FCC Challenges Bitcoin Miner (But Not for Mining Bitcoins)

You know how bitcoins work. Not yet? We’re still coming up to speed. But we do get the part where bitcoins are created by people doing a lot of intensive computation called “mining.” It reminds us of the old Warner Brothers cartoon where a character turns a crank on a machine and dollar bills fly out.

It turns out you can buy that machine, or at least the bitcoin version, and do exactly what the comic book ads used to promise: make money at home in your spare time. The machine, though, comes with a flaw –at least, the unit used by Victor Rosario of Brooklyn did. All digital devices have the potential to create radio interference. Mr. Rosario’s bitcoin miner put out interference strong enough to make trouble for T-Mobile and its Brooklyn customers. T-Mobile called in the FCC, whose direction-finding equipment zeroed in Mr. Rosarios’s home. The FCC sent Mr. Rosario a stern letter directing him to turn off the machine. It also threatened steep fines, seizure, and imprisonment, and asks questions about the device and where Mr. Rosario bought it.

The item caught our eye because it makes a nice addition to our collection down here in the CommLawBlog bunker of “things that really shouldn’t cause radio interference but do anyway.” We’ll put the bitcoin miner next to the well pump, in among the lighting fixtures here, here, and here, and right behind that still-unknown device in a Lemont, Illinois home. (In another room we keep all the jammers, which differ in that they cause interference intentionally: this one and this one and this one and many more.)

Still unanswered: whether, if the FCC does fine Mr. Rosario, he will be allowed to pay the fine from the bitcoins he mined using the machine that triggered the fine.

FCC Opens Up Special Displacement Window for LPTV Stations

Last week the FCC’s Incentive Auction Task Force and the Media Bureau announced the opening of a 60-day filing window for those LPTV stations who are being displaced as a result of the post-incentive auction repacking process. The “Special Displacement Window” applies to certain LPTV stations, TV translators, and analog-to-digital replacement translators. The window will be open from Tuesday, April 10 through Tuesday, May 15 at 11:59 p.m. EST. Once a station has identified which channel it wants – and on which it can operate without causing unacceptable interference — it should file a construction permit application during this filing window.

This special filing window is open to “operating” and “displaced” LPTV/translator stations only. An LPTV is considered “operating” for purposes of this window if it was licensed, or had a license to cover application on file, as of April 13, 2017 – the date on which the incentive auction closed. “Displaced” stations are defined by the Media Bureau as stations that:

  • are authorized on channels that are being taken by a full power or Class A television station in the repacked television band (channels 2- 36) as a result of the incentive auction and repacking process;
  • are licensed on frequencies repurposed for new, flexible use by a 600 MHz Band wireless licensee (channels 38-51); or
  • are licensed on frequencies that will serve as part of the 600 MHz Band guard bands (which includes the duplex gap).

In conjunction with this filing window, the FCC has announced that it is releasing data that, according to the Media Bureau, “identifies locations and channels where LPTV/translator stations filing applications in the Special Displacement Window likely cannot propose displacement facilities because of the presences of non-displaced LPTV/translator stations and permittees, full power and Class A television stations, or land mobile operations.” Displaced stations should consider this information in determining what channels may be available to them in the filing window.

To increase the number of available channels, the FCC also clarified that displaced LPTV/TV Translator stations may apply to operate on channels (between 2 and 36) that are currently occupied by full-power or Class A stations, but that those stations are giving up in the repack. Any applications for such channels may only be filed on the condition that operations will not begin until the full power or Class A licensee vacates the channel.

All applications filed during the Special Window will be treated as having been filed on the same date, so there is no advantage to filing on the first day of the window. We strongly recommend not trying to file on the last day, because FCC online applications system have in the past crashed when overwhelmed with too many filings on one day.

All applications filed during the window will be treated with equal priority, which means that if there are conflicting applications that cannot be resolved, the FCC will have to hold an auction. The FCC has been very reluctant to hold LPTV/translator auctions in the past, because they have not drawn enough money in bids to pay for the cost of the auction; so it is likely that the FCC will offer one or more settlement opportunities mutually exclusive applicants can make deals (though probably not “for-profit” deals).

The one exception to all applications being treated the same is that applications for fill-in translators by full power stations will have priority over LPTV and other translator applications.

In conjunction with this filing window, the FCC has announced that it is releasing data that, according to the Media Bureau, “identifies locations and channels where LPTV/translator stations filing applications in the Special Displacement Window likely cannot propose displacement facilities because of the presences of non-displaced LPTV/translator stations and permittees, full power and Class A television stations, or land mobile operations.” It is likely that you will need professional engineering assistance to make use of this information.

If you need advice on navigating this filing window, we will have attorneys ready to help with strategy and application preparation.

While details will be coming out shortly in another public notice, mark your calendars for a webinar on Feb.28 at 1 p.m. in which the Incentive Auction Task Force and the Media Bureau will get into the weeds on the data set and answer questions from LPTV licensees. For advice on navigating this filing window, reach out to us at www.fhhlaw.com.

**Editor’s Note: This post was updated on 02/14/2018.

FCC Extends Comment Deadline on National TV Ownership Cap

Photo courtesy of Flash.Pro via Flickr through the Creative Commons License

On Feb. 12, the Commission announced that it would extend the comment deadline for a Notice of Proposed Rulemaking regarding potential changes to the national television ownership cap. Comments are now due by March 19 and reply comments will be due by April 18.

The NPRM was adopted on Dec. 14 beginning the FCC’s “comprehensive review” of the national television ownership cap. As we wrote about back in December, the NPRM addresses the current prohibition on any entity owning or controlling television stations that reach more than 39 percent of US television households. The NPRM requests comment on whether the Commission can and should reduce or completely eliminate the national ownership cap in light of changes in the media landscape since it was adopted back in 2004. The FCC also seeks comment on whether or not the UHF discount should be modified or eliminated altogether.

Commercial Broadcasters March Toward a Second Extension of GMR Interim License

Photo by João Silas courtesy of the Creative Commons License.

Over the past 14 months, we’ve kept our readers updated on the music licensing fight between the Radio Music License Committee (RMLC) and Global Music Rights (GMR). This, of course, started when the two sides couldn’t reach an agreement on the terms of a license that would allow the commercial radio stations represented by the RMLC to perform publicly the musical works in GMR’s catalog.

As the end of 2016 approached without a license in place, those radio stations faced four undesirable alternatives:

  1. pay the fees demanded by GMR (which the RMLC discourages given how high those fees are);
  2. attempt to avoid playing any GMR compositions (which could be hard given the prominent names that figure in GMR’s catalog, the fluid state of that catalog, and the difficulty of clearing performances in commercials and third-party programming);
  3. continue to play GMR music without attempting to negotiate a license (a risky and unadvisable venture given how high infringement damages can run); and
  4. challenge GMR’s anticompetitive conduct in a lawsuit.

As regular CommLawBlog readers know, the RMLC chose no. 4, filing a lawsuit in the United States District Court for the Eastern District of Pennsylvania on Nov. 18, 2016. Continue Reading

DataConnex Gets Hit with $18.7M Fine for Violation of the Rural Health Care Program

Photo by Hush Naidoo on Unsplash

As it has for many months now, the FCC at its January Open Meeting continued its review of the Rural Health Care Program (RHCP). This time, it issued a proposed $18.7M fine against health care telecommunication service provider DataConnex. A reseller of telecommunications services, DataConnex is alleged to have taken in millions of dollars from the RHCP that it was not entitled to. Primarily, the FCC alleges that DataConnex “willfully and repeatedly” provided inaccurate, forged, misleading, or unsubstantiated documents to support that it had made payments to the Universal Service Fund. Furthermore, the FCC says that DataConnex violated the RHC’s competitive bidding rules.

What is most significant about this forfeiture is the amount of the proposed fine. DataConnex’s fine is three times the amount it wrongfully received from the RHCP and the FCC has warned it may revoke the company’s authorization to sell telecommunication services altogether. Plus, the FCC said it is considering a measure to waive the competitive bidding rules on account that DataConnex played the system to its advantage, thus undermining the bidding process for other telecommunication services in the RHCP. Continue Reading

FCC Annual CPNI Certifications Are Back After One Year Off – Due March 1

Photo by Sonja Langford on Unsplash

It’s that time of year again! (Well, again after a one-year hiatus, that is.) Time for our annual reminder that the annual customer proprietary network information (CPNI) certifications are due by March 1 for most (but not necessarily all) telecommunications carriers and interconnected VoIP providers.

CPNI includes a variety of sensitive customer data such as, among other things, telephone numbers of people you call and people who call you. To address privacy concerns, the FCC’s regulations help protect CPNI from unauthorized access, use, or disclosure, and all covered entities are required to file, by March 1, an annual certification of compliance with CPNI rules during the previous calendar year.

You may have noticed that our last reminder about the annual certification was in 2016. That’s because in 2016 the FCC, under Chairman Wheeler, completely revised its privacy rules to also encompass providers of broadband Internet access service. Under those rules, the annual March 1 certification was not required in 2017. But those rules were abandoned in 2017 after the Republican administration took over and the FCC restored the prior CPNI requirements (including the annual March 1 certification) to their former glory.

That brings us to the present day where the FCC’s Wireline Competition Bureau has released a Public Notice reminder that the annual CPNI certification is again due by March 1. While the reminder still includes the typical warning that noncompliance can result in hefty penalties, it doesn’t quite strike the same ominous tone as prior reminders issued by the FCC’s Enforcement Bureau (for example, see this FCC Enforcement Advisory from 2016).

Of course, that doesn’t mean you should take the annual CPNI certification any less seriously. Those with long memories will recall the days when failure to file came with a nearly automatic $20,000 forfeiture penalty. So hopefully you’ll also still remember how to get the CPNI certification submitted on a timely basis. As always, if you’re unsure of how to comply, or whether this requirement applies to your company, be sure to seek appropriate guidance.

Noncommercial Stations Beware: When ‘Underwriting’ Spots Turn into Advertising, a Big Penalty Can Follow

Photo courtesy of the Creative Commons Licence

Many noncommercial educational (NCE) stations – and their lawyers – were caught by surprise last week when the FCC issued a $115,000 civil penalty against an NCE licensee. The Cesar Chavez Foundation (CCF) was hit for running underwriting spots promoting for-profit entities. CCF agreed to the monetary penalty as part of an FCC approved consent decree released on Feb. 1.

In the past, FCC civil penalties and forfeitures for violation of underwriting restrictions have been more modest, typically $12,500 or less. The size of this penalty may indicate an interest by Chairman Pai’s new Enforcement Bureau Chief, Rosemary Harold, to get tougher about NCE underwriting practices. But it also might indicate a loss of patience with CCF, since this is not the first, not the second, but at least the third time that CCF has been cross-wise with the FCC over underwriting copy. Specifically, in 2012 CCF was hit with a $12,500 forfeiture and then in 2016 it agreed to another $12,500 civil penalty as part of a consent decree deal.

The penalties in this latest CCF latest case include, in addition to the $115,000 assessment a one-year prohibition on broadcasting any underwriting announcements on behalf of for-profit entities. A death knell for many NCE stations –  this is the first time we can recall such a restriction being imposed.

The practice of resolving cases through consent decrees, where the licensee agrees to certain sanctions in return for closure of an investigation, makes it difficult for other NCE stations and their lawyers to tell how egregious the offensive announcements were, because decrees typically don’t quote the offending language. But In this case, the FCC accompanied the consent decree with a news release that provides a little more detail.

According to the FCC, the spots CCF aired ran afoul of the underwriting rules in various ways by:

  • Drawing comparisons between an underwriter’s products or services and those of its competitors and making a qualitative statement (“There are times that we fear going to see cars because we don’t know who to trust. You can trust the Bill Luke car dealership”);
  • Including information on prices, savings, or value (“Additional holiday bonus savings on select models”);
  • Making calls to action (“Are you ready to buy a house? Want to know if you qualify?”);
  • Listing a “menu” of products or services (“Cell phones from companies such as Verizon Wireless, Cricket, T-Mobile, Virgin Mobile, Trac-Fone”); and
  • Making the spots too long (here, between 30 and 60 seconds in duration).

Regarding this last point, while the FCC has not set a maximum length for underwriting spots, it has said, “the longer the announcement, the more likely it is to contain material that is inconsistent with their ‘identification only’ purpose.”

As to the “menu” restriction, we don’t recall seeing that policy being applied to a spot listing as few as five items, which is the number in the example included in the FCC’s news release. Seven, yes; five, no.

Whether the CCF consent decree marks the beginning of enhanced enforcement of the FCC’s underwriting restrictions or only an outlier involving a repeat offender remains to be seen. But in any case, going forward NCE stations should exercise particular care in reviewing underwriting copy. More and more, underwriters are pushing stations toward going over the line. Stations now have a concrete reason to push back against calls to action and qualitative or comparative claims. It could get them in trouble if they don’t.

 

Upcoming FCC Deadlines February 2018 – March 2018

Photo used courtesy of the Creative Commons Licence

Do you know what FCC filing deadlines are in the coming months? We do. Time to mark up calendars so you’re not late on these important deadlines. Call FHH if you have trouble meeting this deadlines or need assistance.

February 9 –  Revising Requirements for “Twilight Towers” –  Comments are due with regard to the Public Notice whereby the FCC has requested comments on a draft Program Comment addressing the historic preservation review requirements for collocating wireless communications facilities on certain communications towers, referred to as “Twilight Towers.”

February 20 – Next Generation TV – ATSC 3.0 – Comments are due in response to the Commission’s Further Notice of Proposed Rule Making, which accompanied its November Report and Order authorizing television broadcasters to use the Next Generation television transmission standard (ATSC 3.0).

February 26 – National TV Audience Reach Limits –  Comments are due in response to the FCC’s Notice of Proposed Rule Making which seeks input on whether to modify, retain or eliminate the national TV multiple ownership rule (or national TV audience reach cap), a rule that limits the number of TV stations a single entity may own nationwide to an audience reach of 39% of all television households.

Revising Requirements for “Twilight Towers” –  Reply Comments are due with regard to the Public Notice whereby the FCC has requested comments on a draft Program Comment addressing the historic preservation review requirements for collocating wireless communications facilities on certain communications towers, referred to as “Twilight Towers.”

March 1 – Radio Station Online Public Files – All radio stations in all markets must have uploaded their entire public inspection files, with the exception of the political file, to the location provided for such public files on the FCC’s website.  The records which must be uploaded by March 1, 2018 include, but are not limited to, any and all issues/programs lists and EEO public file reports for the current license term, as well as either a current list of or copies of organizational documents and contracts required to be filed with the Commission. Continue Reading

Third Circuit Asked to Delay Implementation of Media Ownership Rules

As we previously reported, the deregulatory changes the FCC recently adopted to its media ownership rules are due to take effect on Feb. 7. Prometheus Radio Project and Media Mobilizing Project, however, have filed an appeal of those rule changes in the U.S. Court of Appeals for the Third Circuit and, as expected, have now asked the Court to delay the FCC’s implementation of those changes.

Photo by John Hult via the Creative Commons License

Interestingly, appellants here have not filed a traditional request for a stay. Rather, they have filed a petition for writ of mandamus. In that petition, they note that the Commission’s ownership orders (the August 2016 Order under former Chairman Wheeler and the December 2017 Reconsideration Order under Chairman Pai) were both adopted at least in part in response to a remand order from the Court. The petition argues that the Court should order the Commission to delay the effectiveness of the rule changes because the orders do not respond to that remand in so far as it directed the Commission to adopt a definition of “eligible entities” or conclude that it could not do so. The petition also argues that the Reconsideration Order does not address the impact its changes would have on minority and female ownership and that the consolidation allowed by the rule changes would likely have an adverse, and irreparable, effect on existing and potential female and minority owners.

The petition not only asks that the Court stay the effectiveness of the rule changes adopted in the Reconsideration Order, but further asks the Court to enjoin the Commission from approving any applications that would be inconsistent with the current ownership rules and to appoint a “special master.” This “special master” would supervise the Commission’s compliance with the Court’s orders in this proceeding.

In light of the limited time remaining before the scheduled effective date of Feb. 7, the Court has ordered the FCC to respond to the petition by no later than Feb. 2. A number of other interested parties, including Sinclair, Fox, the News Media Alliance, and the NAB, have asked the Court to allow them to participate in the proceeding as well. While courts are generally reluctant to stay agency rules, or issue writs of mandamus, the ultimate outcome here remains uncertain. We here at CommLawBlog will keep you updated as the proceeding develops.

Comment Period Now Open on National Ownership Cap

Photo by Frank Okay on Unsplash

Last Friday, the FCC published the December Notice of Proposed Rulemaking regarding the national ownership cap in the Federal Register.

As we wrote about back in December, the NPRM addresses the current prohibition on any entity owning or controlling television stations that reach more than 39 percent of US television households. The NPRM requests comment on whether the Commission can and should reduce or completely eliminate the national ownership cap in light of changes in the media landscape since it was adopted back in 2004.

In addition to asking for comment on the threshold issue of whether the Commission has the authority to modify the 39 percent cap, which is included in the Communications Act, the Commission is seeking comment on whether the current media landscape still necessitates a national ownership cap at all and whether the UHF discount should be modified or eliminated. On the UHF discount, the Commission is seeking comment on what impact an elimination of the UHF discount would have on the broader video marketplace.

Publication of the NPRM in the Federal Register means that comments are now due by no later than Feb. 26 with reply comments due before March 27.

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