CommLawBlog : Broadcast & Communications Lawyers & Attorneys : Fletcher Heald & Hildreth Law Firm : Telecommunications, FCC Regulation, Communications Act

An expensive reminder that the FCC is still policing the long distance industry.

If you’ve been thinking that the FCC doesn’t care about “slamming” anymore, think again. The Commission has proposed a multi-million dollar fine against long distance service provider Advantage Telecommunications Corp. (ATC) for slamming violations.

Which raises two obvious questions: (1) Is there still such a thing as a long distance service provider? and (2) “What did ATC do to deserve a $7.6 million fine?

Answer (1): Yes, long distance service providers still exist. There remains a niche market for standalone (i.e., unaffiliated with your local phone company) long distance carriers serving consumers with traditional landline telephones. They offer 1+ (i.e., long distance, dubbed “1+” because you have to dial “1” plus the rest of the number to make a long distance call) service plans in competition with the local phone companies.

Now, to the $7.6 million dollar question . . .

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Proposals for satellite and space operations call for new commingling of spectrum operations.

This Notice of Proposed Rulemaking (NPRM) looks to alter the way in which certain spectrum is to be shared between the government and private users.  At first glance it is about as tedious and picky as anything coming out of the FCC. But it may signal the beginning of the end of a basic tenet of U.S. spectrum management.

Radio spectrum is allocated separately for federal and non-federal use. Take a look at the official Table of Frequency Allocations (or type a frequency into this unofficial but easier-to-use version). Notice the separate federal and non-federal entries. Federal spectrum is regulated by the National Telecommunications and Information Administration (NTIA) through its Office of Spectrum Management. Non-federal spectrum, also called “private” or “commercial,” comes under the jurisdiction of the FCC. To be sure, some spectrum is allocated jointly for federal and private use, regulated by the two agencies acting cooperatively. But even then, NTIA manages federal users operating federal equipment, while the FCC oversees private users working with private equipment.

The federal-private distinction, basic to the statutory scheme of U.S. communications law, has worked successfully for decades. Now, though, it is starting to come unglued.

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FCC announces procedures for waiver requests by noncommercial broadcasters.

The time has come, yet again, for broadcasters to respond to a natural catastrophe with their characteristic humanity, offering help wherever and whenever possible. As the horrific stories and images from tornado-devastated Oklahoma – and particularly the community of Moore – make their way out of the storm’s heartless swath, broadcast stations may want to undertake fund-raising efforts to support relief efforts. The FCC clearly does not want to do anything to discourage such laudable humanitarian impulses. However, rules are rules – and the Commission’s rules (Sections 73.503(d) for radio and 73.621(e) for TV) generally prohibit noncommercial educational (NCE) broadcasters from engaging in on-air fund-raising activities on behalf of anybody but the station itself.

Not to worry. The Commission has historically waived that prohibition following “disasters of particular uniqueness or magnitude” – Hurricane Katrina, the 2010 Haiti earthquake, the 2011 Japanese tsunami and Superstorm Sandy come to mind as ready examples. And just to be sure that we all know that the FCC views the Oklahoma tornado to be in the same league, the Commission has issued a public notice laying out the procedures by which NCE licensees may request waivers so that they can engage in fund-raising for relief efforts.

Stations seeking such waivers should prepare an informal request providing the following basic details of their fund-raising activity:

• the nature of the fund-raising activity;
• the proposed duration of the activity;
• the organization(s) to which fund will be donated; and
• whether the fund-raising activity will be part of the station’s regularly-scheduled pledge drive or fund-raising efforts

The informal request should then be emailed to the FCC.  NCE television licensees should address their requests to Barbara Kreisman (barbara.kreisman@fcc.gov). NCE radio licensees should address their requests to Peter Doyle (peter.doyle@fcc.gov) and Michael Wagner (michael.wagner@fcc.gov). Those points of contact are also available for any particular questions you might have about such things.

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Rulemaking petition denied on grounds relating to auction, interference and frequency coordination.

The Wireless and International Bureaus and the Office of Engineering and Technology (Bureaus) have denied a 2008 petition by the Utilities Telecom Council and Winchester Cator, LLC that asked the Commission to open the 14.0-14.5 GHz band for terrestrial point-to-point and point-to-multipoint communications. The requested allocation would have served critical infrastructure industries, including electric utilities and emergency responders. Other services would have been permitted on a preemptible basis.

The Bureaus disagreed with the petition’s argument that the band could be licensed without an auction. They also had concerns about interference into fixed satellite uplinks, which are primary in the band, and expressed doubts as to whether the proposed single-entity frequency coordinator could identify and resolve any interference issues that occurred. The Bureaus pointed out many bands the utilities industry could use instead, and also noted its access to “an extensive physical network” that could support wired infrastructure.

Based on these considerations, the Bureaus concluded that the petition “plainly [does] not warrant consideration by the Commission.” That strikes us as little harsh. Had the Bureaus wanted to move forward, they plausibly could have raised each objection instead as a question in a Notice of Proposed Rulemaking.

Not mentioned in the turn-down is another possible reason for its issuance: a recently proposed use of this same band for air-ground broadband systems to facilitate Internet service for airplane passengers. We mentioned earlier that the air-ground proposal could put the kibosh on critical infrastructure communications. Perhaps the FCC judged that the two systems could not coexist, and has now made its choice between them.

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[Blogmeister’s Note: We haven’t heard much about porn copyright trolls in a couple of years, but a recent decision by a federal judge in California caught our eye. The judge slammed a troll operation, and he did it with flair – his opinion opens with a quote from a Star Trek movie (“The Wrath of Khan”) and proceeds to riff off the Star Trek theme throughout its 11 pages. Our colleague Tony Lee volunteered to report on the decision because – or so we thought – he had been involved with porn copyright trolls in the past (defending against them, he assures us). What he didn’t tell us is that he is a major league Star Trek fan. The result: the following homage to both Star Trek and the federal judge who mind-melded with the Trekker universe. Tony has graciously prepared a separate, annotated version of his post – accessible here – for anyone who might be interested. And yes, we know that the title of this piece conjures Star Wars, not Star Trek – it’s the best the headline-writing department here at CommLawBlog.com could come up with.]

In Star Trek-infused opinion, a federal judge beams copyright trolls to Planet Loser.

In a decision chock-full of Star Trek references, U.S. District Judge Otis D. Wright, II has levied planet-wasting (or at a minimum, career-ruining) sanctions against a collective of porn copyright trolls looking to assimilate the pocketbooks of alleged porn downloaders. 

The trolls incurred the Wrath of Wright by weaving a complicated Tholian web of deceit using the court as an unwitting but crucial element of their nefarious scheme. As the Judge put it: “[W]hen the Court realized [the trolls had] engaged their cloak of shell companies and fraud, . . . the Court went to battlestations.”

Before delving into the hull-breaching sanctions resulting from the Judge’s full volley of photon torpedoes, a little background. 

The case began as porn troll cases generally do.

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Proposed law looks to address multiple aspects of TV in the MVPD era, including bundling, broadcast abandonment and blackouts.

True to his reputation as a maverick, Arizona Senator John McCain has authored a bill seemingly designed to please nobody, while arguably disserving just about everybody. Dubbed the “Television Consumer Freedom Act of 2013”, it consists of clumsily crafted legislative language that mashes together in one bill three disparate and contentious aspects of the current video delivery system. In only one of those three areas does McCain’s proposal come to remotely practical terms with the problem it seeks to address.

McCain’s bill aims to: (1) promote “a la carte” program availability for MVPD subscribers; (2) discourage broadcasters from removing their programming from over-the-air availability (in response to the success that Aereo has recently enjoyed); and (3) eliminate broadcast blackouts of sports coverage in certain situations.

Promoting “A la Carte” MVPD offerings

McCain has long been an advocate of an a la carte approach to program availability. Under that approach, cable and satellite TV subscribers would be able to sign up for only those channels they want to watch – no more required “bundles” or “tiers”, i.e., packages of channels including some really desirable choices and a bunch of others that probably won’t be watched much, if at all. 

The practice of “bundling”, of course, is not unique to the MVPD operator/MVPD subscriber relationship.

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New Media Bureau policy opens door for reduced fines for first-time violators of some paperwork rules.

The FCC’s enforcement actions often leave us shaking our heads wondering if the bureaucracy recognizes the challenges faced in real life by those it regulates. But occasionally there are rays of hope.  Case in point: the Media Bureau has revised its policy for enforcing certain paperwork obligations against student-staffed noncommercial educational (NCE) radio broadcast stations. The revised policy provides an opportunity for such stations to avoid crushing forfeitures which could end up shutting the stations down.

Last July, we blogged about the stifling impact of the FCC’s forfeitures on student-operated stations. Because of frequent student staff turnover, such stations can be prone to rule violations, which in turn result in steep forfeitures often amounting to a substantial portion of -- indeed, sometimes even more than -- the station’s annual budget. That happens when the fine is based on the Commission’s schedule of “standard” forfeitures even without any upward adjustments.

While some stations hit with fines have argued to the Commission that their budgets can’t sustain the forfeiture amount, the FCC has historically ignored such claims. Instead, it has looked to the resources of the entire educational institution, rather than just the station itself, presumably (but unrealistically) assuming that the institution would pay up.  Unfortunately, as we reported in our earlier post here,even though many institutions do pay up, the threat of further severe regulatory enforcement has apparently led some institutions to sell their stations, thereby eliminating opportunities for entry and training of young people in the art of broadcasting.

But now the Bureau has a new policy.

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A bit of Fletcher Heald family news. Our colleague, Davina Sashkin, and her hubby, Bill Schreiner, welcomed William A. Schreiner, III, into their family – and the greater FHH fold – this past week. Mom and young Liam are doing well.  Liam is pictured, angelically asleep, at left. (Tip to Davina and Bill: don’t get used to this.) We here in the CommLawBlog bunker wish them all the best.

And Liam’s arrival reminds us that today is Mother’s Day. Permit us to diverge slightly from our usual FCC-centric mission to provide this public service announcement. If you haven’t already done so, we recommend that you turn off your computer, pick up the phone, and give Mom a call to thank her for what she’s done for you lo these many years. You know you appreciate her – and today’s the day to let her know, too.

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If you have the vague sense that you might like to file comments in response to the bizarre invitation for comments relative to the FCC’s indecency policies, but you’re still trying to figure out exactly what those policies are in the first place, you're in luck. The General Counsel’s office and the Enforcement Bureau have extended the deadlines. Comments are now due by June 19, 2013 and reply comments by July 18. Unfortunately, the public notice announcing the extensions does not shed any more light on the indecency inquiry. As previously reported here, the inquiry posed on April Fool’s Day is, at best, cryptic and unilluminating, so much so that it’s difficult to imagine that anything useful could possibly come from it. But for those of you who may be champing at the bit to toss in your two cents’ worth, you now have a little more time within which to hone your prose.

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Antennas would use directional pointing rules to avoid interfering with satellites.

The FCC is looking to expand the use of wireless services, particularly in-flight Wi-Fi, on aircraft traveling over the contiguous United States.  In a Notice of Proposed Rulemaking (NPRM), the FCC has proposed the establishment of a new air-ground mobile broadband service in the 14.0-14.5 GHz band.

The proposal was first advanced by Qualcomm, which hopes to augment the recently authorized (just last December) satellite-based connections to aircraft with a nationwide network of air-to-ground stations that would allow plane passengers to connect more easily and cheaply to the Internet. Unlike satellite connections (which work anywhere), the new system would work only while the plane is in U.S. airspace. The FCC sees – and wants to accommodate – the growing demand for in-flight Internet access, while increasing competition, improving service, and lowering prices.

The proposed service poses potentially difficult technical issues.

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The full FCC agrees with the Wireless Bureau that FiberTower’s failure to construct resulted from its own business decisions.

FiberTower loses again. The full FCC has backed the Wireless Telecommunications Bureau’s decision to cancel 698 licenses held by the company in the 24 GHz and 39 GHz auctioned fixed microwave bands, for failure to construct sufficient facilities.

As we explained last December in our sister publication FHH Telecom Law, FiberTower is not alone in its difficulties. Nearly all of the area-wide licensees in the four auctioned bands used to communicate between fixed points – at 24, 28, 31, and 39 GHz – have had difficulty in meeting their renewal obligations. In part the problems trace to a shortage of suitable equipment, and in part to markets that did not develop as expected. FiberTower, ironically, was one of the more commercially successful licensees, so the FCC action against it seems particularly harsh.

The usual duration for microwave licenses of all kinds is ten years. When an area-wide licensee applies for renewal after that period, it must show it is providing “substantial service.” The FCC rules define this, unhelpfully, as “a service which is sound, favorable, and substantially above a level of mediocre service which just might minimally warrant renewal during its past license term.” (Confusingly, this says the level of service required for renewal is substantially above the level of service required for renewal.)

Thanks to a “safe harbor” policy, a licensee is deemed to be providing “substantial service” if it demonstrates that it has constructed four links per million population in its service.

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The more the merrier: Major telecom reform measure marks turning point in regulatory approach. 

[Blogmeister’s Note: We welcome a new guest contributor, Ernesto Velarde-Danache, an attorney with offices in Mexico and Texas who is familiar with Mexico’s regulatory activities vis-à-vis its telecommunications industries. Ernesto has provided us with the following recap of a new law recently passed by the Mexican national legislature. As outlined below, the law, which is awaiting ratification by a majority of Mexico’s states, will have a major impact both on Mexico’s telecom industries and on foreign investors who might now be able to participate in those industries.]

For so many years important sectors of the telecommunications industry in Mexico have been under the control of the Mexican government or in the hands of a few private investors. This practice has been systematically denounced as oligopolistic by both Mexican and foreign entrepreneurs frustrated by the lack of opportunities within the sector.

Fortunately, this situation is nearing a most anticipated end. The Mexican congress recently approved a bill that, once approved by the majority of the Mexican states’ legislatures, will result in unprecedented opportunity for Mexican and foreign investors who have been waiting for this dramatic and, for many, most welcome breakthrough.

Under the new law, foreign investors will be allowed to invest up to 100% in the telecom industry. Historically, foreigners have been limited to owning no more than a 49% interest in Mexican telecom businesses. The new law will also dramatically change Mexico’s long-time bar against foreign ownership of any share of Mexican broadcast stations. The new law permits foreign investment in broadcast stations up to the higher of: (a) 49% of the corporate capital, or (b) the percentage of corporate capital investment made available to Mexican nationals in the investor’s home country.

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Request reopens matter laid to rest just six years ago.

The FCC has reopened the difficult question of technical standards for radio receivers.

Everyone agrees that poor receivers impair efficient use of spectrum. In particular, receivers that respond to a wider swath of frequencies than necessary can receive interference from unwanted signals close by the intended signal. Just ask LightSquared, whose plans to use mobile satellite frequencies on terrestrial towers failed because its signal was close enough to GPS frequencies to overpower some GPS receivers.

Less selective, more interference-prone receivers are cheaper to manufacture. Market forces are not much help because a more selective (and hence more expensive) receiver is rarely of immediate benefit to the purchaser. The improved receiver does benefit other users seeking to operate on frequencies nearby, as better GPS receivers would have benefited LightSquared. But the manufacturer gains no competitive advantage to offset the higher price. So manufacturers, especially of consumer equipment, tend to supply the least selective (and least expensive) receivers that will work in the current spectrum environment.

A situation like this, where market forces act against the public good, is a classic set-up for regulation.

The FCC tried. Just over ten years ago it issued a Notice of Inquiry on whether to include “receiver interference immunity performance specifications” in its rules. After sifting through sixty-odd comments, and then waiting a few years, the FCC terminated the proceeding in a terse one-pager.

Now the issue is back.

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FCC proposes rule changes to help combat contraband cell phone usage in correctional institutions.

If The Shawshank Redemption had been set in 2013 rather than 60 years or so earlier, this prison-yard exchange between inmates Andy Dufresne and Red would probably go something like this:

Andy: I understand you're a man who knows how to get cell phones.

Red:    I'm known to locate cell phones from time to time…but what would you want one for, Andy, to update your Facebook status?

The problem of contraband cell phone use in correctional institutions for social media status updates is very real. And while inmate status updates or video posts might be somewhat amusing – especially if they involve an organized flash mob(ster?) or this rendition of Michael Jackson’s Thriller – authorities are evermore concerned that contraband cell phones are being used by inmates for far more nefarious, criminal purposes.

In a recent Notice of Proposed Rulemaking (NPRM), the FCC is exploring regulatory approaches for reducing contraband cell phone usage in correctional institutions.

Why can’t prisons just “jam” the contraband cell phone signals, you ask?

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