Selected portions of the BloostonLaw Telecom Update, and/or the BloostonLaw Private Users Update — newsletters from the Law Offices of Blooston, Mordkofsky, Dickens, Duffy & Prendergast, LLP are reproduced in this section with the firm's permission.
|BloostonLaw Telecom Update||Vol. 17, No. 51||December 17, 2014|
In lieu of holiday cards this season, BloostonLaw will be making a donation to Healthcare for the Homeless, a local charity program. We wish our clients a happy and safe holiday season! In observance of the holiday, we will not publish the newsletter until Jan. 7.
Our office will be closed Dec. 24-26 and closing at 2pm Dec. 31.
FCC Adopts CAF Phase II Order, Increases Broadband Speed Requirement to 10 Mbps
As expected, the FCC adopted an Order at its December 11 Open Meeting resolving some of the further rulemaking proposals set forth in the June 10, 2014 Omnibus USF Order. At this time, the text of the Order itself is not available.
According to a press release issued by the FCC on the day of the meeting, the main expectation regarding the contents of the Order has been borne out – specifically, that the FCC would increase the minimum broadband speed associated with universal service support to 10 Mbps downstream and 1 Mbps upstream (see BloostonLaw Telecom Update of November 25, 2014). The FCC’s press release also indicates that the Order (i) increases the term of support for price cap carriers from five years to six years, with an option for a seventh year in certain circumstances; (ii) provides increased flexibility in CAF build-out requirements; (iii) forbears from certain universal service obligations in low-cost census blocks where price cap carriers are not eligible to receive CAF support and census blocks where carriers face competition; and (iv) requires recipients that decline CAF support in a state to continue to deliver voice service to high-cost census blocks until replaced through a competitive bidding process by another subsidized carrier.
The press release also indicates that the Order “makes changes that will distribute traditional universal service support for small carriers more equitably and curb waste.” This appears to refer to the FCC’s proposal to deal with the High Cost Loop Support (HCLS) mechanism cap by freezing the national average cost per loop, and then reducing the support of all HCLS recipients by the same percentage if the cap is exceeded (rather than eliminating all of the HCLS support for certain of the lower cost companies). It does not appear (but is not yet absolutely certain) that the FCC has adopted its proposal to deny HCLS and Interstate Common Line Support (“ICLS”) for new construction after a date certain in areas already served by a qualified competitor.
FCC Issues E-Rate Order, Increases E-Rate Spending Cap by $1.5 Billion
In another as-of-yet unreleased Order adopted at its December 11 meeting, the FCC made a number of changes to the Schools and Libraries universal service support program (known as the E-Rate Program). As we reported in the November 19 edition of the BloostonLaw Telecom Update, the highlight of this Order is a $1.5 billion increase in the annual cap on the size of the program, taking it from $2.4 billion to $3.9 billion.
According to the news release issued on the day of the meeting, the Order also “takes further steps to improve the overall administration of the program and maximizes the options schools and libraries have for purchasing affordable high-speed broadband connectivity” by:
- Suspending the requirement that applicants seek funding for large up front construction costs over several years, and allowing applicants to pay their share of one-time, up-front construction costs over multiple years.
- Equalizing the treatment of schools and libraries seeking support for dark fiber with those seeking support for lit fiber.
- Allowing schools and libraries to build high-speed broadband facilities themselves when that is the most cost-effective option, subject to a number of safeguards.
- Providing an incentive for state support of last-mile broadband facilities through a match from E-rate of up to 10% of the cost of construction, with special consideration for Tribal schools and libraries.
- Requiring carriers that receive subsidies from the High Cost program to offer high-speed broadband to schools and libraries located in geographic areas receiving those subsidies at rates reasonably comparable to similar services in urban areas.
- Expanding the five-year budget approach to providing more equitable support for internal connections (Category Two) through funding year 2019.
Commissioner O’Rielly continued to criticize the effort, noting in his dissent that, “a person can support E-rate, E-rate modernization, and the good work of the panelists and yet not be in favor of this particular item. Sadly, this item makes the E-rate program more complex, less efficient, and potentially wasteful. Therefore, I cannot support it.”
FCC Seeks Comment on Incentive Auction Procedures
The FCC late yesterday released a Public Notice seeking comment on detailed proposals for conducting the broadcast television spectrum incentive auction, which is currently expected to be held in early- to mid-2016. Comments are due on or before January 30, 2015, and reply comments are due on or before February 27, 2015.
The broadcast incentive auction is the process that will allow the FCC to repurpose and grant new Partial Economic Area (PEA) geographic licenses for 600 MHz band spectrum that is voluntarily relinquished by broadcasters. The FCC expects that 600 MHz licenses will be used to increase the speed, capacity and ubiquity of mobile broadband service available to consumers and businesses throughout the country.
The Public Notice is intended to establish the final procedures for the incentive auction, so it is vital that entrepreneurs and companies who may choose to bid participate in the joint comments so the FCC is aware of the need to adopt procedures and rules that ensure a level playing field for small and rural carriers. With bid prices in the current AWS-3 auction (Auction 97) at a record $44 billion and still rising, it will be more important than ever that the Commission adopt procedures that promote small carrier bidding and consortia, and so they are not priced out of the auction. The FCC is seeking input on crucial auction design issues, implementing decisions the Commission made in its May 2014 Incentive Auction Report and Order, including:
- The methodology for establishing opening prices for the reverse and forward auctions;
- How to determine an initial spectrum clearing target and measuring the extent of potential impairments due to inter-service interference;
- The components of the final stage rule which establishes the conditions that must be satisfied before the auction can successfully conclude;
- The implementation of the market-based reserve the Commission adopted in the May 2014 Mobile Spectrum Holdings Report and Order; and
- The factors to be considered in “optimizing” channel assignments when determining the initial auction clearing target and the final channel assignments after the auction closes.
“We have worked hard to make sure that the incentive auction will be a win for multiple stakeholder groups—broadcasters, carriers big and small, consumers, and taxpayers,” wrote FCC Chairman Tom Wheeler in a statement supporting the item. “I am confident that the proposals in today’s item will lead to an auction that creates value for the public and all stakeholders.”
We are in the process of reviewing the 167-page document, and evaluating how the Commission’s complex and novel incentive auction proposals will impact our law firm’s small business and independent telco clients. We expect to have draft comments prepared for our clients to review in mid-to-late January, prior to the comment deadline. Clients with particular questions or concerns to be addressed in the comments should contact us.
Comment Sought on IntraMTA Petition for Declaratory Ruling; Will Impact Related Lawsuits
The FCC seeks comment on the Petition for Declaratory Ruling filed by a group of rural LECs, asking the FCC to confirm that the intraMTA rule, under which intraMTA calls exchanged between LECs and CMRS providers are subject to reciprocal compensation, does not apply to LEC charges billed to an IXC when the IXC terminates traffic or receives traffic from a LEC via tariffed switched access service. Comments on the Petition are due February 9, 2015. Reply comments are due March 11, 2015.
The Petitioners include CenturyLink, Bright House Networks, Consolidated Communications, Cox, FairPoint, Frontier, LICT, Time Warner Cable, Windstream, 108 Iowa RLECs, and the Missouri RLEC Group. The Petition was prompted by numerous lawsuits filed by IXCs, primarily Sprint and Verizon, claiming that LECs cannot apply access charges to allegedly wireless intraMTA calls. The IXCs are withholding access charge payments and seeking refunds for access charges previously paid. In addition to the Petitioners, a number of our LEC clients have been named in these lawsuits. The Commission's action on the Petition should resolve the primary legal question in these lawsuits and possible future lawsuits based on this claim. Accordingly, all LECs will be impacted by this proceeding.
Wireline Competition Bureau to Hold Special Access Data Collection Webinar; Updates FAQ
On December 12, the FCC’s Wireline Competition Bureau issued a Public Notice announcing it will host a public webinar on December 18 to provide a walk-through of the database container for the Special Access Data collection. The Public Notice also indicates that Bureau staff will discuss the procedures for creating and loading the database container and answer questions.
The Wireline Competition Bureau also updated the special access data collection FAQs, which provide answers to non-technical questions.
Law & Regulation
Deadlines for Unlicensed Use of 600 MHz Band and Wireless Microphone Proceedings Extended
On December 10, the FCC adopted an Order extending the deadline for comment in the proceeding on unlicensed operations in the televisions and repurposed 600 MHz bands (ET Docket No. 14-165, GN Dockets No. 14-166 and 12-268). Comments are now due on February 6, 2015 and reply comments are now due on February 25, 2015.
The proceeding addresses two separate Notices of Proposed Rulemaking (NPRMs) the FCC issued on September 30, 2014. One NPRM proposes and seeks comments on rules for unlicensed operations in the frequency bands that are now and will continue to be allocated and assigned to broadcast television services (TV bands), including fixed and personal/portable white space devices and unlicensed wireless microphones. The other NPRM specifically focuses on examining wireless microphone users’ needs and technologies that can potentially address those needs. It also seeks comment on a variety of existing and new spectrum bands that might accommodate those respective needs.
Commission Announces First Quarter USF Contribution Factor for 2015
The FCC’s Office of Managing Director released a Public Notice on December 15, 2014, announcing a proposed USF contribution factor for First Quarter 2015 of 15.7 percent, down from 16.6 percent in the previous quarter.
According to the Public Notice, contributions to the federal universal service support mechanisms are determined using a quarterly contribution factor calculated by the FCC, based on the ratio of total projected quarterly costs of the universal service support mechanisms to contributors’ total projected collected end-user interstate and international telecommunications revenues, net of projected contributions.
If the FCC takes no action regarding the projections of demand and administrative expenses and the proposed contribution factor within 14 days following release of the Public Notice, they are deemed approved and the contribution factor will be used by USAC to calculate first quarter 2015 universal service contributions.
Comcast Sued for Using Private Routers to Offer Public Wi-Fi
Multiple news sources are reporting that two San Francisco residents have instituted a class-action suit against Comcast for “exploiting them for profit” by using the router they lease from Comcast as part of a nationwide network of for-pay public hotspots.
According to the complaint, “Within the past several years, Comcast began supplying its residential customers with new wireless routers, equipped to broadcast not only its customers’ home Wi-Fi network signal, but also an additional Wi-Fi network signal that was available to the public.” This equipment, which Comcast allegedly does not obtain customer’s permission to use in this manner, “consume[s] vastly more electricity in order to broadcast the second, public Xfinity Wi-Fi Hotspot…”; degrades performance of the home network; and “subjects the customer to potential security risks, in the form of enabling a stranger who wishes to access the Internet through the customer’s household router, with the customer having no option to authorize or otherwise control such use.”
The complaint alleges that Comcast’s actions violate the Computer Fraud and Abuse Act; California’s Unfair Competition Law; and the Comprehensive Computer Data Access and Fraud Act of the California Penal Code. The plaintiffs are seeking injunctive and declaratory relief, restitution, and monetary damages.
According to Fast Company, Comcast defends the hotspots, claiming that they “consume minimal extra power and do not pose security risks because they are walled off as a separate IP address.” Fast Company further reports that Comcast acknowledges that neighborhoods with many routers can result in interference and impact the speed of connections, but that such interference would be minimal.
Netflix Responds to Commissioner Pai on Fast Lane Allegations
As we reported in the December 3 edition of the BloostonLaw Telecom Update, FCC Commissioner Ajit Pail wrote a letter to Netflix CEO Reed Hastings asking why Netflix advocates a free and open internet while at the same time working to secure so-called “fast lane” deals with ISPs. On December 11, Netflix replied.
In his letter, Commissioner Pai wrote, “Netflix has been one of the principal advocates for subjecting Internet service providers (ISPs) to public utility regulation under Title II of the Communications Act, arguing that this step is necessary to prevent the development of so-called "fast lanes" on the Internet. For this reason, the Commissioner continued, he “was surprised to learn of allegations that Netflix has been working to effectively secure "fast lanes" for its own content on ISPs' networks at the expense of its competitors.”
Netflix responded by explaining the purpose of its content delivery networks (CDNs), Open Connect, and asserting that Open Connect is not a “fast lane” and does not prioritize Netflix data. Similarly, when Netflix directly interconnects with an ISP instead of using the CDN, as in the case of the oft-reported deals Netflix struck with Comcast and others, Netflix data does not travel faster than other Internet content unless the ISP is artificially constraining capacity to other data sources.
Pai also noted his understanding that, “Netflix has at times changed its streaming protocols where open caching is used, which impedes open caching software from correctly identifying and caching Netflix traffic.” Netflix responded that it does not impede proxy caches by changing protocols, but does obscure certain URL structures “to protect [its] members from deep packet inspection tools deployed to gather data about what they watch online.”
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 (as February 1 falls on a Sunday this year). 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. [emphasis added]
Dec. 17 – Comments are due on Part 22 Technical Changes.
Dec. 19 – Reply comments are due on Unauthorized EAS Alert Public Notice.
Dec. 22 – Comments due on Broadband Speed, Latency Testing Methodology.
Dec. 22 – Reply comments are due on US Telecom Petition for Forbearance from Certain Wireline ILEC Regs.
Dec. 23 – Reply comments are due on TracFone Petition for Declaratory Ruling on 911 Taxes.
Dec. 24 – Comments are due on Robocall and Call-Blocking Issues.
Dec. 24 – Reply comments are due on E911 Location Accuracy “Roadmap.”
Jan. 8 – Reply comments are due on Robocall and Call-Blocking Issues.
Jan. 15 – Annual Hearing Aid Compatibility Report is due.
Jan. 19 – Reply comments on Part 22 Technical Changes are due.
Jan. 29 – Deadline for Special Access Data Collection for large businesses with more than 1,500 employees.
Jan. 30 – Comments are due on the FCC’s Incentive Auction Procedures.
Jan. 31 – FCC Form 555 (Annual Lifeline ETC Certification Form) is due.
Feb. 2 – FCC Form 499-Q (Quarterly Telecommunications Reporting Worksheet) is due.
Feb. 2 – FCC Form 502 (Number Utilization and Forecast Report) is due.
Feb. 6 – Comments are due on Unlicensed Use of TV Band and 600 MHz Band Spectrum.
Feb. 9 – Comments are due on the IntraMTA Petition for Declaratory Ruling.
Feb. 25 – Reply comments are due on Unlicensed Use of TV Band and 600 MHz Band Spectrum.
Feb. 27 – Deadline for Special Access Data Collection for small businesses with less than 1,500 employees.
Feb. 27 – Reply comments are due on the FCC’s Incentive Auction Procedures.
Mar. 11 – Reply comments are due on the IntraMTA Petition for Declaratory Ruling.