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wireless messaging newsletter

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FRIDAY - NOVEMBER 14, 2008 - ISSUE NO. 336

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BLOOSTON LAW

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BloostonLaw Telecom Update

Published by the Law Offices of Blooston, Mordkofsky, Dickens, Duffy & Prendergast, LLP

[Selected portions reproduced here with the firm's permission.]

www.bloostonlaw.com

   Vol. 11, No. 40 November 5, 2008   

January 1: Carriers Must Notify Customers Of “Do Not Call” Options

The FCC requires each wireline and wireless common carrier (including but not limited to facility-based carriers and resellers) offering local exchange service to inform subscribers of the opportunity to provide notification to the Federal Trade Commission (FTC) that the subscriber objects to receiving telephone solicitations.

The carrier must inform subscribers of:

(1) their right to give or revoke a notification of their objection to receiving telephone solicitations pursuant to the national “Do Not Call” database; and

(2) the methods by which such rights may be exercised.

Beginning on January 1, 2004, and annually thereafter, such common carriers shall provide an annual notice, via an insert in the customer’s bill, to inform their subscribers of the opportunity to register or revoke registrations on the national Do Not Call database. BloostonLaw will provide clients with the wording for an appropriate notice upon request. BloostonLaw contacts: Hal Mordkofsky, Ben Dickens, Gerry Duffy, and John Prendergast.

FCC Conditionally Approves Verizon-Alltel Merger At November 4 Open Meeting

FCC also OKs Sprint Nextel-Clearwire Deal

At yesterday’s open meeting, the FCC approved, with certain conditions, the merger of Alltel into Verizon Wireless. Some of the conditions will certainly help rural carriers, but the availability of fair roaming terms was not completely resolved, and the outcome of other issues raised by the rural industry will not be known until the full text of the FCC’s order is available.

Responsive to issues raised in petitions filed against the merger by the South Dakota Telecommunications Association, a group of BloostonLaw rural carriers, and others, the Commission conditioned its approval of the proposed transaction on Verizon Wireless’ proposed divestiture of Alltel operations in 100 markets. Based on a case-by-case analysis that found a potential for competitive harm in another five markets, the Commission is also requiring that one of the two companies divest the licenses and related operational and network assets in those markets (apparently in Tennessee, Michigan, and certain other states). The voluntary divestitures imposed as conditions, together with the additional divestitures required, are touted to prevent consolidation in individual markets from advancing to a point at which it would threaten competition and potentially harm consumers. (The Department of Justice approved the merger last week, subject to a settlement with the parties that included the above divestitures.)

As part of its analysis, the Commission revised the spectrum aggregation portion of the Commission’s initial anticompetitive impact screen, replacing the previous nationwide screen with a market-specific spectrum screen. To the extent that Advanced Wireless Services (AWS) and certain Broadband Radio Service (BRS) spectrum is available in a particular market, such spectrum is now included in the analysis – along with Cellular, Specialized Mobile Radio (SMR), broadband Personal Communications Services (PCS), and 700 MHz spectrum – in the particular initial spectrum screen applied to that market. This expanded view of the relevant spectrum will make it more difficult for rural wireless carriers to demonstrate market consolidation and anti-competitive impact due to a merger, even though AWS, BRS and Auction 73 700 MHz spectrum is often not yet deployed in a given market, and may be years away from having an impact.

The FCC also conditioned the merger on Verizon's proposal to give rural carriers the choice of continuing existing roaming arrangements under the terms of either the Verizon or Alltel roaming agreement, and extended the mandatory term of such agreements from Verizon's proposed two years to four years. However, this does not address the circumstance of many carriers that do not have an existing agreement with Alltel, so this solution is an imperfect one. It is not yet clear if and how the FCC addressed the issues of 3G data roaming and handset availability, although it is expected that these matters were left for other proceedings.

Additionally, the Commission conditioned the merger on the use of counties for measuring compliance with the Commission’s wireless E911 location accuracy rules governing handset-based technologies.

The Commission also conditioned its approval of this transaction on Verizon Wireless’s commitments to accept a phase down of competitive eligible telecommunications carrier (ETC) high cost support, for any properties which Verizon Wireless retains, over a five year period following closing of the transaction, and BloostonLaw’s proposed requirement that Verizon justify continued Universal Service Fund (USF) support with cost support showings.

The licenses, spectrum leasing agreements, and authorizations to be transferred in this transaction include Cellular licenses, broadband personal communications service (PCS) licenses, Local Multipoint Distribution Service (LMDS) licenses, Local Television Transmission Service licenses, Common Carrier Fixed Point-to-Point Microwave licenses, and international and domestic section 214 authorizations.

The Commission also found that the public interest would be served by extending the current foreign ownership ruling under section 310(b)(4) to permit Verizon Wireless to acquire up to and including 100 percent of the equity and voting interests in Alltel, its subsidiaries, and the partnerships in which Alltel holds a controlling ownership interest subject to the terms and conditions of the ruling issued in the Vodafone-Bell Atlantic Order. The Commission conditioned its approval of the transfer of Alltel’s non-controlling partnership interests in three partnerships on Verizon Wireless’s commitment to place its voting rights in these partnerships in a voting trust, with terms satisfactory to the Commission, with a U.S. citizen, or U.S. entity that is controlled by U.S. citizens.

FCC Chairman Kevin Martin said that with respect to roaming, the commitment proposed by Verizon Wireless to extend its roaming obligations provides added certainty to small and rural carriers. “In addition, Verizon Wireless has made additional commitments with respect to continuing the Alltel GSM network and allowing carriers to choose which roaming agreement to continue. This should all help smaller, rural and regional carriers providing roaming to their consumers.” Because the Commission also approved the Sprint Nextel-Clearwire merger, Martin said: “Consumers are also beneficiaries of a new entrant into the wireless market, Clearwire. This provider will enhance competition and solidify wireless as an additional broadband platform. Moreover, Clearwire committed to embrace more open networks, one open to all applications and devices. This approach will spur innovation and give greater choice and improved services to consumers.

“I am also very pleased with the voluntary commitments made by Sprint Nextel and Verizon Wireless with respect to the Universal Service Fund and E911 location accuracy. With respect to E911, these companies have taken a leadership role in the industry and are following through on their promises to meet E911 location accuracy obligations at the county-level. This is an issue that is critical to consumers and first responders, and an issue that has been a priority to me as Chairman. This commitment will allow first responders to reach those in need more quickly, and find callers more consistently. This is clearly in the public interest.”

“With respect to the Universal Service Fund (USF), the phase-out of high-cost competitive ETC funding to these carriers will provide significant benefits to the fund, while also providing certainty to the carriers. High-cost support for competitive ETCs has grown rapidly over the last several years, placing extraordinary pressure on the federal USF. In 2001, high-cost universal service support totaled approximately $2.6 billion. By 2007, the amount of high-cost support had grown to approximately $4.3 billion per year. In recent years, this growth has been due mostly to increased support provided to competitive ETCs, which receive high-cost support based not on their own costs, but on the per-line support of the incumbent LECs. Competitive ETC support, since 2001, has grown from under $17 million to over $1.18 billion—an annual growth rate of over 100 percent. The offers made by the carriers here provide certainty for the carriers, while reducing the pressure on the fund over time.

“Finally, I note that the industry has made considerable progress with respect to the issue of openness of devices and applications. With the issuance of Verizon Wireless’s 700 MHz licenses the open platform obligations we imposed on the C Block become a step closer to implementation. The availability of third party handsets with the capability of downloading the applications of the user’s choice will provide substantial opportunities and competitive pressure to ensure that the benefits of open platforms are realized. Moreover, coupled with the considerable openness plans that New Clearwire intends to include as it rolls out its new network and our action today on making available the white spaces, there is a ripe field for wireless innovation and growth.”

The merger approval vote drew separate statements from each Commissioner, and was not without controversy. Commissioners Adelstein and Copps both cited the unsatisfactory resolution of the roaming issue.

Commissioner Michael Copps, who concurred and dissented in part, said that the merger is “seriously bad news for smaller carriers who rely on roaming—and their customers. The reason is that the new, merged network will be the only game in town when it comes to roaming in many regions of the country. Smaller carriers that rely on roaming contracts to provide nationwide service will see a critical partner eliminated in rural areas. This development may even put some smaller carriers out of business—thus further consolidating the wireless marketplace. The creation of an ever more dominant carrier will also have ripple effects in many other parts of the wireless marketplace—tipping the balance even more towards the network operator when it comes to dealing with handset manufacturers, content providers, application designers and the many other companies that will be forced to ask for ‘permission to innovate.’

“I must limit myself to concurrence in part of this proceeding and also to a partial dissent. I concur in part only because the company and my colleagues have agreed to modest roaming conditions that will partly—but only partly—ameliorate the problems of creating such an enormous force in the wireless marketplace. The main conditions we secure today are a commitment by Verizon Wireless to extend existing roaming contracts for four years and to maintain Alltel’s existing GSM network “indefinitely.” These provisions are better than nothing—and better than what was originally proposed when this item was circulated—but I cannot say that they answer more than a portion of my concerns. And I am disappointed that discussions suggesting a seven year roaming commitment did not end successfully.

Commissioner Jonathan Adelstein, who also concurred and dissented in part, said “I am particularly concerned that a decrease in competition in this instance may have a dramatic effect on the roaming market, and hence on consumers of competing, and smaller, wireless service operators. With the loss of the largest regional CDMA carrier resulting from this transaction, and with only two available CDMA carriers nationwide, there is a real concern that smaller carriers may be unable to negotiate reasonable and nondiscriminatory roaming terms with national carriers. Not only does this threaten consistency in service across the country, with fewer carriers in each market, but roaming rates can easily rise and the costs may ultimately be passed on to consumers. This will undercut the remaining competitive carriers, potentially resulting in reduced competition in the local and national retail market. I would have preferred that the majority adopt transaction specific, pro-competitive conditions to address these very legitimate and specific competitive harms.”

Commissioners Deborah Tate and Robert McDowell supported the item. McDowell, however, could “only concur to the universal service condition imposed here. First, this condition is not merger-specific. In addition, while I may agree with some of the universal service policies contained in this order, I see no need to potentially prejudice the Commission’s ongoing rulemaking on this important matter. This is especially the case given that I, along with three of my colleagues, have made public our commitment to wrap up our work on universal service reform no later than December 18, 2008. Moreover, the text of [the] order is unclear as to whether our action … would be superseded by action in the universal service proceeding.”

Commissioner McDowell's statement hints that the FCC tried to address future roaming negotiations by "clarifying" the rights of carriers requesting roaming terms, under Title II of the Communications Act.

Sprint Nextel-Clearwire Merger: The FCC separately approved, with conditions, the merger of the broadband wireless operations of Sprint-Nextel Corporation and Clearwire Corporation into New Clearwire Corporation. This merger “marries” the two largest Broadband Radio Service (BRS) and Educational Broadband Service (EBS) operations in the country. In analyzing these applications, the FCC examined the market for various services and concluded that the companies had demonstrated that the transaction will be in the public interest with no competitive harm identified in any market.

As discussed above, the Commission again applied the revised spectrum aggregation portion of the Commission’s anti-competitive impact screen, replacing the previous nationwide screen with a market-specific screen. The Commission conditioned its approval of this transaction on Sprint Nextel’s compliance with a voluntary commitment to phase out its requests for federal high-cost universal service support over a five-year transition period and with a voluntary commitment to use counties for measuring compliance with the Commission’s wireless E911 location accuracy rules governing handset-based technologies.

The licenses, leases, and authorizations transferred in this transaction include BRS, Educational Broadband Service, Point-to-Point Microwave, and Local Multipoint Distribution Service.

BloostonLaw contacts: Ben Dickens, Gerry Duffy, and John Prendergast.

FCC Deletes ICC/USF Item From Open Meeting Agenda

FCC Chairman Kevin Martin on Monday deleted the entire intercarrier compensation and Universal Service Fund (USF) reform item from yesterday’s open meeting agenda. This includes Martin’s own proposals for a Report and Order; an Order on Remand (i.e., the ISP Remand Order), which has a November 5 (today) deadline; and a Further Notice of Proposed Rulemaking (FNPRM).

Following the deletion of this agenda item, Commissioners Deborah Tate, Robert McDowell, Michael Copps, and Jonathan Adelstein issued a joint statement, which said, in part:

“Three weeks ago, Chairman Martin first shared with the Commission his proposals to fundamentally reform the intercarrier compensation and universal service systems. Four Commissioners provided the Chairman bi-partisan, constructive and substantive suggestions, and stated that notice and comment should be sought on the proposals, with an understanding that we would all be prepared to vote on December 18. We also have asked the Chairman to narrowly address the ISP-bound traffic remand and the Joint Board’s Recommendation. We therefore are disappointed that the Chairman has withdrawn the fundamental reform item from tomorrow’s agenda.

“We approached this proceeding with the common goal of modernizing our universal service and intercarrier compensation policies, and commend the desire to tackle some of the most important issues facing this Commission. It is equally important to ensure that any reform proposal receive the full benefit of public notice and comment - especially in light of the difficult economic circumstances currently facing our nation.”

Chairman Martin subsequently issued the following statement:

“The issues of Intercarrier Compensation and Universal Service reform have been in front of the Commission for years. Last summer I publicly indicated my intention to put forward concrete and comprehensive proposals to reform the inefficient and outmoded Intercarrier compensation and Universal Service programs. Those proposals have been with my colleagues for several weeks now. I am disappointed that we will miss the opportunity for comprehensive reform. Instead my colleagues have requested that we once again seek public comment on several proposals. As a result such a notice would make little progress and ask for comment again on the most basic and broad questions about reforming the two programs. For example, the Commission would again ask should broadband be supported by the Universal Service Fund and should we move to one uniform rate for all traffic or should that rate vary by the type of company?

“I would like to be encouraged by my colleagues’ commitment that they will truly be ready to complete this much needed reform on December 18. The nature of the questions they would like to include makes me doubt they will have found their answers with an additional seven weeks. I believe the far more likely outcome is that, in December, the other Commissioners will merely want another Further Notice and another round of comment on the most difficult questions. I do not believe they will be prepared to address the most challenging issues and that the Commission will be negotiating over what further questions to ask in December.

“Additionally, I have instructed the [Wireline Competition] Bureau to draft a narrow order to address the Court’s remand. However, I remain skeptical that such an order which retains artificial and unsupported distinctions between types of Internet traffic will be seen any more favorably by the Court than the Commission’s two previous attempts.

“I recognize that few other issues before the Commission are as technically complex and involved, with as many competing interests, as are reforming the Intercarrier Compensation and Universal Service programs. But neither of those two realities are an excuse for inaction. They will be true in one month, in one year or as we have now seen at the Commission, in ten years. I too remain committed to tackling the most difficult issues, providing answers to the toughest questions, fixing broken and outdated government programs and providing broadband to all Americans including those living in rural areas. I look forward to completing these long overdue and much needed reforms as soon as possible.”

BloostonLaw contacts: Ben Dickens, Gerry Duffy, and Mary Sisak.

FCC Approves Rules For TV “White Spaces”

The FCC, at yesterday’s open meeting, adopted a Second Report and Order (Second R&O) that establishes rules to allow new, sophisticated wireless devices to operate in broadcast television spectrum on a secondary basis at locations where that spectrum is open. (This unused TV spectrum is now commonly referred to as television “white spaces”). The rules will allow for the use of these new and innovative types of unlicensed devices in the unused spectrum to provide broadband data and other services for consumers and businesses.

The rules represent a first step to permit the operation of unlicensed devices in the TV white spaces and include numerous safeguards that are designed to protect incumbent services against harmful interference. The rules will allow for both fixed and personal/portable unlicensed devices. Such devices must include spectrum-sensing technology, a geolocation capability and Internet access to a database of the incumbent licensees, such as full power and low power TV stations and cable system headends, in addition to. The data base will tell the white space device what spectrum may be used at that location. Wireless microphones will be protected in a variety of ways. The locations where wireless microphones are used, such as sporting venues and event and production facilities, can be registered in the data base and will be protected in the same way as other services. The Commission also has required that devices include the ability to listen to the airwaves to sense wireless microphones as an additional measure of protection for these devices.

All white space devices are subject to equipment certification by the FCC Laboratory. The Laboratory will request samples of the devices for testing to ensure that they meet all the pertinent requirements. The Commission also will permit certification of devices that do not include the geolocation and data base access capabilities, and instead rely solely on spectrum sensing to avoid causing harmful interference, subject to a much more rigorous approval process. In a process that will be open to the public, applications will be released for public comment prior to agency action. Such devices will be tested by our Laboratory to a “Proof of Performance” standard both in the lab and in a variety of real-world environments to ensure they do not cause interference to licensed services when in use.

The staff report and recommendation will also be released for public comment. For now, certification of any such device will require approval by the full Commission. Manufacturers may continue to provide additional information to the Commission to support the use of higher power devices in adjacent channels. In addition, the Commission will explore in a separate Notice of Inquiry whether higher-powered unlicensed operations might be permitted in TV white spaces in rural areas. The Commission will closely oversee and monitor the introduction of TV white space devices. The Commission will act promptly to remove from the market any equipment found to be causing harmful interference and will require the responsible parties to take appropriate actions to remedy any interference that may occur.

The vote on this item was 5-0, with only Commissioner Deborah Tate dissenting in part. In her separate statement, she said: “I am not convinced that making Channels 21 – 51 available only for unlicensed use is necessary to create the types of exciting new services that have been predicted. I am even less convinced – and the record does not support – that we must make the entire core TV band, Channels 2 – 51, available for such use. This is more spectrum than was requested by most of the parties who argued that they could provide new and innovative services using Channels 21 – 51. Therefore, while I supported moving forward to allow a portion of the white spaces be made available for unlicensed use, I respectfully dissent from including all channels in the band plan in this order.”

BloostonLaw contacts: Hal Mordkofsky, John Prendergast, and Cary Mitchell.

ID Theft Protections Other Than Red Flag Rules May Apply To Some Carriers

Although the Federal Trade Commission (FTC) has indicated that it will not enforce the Red Flag Rules until May 1, 2009, it is important to note that the Red Flag Rules were not the only additions to the Fair Credit Reporting Act (FCRA) in the final rules. Alongside section 681.2 (the Red Flag Rules), the FTC also implemented sections 681.1 and 681.3, which require users of consumer reports and issuers of credit or debit cards to implement procedures to validate a change of address in the event that a notice of change of address is received from a customer. As mentioned in our most recent story on the Red Flag rules, the enforcement of these related but separate rules has NOT been delayed, thus becoming effective under the original November 1, 2008, deadline.

However, these two rules may not apply to many of our clients. Section 681.1 only applies to companies that request and use consumer credit reports relating to their customers. If it does apply (i.e., the carrier uses credit reports to verify customer information), this section requires that the company have procedures in place to (1) verify that the credit report they receive is actually about the consumer for which they requested it and (2) verify the address of the consumer in the event that the consumer reporting agency gives notice of a discrepancy in addresses.

Section 681.3 only applies to companies that issue credit or debit cards. Under the FCRA, a credit card is defined as, “any card, plate, coupon book or other credit device existing for the purpose of obtaining money, property, labor, or services on credit” and a debit card is defined as, “any card issued by a financial institution to a consumer for use in initiating an electronic fund transfer from the account of the consumer at such financial institution, for the purpose of transferring money between accounts or obtaining money, property, labor, or services.” Most telecom carriers do not issue credit or debit cards, and it does not appear that calling cards sold by carriers would generally fall under the above definition of debit cards. To the extent that a company does in fact issue credit or debit cards, procedures for the validation of a consumer’s address should be implemented immediately.

BloostonLaw contacts: Gerry Duffy and Mary Sisak.

Court Dismisses Case Involving Core’s Petition To Forbear From Rate Averaging, Regulation

The U.S. Court of Appeals for the District of Columbia Circuit has dismissed Core Communications’ petition requesting forbearance from rate regulation under Sections 251 and 254 of the Communications Act. (Note: this case is not related to the ISP Remand Order referenced in the story above.) Specifically, Core asked the FCC to forbear from “rate regulation preserved by” Section 251(g), from “rate averaging and rate integration required by” Section 254(g), and, in each case, from “related implementing rules.” After the Commission denied Core’s petition in full, Core sought judicial review. But the court determined it had no occasion to get into the merits because Core had not shown a basis for Article III standing. Specifically Core had failed to make clear how the requirements it mentioned under those statutory provisions, or their “related implementing rules,” caused Core any harm.

According to the D.C. Circuit, in Core Communications v. FCC, Core failed to explain how it was being injured by the application of Sections 251(g) and 254(g). It did not reveal what services it offered or planned to offer that are or would be affected by these statutory provisions. Nor, to the extent that the services might be in markets that Core might enter, did Core say anything to indicate the seriousness of its plans, which might range from a gleam in management’s eye to a well-developed business plan. As a result, the FCC in its response brief was “left to flail at the unknown in an attempt to prove the negative,” the court said. Conceivably Core’s reply brief (or even the FCC’s response, or the combination), might have shown that in fact standing was “self-evident,” or “apparent from the administrative record.” They did not; but they did disclose an invalid theory that seems to lie at the heart of Core’s idea of its injury. The FCC observed in its brief that to the extent “information can be gleaned from other litigation before this Court and public sources . . . Core is a competitive local exchange carrier (LEC) engaged in delivering large quantities of incumbent LEC-originated Internet-bound dial-up traffic to Internet service providers.” Core responded in its reply brief and at oral argument that the Core traffic that the FCC described would indeed benefit from the forbearance sought in its petition, the court said.

According to the court, here’s the attempted logical chain: The Commission, finding in 2001 that the then-existing “reciprocal compensation obligations of Section 251(b)(5)” gave competitive LECs such as Core “opportunities for regulatory arbitrage,” issued an order removing Internet Service Provider (ISP)-bound traffic from those obligations. In place of the Section 251(b)(5) regime, the ISP Remand Order imposed both a “bill-and-keep” system, under which each carrier recovers its costs from its own end-users, and a set of interim cost-recovery rules to aid in the transition to that regime. In adopting the order, the Commission relied solely on Section 251(g).

Had matters stopped there, the court said, Core’s standing would be clear. Forbearance from enforcement of rate regulation under Section 251(g) and “related implementing rules” would remove the force of the ISP Remand Order, which had been adopted under Section 251(g) precisely to thwart the “regulatory arbitrage” employed by firms like Core. But matters did not stop there. An array of firms, the court said, including Core, challenged the ISP Remand Order in this court, which held unequivocally that Section 251(g) did not provide a legal basis for the order. The D.C. Circuit nonetheless did not vacate the ISP Remand Order. Not only did many of the order’s challengers themselves favor a bill-and-keep regime, but there was “a non-trivial likelihood that the Commission ha[d] authority to elect such a system (perhaps under Sections 251(b)(5) and 252(d)(B)(i)).” Accordingly, the court simply remanded the matter to the Commission; the ISP Remand Order thus entered a kind of regulatory limbo, from which it has yet to emerge. (The court noted, however, that it recently directed the Commission to explain by November 5, 2008 (today), the legal authority for the ISP Remand Order (see separate story above).

But, the court said, the passage of time, of course, has not miraculously pulled the ISP Remand Order back under Section 251(g). Accordingly, removal of rate regulation under Section 251(g) and “related implementing rules” would have no effect on Core. There remains the possible link between Core’s business or future business and rate averaging and integration under Section 254(g). On this issue Core has pointed us to its website, www.coretel.net, which it says provides links to its “tariffed local exchange, exchange access, and long distance (i.e., ‘IXC’) offerings.” While the webpage does indeed link to an interstate access tariff, there is no indication that Core provides any service there under. At no point—much less in the opening brief, as required for any element of standing that is not self-evident—does Core show how its position, with respect to some specific service, would be improved by grant of its petition for forbearance from regulation under Section 254(g). BloostonLaw contacts: Ben Dickens, Gerry Duffy, and Mary Sisak.

LAW & REGULATION

2nd CIRCUIT DISMISSES APPEAL FOR TCPA CLASS ACTION SUIT: In Bonime v. Ayaya, Harold Bonime appealed the dismissal of a putative class action before the 2nd U.S. Circuit Court of Appeals in New York, alleging violations of the Telephone Consumer Protection Act (TCPA). The United States District Court for the Eastern District of New York had dismissed the complaint because New York law does not permit private actions for violations of the TCPA to be brought as class actions. Bonime, a citizen of New York, appealed the decision of a lower court, which dismissed, for lack of subject matter jurisdiction, his claim under a provision of the TCPA, which, among other things, regulates unsolicited facsimile communications. Appellee Avaya, Inc., a citizen of Delaware and New Jersey, is a telecommunications company that sells its goods and services through a network of resellers. Bonime alleges that DJJ Sales Associates Inc., a reseller of Avaya products that possessed “actual authority to act on behalf of [Avaya],” “transmitted a facsimile to [Bonime] that advertised the commercial availability or quality of [Avaya’s] goods and services” without Bonime’s permission. Bonime also sought to represent a purported class, consisting of “all persons. . . to whom [Avaya’s] agents transmitted one or more facsimiles advertising [Avaya’s] goods and services without the recipient having given . . . express invitation or permission” for a period beginning four years prior to the commencement of the suit. According to the complaint, Avaya’s “business partners transmitted facsimiles advertising [Avaya’s] goods and services to more than 10,000 recipients” without the recipients’ permission. Bonime asserts that the amount in controversy is therefore greater than $5,000,000 exclusive of interests and costs and that the federal courts consequently have jurisdiction under the Class Action Fairness Act (CAFA). Bonime’s argument is essentially beside the point, the 2nd Circuit said, because Congress directed that the TCPA be applied as if it were a state law. In other words, the court continued, Congress drafted the TCPA so that it would interact with the federal and state judicial systems as would a state law. While the TCPA is not state law, Congress has clearly indicated that the courts should treat it as though it were. And so, for the court’s purposes, it behaves like state law. BloostonLaw contacts: Ben Dickens, Gerry Duffy, and Mary Sisak.

FCC GRANTS IN PART GLOBALSTAR’s ATC REQUEST IN CONJUNCTION WITH MSS OPERATIONS: The FCC has granted in part Globalstar Licensee LLC’s request to modify its authority for an ancillary terrestrial component (ATC) to be operated in conjunction with the Globalstar Mobile Satellite Service (MSS) system. Specifically, the FCC modified Globalstar’s license to permit use of the WiMAX air interface protocol. In doing so, the Commission found that an interim waiver of certain of its ATC “gating criteria” and technical rules will serve the public interest by permitting Globalstar and its spectrum lessee, Open Range Communications, Inc., to commence deployment of a broadband service consistent with a $267 million loan commitment from the Department of Agriculture’s Rural Development Utilities Program. Additionally, the FCC found that Globalstar has adequately demonstrated that its proposed WiMAX operations in the 2483.5-2495 MHz band would not produce any greater potential interference than would result from operation in compliance with the rules. Globalstar provided a detailed overview of the WiMAX protocol, emission plots for its proposed base station and mobile terminals showing the actual signal roll-off, including the out-of-channel emission levels, and an in depth technical interference analysis on how its proposed WiMAX protocol would not produce any greater potential interference than that resulting from operations of air interfaces currently permitted by the rules. Therefore, the FCC granted Globalstar’s request to operate TDD WiMAX in the band 2483.5 – 2495 MHz. It also waived Section 25.149(a)(1) of the Commission’s rules to allow Globalstar to operate WiMAX in the non-forward band mode of operation as requested. BloostonLaw contacts: Hal Mordkofsky, John Prendergast, and Cary Mitchell.

DEADLINES

DECEMBER 30: FCC FORM 507, UNIVERSAL SERVICE QUARTERLY LINE COUNT UPDATE. Line count updates are required to recalculate a carrier's per line universal service support, and is filed with the Universal Service Administrative Company (USAC). This information must be submitted on July 31 each year by all rate-of-return incumbent carriers, and on a quarterly basis if a competitive eligible telecommunications carrier (CETC) has initiated service in the rate-of-return incumbent carrier’s service area and reported line count data to USAC in the rate-of-return incumbent carrier’s service area, in order for the incumbent carrier to be eligible to receive Interstate Common Line Support (ICLS). This quarterly filing is due December 30 (for lines served as of June 30, 2008; and March 31, 2009, for lines served as of September 30, 2008)), and July 31, 2009, for lines served as of December 31, 2008. BloostonLaw contacts: Ben Dickens, Gerry Duffy, and Mary Sisak.

DECEMBER 31: FCC FORM 525, COMPETITIVE CARRIER LINE COUNT QUARTERLY REPORT. Competitive eligible telecommunications carriers (CETCs) are eligible to receive high cost support if they serve lines in an incumbent carrier’s service area, and that incumbent carrier receives high cost support. CETCs are eligible to receive the same per-line support amount received by the incumbent carrier in whose study area the CETC serves lines. Unlike the incumbent carriers, CETCs will use FCC Form 525 to submit their line count data to the Universal Service Administrative Company (USAC). This quarterly report must be filed by the last business day of March (for lines served as of September 30 of the previous year); the last business day of July (for lines served as of December 31 of the previous year); the last business day of September (for lines served as of March 31 of the current year); and the last business day of December (for lines served as of June 30 of the current year). CETCs must file the number of working loops served in the service area of an incumbent carrier, disaggregated by the incumbent carrier’s cost zones, if applicable, for High Cost Loop (HCL), Local Switching Support (LSS), Long Term Support (LTS), and Interstate Common Line Support (ICLS). ICLS will also require the loops to be reported by customer class as further described below. For Interstate Access Support (IAS), CETCs must file the number of working loops served in the service area of an incumbent carrier by Unbundled Network Element (UNE) zone and customer class. Working loops provided by CETCs in service areas of non-rural incumbents receiving High Cost Model (HCM) support must be filed by wire center or other methodology as determined by the state regulatory authority. CETCs may choose to complete FCC Form 525 and submit it to USAC, or designate an agent to file the form on its behalf. BloostonLaw contacts: Ben Dickens, Gerry Duffy, and Mary Sisak.

JANUARY 12: DTV EDUCATION REPORT. New 700 MHz licensees from Auction No. 73 are required to file a report with the FCC concerning their efforts to educate consumers about the upcoming transition to digital television (DTV). Last summer, we explained that the FCC’s Part 27 rules require 700 MHz licensees that won licenses in Auction No. 73 to file quarterly reports on their DTV consumer outreach efforts through the Spring of 2009. However, in an apparent contradiction, the same rules do not impose any substantive consumer education requirements on 700 MHz license holders. This situation has not changed. The reporting rule simply states that “the licensee holding such authorization must file a report with the Commission indicating whether, in the previous quarter, it has taken any outreach efforts to educate consumers about the transition from analog broadcast television service to digital broadcast television service (DTV) and, if so, what specific efforts were undertaken.” Many licensees may not have initiated 700 MHz service as of yet. However, to the extent they are also an Eligible Telecommunications Carrier (ETC) and recipient of federal USF funds, separate FCC rules found in 47 C.F.R. Part 54 (Universal Service) require ETCs to send monthly DTV transition notices to all Lifeline/Link-Up customers (e.g., as part of their monthly bill), and to include information about the DTV transition as part of any Lifeline or Link-Up publicity campaigns until March 31, 2009. BloostonLaw contacts: Hal Mordkofsky and Cary Mitchell.

JANUARY 15: HAC REPORTING DEADLINE: The next Hearing Aid Compatible (HAC) reporting deadline for digital commercial mobile radio service (CMRS) providers (now including carriers that provide service using AWS-1 spectrum and resellers of cellular, broadband PCS and/or AWS services) falls on January 15, 2009. The information provided in reports must be current through the end of the calendar month preceding the filing date (i.e., through December 31), and include historical data for the period since the entity filed its last report. For purposes of this report, service providers must include historical data relating to compliant and noncompliant handset models for the six-month period prior to reporting (i.e., beginning in July of 2008). We have prepared a HAC reporting template to assist our clients in keeping track of their HAC handset offerings, and other regulatory compliance efforts. ALL SERVICE PROVIDERS SUBJECT TO THE COMMISSION’S HAC RULES – INCLUDING COMPANIES THAT HAVE HERETOFORE QUALIFIED FOR THE DE MINIMIS EXCEPTION – MUST PARTICIPATE IN RECORDKEEPING AND ANNUAL HAC REPORTING. To the extent that your company is a provider of broadband PCS, cellular and/or interconnected SMR services, if you are a CMRS reseller and/or if you have plans to provide CMRS using newly licensed (or partitioned) AWS or 700 MHz spectrum, you and your company will need to be familiar with the Commission’s revised rules. With the recent Federal Register publication of the revised HAC rules, the most immediate compliance deadlines for Tier III wireless carriers become effective September 7, 2008. Under the new rules, service providers other than Tier I carriers must offer (for every air-interface, e.g., CDMA, GSM , TDMA) the lesser of 50% or eight (8) handsets that are rated M3- or better, and the lesser of 33% or three (3) handsets that are rated T3- or better. BloostonLaw contacts: Hal Mordkofsky, John Prendergast, Cary Mitchell, and Bob Jackson.

JANUARY 19: FCC FORM 497, LOW INCOME QUARTERLY REPORT. This form, the Lifeline and Link-Up Worksheet, must be submitted to the Universal Service Administrative Company (USAC) by all eligible telecommunications carriers (ETCs) that request reimbursement for participating in the low-income program. The form must be submitted by the third Monday after the end of each quarter. It is available at: www.universalservice.org. BloostonLaw contacts: Ben Dickens, Gerry Duffy, and Mary Sisak.

JANUARY 30: REPORT OF EXTENSION OF CREDIT TO FEDERAL CANDIDATES. This report (in letter format) must be filed by January 30 and July 31 of each year, but ONLY if the carrier extended unsecured credit to a candidate for a Federal elected office during the reporting period. BloostonLaw contacts: Hal Mordkofsky and John Prendergast.

FEBRUARY 2: FCC FORM 502, NUMBER UTILIZATION AND FORECAST REPORT: Any wireless or wireline carrier (including paging companies) that have received number blocks—including 100, 1,000, or 10,000 number blocks—from the North American Numbering Plan Administrator (NANPA), a Pooling Administrator, or from another carrier, must file Form 502 by February 2. (Normally, this filing is due February 1, but in 2009, February 1 falls on a Sunday, and FCC rules require the filing be submitted the next business day.) Carriers porting numbers for the purpose of transferring an established customer’s service to another service provider must also report, but the carrier receiving numbers through porting does not. Resold services should also be treated like ported numbers, meaning the carrier transferring the resold service to another carrier is required to report those numbers but the carrier receiving such numbers should not report them. Reporting carriers are required to include their FCC Registration Number (FRN). Reporting carriers file utilization and forecast reports semiannually on or before February 1 for the preceding six-month reporting period ending December 31, and on or before August 1 for the preceding six-month reporting period ending June 30. BloostonLaw contacts: Ben Dickens, Gerry Duffy, and Mary Sisak.

FEBRUARY 2: FCC FORM 499-Q, TELECOMMUNICATIONS REPORTING WORKSHEET. All telecommunications common carriers that expect to contribute more than $10,000 to federal Universal Service Fund (USF) support mechanisms must file this quarterly form. (Normally, this filing is due February 1, but in 2009, February 1 falls on a Sunday, and FCC rules require the filing be submitted the next business day.) The FCC has modified this form in light of its decision to establish interim measures for USF contribution assessments. The form contains revenue information from the prior quarter plus projections for the next quarter. Form 499-Q relates only to USF contributions. It does not relate to the cost recovery mechanisms for the Telecommunications Relay Service (TRS) Fund, the North American Numbering Plan Administration (NANPA), and the shared costs of local number portability (LNP), which are covered in the annual form (Form 499-A) that was due April 1. BloostonLaw contacts: Ben Dickens and Gerry Duffy.

MARCH 2: CPNI ANNUAL CERTIFICATION. Carriers should modify (as necessary) and complete their “Annual Certification of CPNI Compliance” for 2008. The certification must be filed with the FCC by March 2. (Normally this filing would be due March 1, but this year March 1 falls on a Sunday; therefore, FCC rules require filing on the next business day.) For 2007, FCC Enforcement Bureau conducted a computerized audit to identify any non-filers, who may face sanctions. Note that the annual certification should include the following three required Exhibits: (a) a Statement Explaining How The Company’s Operating Procedures Ensure Compliance With The FCC’S CPNI Rules to reflect the Company’s policies and information; (b) a Statement of Actions Taken Against Data Brokers; and (c) a Summary of Customer Complaints Regarding Unauthorized Release of CPNI. A company officer with personal knowledge that the company has established operating procedures adequate to ensure compliance with the rules must execute the Certification, place a copy of the Certification and accompanying Exhibits in the Company’s CPNI Compliance Records, and forward the original to BloostonLaw for filing with the FCC by March 1 (March 2, this year). BloostonLaw is prepared to help our clients meet this requirement, which we expect will be strictly enforced, by assisting with preparation of their certification filing; reviewing the filing to make sure that the required showings are made; filing the certification with the FCC, and obtaining a proof-of-filing copy for your records. Clients interested in obtaining BloostonLaw's CPNI compliance manual should contact Gerry Duffy (202-828-5528) or Mary Sisak (202-828-5554).

MARCH 2: FCC FORM 477, LOCAL COMPETITION AND BROADBAND REPORTING FORM. Three types of entities must file this form. (1) Facilities-based Providers of Broadband Connections to End User Locations: Entities that are facilities-based providers of broadband connections – which are wired “lines” or wireless “channels” that enable the end user to receive information from and/or send information to the Internet at information transfer rates exceeding 200 kbps in at least one direction – must complete and file the applicable portions of this form for each state in which the entity provides one or more such connections to end user locations. For the purposes of Form 477, an entity is a “facilities-based” provider of broadband connections to end user locations if it owns the portion of the physical facility that terminates at the end user location, if it obtains unbundled network elements (UNEs), special access lines, or other leased facilities that terminate at the end user location and provisions/equips them as broadband, or if it provisions/equips a broadband wireless channel to the end user location over licensed or unlicensed spectrum. Such entities include incumbent and competitive local exchange carriers (LECs), cable system operators, fixed wireless service providers (including “wireless ISPs”), terrestrial and satellite mobile wireless service providers, MMDS providers, electric utilities, municipalities, and other entities. (Such entities do not include equipment suppliers unless the equipment supplier uses the equipment to provision a broadband connection that it offers to the public for sale. Such entities also do not include providers of fixed wireless services (e.g., “Wi-Fi” and other wireless ethernet, or wireless local area network, applications) that only enable local distribution and sharing of a premises broadband facility.) (2) Providers of Wired or Fixed Wireless Local Telephone Services: Incumbent and competitive LECs must complete and file the applicable portions of the form for each state in which they provide local exchange service to one or more end user customers (which may include “dial-up” ISPs). (3) Providers of Mobile Telephony Services: Facilities-based providers of mobile telephony services must complete and file the applicable portions of this form for each state in which they serve one or more mobile telephony subscribers. A mobile telephony service is a real-time, two-way switched voice service that is interconnected with the public switched network using an in-network switching facility that enables the provider to reuse frequencies and accomplish seamless handoff of subscriber calls. A mobile telephony service provider is considered “facilities-based” if it serves a subscriber using spectrum for which the entity holds a license, that it manages, or for which it has obtained the right to use via lease or other arrangement with a Band Manager. On June 12, 2008, the FCC released a Report and Order (FCC 08-89) and an Order on Reconsideration (FCC 08-148) that together revise the Form 477 filing requirements. BloostonLaw contacts: Ben Dickens, Gerry Duffy, and Mary Sisak.

FCC Meetings and Deadlines

Nov. 12 – Deadline for reply comments on FNPRM regarding FCC’s modified rules for 700 MHz D Block licenses (WT Docket No. 06-150 and PS Docket No. 06-229).

Nov. 13 – Deadline for comments on NOI regarding oversight of USF (WC Docket No. 05-195).

Nov. 14 – Deadline for comments on NPRM regarding collection of industry-wide data (WC Docket No. 08-190).

Dec. 2 – Deadline for comments on Rural Cellular Association petition regarding exclusivity arrangements between commercial wireless carriers and handset manufacturers (RM-11497).

Dec. 2 – Deadline for comments on RTG petition seeking aggregation limit on commercial terrestrial spectrum below 2.3 GHz (RM-11498).

Dec. 15 – Deadline for reply comments on NOI regarding oversight of USF (WC Docket No. 05-195).

Dec. 15 – Deadline for reply comments on NPRM regarding collection of industry-wide data (WC Docket No. 08-190).

Dec. 18 – FCC open meeting.

Dec. 22 – Deadline for reply comments on Rural Cellular Association petition regarding exclusivity arrangements between commercial wireless carriers and handset manufacturers (RM-11497).

Dec. 22 – Deadline for reply comments on RTG petition seeking aggregation limit on commercial terrestrial spectrum below 2.3 GHz (RM-11498).

Dec. 30 – FCC Form 507, Universal Service Quarterly Line Count Update, is due.

Dec. 31 – FCC Form 525, Competitive Carrier Line Count Quarterly Report, is due.

Jan. 1 – Carriers must notify customers of “Do Not Call” options.

Jan. 12 – Auction 73 winners must file quarterly report covering DTV consumer education outreach efforts for period Oct.-Dec. 2008.

Jan. 12 – DTV Education Report is due.

Jan. 15 – HAC report is due. Note: CMRS resellers and MVNOs that offer two or fewer digital wireless handsets are exempt from the HAC handset requirements but must participate in the January 2009 HAC reporting requirements.

Jan. 19 – FCC Form 497, Low Income Quarterly Report, is due.

Jan. 30 – Report of extension of credit to Federal candidates is due.

Feb. 2 – FCC FORM 502, Number Utilization and Forecast Report , is due.

Feb. 2 – FCC FORM 499-Q, Telecommunications Reporting Worksheet, is due.

Mar. 2 – CPNI Annual Certification is due.

Mar. 2 – FCC FORM 477, Local Competition and Broadband Reporting Form, is due.

This newsletter is not intended to provide legal advice. Those interested in more information should contact the firm.

Source: Blooston, Mordkofsky, Dickens, Duffy and Prendergast, LLP For additional information, contact Hal Mordkofsky at 202-828-5520 or halmor@bloostonlaw.com

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