clude his views on the amount of power that the federal government should have to fight crime, an issue which will dovetail closely with the DOJ’s CALEA proposal now before the FCC. New Laws For 2005 Recent legislation passed at the end of 2004 will significantly affect E9-1-1 and the Universal Service Fund going into 2005. E9-1-1 By the time you read this article, President Bush is expected to have signed the “Ensuring Needed Help Arrives Near Callers Employing 911 Act of 2004,” or “ENHANCE 911 Act,” which was passed by Congress as 2004 came to a close. The ENHANCE 911 Act will allow for up to $250 million annually in matching grants to state and county offi-cials to assist with the implementation of wireless E9-1-1 initiatives including upgrading 9-1-1 call centers to allow for location tracking of wireless 9-1-1 calls. This number is important because it represents a significant increase in fund-ing for the matching grants on the state and municipality level, which was pro-vided in the original E9-1-1 legislation. In order to discourage the all-too-common practice of diverting revenue from state and local E9-1-1 taxes to unrelated programs, the ENHANCE 911 Act provides for funding only to jurisdictions which certify that E9-1-1 tax revenue is not siphoned off for other purposes.

Text Box: Additionally, the ENHANCE 911 Act serves to create a national “implementation coordination” office which will serve to oversee, plan for and assist with E9-1-1 implementation as well as serve as grant administrator for the outlays contemplated by the ENHANCE 911 Act. The office cre-ated by the ENHANCE 911 Act will be operated jointly by the Commerce Department's National Telecommuni-cations and Information Administra-tion and the Transportation Depart-ment's National Highway Traffic Safety Administration. Universal Service Fund A potential crisis involving the Universal Service Fund (USF) appears to have narrowly been avoided at the close of 2004 because of a federal law known as the “Anti-Deficiency Act.” The Anti-Deficiency Act requires that before any federal agency makes or authorizes any expenditure, the funds to cover that expenditure must have been appropriated or must be available in a given fund. Due to the way that USF is billed and collected, the USF program violated this restriction of the Anti-Deficiency Act. Projections had the FCC increasing the USF contribu-tion factor to as high as approximately 14% in order to bring the program into compliance. The Anti-Deficiency Act had also caused USAC to temporarily suspend issuance of all Schools & Libraries Support Mechanism funding commit-ments. However, only days before the announcement of the first quarter 2005 contribution factor, Congress passed a bill exempting USF from the Anti-Deficiency Act’s requirements until December 15, 2005. The President is expected to have signed this bill into law by the time you read this article although he had not done so by the deadline for this report. (Continued on Page 8) ò