BloostonLaw Telecom Update
Published by the Law Offices of Blooston, Mordkofsky, Dickens, Duffy & Prendergast, LLP
[Portions reproduced here with the firm's permission.]
| Vol. 14, No. 9|| March 2, 2011 |
Open Meeting Agenda
The FCC will consider the following items at its March 3 open meeting:
1. An Order to revise rules or establish waiver standards that will make it easier for Native Nations to provide radio service to areas that are the functional equivalent of Tribal Lands and to Tribal Lands that are small or irregularly shaped; and to adjust policies for determining whether proposed new radio stations or station moves constitute an equitable distribution of radio service under Section 307(b) of the Communications Act. A Further Notice of Proposed Rule-making (FNPRM) seeks comment on adopting a Tribal eligibility requirement or a tribal bidding credit to foster radio service by Native Nations on their lands.
2. An NPRM to explore a range of recommendations to help close the wireless gap on Tribal Lands
3. An NOI that explores ways to overcome the barriers to deployment of communications services to Native Nations communities, and to improve consultation and coordination with Native Nations.
4. An NPRM that seeks comment on changes to rules governing or affecting retransmission consent negotiations between broadcasters and multichannel video programming distributors.
5. An NPRM to reform and modernize the universal service Lifeline and Link Up programs by eliminating waste, fraud, and abuse; improving program administration, accountability, and fiscal responsibility; and updating the program in light of market and technology changes, including to support pilot programs for broadband adoption.
6. An NPRM that seeks comment on rules implementing provisions of the Twenty-First Century Communications and Video Accessibility Act of 2010 (CVAA). The NPRM proposes rules requiring providers of advanced communications services and manufacturers of equipment used for those services to make their products accessible to people with disabilities.
7. An NPRM to reinstate the video description rules adopted by the Commission in 2000, as directed in the CVAA.
INSIDE THIS ISSUE
- FCC sets comment dates for CAF/ICC rulemaking.
- Rural, other trade groups oppose FCC on duplicative Lifeline support program.
- FCC proposes to fine 10 companies for failing to file CPNI certifications.
- FCC sets comment dates for 700 MHz public safety interoperability FNPRM.
- FCC sets comment cycle for NPRM for revising Form 477.
FCC Sets Comment Dates For CAF/ICC Rulemaking
The FCC has set comment dates for its Notice of Proposed Rulemaking (NPRM) and Further NPRM that proposes to transform high-cost Universal Service Fund support for voice service into a Connect America Fund (CAF) for broadband services, and eliminate access charges altogether or replace them with some form of transitional CAF support (Blooston Telecom Update, February 9 and 16). Comments on the issues of inter-carrier compensation for VoIP, phantom traffic and access stimulation are due April 1, and replies are due April 18. For all other issues, comments on this CAF/Intercarrier Compensation (ICC) rulemaking proceeding are due April 18, and replies are due May 23. Submissions should be identified by WC Docket Nos. 10-90, 07-135, 05-337, 03-109; GN Docket No. 09-51; and CC Docket Nos. 01-92, 96-45.
As we have noted previously, there are serious concerns that the ultimate impact (if not purpose) of the FCC plan is to redistribute high-cost support away from rural local exchange carriers (RLECs) that have used it efficiently and effectively to deploy broadband to larger price cap and wireless carriers, as well as public-private partnerships. BloostonLaw is in the process of positioning its clients to overcome what is clearly a major threat to the rural telecommunications industry.
NPRM/FNPRM: In general, the FCC will be guided by four principles: (1) modernization of the Universal Service Fund (USF) and intercarrier compensation (ICC) for broadband service; (2) fiscal responsibility; (3) accountability; and (4) market-driven policies. The Commission says it will avoid sudden changes or “flash cuts.” The new Connect America Fund (CAF) will ultimately replace all explicit support currently provided by USF and implicit support provided by ICC. The NPRM outlines both short-term and long-term proposals for USF and ICC reform.
Universal Service Fund
Regarding the USF, the FCC proposes that short-term reforms would begin in 2012, and that this would involve transitioning USF funds from “less efficient” to “more efficient” uses (e.g., broadband).
The Commission believes that the three current USF support mechanisms for rate of return (RoR) carriers—High Cost Loop (HCL), Local Switching Support (LSS), and Interstate Common Line Support (ICLS)—provide poor incentives for RoR carriers to operate and invest efficiently. This contributes, the Commission believes, to excessive spending in one community, which limits opportunities for consumers in other communities, and may not be in the best interests of the nation. The Commission says there are few, if any, benchmarks for determining whether network investment is justified or appropriate.
In brief, the FCC believes that LSS provides perverse incentives for companies not to realize efficiencies by combining service areas. The FCC seeks comment on a “suite of reforms” to increase accountability and start RoR carriers on the path towards market-driven, incentive-based regulation.
Long Term USF Reforms
The FCC would transition all remaining high-cost programs to the CAF, and seeks comment on three options for providing “sufficient, but not excessive” high-cost support: (1) award all ongoing support through a competitive, technology-neutral bidding mechanism; (2) offer the incumbent local exchange carrier (ILEC) a right-of-first-refusal to serve as carrier of last resort (COLR) in return for receipt of CAF support determined by a proxy model; or (3) if the ILEC refuses, the FCC would hold an auction.
The FCC’s rulemaking covers the following topics:
- Short Term Immediate Reforms
- Access stimulation
- Carriers with revenue-sharing arrangements must refile tariffs
- RoR – Adjust rate to reflect new demand
- CLEC – Benchmark to large ILEC
- Phantom traffic
- Amend signaling rules to require adequate billing data.
- Determine obligations for interconnected VoIP traffic.
- Long Term Comprehensive Reform
- Adopt a sustainable long term framework to reduce per-minute charges.
- Seeks comments on several aspects of ICC rate reductions.
- Federal/State role options
- Federal does interstate, states do intrastate, or
- Federal uses 251/252 rules to unify all ICC under reciprocal compensation.
- Should state and interstate move together, or
- Should state move to interstate, and then interstate to ultimate levels.
- Glide path to take all ICC to zero, with all explicit support coming from CAF.
Staff members of the Federal-State Joint Board on Universal Service have also posted a number of alternative reform scenarios on the National Association of Regulatory Utility Commissioner (NARUC) website, including the “Consultants’ Plan,” the “Omaha Plan,” and the “Shifman Plan.”
BloostonLaw contacts: Ben Dickens, Gerry Duffy, and Mary Sisak.
Rural, Other Trade Groups Oppose FCC On Duplicative Lifeline Support Program
The National Telecommunications Cooperative Association (NTCA), Organization for the Promotion and Advancement of Small Telecommunications Companies (OPASTCO), Rural Cellular Association (RCA), and Western Telecommunications Alliance (WTA) have joined with large and mid-sized trade groups to ask the FCC to reconsider its decision regarding duplicate Lifeline claims. More specifically, the rural trade associations have joined with CTIA-The Wireless Association, the United States Telecom Association (USTA), and the Independent Telephone and Telecommunications Alliance (ITTA) in petitioning the FCC to reconsider the decision set forth in a letter dated January 21 from the Chief of the Wireline Competition Bureau (WCB) to the Chief Operating Officer of the Universal Service Administrative Company (USAC), in which the WCB issued directives to USAC and eligible telecommunications carriers (ETCs) regarding duplicate Lifeline claims (BloostonLaw Telecom Update, January 26). The petition for reconsideration is accompanied by a request for stay of the implementation of the January 21 letter.
Essentially, the January 21 letter directs USAC to notify ETCs when a duplicate Lifeline claim has been discovered, and then requires the ETC to notify the affected customer via phone and in writing that he/she has 30 days to choose a single Lifeline provider or leave the program. The customer must then sign a new certification with the chosen provider, and the non-chosen ETC must then de-enroll the customer.
In their reconsideration petition, the associations argue that the FCC is in violation of the Administrative Procedure Act (APA) by promulgating new rules without appropriate notice and comment, imposes new information collections without the required approval of the Office of Management and Budget (OMB) in violation of the Paperwork Reduction Act, and is in violation of the Regulatory Flexibility Act (RFA) by failing to consider ways to reduce burdens on small entities. Additionally, the associations argue that the WCB exceeded its authority by initiating or attempting to complete a rulemaking.
“Had the Commission sought public comment on these directives before they were imposed, it would have learned that they are incomplete, and that, even setting aside the substantial burden they impose on ETCs and low income consumers, if implemented, they would be ineffective at preventing the recurrence of duplicate Lifeline subscriptions,” the associations said. “Because a low income consumer can initiate a new subscription with any Lifeline provider by executing the necessary self-certifications, duplicates will inevitably begin recurring as soon as they are eliminated. Such a tail-chasing exercise cannot pass the cost-benefit analysis contemplated by the President’s recent Executive Order on ‘Improving Regulation and Regulatory Review,’ The Commission or the Bureau should rescind the January 21 Letter, and, in the Notice of Proposed Rulemaking to be considered at the Commission’s March 3, 2011, meeting, seek comment on an interim mechanism to address situations in which consumers receive Lifeline benefits from two or more ETCs.”
The associations said that the Commission should rescind the January 21 Letter and/or direct USAC to hold in abeyance implantation of the Letter. The associations asserted that the Commission failed to properly promulgate the requirements contained in the Letter in accordance with the Administrative Procedure Act’s notice and comment procedures. The Letter also does not comply with the Paperwork Reduction Act or the Regulatory Flexibility Act. Accordingly, according to the associations, it is unenforceable. The associations said the Commission should properly publish a notice and seek comment regarding the proposed rules, and it should seek OMB approval of the proposed information collections.
BloostonLaw contacts: Ben Dickens, Gerry Duffy, and Mary Sisak.
FCC Proposes To Fine 10 Companies For Failing To File CPNI Certifications
The FCC has issued an Omnibus Notice of Apparent Liability for Forfeiture and Order (NAL), proposing to fine 10 telecommunications companies for apparently having willfully and repeatedly violated (1) section 64.2009(e) of the FCC’s rules by failing to submit an annual customer proprietary network information (CPNI) compliance certificate, and (2) failing to provide certain information regarding their CPNI filings. The FCC found that the companies are each apparently liable for a monetary forfeiture in the amount of $29,000. Furthermore, the FCC directed the companies to file the reports required under section 64.2009(e) of the Commission’s rules that were due March 1, 2009, and March 1, 2010. This proposed fine underscores the need for strict compliance with all aspects of the CPNI rules, and reminds carriers that it is best to avoid any FCC violation, since past violations can result in steeper fines in the future.
While the Commission acknowledged that it has not previously issued a citation, admonishment, or NAL against any of the companies for a violation of the CPNI rules, it nevertheless said that it has advised each of them, through the letters sent in early 2010, that they appeared to be in noncompliance with the rules for calendar year 2008, and it reminded them of the then-upcoming filing requirement for calendar year 2009.
Further, notwithstanding the section 503(b)(6) one-year statute of limitations for assessing forfeitures, the FCC said it is permitted in this NAL to consider the companies’ failure to file the certification required for calendar year 2008 (due March 1, 2009) for two different reasons. First, section 503(b)(2)(E) not only permits, but indeed requires, the FCC to consider an entity’s past violations in determining a forfeiture penalty: “the Commission or its designee shall take into account … with respect to the violator, any history of prior offenses….” Second, in a number of recent actions, the Commission has held that the failure to file forms is a continuing violation until cured, i.e., the companies cited in the NAL continue to violate the certification filing requirement for 2008 until they file the certification. Accordingly, the FCC found that an adjustment upward from the original $20,000 forfeiture it had proposed for failure to file a CPNI certification was warranted.
With respect to determining the forfeiture for the companies’ violation of an FCC order to provide information, the FCC noted that the base forfeitures for failing to respond to FCC communications is $4,000. Based on each of the companies’ failure to respond to the Bureau’s letter containing the order to provide information, the FCC determined that an additional $4,000 forfeiture on top of the $25,000 for failure to file a certification is appropriate.
The companies at issue are A2Z Telecom Inc.; Civicom Inc; Communications Masters Inc.; Conversenetworks LLC; Canopco Inc.; EnterConference; ESLITE Networks LLC; Jahan Telecommunication; Owtel Inc.; and Ready-Talk.
BloostonLaw contacts: Ben Dickens, Gerry Duffy, and Mary Sisak.
FCC SETS COMMENT DATES FOR 700 MHz PUBLIC SAFETY INTEROPERABILTY FNPRM: The FCC has set comment dates on its Fourth Further Notice of Proposed Rulemaking (FNPRM) seeking comments on the development of a technical interoperability framework for the nationwide public safety broadband network. This document considers and proposes additional requirements to further promote and enable nationwide interoperability among public safety broadband networks operating in the 700 MHz band. This document addresses public safety broadband network interoperability from a technological perspective and considers interoperability at various communication layers (BloostonLaw Telecom Update, January 26). Comments in this PS Docket No. 06-229, WT Docket No. 06-150, and WP Docket No. 07-100 proceeding are due April 11, and replies are due May 10. The FCC said the rules proposed in the FNPRM are necessary to ensure the interoperability of 700 MHz public safety broadband networks that are expected to be deployed in the near term. The proposed rules create technical requirements designed to ensure that public safety broadband networks are technically and operationally compatible, so that public safety personnel from various jurisdictions and departments are able to communicate effectively over these networks. The FNPRM proposes changes to part 90 of the rules. Specifically, it proposes to:
(1) Develop a regulatory and operational framework for roaming from one public safety broadband network to another.
(2) Require that public safety broadband networks meet certain technical requirements designed to ensure that networks are technically interoperable or compatible.
(3) Require that public safety broadband networks meet additional requirements designed to ensure that networks achieve a baseline of operability necessary to support interoperable communications.
(4) Require public safety broadband network operators to complete testing for equipment and user devices operated on their networks to ensure conformance with relevant technical standards and ensure interoperability between networks.
(5) Make additional minor edits to part 90.
BloostonLaw contacts: Hal Mordkofsky, John Prendergast, and Cary Mitchell.
FCC SETS COMMENT CYCLE FOR NPRM FOR REVISING FORM 477: The FCC has set a comment cycle for its Notice of Proposed Rulemaking (NPRM) to consider whether and how to reform the Form 477 data program, which serves as the Commission's primary tool for collecting broadband and local telephone data. The Commission said it believes this is an important part of the Commission's larger initiative to modernize and streamline how the Commission collects, uses, and disseminates data (BloostonLaw Telecom Update, February 9). Comments in this WC Docket Nos. 07-38, 09-190, 10-132, and 11-10 proceeding are due March 30, and replies are due April 14. In the NPRM, the FCC seeks comment on whether and how to reform the Form 477 data program to improve the Commission's ability to carry out its statutory duties, while streamlining and minimizing the overall costs of the program, including the burdens imposed on service providers. The FCC said this NPRM is an important part of its larger Data Innovation Initiative to modernize and streamline how it collects, uses, and disseminates data, and to ensure that all of the data it collects is useful for supporting informed policy-making, promoting competition, and protecting consumers. The FCC said it is focused on giving careful consideration to the benefits and burdens of its data collections, and eliminating unnecessary collections where possible. For example, the Initiative already has identified over twenty data collections across the entire Commission that may be outdated and ripe for elimination, as well as a number of statutory reporting obligations that may have outlived their usefulness. Similarly, for each type of data discussed in this NPRM, the FCC said it will consider the burdens and benefits of any proposed changes. The agency’s goal is to ensure that it has the data it needs, while minimizing the overall burdens of data collection.
Established in 2000, Form 477 is the Commission's primary tool for collecting data about broadband and local telephone networks and services. The form requires providers of broadband service, local telephone service, interconnected Voice over Internet Protocol (VoIP) service, and mobile telephone service to report the number of subscribers they have in their respective service areas. But the Commission has in the past noted shortcomings of the data collected using Form 477, and after more than a decade of rapid innovation in the market for broadband and telephone services, and consistent with the Government Accountability Office's (GAO) recent finding that the Commission's broadband data collection fails to collect key data required to inform policy decisions and generally needs improvement, the FCC believes it may be time to modify Form 477 to better serve the needs of the Commission, Congress, service providers, and consumers. In fact, since the last modification of Form 477, Congress directed the FCC to collect additional information to supplement its analysis of broadband deployment and availability. Form 477 collects data that are “a critical precursor'' to the Commission's ability to fulfill its statutory duties, and provides the Commission with “a set of data of uniform quality and reliability'' superior to other publicly available information sources. Form 477 also enables the Commission to fulfill its obligation to reduce government regulation wherever possible, by providing a factual basis to evaluate the nature and impact of existing regulation and, in particular, to identify areas where competition has developed sufficiently to justify deregulation. BloostonLaw contacts: Ben Dickens, Gerry Duffy, and Mary Sisak.
FCC SETS COMMENT CYCLE FOR NPRM PROPOSING TO REMOVE CEI, ONA RESTRICTIONS: The FCC has set comment dates for its Notice of Proposed Rulemaking (NPRM) proposing the removal of the narrowband comparably efficient interconnection (CEI) and open network architecture (ONA) reporting requirements that currently apply to the Bell Operating Companies (BOCs) due to a lack of continuing relevance and utility. The NPRM continues the Commission's examination of its data practices through the Data Innovation Initiative, including identification of data collections that can be eliminated without reducing the effectiveness of the Commission's decision-making process. Comments in this WC Docket No. 10-132 proceeding are due April 1, and replies are due April 18. BloostonLaw contacts: Ben Dickens, Gerry Duffy, and Mary Sisak.
SENATE COMMERCE COMMITTEE TOUGHENS RULES FOR WITNESS DEPOSITIONS: The U.S. Senate Committee on Commerce, Science, and Transportation has approved new expedited procedures to conduct witness depositions. Under the new rules, Chairman Jay Rockefeller (D-W.Va.) can now authorize committee staff to interview witnesses under oath during committee investigations. The new rules also give Republican Ranking Member Kay Bailey Hutchison (R-Texas) and her staff the right to participate in these depositions. “One of my priorities at this committee is fighting for American consumers and doing everything we can to root out waste, fraud, and abuse in the government.” Rockefeller said. “By increasing the Committee’s capacity to gather crucial information during investigations, we have also increased our ability to stop misleading practices in the private sector and to protect taxpayers’ dollars against waste, fraud, and abuse. I am pleased with the outcome of the committee vote today, and I look forward to working with my colleagues on future committee investigations.” Since 2009, the Committee said, its investigations have: (1) put an end to a billion-dollar Internet commerce scam; (2) helped end abusive practices of the debt settlement industry; (3) disclosed unfair billing practices in the health insurance industry; (4) uncovered waste, fraud, and abuse in the Small Business Innovation Research (SBIR) program; (5) led to a pro-consumer provision in health care reform; and (6) improved oversight at the National Highway Traffic Safety Administration (NHTSA) in response to reports of Toyota vehicle safety concerns. BloostonLaw contacts: Hal Mordkofsky, Ben Dickens, Gerry Duffy, and John Prendergast.
FCC SETS COMMENT DATES REGARDING ORBIT ACT REPORT TO CONGRESS: Section 646 of the Open-Market Reorganization for the Betterment of International Telecommunications Act (ORBIT Act) requires the FCC to report annually to the Committees on Commerce and International Relations of the House of Representatives and the Committees on Commerce, Science, and Transportation and Foreign Relations of the Senate on the progress made to achieve the objectives and carry out the purposes and provisions of the ORBIT Act. The purpose of the Act is to promote a fully competitive global market for satellite communications services for the benefit of consumers and providers of satellite services and equipment by fully privatizing INTELSAT and Inmarsat. The Commission has previously received comment on INTELSAT’s and Inmarsat’s privatization in connection with other proceedings and prior to earlier reports to Congress. Thus, the FCC has released a Public Notice to provide an opportunity for industry and consumers to file additional comments, particularly with respect to the impact of privatization on U.S. industry, jobs, and industry access to the global marketplace. Comments and views will be reflected in the Commission’s report and made available in full to the House and Senate committees. Comments in this IB Docket No. 11-30 are due March 28, and replies are due April 12. BloostonLaw contacts: Hal Mordkofsky and John Prendergast.
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