Rural Call Completion Update: FCC Grants One, Tosses Four Petitions for Reconsideration

As we reported just about a year ago, the FCC adopted a number of rules to address the problem of rural call completion or, more accurately, rural call non-completion. Many calls placed to numbers served by small rural telephone companies don’t seem to make it to their destination. And that seems to happen especially when the calls are routed through “least cost” intermediate service providers who don’t take kindly to the high per-minute termination access charges imposed by many small telcos. In keeping with its priority goal of universal connectivity, the FCC adopted rules mandating that calls not be blocked, that carriers file quarterly reports on call completion success rates, and that a ring tone not be delivered to the calling party until the call has actually been connected to its destination.

Five petitions for reconsideration were filed and the Commission has now denied all but one of them.

In response to the one successful petition, filed by USTelecom and ITTA, the FCC has decided to exempt from call quality reporting requirements intraLATA toll calls that are: (a) carried entirely over the covered provider’s network or (b) handed off by a covered provider directly to a the terminating carrier or a terminating tandem switch. Some carriers don’t keep detailed records of such calls now, so the cost of reporting on such calls would likely impose significant new cost burdens. Since the benefit of reports on such calls would be limited, the scale balanced in favor of an exemption. The exemption does not apply to interLATA toll calls, even if they are directly handed off to the terminating carrier or tandem; the FCC said that the majority of on-net traffic is interLATA and will still be covered.

Continue Reading...

Update: Last of the New 911 Rules Now in Effect

Almost a year ago we reported on the adoption of a number of rules designed to improve performance of the 911 system in the aftermath of the 2012 “derecho” storm. Most of the new rules had taken effect by February of this year, but a couple lingered on in limbo, awaiting OMB approval. All but one of those stragglers made it through the Paperwork Reduction Act process last month, leaving only Section 4.9(h) on the outside looking in. (For those who may have lost track over the last year or so, Section 4.9(h) requires “Covered 911 Service Providers” to notify Public Safety Answering Points (PSAPs) and other “911 special facilities” of major disruptions in 911 service within time limits established by the Commission.)

The wait is over! According to a notice in the Federal Register, OMB has signed off on Section 4.9(h), so it has become effective as of November 4, 2014.

Update: More New 911 Rules Take Effect

Slowly but surely, the new set of rigorous requirements for 911 system service providers adopted last December in the wake of the 2012 “derecho” storm are coming on line. Most of those requirements took effect in February, but four particular rules did not. That’s because they involve “information collections” that had to be run past the Office of Management and Budget thanks to the Paperwork Reduction Act. OMB’s review process has now been wrapped up for three of the four – those would be Sections 12.4(c), 12.4(d)(1) and 12.4(d)(3) – and they have now taken effect, according to a notice in the Federal Register. (To refresh your recollections, Sections 12.4(c) and 12.4(d)(1) relate, respectively, to the required submission of annual reliability and initial reliability certifications. Section 12.4(d)(3) imposes certain record retention obligations.)

Still waiting in the wings: Section 4.9(h), which requires reporting on outages potentially affecting a special 911 facility. Apparently OMB hasn’t given that one the thumbs up yet. When that does happen, look for another Federal Register notice. We’ll let you know when that pops up.

Update: Effective Date of (Most) Revised Tower Rules Set

Last month we reported on the FCC’s overhaul of its antenna structure regulations. The Commission’s Report and Order has now made it into the Federal Register. That, of course, establishes the effective date of most of the revised rules – and that date is October 24, 2014. We say “most” of the revised rules because, wouldn’t you know it, a couple of the revisions involve “information collections” that have to be run past the Office of Management and Budget thanks to the Paperwork Reduction Act. Those revisions – which involve Sections 17.4, 17.48 and 17.49 – will kick in once OMB has given them the once-over. Check back here for updates.

Regulatory Weed-Whacking: The FCC Cleans Up its Antenna Structure Regulations

Nearly a decade in the making, FCC tower rules brought into the 21st Century

If you’ve got one or more tower structures, you may be in luck. The FCC has at long last taken a weed-whacker to Part 17 of its rules, a long-overgrown regulatory briar patch governing the construction, painting and lighting of antenna structures. While the substantive requirements remain largely intact, a number of procedural changes should make life at least a little easier for tower owners as well as the Commission’s Staff. At a minimum, the changes should make the rules easier for real people to grasp.

The only real question here: What took so long?

Tower Inspections. The current rules require that tower lights be monitored at least once every 24 hours, either by observation of the tower itself or through an alarm system that takes care of the process automatically. In addition, any automatic or mechanical control devices, indicators, and alarm systems associated with a tower-lighting system must be inspected quarterly to confirm that the gear is working properly. Some major tower owners have set up Network Operations Centers (NOCs) which are staffed at all times, have highly sophisticated equipment that sounds an alarm at any tower lighting malfunction, and stores records of all alerts. An alert is sent not only if the lights fail at a tower but also if the monitoring system fails. Historically, the FCC has granted several waivers of the quarterly inspection requirement to companies that have demonstrated that their NOCs are adequately staffed and equipped.

Continue Reading...

Wireline Competition Bureau Clarifies That You Do - or Do Not - Need Agency Approval Before Transferring Control of Some ETCs

Well, that clears that up

On July 24, the FCC’s Wireline Competition Bureau (WCB) issued a public notice “reminding” carriers of prior approval requirements when certain Eligible Telecommunications Carriers (ETCs) plan to undergo a transfer of control. ETC status is granted by state public utility commissions in most cases, but the FCC itself handles this function in the 20% or so of the states that have chosen not to regulate in this area. ETCs receive millions of dollars from the Universal Service Fund (USF) to support the services they provide, so the administering agency, whether it be the FCC or a comparable state agency, reviews the identity and commitments of proposed ETCs carefully before granting them that status and thus making them eligible to receive the USF support. It would not be surprising, therefore, for the pertinent regulatory agency to require ETCs to seek approval before control of the entity is transferred to a new entity.

The problem is that there is nothing in the FCC’s rulebook that requires such approval.

Continue Reading...

Update: FCC Announces Form 477 Web Pages, Webinar

Webinar on new filing interface for Form 477 to be held on August 6; FCC releases link to Form 477 filing resources.

As we reported last month, the new Form 477 filing interface implemented as part of the Commission’s expansion of the Form 477 Data Program goes live on July 31. And as the FCC promised, additional Form 477 guidance – consisting of several web pages with instructions, resources, system guides, background information – is now available to prospective filers on the FCC’s website. (Cautionary note: While the FCC has indeed set up potentially useful web pages, it has included on those pages a number of links that are not yet live, at least as of the date the availability of those pages was first announced. The Commission assures one and all that those links will be updated before the new interface goes live on July 31.)

The Commission also promised an instructional webinar after the launch. True to its word, the FCC has announced that the promised webinar has been scheduled to occur on August 6, 2014 from 2:30-3:30 p.m. (ET). You can attend the real deal at the FCC’s Meeting Room in Washington, or you can watch it live over the ether at http://fcc.gov/live. Stay-at-home viewers will be given the opportunity to email questions in to the presenters during the show.

Fifth Circuit: False Claims for USF Funds Are Not Subject to False Claims Act Suits

Court holds that USF funds, administered by a private corporation, are not “federal funds” within meaning of False Claims Act.

One weapon in the government’s anti-fraud arsenal – the False Claims Act – will no longer be available to the Feds in their efforts to combat bogus claims made to the Universal Service Fund (USF) if a recent decision out of the U.S. Court of Appeals for the Fifth Circuit sticks.

The USF, of course, is the multi-billion dollar cash reservoir used to subsidize a variety of programs designed to assure that all Americans have affordable access to essential telecommunications services. Created by Congress in 1996 (but having roots dating back to 1934), the USF is funded by mandatory contributions from telecom carriers, who in turn pass the charges along to their customers. If you haven’t heard of it, take a look at your phone bill, which has a surcharge of more than 15% to cover your share of your carrier’s mandatory contribution to the USF. Since pretty much every phone bill every month to every customer everywhere includes that line item, the cash coming into the USF is not chickenfeed. (Illustrative examples: Annual USF disbursements exceeded $8.5 billion in 2012; earlier this month the Commission expanded the funds available to the Education Rate (E-rate) component of USF – which supports communications technology (e.g., Wi-fi) in schools and libraries – to more than $3 billion annually for the next two years.)

The USF is administered by the Universal Service Administrative Company (USAC), a non-profit corporation established to oversee the day-to-day operation of the USF. Contributions go directly to the USAC, which then distributes them back out to service providers in furtherance of USF programs.

When so much money is doled out anywhere, you can pretty much count on people trying to get their hands on more than they’re entitled to.

Continue Reading...

Connect America Fund Recon: What the FCC Taketh, the FCC Can - and Does - Giveth Back

FCC answers some questions on next phase of CAF, but raises new questions about the CAF Phase II and Mobility Fund Phase II Auctions

If we go just by the title of the FCC’s most recent action in the Connect America Fund (CAF) docket, the FCC accomplished quite a bit in one fell swoop. The lengthy (108 pages!) document is entitled “Report and Order, Declaratory Ruling, Order, Memorandum Opinion and Order, Seventh Order on Reconsideration, and Further Notice of Proposed Rulemaking.” Phew! (Let’s just call it the CAF Recon Order for short.) That just about runs the gamut of possible FCC actions, so we should expect a lot for our money. And, to a large extent, we got it. 

The CAF Recon Order is a follow-on to the FCC’s massive and comprehensive attempt in 2011 to radically reform the entire regime of universal service funds (“USF”) and intercarrier compensation that has ruled the telecom landscape for a generation. That effort, grandiosely but not inaccurately dubbed the “Transformation Order” by the FCC, took an axe to the carrier-to-carrier rates and USF that previously paid for the high costs of completing long distance calls to rural areas of the country. Many prices paid by long distance telephone companies and wireless carriers, along with some previously available USF, were reduced, consolidated or eliminated over a period of a few years, and provisions that might have incentivized some operators to over-invest in upgrading their networks were eliminated. The availability of USF was eliminated as unnecessary for situations where, without reliance on USF, comparable service had been deployed. 

The “transformation”, while dramatic, has proven to be less than permanent in a number of respects.

Continue Reading...

Form 499 Changes in the Works, Apparently

Does the FCC really care about your input on a mandatory online filing requirement for the Forms 499? We’re not entirely sure.

The Office of Management and Budget advises that “[e]liminating . . . unjustified reporting and paperwork burdens” is a “high priority” of the current Administration. Perhaps, but OMB also reports that, in 2011 Americans spent an estimated 9.14 billion hours filling out Federal government forms.

According to a recent notice published in the Federal Register pursuant to the hilariously named Paperwork Reduction Act (PRA), the FCC is looking to streamline the reporting burdens of Forms 499-A and 499-Q by eliminating one filing requirement (“the third-party disclosure requirement” – whatever that means… more on this below) and ditching paper filing in favor of mandatory online electronic filing for Forms 499-A and 499-Q. So, thankfully, the FCC may be embracing the Administration’s supposed priority.

Or maybe the FCC just got tired of trying to squeeze new boxes and lines onto the paper forms whenever requirements change.

In any case, other than the extremely vague PRA notice, we know nothing about the proposed changes because the FCC hasn’t released any other information about them. So filers have no way of knowing how the new requirements may be implemented or whether the changes will actually reduce reporting burdens.

Continue Reading...

Update: Final Effective Date for Form 477 Expansion Plan Set

The new Form 477 filing interface goes live on July 31.

Last year we reported on the Commission’s expansion of the Form 477 Data Program, which collects information from broadband and voice service providers. Because of the new “information collection” components, the expansion could not fully take effect until approval by the Office of Management and Budget. The FCC has now published notice in the Federal Register announcing OMB’s final approval of the new Form 477 protocols. As a result, all the rules comprising the Form 477 Data Program are now in effect and the FCC is ready to collect its data through a new filing interface.

And about that new interface. According to a recent Public Notice, the newly developed Form 477 filing interface – originally set to go live on July 31 – must be capable of collecting and processing data “securely and efficiently”. Of course, being a new system (and developed by the government), one would anticipate a few technical difficulties at the outset. To account for potential issues, the FCC has shifted the Form 477 filing window by 30 days – where it would typically run from July 1 to September 1, this year it will run from July 31 to October 1, 2014.

To assist filers with the new system, the Commission also plans to march out a number of resources – updated web pages, instructions, systems guide, and frequently asked questions – before July 31. It’s also planning to present an “instructional webinar”, but don’t look for that until sometime after the filing window opens. Unfortunately, there’s no mention of an Android or iPhone app.

More information on the revised Form 477 data collection can be found on the FCC’s website.

Court Dismisses TCPA Charges Brought Against Telecommunications Provider

Federal judge: Telecom carriers (1) not routinely liable for telemarketing violations committed by customers and (2) not subject to private suit for alleged violations of Truth in Caller ID Act.

Increasingly, telephone carriers may find themselves unexpectedly on the wrong end of lawsuits alleging violations of the telemarketing laws. Fortunately, at least one federal judge has recognized that such suits are off the mark.

Unsolicited marketing calls are like weeds – nobody likes them, they seldom do any good, and they’re almost impossible to get rid of. But Congress tried. In 1991 it enacted the Telephone Consumer Protection Act (TCPA), which perhaps most famously created the “Do Not Call” list. The TCPA also created a “private right of action” that allows consumers – individually or, increasingly, as an entire class – to sue telemarketers who break the rules.

That right to sue can be effective when directed against the proper targets (i.e., the wrongdoing telemarketer), but it can also be misdirected toward blameless parties, with unhappy results – much like a flame thrower which is effective at killing the occasional dandelion, but which wreaks havoc when pointed at the rose bushes. The universe of innocent bystanders in the TCPA context includes telephone carriers. You might think that no penalty could legitimately be imposed on carriers whose only involvement is the happenstance that a telemarketer used the carriers’ services. But aggrieved consumers (and their deep-pocket-seeking counsel) probably think otherwise.

Take, for example, the case of Flowroute, a telecommunications provider.

Continue Reading...

Rural Call Completion Update: FCC Invites Comments on Waiver Requests, Possible Clarifications

As we reported last year, the Commission adopted new rules designed to increase its ability to monitor, and correct, the “frequent and pervasive” problem of failed telephone calls to small towns and rural areas. While those new rules took effect several months ago, it appears that a number of bugs, or possible bugs, still need to be worked out in the reporting system. We know this because a number of requests for waivers have already been filed, and the Commission itself is wondering whether certain categories of call attempts described in Appendix C of the Rural Call Completion Order need to be clarified or modified.

AT&T presents perhaps the most troublesome proposal. AT&T wants to report only the sample of data contained in the Originating Access Charge Verification records. With only sample data, the FCC will be unable to determine the cause for the degradation of many rural calls that are not contained in AT&T’s sample. That could significantly undermine the overall effectiveness of the new rules. AT&T is also looking for waivers with respect to certain AT&T Mobility traffic and intraLATA toll traffic, not to mention a six-month extension of the reporting deadline. As AT&T is the interexchange carrier with the most traffic terminating to many rural areas, a grant of AT&T’s waiver request could nullify many of the benefits to be derived from the new rural call completion rules.

Continue Reading...

Update: FCC Rejects Class Action Proposal

About a year and a half ago we alerted readers to a Petition for Rulemaking proposing that the FCC allow lawyers to file class actions on behalf of complainants. Rather than summarily toss the petition, the Commission invited public comments on it. And now, 19 months down the line, the Commission has tossed the petition.

Not surprisingly, the FCC sees no need to set up a new class action process when the federal courts are already highly experienced in handling such cases. Further, there’s the question of resources: the Commission recognizes that implementation of a class action process would suck up “considerable resources” and would entail various litigation-related activities with which the Commission has no experience. Why bother, when the existing complaint procedures already emphasize "streamlined and expeditious dispute resolution"? And anyway, there’s no evidence that folks who complain to the FCC would prefer to be shunted off into Class Action Land, that the Commission could force them to go that route in any event, or that their various complaints would necessarily raise the common issues of law and fact necessary for class action treatment.

So if you’re thinking of filing a class action, don’t waste time going to the FCC – just head to court straightaway.

Good Day Sunshine: "The Federal Communications Commission Process Reform Act of 2014"

Rob Schill shares his views on the latest Congressional effort to bid “good day” to the Sunshine Act.

[Blogmeister’s Note: The House recently passed H.R. 3675, the Federal Communications Commission Process Reform Act of 2014. If passed by the Senate and signed by the President, this bill would require the FCC to set certain deadlines and time limits for some of its activities, and also prepare some extra routine reports and the like. We’d go into greater detail on these nitty-gritty points if the bill were likely to get through the Senate, but the smart money currently says that that’s not going to happen, so we won’t bother our readers with unnecessary information. If the smart money turns out to have been wrong, for sure we’ll be reporting on the final bill.

One aspect of the House bill did attract our attention: a provision that would permit FCC Commissioners to meet in nonpublic sessions to discuss business. The longstanding Government in the Government in the Sunshine Act (the Sunshine Act) would ordinarily prohibit such closed door meetings, but the House is nevertheless apparently OK with letting the FCC bar the doors and shutter the windows. A nearly identical proposal was introduced in 2013. Our colleague, Kevin Goldberg, wrote – somewhat disparagingly – about it back then. In the interest of fairness and balance, this time around we’re offering a different take on the matter from our colleague, Rob Schill.]

The Federal Communications Commission Process Reform Act of 2014 (the 2014 Reform Act) raises the same essential question my friend and colleague Kevin Goldberg addressed last year: Is it conducive to “good government” to create an exception to the Sunshine Act that would allow more than two commissioners to meet privately when a few key transparency safeguards are included? Kevin and I reach different answers to that question.

The 2014 Reform Act seeks the happy medium between the competing needs of openness and administrative efficiency. The bill looks to provide for transparency and accountability while acknowledging the reality that the FCC often does not move at a pace consistent with the changing technology world it is tasked to oversee. The fact that the bill has bipartisan Congressional support, as well as the support of FCC members and industry representatives, suggests that perhaps Congress is onto something here. 

Continue Reading...

FCC Seeking Proposals for Rural Broadband Experiments

Some Connect America funding contemplated once policies, standards are set in second phase of proceeding.

The FCC is looking for proposals to bring advanced telecommunications services to rural Americans . . . and it’s planning on providing governmental cash to worthy proponents. To help it determine what projects will get funded and how much funding will be available, the Commission has launched a two-phase process. In the now-open first phase, prospective proponents have been invited to submit “expressions of interest” describing what they have in mind. In the second stage, the FCC will seek more detailed and definite applications, subject to resolution of certain policy issues in the Further Notice of Proposed Rulemaking (FNPRM) component of the Technology Transition Order. Comments on the FNPRM are due March 31. 

The Commission’s invitation is addressed to the widest range of communications service providers, including ILECs, CLECs, cable, utilities, fixed and mobile wireless, municipalities, Tribes, WISPs, and others. So if you’re interested in building high-speed, scalable IP-based networks in rural areas and maybe getting at least some federal funding in the process, listen up.

In its call for proposals, the FCC is focusing on proposals to build robust last-mile broadband, rather than middle mile projects. Proposed experiments described in expressions of interest must be for rural areas currently lacking Internet access service that delivers at least 3 Mbps downstream/768 kbps upstream.

The major goal here is to determine how the use of “tailored economic incentives” might encourage the deployment of next gen networks, wireline and wireless, in rural, high cost areas to which such networks have historically been slow to spread. In the FCC’s words, the experiment will “test, on a limited scale, the use of an application-based competitive bidding process with objective selection criteria”.

The Commission is currently considering what mechanism(s) to use in the award of Connect America funding support in price cap territories where the incumbent declines the offer of model-based support. One possibility would be for the FCC to use application-based competitive bidding, rather than a reverse auction. Another innovation: while such funding has previously been available only in areas served by price cap incumbent local exchange carriers, in this program it will also be made available in areas where the incumbent is a rate-of-return carrier.

Continue Reading...

First IP Transition Experiment Proposal Out for Comment

First in the door with a proposal: Iowa Network Services, with the help of one of our Fletcher Heald colleagues

As we reported last month, in late January the FCC released its Technology Transitions Order inviting proposals for service-based experiments designed to gauge the effects likely to be encountered as we shift from the legacy telephone network to an all Internet Protocol (IP) alternative. The target deadline initially set for proposals was February 20. And with lightning speed, the very next day the Commission released a public notice seeking comment on the first proposal, which had been filed on February 20.

We are pleased to report that that proposal, filed by Iowa Network Services, Inc. (INS), was prepared by our colleague (and occasional CommLawBlog contributor) James Troup on behalf of INS, an FHH client.

INS operates a statewide Centralized Equal Access (CEA) network in Iowa comprised of more than 2,000 miles of fiber optic cable and dual tandem switches. The network allows INS to aggregate rural traffic, centralize the provisioning of expensive features and functionalities, and help bring the benefits of advanced communications services and competition to rural areas of Iowa. INS connects service providers to more than 300 rural exchanges.

Continue Reading...

Upcoming Webinar: Paul Feldman on the IP Transition Trials

On the agenda: The FCC’s invitation for IP experimentation – how it will work, who stands to gain or lose, what it all means

No doubt about it: the transition from 20th telephone technology to 21st Century digital-based IP telephony is a game-changing development likely to affect service providers, equipment vendors, device manufacturers and, of course, the consuming public. As reported here by FHH telecom guru Paul Feldman, the FCC has invited telephone service providers to undertake experiments to identify and test the effects of the IP transition across the board.

If you’re looking for insight into the myriad questions arising from the FCC’s invitation to experimentation, Paul will be participating in a webinar on the IP transition order on Friday, February 28, 2014 at 1:00 p.m. (ET). Paul and fellow panelists Sam Harlan, VP-Engineering at CHR Solutions, and Ken Pyle, Managing Editor of Viodi View, will address a wide range of transition-related issues, including:

  • ŸWhat are some of the larger short-term and long-term implications of the order?
  • What companies may propose experiments? Are non-traditional carriers likely to try any pilot projects?
  • How will test results be fed back into something that is more permanent?
  • What are the potential dangers and opportunities for small carriers and vendors?
  • Who might be the winners and losers?

Best of all, the webinar, which is a production of Team Lightbulb, is FREE! You can register here.

Update: Most, But Not All, New 911 Rules Now In Effect

Some reporting, record retention requirements still in limbo pending OMB approval

In December we reported on a new set of rigorous requirements for 911 system service providers. And as we reported last month, most – but not all – of the requirements were set to take effect on February 18, 2014. However, also as we reported last month, two of the new rule sections impose new “information collections”; before they can take effect, those two sections (Sections 12.4(c) and (d)(1)) must be run through the Office of Management and Budget (OMB), a process that generally takes several months.

What we did not report in January was the fact that two additional sections (Sections 12.4(d)(3) and 4.9(h)) also impose “information collections” and must, therefore, also be shipped over to OMB. (We didn’t report that in January because the FCC didn’t acknowledge that those two were in fact “information collections” until a corrective announcement in February.)

To recap, then, now that February 18 is here, all “Covered Service Providers” must take reasonable steps toward providing reliable 911 service by conducting network monitoring and circuit audits and insuring the availability of backup power at any central office that serves a public safety access point.

But until further notice from the FCC, “Covered Service Providers” are not required to submit their annual reliability certifications (Section 12.4(c)) or their initial reliability certifications (Section 12.4(d)(1)). They are also not required to comply with the record retention obligations of Section 12.4(d)(3) or to report on outages potentially affecting a special 911 facility (Section 4.9(h))..

OSHA to Tower Industry: Protect Your Workers

With 17 preventable deaths in the last 14 months, regulators send a message to everybody involved with tower work.

A great many communications operations  – broadcasters, telecom, cable, public safety – utilize towers in some capacities. So it caught our attention when our friends at Radio World reported on an open letter released recently by David Michaels, Ph.D., MHP, addressed to “Dear Communication Tower Industry Employer”. The letter highlights an important area of regulation for anybody responsible for a tower. (You may know Dr. Michaels better as the Head Honcho -- technically correct title: Deputy Secretary for Occupational Safety and Health in the Department of Labor -- at the Occupational Safety and Health Administration (OSHA).)

The gist of the letter: There has been a rash of fatal accidents involving tower workers. Thirteen deaths in 2013, four more reported already in 2014.

And, according to Michaels, all of those deaths were preventable.

Aggravating that already tragic report is OSHA’s conclusion that a “high proportion” of the deaths occurred because of a “lack of fall protection” – either inadequate protection or failure to ensure that tower workers are using the available protection properly – for which the workers’ employers are responsible.

So Michaels is using his open letter to remind employers, in no uncertain terms, of their “responsibility to prevent workers from being injured or killed while working on communication towers”. Who is the target audience? Not only the company that hires the workers, but also tower owners and “other responsible parties in the contracting chain”.

Continue Reading...

Complete Waiver of Tower Inspection Requirement Sought

Section 17.47 of the FCC’s tower lighting and marking rules has two straight-forward requirements. One of those two provides that tower owners must inspect their tower(s) once every three months.

That’s a lot of work, especially if you own a whole bunch of towers. Because of that, back in 2007, two big-time tower owners – American Tower and Global Signal – asked for, and got, a break. As we reported back then, the Commission agreed to waive the inspection-every-three-months requirements. The FCC was particularly swayed by the fact that both companies had state-of-the-art remote tower monitoring systems: American Tower was using the Eagle Monitoring System, Global Signal the HARK Tower System. As a result, the FCC agreed to waive the quarterly inspection requirement to a once-a-year event for tower owners using the Eagle, HARK or similar systems. (The Commission eventually adopted an expedited process for waiver requests based on the use of such systems.)

Reducing the inspection chore by 75% provided considerable relief. But over the six-plus years since its waiver was first granted, American Tower still rang up nearly $10 million in costs conducting some 39,000 annual inspections. So now it has come back to the FCC for a further waiver: it wants to be relieved of any inspection requirement; the computer-based monitoring system can handle everything that needs to be handled.

Obviously, the cost of complying with the inspection requirement is a boatload more for American Tower, which owns a gazillion towers, than for most folks. And the cost of installing and maintaining an adequate monitoring system is not inconsiderable. But all tower owners should give some thought to whether the requested waiver might make sense for them. If it would, then it might be a good idea to throw in some comments in support of American Tower’s request.

Comments on the American Tower proposal are due by Valentine’s Day; reply comments are due by February 21.

Telecom Tickler 2014 - CPNI Certifications Due By March 3

It’s that time of year again – time for our annual reminder to all telecommunications carriers and interconnected VoIP providers that your CPNI certifications are due by March 3, 2014. While the Enforcement Bureau has announced the deadline as March 1, it appears not to have noticed that in 2014, March 1 is a Saturday. Thanks to our old friend Section 1.4(j) of the FCC's rules, when a filing deadline falls on a holiday -- and the rules do indeed specifically confirm that Saturdays are "holidays" -- the deadline rolls over to the next business day, which in this case will be Monday, March 3.

As described by the Enforcement Bureau, CPNI – Customer Proprietary Network Information to the uninitiated – includes “some of the most sensitive personal information that carriers have about their customers as a result of their business relationship”. Think phone numbers of calls made or received, or the frequency or duration of calls, etc. . . . basically the same stuff the NSA has apparently been collecting for years. While the NSA is not required to file CPNI certifications with the FCC, telecom carriers aren’t so lucky.

The Bureau has issued a convenient “Enforcement Advisory” to remind one and all of the fast-approaching March 3 deadline. Like similar advisories in past years, this year’s includes a helpful list of FAQs and a suggested template showing what a certificate should look like. The only noteworthy change from last year: the potential per-violation fine has risen to $160,000 (from last year’s $150,000), and the maximum potential fine for a continuing violation has been similarly jacked up, to $1,575,000 (from last year’s $1,500,000).

As those potential fines indicate, the Commission takes this reporting requirement very seriously. Historically it has doled out five-digit fines to non-compliant carriers. In fact, the FCC’s zeal is such that, in many instances, it has initiated forfeiture proceedings even against carriers who, as it turned out, had fully complied with the rules.

Continue Reading...

FCC Invites Experiments To Test Effects of All-IP Telephone Network.

Commission seeks data for critical policy dialogue; coming changes may particularly affect smaller carriers – and their customers.

Major changes are coming to the telephone system that provides the interconnected communications system on which American society has long depended. For more than 125 years that system has been based on a circuit-switched, mostly copper-wire-based public switched network (PSTN) – nowadays sometimes called a “Time Division Multiplex (TDM)” network. But networks based on Internet Protocol (IP) technology have begun to replace the PSTN. The FCC has now expressly acknowledged that the “the global multimedia communications infrastructure of the future” will consist of all-IP networks very different from the circuit-switched technology we have been used to since Alexander Graham Bell.

And with that acknowledgement, the FCC has now started to take steps to identify and assess the effects that the fundamental technological overhaul of our nationwide phone system are likely to have on phone companies, consumers, and the FCC’s own ability to achieve its statutory responsibilities.

To that end, the FCC has invited proposals for “service-based” experiments designed to illuminate and inform the transition to IP-based service. Reflecting the seriousness and urgency of its purpose, the FCC has set an unusually short deadline for the submission of the initial round of experiment proposals: they are due by February 20, 2014, a mere three weeks after the FCC’s call for those proposals. Potential experiment proponents will need to get moving quickly, as will parties wishing to comment on any proposals that are ultimately filed: comments are due by March 21.

Continue Reading...

Size Still Matters to M&A Regulators

As usual, triggers for automatic merger and acquisition review have been revised.

As the recovery from the economic turmoil of the late oughts gathers steam, the federal government has performed its annual ritual of gazing into its crystal ball, furrowing its regulatory brow, and announcing the thresholds it will use for automatic federal review of mergers and acquisitions for the coming year. 

The FCC, of course, can choose to review, or not to review many, if not most, communications-related transactions in detail before issuing an approval.  On the other hand, Congress long ago deemed that the Department of Justice and the Federal Trade Commission must review transactions that cross certain dollar amount thresholds.  The dollar amounts of those thresholds for the rest of 2014 have now been announced.  They are set to take effect as of February 24, 2014.  Readers considering a merger or acquisition should bear in mind that the administration automatically will be sending at least two agencies to take a closer look at transactions where either:

  • the total value of the transaction exceeds $303,400,000; or
  • the total value of the transaction exceeds $75.9 million and one party to the deal has total assets of at least $15.2 million (or, if a manufacturer, has $15.2 million in annual net sales) and the other party has net sales or total assets of at least $151.7 million

The new thresholds also affect the filing fees that parties to a deal have to pay the government for the pleasure of going through the review process. (Fees are split between the FTC and the Department of Justice.) For most of 2014, any deal subject to review and valued at less than $151.7 million will pay a $45,000 fee. (Used to be that deals coming in at a mere $100 million got to pay that.) For deals valued at more than $151.7 million but less than $758.6 million, the review fee will be $125,000. And if you’re proposing a deal valued at more than $758.6 million, get set to fork over a tidy $280,000.

When negotiating deals, all parties would be well-advised to bear these thresholds in mind. Once those lines are crossed, the prospect of additional (and considerable) time, expense and hassle to navigate the federal review process is a virtual certainty.

Update: Effective Date Set for Most New 911 System Service Provider Rules

Last month we reported on a new set of rigorous reporting requirements to which 911 system service providers will be subject. The Commission’s Report and Order laying out the new requirements has now been published in the Federal Register, which means that they will become effective as of February 18, 2014 – EXCEPT FOR new Sections 12.4(c) and (d)(1). Those sections – which include the specs for the new Annual Reliability Certification and Initial Reliability Certification – involve new “information collections” which must be run through the Paperwork Reduction Act drill before they can take effect. That process generally takes several months to complete. Check back here for updates.

Comm Act Overhaul Underway . . . Sort of

Commerce, Communications Committee chairmen seek public input on fundamental questions about federal regulation of communications

It’s generally acknowledged that the Communications Act – first enacted four score years ago and not substantially updated in nearly 20 years – is ill-suited for regulation of the 21st Century communications landscape. And now two well-placed members of Congress have announced the start of an effort to update the Act and perhaps restructure the FCC itself.

Given the prominence of the folks making that announcement, anyone subject to the FCC’s regulatory reach should pay attention. But before you get overcome with visions of sweeping change just around the corner, it’s important to temper your expectations with a healthy splash of reality: any significant change to the Act that may occur isn’t likely to happen in the immediate future, if at all.

The two gentlemen responsible for the latest initiative are Fred Upton (R-MI) and Greg Walden (R-OR), the Chairs of, respectively, the House Energy and Commerce Committee and that Committee’s Communications and Technology Subcommittee. You can see them explain their plans in a 13-minute video posted on the Committee’s website. To summarize: Noting that (a) the FCC first opened its doors in the Great Depression and (b) the last time the Act was amended, 56 kb/s by dial-up modem was the state of the art, Upton and Walden sensibly feel that it’s time to talk about an update.

The emphasis, though, is more on the “talk” part than the “update” part.

Continue Reading...

Can the FCC Handle Phone Service over the Internet?

Regulating IP telephony will be like updating the rules of the road from horse-and-carriage traffic to modern automobiles.

Slowly and carefully, the FCC is circling around a problem that may be its hardest ever. The digital TV transition? Piece of cake. First-on-the-planet incentive auctions? No sweat. But this one is tough: nothing less than a remake of the U.S. telephone system, all 120 million phones and 1.5 billion miles of wire.

The engineers and entrepreneurs have gotten out ahead of the FCC lawyers. Now the lawyers are scrambling to catch up.

Bell’s System

Imagine you’re Alexander Graham Bell. It’s 1876. You’ve just finished constructing the first two working telephones. You have made the first ever telephone call, to your assistant in another room: “Mr. Watson, come here, I want to see you.” The call needed a pair of copper wires between the telephones, to carry an electrical signal whose variations matched the sound waves of your voice.

Now you’re ready to scale, as we say these days – to start the rollout that will place a telephone in every home and business. Your problem: just like that first time, any two telephones on a call must have a pair of wires connecting them.

Continue Reading...

Update: Effective Dates Announced for Some (but Not All) of the New Rural Call Completion Rules; Comment Deadlines set for Proposed Rules

Last month we reported on the Commission’s Report and Order and Further Notice of Proposed Rulemaking (R&O/FNPRM) aimed at addressing the problem of failed telephone calls placed to small towns or rural areas. The R&O/FNPRM has now made it into the Federal Register in two separate parts. The R&O portion includes the rules that the Commission has already adopted, and the FNPRM portion includes the further contemplated changes about which the FCC has invited comment.

Federal Register publication, of course, means that effective dates and comments deadlines have now been established.

According to the Register notice, the newly adopted rules will become effective on January 16, 2014. Before you mark your calendars, though, be advised that that date appears to apply only to Section 64.2101, which consists of definitions. Section 64.2201, which specifies ringing indication requirements, will not take effect until January 31, 2014, and the various retention and reporting requirements (set out in Sections 64.2103, 64.2105 and 64.2107) won’t take effect until further notice because they have to run past the Office of Management and Budget thanks to the Paperwork Reduction Act.

As far as the FNPRM is concerned, comments may be filed by January 16, 2014 and reply comments by February 18, 2014.

FCC Imposes New Requirements for 911 System Service Providers

Commission addresses numerous systemic failures in 911 service that surfaced after 2012 “derecho” storm.

In a matter of hours on June, 2012, a powerful, fast-moving, killer storm (dubbed a “derecho”) swept from the Midwest to Northern Virginia, a silver-dollar’s-throw across the Potomac from the FCC’s headquarters. It laid bare severe shortcomings in 911 service: from isolated breakdowns to systemic failures, 911 service was unavailable (or at least unreliable) for millions of residents for extended periods.

In the wake of that unacceptably poor performance of a critical public safety function, the FCC completed an extensive review of the 911 system begun in 2011. As a result of that review, the FCC has now imposed on 911 system service providers (SSPs) a new and rigorous set of requirements. (This latest action is separate from, but motivated by some of the same concerns as, the FCC’s Notice of Proposed Rulemaking released last September looking to require facilities-based Commercial Mobile Radio Service providers to provide daily public reports of the percentage of cell sites operating in their networks during and immediately after major disasters.)

SSPs are, generally speaking, wireline phone companies that route 911 calls from wireline and wireless phones to 911 call centers. Historically, SSPs have not been subject to detailed regulatory requirements relative to system maintenance and monitoring. Instead, the Commission has expected SSPs to voluntarily adhere to a number of “best practices” developed by several industry organizations, including (a) the Network Reliability Steering Committee (NRSC) of the Alliance for Telecommunications Industry Solutions, (b) the Network Reliability and Interoperability Council (NRIC) and (c) the Communications Security, Reliability, and Interoperability Council (CSRIC). The FCC did require SSPs to keep track of, and report, outages. Analysis of the outage reports – by both the FCC and the reporting SSP – was thought to provide adequate information, and impetus, to assure the identification and correction of any systemic problems.

The FCC’s review of the 911 system, however, demonstrated convincingly what the derecho experience had strongly suggested: the voluntary approach didn’t work, and the submission of outage reports didn’t uncover the resulting problems.

Continue Reading...

More 411 on 844: New Toll Free Numbers Up For Grabs as of 12/7/13

With toll free numbers fast running out, FCC declines to delay roll out of new toll free code despite concerns about possible abuses.

If you’ve got your eye on a vanity toll free telephone number you’d like to use – or if you might want to expand an existing vanity number to include another toll free area code – listen up: New toll free area code 844 is about to make its debut. And now the FCC has announced how numbers in that area code are going to be assigned.

Last summer we wrote about the new toll-free code, which is set to become available at noon (ET) on December 7, 2013. At that point area code 844 will join the ranks of 888, 877, 866, and 855, along with the original toll-free 800 code. 

All toll free numbers are administered by SMS/800, Inc., which oversees the toll free Service Management System for the North American Numbering Plan. Entities known as “Responsible Organizations” – usually referred to simply as “RespOrgs” – can access the SMS/800 database and reserve particular numbers. If a subscriber wants a particular toll free number, it contacts a RespOrg, which in turn obtains the number for that subscriber from the database.  A RespOrg is not supposed to reserve any number unless the RespOrg is doing so at the specific request of a telephone subscriber.

Anticipating an initial rush for numbers using the new 844 code, the FCC asked for comment on how distribution of those numbers should be handled. Its conclusion: limit each RespOrg to 100 numbers per day for the first 30 days. (The FCC imposed a similar limit when area code 855 first came on line.) After the first 30 days, the usual rule will come back into effect for numbers in the 844 code: like other toll free numbers, they will be assigned on a first-come, first-served basis.

Continue Reading...

FCC to Telemarketers: Get It In Writing!

New FCC rules requiring express written consent now in effect

If you’re a for-profit company that engages in or relies on telemarketing, BEWARE! Rule revisions adopted by the FCC nearly two years ago have recently taken effect. Those revisions, adopted pursuant to the Telephone Consumer Protection Act (TCPA) impose significantly tighter restrictions on certain telemarketing activities. Since the number of potentially expensive TCPA-based law suits targeting telemarketers continues to grow, everyone involved in such activities should pay close attention to the revised requirements.

The TCPA, enacted more than two decades ago, is Congress’s effort to protect consumers from unsolicited telephone and fax advertising. The particular TCPA-based rules at issue here involve: (1) autodialed or pre-recorded telemarketing calls to cell phones; and (2) telemarketing calls, to any residential line, using an artificial or prerecorded voice. Historically, both types of call have been permitted under certain limited circumstances. The new rules tighten up those limited circumstances considerably.

First things first. What is “telemarketing?”, you ask. The FCC defines it (in Section 64.1200(f) of the rules) as

the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person.

Some telemarketing calls, often referred to as “robocalls”, are made using automatic dialing equipment (autodialers); some may include prerecorded or artificial voices. With few exceptions, all telemarketing calls require some form of consent on the part of the party being called.

Continue Reading...

Commission Starts to Address Rural Failure(s) to Communicate

With new reporting requirements, FCC begins effort to crack down on rural call impairment.

Acting with impressive speed (a mere nine months after issuing the underlying Notice of Proposed Rulemaking (NPRM)), the FCC has adopted new rules designed to increase its ability to monitor, and correct, the “frequent and pervasive” problem of failed telephone calls to small towns and rural areas. The new rules mark an important first step toward safeguarding the integrity of our nation’s telecommunications network and protecting the consumer’s right to communicate without service provider interference or intrusion. The FCC has done the right thing, giving priority to the rights of consumers to have their calls completed without interruption or degradation.

The new data collection and reporting requirements – adopted in the face of extensive lobbying by large telephone companies seeking exemptions that would have rendered the new rules useless – should provide the FCC with the tools to uphold the social compact between carriers and consumers. In the words of the new FCC Chairman Tom Wheeler, the Commission is looking to “make networks work for everyone.”

Whom do the new rules apply to? “Covered Providers” – defined here as any provider of long distance voice service that makes the initial long distance call path choice for more than 100,000 domestic retail subscriber lines. So long as the 100,000 line threshold is met, a Covered Provider can be an ILEC, CLEC, interexchange carrier (IXC), CMRS provider, or a voice over Internet protocol (VoIP) service provider – both one-way and two-way VoIP. (Some VoIP providers argued that the FCC didn’t have the authority to impose rules on them; the Commission rejected those challenges.)

Continue Reading...

Form 499-A Instructions: Comment Sought (Again) on Proposed Changes

The latest version of the FCC’s clarification on reseller certification language recommended for use by wholesale telecommunications providers is now available for comment.

The FCC’s Wireline Competition Bureau is seeking comment on another round of proposed changes to the Form 499-A and Form 499-Q instructions. The latest proposals contain (among a few other things) what many hope will be the final version of the “reseller certification” language for use starting next year. (Reseller certifications are what wholesale telecommunications providers rely on to ascertain applicable Universal Service Fund (USF) contribution obligations.)

Our regular readers will recall that the Commission’s “Wholesaler-Reseller Clarification Order” from nearly a year ago promised clarification to the reseller certification language in the upcoming Form 499-A instructions.  As we observed last March, that clarification was missing from the instructions released earlier this year. Then in August we reported that a group of wholesale telecommunications providers had offered suggested revisions to the reseller certification language and other aspects of the FCC Form 499-A instructions.

(If you need to refresh your recollection of the information in our previous posts, now would be a good time to go back through them again. That background will be helpful for what follows.)

Continue Reading...

Meet the New Boss(es) . . .

. . . same as the old bosses? Wheeler, O’Rielly finally confirmed.

OK, readers, how about a big “welcome aboard” to the two newest arrivals on the Eighth Floor?

The Senate has confirmed Tom Wheeler and Michael O’Rielly as Chairman and Commissioner, respectively, of the Federal Communications Commission. They are expected to be sworn in as soon as possible. The confirmations return the FCC to a full complement of five commissioners. 

For those keeping score, Wheeler will be the third Democrat commissioner (joining Commissioners Mignon Clyburn – previously the Acting Chairwoman – and Jessica Rosenworcel) while O’Rielly will be the second Republican (along with Commissioner Ajit Pai).

The confirmations were delayed briefly when Senator Ted Cruz placed a procedural hold on them because of concerns about possible changes in FCC policy to expand mandatory disclosures relative to television political advertisements. Wheeler and Cruz had a sit-down chat about the matter, during which Wheeler advised Cruz that imposing such disclosure requirements was “not a priority”. Cruz was apparently satisfied, and he lifted his hold.

With that, the normally creaky Congressional wheels suddenly began to spin with impressive ease. During the last two minutes of the Senate session immediately following Cruz’s announcement, Senate Majority Leader Harry Reid asked for unanimous consent that the nominees be confirmed. No objection was voiced, and that was that. 

The record will reflect that, also in those last two minutes, the Senate unanimously approved the designation of November 2, 2013, as National Bison Day. And, just in time (since the month was already pretty much gone), it approved the annual designation of October as National Work and Family Month.

Continue Reading...

Yeah, Who DOES Need the FCC?

A counterpoint to Mitchell Lazarus’s similarly-titled, but philosophically different, post.

[Blogmeister’s Note: When we posted Mitchell Lazarus’s item concerning the need for the FCC, we anticipated push-back. And sure enough, our colleague Jon Markman has stepped up. The views expressed in the post below are Jon’s alone. As was the case with Mitchell’s post, others here at FHH may share some or all of Jon’s views; some may not. Ditto for our readers. We again encourage anyone who agrees or disagrees with Jon to let us know by sending along a comment.]

In a recent post here on CommLawBlog, my colleague Mitchell Lazarus addressed some core functions of the FCC that make it “not only valuable, but indispensable to how we live”. With all due respect to Mitchell – who has forgotten more about the FCC, spectrum, and telecom law in the last month than I could hope to learn in a decade – I would like to offer a different take.

The government shutdown prompts a conversation on just what are the “essential” tasks of the Federal government (keeping in mind that the Federal government is just one of the many levels of government we have in the U.S.).

In his post, Mitchell alluded to some of the extreme posturing inspired by the government shutdown, such as claims that the shutdown demonstrated the irrelevance of the Federal government and proved that smaller government is good and no government is even better. I tend to believe that this was mostly rhetoric used by one side to rally their base and/or strengthen their bargaining position in the budget negotiations; I suspect that the speakers in fact support much of what the Federal government does. But insofar as they were representative of honest beliefs, they are indicative of a far more extreme position than the norm.

Continue Reading...

Who Needs the FCC?

The operation of our culture and commerce depends on at least three of the FCC’s functions.

[Blogmeister’s Note: Despite Blogger Mitchell Lazarus’s use of the editorial “we”, the views expressed in this post are his alone. Others here at FHH may share some or all of his views; some may not. Ditto for our readers. We encourage anyone who agrees or disagrees with Mitchell to let us know by sending along a comment.]

The recent government shutdown was applauded by some who believe that small government is better, and so, by extension, that no government at all must be better still.

That got us to thinking. Not about the whole government, just the piece we know best: the FCC. Suppose the FCC closed for good. Would anybody notice? (Other than us; we’d have to find another line of work.)

In other words: How essential is the FCC to a functioning society?

A lot of what the FCC does has social value, in the eyes of many. But set that aside. Are any of the FCC’s responsibilities not only valuable, but indispensable to how we live?

We wouldn’t ask the question unless we had an answer.

Continue Reading...

Buddy, Gonna Shut You Down (Reprise)

Tach it up! Tach it up! For the second time in two and a half years, FCC moves to DefCon1 in anticipation of government shutdown.

We posted a heads-up alert last week about the possible shutdown of the federal government and the effect that that could have on licensees. Now the FCC itself is getting into the act. It has just posted on its website a “Plan for Orderly Shutdown Due to Lapse of Congressional Appropriations”. The Commission’s plan allots a total of four hours to complete “orderly” shutdown procedures.  They’re figuring that, of a total of about 1,750 agency employees, only 38 will be manning the battle stations during the shutdown; everybody else will have to go home and shelter in place . . . but only after they have completed their orderly shutdown procedures. (Comforting factoid: All three Commissioners will stay on board through the shutdown.)

Unfortunately, the Plan doesn’t shed any light on practical questions of importance to us out here in the Real World. For instance, will the Commission’s various e-filing portals remain open and operational? We don’t expect that anything that might get filed during the shutdown (assuming that any of those portals do stay up and running) would be given a file number or be processed in any way during the shutdown, but it would still be a relief to be able to file applications, etc., even if they remain untouched by any bureaucratic hand for the duration.

[UPDATE: Since we first posted the above item we have been informally advised by a member of the Media Bureau’s staff that no FCC systems will be available for any purpose during the shutdown. From this it’s probably reasonable to conclude that CDBS, ULS and the Commission’s other online filing systems are going to be shut down for the shutdown. It’s not entirely clear why that should be the case, since the Commission routinely closes up shop – every weekend, for instance, and all federal holidays – without feeling the need to seal off its e-filing portals. But we don’t make the news here, we just report it – and the word we’re getting is that uploading of materials through the Commission’s online systems will not be a happening thing during the shutdown.]

Foreign Ownership Questions? Frank Montero, Don Evans May Have Some Answers

FHH foreign ownership gurus on the bill in upcoming webinar

If you’re interested in the FCC’s recent relaxation of its foreign ownership rules – and the impact that that relaxation might have on commerce nationally and globally – check this out. FHH mavens (and regular CommLawBlog contributors) Don Evans and Frank Montero will be sharing their expertise in a webinar on October 23, 2013. Titled “What the FCC’s Relaxed Foreign Ownership Regulations Mean for Global Commerce”, the gig is billed as a webinar for folks who advise communications and broadcasting companies, professionals involved in media ownership and regulation, and pretty much anybody dealing in international commerce. It may even qualify for continuing legal education in some jurisdictions. Such a deal! The 90-minute affair is sponsored by Bloomberg BNA.  Consult the registration page for information about admission fees (there are several options),CLE details, other webinar panelists and the like.

Update: Initial Effective Date for Form 477 Expansion Plan Set

Last month we reported on changes to the Commission’s Form 477 Data Program, which collects information from broadband and voice service providers. The Report and Order setting out those changes has now made it into the Federal Register, meaning that some – but not all – of those changes will take effect on September 12, 2013. Which parts didn’t make the cut? Those would be the new “information collection” components, which can be found in Sections 1.7001, 1.7002, 43.01 and 43.11. As we mentioned in our earlier post, such information collections have to be run through the Office of Management and Budget for its thumbs up pursuant to the hilariously named Paperwork Reduction Act. That process usually takes several months. Check back here for updates.

Form 499-A Instructions: The Industry Suggests an Alternative

The FCC seeks comment on proposed changes to the Form 499-A instructions submitted by a group of wholesale carriers.

The Commission is on a constant crusade to ensure that all telecommunications providers who are supposed to be contributing to the Universal Service Fund (USF) are in fact doing so . . . and doing so in the proper amounts. Last month the FCC received some help from the private sector in the form of a letter – filed jointly by eight wholesale telecommunications providers (including Verizon, AT&T, Sprint, CenturyLink and XO Communications) – offering suggested revisions to the “reseller certification” language, and other aspects, of FCC Form 499-A. 

And now the Wireline Competition Bureau (WCB) has solicited input on the proposal.

The USF, of course, is a program which supports several federal, telecom-related, subsidy programs. It is funded through mandatory “contributions” – the guv’mint prefers that you don’t call it a tax, even if it looks like one – from telecommunications providers based on their “end-user” revenues. (More below on what constitutes an “end-user”.) The providers traditionally don’t dip into their own pockets to make the payment; instead, they simply pass the cost along to their customers in a separate line item charge. Still, providers want to be sure that they aren’t overpaying, while the Commission wants to make sure that all are paying their fair share.

Which brings us to Form 499-A.

Continue Reading...

The 411 on 844: A New Toll-Free Area Code Coming Soon

Toll-free phone numbers using the next area code in the 800 series will be up for grabs starting this December.

A new toll-free area code is about to become available. Put your hands together for 844, which is set to join the ranks of 888, 877, 866, and 855, and, of course, the venerable 800.  844 will be the sixth toll-free code. Two more are on deck for future use – 833 and 822. Note: 811 is not a toll-free area code; rather, that has been reserved for the “Dig Safe” (formerly known as “Miss Utility”) three-digit dialing code used to notify the appropriate folks of planned excavation that might disrupt underground pipes or wires.

The establishment of a new toll-free area code gives rise to potential opportunities and problems. You’ve got four months to figure out what it might mean for you.

Before we get into all that, though, we must express our surprise that the demand for toll-free numbers continues to mushroom. After all, many people are migrating from conventional landlines to cellphones and IP-based services which don’t charge for what we used to call “long distance” calls. If there is no toll, why worry about setting up toll-free numbers? We don’t know, but we do know that the demand continues unabated. 

How unabated?

Continue Reading...

Update: Deadlines Set for Responses to CTIA Recon of Text-to-911 Bounce-Back Rules

A couple of weeks ago we reported that CTIA-The Wireless Association® had filed for reconsideration of the Commission’s new text-to-911 “bounce-back” rules. The official notice of that filing has now made it to the Federal Register, which starts the opposition and reply periods. Anyone inclined to oppose CTIA’s petition has until August 15, 2013 to do so; CTIA will then have until August 26 to respond.

Foreign Ownership Rules Loosened For Common Carrier and Aeronautical Licensees

FCC relaxes alien ownership restrictions for some, but NOT all, services.

While Congress continues to debate fundamental issues of immigration policy, the FCC has taken steps to make it considerably easier for aliens to own controlling and non-controlling interests in common carrier and aeronautical stations. The odd result is that aliens can now own such licenses but may find it difficult to immigrate here to operate them.

As we reported when the FCC initially proposed changing its alien ownership rules, the impetus for the FCC’s Second Report and Order (Second R&O) was two-fold. First, the Commission recognized that its cumbersome alien-ownership approval process was impeding foreign investment in the United States at a time when capital investment is being strongly encouraged. Second, the process of trying to identify exactly who a company’s foreign owners are and where they are from can be difficult, if not impossible. The Commission and its regulatees found that they were spending inordinate amounts of time and money trying to ascertain where alien owners were from for purposes of the rules without any concomitant public benefit for the effort involved.  

While the new rules retain the basic structure of requiring prior FCC approval for aliens either to: (a) indirectly control a US common carrier licensee, or (b) own more than 20% of a licensee company, they greatly simplify the procedures and detailed ownership accounting that created so much wasted effort. We hasten to emphasize that the rules continue their very strong prohibition on alien ownership or control of broadcast licensees above the benchmark levels, even though those licenses are statutorily eligible for the same treatment as common carrier and aeronautical licenses. This disparate treatment is coming under increasing attack, most directly by Commissioner Pai. For the time being the disparity remains firmly in place, although the Commission has invited comment on a request for “clarification” of limitations on alien ownership of broadcast licensees.

Here are some of the highlights of the new rules:

Continue Reading...

Form 477 Expansion Plan

FCC expands data collection program for broadband/voice service providers; someday the FCC will also want to know what planet you’re from.

FCC <3 DATA. (Translation from the ’net-speak: The FCC loves DATA.) In particular, the kind of data that broadband and voice service providers are required to report and that, presumably, assist the FCC in making informed policy decisions.

So we probably shouldn’t be surprised that the Commission has decided to collect even more of it through a modified “Form 477 Data Program” as broadband and voice services continue to evolve (but not quite to this level . . .yet).

FCC Form 477 has been around since the turn of the century. Many providers of broadband, local and mobile phone, and interconnected VoIP services are already familiar with it, since they’ve had to file it twice a year for some time now. But get ready, the FCC has now made several changes to the types of data it will be collecting.

The changes are part of an overall Commission effort to comply with requirements of the Broadband Data Improvement Act and the FCC’s own recommendations in the National Broadband Plan.  Also spurring the changes: next year the Commission will be assuming responsibility for collection of broadband deployment data under the State Broadband Initiative program.  Historically, the National Telecommunications and Information Administration has taken care of that chore, but that’s set to end in the fall of 2014.

So, starting most likely in 2014, through its modified Form 477 program the FCC will be collecting even more data about:

Continue Reading...

Update: Reconsideration of Text-to-911 Bounce-Back Details Sought

CTIA says the roaming responsibilities imposed by FCC can’t be implemented technologically.

In May we reported on the FCC’s adoption of new rules requiring that bounce-back messages be provided in situations where a person sends a text message to “911” but text-to-911 capabilities are not actually available. Text messaging service providers must be able to “do the bounce-back” by this September. As it turns out, not everyone is totally tickled pink with the new rules. CTIA – The Wireless Association®, for one, doesn’t like the way the new rules would be applied to roaming situations.

For those of you who – like Justice Scalia (check out Footnote 1 in the linked opinion) – may not be familiar with CTIA – The Wireless Association®, it’s the trade group repping the international wireless telecom industry. “CTIA” originally stood for “Cellular Telephone Industry Association”, but that later transmogrified into “Cellular Telecommunications & Internet Association” and, eventually, into the quasi-acronymic “CTIA – the Wireless Association®” (don’t forget the R-in-a-circle registered trademark symbol!). 

As adopted, the FCC’s new bounce-back rules make a wireless carrier responsible for providing bounce-back messages to a consumer “roaming” on its network. But, according to a Petition for Reconsideration filed by CTIA, this is technologically impossible – at least just now – due to the way text messaging works in roaming situations. Apparently, however, a consumer’s “home” wireless carrier is able to provide bounce-back messages to its own customers while they are roaming on another network. Thus, CTIA is asking the Commission to modify the bounce-back rules to “allocate carrier responsibilities in a way that aligns with technical realities.”

The FCC has released a Public Notice announcing the filing of CTIA’s petition. Oppositions to the petition will be due within 15 days after notice is published in the Federal Register.  Check back here for updates.

(REMINDER: Text-to-911 service is not yet widely available. Calling 911 is preferable to texting 911 in most circumstances. It’s still advisable to refrain from sending text messages to 911 unless you can’t make a voice call for some reason in an emergency situation.)

Update: Comment Deadlines Set in Government/Private Sector Spectrum Sharing Proceeding

In May we reported on a Notice of Proposed Rulemaking (NPRM) looking to alter the way in which certain spectrum is to be shared between the government and private users. The NPRM has made it into the Federal Register, so we now know what the comment deadlines are. Comments may be filed by August 30, 2013, and replies by September 30.

Number, Please! Comment Deadlines Set in Telephone Numbering Proceeding

In April we reported on a Notice of Proposed Rulemaking and Notice of Inquiry (NPRM/NOI) in which the FCC has proposed changes in how telephone numbers are obtained by certain types of providers. The ultimate upshot of the Commission’s proceeding could eventually mean serious changes in what we understand a telephone number to represent. The NPRM/NOI has now been published in the Federal Register, which (as loyal readers should know by now) sets the deadlines for comments and reply comments. Anyone interested in commenting has until July 19, 2013; reply comments are due by August 19.

Raisin' Defenses at the FCC

A Supreme Court case offers a possible route to appealing a forfeiture without having to pay it first.

A pair of California raisin farmers might have made it easier to challenge an FCC forfeiture.

A party dinged with a forfeiture that it thinks is unfair now has two options under the Communications Act. One is to challenge the forfeiture order directly in the Court of Appeals. The problem with that approach is that, as a condition to getting into the Court of Appeals, the challenger must first pay the forfeiture. Since forfeitures can reach up into six and seven figures and, let’s face it, not everyone has that much spare cash lying around, that condition poses a serious disincentive to direct appeals.

The other option is to not pay the forfeiture and wait for the FCC (assisted by their friends from the Department of Justice) to bring suit in your nearest federal District Court. In that case, the burden is on the government to prove that you are in fact really liable for the forfeiture, which gives you an arguable advantage going in. But at least one appellate court has held that a party choosing this option is not allowed to raise the full panoply of defenses that might normally be available in challenging the forfeiture.

What does this have to do with raisins?

Continue Reading...

Update: Effective Date Set for Text-to-911 Bounce-Back Rules

The new requirements relative to text-to-911 bounce-back messages have been published in the Federal Register, which means that they are technically set to become effective on June 28, 2013. As a practical matter, that effective date is meaningful only to the lawyers, since the “bounce-back” obligation won’t have to be implemented by carriers until September 30. But the Federal Register publication does set the dates for seeking reconsideration (June 28) and judicial review (July 29).

Coming Soon, Universal Text-to-911; Coming Sooner, Bounce-Back Messages

FCC looks to eliminate possibly dangerous confusion over spotty availability of text-to-911 service. 

Text messaging is rapidly becoming the preferred method of communication by smartphone and tablet users. Trillions of texts are sent each year. But many emergency assistance providers – the folks on the receiving end of 911 calls – aren't yet ready to adapt to the trend. Although texting to 911 will be part of the next generation 911 technical standard, emergency dispatch centers are currently able to receive text messages in only a few select areas.

So if you’re in an emergency, and you text 911 about your dilemma, how do you know whether the message was received and help is on the way? The bad news: you don’t. The good news: by September 30, 2013, you will, thanks to new “bounce-back” requirements adopted by the FCC.

The move is part of the on-going effort, by the Commission and the wireless industry, to provide more effective emergency communications services. Last year, in an agreement with the National Emergency Number Association and the Association of Public Safety Communications Officials (APCO), the largest nationwide cell phone carriers -- Verizon, AT&T, Sprint and T-Mobile -- voluntarily committed to make text-to-911 services available by May 2014. 

But just because the Big Four can do it doesn't mean that the smaller carriers will follow suit. Since 911 is a universal number which consumers expect to work everywhere, the FCC has issued a Further Notice of Proposed Rulemaking (FNPRM) looking to develop guidelines for text-to-911 deployment by all carriers. Text-to-911 will significantly improve access to emergency 911 services in a wide range of circumstances. It will be a boon to individuals with hearing or speech disabilities who cannot make voice calls, for instance. It will help in those (ideally) rare situations where a voice call might be dangerous (the burglar is in the house, and you’re hiding). Since text messaging uses the spectrum more efficiently than voice, text-to-911 will also help ease the load on networks otherwise blocked by congestion or outages (earthquakes and tornadoes, for example).  

But universal text-to-911 capability won’t happen overnight.

Continue Reading...

2013 Reg Fees: The FCC Proposes a Couple of Alternatives

Commission looks to update its methodology for calculating regulatory fees, but proposes a possible alternative approach to cushion the blow this year.

One of the time-honored rites of spring – at least at the FCC – is the release, every April or May, of a Notice of Proposed Rulemaking setting out the schedule of regulatory fees the Commission thinks it may impose on all regulatees come August-September. Historically, we here at CommLawBlog have tried to be Johnny-on-the-spot in letting our readers know the fees that have been proposed, even though the fees that eventually adopted (usually in July) may vary here and there from the initial proposal.

But this year is different.

Instead of providing one set of proposed fees, the Commission has given us a Notice of Proposed Rulemaking (NPRM) laying out two sets of possible fees . . . because it’s in the process of a much-needed update of its calculation methodology, and it’s still not sure: (a) whether the new approach is exactly right and, even if it is, (b) whether that new approach should be applied this year. Depending on which method it ultimately adopts, the fees for some broadcasters could swing by a couple of thousand dollars. As a result, we’ve had to prepare a more elaborate table reflecting the proposals, so we’re a day or so behind our usual curve. Please bear with us.

To understand what’s going on here, you have to understand how reg fees are calculated.

Continue Reading...

FCC Slams Long Distance Carrier for "Slamming"

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 . . .

Continue Reading...

The FCC Asks: Should Government and Private Users Share Radio Facilities?

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.

Continue Reading...

FCC Proposes Rule Changes for Obtaining Telephone Numbers

Interconnected VoIP providers may soon have direct access to numbering resources, and the significance of area codes could become a thing of the past.

Have you ever wondered where telephone numbers come from? Well, kids, there’s this bird called a stork that delivers the numbers to your phone company which is very happy to receive them…

If only it were that simple.

Telephone numbers aren’t just made up by the phone companies. There are complex rules and processes (and history) involved in determining where numbers are assigned geographically, which sequences of numbers can be assigned, and which companies are ultimately allowed to have access to the numbers. Of course, these processes ultimately involve the FCC, which has authority over all telephone numbers in the U.S.

In a recent release containing a Notice of Proposed Rulemaking (NPRM), Order and Notice of Inquiry (NOI) the FCC is looking to make some changes to how telephone numbers are obtained by certain types of providers and, eventually, the fundamentals of what we understand a telephone number to represent.

Unfortunately, no, the FCC still doesn’t have a way to make telephone numbers magically immune from robocallers.

In the near-term, rules proposed in the NPRM (if adopted) would allow interconnected VoIP providers to have direct access to telephone numbers instead of having to obtain them through  carriers. The NPRM seeks comment on this proposal and the associated issues. To test out its proposals and gather data, the FCC’s Order is allowing certain interconnected VoIP providers – including, specifically, Vonage – to have direct access to telephone numbers as part of a limited trial.

For the long-term, the FCC is seeking, through the NOI, comment on various issues related to whether telephone numbers should be disassociated from specific geographic locations.

In other words, in the future area codes such as 212, 305, and 404 might not be tied specifically to Manhattan, Miami and Atlanta… but more on that a little later.

Continue Reading...

Failure to Communicate? FCC Proposes New Reporting Requirements for Blocked Rural Calls

New quarterly form would theoretically shed more useful light on chronic problem, but proposed exceptions could gut the form’s effectiveness.

Although perhaps not widely acknowledged or often discussed, the problem of “blocked” or unsuccessful long-distance telephone calls to rural customers is a serious one. For at least a couple of years interested parties have urged the Commission to do something about it. And now the FCC thinks that it’s come up with a way to begin to address this failure to communicate:  new recordkeeping requirements, and a new report to be filed quarterly by facilities-based originating providers (with some notable exceptions). 

The report would theoretically allow the Commission to better monitor the delivery of long-distance calls in rural areas. In a Notice of Proposed Rulemaking (NPRM), the FCC has invited comments on the proposed requirements.

So what’s the problem the FCC is addressing here?

Continue Reading...

Regulation in Retrospect: "New" FCC Rule Books Now Available

In a quaint tip-of-the-hat to the Way Things Used To Be, the FCC has issued its annual public notice advertising the availability of printed versions of its rules. According to the notice, for less than $300 – $298, to be precise – you can grace your bookshelves with all five volumes that comprise Title 47 of the Code of Federal Regulations. Hot off the presses, straight from the Government Printing Office (GPO) to your door.

Before getting out your checkbook, though, take a closer look at what the FCC’s public notice is touting: hard copies of the rules as they were as of October 1, 2012. That’s right, for $298 you can buy a set of rules that are already more than six months out of date. Such a deal. It’s the kind of thing you might expect to find if you cruise a lot of yard sales on the weekends. Just the ticket if you’re looking for neat stuff to put in an October, 2012 time capsule.

For many of us there is something curiously reassuring about holding a real book in your hand, leafing through its fine-print pages to find just the rule you’re looking for. The problem with the books the government is selling is that the rule you find there may not be the rule that’s in effect anymore.  (And let's be clear here -- it's the GPO which is selling these books, not the FCC.  The FCC has simply announced their availability, and is presumably standing ready to throw them at wrong-doers.)

Many old timers in the communications bar swear that the Commission used to require that all licensees have on hand at their stations copies of the rules relevant to their service. If such a requirement did exist (and we suspect that it did), it appears to have gone by the boards. Nowadays, the FCC’s website says nothing about such a requirement. Instead, it refers the reader to the e-CFR website maintained by the GPO. That GPO site – which, by the way, we here at CommLawBlog swear by and strongly recommend – is generally up-to-date within 24 hours, meaning that even the most recent rule changes are reflected in their version. Oh yeah, and it’s free.

FCC Announces Restoration of Media Bureau

The Media Bureau is back! Did YOU miss it? WE did.

Looks like the successful hack of the FCC’s computer network in September, 2011 – which we reported on back in February – may have been more intrusive than the government has let on so far. In an unusual public notice, the FCC has acknowledged that the entire Media Bureau apparently went missing sometime in the late summer/early fall of 2011. The agency’s internal computer records reflect that, as of October 1, 2011, all traces of the Media Bureau – historically one of the hardest working and most productive operations within the agency – had been purged from all Commission systems.

As a result, there have been no references to the Bureau on the FCC’s website for the last 18 months or so. The disappearance was apparently not noticed by visitors to the website. We’re guessing that that’s because, thanks to the redesign of the site, those seeking the Media Bureau pages generally gave up in frustration, assuming that the Bureau’s pages (a) were there somewhere, but (b) had been buried so deeply behind various blogs, dashboards, consumer notices and other higher priority matters that they could not, as a practical matter, be located through routine search techniques. (Vestigial cached versions of Bureau materials, including some CDBS records, apparently remained accessible from some computers external to the FCC’s systems, creating the comfortable illusion within the private sector that all systems were still go and things were still Business As Usual within the Bureau.)

While the Commission’s notice stops short of explaining exactly what happened, there’s plenty of solid information from which we might cobble together a reasonable theory.

Continue Reading...

Update: PSAP Do-Not-Call Registry Now Effective

Compliance deadline still up in the air pending finalization of operational details

Late last year we reported on the FCC’s adoption of new rules establishing a “do-not-call” registry for Public Safety Answering Points (PSAP’s). PSAP’s, of course, are places where your 911 is answered; the phones there are associated with conventional 10-digit telephone numbers which are accessed when you dial 911 for emergency assistance. The new registry is part of a Congressionally-mandated system intended to prevent automatically-generated marketing calls – the dreaded “robocalls” – from being made to PSAP numbers.

As noted in our earlier post, noncommercial TV and radio stations which use automatic dialing equipment in connection with their fund-raising activities will need to be careful to comply with the new rules. Historically, charitable and political organizations have been allowed to call numbers on the FTC’s “Do Not Call” list because their calls are deemed to be noncommercial and, thus, entitled to greater First Amendment protection. But the FCC’s new PSAP Do-Not-Call regime does not include any such exemption. Since it does impose very serious penalties for violations, attention should be paid by anyone using automatic dialing equipment.

While the PSAP Do-Not-Call rules were adopted by the Commission last October, they did not become effective immediately. That’s because some aspects of those rules needed first to be run through the Paperwork Reduction Act drill at the Office of Management and Budget (OMB). According to a notice published in the Federal Register, however, OMB has now signed off on the rules (principally, Section 64.1202). As a result, they have become effective as of March 26, 2013.

But just because the underlying rules are now effective does not mean that the PSAP Do-Not-Call registry is yet up and running. In its Federal Register notice, the Commission advises that, “[o]nce the operational details of the PSAP Do-Not-Call Registry have been finalized”, the Commission will be issuing a public notice alerting affected entities of the date by which compliance must begin. Check back here for updates.

FCC Form 499-A: Updated and Ready to File by April 1

The newly revised FCC Form 499-A and its accompanying instructions are now available, but some expected revisions on wholesaler-reseller USF exemption guidance are conspicuously absent.

It’s March! Spring is right around the corner, the excitement of college hoops is in the air, and you only have a few weeks left to come up with a clever April Fools’ Day prank to play on your coworkers. (If you’re short on novel – and safe – ideas, here’s a classic.) As if that’s not enough excitement, telecommunications providers get to experience the fun of preparing the annual FCC Form 499-A filing due by April 1. 

The FCC has released its annual update of the Form 499-A, including changes to the Form’s accompanying instructions. All joking aside, there really are some interesting aspects to this year’s new 499-A – including some anticipated “guidance” that is conspicuously absent. We’ll discuss that more after we cover some of the 499-A basics.

When to file? 499-A filings are due by April 1. If you’ve filed the 499-A before, you know it’s a process that has undoubtedly contributed to the madness in March. It’s as fun as filing your taxes but with virtually no possibility of getting a deadline extension. So don’t be a fool, and don’t miss the April 1 due date – the potential penalties are no joking matter.

Who has to file? With very few exceptions, telecommunications providers of all kinds must file the 499-A. This includes, for example, providers of wireless and wireline telephony, interconnected and non-interconnected VoIP service, audio bridging service, prepaid calling cards, and satellite services. A common misconception is that the 499-A and other FCC requirements don’t apply to non-voice/data services or to companies that simply buy and resell the services of other carriers. Don’t be fooled (there’s that word again): the definition of telecommunications is quite broad (basically, any transmission of information could fit) and the 499-A’s applicability is vast.

(REMINDER: The FCC’s new accessibility-related recordkeeping certification is also due by April 1. If you’re required to file the FCC Form 499-A, you’ll most likely need to also file this new certification. Sorry, not joking here, either.)

Continue Reading...

The Five-Year Enforcement Shot Clock: Has the FCC Finally Begun to Acknowledge It?

Forfeiture cancellations suggest possible path to clearing backlogged complaints (and enforcement holds).

It appears that the Commission may have taken the first steps – baby steps carefully cloaked from public view, perhaps, but steps nonetheless – toward addressing its hopeless backlog of broadcast complaints. In a series of super-low-key actions in recent weeks, the Media Bureau has quietly cancelled a number of previously assessed forfeitures. The actions have been reflected in terse (and we do mean terse – check out this example) letters that provide no explanation for the cancellations. But based on the answers we got to some informal inquiries, we figure that these cancellations could be the harbinger of considerably more dramatic developments on the complaints front.

It appears that the recent forfeiture cancellations have all involved the same general fact pattern. The Bureau issued a notice of apparent liability (NAL) and/or forfeiture order for violations which occurred significantly more than five years ago. The target licensee responded by arguing that, thanks to 28 U.S.C. §2462, the FCC is statutorily prevented from collecting the fines, so they should be cancelled. That argument has been initially rejected by the Bureau in some cases (here’s an example), but the licensees have pressed their argument before the Commission in applications for review. 

And now, we understand that the Bureau has been directed by higher-ups in the agency to cancel the forfeitures in light of that Section 2462 argument. The Bureau’s cancellation letters are, we are told, the result of that direction.

Continue Reading...

Ain't No Sunshine: Introducing "The Federal Communications Commission Collaboration Act of 2013"

[Blogmeister’s prologue: Kevin Goldberg has a second-to-none track record when it comes to defending the First Amendment and Open Government. Named the outstanding constitutional law student in his graduating class at the George Washington University Law School, he has served as a member of the Board of Directors of the District of Columbia Open Government Coalition, a member of the Executive Committee of the Board of Directors of the National Press Foundation, a member of the Board of Directors of the Public Participation Project and the Chair of the Legislative Affairs Committee of the Media Law Resource Center. In 2006, Kevin was inducted into the National Freedom of Information Hall of Fame for his continued and superlative service in pursuit of open government. He is the youngest of the current 56 members in the Hall. When he has something to say about the public’s right to know, we listen. Kevin has something to say about the proposed “Federal Communications Commission Collaboration Act of 2013”.

We expect some of our readers may disagree with Kevin’s views, and we expressly invite those who do disagree to share their views with us in comments, or possibly even in a guest post.]

Nearly 50 years ago, Congress passed the federal Freedom of Information Act (FOIA), giving all of us citizens access to the records of every executive branch agency (subject to nine very narrowly-construed exceptions). The FOIA embodies the fundamental premise that the public has a right to know how the government does the public’s business.

A decade later, in the wake of the Watergate scandal, Congress passed the Government in the Sunshine Act (a/k/a the Sunshine Act), again seeking to ensure the public’s right to know. (In Congress’s words, “Government is and should be the servant of the people, and it should be fully accountable to them for the actions which it supposedly takes on their behalf.”) The Sunshine Act gives us all access to the meetings of certain executive branch agencies, much as the FOIA give us access to those agencies’ written records.

Maybe not for long, though, at least as far as the FCC is concerned.

Bills proposing the “Federal Communications Commission Collaboration Act of 2013” have been introduced in Congress – as S. 245 by Senators Amy Klobuchar, D-MN, and Dean Heller (R-NV) and H.R. 539 by Representatives  Anna Eshoo (D-CA), John Shimkus (R-IL), and Mike Doyle (D-PA). Under the bills’ provisions, FCC Commissioners would be allowed to engage in a significant amount of regulatory activity outside of the public’s view.

Continue Reading...

As the Blizzard of 2013 Makes Its Move, FCC Provides Emergency Response Information

With a nasty nor’easter threatening to dump its load all the way from the Great Lakes to New York and New England, the FCC has started its anticipatory disaster response. A public notice released this afternoon alerts the public that Commission personnel will be available through the weekend, 24/7, to assist communications providers as they deal with the effects of the storm.  Emergency communications providers – a universe that includes broadcasters, cable operators, wireless and wireless providers, and, of course, first responders – should contact that Operations Center if they need help in initiating, resuming, or maintaining communications operations during the weekend. The phone number for the FCC Operations Center is 202-418-1122, and its email address is FCCOPCenter@fcc.gov.

Although the public notice doesn’t mention it, folks in the storm zone might also want to take a look at the FCC’s “advisory tip sheet” on communicating during emergency conditions. The tips, developed by the Commission in partnership with the Federal Emergency Management Agency (FEMA), aren’t what you’d call radical or cutting-edge by any means, but they serve as an excellent reminder that, in emergencies, caution, cool heads and common sense are among the most useful tools available.

Historically, the Commission has also activated its Disaster Information Reporting System (DIRS) in advance of approaching major storms. Such activation has not yet been announced by the FCC (as of 4:30 p.m. on Friday, February 8), but we won’t be surprised if word comes down before too long that the DIRS is open for business. Check back here for updates.

Telecom Providers and Manufacturers: Accessibility-Related Recordkeeping and Certification Requirements Are Now in Effect

For some time already many, if not most, communications service providers and equipment makers have had to ensure accessibility to the disabled; now they’ve got to keep records of those efforts AND separately certify to the FCC that they’re in fact keeping those records.

If you happen to be subject to Section 255, 716 and/or 718 of the Communications Act, the FCC wants to make sure that you know you’ve got some recordkeeping to do – and some reporting, too. (Fuzzy on whether you’re in that club? If you are not a communications service provider or equipment manufacturer, you need read no further. If you do happen to fall into one or both of those categories, you should read on, although it may turn out that you, too, are off the hook.)

The new recordkeeping requirements – which took effect on January 30, 2013 – arise from Congress’s repeated efforts to ensure that telecommunications services and equipment are accessible to folks with disabilities. Thanks to those efforts, certain service providers and manufacturers must take affirmative steps to provide accessibility to the extent achievable. 

And now, in addition to actually taking those steps, the affected companies must also maintain records of the steps they’ve taken . . . and they’ve also got to confirm to the FCC, once a year, that they are indeed maintaining such records.

What kind of recordkeeping are we talking about?

Continue Reading...

FCC Demonstrates Principle of Conservation of (Regulatory) Energy

Law of physics, FCC-style: Energy expended on international telecommunications reporting requirements must apparently remain constant

Providers of international telecommunications services may be happy to learn that the FCC has reduced or eliminated requirements to report data on international traffic, revenue and circuits.  Sort of.  By consolidating Sections 43.61 and 43.82 of its rules into a single rule (Section 43.62), the FCC claims in the public notice touting its Second Report and Order (2nd R&O) that it will “eliminate” international traffic and revenue reporting requirements for over 1,000 reseller carriers. (Facilities-based service providers should get a few breaks, too, but we won’t cover them in detail here.)

But there’s a catch (or two, or three, or four. . .) to the Commission’s broad claim of deregulation. As it turns out, the elimination/reduction of reporting requirements is balanced out by a raft of new requirements which effectively restore the equilibrium of regulatory burden because, presumably, to do otherwise might violate the laws of physics and destroy the universe.

What new requirements are involved?

First, all entities that either (a) have an International Section 214 Authorization or (b) provided any international services in the prior year will have to file a “Registration Form” and a “Services Checklist” annually by July 31. Previously, only common carriers that actually provided international services had to file anything. (This means that all holders of International Section 214 Authorizations must now file something each year. Before, by simply not providing telecommunications services, companies could obtain and retain such authorizations without necessarily triggering additional filing requirements.)

The new Registration Form shouldn’t create a huge burden. In addition to soliciting basic name/address information and a certification, it also requires a list of a filer’s International Section 214 Authorizations and cable landing licenses. Doesn’t the Commission – which granted such authorizations in the first place – already have all this information in its databases, you ask? Yes, but according to the FCC, requiring companies to report these data “will serve as a valuable check on our own records, ensuring that the filers’ records and our records agree.”

The new Services Checklist, which consists of a list of seven check boxes (two of which include two separate sub-boxes each) also seems fairly tame, for an FCC required form. Reporting entities simply designate the categories which apply to their services; entities which provided “International Communications Services Resale” (ICS Resale) and “International Miscellaneous Services” during the reporting period must indicate whether or not such services generated over $5,000,000 in revenue in the prior year. 

Simple so far.

Continue Reading...

Telecom Tickler 2013 - CPNI Certifications Due By March 1

If you’re a telecommunications carrier or interconnected VoIP provider, now’s the time to get out your calendar, turn it to early February or so, and mark in big red letters: “CPNI CERTIFICATIONS DUE MARCH 1, 2013”. And don’t forget to follow up by that important deadline.

CPNI here refers, of course, to Customer Proprietary Network Information (but you probably already knew that), and the certifications that are due at the Commission by March 1, 2013 are required by the FCC’s rules (as you hopefully already knew as well.) The FCC has issued a convenient “Enforcement Advisory” to remind one and all of the deadline. Like similar advisories in past years, this year’s includes a helpful list of FAQs and a suggested template showing what a certificate should look like. Heads up, though – this year’s advisory specifies that CPNI includes the numbers of calls made and received; advisories in past years referred only to “phone numbers called”. Additionally, in this year’s advisory voicemail is specifically included among the services covered by CPNI.

As we have explained annually for the past several years, the CPNI rules are designed to safeguard customers’ CPNI against unauthorized access and disclosure.  The rules themselves are set out in Subpart U of Part 64 of the Commission’s rules, if you want to check them out yourself. Here’s a link that will take you there, but you might want to stock up on No-Doz® before heading there.

Continue Reading...

The Bigger They Come . . .: Size Still Matters to M&A Regulators

Feds revise triggers for automatic merger and acquisition review.

With the 2012 book now closed on several acquisitions and mergers in the communications field, the federal government has performed its annual ritual of announcing the thresholds it will use for automatic federal review of mergers and acquisitions.  The FCC worked on several 2012 “Big Ticket” transactions including the Verizon spectrum shuffle with assets from Verizon Wireless, T-Mobile, Leap, several cable companies and others.  Still under review by the FCC is the Liberty Media acquisition of Sirius/XM. 

The FCC can review any transaction in detail before issuing an approval.  On the other hand, Congress long ago deemed that the Department of Justice and the Federal Trade Commission must review transactions that cross certain dollar amount thresholds.  The dollar amounts of those thresholds were announced in today’s Federal Register.  They are set to take effect as of February 11, 2013.  Readers considering a merger or acquisition should bear in mind that the administration automatically will be sending at least two agencies to take a closer look at transactions where either:

  • the total value of the transaction exceeds $283,600,000; or
  • the total value of the transaction exceeds $70.9 million and one party to the deal has total assets of at least $14.2 million (or, if a manufacturer, has $14.2 million in annual net sales) and the other party has net sales or total assets of at least $141.8 million

The new thresholds also affect the filing fees that parties to a deal have to pay the government for the pleasure of going through the review process. (Fees are split between the FTC and the Department of Justice.) For most of 2013, any deal subject to review and valued at less than $141.8 million will pay a $45,000 fee. (Used to be that deals coming in at a mere $100 million got to pay that.) For deals valued at more than $141.8 million but less than $709.1 million, the review fee will be $125,000. And if you’re proposing a deal valued at more than $709.1 million, get set to fork over a tidy $280,000.

When negotiating deals, all parties would be well-advised to bear these thresholds in mind. Once those lines are crossed, the prospect of additional (and considerable) time, expense and hassle to navigate the federal review process is a virtual certainty.

Court Upholds FCC Role as Data Roamin' Umpire

But the opinion may indirectly threaten survival of the FCC’s “network neutrality” rule

The FCC can require mobile data providers to offer roaming arrangements, says the U.S. Court of Appeals for the D.C. Circuit. But in so ruling (in a case titled Cellco Partnership v. FCC), the court may have threatened survival of the FCC’s network neutrality rules. We’ll come back to that.

“Roaming” arrangements make it possible to use your cell phone outside your own provider’s service area. We take it for granted that a cell phone will work anywhere in the country, and usually it does. If your own provider has a tower in the vicinity, it will take the call. Otherwise, one of the local cell companies will handle the call and send the bill to your provider, which (of course) will pass the bill on you.

As to voice calls, the FCC has required roaming capabilities since the dawn of the cell phone era. No one questions its authority over voice-call roaming. But the FCC’s jurisdiction over roaming for mobile data usage – such as email, Facebook, and web browsing on smartphones and tablets – has been a matter of debate, at least until this court ruling.

Why the difference? After all, voice calls are transmitted in digital form. The technologies for handling voice and data are very similar. Why would anyone think the regulatory schemes might be different?

The answer: common carriage.

Continue Reading...

FCC Bars Non-Emergency Robocalls to PSAP Numbers

New rules impose new obligations, hefty potential penalties, on politicians and non-profits (including NCE broadcasters) who use automatic phone dialing gear for public outreach.

Unwanted marketing telephone calls are merely annoying for most of us, but in some cases they’re actually dangerous. A marketing call that goes to a number in a 911 service center can block capacity needed for an emergency call – basically, it ties up a line that could and should otherwise be open for real emergency calls, not commercial come-ons or requests for contributions – and the results can be disastrous. 

Simply blocking “911” from automatic dialing equipment won’t do the trick. That’s because the well-known “911” is just an expedient device making it easy for the public to reach help in case of an emergency. In fact, when you dial “911,” your call is directed to a conventional 10-digit phone number at a Public Safety Answering Point, or “PSAP”. The full 10-digit numbers associated with PSAP’s aren’t generally publicized, but that makes no difference to automatic equipment that initiates marketing calls. That equipment simply dials random or sequential numbers; the odds are that such calls will hit some PSAP numbers sooner or later.

The FCC has now adopted rules establishing a new and separate “do-not-call” registry designed specifically to protect PSAP numbers from non-emergency calls. Why? Because Congress told them to do it in the Middle Class Tax Relief and Job Creation Act of 2012 – the same sweeping law that brought us, among other things, the reverse and forward auctions aimed at TV spectrum repacking. The new rules apply to both voice and text messaging calls to PSAP numbers. Congress wasn’t fooling around, and neither is the FCC. The statute mandates fines of at least $100,000 and up to $1 million per call for automatically dialed calls (“robocalls”) directed to PSAP numbers. Telemarketers must check the FCC’s database at least once every 31 days.

We hope that most, if not all, of you are familiar with the “Do Not Call” list created several years ago by the FCC and Federal Trade Commission (FTC). You can put your home number on the list at www.donotcall.gov (some 209 million numbers have been registered). Telemarketers (at least those who observe the law) are not allowed to call numbers on that list.

But the FTC’s “Do Not Call” list doesn’t stop all uninvited – and possibly unwanted – calls.

Continue Reading...

FCC and GAO Back Current Licensing for Fixed Microwave

In separate reports to Congress, both agencies found high spectrum efficiency.

With all the work Congress has to do in averting fiscal cliffs, raising debt ceilings, and naming post offices, we were surprised they found time to look into whether fixed microwave spectrum is being used efficiently. Apparently no concern of national interest, no matter how obscure, escapes the attention of our lawmakers.

In passing the Middle Class Tax Relief and Job Creation Act of 2012, back in February, Congress tacked on questions to the FCC and the Government Accountability Office (GAO) about use of the 11, 18, and 23 GHz fixed microwave bands. Congress asked the FCC for the “rejection rate” in these bands – “rejection rate” being defined as the number and percentage of common carrier applications that are rejected due to spectrum congestion. Congress asked GAO whether current rules provide adequate incentive for efficient use of the spectrum, and whether the Government could maximize revenue by auctioning the bands.

We reported earlier on the statute, and subsequently, on the FCC’s public notice seeking advice on what to tell Congress.

Both agencies have now issued their reports.

Continue Reading...

DIRS Activated as Hurricane Sandy Makes Landfall

Sweeping alert affects communications providers in 150+ counties across 10 states and DC.

As we anticipated, the FCC has activated its Disaster Information Reporting System (DIRS), to enable it to monitor damage to broadcast and telecommunications facilities during Hurricane Sandy.  (Note that the activation has occurred even though the FCC itself is shut down because of the storm -- major props to the folks in the FCC's Public Safety and Homeland Security Bureau for stepping up to shoulder this important responsibility.)

The DIRS is a voluntary, web-based system that communications providers – a universe that includes wireless, wireline, broadcast, cable and Voice over Internet Protocol providers – can use to report “communications infrastructure status and situational awareness information during times of crisis.” The FCC is asking that providers submit their reports starting 10:00 a.m. on Tuesday, October 30, 2012, and every day after that by 10:00 a.m. until DIRS is deactivated.

In particular, the Commission wants to know, among other things, the status of communications equipment, restoration efforts, power (i.e., whether providers are using commercial power, generator or battery), and access to fuel, if they provide service to certain affected areas.

What are those areas? Given the enormous size of Sandy, there are a lot of them. Take a deep breath. Here are the areas the FCC has identified:

Continue Reading...

As Sandy Nears, FCC Provides Emergency Response Information

 With Frankenstorm Sandy muscling its way up the East Coast and preparing to turn inland in a couple of days (if virtually all the current weather reports are to be believed), the FCC has started its anticipatory disaster response. A public notice released late Friday, October 26, alerts the public to an “advisory tip sheet” on communicating during emergency conditions. The tips, developed by the Commission in partnership with the Federal Emergency Management Agency (FEMA), aren’t what you’d call radical or cutting-edge by any means, but they serve as an excellent reminder that, in emergencies, caution, cool heads and common sense are among the most useful tools available.

And in a separate public notice, the FCC has confirmed that its Operations Center will be open all this weekend, 24-hours-a-day, to address emergency communications needs as they arise. (Presumably the Center will stay open during the coming week as the storm makes landfall, but the notice released Friday addresses only this weekend.) Emergency communications providers – a universe that includes broadcasters, cable operators, wireless and wireless providers, and, of course, first responders – should contact that Operations Center if they need help in initiating, resuming, or maintaining communications operations during the weekend. The phone number for the FCC Operations Center is 202-418-1122, and its email address is FCCOPCenter@fcc.gov. 

Other emergency contacts listed on the FCC’s website include:

Eric Panketh
Acting Division Chief
phone: 202-418-0063
email: Eric.Panketh@fcc.gov

Tim Perrier
Associate Division Chief, Operations and Security
phone: 202-418-1190
mobile: 202-907-4424
email: Timothy.Perrier@fcc.gov

Steve Maguire
Associate Division Chief, Plans and Programs
phone: 202-418-0614
mobile: 202-365-1539
email: Steve.Maguire@fcc.gov

Louis Sigalos
Regional Communications Liasion
phone: 281-492-6288
email: Louis.Sigalos@fcc.gov

Historically, the Commission has also activated its Disaster Information Reporting System (DIRS) in the face of approaching hurricanes. Such activation has not yet been announced by the FCC (as of 9:00 a.m. on Saturday, October 27), but we won’t be surprised if word comes down before the weekend is out that the DIRS is open for business. Check back here for updates.

FTC Posts Bounty on Robocallers

You can win $50,000 and a trip to Washington. And the undying, everlasting gratitude of your fellow telephone subscribers.

Sometimes technology just takes a wrong turn. Yes, it has vastly improved our lives. No one wants to go back to the days before smallpox vaccine, or power steering, or existential cat videos. But technology also provides its share of daily annoyances. High on that list is the “robocaller”: a machine that dials your phone, and when you answer, delivers a recorded message.

The economics of robocalls works much like email spam: the perpetrators can reach so many people, at such a low cost per contact, that they don’t care if 99.9% hang up without hearing the message. But robocalls are much more intrusive than spam. They prompt the victim off the couch to answer a ringing phone. And, unlike other kinds of telemarketing calls, robocalls even deny us the satisfaction of telling off the person who called.

The Federal Trade Commission has decreed most robocalls to be illegal. But the rules do allow some kinds. Political parties can robocall at will, thanks to that pesky First Amendment – and in these final days leading up to an election, they exercise that right with a vengeance. Also legal are robocalls from charities and health care providers, and “reverse 911” calls that warn people about local emergencies – for example, calls to a particular neighborhood about contamination of the water supply.

But the FTC is confident that illegal robocalls make up the vast majority (even though it does not provide any hard supporting data). And enforcement has been lax. We know that because we get so many of them. As yet there is no easy way for the recipient to block robocalls – no equivalent of the email “junk filters” that protect us from most email spam.

That is where the FTC comes in.

Continue Reading...

Class Action Option Out for Comments

FCC invites input on proposal that would allow actions against carriers with results that would be binding even on customers unaware of the dispute.

[Blogmeister’s Note: Peter Tannenwald and Mitchell Lazarus collaborated in the authorship of this post.]

You’ve see the ads: “Did you use Acme brand dynamite in 2011? And miss the Roadrunner? You might be entitled to compensation!!” – followed by columns of mind-numbing fine print. This is the visible tip of a “class action.”  It works like this: A law firm sues some hapless (but rich) company on behalf of a category of persons alleged to have suffered the same harm at the hands of the defendant. The class of plaintiffs must be well defined – this is a legal requirement – but its members need not all be named. If the action succeeds, the class members who heard about it and came forward receive compensation – typically very small, sometimes worth just a few dollars. And the law firm that brought the action can recover very substantial legal fees. (Keep this last point in mind.)

A newly formed company called Solvable Frustrations, Inc. (SFI) has asked the FCC for a rule change that would allow lawyers to file class action complaints at the FCC on behalf of consumers. So far SFI is targeting only common carriers, not broadcasters or cable companies. How Internet Service Providers might fare under a class action regime remains to be seen, but we can image mega-cases over issues like net neutrality and privacy.

The proposal is win-win for everyone, at least according to SFI. Where it would not pay an individual consumer to sue a phone company or cell carrier over a few dollars’ worth of overcharge, a large group of consumers might get meaningful relief by joining together and exploiting the might of large numbers.

Even the carriers, says SFI, would benefit from the economies of scale. They would have to defend a complaint case only once; the issues would be presented by qualified professionals; and the outcome would be binding on all of the other potential complainants waiting in the wings, who would then not be permitted to sue separately. And the FCC would have to go through the decision process only once. Today the backlog of small complaints is humongous. Wouldn’t it be better to reduce a million complaints to half a dozen or so?

There remain just a few legal problems.

Continue Reading...

War of the Words: Coalition Urges Greater Alien Welcome

Broadcasters launch effort to promote greater alien ownership in broadcasting (while H.G. Wells rolls over in his grave).

Hot on the heels of the FCC’s recent liberalization of the restrictions on alien ownership of common carrier licensees, a group dubbed the Coalition for Broadcast Investment (the Coalition) has filed a petition seeking similar leeway for broadcast licensees.  The Coalition is an ad hoc group comprised of minority-oriented station owners as well as some of the largest multi-station group owners in the country.   The Coalition’s petition is styled as a “Request for Clarification” of the Commission’s policy with respect to alien ownership of broadcast stations, but it’s effectively a petition for a declaratory ruling on the issue presented.

Our regular readers will remember that in August the FCC released an order designed to clarify the power of the Commission to authorize significant indirect, non-controlling foreign interests in common carrier licensees. The August order addressed the fact that, as interpreted by the FCC, Section 310(b)(3) of the Communications Act bars aliens from indirectly owning 20% to 50% of a radio licensee but Section (b)(4) permits indirect alien ownership – with prior FCC approval – of controlling interests in radio licensees.   The FCC dealt with this odd anomaly by “forbearing” from enforcing the Section 310(b)(3) restriction on non-controlling alien interests. 

There were two catches to this solution.

Continue Reading...

FCC Complicates, Simplifies Foreign Ownership Rules

The Communications Act imposes complex limits on alien ownership. The FCC’s historical interpretation of those limits has made them even more complex. The Commission has now revisited that interpretation – with mixed results.

We reported last year that the FCC initiated a rulemaking proceeding to consider how it might facilitate foreign ownership of licensed common carriers.   And we reported last spring that, in the initial rounds of that proceeding, the FCC received some industry feedback that its foreign ownership rules were limiting or hindering foreign investment unduly. As FCC veterans know, the Communications Act imposes certain restrictions on the ownership of broadcast and common carrier licenses by aliens. Specifically, Section 310(b)(3) of the Act forbids aliens from directly owning more than 20% in such licenses. Section 310(b)(4) precludes aliens from controlling a company that directly or indirectly owns more than 25% of such a license unless the FCC approves the ownership. 

Three score and 18 years after the Act came into being, the FCC has now taken a fresh look at those provisions.   It had previously decided that Section (b)(3) actually applies to indirect ownership interests even though, unlike Section (b)(4), Section (b)(3) doesn’t say that. The FCC has interpreted Section (b)(3) to apply when the alien entity does not control the licensee, while (b)(4) applies only when the alien does control. Non-controlling alien ownership interests between 20% and 50% were out of luck since an alien with an indirect 30% ownership interest would exceed the permissible level for non-controlling entities banned by (b)(3) but would not have the control necessary to permit the ownership to be approved. 

This interpretation presented a strange anomaly: an alien could indirectly own a controlling interest in a company so long as the FCC approved it, but an alien couldn’t own a non-controlling interest between 20 and 50% under any circumstances.  And indirect non-controlling  interests between 20% and 25% fell even deeper into the Twilight Zone – they seem to be fully permissible under (b)(4) without any FCC approval at all, but completely and irremediably banned under (b)(3). Commissioner Pai recognized this problem in his statement accompanying the Order – the Commission’s interpretation of the statute leads to “absurd” results.

Continue Reading...

Fifth Circuit Short Circuit: Court of Appeals Limits Rights of FCC Forfeiture Defendants

The Fifth Circuit has separated when and where a forfeiture defendant can raise defenses based on fact or on law.

Suppose you receive a Forfeiture Order from the FCC demanding a large check for allegedly violating FCC rules, as happened to Jerry and Deborah Stevens back in 2010. And suppose you want to raise a challenge. When and where do you do that?

The U.S. Court of Appeals for the Fifth Circuit has chimed in with a ruling that stirs up these already turbulent waters.

After the usual preliminaries, here and here, the Enforcement Bureau issued a Forfeiture Order that dinged the Stevenses $10,000 for operating a pirate FM station out of their home without a license. Although at very low power, the transmitter nonetheless exceeded the permitted power levels for an unlicensed device. The Stevenses did not pay. Eleven months later, the FCC sued them in a Texas federal district court to collect the money. The Stevenses objected that their FM station reached only one state, and claimed the FCC had jurisdiction only over “interstate” radio communications. Accordingly, they argued, the Forfeiture Order was invalid, and the FCC’s lawsuit should be dismissed. The district court declined to dismiss; the Stevenses appealed to the Fifth Circuit.

The Fifth Circuit’s problem was to reconcile two statutes.

Continue Reading...

Qwest Quest for Forbearance Quashed

Tenth Circuit lets FCC “move the goalpost” in on-going development of forbearance policy.

Despite its obvious concern about the fact that the FCC had “moved the goalposts” with little notice, the U.S. Court of Appeals for the Tenth Circuit has cut the Commission some slack. The court has upheld the FCC’s denial of a request by Qwest Corporation for forbearance from the application of certain dominant common carrier obligations for its local exchange operations in the Phoenix market. Qwest is the former U.S. West Bell Operating Company, later acquired by and now doing business as CenturyLink. Its request, which it framed to fit within analytical requirements the FCC had previously used, fell short when the FCC shifted the regulatory goalposts for such matters.

Two general principles are at work here. First, thanks to the 1996 Telecom Act, incumbent local exchange telephone carriers (ILECs) that are considered “dominant” in their market must, in effect, “share” their networks with competitors by providing those competitors with access to their networks, and on top of that providing access existing network elements on an unbundled basis (i.e., you don’t have to buy packages that include services or facilities you don’t want) at “just” and “reasonable” rates. For ILECs, that’s the bad news.

Continue Reading...

Update: OMB Approves Remaining Elements of Revised iTRS Rules

As we reported last August, the FCC has revised its rules governing Internet Telecommunications Relay Service (iTRS).  iTRS is the short-hand term for Video Relay Service and IP Relay, services that permit deaf and hard-of-hearing folks to communicate by telephone – over the Internet – with persons with or without normal hearing.  

iTRS services, which are free to the deaf/hard-of-hearing user, are funded by fees imposed on telecommunications service providers. The new rules were intended to avoid abuses that inflated minutes of use (and thus the payments collected by iTRS service providers) and to drive overall costs down.

While some of the rule changes took effect last October, a number of aspects (which happened to constitute “information collections” subject to the Paperwork Reduction Act) could not kick in until the Office of Management and Budget (OMB) had signed off on them. According to a notice in the Federal Register, OMB has now done so (in fact, it did so nearly a month ago), so it appears that those remaining rule sections are good to go. The sections in question – (§§64.611(e)(2), 64.611(e)(3), 64.611(g)(1)(v), 64.611(g)(1)(vi), and 64.613(a)(3) – involve disclosure of: ownership of iTRS providers; disclosure of sponsorship of iTRS services; information about the infrastructure of call centers and copies of deeds for the property where centers are located; reports of service interruptions and cessation of service; and annual reports to the FCC.

The Federal Register notice, curiously enough, does not expressly state the date on which these rules have taken, or will take, effect.  It does, however, helpfully inform us that the response time required by the new information collections is estimated by the Commission to be anywhere from one minute (or, as the notice specifies, "0.17 hours") to 50 hours.  Adjust your schedules accordingly.

From the FCC Police Blotter: Misrep Lite - When Thinking You're Being Honest Just Isn't Enough

Texas AM whacked $25K for statement that might have been inaccurate.

One of the most fundamental axioms of communications law: correctness is essential, whether you’re filling out an application, filing a pleading, responding to an FCC inquiry, or whatever. When you tell the Commission something, you had better be right. We’re not talking about affirmatively lying to the Commission. That, of course, is even higher up on the list of mortal sins in the FCC’s catechism. But nowadays, any inaccuracy in what you tell the agency – even if it’s not an intentional inaccuracy – can land you in hot water, unless you can show that you had a “reasonable basis” for your statement. The FCC enforcement folks, whose contributions to the government's coffers have increased dramatically in recent years, have recently driven this point home with considerable vigor.

As we have previously observed, Section 1.17(b) of the Commission’s rules prohibits what we have referred to as “misrepresentation lite”. As my colleague Mitchell Lazarus described it, the misconduct prohibited by the rule

does not involve “misrepresentation” – what many of us know as “lying” – because that requires some element of deceit. No showing of deceit is necessary to trigger Section 1.17. All it takes is the filing of “incorrect” information “without a reasonable basis for believing” that the information is, in fact, correct. This seems to say that any mistake in an application could subject the applicant to a very substantial penalty, even if the mistake is purely unintentional.

An AM licensee in Texas found out about this the hard way.

Continue Reading...

Revised Tower Registration Process Now In Effect

 It’s official!!! The Commission’s revised antenna structure registration process is now in effect. We know that because the FCC has said so, in the Federal Register – and you can’t get more official than that. The notice announces that the Office of Management and Budget has approved the “information collection” aspects of the new system, so the FCC is cleared to crank it up – which it has now done, effective June 18, 2012

This is important news for anyone who is:

planning to build any new tower that would have to registered through the FCC’s Antenna Structure Registration (ASR) system. The only exceptions are for (a) towers to be built on sites for which some other federal agency has responsibility for environmental review or (b) cases in which an emergency waiver has been granted; or

modifying an existing registered tower by (a) increasing its overall height by more than 10% or 20 feet, or (b) adding lighting to a previously unlit structure, or (c) modifying existing lighting from a more preferred configuration to a less preferred configuration. (Helpful tip: the “most preferred” configuration is no lights at all; the least preferred is red steady lights. Anything else falls in the middle.); or

amending a pending application involving either of the foregoing situations and the amendment would (a) change the type of structure, or (b) change the structure’s coordinates, or (c) increase the overall height of the structure or (d) change from a more preferred to a less preferred lighting configuration or (e) an Environmental Assessment is required.

If you’re looking for background on what the changes may mean for you, check out our earlier post on the subject. Or you could watch the FCC’s introductory presentation and demonstration of the new system, which is available at the Commission’s website. (Time Management Tip: Before committing to watch the whole show, be prepared to invest 75 minutes of your valuable time.)

USF Contribution Reform Underway (Again)

Facing steady declines in contributions under the existing system, the FCC is trying – for the third time – to come up with a successful Plan B. Here’s hoping that three’s the charm. 

As we have reported, the Commission recently overhauled the way it doles out the Universal Service Fund (USF), a fund that last year exceeded $8 billion. Now the Commission has turned its attention to the all-important question of how it should be rounding up the cash to be doled out. In a Further Notice of Proposed Rulemaking (FNPRM), the FCC is exploring a number of potentially significant changes to the USF contributions process. 

Historically, the USF has been funded through contributions from common carriers and certain other telecommunications providers. While 2,900 (or so) telecommunications providers currently chip in to the USF, nearly 75% of USF contributions come from five companies: AT&T, CenturyLink, Sprint Nextel, T-Mobile, and Verizon.  But these contributors don’t pay out of their own pocket, as they routinely recover their USF contribution costs from their customers, usually through a line item for USF pass-through charges which is included on each consumer’s monthly bill. Since the bill for USF is thus ultimately footed in large measure by Joe and Loretta Average-Phone-User, USF funding is an important consumer issue.

The Commission is under considerable pressure to expand the universe of USF contributors or otherwise pump up contributions. That pressure arises from decreasing contributions and increasing USF demands.

Continue Reading...

Multiline Telephone Systems and 911 Caller Location - Room for Improvement?

At Congress’s direction, FCC explores feasibility of more precise caller-location capability for 911 calls from MLTSs.

When you make an emergency call to 911, it’s helpful – and often crucial – for the person on the receiving end to be able to figure out where the call is coming from, particularly if you the caller can’t speak or aren’t familiar with your surroundings.  The receiving operator, stationed at a Public Safety Answering Point (PSAP), generally sees both the number from which the incoming call is made and the address associated with that number in a database available to the PSAP.  This occurs through the magic of Automatic Number Identification, similar to the Caller ID system with which we’re all familiar.  Even cellphones must report their location to the PSAP, meeting FCC-prescribed accuracy standards.

But if the 911 call is made from a phone system that operates through multiple extensions (including Centrex, VoIP, PBX, hybrid, and key systems) – systems referred to as Multi-Line Telephone Systems (MLTSs) – the magic may not work.  MLTSs, used by businesses and institutions, usually use shared outgoing trunks that may not even have a conventional phone number and are tied only to the location of the central phone system and not the location of the calling extension.  So when a 911 call comes in from an MLTS, the PSAP must hope that the caller can report his/her location and callback number.  Without input from the caller, the PSAP operator may know only the general location of the business or institution, but not the particular room, floor, or even building from which the call is coming.

It doesn’t do a lot of good to send an ambulance to a university campus if you don’t know where on the campus to look for the patient.

Continue Reading...

Top Ten Tips for Telecom Transactions - Part V

[This is the fifth (and last) in a series of posts by Bob Butler on the Fine Art of Telecom Transactions. In the first installment, he cautioned about the needs to plan early and to understand the structure ad interrelationships of the deal documents. In this and the other installments, he identifies more factors to watch out for in the drafting process.]

Tip No. 9 – Limit Your Liability Exposure

The standard carrier agreement almost invariably contains very one-sided risk allocations. Clauses limiting liability under the contract and requiring indemnification for third party actions are frequently drafted solely in favor of the carrier. You need as a minimum to make these provisions mutual and ensure that liability caps (a) are not so low as to be meaningless, and (b) do not apply to indemnification obligations. In particular, in this era of increasing litigation by patent trolls, a comprehensive indemnification from your vendor for all costs, not just finally awarded damages, for infringement of a third party’s intellectual property is a must.

Tip No. 10 – Secure Your Migration and Exit Strategies

The flip side of early planning (see the first installment of this series) is ensuring that you have a sound migration and exit strategy. This means that your contract should permit you to: (a) terminate without liability for material vendor breach and extended force majeure events (watch out for obligations to pay vendor’s third party costs); and (b) continue to receive service on the same terms and conditions for at least six months after expiration or termination of the agreement for any reason in order to permit you to transition in an orderly fashion to a new provider.   (Important: The vendor should be obligated to cooperate in this transition.) You also need to be aware of your vendor’s plans for service obsolescence and the concomitant risk that you will be forced to migrate to a new service or technology. Carriers uniformly insist upon the right to discontinue aging services they no longer wish to support, often with only 12 months or less notice.  

*                      *                      *

The issues I’ve addressed in this series are not meant to be exhaustive or definitive. Individual situations may entail additional factors or may warrant a reordering of priorities. Issues of confidentiality, network security, service provisioning, software and equipment use, account support and staffing, and other important topics may assume a greater importance to you. But it will still be advisable to pay heed to the top ten issues I have identified in order to secure the benefit of your bargain and avoid exposure to unacceptable liabilities in contracting for telecommunications and related services.

Top Ten Tips for Telecom Transactions - Part IV

[This is the fourth in a series of posts by Bob Butler on the Fine Art of Telecom Transactions. In the first installment, he cautioned about the needs to plan early and to understand the structure ad interrelationships of the deal documents. In this and the other installments in this series, he identifies more factors to watch out for in the drafting process.]

Tip No. 7 – Beware the AUP

Historically, Internet service providers have established draconian acceptable use policies (AUPs) designed to hold their customers liable for virtually any bad act perpetrated by anyone over the purchased services. In most instances such AUPs will expose you to substantial potential liability and the threat of service cut-off without notice or recourse. What’s worse, vendors are increasingly seeking to apply AUPs to non-Internet services as well. While in theory there’s nothing wrong with the concept of an “acceptable use” policy, it’s important that such policies reasonably reflect appropriate assignment of responsibility for problems that may be encountered. It’s equally important that you be given some adequate opportunity to correct problems that are within your control before the vendor pulls the plug on you.

Possible approaches include, as a minimum: negotiating limits to your third party liability exposure; shifting the responsibility for network security breaches back to the vendor; and securing meaningful advance notice and cure rights before your service can be suspended or terminated.

Continue Reading...

Top Ten Tips for Telecom Transactions - Part III

[This is the third in a series of posts by Bob Butler on the Fine Art of Telecom Transactions. In the first installment, he cautioned about the needs to plan early and to understand the structure ad interrelationships of the deal documents. In this and the other installments in this series, he identifies more factors to watch out for in the drafting process.]

Tip No. 5 – Watch for Term and Commitment Traps

Most telecom contracts specify a minimum financial commitment – the dollar spend for services you agree to buy, whether annually or over the life of the contract – and a minimum time commitment, or contract term, which typically runs three-five years. To maximize your flexibility and leverage, you should: (a) opt for shorter terms (no more than three years except in specialized cases, such as fiber build-outs); (b) commit to no more than 60-70% of your expected actual spend; (c) make the commitment only over the full term of the agreement rather than annually or with respect to particular services; and (d) secure a termination right that will kick in whenever you reach the committed spend, even if early in the term. The idea is to make it as easy as possible for you to satisfy your commitment, with the additional benefit (and inducement) of being able to terminate the deal once you have met that commitment.

Of course, even the best laid plans often go awry, so it’s also a good idea to consider, and protect against, unfavorable scenarios. For example, despite your best efforts, you may not satisfy your commitment. Recognizing that up front, you should not agree to 100% shortfall liability in the event of such a failure. In my experience, 25-50% is more typical, and it’s often possible to further cushion the blow by negotiating rollover or work-off options as well. You should also ensure that you are not obligated to pay both shortfall and termination liability changes if you exit the contract early without cause or the carrier terminates you for breach. You certainly don’t want to pay what would amount to a double penalty for early termination.

Continue Reading...

FCC Query: How Much Free Internet Does it Take to Get Consumers Hooked?

The Universal Service Fund (USF) – it’s not just for telephone service anymore.

For more than a decade, the Universal Service Fund (USF) has subsidized (1) telephone lines in places where there isn’t enough of a business case for phone companies to build and operate them, and (2) monthly telephone service for people who couldn’t afford it. 

That’s not good enough anymore, according to the FCC. 

As the Commission sees it, high-speed Internet – broadband – is a necessity, not a luxury. Accordingly, the FCC is looking to re-direct some USF funds to support broadband. Most likely, this will take the form of a monthly discount on broadband for low-income households.

In moving broadband way up on the list of life’s essentials, the Commission may be getting ahead of many consumers. Affordability is undoubtedly one factor in broadband adoption, but there may also be a number of people who just don’t think it’s that important, or not worth the hassle, or too much of a privacy risk, or any number of other concerns. To change their minds, the FCC has decided to use a ploy familiar to the criminal element: it’s going to test how much free or discounted Internet Joe Consumer needs to get hooked on broadband.  As with any pusher, the FCC’s apparent hope is that eventually the consumer will become addicted and willing to cough up the full price.

Accordingly, in February, the Commission announced (in its overhaul of the USF Lifeline program) that it would be setting up a Pilot Program “to test how the Lifeline program could be structured to promote the adoption and retention of broadband services by low-income households”. And now, with a public notice released April 30, 2012, the Wireline Competition Bureau has followed up on that plan. The Bureau is making $25 million available to eligible telecommunications carriers (ETCs) to carry out “field experiments” on customers.

Continue Reading...

Top Ten Tips for Telecom Transactions - Part II

[Blogmeister’s Note: This is the second in a series of posts by Bob Butler on the Fine Art of Telecom Transactions. In the first installment, he cautioned about the needs to plan early and to understand the structure ad interrelationships of the deal documents. In this and upcoming installments, he moves on to factors to watch out for in the drafting process.]

Tip No. 3 – Understand and Accommodate the Impact of Regulation

Telecommunications services are still regulated in various ways at the federal, state and local level in the U.S., and to even greater extents in many foreign jurisdictions. The good news is that such regulation will rarely give a vendor an excuse not to meet your reasonable requests for service or specific contract terms.  The bad news? Governmental regulation may still in some respects limit your vendor’s flexibility in providing the service; it can also increase costs (for both the vendor and, more importantly, you) through taxes and specialized levies such as universal service fund payments. 

What makes matters more difficult is the fact that the regulatory landscape is shifting in various, not necessarily predictable, ways. Contrary to what we’ve generally seen in the past two decades, the recent trend is to increase regulation for some previously regulated service, and to start to regulate previously unregulated offerings such as Internet and other IP services. These changes, which are occurring both in the U.S. and in other countries, can undermine the enforceability of previously negotiated terms, and they can complicate negotiations that are still underway.

To avoid the potential pitfalls created by the uncertainties of regulation, it’s important to conduct due diligence so that you understand the effect that both existing and potential regulation could have on your deal. And an essential added safeguard is an effective material adverse change (MAC) clause to permit you to make appropriate adjustments should regulatory changes, whether or not anticipated, adversely affect your interests after you’ve signed the deal.

Continue Reading...

Media Access Project Exits Stage Left

Public interest communications “law firm and advocacy organization” closes up shop

Media Access Project (MAP), a long-time player in the soap opera that is communications law, has left the show. As of May 1, MAP suspended operations “after evaluating the difficult funding environment facing MAP and other progressive public interest groups.”

Founded in 1973, MAP assumed a variety of roles over the course of its 39-year history. To some it was a tough litigator, a thoughtful advocate, and a mouthpiece for a wide range of interests that might not otherwise have had a mouthpiece. To others, it was a self-promoting buttinsky given to advancing positions of questionable (if any) validity. A seemingly constant presence in the mainstream press, it could be a total pain in the tail to those with whom it disagreed. Many – maybe even most – “industry” representatives may have disagreed with many – maybe even most – of MAP’s positions and tactics. But MAP, apparently indefatigable and unquestionably resourceful, made its voice heard, for better or for worse.

MAP prevailed in a number of important cases before the Commission and the courts and succeeded in swaying legislative policy. But MAP’s more lasting impact will likely be the fact that it spawned, directly and indirectly, a new generation of like-minded organizations that will carry on MAP’s work into the 21st Century. The ongoing work of those organizations will be MAP’s true legacy.

The demise of MAP has a particular, personal, effect on this blogger.

Continue Reading...

Top Ten Tips for Telecom Transactions

[Blogmeister’s Note: In January Fletcher, Heald & Hildreth welcomed Robert Butler into the fold. Bob – whose extensive bio can be checked out here – has decades of experience in telecom contracting, the fine art of identifying a client’s telecom needs and negotiating to secure the capacity and services to meet those needs without (a) over-buying (i.e., ending up with more services or capacity than you want), (b) under-buying (i.e., getting less than what you really need), (c) over-paying, or (d) exposing yourself to unnecessary potential liabilities. Bob has graciously put together a set of tips that any party looking to deal with a telecom provider should keep in mind. The following -- which presents the first two of Bob's Top Ten Tips -- is the first of five installments.]

Buying telecommunications and related services presents a different kind of contracting challenge.  Such services are, of course, absolutely essential in the modern marketplace. But successfully arranging for just the right services is a far cry from buying paper clips at Office Depot.

Start with the expanding universe of constantly developing high tech products available, all swimming in a dense alphabet soup of acronyms – VANs/WANs, VPNs, VOIP, ISDN, DSL, ATM, MPLS, DS1s, 2s, and 3s, OC-1/10s, etc. Recognize that those products include a mix of regulated and unregulated offerings. Throw in the reality that many routine transactional documents often still include (at least in the initial go-round) contractual artifacts from a long gone monopoly era. Appreciate the fact that one’s particular situation often demands unique contractual provisions addressing specialized needs or concerns. And don’t forget the importance of minimizing exposure to liability that could arise from myriad potential worst case scenarios.

The bottom line is that a steady and experienced hand is indispensable to securing a customer-friendly deal. The following are prime examples of areas in which an experienced hand can and should assist anyone looking to arrange for telecom services.

Continue Reading...

Wireless Bureau Sheds Light on Upcoming Tower Registration Regimen

Announcement of OMB approval expected soon

If you’re planning on building a new tower, or significantly modifying an existing tower, in the foreseeable future, listen up. The Commission’s Wireless Telecommunications Bureau has issued a public notice laying out the new registration procedures that have been adopted (but not yet implemented) to provide pre-registration notice-and-comment opportunities relative to environmental considerations. We have previously reported on the new procedures; the public notice puts a little more meat on the procedural bones we have already described.

Who needs to worry about this? You do, if you’re:

planning to build any new tower that would have to registered through the FCC’s Antenna Structure Registration (ASR) system. The only exceptions are for (a) towers to be built on sites for which some other federal agency has responsibility for environmental review or (b) cases in which an emergency waiver has been granted.

modifying an existing registered tower by (a) increasing its overall height by more than 10% or 20 feet, or (b) adding lighting to a previously unlit structure, or (c) modifying existing lighting from a more preferred configuration to a less preferred configuration. (Helpful tip: the “most preferred” configuration is no lights at all; the least preferred is red steady lights. Anything else falls in the middle.)

amending a pending application involving either of the foregoing situations and the amendment would (a) change the type of structure, or (b) change the structure’s coordinates, or (c) increase the overall height of the structure or (d) change from a more preferred to a less preferred lighting configuration or (e) an Environmental Assessment is required.

If you’re in one of those categories, here’s what the Bureau will expect you to do once the new process takes effect.

Continue Reading...

USF/ICC Update: Changes in Carrier Reporting Requirements Effective May 8, 2012

In its sprawling Report and Order and Further Notice of Proposed Rulemaking on the Universal Service Fund (USF) and Intercarrier Compensation, released last November, the Commission adopted (among a lot of other things) a number of changes to the various reporting requirements. Those requirements affected certain carriers, including competitive eligible telecommunications carriers (ETCs) and incumbent local exchange carriers. (Last December we described how many, but not all, of the extensive changes would affect wireless providers.)

Because many of the modified reporting requirements involved “information collections” subject to the Paperwork Reduction Act, they could not take effect right away. Rather, they had to be reviewed and approved by the Office of Management and Budget. That process has now been completed, according to a notice published in the Federal Register. As a result, a number of the rule changes adopted last fall have now become effective or applicable as of May 8, 2012.

The rules that have become effective are: Sections 54.312(b)(3); 54.313(b); 54.313(h); 54.314; and 54.320(b). The rules that have become applicable are: Sections 54.305(f); 54.307(b) and (c); and 54.313 (a)(1)-(a)(6).

Additionally, the Federal Register notice provides official notification to ETCs and other unspecified stakeholders that information required to be filed pursuant to Section 54.313(a)(2)-(6) and (h) must be filed by July 2, 2012.  Section 54.313 sets out the annual reporting requirements for high cost recipients.

Phase I Mobility Fund Reverse Auction Rules Set

$300 million to be available for areas with poor broadband access

Following up on the landmark USF Order last fall in which it first adopted a plan to distribute Universal Service Fund money for broadband build-outs, the FCC has released a Public Notice setting out the basic ground rules for the “reverse auction” by which the money will be distributed. The Notice fills in some important gaps in how the whole process is supposed to work.  

As we have previously reported, the FCC is proceeding for the first time with an unusual reverse auction under which rights will be determined by the party which bids the lowest amount for the area in question.   In this case, carriers will be bidding to provide service to relatively high cost parts of the country provided they receive certain subsidies.   The company asking for the lowest subsidy to do the job will get the money and the attendant service obligation. Many of the key features of this auction remain subject to petitions for reconsideration, but the Wireless Bureau is nevertheless plunging forward to set the ground rules on the assumption that the auction will proceed largely as laid out in last fall’s USF Order.

In addition to the usual provisos, warnings, disclaimers, and notices that accompany every FCC auction, the Public Notice alerts us to the following:

Continue Reading...

2012 Reg Fees Proposed: Up, Up and Away!

The FCC has performed that annual rite of spring – its announcement of proposed regulatory fees for 2012. These are the reg fees that, for the vast majority of Commission regulatees, will be due and payable by a to-be-announced date (probably sometime in August or September). As with most ritual activities, there are no real surprises here: the rates are, with very few exceptions, proposed to go up. 

In general, the Commission figures that broadcast-related reg fees should get bumped up between 4-7% or thereabouts, depending on the type of facility in question and the market in which it’s located. There are some exceptions, though. For example, commercial VHF TV stations in Markets 51-100 would enjoy a nearly 9% reduction (amounting to $2,205) compared to last year’s fee, if the FCC’s proposal holds. And fees for UHF stations in Markets 11-25 would drop $1,000 (about 3%) from last year’s levels.

We’re attaching a grid providing the proposed 2012 fees along with some comparative information showing the changes from the fees actually imposed last year. (Red entries reflect 2012 fees that would go up over last year’s fees; the small handful of green entries reflect fees that would go down this year.)

As always, the Commission is giving everybody a chance to comment on the proposed fees. If you’ve got something to say about the proposals, you’ve got until May 31, 2012 to file comment with the Commission. Reply comments may be filed until June 7

Over and above the fees themselves, this year’s Notice of Proposed Rulemaking (NPRM) contains a couple of elements of interest.

Continue Reading...

Some, Maybe All, Remaining Effective Dates in Lifeline Reform Set

Last month we reported that effective dates for some, but not all, of the rules revised as part of the Commission’s reform of its Lifeline program had been set. It looks like the effective dates of the rest have now also been set, although the Commission’s own Federal Register notices concerning those dates leave at least some room for doubt.

The Lifeline reforms were adopted back in February. In a Federal Register notice published in March, the Commission announced that Sections 54.411, 54.412, 54.413 and 54.414 were to take effect April 1, 2012 and Section 54.409 will take effect June 1. No problem there. But it then said that Sections 54.202(a), 54.401(c), 54.403, 54.407, 54.410, 54.416, 54.417, 54.420 and 54.222 wouldn’t kick in until after the Office of Management and Budget (OMB) had given them the Paperwork Reduction Act once-over.

According to the latest Federal Register notice, OMB has completed its review and given its thumbs up. So the FCC has announced that Sections 54.202(a), 54.401(d), 54.403, 54.405(c), 54.407, 54.416, 54.417, 54.420(b), and 54.422 have become effective as of May 1, 2012, while Section 54.410(a)-(f) will take effect June 1, 2012.

Careful readers will note a couple of minor discrepancies between the March notice and the most recent. Where the March notice referred to Section 54.401(c), the April notice refers to Section 54.401(d). Also, the April notice indicates that Section 405(c) is among the sections taking effect on May 1. But that particular section wasn’t among those listed in the March notice. And, in the most recent notice, the Commission mentions, pretty much in passing and without explanation, that it has also removed certain provisions (in particular, the temporary address confirmation and recertification requirements set forth in Section 54.410(g), the chunk of Section 54.405(e)(4) relating to temporary address de-enrollment, and the biennial audit requirements of Section 54.420(a)).  It's not clear what that means. The rules have, after all, been formally adopted by the Commission and are therefore technically in the books, but if OMB hasn't signed off on them (which appears to be the case), they can't become effective.  So they'll presumably just be dead wood in the rule book, at least for the time being.   

These discrepancies, though, may be relatively minor, particularly given the enormity of the changes the Commission is making to the overall Lifeline program. Look for the Commission to tie up any loose ends eventually.

One final observation.  While the standard OMB approval extends for three years, this OMB approval is for a paltry six months.  That means the FCC will be back knocking on OMB's door before you know it.  Interestingly, the FCC asked OMB to act on this particular request on an emergency basis.  What was the emergency?  According to the FCC:  “The Commission has set a budget target to eliminate $200 million in waste in 2012, which is dependent on certain rules going into effect as soon as possible.” Ah, a self-created emergency. We can't wait to see what they come up with in six months.

Update: Comment Deadlines Set in Alien Ownership Inquiry

A week or two ago we reported on a request for further comments in the alien ownership proceeding. The FCC’s notice asking for more comments has now made it into the Federal Register, which establishes the deadlines for anyone interested in chipping in his/her two cents’ worth. Comments in response to the notice are due by May 15, 2012; reply comments are due by May 25.

Lifeline Reform Update: FCC Invites Comments on Recons

Got something more to say about the FCC’s Lifeline reform? You’re in luck, because at least one more chance to share your thoughts with the Commission is here – as long as those thoughts have something to do with any of the petitions for reconsideration filed with respect to the Lifeline reform order released back in February.

According to a notice in the Federal Register, a total of eight reconsideration petitions were filed. The publication of that Register notice sets the deadlines for oppositions and replies to the petitions. If you want to oppose any of the petitions, you’ve got until May 7, 2012. Replies are now due by May 15.

In the underlying order, the Commission adopted various reforms to reduce Lifeline fraud, waste and abuse, and otherwise overhaul the Lifeline program. Read the full order here – or if you’re not up for 231 pages of fine print bureaucratese, followed by another 100+ pages of appendices – you can read more about it in our post from last month.

If you would prefer to read only the petitions for reconsideration, you can find them at the links below:

USTelecom

TracFone Wireless

T-Mobile USA, Inc.

Sprint Nextel

General Communication, Inc.

Nexus Communications, Inc.

American Public Communications Council, Inc.

District of Columbia Public Service Commission

FCC Gives T-Mobile an Earful

Carrier socked with potential $819,000 fine for not offering enough hearing aid-compatible phones

The FCC has been extraordinarily vigilant about enforcing the requirement that telecom carriers offer their customers certain minimum numbers of hearing aid-compatible handsets.   This requirement arose in 2008 when the Commission established a gradually increasing quota of acoustically coupled and inductively coupled handsets which carriers must make available to hard-of-hearing customers. The idea is that hearing-impaired folks must have a broad range of handsets of different feature levels to select from.

Although the FCC alerted the industry repeatedly to the requirements of Section 20.19 of the rules, T-Mobile seems to have seriously dropped the ball. According to a recent Notice of Apparent Liability (NAL), T-Mobile came up way short: as many as 33 acoustic hearing aid compatible handsets short in 2009 and 2010, and 14 inductive handsets short in that same period. These shortfalls were clear on the face of the annual report that T-Mobile (like other carriers) must file with the FCC detailing, among other things, the handsets they offer. The NAL doesn’t explain how T-Mobile could have failed to take steps to bring itself into compliance when its own disclosures apparently showed a shortfall in the required handsets.

The price tag for this problem?  $819,000.

Several things are notable about the NAL which, we hasten to mention, is only a preliminary set of allegations, not a final determination. T-Mobile will still have plenty of opportunity to plead its case to the Commission.

Continue Reading...

FCC Seeks Further Input on Foreign Ownership Rules

Commission contemplates forbearance approach to direct alien ownership limits.

Last fall we reported on an FCC Notice of Proposed Rulemaking in which the FCC is considering how to simplify the application of the foreign ownership restrictions that appear in the Communications Act.   After digesting the comments submitted in that proceeding, the FCC has asked for more input. It seems that a number of commenters were concerned about the interplay of Section 310(b)(3) of the Act with Section 310(b)(4).

Section 310(b)(3) strictly forbids ownership of a broadcast or common carrier licensee by a corporation which is more than 20% owned by aliens or their representatives or by foreign governments or foreign corporations.   In other words, no more 20% of the licensee entity itself may be owned by aliens or their representatives. Section 310(b)(4), however, permits licensee entities to be owned by companies that are themselves owned by aliens or their representatives, so long as the FCC OKs the ownership. In other words, indirect ownership of licensee entities by any quantum of aliens is permissible as long as the FCC approves it.   These provisions have long been thought to define two separate classes of ownership, direct and indirect, with distinct restrictions applicable to each.

Apparently Verizon – a company whose Cellco Partnership subsidiary has significant foreign ownership – pointed out that the FCC’s 2004 effort to provide guidance on these matters actually confused things. Those 2004 guidelines seemed to treat indirect interests in licensees as being subject to the strict 20% prohibition of 310(b)(3) rather than the more liberal 25% provision applicable to indirect interests under Section 310(b)(4). Verizon correctly noted that this makes no sense, and the FCC seems to have heard Verizon’s plea.

Continue Reading...

Access of Evil? FCC Unveils NOITALS

Don’t be surprised when Broadband the FCC Cat pops up on your screen.

The Commission has long bemoaned the fact that the Great Unwashed are “woefully ignorant” of the nitty-gritty details of their Internet access. Not for long. That bell you just heard was signaling the start of classes at the University of FCC, Online Division. Attendance is required. Prepare to get schooled.

In a surprising move – made all the more surprising by the low-key way in which it was disclosed – the Commission is taking aggressive steps to correct the rampant problem of high tech know-nothingism.

Meet NOITALS – the Nationwide Online Information Tracking and Logistics System. (Apparent pronunciation: “KNOW-IT-ALLS”.) In a public notice announcing, among other things, an expansion of the 2012 Measuring Broadband America Performance Study of Residential Broadband Service in the U.S., the Commission mentions NOITALS, pretty much in passing, without any fanfare at all. The Commission plans to use NOITALS to measure everybody’s Internet access speed, along with other parameters of Internet performance). 

How’s it going to do that? 

It seems that NOITALS enables the Commission to see what’s going on in each individual computer, nationwide, without the intervention of the computer’s user.

Continue Reading...

Update: OMB Sets Comment Deadline for Tower Registration Regimen Revisions

Last month we reported on changes to the FCC’s tower registration process that have been adopted, but not yet fully implemented. One of the hold-ups in the implementation process is the need for OMB approval (thanks to our old friend, the Paperwork Reduction Act). Never fear. The Commission is working on taking care of that detail. The first step of the PRA review process has been wrapped up and, according to a notice in the Federal Register, OMB has now invited comments on the FCC’s tweaks to the tower registration process. The deadline for those comments is April 18, 2012. The notice does not contemplate any reply comments, so once Patriot’s Day comes and goes, OMB will be in a position to sign off on the changes (assuming that everything is in order – and at this point, there seems little reason to doubt that that’s the case). Once OMB has given them the thumbs up, the FCC will publish a notice alerting us all to that and establishing an effective date. Check back here for updates.

Telecom Companies Take Note: Your Form 499-A Deadline Is Less than a Month Away

It’s that time of year again – all telecoms and VoIP providers must file their annual Form 499-A by April 2.

That “other” April deadline is right around the corner: all telecommunications carriers are required to file FCC Form 499-A by April 2, 2012. If you’re an intrastate, interstate or international provider of telecommunications in the U.S., this probably means YOU (but check below for the short list of exemptions).

 Form 499-A is used to true up the carrier’s Universal Service Fund contributions reported during the previous year. The revenues reported on the form will also be used to calculate upcoming 2012 contributions to the Telecommunications Relay Service, the North American Numbering Plan, and the Local Number Portability Fund.  (For 2012, the proposed “contribution factor” – i.e., percentage of revenues that must be paid – will be a whopping 17.9 percent, up from 15.3 percent in the last quarter of 2011. Ultimately, these contributions come from consumers, who are assessed a surcharge as a percentage of their phone bill.)

The new 2012 form was released on March 5, giving carriers less than a month to get on file. It’s mostly the same as last year, except that now non-interconnecting VoIP providers must file to fulfill their new obligation to contribute to the Telecommunications Relay Service Fund. (That new obligation comes courtesy of the Twenty-First Century Communications and Video Accessibility Act of 2010.)

A reporting company’s initial 499-A filing must be paper and ink; after that, carriers can file online through USAC’s website.

Before starting to fill out the form, a reporting company will need to pull together some financial information – i.e.,billed revenues for 2011, broken down into various categories. There is a safe harbor percentage available for entities that have difficulty separating their telecommunications versus bundled non-telecoms revenues. There is also a safe harbor for cell and VoIP providers to use in breaking out their interstate versus intrastate revenues.

Additionally, carriers with a lot of international revenue should take note of the “limited interstate revenues exemption” (LIRE). That allows companies whose interstate revenues are 12% or less than their international revenues to exclude international revenues in their “contribution base” (the amount upon which their contribution is assessed). Don’t look for this exemption in the Form 499-A instructions; it’s buried in a worksheet in an appendix.

If you’re not sure whether you’re a telecommunications carrier or not, you probably are. The category of mandatory 499-A filers is broad, including resellers, non-common carriers and VoIP providers. However, there are limited exemptions for:

Continue Reading...

Update: Comment Deadlines, Some Effective Dates in Lifeline Rulemaking Set

The Commission’s magnum opus setting out new rules for the Lifeline program – and proposing more new rules for that program – has been published in the Federal Register. (Click here for the portion containing the proposed rules; click here for the portion containing the new rules that have already been adopted.)

This publication establishes the deadlines for comments and reply comments relative to the proposed rules. If you would like to submit comments, you have until April 2, 2012; reply comments are due by May 1.

The Federal Register publication also establishes the effective dates of some (but not all) of the adopted rules. Get a pencil and paper out – you may need to take notes. Sections 54.411, 54.412, 54.413 and 54.414 will take effect April 1, 2012. Section 54.409 will take effect June 1, 2012. What about Sections 54.202(a), 54.401(c), 54.403, 54.407, 54.410, 54.416, 54.417 54.420 and 54.222? They all involve “information collections” and thus must first be blessed by the Office of Management and Budget thanks to our old friend, the Paperwork Reduction Act before they can take effect.

FCC Tightens up Lifeline Program

Looking to rein in fraud, waste, and abuse in the federal Lifeline program, the FCC has pulled out almost every bureaucratic tool in the box.

As we all know, the federal Lifeline program, overseen by the FCC, provides subsidized phone service to low-income households. In 2010, the Government Accountability Office released a report revealing a significant lack of direction and control within the Lifeline program. In response, the FCC has now adopted comprehensive measures to combat fraud, waste, and abuse in the program. By doing so, it hopes to trim “up to” $200 million from the Lifeline program this year and $2 billion over the next three years.

The FCC’s Report and Order and Further Notice of Proposed Rulemaking (R&O/FNPRM) spans 231 pages (and another 100 pages or so of appendices). Eligible telecommunications carriers (ETCs) will want to familiarize themselves with the many specific requirements detailed in the R&O/FNPRM in order to assure compliance. The following provides an introductory overview of the highlights of the FCC’s action. (Important note: this post does not address (a) Lifeline issues specific to Tribal lands or (b) state-conducted eligibility review.)

The R&O/FNPRM focuses on two main problem areas: (1) support for more than one person per household; and (2) support for ineligible consumers.

Continue Reading...

Telecom Tickler 2012 - CPNI Certifications Due By March 1

It’s that time of year again – that is, if you happen to be a telecommunications carrier or interconnected VoIP provider. If you’re one of them, your Customer Proprietary Network Information (CPNI, for short . . . but you already knew that) certifications are due at the Commission by March 1, 2012. The FCC has issued a convenient “Enforcement Advisory” to remind one and all of the deadline. Like similar advisories in past years, this year’s includes a helpful list of FAQs and a suggested template showing what a certificate should look like. 

 As we have explained before (last year, for example), the CPNI rules are designed to safeguard customers’ CPNI against unauthorized access and disclosure. (If you’re a glutton for punishment and want to read the actual rules, you can find them in Subpart U of Part 64 of the Commission’s rules. Here’s a link that will take you there, but don’t say we didn’t warn you.) Since 2008, the rules have required that telecommunications carriers and interconnected VoIP providers have an officer sign and file with the Commission a compliance certificate, annually, stating that he or she has personal knowledge that the company has established operating procedures that are adequate to ensure compliance with the rules. The carrier must also provide: (a) a statement accompanying the certification explaining how its operating procedures ensure that it is or is not in compliance with the rules; and (b) an explanation of any actions taken against data brokers and a summary of all customer complaints received in the past year concerning the unauthorized release of CPNI.  

The Commission takes this reporting requirement very seriously – so seriously, in fact, that it has in many instances initiated forfeiture proceedings against carriers who, as it turned out, had fully complied with the rules.

Continue Reading...

Revised Tower Registration Regimen Ready (But Not Yet In Effect)

FCC adopts changes in ASR processes for the birds; OMB approval still needed

It looks like new bird-friendly procedures for proposed tower construction could be with us by summer. If you’re thinking about building a tower 200 feet tall (or taller) – and especially if you’re planning to build something taller than 450 feet – you might want to get that proposal on file sooner rather than later. The longer you wait, the more likely it is that you’ll end up subject to considerably more burdensome processes.

The new procedures have been years in the making. (We previewed them last April, shortly after the Wireless Bureau solicited comments on a preliminary version.) They arise from concerns raised by a number of conservation groups (e.g., the American Bird Conservancy, the National Audubon Society) who urged that the Commission should afford more opportunity for public comment about proposed tower construction. According to the conservation groups, towers pose risks to birds (particularly migratory birds).

Accordingly, the groups (with a boost from a 2008 decision of the U.S. Court of Appeals for the D.C. Circuit) have pressed the Commission to modify its Antenna Structure Registration (ASR) program. Those chickens will soon be coming home to roost.

Continue Reading...

FCC To Proceed With Mobility Phase I Auction

FCC plunges ahead despite pending appeals and reconsideration petitions

The FCC has released a Public Notice announcing proposed ground rules for its planned “reverse auction”  to award $300 million in funding for mobile service to under-served parts of the country.    In a reverse auction, bidders vie to accept the lowest payment from the FCC to provide a slate of designated services by a certain date. The Commission is inviting comments on its proposed approach, but interested parties will have to act fast (as will the Commission): the auction is tentatively scheduled for September 17, 2012, but there is a lot of work to be done before the auction can actually take place. 

No one can say the FCC isn’t moving quickly on this auction – perhaps too quickly. It issued this public notice only a month after the new Mobility Phase I process became effective as part of the watershed USF/ICC reform order adopted last fall. The problem is that petitions for reconsideration were filed in December challenging the timing and structure of the proposed auction. Until those are resolved, the FCC can hardly proceed too far with the auction.  

At the same time, the source of the funds to be distributed in the auction remains up in the air. Long-time observers of this space will recall that the FCC in 2010 took the unusual step of “re-purposing” some $500 million dollars that has been designated under the USF program for CETCs.   (When Verizon and Sprint agreed to forgo USF payments that would have been due to them over the next five years, the FCC decided to put that money into a rainy day fund for broadband build-out rather than distributing it to the remaining CETCs.) That highly unusual and suspect action remains under review by the U.S. Court of Appeals for the D.C. Circuit. Depending on the outcome of that case, there may not be any money to hand out. 

Curiously, the FCC failed to alert folks interested in the auction that the auction and the money are both still very much up in the air.

Assuming that the auction proceeds in something like its present form, however, the FCC’s notice sheds some light on what is likely to be in store.

Continue Reading...

Update: Comment Deadlines Set in Video Relay Service Overhaul

Last month we reported on the FCC’s extensive proposal to overhaul the Video Relay Service, the service which enables people who can’t hear to have near-normal telephone conversations with those who can. The Commission’s Further Notice of Proposed Rulemaking has now been published in the Federal Register, which means that we now know the deadlines for comments and reply comments. Comments on the VRS proposals are due by March 2, 2012, and reply comments by March 19.

Big Deal? Size Still Matters to M&A Regulators

Feds revise triggers for automatic merger and acquisition review

Last year saw some successful (NBC/Comcast) and some not so successful (AT&T/T-Mobile) merger applications in the communications sector.  And with hope for continued improvement in the overall economic climate springing eternal, it’s possible that more large scale mergers may be in the pipeline. With that in mind, potential merger/acquisition candidates should be aware that the federal government has performed its annual ritual of announcing the thresholds it will use for automatic federal review of mergers and acquisitions

If a transaction exceeds a certain amount, both the Department of Justice and the Federal Trade Commission must scrutinize the deal and render an opinion about any anti-trust concerns raised by the deal.  In addition, as AT&T is acutely aware, when a large merger involves communications assets, the FCC also has no problem sticking its nose into the deal.  In fact, the FCC has its own SWAT team (formally called the Office Of General Counsel Transaction Team) to review deals.  Unlike the DoJ and the FTC, the FCC’s team is not automatically required to review deals of certain size; they could theoretically refrain from involving themselves in deals that pass the triggers described below. Note, though, that the FCC’s SWAT team – as well as DoJ and FTC – can choose to investigate smaller deals coming in below the triggers.

Readers considering a merger or acquisition should bear in mind that after February 27, 2012, the administration automatically will be sending at least two agencies to take a closer look at transactions where either:

the total value of the transaction exceeds $272,800,000; or

the total value of the transaction exceeds $68.2 million andone party to the deal has total assets of at least $13.6 million (or, if a manufacturer, has $13.6 million in annual net sales) and the other party has net sales or total assets of at least $136.4 million

When negotiating deals, all parties would be well-advised to bear these thresholds in mind. Once those lines are crossed, the prospect of additional (and considerable) time, expense and hassle to navigate the federal review process is a virtual certainty.

Update: FCC Invites Comments on Recon re New iTRS Rules

Last August we reported on new rules imposing a number of restrictions on providers of Internet Telecommunications Relay Service (iTRS). Those rules took effect in October, but if you have an interest in iTRS, heads up. A petition for reconsideration of the new rules was filed, and the deadline for commenting on, or opposing, the petition has just been announced.

Among other things, the new rules put an end to the previous practice of some iTRS providers of assigning free “800” numbers to iTRS users. While iTRS users may still have toll-free numbers, they now have to obtain those numbers like everyone else – from the same companies that provide them to the public at large, subject to whatever fees may be involved (unless a hardship waiver is granted).  Each toll-free number must be mapped to a regular “plain old telephone service” (POTS) number and be portable from one carrier to another; numbers that aren’t so mapped must be removed from directories. 

The sole petitioner seeking reconsideration – Sorenson Communications, Inc. (Sorenson) – says that the FCC put an unjustified burden on its back.Sorenson, which controls the lion’s share of the iTRS market, complains that iTRS service providers should not be responsible for mapping toll-free numbers to POTS numbers. According to Sorenson, if an iTRS provider doesn’t issue the toll-free number, the provider won’t know (other than by burdensome case-by-case investigation) whether a number provided by its customer is legitimate.  The number might not work at all, it might be discontinued after a while, or it might be used for spoofing or other deceptive practices.  If the FCC won’t let iTRS providers issue the numbers, it would be better just to take toll-free numbers out of the iTRS database, in Sorenson’s view.

Oppositions to Sorenson’s petition may be filed by January 24, 2012; replies may be filed by February 3.

FCC Proposes to Reform Video Relay Service

A service that facilitates communications between hearing-impaired and hearing people is in for a major overhaul.

The FCC is trying to update the Video Relay Service (VRS), which enables people who can’t hear to have near-normal telephone conversations with those who can. Did we say “update”? Actually, “complete overhaul” may be more what the Commission has in mind.

Modern technology has done wonders for people with hearing problems. First came Teletype-like devices, called TTY, that sent typed messages over telephone lines. Problem: users on both ends needed TTY units, even if one of them could hear. Then came Telecommunications Relay Service (TRS) in which a Communications Assistant (CA) with a TTY acts as an intermediary between the hearing and the hearing-impaired, speaking aloud what a deaf person types, and typing what a hearing person speaks. TRS thus enables hearing people having no special equipment and deaf people to communicate readily. A variation on TRS, provided over the Internet, is called (inevitably) iTRS.

But that's all very 20th century. Today, the broadband Internet allows live video contact. A CA can provide visual sign language interpretation between a deaf and a hearing person. That is VRS. The overall improvement in the quality of life for deaf people has been dramatic.

Part of the eyebrow-raising fees that we all pay on our telephone bills funds both TRS and VRS. The service is otherwise free to users. Today VRS providers are compensated from the fund on a per-minute basis, and that causes a problem. Since users don’t pay, and vendors are paid per minute, no one has incentives to be efficient or to avoid wasteful use. Indeed, there is a contrary incentive for service providers to stimulate minutes of use, and thus enhance their own income. Service providers’ employees, for example, can pump up usage with subsidized calls, including sales calls to existing and prospective customers. (Some say this crosses over into fraud.) Service providers also want to hinder their users’ switching to a competitor.   One technique is to offer free equipment with unique features that don’t work with other providers. Even though the FCC mandates number and equipment portability, there is no requirement that additional features work universally.

With all the free video calling software and services available today to anyone who wants it, the FCC got to thinking.

Continue Reading...

AT&T Gets More Spectrum with Buy from Qualcomm

In wake of rejection of T-Mobile acquisition, AT&T extends its holdings in the Lower 700 MHz band, with a few strings attached.

The march toward spectrum consolidation continues. In a Christmas week action, the Commission has approved AT&T’s purchase of a potential treasure chest of spectrum from Qualcomm. How much treasure? $1.925 billion worth.

In green-lighting the deal, the FCC may have been trying to avoid accusations that it is suffocating the growth of AT&T’s wireless services. The Commission had, after all, just slammed the regulatory door on AT&T’s attempt to buy T-Mobile (that would be AT&T’s only GSM cellular competitor), saying that the transaction would not be approved without a hearing. Whatever the Commission’s motivation, though, the AT&T/Qualcomm decision was released on December 22, just in time to keep lawyers busy over the Christmas weekend. Holiday notwithstanding, the deal has already closed.

In return for its $1.9B, AT&T got access to what used to be TV Channel 55 on a nationwide basis and TV Channel 56 in New York, Boston, Philadelphia, Los Angeles, and San Francisco. Qualcomm had originally obtained some of this spectrum from Aloha Partners and the rest at an FCC auction. They used it to launch their MediaFLO mobile video service, which did not live up to expectations and was shuttered earlier this year.

The spectrum is unpaired. In other words, it does not include blocks separated by a gap that facilitates interference-free two-way traffic. AT&T plans to use it for one-way downlinking only, to deliver data-intensive services like movies and other video material requiring little or no uplink interaction. (Editorial aside: That kind of one-way heavy data dump could also be provided by broadcasters, if the FCC would only let them. A number of broadcast organizations – Sinclair Broadcast Group and SpectrumEvolution.org, for two – have formally proposed such use. Their proposals, however, have thus far been met by nothing but stony silence, and in some cases hostility, from the FCC.)

This purchase is not AT&T’s first.

Continue Reading...

FCC's USF/ICC Order: How It Affects Wireless Providers

A semi-brief overview, from the wireless perspective, of the massive order overhauling the Universal Service Fund and Intercarrier Compensation system

The FCC released its historic 751-page Report and Order and Further Notice of Proposed Rulemaking on the Universal Service Fund (USF) and Intercarrier Compensation on November 18, providing a sumptuous repast for the communications industry to feast on over the Thanksgiving holiday.   It took many readers a few weeks to fully digest the vast smorgasbord of items resolved by the Commission in this one proceeding.   But having pushed ourselves away from the table at last, we can now comment on particulars of the Order that most affect wireless providers.   The Order also very radically affects the rules governing intercarrier compensation and USF for wireline service, but we are reporting on those developments separately out of compassion for our readers.

Definition of Supported Services. The first big step taken by the Commission was to bring broadband within the universe of services supported under the USF umbrella. The FCC chose not to simply define broadband as a supported service, but instead to expand its definition of supported “voice telephony” to include VoIP. At the same time, the FCC is requiring supported voice telephony providers to provide broadband.  

This awkward dance permits the Commission to continue ducking the issue of whether broadband should be re-classified as a “telecom” service regulated under the common carrier regime of the Communications Act or an “information” service regulated only under the FCC’s ancillary jurisdiction. But this dance creates problems of its own.

Continue Reading...

FCC Issues Behemoth USF Order

759-page tome hits the streets, with surprisingly brief comment periods

Call me Ishmael! 

That’s how the Commission might have opened its leviathan Report and Order and Further Notice of Proposed Rulemaking (R&O/FNPRM) in the proceeding to overhaul the Universal Service Fund.  Weighing in at a hefty 489 pages – with an additional 16 appendices and four separate Commissioners’ statements bringing the total package to a whopping 759 pages – the document is physically daunting.  And to be perfectly honest, we haven’t read it yet.  But we plan to, and we expect to get a summary of it posted as soon as possible.

However, in a time-honored Washington tradition, the Commission unleashed the R&O/FNPRM at about 6:00 p.m. on a Friday evening.  That would be the Friday before Thanksgiving.  So the prospects for getting a post up in the next couple of days are limited. 

But we have previously reported on an “executive summary” released by the Commission last month, describing the outlines of the ambitious R&O/FNPRM, so interested readers may use that as a sort of Cliff’s Notes intro to the full version for the time being.  And anyone interested in participating in the proposed rulemaking portion of the proceeding better get reading.  Comments on some aspects of the FNPRM are currently due to be filed by January 18, 2012, with replies by February 17.  Comments on other aspects aren’t due until February 24, with replies by March 30.  With Thanksgiving and the year-end holidays fast approaching, those deadlines will arrive sooner than you know it.

Check back here for updates and further information.

Hill's Bills Drill Process Ills

House, Senate proposals – S.1784, H.R.3309, S.1780 and H.R. 3310 – look to increase transparency, efficiency, predictability of Commission’s activities

On November 2, Rep. Greg Walden (R-OR), Chairman of the Energy and Commerce Subcommittee on Communications and Technology, and Senator Dean Heller (R-NV) took the wraps off  legislation aimed at improving regulatory process at the Federal Communications Commission (FCC).  Just how might that be accomplished? According to the bills’ sponsors, by imposing a number of procedural constraints on the Commission that would force it to act more transparently, more efficiently, and within more predictable time frames.

As we’ve previously reported, over the last several years FCC process has at times been a source of bipartisan frustration.  Concern about the absence of certainty in how – and how fast – the process will run has developed into a mini-movement to revisit agency process.  Agency practices that have given rise to this alarm include: texts of orders not being released until weeks or months after their nominal adoption; “shot clocks” for agency action that are inconsistently applied (when they exist at all); unilateral control of the Commission’s agenda being wielded by the Chairman (allowing the Chairman to prevent action on matters that a majority of Commissioners might prefer to vote).

And, perhaps, the attention of a divided Congress is more easily attracted to an agency that asserts itself into areas where its statutory authority is at best indirect and, in the eyes of some, even nonexistent (hard to believe? check out the D.C. Circuit’s 2010 Comcast decision on net neutrality).

Continue Reading...

When is a Requirement Not a Requirement?

“Effective dates” can be hard to pin down,  thanks to contradictions, omissions and an overall lack of clarity by the FCC – take Form 477 as an example

The November 7, 2011 edition of the Federal Register contained what appeared at first blush to be a fairly routine notice that certain rules had received approval from the Office of Management and Budget (“OMB”) and were therefore going into effect as of the publication of that notice.   But when we lift up that seemingly innocent flat rock of a notice, we observe a swarm of ugly questions about just how and when FCC rules become effective. Because FCC regulations have the force of law and are enforceable by fines in thousands and even hundreds of thousands of dollars, it is critical that the public know exactly when compliance is required. Yet that seemingly simple detail – when do we have to obey a new rule? – can be hopelessly obscure, as was certainly the case in the proceeding referenced in the November 7 notice.  

That proceeding involved amendments to Form 477, but the same question – i.e., when does a requirement become “effective” – applies to many other FCC proceedings.

Continue Reading...

FCC Launches Historic Reform of USF and Intercarrier Compensation Regimes

After one of the most hotly and intensely lobbied proceedings in its history, the FCC has adopted a framework by which to (a) reform and re-purpose the distribution of billions of dollars in Universal Service Fund (USF) money and (b) revise the financial arrangements governing the exchange of traffic between all categories of carriers. The stakes in this game are huge, because the FCC’s action upsets, albeit gradually, a generation of expectations about who receives and who pays for hundreds of billions of dollars in telecommunications services -- and how they pay for it. The sweep of the FCC’s action is so broad that there is something almost every industry player will love and something they will hate just as much.

At this writing, the FCC has not yet issued its magnum opus, a tome likely to reach Moby Dick-like proportions. The FCC’s action included both a Report and Order (R&O) adopting many new rules that will go into effect after publication in the Federal Register, and a Further Notice of Proposed Rulemaking (FNPRM) seeking comment on some important loose ends left hanging by the Report and Order.   A myriad of the details of the plan will be known only when the full text of the R&O is released; in the meantime, however, the FCC has released a brief Executive Summary outlining the most important provisions of the new regime. These include:

Continue Reading...

Update: Effective Dates Set For Wireless Backhaul, iTRS Revisions

Last August we reported on some changes, and proposed changes, relating to the Commission’s wireless backhaul rules. Both the Report and Order component of that action (addressing the rule changes that were actually adopted) and the Notice of Proposed Rulemaking component (addressing the changes that are only proposed at this stage) have now been published in the Federal Register. As a result, we now know that the effective date of the new rules will be October 27, 2011. The only loose end is Section 74.605, which mandates registration (in the Commission’s Universal Licensing System) of stationary receive sites for TV pickup stations in the 6875-7125 MHz and 12700-13200 MHz bands. That registration requirement is an “information collection” subject to the Paperwork Reduction Act, so the Commission will be shipping that particular aspect of the new rules over to OMB for its review before the requirement can be finally imposed.

Federal Register publication also establishes the comment deadlines relative to the proposed rules, but those deadlines (October 4, 2011 for comments, October 25, 2011 for reply comments) had already been announced by the Commission back in August; the Register notice confirms them.

Elsewhere in the Federal Register, the Commission has also published the revised rules it adopted last August to align the use of local and toll free numbers by Internet Telecommunications Relay Service (iTRS) users more closely with the way that hearing users use such numbers. (We reported on that decision here.) Those revisions are now set to take effect on October 27, 2011, except for several sections (§§64.611(e)(2), 64.611(e)(3), 64.611(g)(1)(v), 64.611(g)(1)(vi), and 64.613(a)(3), if you’re keeping track) that still need OMB/Paperwork Reduction Act approval.

OMB: Thumbs Up for Net Neutrality Provisions

After months of quiescence, net neutrality is on the move

The net neutrality rules have cruised past another hurdle: the Office of Management and Budget (OMB) has approved the two “information collection” aspects of the “open Internet” rules that the FCC shipped over there last July (as required by the Paperwork Reduction Act). While OMB approved those aspects almost two weeks ago (on September 9), the official announcement of the approval didn’t make it into the Federal Register until September 21.

OMB approval often marks the end of the rulemaking process in many instances; not so here. New rules generally cannot take effect until their full text has been published in the Federal Register. In many other rulemakings, the Commission takes care of that full-text publication first, and then follows up with getting OMB approval for any incidental “information collections” that may be involved.  As a result, OMB approval of such collections is often the last development in the rulemaking process.

It hasn’t gone down that way with net neutrality.

Continue Reading...

Welcome Mat Out for Aliens?

NPRM proposes lower hurdles for alien ownership -- and alien investment.

With the issuance of an extensive Notice of Proposed Rulemaking (NPRM), the FCC is looking to liberalize its approach to permitting alien ownership of common carrier and aeronautical radio station licenses. While it’s not exactly a re-opening of Ellis Island, the plan should significantly expand opportunities for aliens to acquire or increase license ownership. The FCC correctly recognizes that its current policies and processes are burdensome to prospective foreign investors, unnecessarily impeding, delaying and obstructing the ability of aliens to buy, or buy into, FCC licensees – and thus also creating barriers to investment capital that could benefit U.S companies and U.S. consumers.

The starting point for any discussion of alien ownership of domestic U.S. communications interests is Section 310(b) of the Communications Act, a provision that dates back to the original 1934 version of the law.  Drafted in an era when foreign Fascists and Communists had to be prevented from acquiring control of our communications media, Section 310(b) strictly prohibited – and continues to prohibit – aliens from directly owning a broadcast, common carrier, or aeronautical radio license or even from owning more than 20% of a company that holds such a license. 

However, having erected a seemingly impenetrable fortress against evil foreign influences, Congress left the back door wide open.

Continue Reading...

Reins Tightened on iTRS Providers

Commission adopts certification requirements for providers, limits on toll-free numbers for users

In an effort to reduce unnecessary costs while assuring that deaf and hard-of-hearing people will still enjoy essentially the same access to telecommunications services as everybody else, the Commission has adopted several changes to the rules governing Internet Telecommunications Relay Services (iTRS).

iTRS is the short-hand term for a couple of related services – Video Relay Service and IP Relay – that permit deaf and hard-of-hearing folks to communicate by telephone, over the Internet, with persons with or without normal hearing. iTRS provide those folks a modern alternative to the crude “TTY” typewriter-like keyboards through which they previously interconnected with the phone system. The basic concept is that, with inexpensive webcams and broadband connections, deaf/hard-of-hearing users can access the services of interpreters who can not only type words but also speak with sound to hearing persons and with American Sign Language to deaf persons. (Want to know more about iTRS? Check out the FCC’s information page on the subject.)

The cost of providing iTRS service is picked up by federal and state governments (which in turn get the funds by including a surcharge on everybody’s telephone bill). With annual costs running close to $740 million, there’s a boatload of money at stake – and, needless to say, with opportunities to game the system in great supply, temptation abounds.

Until now, that is – if the FCC has its way.

Continue Reading...

Update: Comment Deadlines Set re Proposed E-911 Rules

Last month we reported on the Commission’s proposal to enhance the location-identification accuracy of E-911 calls. That proposal has now been published in the Federal Register. As a result, the deadlines for comments and reply comments on that proposal have been established: comments are due by October 3, 2011; reply comments are due by November 2, 2011.

AstroTurf ® Filings Condemn AstroTurf ® Filings

Group that decries hidden interests keeps its true interests well hidden.

Here in Washington, we’re used to a certain amount of hypocrisy. It’s part of the atmosphere, like exhaust fumes from the high school tour buses.

But once in a while even we get taken aback. No, not about the debt-limit debate, although that also strains our tolerance. We are referring to an unusual spate of filings in one of the FCC’s rulemaking dockets.

The rulemaking itself is an inside-the-Beltway matter. The FCC allows interested parties to file views on its proceedings even after the published comment schedule has expired. These late submissions are called “ex parte” filings, from the Latin for “one-sided,” which they generally are. In the past, they offered a way to put useful technical and policy information before the FCC staff. With the advent of electronic filing, the ex parte process has also become a way for special interest groups speaking through complaisant individuals to flood the FCC with dozens, sometimes hundreds, of nearly identical statements.

The rulemaking in question asks for comment on whether groups filing ex parte statements should have to identify who they really are. After all, an organization called “Citizens for Better Phone Service” may in fact be a telephone company seeking relief from regulation. “Coalition for a Free Internet” may be a front for a cable company opposed to network neutrality rules. And so on. Such groups are often called “AstroTurf®” entities: an artificial construct masquerading as a grass-roots organization. (AstroTurf ® is a registered trademark, even if the registration doesn't cover this particular use of the term.)

In addition to the usual suspects – lobbying groups that make frequent ex parte filings with the FCC – this rulemaking has attracted well over 200 identical submissions signed by individuals. They all read as follows:

Continue Reading...

Update: Effective Date of Anti-Spoofing Rules Set

Earlier this month we reported on the adoption of the FCC’s new “anti-spoofing” rules. Those rules, mandated by Congress in the Truth in Caller ID Act, make it unlawful to transmit misleading or inaccurate caller ID information – that is, to “spoof” – if the goal is “to defraud, cause harm, or wrongfully obtain anything of value”.

The Commission’s Report and Order has now been published in the Federal Register. As a result, we can report that the new rules will take effect on August 19, 2011.

While the new rules may have been initially conceived as a protection primarily for consumers, the Commission has expressly acknowledged that spoofing committed to “wrongfully avoid payment of intercarrier compensation charges would be a violation” of the rules. That would include spoofing by the originating provider or an intermediate carrier, among others. Thus, when the new rules become effective, they should provide a weapon through which carriers can seek to discourage other carriers from attempting to use spoofing to duck their intercarrier obligations.

FCC Bidding Adieu to International Settlements Policy?

The FCC giveth and the FCC taketh away as it proposes elimination of International Settlements Policy while continuing to monitor competitiveness, possibly through new or expanded reporting requirements

The FCC has proposed to eliminate its 80-year-old International Settlements Policy (ISP) (except as it applies to Cuba – that would require the State Department’s blessing). The ISP is intended to prevent monopolistic foreign carriers from charging U.S. carriers non-competitive rates for the termination of foreign traffic, leading to high international rates for U.S. consumers.

In its very simplest terms, the policy dictates a uniform bargaining position for U.S. carriers: they must accept the same rates as other carriers on that route, are entitled to terminate their proportionate share of incoming traffic from a foreign carrier, and have to split termination rates (a/k/a/ “accounting rates”) 50/50 with the foreign carrier.

The ISP does not apply where carriers pay below a certain set benchmark rates for that route. There are only a few dozen routes to which the ISP still applies, so it’s no longer an active key component of international regulation. The Commission is concerned that the policy itself may be preventing carriers from negotiating benchmark or lower rates on ISP routes because foreign carriers have little incentive to negotiate symmetric rates when they can re-originate traffic at lower rates.

Continue Reading...

MORE New E-911 Rules: Can You Find Me NOW?

Never mind – the Man will know where you are, even if you don’t

Even as privacy advocates are getting increasingly nervous about the extent to which our communications devices keep tabs on our whereabouts, the FCC is looking to make it easier to monitor our location more precisely and over a broader range of devices.   In a combined Notice of Proposed Rulemaking, Third Report and Order, and Second Further Notice of Proposed Rulemaking (let's just go with R&O/NPRM for short), the FCC has taken steps to enhance E-911 accuracy in two respects.  

The new measures build upon rules adopted last year in which the FCC tightened and clarified the accuracy requirements for carriers who employ “handset” and “network” solutions for achieving specified location accuracy levels. (Handset carriers rely on the GPS capabilities of the customer’s handset to establish his or her location.   Network carriers rely on triangulation of radio signals among cell towers to find their customers.) By requiring accuracy levels to be met at the county or PSAP level, the Commission indirectly raised the accuracy bar by ensuring that high accuracy is achieved in all parts of a carrier’s service area. (The FCC provided exceptions for areas where dense forestation or the lack of triangulation would not permit these high levels to be reached.)   These accuracy requirements are to take effect over an eight-year period.

In the R&O/NPRM released July 13, the FCC has ordained that, following that eight-year implementation period, the Commission will do away with the separate network-based accuracy standard entirely.

Continue Reading...

IXC v. CLEC: Tariff Tossed Due To "End User" Definition

Q: When is a carrier’s local subscriber not an “end user”? A: When the subscriber doesn’t have to pay.

In a recent decision in the ongoing saga of who should pay the cost of “free” conference calling services, the full Commission – not just a subordinate Bureau – declared unlawful the interexchange switched access charge tariff of a competitive local exchange carrier (CLEC) because some of the CLEC’s end user customers do not pay for their local exchange service.

The FCC normally cuts CLECs a lot of slack in setting rates. That’s because if a CLEC charges too much, it won’t be able to woo customers away from the local incumbent local exchange carrier (ILEC) with which it must compete. But there is one area that is not so competitive – access charges imposed on interexchange carriers (IXCs) for incoming calls. An IXC must deliver each call to whichever LEC serves the destination subscriber, and the IXC has no influence over which local carrier the destination subscriber uses. So if a call is destined for a CLEC customer, the IXC has to pay that CLEC’s rates, or else the call won’t go through.

The opportunity to set incoming access charges with relative impunity has led to arrangements where the principal business of a CLEC may be providing local service to services that generate large volumes of incoming traffic and nearly no outgoing traffic – for example, conference call and chat line services. The CLEC files a tariff with terminating charges that are high enough to cover all of its costs and then some. To attract high volume customers, the CLEC provides local service for free and may even pay the customer a share of its access charge revenues. Needless to say, these arrangements are highly attractive to conference calling and chat line providers. They’re also appealing to the general public, which may enjoy the services for no more than the normal cost of a long distance call – and that cost may be essentially zero if they use one of the newly popular bundles with flat rate unlimited long distance. 

The attitude of IXCs toward such arrangements is substantially more negative, to say the least, because the access charges they pay sometimes exceed the toll rates they charge their customers.

Qwest Communications Company decided to blow the whistle on Northern Valley Communications, which operates in South Dakota, by filing a formal complaint under Section 208 of the Communications Act.

Continue Reading...

FCC Hammers Crammers

Companies billing for unauthorized services are fined $11.7 million.

The FCC has proposed multi-million dollar fines against four companies for allegedly “cramming”: billing telephone customers for services they did not ask for. At the same time, the FCC issued guidelines to both telephone companies and the public about how to detect and prevent cramming, and plans to offer new rules against the practice.

Cramming problems usually relate to charges by third-party companies for services supposedly ordered by the phone company’s customers, and included on the phone bill. The FCC’s “Truth-in-Billing” rules require phone bills to include clear descriptions in plain language for each service, with a toll-free number for customers to question or dispute the charges.  Until a customer complains, though, the phone company has no way of knowing whether the charges are legitimate. This leaves it up to customers to review their bills for suspect charges. Knowing this, crammers sometimes try charging just two or three dollars a month, hoping that busy consumers won’t notice. The FCC’s Enforcement Bureau says thousands of people have fallen victim. 

The FCC and the Federal Trade Commission (FTC) share responsibility for protecting consumers from cramming. The FCC has jurisdiction over the telephone carriers and other communications service providers. The FTC has jurisdiction over the third-party service providers whose charges (for things like chat lines, diet plans, etc.) are wrongly added to a telephone customer’s bill. The two agencies coordinate their enforcement activities to protect the public.

In the most recent cases, the FCC proposed fines ranging from $1.5 million to $4.2 million against four companies. (The individual “Notices of Apparent Liability” are here, here, here and here.)

Continue Reading...

"I See Dead Proceedings."

With FCC’s blessing, CGB proposes to toss 1,000 – 1,500 (or so) “dormant” proceedings.

In February, 2010, the Commission issued a low-profile Notice of Proposed Rulemaking addressing a number of procedural issues of seemingly minor interest to most of us. In a section titled “Management of Dockets”, the Commission observed that it has more than 3,000 open dockets on its books, many of which “have seen little or no activity in years.”  No surprise there. Conjuring dark images of Docket Death Panels, the Commission ominously opined that “some open dockets may be candidates for termination.” The Commission then proposed to authorize its Consumer and Governmental Affairs Bureau (CGB) to “review all open dockets”, identify “candidate[s] for termination”, consult with the relevant Bureaus and then, WHACK, pull the plug on dockets in which, for example, “no further action is required or contemplated.” 

Fast forward to February, 2011. In a similarly low-key order, the Commission did indeed empower CGB to euthanize what the FCC now characterized euphemistically as “dormant proceedings”. In doing so it gave CGB virtually no guidance to help it identify such proceedings. Candidates for termination with prejudice “might include dockets in which no further action is required or contemplated and dockets in which no pleadings or other documents have been filed for several years” – but would not ordinarily include “proceedings in which petitions addressing the merits are pending”, unless the parties consent.

Armed with that nebulous mandate, CGB has released for comment its initial list of “dormant proceedings” which, absent objection, will be summarily flushed down the tubes in a couple of months. That list is set out in a 97-page table containing more than 1,000 separate line entries. When you dig into them (see below for how you can do this – the process is not as simple as you might think), you find that a fair number of those individual line entries in turn contain as many as 30 or 40 separate and distinct items. From a casual back-of-the-hand calculation, we’d say that CGB is proposing to dump somewhere close to 1,500 separate and distinct proceedings.

So the FCC could be relieving itself of up to half of its open dockets with little more than a single perfunctory notice.

One question: When can we get CGB to come to our office to work its magic with our backlog?

Continue Reading...

Rural Interconnection Direction Correction

FCC clarifies interconnection obligations of rural carriers and role of state commissions.

Telecommunications carriers are required to interconnect, directly or indirectly, with the facilities and equipment of other telecommunications carriers. Congress said so, in Section 251(a) of the Communications Act. In addition to fostering competition as much as possible, the goal is to assure that our telephone calls are all completed no matter which carrier we use to make the call or which carrier serves the destination number.   

A couple of subsections later, though, in Section 251(f)(1) Congress created a limited exemption from some, but not all, interconnection-related obligations. The so-called “rural exemption” is available to rural local exchange carriers (LECs) under certain circumstances. It exempts eligible LECs from, among other things, the obligation (contained in Section 251(c)) for incumbent LECs to negotiate in good faith the terms of interconnection agreements.

But if you aren’t required to negotiate, how can you be expected to reach agreement on interconnection arrangements? If exempt rural LECs don’t have to negotiate interconnection agreements, does that relieve them of the obligation to interconnect at all? 

The Commission has recently answered that question in a Declaratory Ruling, and the answer is: No way.

Continue Reading...

Court To FCC: OK To Defer To State Rate Determinations Re Intrastate Call Terminations

D.C. Circuit will not require Commission to set intrastate termination rates in first instance.

When it comes to setting “reasonable compensation” rates for the termination of intrastate phone traffic, the FCC normally defers in the first instance to state authorities.  And now, in the case of MetroPCS California v. FCC (No. 10-1003), the D.C. Circuit has confirmed that that deferential approach is permissible – even if it means that the result may be a “patchwork of regulatory schemes” facing phone service providers across the country, with each state fashioning its own approach to “reasonable compensation”.

The question arose when a local exchange carrier (LEC) in California unilaterally set a rate for terminating purely intrastate phone traffic from MetroPCS California (MetroPCS), a California commercial mobile radio service (CMRS) provider.  MetroPCS objected to the rate, and the LEC complained to the FCC that MetroPCS wasn’t paying like it should. 

The FCC didn’t resolve the complaint; instead, it held the complaint in abeyance to give the California Public Utilities Commission (CPUC) a chance to set the appropriate rate.  Unhappy with that approach, MetroPCS asked the U.S. Court of Appeals for the D.C. Circuit to step in and require the Commission to set the rate itself.  The Court stepped in but, presumably to the chagrin of MetroPCS, the Court sided with the Commission.

MetroPCS thought that the FCC is statutorily obligated to set the “reasonable compensation” intrastate termination rates itself, or at least to provide “guidance” to the CPUC on “how to set a reasonable rate”.  It appears that MetroPCS has at least one more think coming.

Continue Reading...

Consent Decree Is Beginning, Not End, Of Licensee's Troubles

When you agree to pay a fine, the FCC really does expect you to pay the fine.

It turns out that, sometimes, the job’s not over even after the paperwork is done. An AM licensee found that out the hard way when it got slapped with a $25,000 notice of apparent liability for failing to take care of a couple of items on a to-do list that it had promised the Enforcement Bureau it would take care of.

The story starts back in 2005, when the licensee (real name: “A Radio Company, Inc.”) received a notice of apparent liability for a short laundry list of problems, including incomplete public file, inadequate tower fencing, and operating with unauthorized facilities (seems the directional AM was using its daytime directional pattern at night). Total damage: $15,000.

The licensee dickered over the details and managed to get the fine backed down a grand (in 2007), but it kept the ball in play by appealing parts of the remaining $14K fine. In 2008, the licensee entered into a Consent Decree with the Enforcement Bureau that shaved another $6,000 off the bottom line. So at that point the licensee was looking at an $8,000 fine, a bit more than half the original amount. According to the Consent Decree, all the licensee had to do was pay the fine, set up a “Compliance Plan” designed to prevent future violations, and file three (count ’em, three) “compliance reports” with the Commission – one 90 days after the Consent Decree, the second a year after, the third two years after – confirming that the Compliance Plan was up and running. Good deal, right?

Apparently not good enough.

Continue Reading...

Update: FCC Process Reform Hearing Date Set

And so it begins . . . on Friday the 13th.

A couple of weeks ago we reported about Congressional interest in FCC process reform, and the likelihood that hearings on that subject might be just around the corner. And sure enough – the Communications Subcommittee of the House Energy and Commerce Committee has announced that it will hold a hearing on FCC Process Reform, May 13 at 9:30 a.m. (if you’re in town and want to pop in for a look-see, stop on by Room 2123 in Rayburn Building).  Note that this is a rescheduling – the hearing was originally set for May 3.  The listed witnesses are Chairman Genachowski and the four commissioners. 

As noted in our earlier report, Subcommittee Chairman Greg Walden (R-OR) believes basic reforms can be addressed in a “positive and constructive way.”  With issues such as net neutrality, merger review (AT&T/T-Mobile anyone?) and agency sunshine rules in play, the upcoming hearing will provide an early public test of that theory.

2011 Reg Fees Proposed: Going Up!

Remember last Spring, when the FCC issued its proposed 2010 reg fees and they had all gone down from the previous year, so we got all excited, and then when the final 2010 fees were announced, they had gone back up again and we were disappointed? Good news! This year, the FCC is sparing us that emotional whipsaw. It has just released its proposed 2011 regulatory fees, and with only few exceptions, they reflect increases – in some cases, significant increases – over last year’s numbers. This way, we won’t be surprised and disappointed in a couple of months when the final fees are announced.

While pretty much everybody’s fees are proposed to go up, the folks who would get hit hardest are full service UHF TV in Markets 11-25 and Market 26-50. Their fees would increase by 9.5% and 10.8%, respectively. We have prepared a table reflecting the proposed 2011 reg fees here. The numbers in parentheses reflect the amount of the proposed changes from last year’s fees – as a visual aid, we have indicated proposed fee increases in red, and proposed reductions in cool green.

As always, the Commission is giving everybody a chance to comment on this year’s proposed fees, but you’ll have to act fast. The deadline for comments on the proposed fees is May 24, 2011; reply comments may be filed through June 1.

This year’s notice includes a couple of noteworthy points.

Continue Reading...

Ex Parte Follow-Up Paperwork Requirements Expanded

Additional proposals for increased reporting after ex parte meetings out for comment

Folks trying to get their way at the Commission routinely engage in what we professionals refer to as “ex parte” contacts – which usually consist of face-to-face, one-on-one meetings with Commissioners or Commission staff. Such meetings theoretically provide an up close and personal opportunity for the outside party to pitch its side of some issue to the regulators.

Ex parte meetings can be useful, but they also can be problematic from the perspective of due process and fairness. The term “ex parte”, after all, derives from the Latin for “one-sided”. If the issue which the private party is pitching in the meetings is contested, what are the chances that the other side of that issue will be fairly and accurately presented? (Non-FCC illustration: how would you feel if you found out that your soon-to-be-ex-spouse had had a private tête-à-tête with the judge presiding over your hotly-contested divorce case?)

In order to assure itself maximum access to potentially useful information (through, e.g., ex parte contacts) while still preserving at least the illusion of fairness and openness in the decision-making, the Commission has crafted a number of rules to govern the ex parte process. Those rules prohibit ex parte contacts in certain types of proceedings; in other types, such contacts are permitted as long as the private party follows up the meeting by submitting a notice summarizing the gist of the meeting (including any written materials that might have been handed out during the meeting). That notice is then placed in the FCC’s public files so that, theoretically, anyone with an interest in the proceeding at issue will be alerted to the meeting.

As happens periodically, the Commission has now adopted new rules clarifying, and expanding, the post-ex parte disclosure requirements.  Although the Commission announced the new rules back in February, they aren’t scheduled to take effect until June 1. (A couple of the changes involve “information collections” and, as a result, won’t be effective until approved by the Office of Management and Budget.) Additionally, the Commission has proposed further changes to those requirements.

Continue Reading...

FCC Process Reform: Change In The Air?

Key Congressional figures signal interest in examining the way the FCC does business

Have any thoughts on how the FCC could operate better? Increasingly, a number of influential members of Congress seem to believe they do. Momentum continues to build on Capitol Hill for reform of the Federal Communications Commission with recent statements – and hints of action – from key members of the House Energy and Commerce Committee.

Speaking at the American Cable Association’s annual summit on April 13, House Communications Subcommittee Chairman Greg Walden suggested there would be a hearing and movement on legislation on FCC reform in the near future. Expectations are that the five FCC commissioners will be called to testify before the subcommittee within a few weeks of Congress’ return from recess.

Walden made a strong pitch for Congress to actively oversee the agency, stating: “Failure to do that only gives them license to do other things they don't have the authority to do.” Walden, of course, introduced a House-passed resolution to invalidate, as an overreach of FCC authority, the Commission’s recent net neutrality rules.

Walden expressed his belief that both the Democrat and Republican FCC commissioners agree on the basic need to improve how the agency functions (see, e.g., “Copps, Commissioner, sunshine rules” and “Baker, Commissioner, merger review”) and that such reform can be done in a “positive and constructive way”.

And Walden is not alone in his interest in Commission process reform.

Continue Reading...

Buddy, Gonna Shut You Down

Tach it up! Tach it up! FCC moves to DefCon1 in anticipation of government shutdown

We’ve posted a couple of alerts about the possible shutdown of the federal government and the effect that that could have on licensees (read them here and here). Now the FCC itself is getting into the act. It has just posted on its website a “Plan for Orderly Shutdown Due to Lapse of Congressional Appropriations”. The Commission’s plan allots a total of four hours to complete “orderly” shutdown procedures. (The clock on that four-hour period apparently will start with the issuance of a “notice of decision to furlough” that will be emailed to all Commission employees to be sent home. Comforting factoid: All five Commissioners will stay on board through the shutdown.)

 

FCC Revising Tower Registration Rules, Routine

Proposed changes, and consequent delays, may stick in some craws

Looking to build a new tower, or maybe make changes to an existing tower? If your proposal involves an antenna structure that requires an Antenna Structure Registration (ASR), you can expect delays ahead if new procedures recently proposed by the Commission are adopted.

This latest development is just one more wrinkle in the years-long effort by a number of bird-loving groups to force the Commission to consider the impact of its ASR program on birds. We have written about that effort – which the birders appear to be winning – previously. The Commission is already in the middle of its own (court-ordered) Programmatic Environmental Assessment (PEA) relative to the ASR program. And while the Commission wades through the PEA process, it is now proposing new processing rules and interim procedures designed to give the public an opportunity to comment on proposed ASR-dependent towers (and proposed changes to existing towers) even before they’re formally proposed!

All of this is set out in a Public Notice recently published in the Federal Register.

Continue Reading...

Verizon v. FCC: On To Plan C?

Initial net neutrality appeal dismissed as premature

So much for creativity in appellate litigation. The U.S. Court of Appeals has determined that Verizon jumped the gun when they filed notices of appeal of the FCC’s net neutrality decision last January. As a result, Verizon’s appeal has been dismissed. (A similar appeal by MetroPCS was also dismissed in the same order.)

As faithful readers will recall, Verizon made a two-pronged effort to insure that the D.C. Circuit would be the court to review the net neutrality approach adopted by the Commission in late 2010. (Verizon’s motive in that effort isn’t hard to guess: the D.C. Circuit had slammed a similar regulatory approach in the 2010 Comcast decision.) But one prong of that effort – a request that Verizon’s appeal be assigned to the same panel of judges who decided Comcastwas rejected in less than two weeks. And now the second shoe has fallen.

The Court’s latest order is terse. Offering no substantive analysis, it merely concludes that

[t]he challenged order [i.e., the net neutrality decision] is a rulemaking document subject to publication in the Federal Register, and is not a licensing decision “with respect to specific parties.”

The theory of Verizon’s approach was that it was a “licensing decision” affecting “specific parties”. So much for that theory. As a result of the Court’s order, judicial review cannot be sought until the agency’s decision is published in the Federal Register, something that hasn’t happened yet. 

The good news for Verizon is that dismissal of its initial appeal does not foreclose it from seeking judicial review again once net neutrality finally makes it to the Register. (No word yet as to when that might be. Trade press reports a couple of months ago indicated that Federal Register publication was then imminent. Those reports were apparently wrong.)

The bad news for Verizon is that, when the opportunity to file does arise, there will be no way to guarantee that the case lands in the D.C. Circuit. If other parties file their petitions for review in other Circuits, a “judicial lottery” system kicks in. While it would seem to make sense for the D.C. Circuit to hear the next round of net neutrality appeals – that Court, after all, is very familiar with administrative law issues generally and issues arising from the Communications Act in particular – at this point it’s anybody’s guess where the case will ultimately land.

Sticking To The Scrip: FCC Announces Near-Term Incentive Auctions

“Incentive Auction Incentive Program” could eliminate need for Congressional authorization

Proving yet again that where there’s a will, there’s a way, the FCC has announced that it is proceeding with incentive auctions “promptly”. This is noteworthy, of course, because Congress still hasn’t gotten around to authorizing the sharing of auction proceeds – and the conventional wisdom has been that, without such authority, incentive auctions were a non-starter.

So much for the conventional wisdom.

As outlined in a public notice, the Commission has devised a novel work-around: an Incentive Auction Incentive Program. Instead of promising broadcasters actual cash payments from auction proceeds in return for relinquishing their spectrum, the FCC will offer its own currency, “in the form of scrip”, which can then be redeemed for various “non-cash resources” already available to the Commission.

Continue Reading...

A Look At The FCC's Proposed Overhaul Of USF And Intercarrier Compensation Regimes

Weighing in at 228 pages (not including an extra 61 pages of appendices and separate Commissioners’ statements), the NPRM illustrates the complexity of the problems facing the Commission.

A journey of a thousand miles begins with a single step. As reported here, last month the FCC began its own long, long march to the Promised Land of USF/ICC reform by issuing a massive 289-page tome that promises to revisit, reassess, restructure and revitalize virtually every aspect of universal service support and intercarrier compensation as we know it.  

The task is a daunting one. Perhaps for that reason, the Commission has been putting it off for more than a decade, tweaking this or that and putting out small brushfires as they’ve arisen, but never tackling the fundamental reform that virtually everyone agrees is desperately needed.   Complicating the task is the fact that USF reform and ICC reform are inextricably related – you can’t reform one without reforming the other.   So the FCC has correctly chosen to attack the two behemoths – each of which has proven remarkably impervious to reform – in a single charge.   This multiplies the complexity and size of the proceeding exponentially, but is the intellectually honest way to approach the matter.

In truth, just reading the Notice of Proposed Rulemaking (whose formal, if somewhat redundant, title is “Notice of Proposed Rulemaking and Further Notice of Proposed Rulemaking”) (NPRM) was a major undertaking. The document inquires into literally scores of existing policy issues, from questions as fundamental as the FCC’s jurisdiction to regulate VoIP to details as granular as benchmark rate levels. So far-reaching is the inquiry that we estimate that more than a thousand distinct questions or issues were posed for industry input.  Recognizing the logistical problem of arranging the myriad number of meetings necessary to garner the expected input from all parties, the Commission has taken the unusual step of establishing formal procedures for scheduling meetings with the staff.

Continue Reading...

Caveat Carriers: Telecom Report Form 499-A Is Due April 1

FCC pillories telecom provider with $600K+ fine as the Form 499-A deadline draws near. Coincidence? We suspect not. 

With less-than-subtle timing, the FCC has fined ADMA Telecom, Inc., a Florida telecommunications company, more than HALF A MILLION DOLLARS for Universal Service Fund (USF)-related violations.  The message is clear: telecom companies that ignore the FCC’s paperwork requirements run the risk of hefty financial penalties. So get out your calculator, look through your books,  and get those 499-A’s on file by April 1, 2011.

As we all know, Congress has long required the FCC to establish and oversee a number of programs aimed at assuring the provision of telecommunication services to all Americans. Those programs are for the most part funded by consumers, through telecom providers. The FCC has developed an extensive set of reporting requirements so that it can keep track of all providers and determine how much each of them owes to the various programs. (Those programs include the USF, the Telecommunications Relay Service (TRS), and the North American Numbering Plan (NANP).)

The reporting requirements include an initial registration (to let the FCC know that the telecom provider has started providing telecom services) and then annual (and, in most cases, quarterly) worksheets – either Form 499-A or 499-Q – from which USF contributions are calculated. These filing chores apply to most telecommunications carriers, including resellers and interconnected VoIP providers.  Limited exceptions include government-only providers, broadcasters, certain non-profits, and systems integrators that derive less that 5% revenue from telecoms resale. Carriers owing less than $10,000 are considered de minimis and do not have to contribute, but still must file the form and pay any TRS and NANP contributions.

Since these programs involve billions of dollars, the Commission has an obvious incentive in riding close herd on the players, to make sure that everybody pays what they owe. And it has an equally obvious incentive to make examples of those who come up short. 

ADMA, for example.

Continue Reading...

Pursestrings 2011: New Application Fees Announced

Effective date TBD

On the same day that it was cranking out hundreds of pages of Very Important Documents (including an NPRM on retransmission consent, a Report and Order on rural radio and related items concerning spectrum opportunities for Native Americans, updated rules governing accessibility for citizens with disabilities), the Commission also managed to slip out, with virtually no fanfare, a new schedule of application fees. It’s been more than two and a half years since the last revision to that schedule was announced. Since the Commission is required to review its fees every two years, this latest update is a tad late – but the last revision didn’t take effect until April, 2009, so if things move smoothly this time around, the process should be back on its biennial track.

It should come as no surprise to anybody that, at least on the broadcast side, almost all fees will be going up. In general, the increases are in the 3%-3.5% range – a figure tied to the Consumer Price Index. Note, however, that the fees for Ownership Reports ($60 per station), call sign changes ($95 per change), TV Translator/LPTV renewals ($60 per application) and AM remote control applications ($60 per) won’t be changing at all.

The Commission’s announcement left up in the air precisely when the new rates will kick in.  Historically, this is where the fun begins. Long-time readers may remember our “Pursestrings” series of posts, starting in September, 2008, and stretching out until mid-May, 2009. That series began with a simple announcement that new fees had been adopted and would be taking effect 90 days after notice of them was given to Congress. Easier said than done, apparently. After a number of odd twists and turns, those fees didn’t take effect until April 28, 2009, and weren’t incorporated into CDBS’s fee calculator until a couple of weeks after that. Read all about it in our archives.

This year’s notice specifies that the effective date of the rates will be 30 days after the order is published in the Federal Register. Perhaps so, but Section 158(b) of the Communications Act appears to require that the Commission notify Congress of application fee adjustments “not later than 90 days before the effective date”. Since the announcement of the new schedule is included in an Order and Notice of Proposed Rulemaking, with the comment dates on the proposed rulemaking portion tied to Federal Register publication,  our guess is that the Commission would like to get that order into the Register sooner rather than later. But if the order is published less than 90 days before notice of the new fees is sent to Congress, . . . well, you see where this could end up. We’ll keep an eye out for developments. Check back here for updates.

Update: Comment Deadlines Set In USF/ICC Rulemaking

Last month we reported on the FCC’s adoption of a “Notice of Proposed Rulemaking and Further Notice of Proposed Rulemaking” (NPRM/FNPRM) kicking off a proceeding which looks to overhaul, from top to bottom, both the Universal Service Fund and the Intercarrier Compensation system.  The NPRM/FNPRM has now been published in the Federal Register, which sets the deadlines for comments and reply comments.  Get out your pencils and papers -- there are more deadlines than usual (probably because of the vast scope of the proceeding). 

If you want to comment on Section XV ("Reducing Inefficiencies and Waste by Curbing Arbitrage Opportunities"), you have until April 1, 2011 to file comments and April 18, 2011 to file replies.  [Note: Section XV comprises Paragraphs 603-677 of the original NPRM/FNPRM.  The summary of the NPRM/FNPRM as it appears in the Federal Register does not contain the full text of the NPRM/FNPRM and does not include the same paragraph numbering or section labeling as the original.]

Comments on the remaining sections are due no later than April 18, 2011; reply comments are due no later than May 23, 2011.  There's also a separate comment date for State Members of the Federal-State Joint Board on Universal Service -- that would be May 2, 2011.  And finally, if you'd like to offer the FCC comments on the information collection aspects of the proposal (in connection with the Paperwork Reduction Act), you have until May 2, 2011.

Striving For Perfection

A week or so ago the FCC released a Report and Order and Further Notice of Proposed Rulemaking (R&O) addressing changes in its ex parte rules – an area so arcane that even we here at CommLawBlog have refrained from blogging about it so far. The R&O is a healthy 37-page item, complete with a detailed table of contents that looked like this when it was originally issued:

But now the Commission’s General Counsel has issued a one-page Erratum, the sole stated purpose of which is to “correct[ ] the paragraph numbers listed in the Table of Contents of the R&O.” The corrected version is reproduced below:

We’re glad they took the time to get that all straightened out  . . .

Next Candidates For Extreme Make-Overs: USF And ICC

FCC proposes major overhaul of Universal Service Fund, Inter-Carrier Compensation Systems

Perhaps inspired by the protesters in Egypt demanding the end to an outdated, bloated, aging, inefficient, and economically unsustainable regime, the FCC has finally taken up the task of systemic reform of the Universal Service Fund (USF) and Inter-Carrier Compensation (ICC).    These two mechanisms – one a product of the 1996 Telecom Act and the other a result of the break-up of the Bell System back in the ‘80s – allocate billions of dollars in telecommunications charges and revenues among carriers.   As with many grand failures, these systems were well intended. They were designed to compensate carriers fairly for routing traffic to and from each other, while also providing transparent subsidies to carriers who provide service in “high cost” areas.

Virtually everyone agrees that the systems do not accomplish their intended purposes either fairly or efficiently. But because there are so many parties that benefit one way or another – to the tune of billions of dollars – from the existing system, the FCC has been paralyzed for over a decade in its efforts to effect meaningful reform.   Now, flying the pennant of the National Broadband Plan (NBP) in which reform of these mechanisms was called for, the FCC has launched a top- to- bottom overhaul of the two systems.   The Commission’s original NBP action agenda called for these reforms to be initiated by the fourth quarter of 2010, but in the glacial scheme of action in Washington, a three-month delay counts as on-time. 

The full text of the catchily-titled “Notice of Proposed Rulemaking and Further Notice of Proposed Rulemaking” has just been released. It weighs in at a hefty 289 pages – which explains why we haven’t sifted through it in detail yet. (We plan to do so shortly and will report on our findings, of course.)

Continue Reading...

Net Neutrality Update: Coming soon - OMB Review!

But effectiveness of the new rules is still months away, at least

The Commission’s Open Internet (a/k/a Net Neutrality) initiative has taken a tangible step forward with the announcement that the FCC is getting ready to ship two “information collection” aspects of the rules over to the Office of Management and Budget (OMB) for its review. But don’t hold your breath – it’ll take at least a couple of months to get there.

OMB review is mandated by our old friend, the Paperwork Reduction Act, which requires agencies to quantify and justify “information collection” burdens before imposing them on regulated industries or the public. The idea is that OMB may perceive regulatory excess that the FCC has somehow overlooked and slam the brakes on the process.

The two Net Neutrality information collections in question? First, there are the formal complaint procedures to be used to resolve “open Internet disputes” when other, less formal, means don’t do the trick. And second, we have the requirement that broadband providers disclose their network management practices. Unfortunately, the FCC’s Federal Register notices concerning its proposals afford no particular insight into just what the complaint and disclosure requirements will involve. That may complicate the task of preparing comments on the proposals.

But wait – doesn’t the Net Neutrality order itself fill in some of the gaps in the notices? Some, maybe . . . but not all.

Continue Reading...

Misrepresentation Lite: Five-Figure Fine For Deceit-Free Fallibility

Inadvertent errors in applications draw $20K fine for Cricket

FCC enforcement procedures continue to baffle us.

Take the case of Cricket Communications. They are a cell phone company, as you probably know – their ads are hard to miss. To move their phone traffic from place to place, they operate dozens of microwave stations. The FCC rules require licenses for these. If you want one, you have to apply for it, but you need not wait for the license to be granted. Rather, you can begin operating as soon as the application is filed, assuming certain conditions are met. Once the FCC does grant the license, the licensee has 18 months to get its station built and on the air (if it isn’t already), and has 15 days beyond that to certify to the FCC that it has done so. Without that certification, the license cancels automatically.

Cricket had trouble with two of its microwave licenses.

As to one, it filed the construction certification on time, stating it had built the station within the 18 months allowed. But it later found the certification was in error, and had to amend. The new certification showed it had built and begun using the station much earlier, before it had even filed the license application. That amounts to unauthorized operation, which is a violation of FCC rules.

As to the other license, Cricket got the contents of the construction certificate right the first time. But it filed the certificate late, after the 18-months-plus-15-days had elapsed. And this certificate likewise showed that operation had commenced before the application was on file.

The Enforcement Bureau has proposed a fine of $20,000, which is exactly the expected penalty for two instances of unauthorized operation.

That should be the end of the story.

Continue Reading...

Verizon v. FCC: On To Plan B?

Comcast panel denies Verizon motion to assign net neutrality appeal to it

Well, that didn’t take long. On February 2, less than two weeks after Verizon filed its unusual motion asking that its appeal of the net neutrality decision be assigned to the same panel that trashed the Commission in the Comcast opinion last April, that panel has denied the motion. Don’t count on sifting through a detailed opinion to obtain subtle nuances of potential significance. The panel’s order consists of a single sentence: “Upon consideration of the appellant’s motion to assign the case to the panel that decided Comcast Corp. v. FCC, it is ordered that the motion be denied.”

Ouch.

Verizon’s appellate strategy has thus suffered a serious blow, but an important element of that strategy is still alive, at least for the time being. Its “notice of appeal” is still pending, although the FCC has moved to dismiss that as well. If the Court denies the FCC’s motion to dismiss and accepts the appeal, then Verizon will at least have secured review by the D.C. Circuit (as opposed to any other federal circuit court of appeals). Chances of that happening? You never know. (Note that the legal arguments underlying Verizon’s “notice of appeal” are separate and distinct from those advanced in its motion for the Comcast panel. In other words, the denial of the latter is not necessarily the kiss of death for the former.)

And even if the Court grants the FCC’s motion and tosses Verizon’s appeal on the theory that Verizon jumped the gun, Verizon will still presumably be able to file a “petition for review” along with any other party unhappy with the net neutrality order once that order is published in the Federal Register. But there is no guarantee that that review proceeding would necessarily end up in the D.C. Circuit. Check back here for updates as developments warrant.

112th Congress: New Line-Up, New Players - New Priorities?

(Blogmeister’s Note: FHH Telecom Law welcomes back guest commentator Catherine McCullough. This month she provides her perspective on the impact recent committee appointments are likely to have on communications issues in the 112th Congress. Catherine is a principal in Meadowbrook Strategic Government Relations, LLC and a specialist in Congressional relations.)

January is over, and the House and Senate Committees that oversee telecom issues have officially organized – issuing full lists of members, deciding on the rules by which the committees will work, and dividing up the budgets between Democrats and Republicans (thus setting the tone for how well the parties will work together in the 112th Congress).

So what will the legislative priorities of these committees be? The two themes of love and money – constituent votes and budget issues – that we identified in an earlier post still dominate. However, now that we know who all of the players are, including the subcommittee chairs, we can take these policymakers’ legislative pasts into account, and perhaps identify which specific bills we should see introduced in the coming months.

Continue Reading...

Telecom Tickler 2011 - CPNI Certifications Due By March 1

Heads up, all you telecommunications carriers and interconnected VoIP providers! Your annual reports certifying compliance with the Customer Proprietary Network Information (CPNI) rules are due by March 1, 2011. And you don’t have to take our word for that: the Commission has issued a helpful reminder notice to make sure that you’re on top of this chore. The Commission has also helpfully provided a copy of an acceptable template for CPNI certifications, as well as a series of Frequently Asked Questions (FAQ). 

As we have explained before (here and here, for example), the CPNI rules are designed to safeguard customers’ CPNI against unauthorized access and disclosure. Since 2008, the rules have required that telecommunications carriers and interconnected VoIP providers have an officer sign and file with the Commission a compliance certificate, annually, stating that he or she has personal knowledge that the company has established operating procedures that are adequate to ensure compliance with the rules. The carrier must also provide: (a) a statement accompanying the certification explaining how its operating procedures ensure that it is or is not in compliance with the rules; and (b) an explanation of any actions taken against data brokers and a summary of all customer complaints received in the past year concerning the unauthorized release of CPNI.  

The Commission takes this reporting requirement very seriously.

Continue Reading...

Effectively Ineffective Effective Date?

FCC either grabs or misses relinquished USF monies

As we reported here a few weeks ago, on December 30 the FCC adopted an Order that permits it to re-purpose the monies that are relinquished by carriers who are no longer ETCs in particular states. From the text of the Order, we thought the Commission wanted to make the Order “effective” as of December 30. Now we’re not so sure.

The back-story here starts in 2008. Under the Interim Cap Order adopted in May of that year, the FCC temporarily “froze” the amount of funds available for distribution to CETCs (including wireless carriers) at then-existing levels. The FCC emphasized at that time that the pool of funds would not change depending on the number of ETCs who were dipping into it – the FCC seems only to have been thinking about increases in the numbers of participants since it designated a lot of new ETCs at the same time as the Interim Cap Order, thus immediately reducing the pro rata funding available to participating ETCs.

In 2008, however, Sprint and Verizon both committed to relinquish their USF funds in certain states as a condition of getting mergers approved.   One would have thought that these funds would then have been available for re-distribution to the remaining ETCs since the amount of funding was to remain fixed. This would have relieved at least a portion of the hit that CETCs took when the combination of the cap and new ETC designations reduced their support well below authorized levels.

Continue Reading...

Size Still Matters To The Feds

2011 threshold triggers for federal scrutiny of mergers and acquisitions announced

Broadcasters and telecommunications operators contemplating possible deals for the coming year should remember that, as far as the federal government is concerned, there may be such a thing as Too Big. The Feds will step in to review an anticipated deal for potential antitrust problems if the deal exceeds certain threshold dollar amounts.  The law mandates that those threshold amounts be revised every year for inflation. The 2011 thresholds have just been announced, and will take effect on February 24, 2011. If your deal exceeds one of the revised thresholds, you should plan for increased government scrutiny, with all the additional hassle, expense and delay that such scrutiny entails.

Under federal antitrust law, certain mergers or acquisitions which exceed the specified thresholds must be submitted to the Federal Trade Commission (FTC) and the Department of Justice for Uncle Sam’s review before the transaction can be consummated.  (The theoretical basis for federal concern here: any transaction big enough to pass the thresholds is presumably big enough to affect interstate commerce.) The government’s internal process for adjusting these thresholds – based on the traditional measure of the gross national product – has been on the books for decades.

The newly-adjusted thresholds require pre-transaction notification if either:

  • the total value of the transaction exceeds $263,800,000; or
  • the total value of the transaction exceeds $66 million and one party to the deal has total assets of at least $13.2 million (or, if a manufacturer, has $13.2 million in annual net sales) and the other party has net sales or total assets of at least $131.9 million.

When negotiating deals, all parties would be well-advised to bear these thresholds in mind. Once those lines are crossed, the prospect of additional time, expense and hassle to navigate the federal review process is a virtual certainty.

Net Neutrality: Verizon Looks For A Home Court Advantage

Another appellate round before the Comcast panel? Could be, if Verizon gets its way

Wasting no time, Verizon has taken a bold move designed to herd the next round of appeals in the Net Neutrality proceeding back before the same panel of judges who slammed the FCC in the Comcast decision last April. Verizon has filed a “notice of appeal” with the U.S. Court of Appeals for the D.C. Circuit relative to the Commission’s latest Net Neutrality decision. That alone might raise some eyebrows. But taking it one step further, Verizon has filed a separate motion asking that the Comcast panel be assigned to Verizon’s appeal.

Appellate litigation aficionados take note.

Continue Reading...

Catherine McCullough, Communicator

C-SPAN calls on CommLawBlog contributor

If you had the bad judgment to stick with the Saints-Seahawks game on Saturday of Wildcard Weekend, you may have missed our friend and occasional contributor, Catherine McCullough, who appeared on C-SPAN’s “The Communicators” program. Catherine was one of two former Hill staffers (and current lobbyists) discussing likely developments in telecom and technology policy in the 112th Congress. (If you did miss it, no worries – the whole 30-minute show is available at C-SPAN’s site.) Props to C-SPAN for its excellent judgment in bringing Catherine on.

Props, too, to Catherine for her useful insights. No surprise there, though – regular readers of CommLawBlog are accustomed to such insight from Ms. M. Check out her previous posts here, here and here.

And speaking of our readers, we couldn’t help but notice how the C-SPAN moderator set up his opening question of the program: “You wrote in a recent blog on CommLawBlog.com . . .” Hey, that’s us! Schweeet! Needless to say, we’re grateful for the shout-out, and we’re happy to be a go-to place for folks like C-SPAN who want to stay on top of developments in the law of communications.

Net Neutrality: Both Sides Are Wrong

The FCC’s new net neutrality rules won’t work. Unfortunately, there are no better alternatives in sight.

(The opinions below are those of the author. He formerly advocated network neutrality; a glimpse of what it might actually look like has prompted him to change his mind.)

Net neutrality is one of those issues that sharply divide the country. Those who take sides in the debate, do so passionately. To call it a “debate,” though, is misleading. In a debate, people listen to each other before responding. On network neutrality—as in health care, financial reform, and other key national issues—people just shout at each other. Making matters worse, the two sides not only hold conflicting opinions, but deal in conflicting facts.

You know the facts are up for grabs when both sides claim the same slogan: “Keep the Internet Free”! To some, this means keep the Internet free of regulation; to others, keep the Internet free of discrimination by the Verizons and Comcasts that connect us to the world.

One fact is inescapable: when the local Internet data load exceeds capacity, someone will decide whose traffic gets held back. It might be Comcast, making a business decision; if might be the FCC, controlling Comcast through regulation. If both keep their hands off—Keep the Internet Free!—the decision gets made anyway, by the kid down the street supplying bootleg hi-def movies through  his parents’ connection. We know when he’s home from school, because service for everybody else on the street drops to a crawl.

Continue Reading...

Update: Commission Sets Hooks Into USF Windfall

FCC acts quickly to facilitate re-purposing of USF payments left behind by Verizon Wireless and Sprint-Nextel

Last September we reported that the FCC had proposed to grab hold of certain Universal Support Fund (USF) moneys that would no longer be distributed to competitive eligible communications carriers (ETCs) when Verizon Wireless and Sprint-Nextel gave up their ETC status in certain markets (in fulfillment of conditions placed on approvals of their mergers).  And as we reported in October, the expectation is that the relinquished funds will be used for a new mobility broadband support fund.

The FCC has quickly adopted its proposal and made it effective immediately, to take advantage of anticipated relinquishment of ETC status in several markets by Sprint-Nextel on December 31, 2010.

Each state has a cap on ETC support from USF.  Historically, when a carrier gave up support, for whatever reason, the cap stayed unchanged.  With the same number of dollars available in the state, but fewer supported carriers, the remaining ETCs claimed the right to an increase in their own payments.  But the FCC had other ideas, seeing an opportunity to fund part of its planned mobile broadband support program.  It proposed not to allow the remaining ETCs to get any of the relinquished funds.

Continue Reading...

Ho-ho-ho - Net Neutrality Order Released

Who says the Christmas spirit didn’t survive the 20th Century? Not us! And, apparently, not the FCC, which took the time – on the eve of Christmas Eve – to release the full text of its Net Neutrality decision. All 194 pages. Actually, the decision itself is only 87 pages long, but then there are the Commissioners’ separate statements, the rules themselves, and a bunch of other stuff that brings the total count close to the 200-page level.

What with last minute Christmas shopping, decorating, baking, and other seasonally-appropriate festivities, we confess that reading the decision has not been a top priority. We do expect to delve into it promptly and will report on our findings, but in the meantime we’re providing the link (above) to the decision for those who want to check it out themselves.

If you’re worried about the immediate effects of the decision, you can breathe a little easy – none of the new rules will take effect until: (1) the Office of Management and Budget has had a chance to give them the once-over (as required by the Paperwork Reduction Act); (2) OMB has given them the thumbs up; (3) notice of the OMB’s approval has been published in the Federal Register; and (4) 60 days have gone by after that publication. In other words, you should be able to enjoy the year-end holidays.

And we here at CommLawBlog do wish all our readers the best of the holiday season.

FCC Adopts Net Neutrality Rules (Genachowski-style)

New rules, solidly endorsed only by the Chairman, seem to displease everybody else; Nagging problem of statutory authority (or lack thereof) persists

The FCC, nominally a five-member organization, proved to be more of a one-man band in the adoption of net neutrality rules. While the official record reflects a 3-2 vote in favor of the rules imposing “open Internet” limitson broadband Internet access service providers, closer inspection reveals that only one member actually favored the rules which have been adopted. The vote tally was: one in favor; two strongly opposed; and two unhappy-with-the-rules-but-willing- to-sort-of-go-along-with-Chairman-Genachowski. 

And with that ringing endorsement, net neutrality has become the law of the land . . . at least for the time being.

The full text of the rules (along with the accompanying order explaining them) has not yet been released. (Check back here for more in-depth analysis once the actual rules and order are available for review.) But from the FCC’s public notice announcing its decision, and from the separate statements of the Commissioners, we can report that, as anticipated, the key provisions of the rules are:

Continue Reading...

Genachowski Signals Bold Net Neutrality Move

At Chairman's insistence, Commission will vote on new net neutrality rules in December despite shaky legal foundations and opposition in Congress.

On December 1, Chairman Genachowski announced that he has circulated a draft net neutrality order to be voted on at the Commission’s December 21 meeting. While the draft has not been made public, the Chairman’s announcement provides some insight into its contents. Here is an overview of the Chairman’s proposed approach, the Commission’s authority to implement that approach, and the likelihood of its success.

The Proposed Rules 

Genachowski’s remarks indicate that the current proposal is broadly similar to the one he introduced last Fall (you can read our report on that earlier effort here), with some refinements on specific issues like usage-based pricing and wireless. The draft is reportedly modeled on a net neutrality bill developed by departing House Commerce Chairman Henry Waxman (D-CA) earlier this Fall in an unsuccessful attempt to help the FCC out of its Comcast hole through legislative compromise. In particular, it appears that the proposed rules would include:

  • a transparency provision, with a requirement to provide consumers with information regarding network management;
  • a non-discrimination clause prohibiting the blocking of lawful content, apps, services, and devices as well as “unreasonable discrimination in transmitting lawful network traffic”.  The non-discrimination clause would allow for “reasonable network management”, taking into account the nature of the network in determining what is reasonable; and
  • some latitude for usage-based pricing to consumers and other measures to match price to cost. 

For wireless, the proposal would include transparency and a “basic” no blocking rule. The FCC would monitor the mobile market and take such further steps as may be necessary to counteract any “anti-competitive” or “anti-consumer” behavior.

Continue Reading...

Environmental Assessment Of ASR Program Underway

At Court’s direction, FCC examining the environmental effects of its tower registration process

The worm is turning.

Having long required various applicants to undertake “Environmental Assessments” (EAs) in connection with their proposals, the Commission now finds itself in the unenviable position of having to do its own EA relative to the effects of its Antenna Structure Registration (ASR) Program on migratory birds. The Commission has kicked off its EA with a public notice announcing a series of three public meetings and an opportunity to submit written comments.

Not surprisingly, this is not something the FCC seems particularly eager to dash into. In fact, its obligation to perform the EA came about when the Commission lost a case in the U.S. Court of Appeals for the D.C. Circuit nearly three years ago – and before then, the issue of the impact of towers on birds (or vice versa) had already been a subject of considerable controversy for at least five years. In 2009 the Commission solicited comments on bird-related issues, and earlier this year a private compromise was reached by a number of tower-related groups and bird-related groups; that compromise was submitted to the FCC, which has taken no action on it to date.) But now, at long last, the Commission is moving forward to comply with the National Environmental Policy Act (NEPA).

The first step in this process is an EA, which is a preliminary investigation of the likely environmental impact of the ASR program. If the EA indicates that the program will result in no significant environmental effects, the Commission will issue a Finding of No Significant Impact (that’s right, a FONSI – not to be confused with Fonzie from Happy Days). But if the EA indicates that any “significant” environmental impacts might result from the ASR program, then the Commission must carry out a more extensive analysis – the dreaded Environmental Impact Statement (EIS).

Why has the FCC been sucked into the NEPA vortex?

Continue Reading...

A Lobbyist's Look At Telecom In The Next Congress

Love and money are likely to be the keys to the game. 

[Blogmeister’s Note: CommLawBlog welcomes back Catherine McCullough, who provides us with the following insight into the upcoming Congressional session. Catherine, who has guest-blogged for us previously, is a principal in Meadowbrook Strategic Government Relations, LLC and is a specialist in Congressional relations.]

Welcome to the 112th Congress. Notice anything missing? Like a third of the House Energy and Commerce Dems? Or a Congressional mandate on net neutrality? Or Chairman Boucher? Me too. So let’s take a few minutes to figure out what it all means.

Let’s start with the larger picture. This year’s midterms have put Members on notice that voters are not afraid to fire them. And each party is looking to 2012 to capture complete control of both houses of Congress and the White House.

So in the upcoming Congress look for Members to be feverishly competing for two things: love and money. Love in the form of votes (from an unusually angry electorate, eager to hold officials accountable). And money in the form of, well, money, i.e., the ability to spend government funds on their preferred projects (without, of course, looking fiscally irresponsible).

As we shall see, both love and money can be found in telecom policy. So it’s likely that telecom issues will get considerable attention from Congressional leadership, including precious “floor time” for debate. Here is how I see the 112th playing out.

Continue Reading...

Effective Date of (Most) New E911 Accuracy Rules Set

Pending OMB approval still keeping some of the new rules in limbo for now

A couple of months ago we reported on two FCC actions involving E911 accuracy standards. In separate decisions released simultaneously, the Commission (a) accepted an industry/public safety community compromise on those standards and (b) proposed to expand the reach of those standards. As we reported a couple of weeks ago, it took the Commission more than a month to get the deadlines for comments and replies about the proposed rules established (by publishing the NPRM in the Federal Register). 

For some unexplained reason, it has taken even longer for the Commission to get the rules it adopted back in September published and, therefore, effective. Never fear, though – today, just in time for Thanksgiving, the Second Report and Order in the E911 location accuracy proceeding has finally made it into the Federal Register. That means that the new rules will become effective in 60 days. Wait, don’t bother to reach for your calendar – we’ve already done the calculation: the effective date will be January 18, 2011 (which is actually 62 days from publication -- presumably that's because the 60th day, January 16, is a Sunday, and the next day, January 17, is Martin Luther King Day).

Note that §§ 20.18(h)(1)(vi), 20.18(h)(2)(iii), and 20.18(h)(3) – all of which were changed in the Second Report and Order – will not necessarily take effect on January 18. That’s because they involve information collections which have yet to be approved by OMB first. OMB approval might be obtained before January 16, but it hasn’t happened yet, so we still can’t say for sure when those particular rules will kick in.

NTIA Charts Ten-Year Plan/Five-Year "Fast Track" Jumpstart To Broadband Nirvana

Spectrum re-purposing process underway with release of Ten-Year Plan and Fast Track Evaluation

Those of you awaiting the FCC’s November 30 meeting (when the Commission is scheduled to unveil its plan for repurposing of TV spectrum) may want to get warmed up for that experience by leafing through two reports just issued by the National Telecommunications and Information Administration (NTIA). (Nit-picky observation: while the covers of both reports bear an “October 2010” date, both were first posted on the NTIA website on November 15.)

One – titled “Plan and Timetable to Make Available 500 Megahertz of Spectrum for Wireless Broadband” (Ten-Year Plan) – outlines in 23 pages of text (with some dazzling charts and tables) the overall process by which the government plans to jigger with existing spectrum usage in order to wring out 500 MHz for wireless broadband. 

The second – with a formal title even more prosaic than the Ten-Year Plan’s (we’ll just refer to it as the Fast Track Evaluation) – lays out over more than 250 pages of text, tables, lists (and a two-and-a-half page glossary of abbreviation and acronyms) the analytical process through which the Feds have identified 115 MHz of their own spectrum which they would like to feed to the Voracious Broadband Beast within five years. 

NTIA has also issued a more digestible five-page “fact sheet” summarizing the two longer items.

The Fast Track Evaluation illustrates a couple of things. 

Continue Reading...

Joint Board Weighs In On USF Lifeline, Link Up

But Board balks because big, basic broadband questions left unasked

Acting in response to a request by the Commission, the Federal-State Joint Board on Universal Service (Joint Board) has adopted a Recommended Decision concerning implementation of the Low Income component of the Universal Service Fund (USF).   Not stopping there, the Joint Board took the time to vent a bit about some broader issues about which the FCC didn’t ask it to comment.

(The Joint Board is composed of representatives from the FCC, state public utility commissions, and one consumer advocate. It was established in 1996 to provide recommendations on the implementation of the universal service provisions of the 1996 Telecommunications Act of 1996.)

Back in May 2010, the Commission asked the Joint Board to take a look at the Link Up and Lifeline components of the USF’s Low Income Program. The Link Up Program helps low income consumers defray the initial hook-up costs for telephone service; the Lifeline Program helps them defray the monthly costs of such service. Both programs are funded through the USF, which in turn is funded by telecom companies paying in a percentage of their interstate end-user revenues, which is in turn paid for by consumers. 

In its May Order, the Commission asked the Joint Board to address three particular administrative aspects of the Link Up/Lifeline Programs: eligibility (who should get the money), verification (how to make sure the money is in fact going to the right people), and outreach (telling people the money is available). 

In response, the Joint Board offered the following:

Continue Reading...

FCC Says: Send Us Toys!

The holidays are still a few weeks off, and the FCC just can’t wait.

The FCC is opening a new “Technology Experience Center.” Its purpose? To give “FCC employees and invited guests hands-on experience with the latest communications devices and solutions.”

Let us explain what this is really about.

Part of our job here at FH&H is persuading the FCC to adjust its technical rules, when needed, to accommodate new technologies. This can be a slow and difficult process.   We find it helps, when visiting the FCC, to put on the table a specimen of the gadgetry at issue, preferably smooth and shiny with blinking lights. The FCC engineers inevitably play with the item, push the buttons, and pry off the cover to see the insides. (Interestingly, most lawyers refuse all hands-on contact.) Once the staff gets a close-up, first-hand look at the technology, the rule changes seem to come more easily.

Apparently, though, people like us are not bringing in new gadgets often enough. So the FCC is asking for more.  Sure, they dress up the request by calling it a “Technology Experience Center”, whatever that is. But we think the real purpose is plain: more toys. Manufacturers and vendors who want to donate devices now have a phone number to call. Of course, the FCC tells contributors not to expect any benefit, and warns that acceptance of a gadget does not constitute endorsement. But even so, we think UPS is going to see a lot more boxes than usual headed for the Portals. We picture a big playroom with lots of shelves filled with blinking lights.

For us, the goal will be, somehow, to get on the list of “invited guests.”

Comment Deadlines Set In Mobility Fund Rulemaking

Deadlines have been set for comments and reply comments in the proceeding aimed at devising a mechanism for distributing the “Mobility Fund” realized through the FCC’s re-direction of USF funds left on the table by Sprint and Verizon. We described the Notice of Proposed Rulemaking last week. Now the NPRM has been published in the Federal Register, which means that comments are due by December 16, 2010, and replies are due by January 18, 2011.

FCC Proposes Distribution Mechanism For USF Windfall

Proposal: Dole out up to $300 million through reverse auction to bring 3G to underserved areas

As we have reported, the FCC decided last month that, instead of re-distributing to CETC’s the $500 million or so in USF funds which Verizon and Sprint renounced as a condition of getting their mergers approved, it would keep the money in a rainy day fund to support broadband mobility. The FCC’s action in that regard was highly suspect on legal grounds (full disclosure: FHH represented the lead proponent of re-distribution of the money to CETCs). Nevertheless, the Commission initiated a rulemaking to try retroactively to justify its unprecedented action.   And now it has opened another rulemaking to determine where and how the so-called “Mobility Fund” will be distributed.  

This proceeding may be a classic case of pre-natal chicken enumeration, since the Commission’s original palming of the Verizon/Sprint funds remains very much in contest. A spate of petitions for reconsideration have been filed, and the matter is likely to go to the Court of Appeals if the FCC remains unmoved. That process could easily take two years, maybe longer.   So no matter what happens in the new rulemaking, Mobility Fund dollars are not going to be finding their way into anyone’s pockets soon, if ever.

That said, the Commission’s proposal for distributing the Mobility Fund is a solid step forward in tailoring the distribution of Universal Service Fund support to those precise areas that most need it without wasteful duplicative support payments. The FCC proposes to distribute $100-$300 million dollars from the Fund by conducting a reverse auction. Bidders would propose to offer 3G-level service in census tracts around the country that have been designated by the FCC as underserved.  The bidder who proposes to provide the service with the lowest amount of support from the Mobility Fund would be awarded the subsidy at that level. There would be only one recipient in each census tract. 

Some specifics from the Commission’s proposal:

Continue Reading...

Commission Cracking Down On Toll-Free Numbers For iTRS Use

Proposal would dramatically restrict iTRS-provider-provided toll-free numbers

In a move that may at first seem counter-intuitive, the Commission is proposing to restrict the issuance of toll-free telephone numbers affording access to deaf and hard-of-hearing people for use with the Internet-based Telecommunications Relay Service (iTRS). But even though the restrictions might appear to deprive deaf and hard-of-hearing people of a possible benefit, there is method to the FCC’s madness – and it has the support of a number of groups representing deaf and hard-of-hearing people, to boot.

The government subsidizes services which allow people with hearing disabilities to communicate by telephone with persons with or without normal hearing. Those services (generically known as “Telecommunications Relay Service”, or TRS) have been greatly improved by the advent of home computers and now for the most part come in two flavors of Internet-based access – “Video Relay Service” and “IP Relay” – which the FCC refers to collectively as iTRS. (Click here for an overview of TRS generally.)

Prior to 2008, iTRS users (i.e., deaf and hard-of-hearing persons) could be reached on the Internet through IP addresses, proxy or alias phone numbers, or toll-free phone numbers. iTRS providers routinely would give iTRS users a toll-free number which the provider controlled. Most people seeking to reach an iTRS user would dial that toll-free number, and the iTRS provider would route the call to the iTRS user with which the iTRS provider had associated the called number in the provider’s database. But back then, providers didn’t share their databases, which meant that people calling the iTRS user were forced to use the service of the iTRS provider that issued the toll-free number to the iTRS user. Such arrangements ran counter to the FCC’s policy to allow users to pick different iTRS providers without changing equipment.

Continue Reading...

FCC Blackout Coming

Financial records to be unavailable October 1-18 (maybe longer) as Commission implements new financial system

Don’t be lending the FCC any money if you need to get paid back before mid-October, at the earliest. The Commission has announced that the first 18 days (at least) of the next fiscal year – starting on October 1, 2010 – will be a “financial system blackout period”. The Commission is implementing a new financial system, and the down-time will be necessary to ensure that the new system gets properly installed and fully operational.

This could affect a variety of applicants and licensees, so listen up.

Continue Reading...

Comment Deadlines Set On Proposed Re-Direction Of USF Funds

Deadlines have been set for comments and replies on the Commission’s proposal to amend certain aspects of the Universal Service Fund. As we reported last week, the FCC is proposing “to facilitate efficient use of reclaimed excess high-cost support” in the Universal Service Fund by “reclaim[ing]” cash that Verizon Wireless and Sprint-Nextel left on the table back in 2008. The Notice of Proposed Rulemaking has now been published in the Federal Register, which in turn establishes the participation deadlines. Comments are due by October 7, 2010 (i.e., 21 days after Federal Register publication); reply comments are due by October 21, 2010 (i.e., 35 days after publication).

USF Bonanza Broadband-Bound?

FCC proposes to re-direct cash left behind by Verizon Wireless, Sprint-Nextel

If you managed to clear out of the office early for the Labor Day weekend, you may have been lucky enough to miss the release of the latest salvo in the FCC’s effort to reform the Universal Service Fund (USF). The Commission’s Order and Notice of Proposed Rulemaking (NPRM) hit the e-distribution system late on Friday afternoon, just as the local streets were clearing after an early rush hour and beach-bound traffic was slowing to a crawl.

The Commission’s new USF game plan involves the likely dedication of hundreds of millions of dollars to subsidize broadband in furtherance of the National Broadband Plan (NBP). (Many observers believe the NBP has replaced the Communications Act of 1934 as the FCC’s Prime Directive.) The cash would come from the existing USF pool of funds – although precisely how the Commission justifies its proposed approach may raise some eyebrows. Still, it seems that that approach may be a fait accompli: the Commission has allotted a mere 21 days for comments on its proposal (and another 14 days for replies).

Continue Reading...

H.R. 5828: USF Reform Proposed In House

Boucher bill boosts boatloads of big bucks for broadband build-out in boondocks

One more element has been added to the full-court governmental press aimed at extending broadband to as many people as possible: a bill recently introduced in the House would reform the 13-year-old, multi-billion dollar Universal Service Fund (USF). The proposal would (among other things) explicitly declare high-speed broadband to be a “universal service” and, therefore, eligible for subsidization from the USF – thus freeing up boatloads of big bucks for broadband build-out in the boondocks. Dubbed the “Universal Service Reform Act of 2010”, the bill is a bipartisan effort sponsored by Reps. Rick Boucher (D-VA) and Lee Terry (R-NE).

The USF was created by the 1996 Telecom Act, but its roots go deeper than that – back at least to 1934, when the FCC was born. The U.S. has sought to assure that every American has access to essential telecommunications services. Historically, such services have entailed mainly standard old telephone service. Putting the consumer’s money where the government’s mouth is, the 1996 Act provided for the establishment of a fund (the USF) to be used to subsidize the provision of affordable telecommunications services in certain circumstances. 

USF subsidies go to: (a) “high cost” areas, mainly rural and sparsely-populated in nature, where delivery of service could otherwise be prohibitively expensive; (b) low income consumers in need of basic local phone service; (c) rural health care providers for both telecom and Internet services; and (d) schools and libraries, to assure access to various telecommunications services. Subsidies for each of these groups are managed by separate divisions within the Universal Service Administrative Company, the non-profit corporation established to oversee the day-to-day operation of the USF. (The USF gets its funds from telecommunications providers, who in turn get the funds from their customers.)

The Boucher-Terry bill focuses primarily on the USF program for delivering telecom services to “high cost” areas.

Continue Reading...

Cuba (Semi-)Libre? Sí, Pero . . .

Despite U.S. efforts to ease entry into the Cuba market, no telecom gold rush has materialized – Por qué no?

It’s no secret that the Obama Administration would like to “reach out” to Cuba in the hope of bringing that island nation and the U.S. closer on a number of levels. One component of that effort involves increased telecommunications links between the two countries, as we reported last December. While it took the FCC a bit longer than other agencies to get with the program, by January the Commission had finally jumped on the bandwagon: as we reported then, the FCC eventually got around to relaxing its longstanding, restrictive policy on telecommunications to Cuba. Having discharged its duty, the Commission sat back and waited for a flood of international 214 applications which would lead to telecom rapprochement with the Cuban people.

This has manifestly failed to happen. Por qué? 

A number of theories and observations were tossed around by a panel of experts at a recent brown bag lunch presented by the Federal Communications Bar Association. Here, we summarize some of the major factors that, according to the panelists, are affecting and will likely continue to affect U.S.-Cuba telecommunications ventures.

Continue Reading...

Previously, On "The Third Way" . . .

Facing a communications universe well beyond anything contemplated by the drafters of the Communications Act in 1934, or even the authors of the 1996 update, the FCC has been forced to improvise – most recently by taking a page from Goldilocks, looking for a “third way” that’s Just Right. On June 17, the FCC took the first formal step in what is likely to be a contentious process intended to determine how, if at all, the FCC will regulate the Internet.

But before we lift the curtain on the next episode of the drama, let’s recap:

Continue Reading...

Part 17 Rulemaking Comment, Reply Comment Deadlines Set

A couple of weeks ago we reported on the FCC’s Notice of Proposed Rulemaking (NPRM) looking to overhaul the Commission’s regulation of towers, er, we mean “antenna structures”. The NPRM has now been published in the Federal Register, which establishes the deadlines for comments and reply comments in response to the NPRM. Mark your calendars: comments are due by July 20, 2010; reply comments are due by August 19, 2010.

FCC Puts New Time Limits On "Porting" Phone Numbers

Changing phone carriers? Keeping the same number? You have friends at the FCC

For several years now, consumers have been able to keep their telephone number when changing telephone service providers, making it easier to switch from AT&T’s iPhone to Verizon’s Droid phone and back again without having to change your number each time. You can even switch the same number between wireline, and wireless, and VoIP carriers. The problem has been that while intercarrier number “ports” take only a day between wireless carriers, they take up to four days when a wireline carrier is involved.

Continue Reading...

The FCC Acts In Mysterious Way

Commissioners signal intent to impose modified Title II common carrier regulation on broadband Internet

This FCC is not letting any grass grow under its feet. Only a month ago, the U.S. Court of Appeals for the D.C. Circuit pulled the rug out from under the FCC's authority to regulate the Internet. In the intervening weeks, there was much speculation about what the Commission should or would do to bring the Good Ship Internet back on course.   Suggestions included turning the entire matter over to the Federal Trade Commission, seeking a change in the Communications Act to expressly grant the FCC the authority to regulate the Internet, appealing to the Circuit Court en banc or the Supreme Court to reverse the Comcast decision, or trying to more solidly justify its ancillary authority over the Internet.  

The most widely discussed option, however, was simply re-classifying broadband Internet access as a telecommunications service. 

While this would require some major backtracking by the Commission (it had previously solemnly declared broadband Internet access to be an “information service” and thus exempt from Title II regulation), it is not uncommon for administrative agencies to change their minds.   The re-classification would deposit broadband Internet access safely back in the nest of common carrier services which no one disputes the Commission has authority to regulate. The only question then would be whether to employ the heavy hammer of full Title II monopoly style regulation or the light feather of minimal regulation applied to wireless carriers, or something in between.

On May 6, the Commission telegraphed which way it’s going, but it did so not by an official order but by a flurry of battling press releases.

Continue Reading...

Part 17: Subject To Change

FCC looks to overhaul antenna structure strictures.

You know how people have been telling you for, like, years that you really ought to clean out your refrigerator? And when you finally get around to it, you find (among other things) that those fuzzy things that look like a science experiment sprouting behind the old jar of maraschino cherries at the back of the top shelf have sell-by dates that went by several years ago?

That’s what the FCC is experiencing right now – but instead of its refrigerator, what needs cleaning up are the rules governing antenna structure construction, lighting, marking and maintenance. 

And so the Commission has released a Notice of Proposed Rulemaking (NPRM) looking to overhaul its tower-related rules, which comprise Part 17 of the rules. While the Commission specifies a number of particular changes it has in mind (see below for examples), the proceeding appears to encompass the entire regulatory scheme of Part 17. Anyone who has an antenna structure or expects to build one may want to take the opportunity to offer their suggestions, since history suggests that, once the structure rules are revised, they’re likely to stay that way for a while.

The FCC, of course, has long required all of its regulatees to comply with various non-RF related aspects of their antenna structures.  (Insider tip: While you may want to refer to them as “towers”, don’t; the government prefers the more elegant term “antenna structures”.) And it routinely issues forfeitures for non-compliance with, e.g., lighting and painting specifications. The goal is to keep aviators and aviation passengers from flying into those structures.

But because the focus here is on aviation, the FCC shares antenna structure responsibilities with the Federal Aviation Administration (FAA). Historically, the FAA has set most of the substantive standards (for, e.g., lighting and painting), even though the FCC has the responsibility for enforcing those standards.  But the two agencies apparently don’t coordinate as well as they might – and, as a result, discrepancies between the FAA’s requirements and their FCC equivalents can develop.

Continue Reading...

Saving Network Neutrality - Make Way For The Third Way

FCC Chairman moves to re-regulate broadband Internet transport function, but network neutrality may fall by the wayside.

Stymied by the Comcast decision in his efforts to impose network neutrality, Chairman Genachowski is asking the FCC to back up and come at the problem again, this time from a different angle. He calls his approach “the Third Way.” The other two Ways, both rejected, consist respectively of too little and too much regulation. So we think instead the Chairman should name his choice the Just Right Way. But the name is not its only problem.

From a regulatory standpoint, Internet service is a combination of two very different things. One is the provision and selection of content, called an “information service” (IS, for brevity). The other is the transport of that content between the Internet provider’s facilities and the customer’s phone or computer, a function termed a “telecommunications service” (TS). Any FCC power to regulate IS comes from Title I of the Communications Act, which provides its somewhat vague authority to regulate wire and radio communications generally.  But when the FCC first drew the IS/TS distinction – in the pre-Internet days of the 1970s – it forbore from regulating IS.

By contrast, the Commission then chose to regulate TS under Title II of the Act, the same statutory regimen that governs telephone service. Title II unquestionably gives the FCC enormous authority over rates and conditions. Among other rules, the Commission required the phone companies to accommodate other Internet service providers on their dial-up phone lines (and still does). The resulting competition effectively prevented any dial-up provider from short-changing its customers on content.

When broadband arrived, the FCC made a drastic change. It treated IS and TS as one combined service subject to the same regulatory approach as IS – i.e., under Title I only. Soon afterwards, Comcast began to selectively interfere with customer content; the FCC ordered it to stop (in the name of net neutrality); and Comcast challenged the order in court. 

In defending against that appeal, the FCC was badly constrained. Having relinquished Title II, it had to argue that the indeterminate language of Title I was enough to support network neutrality rules. And since Title I has no actual words on the subject, the FCC could rely only on the claim that Title I provides it “ancillary” authority. Wrong, said the court, to the joy of cable companies and phone companies everywhere.

Now Chairman Genachowski is looking for some way out of the hole. And that way is the Third Way.

Continue Reading...

Effective Date, Comment Dates Set For Roaming Rule Changes

A couple of days ago we reported on an FCC order which (a) made changes in the rules regarding “home roaming” and (b) solicited comments on whether automatic roaming for data services should be required. The order (broken out into two separate parts) has now been published in the Federal Register. That publication has two effects. First, it establishes the effective date of the change in the “home roaming” rule. Mark May 28, 2010, on your calendar for that.

And second, it sets the comment and reply comment dates with respect to the data roaming questions. Comments are due by June 14, replies by July 12.

A Lobbyist's Look At The Comcast Question

Looking for net neutrality authority at the FCC? You might be one letter off. 

[Blogmeister’s Note: CommLawBlog.com welcomes back guest blogger Catherine McCullough, principal of Meadowbrook Strategic Government Relations, a D.C. lobbying firm. We are pleased that Catherine has agreed to share with our readers her thoughts on how the Administration might deal with its Comcast problem.]

Across the post-Comcast playing field, the governmental players are staking out their positions on the question of who, if anybody, has the authority to enforce network neutrality. 

A recent hearing before the Senate Commerce Committee provided examples: Chairman Rockefeller, emotionally describing how lack of service affected his constituents during the recent West Virginia coal-mining disaster, said he will put his considerable power behind writing a bill to give the FCC unambiguous authority to protect consumers; Ranking Member Hutchison – who doesn’t have the final say over any majority bill now, but whose party could hold all the cards if elections go Republicans’ way in November – warned the FCC that there would be consequences if it acted to reclassify. 

And in an exercise I’ve seen repeated in that Committee room by other agency leaders, Chairman Genachowski stuck to his written testimony and gently tiptoed around the hard questions (like how the FCC might plan to make the National Broadband Plan a reality given the new hazy regulatory climate).

If you were Mr. Genachowski, how would you deal with the conundrum of network neutrality in the aftermath of Comcast?

Continue Reading...

Roamin' Forum

FCC requires reasonable home roaming for voice services, invites comment on mandatory automatic roaming for data services

In an Order/Further Notice of Proposed Rulemaking adopted at its April 21 meeting, the FCC slightly modified its current rules on the obligation to provide automatic roaming to other CMRS carriers, while temporizing on the question of whether to extend automatic roaming privileges to data services.

The modest change concerns the elimination of “home roaming” as an exclusion from the usual automatic roaming rule applicable to voice, SMS and push-to-talk services. In 2007 when the FCC originally declared that the enabling of automatic roaming was a common carrier obligation, it carved out an exception for home roaming.  Home roaming, of course, refers to the situation where a carrier’s customers roam on another carrier’s network while they are in their home carrier’s licensed service area – not at all the circumstance that roaming is usually thought to apply. 

The exclusion of home roaming from the roaming mandate made a certain sense. If carriers could simply have their own customers roam on their competitors’ networks in markets where they themselves had licenses, there would be no incentive for them to build out the portions of the market that would be difficult or expensive to reach or serve. They could simply piggy-back on their competitor by having their subscribers roam in the remote parts of their service areas where the competitor had spent the time, money and effort to erect facilities. This seemed to run counter to the Commission’s policy of fostering facilities-based competition wherever possible.

Nevertheless, a gaggle of Tier II and Tier III carriers sought reversal of this decision, vigorously opposed by AT&T and Verizon. It seemed that the smaller carriers were licensed in many territories where it was infeasible to serve all or part of the territory, at least for the immediate future.  In the meantime, the home roaming exclusion gave AT&T and Verizon the right to forbid roaming altogether in those markets, putting the junior carriers at a significant competitive disadvantage.

Continue Reading...

NBP Lift-Off!

FCC launches five – uh, make that six – NBP-related items in one day

If you thought the FCC might have been kidding around when it promised quick action on the National Broadband Plan (NBP) agenda items, the FCC is working hard to move you off that thought. In an impressive display of regulatory shock and awe, the FCC has put a substantial dent in its NBP to-do list by launching six separate proceedings covering five discrete subjects. The items include:

The six items top out at a total of just over 250 pages in all, so you might want to start reading now.  If you just want to get a quick sense of what each involves, you might want to check out the public notices which recap each: Universal Service Fund; Roaming Obligations; Survivability; Cyber Security Certification; and Set-top Boxes.

 Each of the six items invites comments and reply comments, but don’t get your calendars out yet. The comment deadlines won’t be set until the various notices are published in the Federal Register. And to make it even trickier to start planning your early summer get-away, the Commission appears to contemplate an oddly diverse set of deadlines. For example, comments and replies in response to the Set-top Box NOI will be due a scant 30 days and 45 days, respectively, after that notice makes it into the Federal Register.  By contrast, comments/replies in the Cyber Security Certification proceeding won’t be due until 60/120 days after publication. And in between you’ve got the Set-top Box NPRM and USF combo NOI/NPRM (60/90 days for each), and the Survivability NOI and Roaming NPRM (45/75 days for each).

With this barrage – or is it a salvo? – the Commission is clearly signaling its determination to move forward with the ambitious campaign mapped out in the NBP, despite the major questions which loom large in the wake of the FCC’s setback in the Comcast case.  And don’t get comfortable, because these are just the beginning.  The NBP envisions more than 60 proceedings in the months to come.  Stay tuned . . .

Is The FCC's Regulation Of VoIP In Jeopardy After Comcast?

Short answer: Yes

According to Comcast v. FCC, the FCC came up short when it tried to show that it has the authority to regulate Comcast’s Internet access traffic management practices. To paraphrase the Vice President, this is a Big Deal – because the FCC’s ability to promulgate net neutrality rules is seriously threatened as a result. (Click here, here and here for analyses of Comcast’s impact on net neutrality.)

But the implications of Comcast go beyond that. They could, for example, gut the Commission’s regulation of Voice over Internet Protocol (VoIP) service.

The focus of Comcast was the scope of the FCC’s “ancillary jurisdiction”. (Check out my colleague Paul Feldman’s post for a cogent explanation of that concept.) The question boils down to this: if Congress hasn’t seen fit to expressly grant the FCC authority to regulate in a particular area, what regulatory actions, if any, can the FCC take in that area? In Comcast the court made clear that the regulation must be “reasonably ancillary to the Commission’s effective performance of its statutorily mandated responsibilities.” Importantly, the court held that mere statements of federal policy in the Communications Act are not “statutorily mandated responsibilities.”

VoIP allows consumers to make and receive telephone calls over the Internet. From the user’s perspective, VoIP is functionally the same as “plain old telephone service” (POTS).  Both allow the user to make and receive calls to and from points otherwise reachable by regular telephone. But the two are technologically different: POTS uses time division multiple access or analog switching to create circuits while VoIP uses session initiated protocol to send and receive messages in packets via the Internet and Internet Protocol. VoIP is basically no more than a software application. So, like any other software application, it isn’t subject to FCC regulation, right?

Not according to the FCC.

Continue Reading...

Can Network Neutrality Survive Comcast v. FCC? (Spoiler Alert: Maybe.)

A look at successes of the past gives the FCC a way to move forward.

(Author’s note: Last November I posted an item here improvidently titled “How to Solve the Network Neutrality Problem.” My solution was overturned, along with the FCC’s efforts at Internet regulation, by the recent court decision in Comcast v. FCC. Below is a revised path to the same goal that still works after Comcast.)

Network neutrality advocates are in despair following the Comcast decision. That case arose when cable company Comcast selectively hindered customers’ access to certain file-sharing services. The FCC told it to stop. Comcast already had stopped, but went to court anyway to protest the FCC’s butting in. The court ruled for Comcast, asserting the FCC lacks authority to regulate Internet service providers. Comcast is free to decide what content to favor, impede, or block entirely. Read our account here

Network neutrality – the principle that Internet providers should treat content even-handedly – seems to be dead, waiting only for someone to close its eyes and straighten its tie.   The more desperate among its advocates – including at least one FCC Commissioner – speak openly about the nuclear option: a step called “reclassification.”  This means the FCC would reclassify broadband Internet service as a common carrier “telecommunications service,” thereby exposing it to a wide panoply of regulation. As my colleague Paul Feldman notes, reclassification would generate opposition from several industry segments and possibly