 BloostonLaw Telecom Update Published by the Law Offices of Blooston, Mordkofsky, Dickens, Duffy & Prendergast, LLP [Portions reproduced here with the firm's permission.] www.bloostonlaw.com |
NOTICE TO CLIENTS: The BloostonLaw Telecom Update newsletter will be on vacation during the month of August. We will resume publication on September 7. Meanwhile, we will keep clients apprised of significant developments via memos and special supplements.
BloostonLaw Private Users Update Published by the Law Offices of Blooston, Mordkofsky, Dickens, Duffy & Prendergast, LLP [Portions reproduced here with the firm's permission.] www.bloostonlaw.com |
11 AT&T Customers Seek Arbitration To Block T-Mobile Merger Eleven AT&T customers are filing arbitration requests to block AT&T’s proposed $39 billion acquisition of T-Mobile, according to various press sources, including Cnet and PCmag. The first “arbitration demand” filing occurred last week. It argued that the proposed merger would violate the Clayton Antitrust Act by harming competition in the wireless market. More specifically, the filing asserts that the merger will result in higher prices and diminished service, according to Cnet. It reported that the customer is asking that the merger be blocked, or that certain requirements be imposed, including the divestiture of some AT&T spectrum, and that AT&T cease its practice of entering into exclusive contracts with handset manufacturers. As Cnet noted, AT&T’s customer contracts prohibit customers from suing the company either individually or as part of class action. The U.S. Supreme Court upheld this practice earlier this year in AT&T v. Vincent Concepion. Thus, customers must use the arbitration process, but they must file their claims individually rather than as a “class.” The Court said that “class arbitration” is too costly, time-consuming, and defeats the “informal” purpose of arbitration. Each arbitration request will be assigned to a separate judge, and each case will be decided independently. AT&T responded in a statement that the claims “are completely without merit." It said that “an arbitrator has no authority to block the merger or affect the merger process in any way. Our arbitration provision allows customers to resolve their individual disputes with AT&T in a prompt and consumer-friendly manner." BloostonLaw contacts: Hal Mordkofsky, John Prendergast, Richard Rubino, and Cary Mitchell. |
Guidance For Seeking Waiver of Jan. 1, 2013 Narrowbanding Deadline The FCC has released a Public Notice reiterating the current narrowbanding deadlines for private land mobile radio services in the 150-174 MHz and 421-512 MHz (VHF/UHF) bands to migrate to narrowband (12.5 kHz or narrower) technology. However, the FCC advises licensees that anticipate the need for additional time beyond January 1, 2013, to request a waiver and provides guidance on how to file such a waiver request. It also strongly encourages licensees that anticipate the need for additional time to file their waiver requests as soon as possible and preferably before the end of 2011. Our clients should be aware that requests for rule waiver are not routinely granted. The FCC is likely to grant a waiver only if it is convinced that the applicant was diligent in its efforts to narrowband its facilities and that its inability to meet the narrowbanding deadline is due to circumstances beyond the licensee’s control. Information that should be included in any waiver request is: - Steps already taken to plan for, initiate, and complete the transition to narrowband operations.
- System size and complexity.
- Whether system equipment is narrowband-capable or must be replaced or upgraded.
- Whether the licensee plans additional system upgrades or improvements in addition to converting to narrowband operation.
- Funding sources, including whether the licensee’s budget requires government approval or a multi-year budget process.
- Whether the licensee’s narrowbanding schedule is affected by neighboring systems due to interoperability relationships or other interdependencies
- Plans to minimize the negative impact of extended wideband operations on co-channel and adjacent channel operations, including a description of the spectrum environment in the affected area.
- If the licensee plans
to migrate to a non-VHF/UHF band (e.g. , 700 MHz or 800 MHz),
whether it will relinquish VHF/UHF spectrum once it has migrated and
the amount of spectrum to be relinquished.
Licensees should also provide a proposed timetable for completion of narrowbanding that includes the following elements: - What steps in the process have been or will be taken prior to January 1, 2013
- Anticipated dates of commencement and completion of:
- Replacement or retuning of mobiles/portables
- Infrastructure replacement or retuning
The FCC has also warned that it will take enforcement action against licensees operating in a wideband mode after January 1, 2013, unless they have been granted a waiver. Enforcement action could include letters of admonishment, license revocation and/or monetary fines of up to $16,000 for each violation or day of a continuing violation and up to $112,500 for any single act or failure to act. BloostonLaw contacts: Hal Mordkofsky, John Prendergast, Richard Rubino, Gene Maliszewskyj. FCC Releases Order On FY 2011 Regulatory Fees The FCC has issued a Report and Order, concluding its Assessment and Collection of Regulatory Fees proceeding to collect $335,794,000 in regulatory fees for Fiscal Year (FY) 2011. In its annual regulatory fee assessment, the FCC said it will use the same methodology adopted last year. The FCC concluded that the FY 2011 Commercial Mobile Radio Service (CMRS) Messaging regulatory fee should remain at a rate of $0.08 per subscriber. The fee rate for the Private Land Mobile Radio Service (PLMRS) (Shared) fee category is $20 per year for a 10-year license. The regulatory fee for private land mobile systems will remain unchanged from FY 2010. The regulatory fee for a Marine Coast license and for an Aircraft station license will increase by $5 year, thus increasing the FCC filing fee for a new license or a license renewal by $50 for the ten-year license. The regulatory fees for private land mobile systems, Marine Coast and Aircraft station licenses will continue to be collected upfront—at the time an application is filed for an initial license or license renewal. BloostonLaw contacts: Hal Mordkofsky, John Prendergast, and Richard Rubino. LMCC Asks FCC To Consider Public Safety, Others When Granting T-Band Waivers In order to find radio spectrum for the burgeoning demand for broadband communications, the FCC is examining a number of possible sources for broadband spectrum, including TV spectrum. Several rule waivers the FCC recently granted to public safety entities for operations in the 470-512 MHz band (T-Band), which falls on TV channels 14-20, have included language indicating that the FCC was considering ways to repurpose TV bands, including the 470-512 MHz band, for flexible use, including commercial mobile broadband. In granting the waivers, the FCC strongly urged public safety entities contemplating future waivers for TV and other non-public safety to consider use of the 700 MHz band to meet their public safety needs. Implicit in the FCC Order granting the waivers is that the FCC was looking at the T-band spectrum for some of the spectrum needed for future broadband use. If so, the FCC may decide to use some of the T-Band spectrum for broadband. It is unclear what would happen to existing T-Band licensees if that happens. However, the Land Mobile Communications Council (LMCC) has sent a letter to FCC Chairman Julius Genachowski, urging the FCC to consider the very significant investments that have been made in non-broadband communications equipment and applications that are being used in the effective operation of public safety, critical infrastructure and other business activities in the T-Band. The LMCC noted that the T-Band is intensively used and essential spectrum for this part of the wireless community. There is no indication at this time that the FCC may be considering a mandatory relocation for existing T-Band systems, but licensees should carefully watch FCC proposals for this spectrum. BloostonLaw contacts: Hal Mordkofsky, John Prendergast, and Richard Rubino. Build Out Deadline For State-licensed Public Safety Narrowband Channels Is Set at June 13, 2014 The FCC has issued a Declaratory Ruling, clarifying that the five- and ten-year substantial service deadlines applicable to state-licensed 700 MHz public safety narrowband channels (set forth in section 90.529(b)) to comply with substantial service requirements on their statewide narrowband channels run from the actual DTV transition date of June 12, 2009. Specifically, the five-year benchmark date will fall on June 13, 2014 , five years after the June 12, 2009, final DTV transition date. Similarly, the ten-year benchmark date will fall on June 13, 2019, ten years after the final DTV transition date. In issuing this clarification, the FCC observed that it has always been the Commission’s intent that the five- and ten-year substantial service periods for the statewide narrowband channels would commence upon the actual DTV transition date. The FCC said the original language of section 90.529(b) indicates as much, expressly describing the deadlines as occurring five and ten years from “the date that incumbent broadcasters are required to relocate to other portions of the spectrum.” The Commission said its failure to update the numerical five- and ten-year dates set forth in section 90.529(b) to reflect the extension of the DTV transition date to June 12, 2009, was an inadvertent omission. With this Declaratory Ruling, the FCC said, it corrects that administrative oversight and provides clarity to state public safety licensees. BloostonLaw contacts: Hal Mordkofsky, John Prendergast, Richard Rubino, and Cary Mitchell. Draft House GOP Spectrum Bill Sparks Controversy But It Is Only One of Several Measures
Addressing Public Safety Spectrum
The House
GOP Discussion Draft of the Spectrum Innovation Act of 2011, which
would authorize the FCC to conduct incentive auctions for broadcast
TV spectrum, has drawn fire from a number of people in the telecommunications
sector . The GOP draft differs from the draft Public Safety Broadband
and Wireless Innovation Act of 2011, recently released by Reps. Henry
Waxman (D-Calif.) and Anna Eshoo (D-Calif.),
and S. 28, a bill with the same title, introduced
last January by Senate Commerce Committee Chairman Jay Rockefeller (D-W.Va.)
that was supplemented by S. 911 , the Strengthening
Public-safety and Enhancing Communications Through Reform, Utilization,
and Modernization Act or the SPECTRUM Act, which expresses
the sense of Congress that bipartisan public safety legislation
should be enacted. S. 911 was introduced by
Chairman Rockefeller and Ranking Member Kay Bailey Hutchison (R-Texas)
last May.
The GOP version has some controversial provisions, including the following: - In lieu of reimbursement for relocation costs, a broadcast TV licensee or a multichannel video programming distributor (MVPD) may seek a waiver or modification of its application regarding “any provision of law administered by the [FCC], or any regulation of the Commission promulgated under any such provision.”
- The Commission may only exercise its authority to allocate a portion of the spectrum for unlicensed use if (1) the Commission conducts a system of competitive bidding (a) for the allocation of such portion for unlicensed use, and (b) for a license for the use of such portion; and (2) the bids for unlicensed use, in the aggregate, exceed the highest bid for such license. The proposed sale of unlicensed spectrum constitutes a significant departure from existing FCC policy.
- In assigning licenses or allocating spectrum for unlicensed use through competitive bidding, the Commission may not impose any condition on the licenses that (1) limits the ability of a licensee to manage the use of its network, including management of the use of applications, services, or devices on its network, or to prioritize the traffic on its network as it chooses; or (2) requires a licensee to sell access to its network on a wholesale basis. The FCC also may not (A) limit participation on the basis of the total amount of spectrum licenses held by a person seeking such participation; or (B) impose any other condition on eligibility for participation that is not related to the qualifications of an applicant.
- The Commission would be directed to assign to each State (without an auction) a license for the exclusive use within such State of the portion of the electromagnetic spectrum between the frequencies from 763 megahertz to 768 megahertz and from 793 megahertz to 798 megahertz for public safety (the already allocated Public Safety broadband block). The public safety community has been seeking a reallocation of the D Block because of their belief that the existing 10 MHz public safety broadband block does not provide adequate capacity.
The Waxman-Eshoo Discussion Draft does not include the above provisions. Among other things, the Waxman-Eschoo proposal would give the FCC incentive auction authority, allocate the 700 MHz D-Block to public safety, require federal agencies to conduct a comprehensive spectrum inventory, and create a federal spectrum strategic plan. In many respects, this draft is similar to S. 911 , the Rockefeller bill, which includes the following: - Allocating 10 megahertz of spectrum, known as the “D-block,” to public safety;
- Directing the FCC to establish standards that allow public safety officials, when not using the network, to lease capacity on a secondary but preemptible basis to non-public safety entities;
- Providing the FCC with voluntary incentive auction revenue sharing authority. This allows existing spectrum licensees to voluntarily relinquish their airwaves in exchange for a portion of the proceeds of the commercial auction of their spectrum.
- Directing
surplus revenue from spectrum auctions, estimated to be more than $10
billion, to the U.S. Treasury for deficit reduction.
The Rockefeller proposal was approved by the Senate Commerce Committee in mid-June (BloostonLaw Telecom Update, June 15). Chairman Rockefeller has made ensuring the necessary public safety communications resources for the nation’s first responders one of his top legislative priorities. To that end, he has secured the support of Sens. Kirsten Gillibrand (D-N.Y.), Charles E. Schumer (D-N.Y.), and Rep. Peter King (R-N.Y.) for his initiative. Rep. King had introduced his own HR 607, the Broadband for First Responders Act, last February. In the House, Rep. John Dingell (D-Mich.) recently introduced HR 2482 , titled the Public Safety Spectrum and Wireless Innovation Act, which differs from S. 911 and both House Discussion Drafts in that it would establish a single public safety wireless network license in the D-Block, with an initial term of 10 years, and a Public Safety Broadband Corporation to oversee the license. Other related bills include: - HR 911 , the Spectrum Innovation and Auction Act, introduced March 3, by Rep. John Barrow (D-Ga.). This bill would require the National Telecommunications and Information Administration (NTIA) and the FCC to conduct an inventory of broadband spectrum, and to conduct voluntary incentive auctions and share the proceeds with licensees who relinquished their spectrum.
- HR 1622 , the Spectrum Innovation Act, introduced April 15 by Rep. Robert E. Latta (R-Ohio), which also would provide for voluntary incentive auction revenue sharing.
- S. 415 , the Spectrum Optimization Act, introduced Feb. 17 by Senator Mark Warner (D-Va.), which also would provide for voluntary incentive auction revenue sharing.
- S. 455 , the Reforming Airwaves by Developing Incentives and Opportunistic Sharing (RADIOS) Act, introduced by Sens. Olympia Snowe (R-Maine) and John Kerry (D-Mass.), which would provide for a spectrum inventory, measurement studies, relocation cost-benefit analyses, as well as voluntary incentive auction revenue sharing.
Clearly,
the House and the Senate have a lot of work to do to resolve the differences
in the various proposals and come up with a comprehensive bill that
can pass in both chambers. It is not clear, however, if they will be
able to achieve this by September 11—the 10th anniversary
of the 9/11 terrorist attacks—the target date Chairman Rockefeller
has set for passage of such a bill. BloostonLaw contacts: Hal Mordkofsky, John Prendergast, Richard Rubino, and Cary Mitchell. FCC Declines To Give More Guidance On Government Use Of 700 MHz Band The FCC has declined to issue a declaratory ruling seeking guidance on the scope of permissible operations under Section 337 of the Communications Act as undertaken by state, local, and other governmental entities in the public safety broadband spectrum of the 700 MHz band. The request was filed by the City of Charlotte, N.C. While dismissing Charlotte’s request, the FCC said in its Fourth Report & Order in WT Docket No. 06-150 that it will consider Charlotte's request in the context of a pending rulemaking. The FCC said that while it disagreed with Charlotte's interpretation of the statute, it found that a reasonably broad interpretation of the definition of "public safety services" under Section 337 of the Act would allow some of the uses proposed by Charlotte and other commenters in the proceeding. The FCC said that Charlotte seeks a declaratory ruling on a matter of statutory interpretation (specifically, Section 337) that has already been raised and remains an open issue. Issuing a declaratory ruling apart from the WT Docket No. 06-150 rulemaking — without taking into account the portions of the rulemaking record relevant to Charlotte's request — would unnecessarily and inappropriately truncate the rulemaking process governed by the Administrative Procedure Act. As a result, the FCC said it would consider Charlotte’s request in the context of the rulemaking. Accordingly, the FCC found find that the presumption that Charlotte seeks that any use of a public safety broadband network in the 700 MHz band by a government entity is permissible is not supported by a plain reading of the statute. However, the FCC found that there is sufficient flexibility within the statute to encompass many of the uses contemplated by Charlotte and many of the commenters. While the FCC has not discussed all of the possible uses of the 700 MHz spectrum that would meet each of the prongs of the statute, it believes it has provided an adequate structure for analyzing the statute that can provide guidance to government entities seeking to determine who may use its systems in this spectrum and how those systems may be used in order to qualify as "public safety services" under Section 337(f). To the extent that any doubt remains as to a particular use, parties may seek a declaratory ruling pursuant to Section 1.2 of our rules. The FCC delegated authority to the Public Safety and Homeland Security Bureau to consider specific uses proposed by a government user and issue a ruling as appropriate. BloostonLaw contacts: Hal Mordkofsky, John Prendergast, and Richard Rubino. Beaumont Granted Waiver For Public Safety Expansion The FCC has granted the City of Beaumont, Texas’ application seeking authority to expand its public safety land mobile operations on frequency 854.3625 MHz as part of a shared regional simulcast system. Beaumont seeks a waiver in order to use this frequency at two new sites prior to Sprint Nextel Corp. vacating this channel. Beaumont operates public safety trunked station WPMG304 at several locations in Jefferson County, TX. In 2009, Beaumont added frequency 854.3625 MHz to call sign WPMG304 in order to replace frequency 860.7375 MHz as part of the 800 MHz rebanding process. Beaumont now seeks to expand its operation on this frequency by adding this frequency to two new sites on Beaumont’s public safety trunked station WPMJ575. To facilitate the licensing of 800 MHz spectrum vacated by Sprint as part of 800 MHz rebanding, the Public Safety and Homeland Security Bureau released a Public Notice announcing application and licensing procedures for the channels relinquished by Sprint in the 809-809.5/854-854.5 MHz Band. The Bureau noted that Sprint-vacated channels would become available for licensing to public safety in multiple stages and that Sprint initiated the process for making frequency 854.3625 MHz available in non-border NPSPAC regions in the first stage. The Bureau also advised licensees to consult the Vacated Channel Search Engine (VCSE) to identify specific channels that are available for licensing. According to the VCSE, however, frequency 854.3625 MHz is unavailable for licensing in the Beaumont area. Thus, Beaumont requires a waiver to expand its operations on this frequency. In support of its waiver request, Beaumont states that it has been engaged in efforts to bring various jurisdictions in Jefferson County into a shared regional radio system “to resolve shortcomings in the capacity and coverage of their current system.” Beaumont explains that “frequency, 854.3625 MHz, is the primary control channel for the expanded regional radio system that serves all of Jefferson and Hardin counties.” Beaumont states that this frequency “is programmed into over 3,000 radios served by our system.” Beaumont states that “Police, Fire and EMS in both counties depend on the regional radio system for Public Safety communications and need the expanded coverage.” Thus, Beaumont claims, that “[n]o other frequency was able to be found in place of 854.3625 MHz and even if one somehow became available it would be an enormous burden and cost to have to reprogram all of our subscriber radios.” Finally, Beaumont pointed out that the Region 51 Regional Planning Committee (RPC) approved Beaumont’s proposed use of this frequency as part of the expanded regional system and “[i]f the waiver is granted the frequency is fully constructed and we will be able to activate it and make use of it immediately.” The FCC found that Beaumont has demonstrated a compelling need to expand its operations on frequency 854.3625 MHz before the VCSE makes this channel available. Beaumont has successfully retuned its existing license (WPMG304) to this frequency as part of band reconfiguration, but it cannot expand its operations on WPMJ575 by adding new sites on the same frequency until the Commission updates the VCSE, the FCC said. It added that it believed that requiring Beaumont to delay its expansion would be unduly burdensome and contrary to the public interest. Beaumont has demonstrated that it has no reasonable alternative to using this frequency because no Public Safety Pool frequency is available that could be substituted for its control channel, the FCC said. BloostonLaw contacts: Hal Mordkofsky, John Prendergast, and Cary Mitchell. FCC Partially Grants Waiver To Operate PLMR System On ATMS Spectrum The FCC has granted in part, and denied in part Vermont Transco’s request for a waiver of certain Part 80 rules to allow it to operate a private land mobile radio (PLMR) system on Automated Maritime Telecommunications System (AMTS) spectrum to provide communication services for Transco’s electric distribution operations. The AMTS service originally was intended to authorize specialized systems of coast stations providing integrated and interconnected marine voice and data communications. In 1997, the Commission amended its rules to permit AMTS licensees to provide commercial service to fixed and mobile units on land, under certain conditions. In 2002, the Commission adopted a geographic area licensing approach for AMTS stations. In 2007, the Commission amended its rules to permit AMTS licensees to provide private mobile radio service, as well as commercial service, to units on land. Transco owns Vermont’s high-voltage electric transmission system, and provides service throughout Vermont and elsewhere in New England. Its communications system will be used to satisfy both fixed and mobile communications requirements, and will provide data and voice service, the FCC said. It added that among other features, the system will provide increased functionality with respect to monitoring equipment performance and service quality, placing back-up facilities into operation or rerouting power distribution when required, dispatching repair crews, and metering. With respect to the monitoring requirement in Section 80.92(a), Transco argues that monitoring the frequencies prior to transmitting is incompatible with the operation of a centralized trunked land mobile radio system, and unnecessary because Transco is authorized for an exclusive geographic area license. Because there are no co-channel site-based incumbent licensees that Transco must protect, the FCC agreed that a waiver of this requirement is warranted under the circumstances presented. The FCC also found that grant of the requested waiver would be in the public interest. The FCC said that Transco’s proposed use of the AMTS frequencies does not jeopardize the maritime community’s ability to meet its operational, safety and security communications needs, and permitting the use of the subject frequencies for PLMR operations will promote the efficient use of AMTS spectrum and serve the public interest by supporting critical power utility operations. However, the FCC noted that Transco states only that it “intends to offer interoperable nonprofit radiocommunication service to affiliated electric utilities in Vermont and the requirement[s] of [these sections] [are] unduly burdensome to that effort.” The FCC said it is not persuaded by this recitation, for Transco does not explain how it would be burdened by providing a letter to each land station or obtaining written consent for mobile-to-mobile operations from affected licensees. Therefore, the Commission denied this aspect of the waiver request. BloostonLaw contacts: Hal Mordkofsky, John Prendergast, and Richard Rubino. FCC Issues Official Citation For Programming Unauthorized Frequencies Into Transmitter The FCC has issued an official Citation to Flatcode Communications, Inc., for programming into a transmitter certain frequencies for which the operator of the transmitter was not authorized, in violation of section 90.427(b) of the Commission’s Rules. The FCC said that Flatcode should take immediate steps to come into compliance and to avoid any recurrence of this misconduct. Future violations of the Rules in this regard may subject Flatcode to substantial monetary penalties, seizure of equipment, and criminal sanctions. Our clients should note that it is sometimes the case that a contractor may program the wrong frequency into a transmitter, which creates a violation that is still the responsibility of the licensee. On March 15, 2011, agents from the Enforcement Bureau’s Philadelphia Office conducted an investigation and found that Flatcode had programmed radio transmitting equipment for the Sheraton Four Points in Allentown, Pa., with the General Mobile Radio Service (GMRS) frequency 462.550 MHz for which the Sheraton was not authorized. A representative for Flatcode later admitted to the FCC agent during a telephone conversation that Flatcode programmed the Sheraton’s two-way portable radios. After receiving the Citation, if Flatcode violates the Communications Act or the Rules by engaging in such conduct, the Commission may impose monetary forfeitures of up to $16,000 for each such violation or each day of a continuing violation and up to $112,500 for any single act or failure to act. In addition, violations of the Communications Act or the Rules can result in seizure of equipment through forfeiture actions, as well as criminal sanctions, including imprisonment, the FCC said. Flatcode may respond to the Citation within 30 days either through (1) a personal interview at the closest FCC office, or (2) a written statement. Any written statements should specify what actions have been taken by Flatcode to ensure that it does not program radio transmitters with unauthorized frequencies in the future. BloostonLaw contacts: Hal Mordkofsky, John Prendergast, and Richard Rubino. FCC Dismisses Petition Regarding Rebanding Costs, Use of Vacated Channels The FCC has dismissed a petition for partial reconsideration filed by Lukas, Nace, Gutierrez & Sachs, LLP and Schulman, Rogers, Gandal, Pordy & Ecker, P.A. seeking reconsideration of an Order released by the Public Safety and Homeland Security Bureau on March 31, 2010. Specifically, Petitioners sought reconsideration of the Bureau’s decisions governing (1) costs associated with the preparation of reports regarding the status of licensees’ 800 MHz rebanding progress and (2) licensees’ eligibility to apply for vacated 800 MHz spectrum. In the August 2004, 800 MHz Report and Order, the Commission ordered Sprint Nextel Corp. and certain 800 MHz licensees, to reconfigure their systems to new frequencies within 36 months. A substantial number of licensees failed to meet that rebanding deadline and were granted multiple extension waivers by the Bureau. The March 2010 Waiver Order granted these licensees a further extension of time in which to complete rebanding. In the Waiver Order — as an incentive for licensees to timely complete rebanding — the Bureau stated that: (a) until a licensee executes a Frequency Reconfiguration Agreement (FRA) with Sprint, it is not eligible to apply for channels vacated by Sprint as part of rebanding (Sprint-vacated channels), and (b) that Sprint is presumptively not responsible for payment of costs incurred by a licensee in filing rebanding progress reports. Petitioners argued (1) that restricting licensees from applying for Sprint-vacated channels penalizes licensees for matters outside their control, and will not advance rebanding, and (2) that the presumption that progress report costs are non-reimbursable is not supported by Commission rule or policy. The FCC dismissed the Petition for lack of standing. When evaluating standing, the Commission said it applies “the same test that courts employ in determining whether a person has standing under Article III to appeal a court order: the person must show (a) a personal injury ‘in fact’; (b) that the injury is fairly traceable to the challenged action; and (c) that it is likely, not merely speculative, that the requested relief will redress the injury.” Moreover, Courts have consistently held that “the mere precedential effect of an adjudicatory order within an agency is not enough to confer standing,” the FCC said. The FCC noted that Petitioners are not licensees in their own right, do not claim to be representing specific Commission licensees, and are filing on their own behalf. They are, therefore, not parties to the proceeding, the FCC said. BloostonLaw contacts: Hal Mordkofsky, John Prendergast, and Richard Rubino. Hackers Target Both Large And Small Businesses News Corp. Chairman Rupert Murdoch’s News of the World scandal in the United Kingdom has brought computer “hacking” to the world stage, and it comes on the heels of the recent controversy over WikiLeaks’ online “publication” of U.S. government documents. Hacking has become a widespread problem for both large and small companies. Recently, our sister publication, Blooston Telecom Update, reported that a New Mexico man, Lance Moore, was charged with stealing AT&T’s documents regarding the company’s 4G and Long Term Evolution (LTE) network plans and posting them on the Internet. In this regard, on the same day that accused hacker Lance Moore was arrested, the FBI conducted more than a dozen raids and made more than a dozen arrests across the United States in connection with the “Anonymous” computer hacking investigation, according to CBS News. It reported that FBI agents conducted raids at four New York residences as well as locations in California, New Jersey, and Florida in connection with the investigation. Agents reportedly seized computers and computer accessories under search warrants at four homes of suspected hackers in Baldwin and Merrick both on Long Island, in Brooklyn and the Bronx. CBS said the allegations are that the network of hackers allegedly carried out distributed denial of service attacks on numerous victims including corporations and their websites. Further, CBS reported that members of the Anonymous hacker group have stated, via Twitter, that they have stolen a gigabyte of information from the North Atlantic Treaty Organization (NATO). The hackers claim that they have a good deal of “restricted material.” The group indicated that this breach was in retaliation for the FBI arrests of some of its members, although it did not explain why it targeted NATO, according to CBS. Additionally, the New York Times reported that Aaron Swartz, a 24-year-old programmer and online political activist, was recently indicted in Boston on charges that he stole more than 4 million documents from the Massachusetts Institute of Technology (MIT) and JSTOR, an archive of scientific journals and academic papers. According to the U.S. Attorney for the District of Massachusetts, the charges against Swartz could result in up to 35 years in prison and a $1 million fine if he is convicted. The charges filed against Swartz include wire fraud, computer fraud, obtaining information from a protected computer and criminal forfeiture, the Times said. Swartz, a well-known figure in Internet academic circles, created a site called Infogami that later merged with the social news site Reddit, according to the Times. He is also a founder and director of the nonprofit group Demand Progress, which calls itself a political action group hoping to change public policy that relates to the Internet, the Times said. In 2009, Swartz downloaded 19 million pages of federal court documents from a government database system, acting on the belief that they should be made available for free, the Times said. Recently, too, Sony, CitiGroup, and Lockheed Martin experienced cyber attacks. Targeting Small Companies A caveat for our clients is: “What can happen to AT&T, NATO, MIT, etc., could happen to you.” The Wall Street Journal recently reported that hackers are expanding their sights beyond multinationals to include any business that stores data in electronic form. Small companies, which are making the leap to computerized systems and digital records, have now become hackers' main target, the Journal said. Last year, cyber thieves planted a software program on the cash registers at two Chicago-area magazine shops that sent customer credit-card numbers to Russia. MasterCard demanded an investigation, at the City Newsstand owner’s expense, and the whole ordeal left him out about $22,000, the Journal said. It noted that with limited budgets and few or no technical experts on staff, small businesses generally have weak security. Cyber criminals have taken notice. In 2010, the U.S. Secret Service and Verizon Communications Inc.'s forensic analysis unit, which investigates attacks, responded to a combined 761 data breaches, up from 141 in 2009. Of those, 482, or 63%, were at companies with 100 employees or fewer. Visa Inc. estimates about 95% of the credit-card data breaches it discovers are on its smallest business customers, the Journal said. The Journal noted that it takes time to break into a major company, but hackers have discovered that they can steal data from dozens of small businesses and not get detected. The fact that there are so many types of security threats makes it difficult for small firms to protect themselves, the Journal said. In April, it added, the FBI issued an alert about a style of attack in which hackers steal a business's online banking login details and use them to transfer funds out of the business's account. That's what happened to Lease Duckwall, when someone logged into his company's bank account for Green Ford Sales Inc. in Abilene, Kansas. The hacker added nine new employees to the car dealership's payroll and transferred $63,000 to them, the Journal said. The costs of a breach can put a small company out of business. In 2006 and 2007, a Bellingham, Wash., restaurant called Burger Me LLC had its computerized cash register hacked, the Journal said. It noted that criminals made untold numbers of fraudulent charges on customer credit cards. As a result, credit card firms shut down the restaurant’s account and put a hold on thousands of dollars in incoming payments. The resulting investigation, combined with the inability to accept credit cards, forced the owner to close the restaurant, the Journal reported. The upshot is that smaller companies are less likely to grasp the security threat from hackers. The Journal noted that a 2010 survey by the National Retail Federation and First Data Corp. of small- and medium-size retailers in the U.S. found that 64% believed their businesses weren't vulnerable to card data theft and only 49% had assessed their security safeguards. Federal Government Response The FCC came up with similar findings last May, when it convened a cybersecurity roundtable of members from the public, private, and non-profit sectors. The Commission came to the following conclusions: As larger companies do more to secure their technology systems, less-secure small businesses are becoming easier targets for cyber criminals. American small businesses lose billions to cyber attacks annually and 74% of small and medium businesses report being affected by cyber attacks in the past 12 months. The average cost of these attacks for business, per incident, was $188,242. Small businesses often struggle to protect confidential data, with 42% of small and medium businesses surveyed reporting the loss of confidential or private data in the past 12 months and 40% experiencing direct financial costs as a result. Small businesses often do not back-up their data, with 47% reporting that they do not ever back up their data. Further, Senate Commerce Committee Chairman John D. (Jay) Rockefeller IV (D-W.Va.), a proponent of comprehensive cybersecurity legislation, recently called on the U.S. Securities and Exchange Commission (SEC) to clarify corporate disclosure requirements for cybersecurity breaches so that the American public can learn more about when hackers make efforts to penetrate companies’ computer systems. Rockefeller, in a letter to SEC Chairman Mary Schapiro , said “Securing cyberspace is one of the most important and urgent challenges of our time. In light of the growing threat…it is essential that corporate leaders know their responsibility for managing and disclosing security risk.” The letter was signed by four other senators: Sens. Robert Menendez (D-N.J.), Sheldon Whitehouse (D-R.I.), Mark Warner (D-Va.) and Richard Blumenthal (D-Conn). The letter stated that cyber risk management is a critical corporate responsibility. Federal securities law requires publicly traded companies to disclose “material” risks and events, including cyber risks and network breaches. A review of past disclosures suggests that a significant number of companies are failing to meet these requirements. The SEC has longstanding authority to publish “interpretive guidance” to clarify corporate responsibilities, protect investors, and promote fair and efficient markets. Congressional Initiatives In this regard, the House Science, Space, and Technology Committee last week unanimously approved the Cybersecurity Enhancement Act of 2011 (HR 2096)—legislation aimed to boost cybersecurity education, research and development. Debate by the full House could come after the August recess. HR 2096, sponsored by Rep. Mike McCaul (R-Texas), would require increased coordination and prioritization of federal cybersecurity R&D activities and the development and advancement of cybersecurity technical standards. The measure also would strengthen cybersecurity education and talent development and industry partnership initiatives. The bill would: - Give the National Institutes of Standards and Technology the authority to set security standards for federal computer systems and develop cybersecurity standards for agencies to follow.
- Create a task force to coordinate research and development efforts between the federal government, universities and the private sector.
- Establish cybersecurity research and development grant programs. Create scholarship programs at National Science Foundation that can be repaid with federal service.
- Require the president to conduct an assessment of cybersecurity workforce needs across the federal government.
In the meantime, the House Energy and Commerce Subcommittee on Commerce, Manufacturing, and Trade , last week approved legislation to protect American consumers from cyber attacks and identity theft. The Secure and Fortify Electronic Data Act (H.R. 2577), or SAFE Data Act, passed the subcommittee by voice vote. The bill now moves to the full Energy and Commerce Committee for consideration. The SAFE Data Act, authored by Subcommittee Chairman Mary Bono Mack (R-Calif.), would establish uniform national standards for data security and data breach notification. H.R. 2577 builds on legislation passed by the House last Congress and reflects the changing landscape of data security. The legislation also encompasses many of the lessons learned at recent subcommittee hearings, which examined this year’s massive data breaches at Sony and Epsilon. FCC Initiatives In addition to establishing a cybersecurity web site (at www.fcc.gov/cyberforsmallbiz ), the FCC has compiled a list of things small businesses can do to protect themselves against hackers: 1. Train employees in security principles: Establish basic security practices to protect sensitive business information and communicate them to all employees on a regular basis. Establish rules of behavior describing how to handle and protect customer information and other vital data. Clearly detail the penalties for violating business cybersecurity policies. 2. Protect information, computers and networks from viruses, spyware and other malicious code: Install, use and regularly update antivirus and anti-spyware software on every computer used in your business. Such software is readily available online from a variety of vendors. Most software packages now offer subscriptions to "security service" applications, which provide additional layers of protection. Set the antivirus software to automatically check for updates at a scheduled time of low computer usage, such as at night (midnight, for example), and then set the software to do a scan after the software update. 3. Provide firewall security for your Internet connection: A firewall is set of related programs that prevent outsiders from accessing data on a private network. Install and maintain firewalls between your internal network and the Internet. If employees work from home, ensure that their home systems are protected by firewalls. Install firewalls on all computers – including laptops – used in conducting your business. 4. Download and install software updates for your operating systems and applications as they become available: All operating system vendors regularly provide patches and updates to their products to correct security problems and improve functionality. Configure all software to install such updates automatically. 5. Make backup copies of important business data and information: Regularly backup the data on every computer used in your business. Critical data includes word processing documents, electronic spreadsheets, databases, financial files, human resources files and accounts receivable/payable files. Back up data automatically if possible, or at least weekly. 6. Control physical access to your computers and network components: Prevent access or use of business computers by unauthorized individuals. Laptops can be particularly easy targets for theft, so make sure they are stored and locked up when unattended. 7. Secure your Wi-Fi networks: If you have a Wi-Fi network for your workplace make sure it is secure and hidden. To hide your Wi-Fi network, set-up your wireless access point or router so it does not broadcast the network name, known as the Service Set Identifier (SSID). In addition, make sure to turn on the encryption so that passwords are required for access. Lastly, it is critical to change the administrative password that was on the device when it was first purchased. 8. Require individual user accounts for each employee: Set up a separate account for each individual and require that strong passwords be used for each account. Administrative privileges should only be given to trusted IT staff and key personnel. 9. Limit employee access to data and information, and limit authority to install software: Do not provide any one employee with access to all data systems. Employees should only be given access to the specific data systems that they need for their jobs, and should not be able to install any software without permission. 10. Regularly change passwords: Passwords that stay the same, will, over time, be shared and become common knowledge to coworkers and can be easily hacked. Passwords should be changed at least every three months. BloostonLaw contacts: Hal Mordkofsky, John Prendergast, Richard Rubio, and Cary Mitchell. Telecom Users Update: The following developments may affect prices paid for, and capabilities of, telecom services that may be used by our Private Radio clients in connection with their business operations. FCC Adopts Measures To Strengthen E911 Location Accuracy Regulations The FCC, at its July 12 open meeting, adopted measures to strengthen the Enhanced 911 (E911) location accuracy rules for wireless carriers and sought comment on improving both 911 availability and E911 location determination for Voice over Internet Protocol (VoIP) services. Specifically, the Commission adopted a Third Report & Order (R&O), Second Further Notice of Proposed Rulemaking (FNPRM) and Notice of Proposed Rulemaking (NPRM) . Thus, clients whose personnel use cellular, PCS and other commercial wireless services subject to the new E911 rules will know that emergency service providers may soon be better able to reach such personnel in the event of a crisis. The enhance location capability is likely to be translated at some point in the future to a commercially available tracking service that may allow our clients to better manage their operations. The FCC said that E911 technology automatically provides a 911 call operator with the caller’s telephone number and location information from either a landline or a wireless phone. Wireless carriers have historically provided E911 location information by one of two methods: “handset-based,” where location information is generated by Global Positioning System (GPS) or similar technologies installed in the caller’s handset, or “network-based,” where location information is generated by triangulating the caller’s wireless signal in relation to nearby cell sites in the carrier’s network. The FCC’s rules require wireless carriers to identify the caller’s location for a specified percentage of 911 calls within a range of 50 to 150 meters for carriers that use handset-based technology, and 100 to 300 meters for carriers that use network-based technology. In September 2010, the Commission adopted benchmarks for wireless carriers to meet these handset- and network-based accuracy thresholds at the county or Public Safety Answering Point (PSAP) level for increasing percentages of 911 calls over an eight-year period. At yesterday’s open meeting, the Commission announced that after the conclusion of the eight-year implementation period in early 2019, it will sunset the existing network-based rule and require all wireless carriers to meet the more stringent location accuracy standards in the handset-based rule. The Commission said it will set a specific sunset date for the network-based standard at a later date, after further notice and comment. The Commission also required new wireless network carriers to meet the handset-based accuracy standard going forward. The FCC also required all wireless carriers to test their E911 location accuracy results periodically and to share the results with PSAPs, state 911 offices, and the Commission, subject to confidentiality safeguards. The Commission directed the Communications Security, Reliability, and Interoperability Council (CSRIC) to make recommendations to the Commission in six months on specific, cost effective testing requirements and methodologies. With respect to VoIP services, the Commission is seeking comment on whether it should apply existing 911 rules that cover two-way interconnected VoIP services to “outbound-only” interconnected VoIP services, which allow users to place outbound telephone calls but not to receive inbound telephone calls. The Commission is also asking for ways it might ensure that all interconnected VoIP providers can provide automatic location information for VoIP 911 calls, rather than relying on the subscriber to register his or her location with the VoIP provider. This includes considering mechanisms that would enable “over-the-top” interconnected VoIP service providers and underlying network access providers to jointly support the provision of location accuracy information to PSAPs. The Commission is also seeking input on ways that location technologies that are already being developed for commercial broadband applications might be leveraged to support 911 location determination. Finally, the Commission is soliciting comment on how to improve location accuracy for 911 calls made from indoors, including large office buildings where it may be difficult to locate an individual in trouble based only on a street address, and directed the CSRIC to develop recommendations for cost effective indoor location accuracy testing. Commissioner Michael Copps supported the item, but he added: “To me public safety communication means two-way communications. Two-way communications become really important if an emergency call gets disconnected, goes dead for any reason, or if other emergency responders need to contact the caller. So I am pleased that we will also inform ourselves about what consumers need in the way of receiving calls back from emergency call centers. I understand that the Net 911 Improvement Act bolsters our legal authority in this area. Nevertheless, as I have said before, I believe the Commission should look comprehensively at the proper classification of VoIP. At the risk of sounding like a broken record, our charge to protect the safety of the American people is clear and should never have to hinge on semantics or distinctions without a real difference.” At our deadline, the text of the items in this GN Docket No. 11-117; PS Docket No. 07-114; WC Docket No. 05-196 , had not been released. BloostonLaw contacts: Hal Mordkofsky, John Prendergast, Richard Rubino, and Cary Mitchell. House Bill Would Put New Wireless Taxes On Hold The House Judiciary Committee has approved the Wireless Tax Fairness Act of 2011, which would put a five-year moratorium on new state and local taxes targeting wireless services but not other goods or services, according to several sources, including FierceWireless and the National Journal. The bill would only apply to new taxes and does not affect to those already in place. CTIA-the Wireless Association has long fought for the bill, arguing that wireless services are unfairly taxed compared with other services. However, state and local governments have said that the bill would deprive them of revenue at a time when budgets are being cut because of the weak economy. The tax hold would obviously help keep the lid on costs for our private user clients that use commercial wireless services such as cellular. The bill was introduced by Reps. Zoe Lofgren (D-Calif.) and Trent Franks (R-Ariz.) earlier this spring, and will now go to the full House for a vote. Lawmakers also approved an amendment allowing a state or city to impose a new wireless tax if it is approved by the affected voters. A companion bill in the Senate, introduced by Sens. Ron Wyden (D-Ore.) and Olympia Snowe (R-Maine), is still at the committee level. Similar legislation was introduced in 2008 and 2009, but the bills died in Congress. BloostonLaw contacts: Hal Mordkofsky, John Prendergast, and Cary Mitchell. |
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