BloostonLaw Telecom Update
Published by the Law Offices of Blooston, Mordkofsky, Dickens, Duffy & Prendergast, LLP
[Reproduced here with the firm's permission.]
| Vol. 14, No. 42 || November 9, 2011 |
Manual” Now Available
COMPLIANCE DUE NOVEMBER 20, 2011
BloostonLaw now has available its “Open Internet Framework Manual,” and the separate website Transparency Rule disclosure templates that need to be completed and posted by fixed broadband Internet access service providers and by mobile broadband Internet access service providers. If you do not provide mobile broadband at this time, you need only post the fixed service template.
The purpose of the manual is to help clients and their staffs to understand the new FCC Open Internet Framework rules. The purpose of the templates is to assist clients in preparing the “Network Management Practices, Performance Characteristics, and Commercial Terms and Conditions” disclosures that they must post on their websites by November 20, 2011. Fixed wireline and fixed wireless service providers must post the fixed provider template, and mobile service providers must post the mobile provider template. A company that provides both fixed and mobile Internet access services should post and separately identify both templates. You must ensure that you point each new customer to where they can view your template, such as a reference to your website.
The templates have been designed to be as generalized as practicable. Nonetheless, some portions [normally, marked in red] require specific information particular to each client. In addition, any client whose practices differ from the general ones listed in the templates can and should make any and all changes necessary to conform the template to its practices, so long as those practices do not violate FCC rules or policies. We recommend that you have us review the finished version of your templates for compliance.
BloostonLaw contacts: Gerry Duffy (202-828-5528), Ben Dickens (202-828-5510), or Mary Sisak (202-828-5554).
INSIDE THIS ISSUE
- News and Views
- Comparing RLEC Plan, Consensus Framework to FCC’s Executive Summary.
- Bills introduced to reform FCC process, reporting.
- Reply date extended until Dec. 5 for “Cramming NPRM.”
- House approves freeze on any new state, local taxes on wireless.
- Senate resolution calls for exempting small businesses from Internet sales tax.
NEWS AND VIEWS
The USF/ICC Decision
This is the first in a series of columns designed to share the firm’s opinion about various topics of the day for our client base. In some cases, we may share our thoughts about late-breaking news items, such as FCC or court developments, or about industry developments that deserve feature and comment — such as recent phantom traffic concerns raised by a particular “CMRS” carrier terminating large amounts of unidentified traffic. We also anticipate having occasional commentary from industry watchers outside the firm.
The Way Forward on the FCC’s Universal Service Fund-Intercarrier Compensation Proceeding:
Although the FCC has not yet released its Order on Universal Service and Intercarrier Compensation (USF/ICC) “reform,” its recent vote (October 27, 2011) on the matter is already subject to intense scrutiny and comment. Several webinars, articles in the press, appeal plans and paid Wall Street Journal advertising all underscore this intense interest, despite the fact that the multi-hundred page order has yet to be released.
What is the way forward from here? When will it be time to act, and what will be the most effective course of action? Or, will it be best to simply close one’s eyes and “hope” that this latest “change” will pass by harmlessly? Unfortunately, this Hamlet-like “to do or not to do” choice will soon be on the front burner for many rural ILECs.
As a threshold matter, one cannot accurately divine (usually) the important details of a complex FCC action until the order is released, which we expect to happen in the next week or so. Thus we believe clients should not rely upon any material aspect of the FCC’s reported action until the order is released and reviewed carefully.
Second, we urge clients to conduct a preliminary impact analysis as soon as possible after the Order is released and reviewed. Rural local exchange carriers (RLECs) should be able to estimate the impact of the new access rate reductions, access restructure mechanism and access restructure charges upon their access revenue streams; as well as the impact of the revised corporate operations expense cap, phase-out of safety net additive, and other USF changes upon their universal service revenue streams. Unfortunately, the potential significant impacts of the Nebraska-proposed Capex and Opex regression models won’t be known until the FCC completes the models in early 2012. The FCC’s current Order (as well as the follow-up orders) will have many moving parts capable of affecting RLEC finances. We urge our clients to undertake this task as soon as possible, in order to understand where one’s interests lie, particularly given the additional FCC proceedings ( e.g., waiver proceedings, reconsideration petition proceedings, rulemakings, etc.) which are likely to follow.
The Likelihood of Appeals and Other Activity:
Against this background, we can make some broader, more generalized predictions. The FCC’s anticipated Order is a watershed event in the history of U. S. Telecommunications policy, and represents one of the largest wealth transfers ever accomplished within the industry. Unfortunately, such transfers come at the expense of small, rural carriers, and will apparently accrue to the benefit of the very largest carriers, like AT&T and Verizon. At the present time, it may be argued that certain aspects of the FCC’s forthcoming Order(s) will be vulnerable to review in the Courts of Appeals on jurisdictional grounds, on grounds relating to reasoned decision-making requirements applicable to federal agencies and on grounds related to statutory and constitutional duties owed to incumbent local exchange carriers by the FCC.
As previously noted, however, review of the FCC’s soon to be released Order is key to determining whether, in our view, such an appellate undertaking is warranted . We will do so promptly after the release of the Order, and publish our views as soon as prudently possible.
We also foresee the necessity of further work on Capitol Hill to help Senators and Congressmen from rural states understand the past success of RLECs in bringing state-of-the-art telecommunications and information services, jobs and economic development to their rural constituents, and to provide the assistance necessary to finish the job of bringing broadband service to Rural America. Don’t be discouraged by those claiming that telecommunications legislation is not possible in the present DC climate; the Congress has the power to fix FCC mistakes, as well as to raise concerns that can impact FCC decisions. Toward that end, we urge clients to keep in mind the utility of impact analyses (mentioned earlier) in conveying the economic harms of the FCC’s raw policy. We will be happy to assist our clients in making their voices heard on Capitol Hill, through meetings and presentations.
As a final note, in this newsletter, we expect to devote much future attention to the FCC’s new policy as the rural industry finds its way forward in a radically changed universe of bill and keep, and consequent non-recovery of revenue requirements.
In the meantime, if you have an opinion or any suggestions about our new format, please let us know.
BloostonLaw contacts: Ben Dickens, Gerry Duffy, and Mary Sisak.
Comparing RLEC Plan, Consensus Framework To FCC’s Executive Summary
From the Executive Summary, it appears that the Order will by and large disregard the Consensus Framework compromises which the Commission repeatedly urged RLECs and Price Cap carriers to reach among themselves and submit to the Commission.
The Order itself reduces total RLEC high-cost support over the next six years by 8 percent (from $13.05b to $12.0b), and contains no provision to transition RLEC high-cost support from the existing High-Cost Loop Sup-port (HCLS) and Interstate Common Line Support (ICLS) mechanisms to a broadband mechanism. It also goes beyond the RLEC Plan and the Consensus Framework: (a) by substituting a regression model capable of reducing support for both existing and future capital expenditures for the proposed RLEC limitation on future capital expenditures; and (b) by adding a regression model capable of reducing support for all operating expenses to the extended cap on corporate operations expenses.
Even if the FCC is able to convince reviewing courts that its additional step reducing the $0.0007/minute terminating access rate to a “0” bill-and-keep rate is a permissible change in rate structure rather than an unlawful preemption of intrastate access rates, it is effectively taking RLEC terminating access rates out of rate of return regulation and putting them on incentive regulation (with indications that originating access and transport will follow in a near-future rulemaking). FCC staff assertions that the new incentive recovery mechanism is a “good deal” for RLECs may or may not be true in a time of declining access minutes. However, it also appears that the new RLEC access recovery mechanism may wreak havoc on NECA pooling, and contemplates no additional recovery for post-2011 switching investments.
The Order will also contain a further notice of proposed rulemaking that should place out for comment some or all of the RLEC Plan for a transition to an RLEC broadband high-cost support mechanism, but that also may put into play proposals for reducing the current 11.25% RLEC rate of return, reducing originating access and transport charges to bill-and-keep, fleshing out the regression modal limitations on support for capital and operating expenses.
Clients will need to rely upon and participate in prospective and future FCC rulemakings, and upon Congressional oversight and legislative modifications, to correct the foreseen and unforeseen consequences of the Order.
- Near Term ICC Reform
- Traffic over PSTN, regardless of where it originates/terminates (and particularly including VoIP traffic), is subject to access or reciprocal compensation charges.
- Apply call signaling requirements to all traffic (including IP)
- Adopt reasonable rules to address access rate development
- Make clear interconnecting carriers must pay applicable charges
- Near Term USF Reform
- Support for future RLEC capital expenditures limited on basis of accumulated depreciation
- Cap on Corporate Operations Expenses extended to ICLS and LSS as well as HCLS
- Long Term ICC Unification
- Unify intrastate and interstate switched terminating access rates
- Restructure mechanism in Connect America Fund (CAF) to offset revenue reductions
- FCC proceeding before further access rate reductions
- NO BILL AND KEEP
- NO .0007
- Long Term USF Reform
- RLEC-Specific CAF Mechanism based upon broadband adoption rates and wholesale broadband benchmark (with reductions of legacy mechanism costs and support)
- Miscellaneous Specific Provisions
- No per-line cap on high-cost support.
- Unsubsidized competitors must make proper showings before RLEC support disaggregated in donut-and-hole situations.
- Total Annual High-Cost Support Budget Target – $4.5b
- Annual Mobility Funding – $300m
- Annual CAF and Legacy Support Budget Target for Rate of Return Carriers – $2b, with up to an additional $50m per year, to a budget target of $2.3b in sixth year
- RLEC Plan, as proposed
- Exception: Interstate Rate of Return – 10% for RLECs (9% for Price Cap Carriers)
- Annual High-Cost Support Budget Target for Price Cap Carriers – $2.2b
- 10-Year Right of First Refusal; Model-based Support
- Terminating Switched Access & Reciprocal Compensation – $0.0007 per minute
- Phased in over 6 steps for Price Cap Carriers
- Phased in over 8 steps for Rate of Return Carriers (intrastate to interstate in 2 steps; interstate to $0.005/minute in 3 steps; $0.005/minute to $0.0007/minute in 3 steps)
- Restructure Mechanism and $25/month benchmark for RLECs
- Traffic over PSTN which originates or terminates in IP format subject to access or reciprocal compensation.
- Total Annual Funding – $4.5b
- Annual Mobility Funding
- Phase 1: Initial $300m, with $50m to tribal areas
- Phase 2: Annual $500m, with $100 to tribal areas
- Annual Funding for Rate of Return Carriers – Approximately $2b annually
- Interstate Rate of Return – Seek comment on reducing from 11.25%
- Annual Funding for Price Cap Carriers
- Phase 1: Existing High-Cost Support + $300m
- Phase 2: Up to $1.8b annually for areas with no unsubsidized competitor
- Terminating Switched Access & Reciprocal Compensation – Bill-and-Keep
- Phased in over 6 years for Price Cap Carriers
- Phased in over 9 years for Rate of Return Carriers
- Incentive-based RLEC restructure mechanism (2011 interstate revenue requirement and intrastate/reciprocal compensation revenues)
- New SLC-like Access Restructure Charges (ARCs)
- Traffic over PSTN which originates or terminates in IP format is subject to access or reciprocal compensation.
BloostonLaw contacts: Ben Dickens, Gerry Duffy, and Mary Sisak.
Bills Introduced To Reform FCC Process, Reporting
Rep. Greg Walden (R-Ore.), chairman of the Energy and Commerce Subcommittee on Communications and Technology, and Senator Dean Heller (R-Nev.) have introduced HR 3309 (the FCC Process Reform Act) and HR 3310 (the FCC Consolidated Reporting Act) to improve the way the FCC operates by improving transparency, predictability, and consistency. The legislation would:
- Require the Commission to survey the state of the marketplace through a Notice of Inquiry before initiating new rulemakings to ensure the Commission has an up-to-date understanding of the rapidly evolving and job-creating telecommunications marketplace.
- Require the Commission to identify a market failure, consumer harm, or regulatory barrier to investment before adopting economically significant rules. After identifying such an issue, the Commission would be required to demonstrate that the benefits of regulation outweigh the costs while taking into account the need for regulation to impose the least burden on society.
- Require the Commission to establish performance measures for all program activities so that when the Commission spends hundreds of millions of federal or consumer dollars, Congress and the public have a straightforward means of seeing what “bang we’re getting for our buck.”
- Apply to the Commission, an independent agency, the regulatory reform principles that President Obama endorsed in his January 2011 Executive Order.
- Prevent regulatory overreach by requiring any conditions imposed on transactions to be within the Commission’s existing authority and be tailored to transaction-specific harms.
- Enhance consistency and transparency in the Commission’s operations by requiring the FCC to establish and disclose its own internal procedures for:
- (1) adequate review and deliberation regarding pending orders;
- (2) publication of orders before open meetings: and
- (3) initiation of items by bipartisan majorities, and minimum public review periods for statistical reports and ex parte communications.
- Require the FCC to establish its own “shot clocks” so that parties know how quickly they can expect action in certain proceedings and provide a schedule for when reports would be released.
- Empower the Commission to operate more efficiently through reform of the “sunshine” rules, allowing a bipartisan majority of Commissioners to meet for collaborative discussions subject to transparency safeguards.
- Consolidate eight, separate congressionally mandated reports on the communications industry into a single comprehensive report with a focus on intermodal competition, deploying communications capabilities to unserved communities, and eliminating regulatory barriers.
BloostonLaw contacts: Hal Mordkofsky, Ben Dickens, Gerry Duffy, and John Prendergast.
REPLY DATE EXTENDED UNTIL DEC. 5 FOR “CRAMMING” NPRM: The FCC has extended the reply comment date until December 5 for its CG Docket No. 11-116 Notice of Proposed Rulemaking (NPRM) on “cramming” — the illegal placement of an unauthorized fee onto a consumer's monthly phone bill (BloostonLaw Telecom Update, July 13). Specifically, the FCC proposed rules that would: (1) require landline telephone companies to notify subscribers clearly and conspicuously — at the point of sale, on each bill, and on their websites — of the option to block third-party charges from their telephone bills, if the carrier offers that option; and (2) strengthen the Commission’s requirement that third-party charges be separated on bills from the telephone company’s charges. In addition, both landline telephone companies and Commercial Mobile Radio Service (CMRS) providers, such as cellular, PCS and other wireless telephone companies, would have to include, on all telephone bills and on their websites, a notice that consumers may file complaints with the FCC and provide the Commission’s contact information for the submission of complaints. These requirements may become significant as more and more vendors are allowing customers to pay for items via their wireless phone. BloostonLaw contacts: Hal Mordkofsky, Ben Dickens, Gerry Duffy, and John Prendergast.
HOUSE APPROVES FIVE-YEAR FREEZE ON ANY NEW STATE, LOCAL TAXES ON WIRELESS: The U.S. House of Representatives has approved a five-year freeze on any new state and local taxes imposed on cellphones and other wireless services, including wireless broadband access. The House voice vote on the Wireless Tax Fairness Act (HR1002) reflected a consensus that new taxes on wireless mobile services have far outpaced average sales taxes on other items and have become a deterrent to the spread of wireless broadband technology. The bill prohibits state and local governments from imposing new discriminatory taxes on mobile services, providers or property — cellphones — for five years. Discriminatory taxes are defined as those not generally imposed on other types of services and providers or imposed at a lower rate. "We need to encourage the development and adoption of wireless broadband, not tax it out of existence," said Rep. Zoe Lofgren (D-Calif.) the sponsor of the legislation. She said that in many places, the taxation of wireless approaches or even exceeds the rates of sin taxes on goods like alcohol and tobacco. She added that wireless customers now pay 16.3% in taxes and fees, more than double the average rate of 7.4% on other goods and services. It said taxes on wireless services hits 26.8% in Baltimore, 20.4% in New York City and 19.9% in Omaha, Neb. BloostonLaw contacts: Hal Mordkofsky, John Prendergast, and Cary Mitchell.
SENATE RESOLUTION CALLS FOR EXEMPTING SMALL BUSINESSES FROM ANY INTERNET SALES TAX: Sens. Ron Wyden (D-Ore.) and Kelly Ayotte (R-N.H.) have introduced a non-binding resolution that calls on the Senate to exempt small businesses from legislation that would authorize states to require Internet retailers to collect sales taxes from out-of-state customers, according to the National Journal. The resolution states: "It is the sense of the Senate that Congress should not enact any legislation that would grant state governments the authority to impose any new burdensome or unfair tax collecting requirements on small Internet businesses and entrepreneurs, which would ultimately hurt the economy of, and consumers in, the United States." The National Journal said that the resolution appears to anticipate legislation now being prepared by several senators—Lamar Alexander (R-Tenn.), Mike Enzi (R-Wyo.), and Dick Durbin (D-Ill.) — that would allow states to require online retailers to collect sales taxes from customers in states where the stores have no “brick and mortar” building. In 1992, the Supreme Court ruled that states cannot require retailers to collect sales taxes for sales to people in states where those retailers lack a physical presence. Since then, states have argued that they are losing billions of dollars in revenues because of this loophole, which originally applied to catalog retailers but has since been extended to online retailers, the National Journal said. BloostonLaw contacts: Hal Mordkofsky, Ben Dickens, Gerry Duffy, and John Prendergast.
WHITE HOUSE THREATENS VETO OF SENATE RESOLUTION DISAPPROVING “NET NEUTRALITY” RULES: Senator Kay Bailey Hutchison and 42 cosponsors have introduced a resolution (S.J. Res. 6) disapproving the FCC’s “Net Neutrality” rules. The resolution is the first step toward a Senate vote to overturn the rules before they take effect on November 20. President Obama, however, has threatened to veto any measure that would kill the Net Neutrality rules. A policy statement released by the White House says: “If the President is presented with S.J. Res. 6, which would not safeguard the free and open Internet, his senior advisers would recommend that he veto the Resolution.” The House recently passed its own resolution of disapproval, and several parties, including Verizon and MetroPCS, have filed lawsuits challenging the rules (BloostonLaw Telecom Update, November 2; and October 5 and 12). BloostonLaw contacts: Hal Mordkofsky, Ben Dickens, Gerry Duffy, and John Prendergast.
COMMENT SOUGHT ON WIRELESS COMPETITION REPORT: The FCC has asked for comment on mobile wireless competition for its Sixteenth Annual Report on the State of Competition in Mobile Wireless, including Commercial Mobile Radio Services (CMRS). The Commission is required to submit annual reports to Congress analyzing competitive conditions with respect to commercial mobile services. The FCC said it seeks to update the information and metrics used in the Fifteenth Report, as well as to enhance the Commission’s analysis of mobile wireless competition for the Sixteenth Report.
This FCC seeks data and information on industry structure, firm conduct, market performance, and consumer behavior with respect to mobile wireless services, as well as on input and downstream segments, intermodal competition, urban-rural comparisons, and international comparisons. The FCC requests that commenters provide, to the extent possible, information and insights on competition across the mobile wireless ecosystem using this framework. It also asks parties to comment on whether the framework used in the Fifteenth Report was adequate for analyzing mobile wireless competition or whether changes should be made for the Sixteenth Report. For the Sixteenth Report, the FCC requests that commenters submit data and statistics for the calendar-year 2010 time period, as well as information on any trends and developments that have occurred during 2010 or 2011. Comments in this WT Docket No. 11-186 proceeding are due December 5, and replies are due December 20. BloostonLaw contacts: Hal Mordkofsky, John Prendergast, and Cary Mitchell.
COURT REFUSES TO DISMISS SPRINT, CELLULAR SOUTH ANTITRUST STANDING; SPECIAL MASTER SAYS AT&T CAN SEE CERTAIN INTERNAL SPRINT DOCUMENTS: The U.S. District Court for the District of Columbia has denied AT&T’s Motion to Dismiss Sprint and Motion to Dismiss Cellular South (now C Spire) insofar as they challenge plaintiffs’ claims to antitrust injury with regard to the proposed T-Mobile acquisition’s effects on the market for mobile wireless devices. The Court denied AT&T’s Motion to Dismiss Cellular South insofar as it attacks Cellular South’s antitrust standing to pursue claims regarding the role of its Corr Wireless subsidiary as a purchaser of Global System for Mobile Communications (GSM) roaming. AT&T argued that because Sprint and Cellular South do not describe the state of competition among device manufacturers, their claims must fail. The Court disagreed. It said that where monopsony power ( e.g., “market power on the buy side of the market”) is the concern, “what matters is market concentration on the buying side of the market, not the selling side.” The Court added: “That there may be and, indeed, by all accounts, is, healthy competition among firms that sell mobile wireless devices is irrelevant to understanding whether, by acquiring T-Mobile, AT&T could so increase its buying power as to dictate terms to device manufacturers and otherwise impair plaintiffs’ access to these necessary inputs. Judged against these standards, the Court concluded that plaintiffs’ complaints contain sufficient facts, which must at this stage be accepted as true, to state a plausible claim to threatened loss or damage in the market for mobile wireless devices.”
In a related matter, Special Master Richard Levie has ruled in favor of AT&T in its request for Sprint to turn over internal strategic documents because of their relevance to the Justice Department's lawsuit challenging the proposed merger. Levie said that "AT&T is entitled to discover what effect the iPhone and other events of the past few months have had on Sprint's relevant market share, a part of the government’s case." Meanwhile, AT&T has pushed back its expected closing of the merger by three months, to June 2012. AT&T also announced that it now expects its proposed $1.93 billion purchase of Qualcomm's 700 MHz Media FLO spectrum, which was announced last December, to close by the end of the first quarter of next year, rather than by the end of this year. BloostonLaw contacts: Hal Mordkofsky, Ben Dickens, Gerry Duffy, and John Prendergast.
REVISED FCC FORM 499-A NOW AVAILABLE: The FCC’s Wireline Competition Bureau has released the revised Telecommunications Reporting Worksheet (FCC Form 499-A) and accompanying instructions that have been approved by the Office of Management and Budget (OMB). The revisions include the following:
- Adding a definition for non-interconnected Voice over Internet Protocol (VoIP) service providers.
- Adding a filing requirement for non-interconnected VoIP service providers with inter-state end-user revenues subject to TRS Fund contributions. Such providers must file the Form 499-A to register with the Commission by December 31, 2011 . If a non-interconnected VoIP provider has already registered with the Commission (e.g., because it has other lines of business subject to the Commission's registration and reporting requirements), it need not refile the Form 499-A.
- Requiring non-interconnected VoIP service providers with interstate end-user revenues subject to Telecommunications Relay Service (TRS) Fund contributions to designate an agent for service of process. (BloostonLaw is available to serve in this capacity.)
- Updating certain instruction references and the contact information for the TRS Administrator.
BloostonLaw contacts: Hal Mordkofsky, Ben Dickens, Gerry Duffy, and John Prendergast.
NARUC UNVEILS DRAFT TELECOM RESOLUTIONS FOR CONSIDERATION AT NOV. 13 MEETING: The National Association of Regulatory Utility Commissioners (NARUC) has proposed draft telecommunications resolutions to be considered at its November 13 meeting in St. Louis. The draft resolutions for consideration include the following:
- Resolution on Mandatory Reporting of Service Outages by Interconnected Voice-Over Internet Protocol Service Providers and Broadband Internet Service Providers. The resolution urges the FCC to extend the mandatory service outage reporting requirements to interconnected VoIP and broadband service providers.
- Resolution on Accountability for FCC Imposed Merger Public Interest Commitments to Deploy Broadband Infrastructure and Adoption Programs. The resolution requests the FCC to undertake a public inquiry into the extent that wireline and wireless carriers and cable television companies have complied with the public interest broadband deployment and adoptions obligations imposed on previous merger applicants; that the FCC require any and all applicants that make merger application public interest commitments to submit on a semiannual basis implementation progress reports to the FCC and State commissions; that the FCC enforce prior and future merger application public interest obligations; and that the FCC prohibit the use of or reliance on federal financial support from the Connect America Fund (CAF) of the Mobility Fund by any wireless or wireline carrier or cable television company or any other applicants.
- Resolution Urging the FCC to Protect All Voice Service Consumers from Cramming Billing Practices. The resolution urges the FCC to implement mandatory cramming rules to all voice service providers that assess telephone bills on consumers, including traditional wireline service providers, interconnected voice-over internet protocol service providers, and wireless service providers.
BloostonLaw contacts: Hal Mordkofsky, Ben Dickens, Gerry Duffy, and John Prendergast.
FCC RELEASES REPORT ON STATE DISTRIBUTION OF 911 FEES & CHARGES: The FCC has released its third annual report regarding states that have diverted any portion of the 911 fees they collect for purposes other than 911 programs. The Report to Congress on State Collection and Distribution of 911 and Enhanced 911 Fees and Charges was submitted to Congress on November 1, 2011. The Commission submits this report annually pursuant to the New and Emerging Technologies 911 Improvement Act of 2008 (NET 911 Act). The information contained in the report is based on information provided to the Commission by states and U.S. territories regarding their collection and expenditure of fees or charges to support 911 or Enhanced 911 (E911) services. This year's report identifies seven states that, in part, used some portion of 911 fees for non-911 purposes in 2010. This represents a decline in the number of states that reported diverting 911 fees for non-911 purposes in previous years: the Commission’s first annual report in 2009 identified 12 states that had diverted 911 funds, while the second annual report in 2010 identified 13 states that had diverted funds. Specifically, Arizona, Illinois, Oregon and Rhode Island diverted 911 fees to their state’s general fund. Virginia and West Virginia used the diverted fees for other public safety-related purposes. South Dakota could not provide expenditure information at this time. In conjunction with release of this year’s report, the Public Safety and Homeland Security Bureau issued a Public Notice proposing to collect more detailed information from states and U.S. territories regarding their collection and use of 911 fees, including whether such fees are or can be used to support Next Generation 911 (NG911) initiatives. The Public Notice also seeks comment on whether the FCC should recommend potential legislative changes to Congress that would provide greater accountability in the collection and expenditure of 911 funds. Comments in this PS Docket No. 09-14 proceeding are due December 6, and replies are due January 5. BloostonLaw contacts: Hal Mordkofsky, Ben Dickens, Gerry Duffy, and John Prendergast.
This newsletter is not intended to provide legal advice. Those interested in more information should contact the firm.