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. 18, No. 34 | September 2, 2015 |
Carriers Making Changes to Data Plans Must Consider Open Internet Rules and Pitfalls Any clients seeking to make changes to their data plans and, in particular, changes to limit or eliminate unlimited data plans, should make sure that any such changes and customer notifications and information do not run afoul of the FCC’s Open Internet rules. This includes making sure any changes comply with the Transparency Rule, which requires broadband providers to disclose the expected and actual access speed of their services. The Transparency Rule also requires accuracy in all statements regarding network management practices, performance, and commercial terms, including those in contracts, customer notifications, advertising and on a website, and prohibits providers from “making assertions about their service that contain errors, are inconsistent with the provider's disclosure statement, or are misleading or deceptive.” In assessing a substantial fine against AT&T for data throttling, the FCC parsed various AT&T practices that the company felt were justified, but which the FCC found to be deficient. We can help our clients avoid similar “land mines” when adopting their data management plan. If not done correctly to begin with, a deficient data management plan can lead to a large fine, since by the time it comes under scrutiny (by, e.g., customer complaint), several months or even years of what the FCC may view as inappropriate throttling may have occurred. If you would like assistance in making sure you avoid running afoul of the Open Internet rules when making changes to your data plans, please contact the firm. Headlines
FCC Adopts Network Change Notice Requirements for Copper Retirement; RLECS May Not Be Exempt In early August, the FCC issued an order in its Technology Transitions proceeding (GN Docket No. 13-5) that adopts detailed procedures for providing Part 51 notices of network changes for copper retirements. For the purposes of such notices, “copper retirements” are defined as: (a) the removal or rendering inoperable of copper loops, sub-loops, or the feeder portion of copper loops or sub-loops; (b) replacement of copper loops with fiber-to-the-curb (“FTTC”) or fiber-to-the-home (“FTTH”) facilities; or (c) de facto retirements due to failure to maintain copper facilities. Since the network change notice requirements in Section 251(c)(5) the Telecommunications Act of 1996 were implemented in 1997, rural local exchange carriers (“RLECs”) with a Section 251(f)(1) rural exemption may have reasonably assumed that they were not subject to them unless and until their state commissions had terminated their rural exemption. However, in its August order, the FCC denied a request by a consulting firm that RLECs be exempted from its revised copper retirement notice rules. The FCC stated that the notice requirements did not constitute a great burden on RLECs, and that rural customers needed information regarding planned copper retirements as much as urban and suburban customers. The FCC order did not make any reference to the statutory rural exemption in Section 251(f)(1) of the Act, or to the fact that this exemption relieves RLECs of the obligation to comply with Section 251(c), including the 251(c)(5) network change notice requirements, unless and until an RLEC’s state commission terminates the exemption. Whereas state commissions have terminated the Section 251(f)(1) rural exemptions of some RLECs, many RLECs still retain their statutory exemption. In addition, the FCC did not thoroughly consider the adverse impacts upon the already difficult and expensive broadband deployments of RLECs and other small carriers of the delays and costs of its new copper retirement notice requirements. It is likely that the FCC’s attempt to apply these rules to all RLECs will be subject to reconsideration petitions and/or judicial appeals once the deadlines for such processes are established. For those RLECs who do not have a Section 251(f)(1) rural exemption or whose Section 251(f)(1) rural exemption has been terminated by their state commission (and for other RLECs if the FCC elects to disregard the statutory rural exemption and is upheld by the courts), the revised copper retirement notice provisions are substantial and must be initiated more than 180 days before copper facilities are actually cut-over to FTTC or FTTH. Clients should note that this is a notice requirement only, and that FCC approval is not necessary except in certain limited situations where a copper requirement is deemed to be a discontinuation of service requiring a Section 214 application and grant (see below). Note also that the copper retirement notice requirements do not apply to situations where a carrier cuts a single customer over to fiber in order to resolve a particular service problem. However, the FCC’s notice requirement with respect to an “affected area” is not very clear. It plainly encompasses an exchange, and very probably encompasses a development, neighborhood, or other significant cluster or portion of an exchange. It probably does not include a small number of locations (e.g., 5-to-10 customers) where fiber is installed to solve maintenance and service problems, rather than as part of a planned conversion of copper to fiber. Where an RLEC is planning a substantial fiber deployment that is going to take 3-to-6 months or so to complete (or where a project gets significantly delayed beyond its initial target dates), a single group of notices and filings “at least” 180 days and “at least” 90 days prior to the actual cutovers (as described below) should suffice. If and when applicable, the copper retirement notice requirements involve the following five steps: - Initial Set of Notices More Than 180 Days Before the Initial Desired Cutover Date. An ILEC must send notices of its planned network changes to (1) the FCC; (2) the Governor of its state; (3) its state commission; (4) the Special Assistant for Telecommunications, Department of Defense; (5) the Tribal entity with authority over any Tribal lands involved; and (6) CLECs and other service providers that directly interconnect with the ILEC. These notices are all identical, have no required format, but must include: (a) the ILEC’s name and address; (b) the name and telephone number of an ILEC contact person who can answer questions about the changes; (c) the implementation date of the planned changes; (d) the location(s) at which the changes will occur; (e) a description of the type of changes planned; (f) a general description of the reasonably foreseeable impact of the planned changes; (g) any changes in prices, terms and conditions that accompany the changes; and (h) if certain of the foregoing information is proprietary and confidential, a statement that the ILEC will make such further information available to those signing a nondisclosure agreement. BloostonLaw will be glad to provide you with a recommended template for the notices upon request.
- Different Notice to Be Sent to Non-Residential Retail Customers More Than 180 Days Before the Initial Cutover Date. Business and anchor institution customers within the affected area must receive the same notice as residential retail customers, but must receive such notice at least 180 days prior to the cutover (rather than at least 90 days like the residential customers).
- FCC Will Then Issue a Public Notice That Sets the 180-Day Period after which the ILEC can begin its cutovers from copper to fiber.
- Notices to Retail Customers At Least 90 Days Before the FCC-Designated Cutover Period Begins. These notices must go to residential customers within the affected area that are losing copper facilities to their premises. These notices may be sent by mail or e-mail (although e-mail distribution requires customer consent and ILEC monitoring). There is no required format, but these notices: (a) must be “clear and conspicuous”; (b) should include a “neutral” statement of the customer’s service options (i.e., the ILEC must not aggressively market its services in this notice; but is free to do so subsequently); and (c) must contain a toll-free number to contact the ILEC, a website address where more information can be found, and the Internet address of the FCC’s consumer complaint portal.
- Certificate of Service to Be Filed with FCC 90 Days Before FCC-Designated Cutover Period Begins. This is a substantial document that must be completed after all the foregoing notices have been sent, signed by an officer of the ILEC, and filed with the FCC. Among other things, it must include: (a) a statement that identifies the proposed changes; (b) statements that each of the required notices have been sent to all of the required recipients; (c) a list of the names and addresses of all of the CLECs and other service providers that directly interconnect with the ILEC to which the initial notice was sent; (d) a statement that the ILEC has complied with its requirement to communicate in good faith with the listed CLECs and other directly interconnecting service providers; (e) a copy of the notice sent to residential and non-residential retail customers; and (f) the docket and other identifying numbers assigned by the FCC to the ILEC’s notice.
In most situations involving RLEC replacement of copper loops, sub-loops and feeder with fiber, the network change notice rules will be the only FCC requirement that may apply (again, assuming that the statutory rural exemption has been terminated by a state commission or successfully disregarded by the FCC). However, in some situations, the Section 214 requirement to obtain prior FCC approval before discontinuing, reducing or impairing a service may apply. The FCC’s August order focused predominately upon fiber conversions that would eliminate copper unbundled network elements and/or other wholesale inputs that CLECs and other carrier-customers were using to provide service to their end users. The FCC required ILECs to consult with their CLEC and other carrier-customers and to make a “meaningful evaluation” as to whether the planned copper replacements would discontinue, reduce or impair service to the carrier-customer’s end users (in which case a Section 214 application would need to be filed and granted) or would not do so (for users (in which case a Section 214 application would need to be filed and granted) or would not do so (for example, because adequate replacement or substitute services were available) in which case the network change notice would be sufficient. The FCC has initiated a further rulemaking to establish more detailed criteria for determining whether adequate substitute services are available. It will very important to ensure that all of the required notices and filings are completed in a timely and correct fashion, especially the certificate of service. We are available to assist our clients with this process. Revised A-CAM Results for RLEC Study Areas Released; Final Offers of Model-Support Still to Come The FCC’s Wireline Competition Bureau has released revised and intermediate illustrative results of the Alternative Connect America Cost Model (“A-CAM”) that is being developed by the Bureau for use as the basis for offering an option of model-based universal service support to rural local exchange carrier (“RLEC”) study areas at a future date (probably, starting in either July 2016 or January 2017).
Please note that this is not the final version of the A-CAM results. Rather, it is the second version, which differs from the initial March 6, 2015 version in that December 2014 Form 477 data has been used to exclude from support calculations Census Blocks where unsubsidized voice and fixed broadband providers have claimed that they offer 10 Megabits per second (“Mbps”) downstream/1 Mbps upstream (or better) service. The Bureau will make several further revisions — including updating the Form 477 data to that for June 2015 (filed September 1, 2015), finishing its correction of study area boundaries, and incorporating plant mix revisions for RLECs choosing to file them — before releasing a final run of the A-CAM setting forth the tentative amount of model-based support for each RLEC study area.
Please note further that the final version of the A-CAM results is not likely to specify the exact amount of support that each study area that elects the model-based support option will actually receive. Rather, that actual amount will depend upon: (1) the number of RLEC study areas that elect model-based support; and (2) the amount of Connect America Fund (“CAF”) reserves that the FCC will allocate to fund support increases for the electing study areas ($100 million and $200 million per year for 10 years have been mentioned, but no final FCC commitment has been made). It is assumed that each electing RLEC study area will receive an amount of model-based equal to its “current” (2014 or 2015) High Cost Loop Support (“HCLS”) and Interstate Common Line Support (“ICLS”), plus some portion of its incremental A-CAM-specified support, and that it will have an obligation to build 10/1 broadband to a specified minimum number of locations during a 10-year period in return for the support. Ultimately, RLECs will have to decide for each of their study areas whether the additional model-based support and the associated number of additional locations they are obligated to serve with 10/1 broadband make it reasonable to elect model-based support, or whether they should keep some or all of their study areas on a revised rate-of-return alternative. In addition to excluding Census Blocks assumed to be served by unsubsidized voice and fixed broadband providers, the current August 31, 2015 illustrative results assume a $52.50 per month funding benchmark (i.e., they assume that the RLEC will collect $52.50 per line per month from its customers or other sources, or forego some revenue), and cap model-based support at three alternative amounts: $200, $215 and $230 per location. With a funding cap of $200 per location, 591 of the studied 1,092 RLEC study areas would receive model-based support greater than their 2014 HCLS and ICLS, while 501 study areas would receive less model-based support. Differences range from several million dollars to a couple thousand dollars per year. If every RLEC elected model-based support, total model-based support would be $1,503,573,226 compared with total HCLS and ICLS support of $1,642,409,236 for 2014. (Note that these totals exclude CAF-ICC support which also counts toward the $2.0 billion high-cost support budget for RLECs.) With a funding cap of $215 per location, 601 of the 1,092 RLEC study areas would receive model-based support greater than their 2014 HCLS and ICLS, while 491 study areas would receive less model-based support. If every RLEC elected model-based support, total model-based support would be $1,544,381,533 compared with total HCLS and ICLS support of $1,642,409,236 for 2014. With a funding cap of $230 per location, 612 of the 1,092 RLEC study areas would receive model-based support greater than their 2014 HCLS and ICLS, while 480 study areas would receive less model-based support. If every RLEC elected model-based support, total model-based support would be $1,581,782,264 compared with total HCLS and ICLS support of $1,642,409,236 for 2014. Note that it is not likely that every company that receives more model-based support than its existing HCLS and ICLS support will elect to opt into the model mechanism, or that every company that loses support under the model will elect to remain on the rate-of-return mechanisms. There are likely to be other considerations, including stability, certainty and build-out obligations. Note, however, that the respective $139 million, $98 million and $61 million reductions in model-based support vis-à-vis existing high-cost support may tempt the FCC to make model-based support mandatory rather than optional at some future date. Also note that the combination of a majority of study areas gaining support under the model with an overall reduction of total support under the model means that the typical “loser” under the model is losing more support than the typical “winner” is gaining. Whereas they have not objected to a voluntary model-based path that can be freely elected by RLECs on a study area basis, rural associations such as NTCA and WTA have questioned whether the significant increases and decreases in model-based support for many RLEC study areas are due to flaws in a model developed for much larger price cap carriers rather than relative efficiencies and inefficiencies, and have asked the FCC to review and revise its A-CAM model between the initial opt-in period and any subsequent one. Any client needing assistance in obtaining or analyzing the August 31, 2015 A-CAM illustrative results can contact the firm. FCC Order Requires Backup Power Option for Ten Years To ensure “that all consumers understand the risks associated with non-line-powered 911 service, know how to protect themselves from such risks, and have a meaningful opportunity to do so,” the FCC has adopted new Rule Section 12.5, which requires providers of facilities-based, fixed, voice residential service that is not line powered to offer new subscribers the option to purchase a backup power solution and to notify subscribers, at the point of sale and annually thereafter, of the availability of backup power purchasing options. The 8 hour backup power requirement will become effective 120 days after publication of the Order in the Federal Register, except that this requirement will become effective 300 days after Federal Register publication for providers that have fewer than 100,000 domestic retail subscriber lines. The disclosure provisions of the rules will become effective 120 days after the FCC notifies the public that approval has been received from the Office of Management and Budget, except that these obligations will become effective 300 days after the FCC notifies the public that approval has been received from the Office of Management and Budget for providers that have fewer than 100,000 domestic retail subscriber lines. The obligation to offer 24 hours of backup power will become effective on the same extended three-year schedule for all providers. Specifically, the FCC has adopted the following requirements: First, all providers of facilities-based, fixed, voice residential service that is not line powered (providers), are required to offer new subscribers the option to purchase a backup solution that provides at least 8 hours of standby power during a commercial power outage. Within three years, providers must offer at least one option that provides a minimum of 24 hours of 911 service. (A 24 hour solution could consist of three 8-hour batteries). Providers include fixed applications of wireless service offered as a “plain old telephone service” (POTS) replacement. The FCC clarifies that a wireless voice service is “fixed” for purposes of this rule if it is marketed as a replacement for line-powered telephone service and is intended primarily for use at a fixed location. The use of a femtocell or similar equipment in a residential setting does not automatically convert a mobile service into a fixed service. According to the FCC, the decisive factor is whether the service is intended to function as or substitute for a "fixed" voice service. To meet the backup power requirement initially, “providers of covered services must offer, at the point of sale, to install a technical solution capable of supporting at least 8 hours of uninterrupted 911 service during a power outage. Within three years, providers must also offer, at the point of sale, a technical solution capable of supporting 24 hours of uninterrupted 911 service if the subscriber desires additional backup power.” The backup power requirements are based on the amount of time a technical solution can maintain a covered service in standby mode, i.e., able to provide a dial tone and to initiate and receive voice calls, but not necessarily in continuous use. Providers must make backup power available to the consumer and install appropriate backup power upon initial installation of service if requested by the consumer. The FCC expects that installers should be able to answer questions about backup power. The FCC does not specify the means by which providers of covered services offer to supply these amounts of backup power. According to the FCC, “a provider could offer a solution with a single, internal battery delivering 8 hours of backup power. With respect to the 24-hour option required within three years, providers may choose to offer consumers a single 24-hour battery (or battery tray as offered by Verizon), three 8-hour batteries, or some other combination of installed and spare batteries, UPS systems or other technologies to provide 24 hours total. If the solution requires a proprietary battery or other equipment that is not widely available in retail stores, the equipment should be provided as part of the installation of service. If, however, the solution accepts commonly available equipment such as D-Cell batteries, providers need not supply such equipment themselves, as long as they notify subscribers at the point of sale that it is not included and must be supplied by the subscriber for the solution to function properly.” The FCC states, however, that providers are required "to assist with the installation of customer-supplied batteries such as D-Cells to the extent that subscribers obtain and make such batteries available when service is installed." According to the FCC, in cases involving spare batteries that are not widely available at retail stores, the solution offered to subscribers should also include a charger or some other method of ensuring that such batteries are stored in a charged state. The FCC states that "a provider could offer a backup power system using standard D-Cell batteries without including a supplemental charger because such batteries are widely available at local retailers. A solution based on less widely available batteries such as sealed lead-acid or lithium-ion cells should include a charger to ensure that spare batteries are maintained in a charged state." The FCC also makes clear that providers of covered services may charge subscribers for backup power capabilities, if subscribers wish to purchase them. The FCC does not specify the rates at which providers of covered services may offer backup power or related accessories and states that a service provider “can receive compensation for all aspects of implementing the rules we adopt today, including the backup power installation, and costs of equipment and labor, from the consumer that elects to have backup power installed.” The FCC does not preclude service providers from including backup power capabilities without separate charge, if they choose to do so. Second, all providers of facilities-based, fixed, voice residential service that is not line-powered must notify subscribers, at the point of sale and annually thereafter until September 1, 2025, of the availability of backup power purchasing options, use conditions and effect on power source effectiveness, power source duration and service limitations, testing and monitoring, and replacement details. The FCC requires providers to disclose to subscribers the following information: - availability of backup power sources (provided by the provider or third parties);
- service limitations with and without backup power during a power outage (including, to the extent the provider has information about other services at the subscriber premises, for example home security, medical monitoring devices and similar equipment, the provider should notify the subscriber that these services will not be powered by the backup power source for voice service);
- purchase and replacement options (if the provider does not sell a backup power source directly to subscribers after the initiation of service, the provider must give subscribers enough information about what type of power source is compatible as well as purchasing options, including where to purchase a power source, the approximate cost, and the voltage and type of battery that is compatible with the service);
- expected backup power duration (length of time the provider’s backup power source is expected to power the service in standby mode and, to the extent possible, the expected amount of talk time);
- proper usage and storage conditions for the backup power source (providers must notify subscribers of the proper backup power usage and storage conditions and how these affect the backup power source operation during a power outage. This includes identifying how subscribers may limit and conserve backup power both before and during a power outage. Providers must advise subscribers of the proper backup power storage and charging conditions so that subscribers know whether battery power life, capacity, or run time will decline, whether the batteries must be replaced after a certain amount of time, and the proper storage temperatures. Information must, at a minimum clearly inform subscribers about the impact of environmental factors and factors that impact duration, such as usage and storage conditions);
- subscriber backup power self-testing and monitoring instructions; and
- backup power warranty details, if any.
The FCC strongly encourages providers to assist subscribers in developing a plan for extended backup power by notifying them of options to extend backup power beyond the life of the battery, such as informing subscribers that they could purchase several backup power units for use during prolonged outages and provide directions for rotating these as required to keep the units charged. The FCC also strongly encourages providers to inform subscribers of any available accessories such as solar or car chargers, which may be able to recharge a depleted backup power unit. When applicable, providers should inform subscribers of the availability of deployed mobile charging stations when the provider deploys them. The FCC permits providers to convey both the initial and annual disclosures by any means reasonably calculated to reach the individual subscriber. The FCC states that a provider may meet this obligation “through a combination of disclosures via e-mail, an online billing statement, or other digital or electronic means for subscribers that communicate with the provider through these means. For a subscriber that does not communicate with the provider through e-mail and/or online billing statements — such as someone who ordered service on the phone or in a physical store and receives a paper bill by regular mail — e-mail would not be a means reasonably calculated to reach that subscriber.” Third, the FCC's rule and requirements will sunset on September 1, 2025. The FCC expects that, over time, “the marketplace and consumer expectations will evolve along with advances in technology so that adequate backup power solutions and availability will become commonplace.” The FCC anticipates that a ten-year period “will allow sufficient time for a 'cultural and educational shift' in consumer expectations, along with marketplace and technological development” at which time, “[c]onsumers will then be empowered to assume primary responsibility over their backup power, similar to the responsibility consumers now bear for mobile devices they may rely on for 911 access during an emergency.” However, if the FCC determines after ten years that the marketplace and expectations have not evolved as expected, it leaves open the possibility of taking action to extend and/or modify the requirements contained in the Order. Price Cap Carriers Accept Over $1.5 Billion in Annual Support from Connect America Fund On August 27, the FCC announced the final totals for annual Connect America Fund support accepted by the price cap carriers. All told, ten telecommunications carriers, including AT&T, Centurylink, Frontier, Fairpoint, Verizon, and Windstream, have accepted a total of $1.5 billion in annual support for rural broadband deployment. The FCC anticipates that, together with these carriers’ own investment, broadband will be expanded to nearly 7.3 million rural consumers in 45 states nationwide and one U.S. territory over the next few years: | State | Homes Businesses Served | Support Amount in Dollars | | Total US | 3,629,996 | $1,500,895,507 | | | | | | AL | 126,497 | $44,767,752 | | AR | 129,812 | $54,276,126 | | AZ | 46,526 | $23,370,158 | | CA* | 231,835 | $98,330,096 | | CO | 53,139 | $26,509,143 | | CT | 1,388 | $435,139 | | FL | 80,909 | $26,836,154 | | GA | 134,005 | $50,858,551 | | HI | 11,081 | $4,424,319 | | IA | 88,214 | $53,200,244 | | ID | 22,379 | $11,502,990 | | IL | 92,519 | $50,128,844 | | IN | 135,082 | $51,128,227 | | KS | 64,393 | $35,443,694 | | KY | 152,742 | $54,573,721 | | LA | 99,302 | $37,378,605 | | MA | 252 | $63,258 | | ME | 35,500 | $13,289,220 | | MI | 180,377 | $60,512,568 | | MN | 170,355 | $85,622,871 | | MO | 189,323 | $93,728,312 | | MP | 11,143 | $2,627,177 | | MS | 139,269 | $51,506,992 | | MT | 35,941 | $16,310,111 | | NC | 68,267 | $19,055,517 | | ND | 8,044 | $5,656,741 | | NE | 35,839 | $23,215,615 | | NH | 13,131 | $4,376,606 | | NJ | 1,881 | $450,340 | | NM | 32,340 | $15,369,074 | | NV | 5,235 | $2,451,840 | | NY | 59,627 | $21,444,471 | | OH | 166,967 | $58,483,365 | | OK | 17,391 | $8,003,516 | | OR | 50,327 | $21,657,260 | | PA | 76,777 | $27,694,806 | | SC | 49,358 | $16,286,714 | | SD | 15,071 | $9,117,215 | | TN | 93,422 | $29,927,295 | | TX * | 212,492 | $93,131,882 | | UT | 9,506 | $4,441,848 | | VA | 52,433 | $16,588,786 | | VT | 28,399 | $8,789,359 | | WA | 81,865 | $34,421,951 | | WI | 230,451 | $95,438,696 | | WV | 89,190 | $38,068,337 |
The breakdown by carrier is as follows: | Price Cap Carrier | Homes & Businesses Served | Support Amount in Dollars | | Carrier Subtotal | 3,629,996 | $1,500,895,507 | | | | | | AT&T | 1,117,806 | $427,706,650 | | Cincinnati Bell | 7,084 | $2,229,130 | | CenturyLink | 1,174,142 | $505,702,762 | | Consolidated | 24,698 | $13,922,480 | | Fairpoint | 105,220 | $37,430,669 | | Frontier | 659,587 | $283,401,855 | | Hawaiian Telcom | 11,081 | $4,424,319 | | Micronesian Telecom | 11,143 | $2,627,177 | | Verizon* | 114,610 | $48,554,986 | | Windstream | 404,625 | $174,895,478 |
Petition for Review of TCPA Declaratory Ruling and Order Filed On August 25, salesforce.com, Inc. and its wholly-owned subsidiary, ExactTarget, Inc. filed a petition for review of July’s TCPA Omnibus Declaratory Ruling and Order (“Order”) with the U.S. Court of Appeals for the District of Columbia Circuit. In the Order, the FCC addressed a number of issues associated with the Telecommunications Consumer Protection Act (TCPA), including creating a clear definition of “automatic telephone dialing system” and clarifying liability for calling parties who have revoked prior consent, among others. According to the petitioners, the Order unlawfully exceeded the FCC’s authority by concluding that the term “automatic telephone dialing system” covers equipment that cannot, without modification, “store or produce telephone numbers to be called, using a random or sequential number generator” and “dial such numbers.” The petitioners also argue that the Order improperly defines the term “called party” within the TCPA’s provision prohibiting any call meeting certain conditions “other than a call made . . . with the prior express consent of the called party” in a way that makes it impossible for callers to ensure that prior express consent is still valid at the time of the call. Finally, the petitioners argue that the FCC’s treatment of “prior express written consent” and revocation of consent is inconsistent with prior FCC statements, exceeds the FCC’s authority, and puts and undue and excessive burden on callers. Law & Regulation
Year End Reminder: Ownership Changes May Require FCC Approval We want to remind our clients that many types of reorganizations, estate planning and tax savings activities and other transactions require prior FCC approval; and given the frequent need to implement such transactions by the end of the year, companies engaging in such transactions should immediately determine whether they must file an application for FCC approval, and obtain a grant, before closing on a year-end deal. Transactions requiring prior FCC approval include (but are not limited to): - The distribution of stock to family members in connection with estate planning, tax and other business activities, if there are changes to the control levels discussed above; Any sale of a company that holds FCC licenses;
- Any sale, transfer or lease of an FCC license;
- A change in the form of organization from a corporation to an LLC, or vice versa, even though such changes are not regarded as a change in entity under state law.
- Any transfer of stock that results in a shareholder attaining a 50% or greater ownership level, or a shareholder relinquishing a 50% or greater ownership level;
- Any transfer of stock, partnership or LLC interests that would have a cumulative effect on 50% or more of the ownership.
- The creation of a holding company or trust to hold the stock of an FCC license holder;
- The creation of new classes of stockholders that affect the control structure of an FCC license holder.
- Certain minority ownership changes can require FCC approval ( e.g., transfer of a minority stock interest, giving the recipient extraordinary voting rights or powers through officer or board position).
Fortunately, transactions involving many types of licenses can often be approved on an expedited basis. But this is not always the case, especially if bidding credits and/or commercial wireless spectrum are involved. Also, in some instances Section 214 authority is required, especially in the case of wireline and other telephony services. Clients planning year-end transactions should contact us as soon as possible to determine if FCC approval is needed. FCC Announces Tentative Agenda for September Open Meeting The FCC’s Chairman Tom Wheeler has announced that the following items are tentatively on the agenda for the September Open Commission Meeting scheduled for Thursday, September 17, 2015: Modernizing Contest Rules – The Commission will consider a Report and Order to provide broadcasters greater flexibility in their disclosure of contest terms. Submarine Cable Reliability – The Commission will consider a Notice of Proposed Rulemaking that proposes to require submarine cable licensees to report outages.
The Open Meeting is scheduled to commence at 10:30 a.m. in Room TW-C305 of the Federal Communications Commission, 445 12th Street, S.W., Washington, D.C., and will be shown live online at www.fcc.gov/live . PRA Comments Sought on Lifeline Information Collection On August 31, the FCC published Notice in the Federal Register seeking Paperwork Reduction Act (PRA) comments on the new rules adopted in the 2015 Lifeline Second Reform Order regarding. Comments are due by October 30. Specifically, the FCC seeks comment on the retention of subscriber eligibility documentation, ETC designation, and ETC reimbursement under the Lifeline program; revision to Form 555 and the accompanying instructions to require ETCs to provide a Service Provider Identification Number; and updates to the Form 497 instructions and requirement to electronically file Forms 497 and 555.
Companies interested in filing PRA comments regarding the burdens associated with complying with the new information collection requirements should contact the firm for more information.
FCC Denies Rural Broadband Experiments Applications for Review On August 27, the FCC denied three separate applications for review filed by Rural Broadband Services Corporation (RBSC), Lennon Telephone Company (Lennon) and Last Mile Broadband LLC (Last Mile). In January, the Wireline Competition Bureau denied petitions from 15 entities seeking waiver of the FCC's financial and technical information requirements and removed them from further consideration for funding, including RBSC and Last Mile. The Bureau also removed Lennon from further consideration for failing to file the required financial information and not submitting a waiver request. It is those actions for which the applicants seek review. On review, however, the FCC upheld the Bureau’s decisions in full. Specifically, the FCC upheld the Bureau’s decision not to grant the waivers requested by RBSC and Last Mile because, “[s]trict enforcement by the Bureau of the filing requirements adopted by the Commission was appropriate given the purpose of the rural broadband experiments and our commitment not to allow the rural broadband experiments to delay the offer of model-based support to price cap carriers.” It upheld the decision to remove Lennon from consideration because “[a]pplicants were expected to familiarize themselves fully with the Commission’s rules and requirements for the rural broadband experiments.” Therefore, the fact that Lennon mistakenly believed that because the Commission allows privately held rate-of-return carriers to submit reviewed financial statements in their annual FCC Form 481, it was permissible to submit reviewed statements for the rural broadband experiments as well, was not enough to cause the FCC to reverse the Bureau’s decision. Illegal RoboCalls Results in $2.96 Million Fine The FCC recently announced the imposition of a $2.96 million dollar fine against Travel Club Marketing for illegal robocalls – the largest fine for robocall violations to date. As we have reported over the years, the FCC and the FTC have taken strong positions against perceived consumer rights abuses, including violations of Do-Not-Call Lists, Fax Spamming and the use of auto-dialer robocalls to landline and wireless phones. In reviewing the complaints against Travel Club Marketing, the FCC noted that it had made or initiated over 185 unsolicited pre-recorded robocalls to over 142 consumers who had not consented to receive such calls. In fact, the vast majority had previously placed their phone numbers on the National Do-Not-Call Registry. For those clients that engage in telemarketing – whether it is for their internal business or as a service to others, we recommend that you ensure that your systems are updated regularly, as required by the FCC and the FTC so that you do not inadvertently include any phone numbers that are on the National Do-Not Call Registry. Over the past several months, industry sources have noted an increasing number of pre-recorded phone calls being made to wireless phones under the guise of a past business relationship – even where the relationship did not exist. Because many of these types of phone calls can come from fraudsters, the FCC and the FTC are especially attuned to the issue – as evidenced by the record fine that was imposed against Travel Club Marketing. Clients with any questions or concerns should contact our office. Citation Issued for Interference to Sprint Cellular System The FCC has cited Jian Chang, the owner of a building in Queens, New York, for causing harmful interference to Sprint’s 1900 MHz cellular system. The FCC determined that the source of the interference was a Part 15 device that was being operated on the Chang property. When the FCC field inspectors came to Mr. Chang’s property, he refused the FCC access and refused to allow an inspection of any Part 15 devices in his possession. It is important to note that the FCC’s Rules require users of Part 15 devices to cooperate with FCC field inspectors. This is due in part to the fact that even though Part 15 devices do not require an FCC license, users of these devices may not cause harmful interference to licensed operations and must accept interference from other devices. Industry
FCC Announces Technological Advisory Council Meeting On August 26, the FCC issued a Public Notice announcing its Technological Advisory Council (TAC) will hold a meeting on September 24, 2015 to discuss progress on work initiatives discussed at the previous meeting. According to the FCC, the TAC is helping the FCC to “continue the momentum spurred by the National Broadband Plan to maximize the use of broadband to advance national interests and create jobs.” Dennis Roberson, Vice Provost and Research Professor, Illinois Institute of Technology, serves as Chairman of the Council. Walter Johnston, Chief of the Electromagnetic Compatibility Division, serves as the Designated Federal Officer. Julius Knapp, Chief of the Office of Engineering and Technology is the Alternate Designated Federal Officer. The meeting will be held in the Commission Meeting Room at 445 12th Street SW, Washington, DC and is scheduled to begin at 1:00pm and end at 4:00pm. All meetings will be webcast and accessible from https://www.fcc.gov/live. New York City Grows Restless as FiOS Roll Out Inches Along Last week, The New York Times published an article detailing a growing dispute between Verizon and the city of New York about whether Verizon has met its promise to “pass all three million homes in the city” by the end of 2014. According to the article, in 2008 Verizon agreed to offer FiOS service to all homes in New York City, with the aim of increasing competition and offering customers better options. According to the city’s Department of Information Technology and Telecommunications, Verizon “systematically refused to accept orders for residential service” and, by the company’s admission, nearly one-fourth of the blocks in the city have no buildings wired for FiOS. At the time, Verizon argued that it met its obligations because the term “pass” meant only that the company had to have fiber in place so that it could provide FiOS within a year to any resident who requested it. Further, according to Verizon, most cases it was prevented from actually providing service by an uncooperative landlord or the like. Interestingly, however, the Times goes on to report that several Verizon employees have disputed the company’s assertions, stating that after wiring all of Staten Island, Verizon “significantly slowed the expansion” to the rest of the city and had been shifting its work force from the wire-line side to the wireless side. Deadlines
SEPTEMBER 30: FCC FORM 396-C, MVPD EEO PROGRAM REPORTING FORM. Each year on September 30, multi-channel video program distributors (“MVPDs”) must file with the Commission an FCC Form 396-C, Multi-Channel Video Programming Distributor EEO Program Annual Report, for employment units with six or more full-time employees. Users must access the FCC’s electronic filing system via the Internet in order to submit the form; it will not be accepted if filed on paper unless accompanied by an appropriate request for waiver of the electronic filing requirement. Certain MVPDs also will be required to complete portions of the Supplemental Investigation Sheet (“SIS”) located at the end of the Form. These MVPDs are specifically identified in a Public Notice each year by the FCC. OCTOBER 15: INITIAL 911 RELIABILITY CERTIFICATION. The Commission’s rules require Covered 911 Service Providers to take “reasonable measures” to provide reliable service with respect to 911 circuit diversity, central office backup power, and diverse network monitoring, as evidenced by an annual certification of compliance with specified best practices or reasonable alternative measures. The Initial Reliability Certification requires covered providers to demonstrate “substantial progress” toward meeting the requirements of the full Annual Reliability Certification, which is defined as compliance with standards of the full certification in at least 50 percent of the Covered 911 Service Provider’s critical 911 circuits, central offices that directly serve public safety answering points (PSAPs), and independently monitored 911 service areas. NOVEMBER 1: 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. 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 499-A that is due April 1. Calendar At-a-Glance
September
Sep. 9 – Reply comments are due on Transparency Exemption proceeding.
Sep. 15 – Reply comments on Lifeline Further Notice of Proposed Rulemaking are due.
Sep. 21 – Reply comments are due on Video Programming Competition report.
Sep. 25 – Comments are due on Section IV.B of the Special Access Data NPRM.
Sep. 30 – FCC Form 396-C (MVPD EEO Program Annual Report). October
Oct. 15 – 911 Reliability Certification.
Oct. 30 – PRA Comments on the 2015 Lifeline Second Reform Order are due. November
Nov. 1 – FCC Form 499-Q (Quarterly Telecommunications Reporting Worksheet) is due. |
