The CAF provides support to broadband service providers to deploy networks in rural and other high-cost service areas. In addition to meeting their deployment obligations, CAF recipients must show that they provide broadband services meeting certain performance requirements that vary by CAF program. Last year, the FCC established uniform testing procedures for CAF recipients to demonstrate that they meet the relevant performance requirements. The testing requires CAF recipients to measure the speed and latency of their broadband services to see if they meet the applicable program benchmarks. Service providers unable to meet their performance requirements lose funding on a sliding scale based on how far they miss the benchmarks. The FCC initially established a July 1, 2020 deadline for CAF recipients to report their broadband performance testing results. However, many service providers raised concerns regarding both the timing and procedures for testing. In particular, these stakeholders noted that the July 1, 2020 reporting deadline would come before many CAF recipients are required to deploy most of their networks. These service providers also took issue with the current cost and availability of testing equipment and requested more time to become familiar with the CAF broadband performance testing process.
The Order attempts to address CAF recipients’ concerns in two ways. First, the FCC will delay the start of testing reporting for many CAF recipients to better align with the deployment deadlines for the different CAF programs. For example, the FCC is in the process of authorizing funding for winning bidders at the CAF Phase II auction that closed last year. These newly-authorized service providers would have at least until 2022 to deploy 40% of their broadband networks. As a result, the FCC will delay the start of testing reporting for CAF Phase II auction winners until January 1, 2023, to ensure a sufficient sample size. Second, the FCC will create mandatory pre-testing periods for CAF recipients to see how their networks and testing equipment perform without risk of losing support for missing the applicable speed and latency program benchmarks. The pre-testing period also will provide time for the cost of testing equipment to decrease and the availability of such equipment to increase. Note that the FCC will not delay the July 1, 2020 broadband performance testing start date for recipients of CAF Phase II model-based support. CAF Phase II model-based support recipients generally are large price-cap carriers that must deploy 80% of their networks by the end of 2020 and that have prior broadband testing experience. A summary of the new pre-testing and testing start dates for the major CAF programs is below:
CAF Program | Pre-Testing Start Date | Testing Start Date |
CAF Phase II (model-based) | January 1, 2020 | July 1, 2020 |
Rural Broadband Experiments | January 1, 2021 | January 1, 2022 |
Alternative Cost-Model I | January 1, 2021 | January 1, 2022 |
Alternative Cost-Model II | January 1, 2022 | January 1, 2023 |
CAF Phase II (auction) | January 1, 2022 | January 1, 2023 |
Having observed a growing number of websites that advertise and sell noncompliant radio accessories, specifically AV transmitters, intended for use with drones, the Bureau thought it was time to remind the public that advertising, selling, or otherwise marketing such devices if they are not certified under the FCC rules is generally illegal, as is using them. Only if AV transmitters operate exclusively within frequencies authorized for use only by amateur licensees may they be marketed without certification (although they must comply with all other relevant rules) and, if then, use is permitted only by licensed amateur operators. (Other operators of such devices that fall in the exception may be subject to penalties.) If AV transmitters operate on frequencies that fall outside the designated amateur frequency bands, even if they also operate within the amateur bands, they must first have a proper FCC certification before they can be advertised, sold, or operated within the United States. If they do not, then the Enforcement Bureau reminded the public that manufacturers, retailers, and operators may be exposed to substantial monetary penalties, citing recent cases ranging from $190,000 to $2,900,000 in forfeitures, and the regulatory limits of fines up to $19,639 per day of marketing violations and up to $147,290 for an ongoing violation.
The Advisory reminds the public that its equipment authorization-related requirements and potential penalties apply to all equipment, regardless of the country of origin, albeit the FCC regulations do not apply to equipment used by Federal government agencies, although the Department of Commerce (“DOC”) and its National Telecommunications and Information Administration (“NTIA”) may impose their own requirements for Federal agency use.
The Bureau reminds retailers and manufacturers to take the time to learn the FCC rules governing equipment authorization and comply with them. The Advisory recommends that drone operators, when buying accessories that either are electronic or have electronic components, should ensure that these devices or components are properly labeled as FCC-compliant. The Bureau also reminds individuals without amateur licenses that they may not use drone equipment, such as AV transmitters that operate only on amateur frequencies, that is designed solely for use by amateur licensees.
]]>The Commission’s rules provides that RF devices that are subject to verification or Declaration of Conformity procedures (or the newly adopted Supplier’s Declaration of Conformity ("SDoC") procedures) may not be marketed (which includes importation) unless the device complies with all of the Commission’s applicable technical, labeling, identification, and administrative requirements. Pure Enrichment sells its products – ultrasonic humidifiers, air purifiers, diffusers, electronic stimulator massagers, and personal care products – online and at brick-and-mortar retail establishments. (The products apparently, at least in many cases, are manufactured by contract manufacturers, based on the NAL.) In response to a March 2017 complaint to the FCC that Pure Enrichment’s humidifiers can radiate RF emissions that cause interference “to other appliances” and were not identified as having satisfied the equipment authorization requirements, the Commission’s Enforcement Bureau launched an inquiry in May of that year. Pure Enrichment, in a series of responses, claimed that it was unaware that it was marketing unauthorized models until receipt of the Bureau’s Letter of Inquiry (“LOI”), claiming that it believed that authorization was not required under a Commission exemption embodied in a Commission Laboratory Knowledge Database Publication certain (but not all) household appliances. Pure Enrichment acknowledged in responses to the FCC during the investigation that (i) five models lacked proper authorization, required user manual disclosures, and FCC labeling (ii) seven models had an authorization but lacked the required user manual disclosures and FCC labeling; and (iii) two models had an authorization but lacked user manual disclosures
Pure Enrichment provided the Commission a list of apparently noncompliant Part 15 and Part 18 radio frequency devices it marketed and imported into the United States, as well as revenues and other information about its sales of such noncompliant devices. Apparently, it continued to market the non-complaint devices after receiving the LOI and acknowledging that a number of the models were out of compliance. A number of the devices also failed to include the information required by the Commission’s rules to be included the user’s manual and/or other permitted means conveying that information to the user. This included information necessary to ensure the device is complaint with technical requirements and to instruct the user to take steps to mitigate any harmful interference caused by the device. Further, the labels required by the FCC’s rules were missing or improper. Some, but apparently not all, manuals and labels were corrected by Pure Enrichment over a three-month period following the receipt of the LOI, but it seems non-compliant product already held by third-party “logistics providers” in the United States continued to be marketed.
Even after becoming aware of the apparent violations, Pure Enrichment continued to market the fourteen models while it took corrective measures. Pure Enrichment apparently achieved compliance for thirteen of the fourteen as of February 15, 2018, but continues to market one noncompliant model that lacks the proper user manual disclosures and FCC labeling in apparent violation of the Commission’s rules.
In the NAL, the Commission proposes to apply the $7,000 base forfeiture for the marketing of unauthorized equipment to each of the fourteen models that failed to comply with the Commission’s equipment marketing requirements at some point within the last twelve months, resulting in an aggregate base forfeiture of $98,000. The Commission then applied several aggravating factors to arrive at the proposed penalty of 590,380, in particular, the intentional nature of the violations, Pure Enrichment’s resulting economic gain, and the duration and scope of the violations. As for intentionality, Pure Enrichment continued to market the noncompliant devices after becoming aware of the FCC’s investigation and then after acknowledging the noncompliance, despite later corrections covering thirteen of the fourteen devices in question. The continued marketing prior to correction resulted in revenues, which the Commission also took into account, but which data the NAL withholds from the public as confidential. As to scope and duration, the NAL notes that more than half of the devices in question allegedly suffered from at least two rule violations and that nine of the fourteen devices were marketed for more than a year, and some up to three years The Commission found no mitigating factors, underscoring that initial misunderstanding and confusion whether all of the models required authorizations provided no basis for a downward adjustment of the proposed forfeiture.
Commissioner Michael O’Rielly filed a concurring statement in which he was appreciative of the increase in proposed penalty almost $500,000 above the base amount, but he argued for reform of the enforcement process to make it more hard hitting. His statement reflects that the Chairman, at his behest, has committed to review the FCC’s forfeiture policies in the future. Commissioner O’Rielly would like to see baseline penalties that are more reflective of the severity of violations, diminishing reliance on upward adjustments and, he contends, improving the transparency, consistency, and credibility of the Commission’s enforcement process. Thus, for example, he raises concerns because, according to him,”[t]he base forfeiture is $7,000 for any model that does not comply with [the equipment authorization] requirements . . . regardless of whether one device of a certain model was sold or a million” and regardless of net profits or the period of time devices are out of compliance. Ostensibly, Commissioner O’Rielly would like to see base amounts increase in some fashion, literally or as applied.
The Commission’s ability to reset the base forfeiture amount is limited because that is set -- $7000 in the case of “importation or marketing of unauthorized equipment” – under Section 503 of the Communications Act, as are maximum penalties for violations and continuing violations. The discretion of the Commission arises in taking into account aggravating and mitigating factors and determining whether to apply the baseline penalty for equipment importation/marketing violations on a per model basis, as is typical (but not required by the statute) or on a per unit basis.
When and how the Commission moves forward with any policy review in this area of enforcement is certainly something that manufacturers, importers, distributors, brokers, and retailers should watch closely. In the interim, such entities may be well-served to review the processes they have in place to ensure that RF equipment which they import or market in any way adheres to the authorization procedures and information and labeling requirements that apply under the Commission’s rules. As the NAL makes clear, misunderstanding the requirements will likely not be an accepted excuse and rapid action to correct any discovered violations is essential to avoid the magnification of penalties should a complaint be made or an investigation commence.
]]>First, the Order updates volume control technical standards for wireline telephones in section 68.317 of the Commission’s rules. These technical standards are developed and amended by the TR-41 Committee, currently affiliated with the Telecommunications Industry Association (TIA). The Commission, responding to a petition filed by TIA, proposed to update the Part 68 wireline volume control rules to incorporate a revised standard developed by the TR-41 Committee, referred to in the Order as the 2012 Wireline Volume Control Standard. All commenters addressing this issue support this adoption. Based on this support and the record evidence, the Commission found the revised standard improves the measurement of volume amplification over the previous standard, which contributed to discrepancies between the claimed and actual amplification being provided.
Specifically, the revised standard enhances the measurement of volume amplification in two ways: by using a Head and Torso Simulator, which considers the lack of seal between a telephone receiver and the ears of users in real-life settings, instead of measuring the volume received by the user with an IEC-318 coupler, which is designed to form a seal with the telephone handset; and by using a “conversation gain,” where gain is measured relative to an absolute benchmark based on the sound of face-to-face conversation at a distance of one meter, instead of measuring loudness in terms of Receive Objective Loudness Rating, where gain is measured relative to each phone’s normal unamplified sound level. Furthermore, the Order requires telephones manufactured or imported for the use in the U.S. to comply with the new standard two years after the Order’s effective date. Additionally, existing inventory and installed base of telephones that comply with current rules are approved to remain in place until retired.
Second, the Order amends the Commission’s rules to extend the HAC requirements for wireline telephones to ACS, which includes interconnected and non-interconnected VoIP services and equipment. The Order specifies VoIP telephones and other wireline equipment collectively termed “ACS telephonic CPE” must comply with the HAC requirements for wireline telephones. These requirements include: (1) having the equipment tested for HAC compliance; (2) registering the equipment with the ACTA terminal equipment database; and (3) providing appropriate labels regarding HAC compliance.
Third, following other Commission explorations into the need for a wireless volume control rule to address the needs of people with hearing loss, the Order finds a wireless phone volume control requirement that specifies certain levels of amplification as an element of HAC is needed and just as necessary as a corresponding wireline provision, especially given the country’s increasing reliance on wireless phones. Therefore, the Order requires all wireless handsets newly certified as hearing aid compatible to include volume control suitable for consumers with hearing loss. Manufacturers and services providers must comply with this stipulation within three years.
Finally, the Order eliminates the 2007 version of ANSI C63.19 (2007 Wireless RF Interference/Inductive Coupling Standard), as a choice for measuring and rating the HAC compliance of wireless handsets and requires the use of an updated version.
The Order was approved over the partial dissents of Republican Commissioners Brendan Carr and Michael O’Rielly, who both questioned the need to adopt a requirement now when the requirement will not be effective for three years. Commissioner Carr pointed out that the applicable technical standard is still being developed and Commissioner O’Rielly more broadly opposed the Commission adopting standards in its rules.
]]>Interstate Telecommunications Service Providers - By logging into the Fee Filer system, ITSPs can preview the FCC Form 159-W ITSP Report worksheet identifying the revenues that were reported on the provider’s April 1, 2017 FCC Form 499-A filing. These revenues will be used to calculate the provider’s regulatory fees once the FCC’s FY 2017 Regulatory Fee Report and Order is adopted and released. ITSPs should be aware that the worksheet is read-only and revisions to revenue amounts can be made only by the ITSP filing a revised Form 499-A worksheet with the Universal Service Administrative Company (USAC). ITSP revenue adjustments cannot be made through the Fee Filer system.
Commercial Mobile Radio Service Providers - CMRS providers also can access the Fee Filer system to preview their subscriber, porting, and Operating Company Number information. The “Net NRUF Telephone Number” subscriber count listed in the system will be used in determining the CMRS provider’s annual regulatory fee. If the provider agrees with the subscriber count, then the provider does not need to take any further action. Unlike with ITSPs, if the CMRS provider believes its subscriber count is incorrect the CMRS provider is able to revise its subscriber count information directly via the Fee Filer system. However, any such revisions are subject to Commission review and approval and must be made by August 24, 2017 to allow the Commission time to decide whether to accept or disapprove the revision and enter any approved revisions in the fee filer system. Revisions made after August 24, 2017 must be sent directly to Roland Helvajian and will be addressed on a case-by-case basis.
September Regulatory Fee Payment Deadline Not Yet Set - While the Public Notice does not identify a deadline for submitting payments of any annual regulatory fees, based on prior year payment deadlines, we anticipate regulatory fees will be due in September. (By law, the FCC must collect the fees before the end of the federal government’s fiscal year, which ends on September 30). In addition, we remind ITSPs and CMRS providers that the FCC no longer mails regulatory fee notices or assessment letters and it is the licensee’s responsibility to pay the fee by the deadline.
All entities paying regulatory fees should be aware that failure to meet the regulatory fee payment deadline (once established) will result in late payment penalties of 25% being applied and the FCC does not waive late payment penalties. Consequently, entities subject to regulatory fees should be sure to pay attention once the payment deadline is announced and timely pay any fees.
]]>The case stems from 2014, when Timothy Carpenter was sentenced for his alleged role in coordinating a series of armed robberies of smartphone vendors. To support its case, law enforcement obtained access to 127 days’ worth of Mr. Carpenter’s cell-site location records through what is commonly referred to as a “D order” (after the subsection of the act under which the records were requested). Whereas warrants require the government to show probable cause, under the Stored Communications Act, a D order merely requires that law enforcement present “specific and articulable facts showing that there are reasonable grounds to believe” that the records requested “are relevant and material to an ongoing criminal investigation.” 18 U.S.C. § 2703(d).
By utilizing historical cell-site location records, law enforcement was able to identify a pattern of contact between Carpenter and his alleged co-conspirators in close proximity to the locations of the robberies at the time they occurred. The prosecution built its case in part around such location information and successfully obtained a conviction before a U.S. District Court in Michigan. Carpenter challenged his conviction in the Sixth Circuit.
Reasonable Expectations of Locational Privacy?
On appeal, a panel of the Sixth Circuit upheld Carpenter’s conviction. In the majority opinion, Judge Kethledge concluded that the Fourth Amendment does not require a warrant for law enforcement officers to request historical cell-site location information. In reaching this conclusion, Judge Kethledge relied on the third-party doctrine, which stands for the proposition that individuals do not have a reasonable expectation of privacy in information that they voluntarily disclose to third parties such as mobile carriers.
Notably, in a concurring opinion, Judge Stranch expressed concern about applying the third-party doctrine to records which reveal personal location information, noted that “[d]etermining the parameters of the Fourth Amendment is the task of the judiciary”, and stated that the courts “have more work to do to determine the best methods for assessing the application of the Fourth Amendment in the context of new technology.”
Judge Stranch is far from the first to invite reexamination of the third-party doctrine. To give but one example, in a concurring opinion in the 2012 GPS-tracking case United States v. Jones, Justice Sotomayor wrote, “I would not assume that all information voluntarily disclosed to some member of the public for a limited purpose is, for that reason alone, disentitled to Fourth Amendment protection.”
The FCC’s Role in Cellular Locational Privacy
Regardless of whether the Supreme Court accepts Judge Stranch’s invitation, Carpenter v. United States may hold important compliance implications for carriers.
Historically, the Federal Communications Commission (“FCC”) has played an important role in location privacy matters:
The Supreme Court’s decision in Carpenter may alter existing carrier obligations or serve as an impetus for rulemaking activity on related matters.
Although the Court accepted the Carpenter case for argument next term (which starts in October), the argument date has not yet been established. Typically, we would not see a SCOTUS opinion until January of next year at the earliest.
We will continue to monitor this case, with particular attention to CALEA and CPNI ramifications.
]]>In 2012, Congress passed the FAA Modernization and Reform Act (“FMRA”), which prohibited the FAA from creating “any rule or regulation regarding a model aircraft.” Under the FMRA, a model aircraft is a UAS that is:
Background:
In December of 2015, despite the prohibition in the FMRA, the FAA rushed to create a rule requiring owners of drones between 0.55 and 55 pounds to register said drones with the agency for a five dollar fee. As a result of the Registration Rule, approximately 760,000 hobbyists have registered model aircraft with the FAA.
However, a D.C. area drone hobbyist named John Taylor challenged the FAA registration regime on two grounds: (1) under the FMRA, the FAA lacked the legal authority to issue the Registration Rule; and (2) a public notice issued by the FAA prohibiting drone operations in select geographic areas violated the FMRA.
On the first point, the D.C. Circuit sided with Taylor – given that Section 336(a) of the FMRA says that the FAA “may not promulgate any rule or regulation regarding a model aircraft,” the Registration Rule was invalid insofar as it applied to model aircraft.
On the second point, however, the D.C. Circuit never reached the merits of the issue and sided with the FAA, because Taylor failed to challenge the public notice in a timely manner.
Next Steps:
Despite the D.C. Circuit’s ruling, there might still be a future for recreational drone registration. Although the stereotypical regulatory posture of corporate enterprises is to oppose federal regulation of their products and services, the nascent drone industry is an exception. In response to the ruling, the Drone Manufacturers Alliance (“DMA”), a coalition comprised of leading consumer drone companies such as 3DR, DJI, and Parrot, put out a statement:
“DMA is studying implications of ruling closely, but believes the existing system has worked well to protect the interests of safe and responsible pilots as well as the interests of society at large.”
Given the dangers associated with drone operations by untrained or careless users, UAS companies appear to generally favor the educational functions and accountability associated with registration regimes.
DJI appears to be going even further – they just announced that all of their customers must register their drones with the company, and that customer drones will not fully function until after registration is complete.
Moving forward, the FAA still has two options – appeal this decision for en banc review by a panel of judges, or work with Congress to amend the text of the FMRA. In the interim, however, the small UAS registration regime has been grounded.
]]>In the BDS Order, as we described in an earlier blog post, the Commission eliminated price caps for significant portions of the BDS marketplace, created a competitive market test to retain price cap regulation for select services in non-competitive geographic areas, mandatorily detariffed competitive BDS, refrained from adopting specific rules to regulate the wholesale BDS market, and clarified that select competitive BDS offerings constitute private carriage offerings.
Sprint and Windstream allege that the BDS Order is arbitrary and capricious, procedurally inconsistent with the notice-and-comment requirements of the Administrative Procedure Act (“APA”), and in violation of the Communications Act and FCC rules.
Ordinarily, parties cannot challenge rulemaking orders that set forth rules of general applicability until such time as those rules are published in the Federal Register (which has not occurred with the BDS Order as of May 15, 2017). This publication generally represents public notice of a rulemaking order. However, Sprint and Windstream contend that the DBS Order also contained narrower adjudicatory determinations deciding matters particular to specifically–named companies, such as the conclusion that a specific business data service offered by Comcast may be treated as private carriage rather than common carriage, and the changes in scope of regulatory forbearance previously granted to certain business data services provided by Verizon affiliates. According to Sprint and Windstream, the adjudicative elements of the BDS Order render the decision as a whole subject to the public notice rules subject to adjudicatory actions – upon release of the decision. Thus, the petitioners contend that their challenge of the BDS Order prior to Federal Register publication is permissible and qualifies their petition for the judicial lottery procedure to determine the forum for review should additional parties seek review in other appellate venues.
As of this posting, no other parties have sought judicial relief from the BDS Order. While it remains to be seen how the D.C. Circuit responds procedurally to Sprint’s and Windstream’s protective petition, it is clear that the BDS Order will face scrutiny by the courts.
]]>The repeal occurred via Congressional Review Act (CRA) procedures, which enable Congress to rescind recently adopted agency rules. The Joint Resolution will have a modest impact on the status quo with respect to both broadband Internet access service (BIAS) providers and traditional voice providers, since few of the new rules in the 2016 Privacy Order had gone into effect when the Joint Resolution was passed into law. However, a less aggressive privacy posture at the FCC is likely to have ripple effects on privacy enforcement at both the federal and state level, as the Federal Trade Commission (FTC) and state attorneys general may attempt to step in to fill the gap, despite potential jurisdictional challenges. Moreover, unless and until the FCC finds otherwise, Section 201(b) (bars unjust and unreasonable practices) and Section 222 (requirements applicable to broadband are unclear) still apply to BIAS. As a result, BIAS providers and voice carriers should maintain reasonable privacy and data security policies and procedures to mitigate risks of enforcement intended to mind the gap in some way.
Our client advisory, available here, provides an overview of the repealed order, the CRA, and the steps providers should take to protect themselves during this period of uncertainty.
]]>Current Reporting and Proposed Changes. Currently, section 43.62 of the FCC’s rules, requires International Service Providers to submit two annual reports to the FCC: (1) traffic and revenue; and (2) circuit capacity.
Responsive to industry comments in the Commission’s 2016 biennial review proceedings, the FCC seeks input on ways to streamline the circuit capacity reporting requirements to minimize filer burdens and seeks comment on the matters such as:
The NPRM has strong Commission backing. In adopting the NPRM, the Commission cited the competitive nature of the international telecommunications sector and a belief that the reports may no longer be necessary in their current form as factors supporting reducing the reporting obligations.
In her statement, Commissioner Clyburn expressed support for the NPRM, noting the importance of regular FCC assessment of whether existing reporting requirements are still in the public interest.
Commissioner O’Rielly expressed his view that, while the NPRM was a good start, it was far from perfect in its current form. While noting his appreciation that efforts were made to quantify the cost of these reports in the NPRM, Commissioner O’Rielly stressed that the Commission tends to underestimate the costs of reporting requirements. He also expressed reservations about the validity of claims that the benefits of the Circuit Capacity reports outweigh their costs and encouraged commenters to ensure they provide detailed information on this matter.
Chairman Pai emphasized that this item would be the beginning of Commission efforts to modernize and reassess its reporting requirements to ensure requirements are actually needed and not being kept simply because of inertia.
The timing of this NPRM is somewhat unusual as these reporting obligations were just revamped in 2013. Accordingly, the adoption of this NPRM suggests comments in the Commission’s 2016 biennial review proceedings recommending the FCC take action to streamline or eliminate the Part 43 reports resonated within the Commission.
International Service Providers should be sure to consider if they want to make their views known to the Commission on these reporting issues. For additional information regarding this matter, please contact a member of Kelley Drye’s Communications Practice.
]]>The disabilities access rules at issue, implemented pursuant to the Twenty-First Century Communications and Video Accessibility Act of 2010 (CVAA), require manufacturers of covered digital apparatus to ensure devices manufactured after December 20, 2016 include accessible user interfaces. Honda does not make products that would typically be deemed communications devices, but its in-vehicle rear entertainment systems are required to comply with the CVAA’s video accessibility rules. FCC rules require that all digital apparatus be designed so that certain standard functions (e.g., play back, display of video programming) have controls that are accessible to and usable by individuals who are blind or visually impaired. (See our previous discussion here, including the broad scope these disabilities access rules). In the Order, the Bureau states that generally “lack of knowledge of the Commission’s rules” is not a viable basis for good cause to issue a waiver. However, in this case, the Bureau determined that there were “compelling special circumstances . . . that warrant a deviation from the general rule.”
The Bureau found persuasive Honda’s justification that, to comply with the deadline, it would have to suspend production and sales of its vehicles. The Order cites Honda’s statement that stopping production would cause temporary layoffs of Honda employees and financial harm to the company that could jeopardize additional jobs. The Bureau agreed that halting production would not be in the public interest. The Bureau also highlighted Honda’s inclusion of a detailed plan for implementing the requisite accessibility features and accounting for the time to undertake each step of the redesign process. The Bureau further noted that the National Federation of the Blind’s opposition did not provide specific evidence to refute Honda’s claims that the changes could not be done in less time.
The Order requires Honda to ensure that vehicles manufactured after August 20, 2018 are fully compliant with all relevant accessibility requirements. The Order also requires Honda to submit status reports about its efforts to integrate the accessibility features for its in-vehicle rear entertainment systems within six months and one year after the initial compliance deadline.
While Honda was granted some reprieve, their products are still deemed to be within the scope of the requirements and they are expected to come into compliance. Therefore, companies that provide digital products or services, including as components in other products, equipment or services, are encouraged to do their due diligence and seek guidance to determine whether they are compliant with disabilities access regulations given the wide breadth of applicability of the CVAA rules.
For additional information regarding disabilities access compliance, please contact a member of Kelley Drye’s Communications Practice.
]]>During the hearing, Senator Patrick Leahy, (D., VT), asked Senator Sessions various questions about the law, noting that Sessions had been among the “very small minority of members” who opposed passage of the law. In response to Senator Leahy’s questions, Senator Sessions stated “I will follow the law”, and added “I do not believe [the USA FREEDOM Act] can be disregarded and it should be followed.”
The USA FREEDOM Act is a complicated piece of legislation with important compliance implications. Although the Act does not expand upon carrier data retention requirements, it forces telecommunications carriers to process requests for records previously collected directly by the NSA.
Moreover, carriers remain subject to various statutory and regulatory customer record retention obligations. For example, carriers offering toll telephone services must retain billing records on long distance calls for 18 months. These records must contain the name, address and phone number of the caller, the number dialed, and the date, time, and length of the call. In addition, providers of services for E-Rate and the Connect America Fund must retain documents pertaining to their delivery of services for at least ten years.
While the USA FREEDOM Act does not change such obligations, it may change the acceptable means of processing law enforcement requests. For example, whereas previous FCC definitions of call detail records included location information, the USA FREEDOM Act explicitly excludes cell site location information and GPS information from the definition of call detail records.
Over time, the USA FREEDOM Act is likely to increase the number of law enforcement requests carriers face. The presidential transition period is an ideal time for carriers to review their data retention practices to ensure compliance with federal law and FCC rules.
Kelley Drye’s Communications and Privacy & Information Security practice groups are well-versed in privacy law at the federal and state level, and stand ready to help interested parties understand the scope of these obligations and how to operationalize them. Should you have any questions, please contact the authors or your regular Kelley Drye contact.
]]>In the 2015 Order, the FCC adopted enhancements to the transparency rule, which covers both content and format of disclosures by providers of broadband Internet access service. However, OMB had been reviewing the enhanced transparency rule, after receiving complaints that the rule violated the Paperwork Reduction Act (PRA). The Commission made clear that it would announce an effective date for the enhanced transparency rule in the Federal Register in wake of OMB approval.
Now that OMB approval is complete, the FCC has sent a notice for publication to the Federal Register, and clarified that the enhanced transparency rule goes into effect January 17, 2017.
The End of the Small Provider Exemption:
The completion of OMB review coincides with the end of a temporary exemption for small Broadband Internet access service (BIAS) providers from the enhanced transparency rule.
The 2015 Open Internet Order expanded the transparency rule from the 2010 Open Internet Order by creating new obligations, requiring providers to disclose promotional rates; all fees and/or surcharges; all data caps and allowances; and additional network performance metrics (e.g., packet loss).
The 2015 Open Internet order exempted small providers (i.e., those with 100,000 or fewer broadband connections) from these new transparency obligations.
Initially, on December 15, 2015, the Federal Communications Commission’s (FCC’s) Consumer and Governmental Affairs Bureau (CGB or the Bureau) issued a Report and Order extending the exemption for one year. The FCC could have opted to make this exemption permanent, but did not take that course of action.
For additional information regarding the enhanced transparency rule, the small provider exemption or the 2015 Open Internet Order, please contact a member of Kelley Drye’s Communications Practice.
]]>At the Federal Communications Commission’s (“FCC”) Open Meeting on October 27, the Commission voted along party lines (3-2) to impose more stringent rules on broadband Internet service providers (“ISPs”). Chairman Tom Wheeler, along with Commissioners Rosenworcel and Clyburn voted in favor of the item, while Commissioners Pai and O’Rielly voted against it.
The new rules clarify the privacy requirements applicable to broadband ISPs pursuant to Section 222 of the Communications Act. The new rules also apply to voice services and treat call-detail records as “sensitive” in the context of voice services.
According to an FCC press release issued immediately after the meeting, these rules “establish a framework of customer consent required for ISPs to use and share their customers’ personal information that is calibrated to the sensitivity of the information.” The Commission further asserts that this approach is consistent with the existing privacy framework of the Federal Trade Commission (“FTC”).
The actual text of the order is not yet available, but a fact sheet and press release outline the core components of the order. Under the order, mobile and fixed broadband ISPs will apparently be subject to the following requirements:
In the fact sheet, the Commission states that ISPs serve as “a consumer’s ‘on-ramp’ to the Internet,” observing that “[p]roviders have the ability to see a tremendous amount of their customers’ personal information that passes over that Internet connection” and asserting that consumers should have the right to decide how such information is used and shared.
The Commission intends for the rules “to evolve with changing technologies and encourage innovation.”
De-identified Information:
ISPs may utilize de-identified information without consumer consent. De-identified information consists of data sets that have been modified so that they can no longer be traced to individual users or devices. However, in recognition of the fact that ISPs might otherwise have the ability and incentive to re-identify customer information, the order adopts a three-part test which the FTC created in 2012 to determine whether de-identified information may be shared without consumer consent.
Pursuant to this framework, in order for an ISP to rely on de-identification without notice and consent, it must:
The Commission appears to be concerned with the bargaining power differential between customers and providers. In an effort to give consumers greater leverage, the order bans ISPs from “take-it-or-leave-it” offers and forces them to serve customers who do not consent to the commercial use or dissemination of their information.
The order also purportedly addresses a recent controversy over mandatory arbitration clauses in ISP-consumer contracts by reiterating the right of consumers to utilize the Commission’s informal dispute resolution process, and signals the Commission’s intent to more directly address the matter in a rulemaking in February 2017.
* * *
The Broadband Privacy Order is an important and controversial decision. Commissioner Clyburn claimed the rules amount to “strong privacy protections.” Commissioner Rosenworcel praised the benefits of the rules for consumer protection, but openly acknowledged that “with respect to the future of privacy, I think we still have work to do” and saw the need for further harmonization efforts vis-a-vis the FTC.Commissioners Pai and O’Rielly both voiced strong dissents. Commissioner Pai emphasized that these rules were out of sync with FTC standards, warned that “[n]othing in these rules will stop edge providers from harvesting and monetizing your data,” and expressed concern that the order sets forth “one-sided rules that will cement edge providers’ dominance in the online advertising market.”
Commissioner O’Rielly expressed frustration with the order’s new opt-in requirements, stating that the use of an “opt-in consent mechanism results in far fewer individuals conveying their consent than is the case under an opt-out consent mechanism even when substantial benefits are at stake.”
FTC Chairwoman Edith Ramirez released a statement praising the order:
“I am pleased that the Federal Communications Commission has adopted rules that will protect the privacy of millions of broadband users. The rules will provide robust privacy protections, including protecting sensitive information such as consumers’ social security numbers, precise geolocation data, and content of communications, and requiring reasonable data security practices. We look forward to continuing to work with the FCC to protect the privacy of American consumers.”
Although the full order has yet to be released, at a press conference following the meeting, Chairman Wheeler indicated there was a relatively strong chance it will be released at some point in the next 24 to 48 hours.
Details aside, it is clear that today’s decision (if upheld) will change the communications and privacy landscape. We will post updates here as we learn more about the new Broadband Privacy rules.
Finally, Kelley Drye will soon offer a free webinar that will unpack the new order. Once the full order becomes available, we will announce the date and time of the webinar.
]]>Comments are due to the Bureau by June 22, 2016. The Commission will use these comments to inform tentative findings, which will then be open for another round of public comment. The report to Congress is due by October 8, 2016.
Section 255 governs accessibility requirements for telecommunications and interconnected VoIP service providers and equipment manufacturers. Section 716 applies to non-interconnected VoIP services, advanced communications services (e.g., electronic messaging services and interoperable video conferencing services), and the manufacturers of devices for these services. Section 718 requires Internet browsers on mobile phones to be accessible to the blind and visually impaired. Section 717 contains recordkeeping and enforcement obligations applied to entities covered by sections 255, 716, and 718.
In addition to telecommunications, advanced communications services, and Internet browser technologies, the Commission seeks comment on accessibility barriers to “new communications technologies,” that are both within and outside the scope of the Act. The 2012 CVAA Report expressed an expectation that many accessibility barriers to new communications technologies would likely be addressed by compliance with the requirements under section 716 and 718, and the Commission now seeks comment on the extent to which that expectation has been met, and what barriers remain.
]]>The FCC regulates disabilities access pursuant to sections 255, 716 and 718 of the Communications Act (as amended by the Twenty-First Century Communications and Video Accessibility Act (CVAA)). Specifically, section 255 requires regulated entities (including “Title II” carriers) to ensure that their services and equipment are “accessible to and usable by individuals with disabilities, if readily achievable.” Section 716 extends these requirements to advanced communications services (e.g., electronic messaging and video conferencing) and section 718 imposes similar obligations with respect to mobile services. To demonstrate compliance with these requirements, service providers and equipment manufacturers must keep records of their efforts to deploy accessible services and devices, and must submit an annual certification about their recordkeeping practices.
The certification must state that the service provider or manufacturer has established operating procedures to ensure compliance with the recordkeeping requirements and that records are being kept accordingly. An authorized officer with personal knowledge of the representations in the certification, must submit an affidavit or declaration, executed under penalty of perjury, verifying the truth and accuracy of the certification. The certification also must include contact information for the person(s) responsible for resolving consumer complaints and the agent designated for service of formal and informal complaints. The certification must be submitted by April 1, 2016 utilizing the FCC’s online filing system, which can be found at https://apps.fcc.gov/rccci-registry/login!input.action.
In light of the Commission’s decision in the March 2015 Open Internet order to reclassify BIAS as a Title II telecommunications service, providers of these services are now subject to the section 255 accessibility requirements. In a recent Public Notice, the Commission clarified that BIAS providers are not yet required to submit a certification of compliance with recordkeeping rules because the obligation continues to undergo Paperwork Reduction Act analysis by the Office of Management and Budget. The Commission was careful to note, however, that some BIAS providers may be “independently subject to these requirements by virtue of offering advanced communications services” (e.g., bundling email with broadband service). We expect that by next year, the recordkeeping and certification obligations will apply to all BIAS providers.
In the meantime, if you are unsure about whether the reporting requirement applies to your company, please contact your usual Kelley Drye attorney or any member of the Communications Practice Group. Our attorneys are experienced in the submission of the accessibility recordkeeping certification requirement and are available to assist you with this process.
]]>The updated Form 499A is available on the FCC’s website and USAC has stated the form will be available to filers, in USAC’s online E-File system, on or before March 1, 2016.
Reminder: Kelley Drye will be hosting its 7th Annual USF Update webinar, where we will talk about the 2016 Form 499A and more, on February 24, 2016. This one-of-a-kind webinar provides an in-depth discussion of trends and issues involving the Universal Service Fund, from contributions, to the four support funds, as well as audits and enforcement. This is one of our most popular webinars and we encourage you to register today.
]]>On November 16, 2015, the Federal Communications Commission (FCC) and the Federal Trade Commission (FTC) reached a Memorandum of Understanding (MOU) in which the two agencies agreed to engage in greater coordination and collaboration on consumer protection issues, with greater respect for each agency’s jurisdiction. The MOU comes at a time when both agencies are seeking to position themselves as protectors of consumers in the digital economy.
In the MOU, the agencies agreed to coordinate with one another “to protect consumers from acts and practices that are deceptive, unfair, unjust and/or unreasonable.” Among other things, the agencies agreed to:
The agencies each appointed Designated Liaison Officers (DLOs) to serve as the primary points of contact for the agencies. Travis LeBlanc (Chief, Enforcement Bureau) and Alison Kutler (Acting Chief, Consumer & Governmental Affairs Bureau) will serve as the DLOs for the FCC, while Jessica Rich (Director, Bureau of Consumer Protection) will serve as the DLO for the FTC.
The MOU comes after an unprecedented year of consumer protection activity at the FCC (and has been in the works for nearly a year and a half). Earlier this year, the FCC reclassified broadband Internet access service (BIAS) as a common carrier service—effectively bringing BIAS-related activities outside the scope of FTC jurisdiction—and imposed a host of “open Internet” and other consumer protection obligations on BIAS providers. Some of these open Internet issues were the subject of ongoing FTC enforcement actions, including a lawsuit challenging AT&T’s throttling practices for its “unlimited” plans, which is now the subject of a $100 million FCC proposed forfeiture. The FCC also has dramatically expanded its privacy and data security enforcement activities against carriers (including TerraCom/YourTel, AT&T, and Cox Communications). Indeed, the FCC’s Enforcement Chief has stated that he views Section 201(b) of the Communications Act—which prohibits “unjust and unreasonable” practices of common carriers—as coextensive with Section 5 of the FTC’s animating statute—which prohibits “unfair and deceptive trade practices.” No wonder, then, that the FCC’s recent privacy and security enforcement actions have taken on the look and feel of traditional FTC enforcement actions, including settlements with comprehensive and multi-year compliance plans designed to send signals to the broader market about agency expectations.
The MOU will have a number of benefits for the two agencies. For the FCC, the MOU will enable it to learn from the wealth of institutional knowledge that the FTC has gained from years of privacy and data security enforcement under Section 5. As the consumer protection provisions of the 2015 Open Internet Order take an increasingly central role in FCC enforcement actions, this sort of information sharing will be critical. For the FTC, the agency will gain some assurance that the FCC will not further expand its own jurisdiction—as it did in the 2015 Open Internet Order—before coordinating and consulting with its sister agency. Above all, the MOU will promote administrative efficiency, a goal that underlay a similar MOU between the FTC and the Consumer Financial Protection Bureau, which, like the FCC, shares some jurisdiction with the FTC. This administrative efficiency may inure to the benefit of regulated entities, which may now avoid the burden of responding to duplicative and uncoordinated investigations.
Kelley Drye’s attorneys have significant experience representing clients before the FCC and FTC on a wide range of consumer protection issues. Should you have any questions about this MOU and what it means for your business, feel free to contact the authors of this post or your usual Kelley Drye contact.
]]>Commissioner Michael O’Rielly recently put his finger on what many foreign investors and foreign corporations find most unnerving, the potentially long suspension of FCC action on applications that must go through the so-called “Team Telecom” review process which is all but automatically triggered by proposed direct and indirect foreign ownership in broadcasters, common carriers and aeronautical licensees as well as submarine cable operators. Applicants requesting approval of foreign ownership must undergo review by not only the Commission but national security and law enforcement review by the collection of federal government agencies commonly referred to as “Team Telecom:” the Department of Justice (including the Federal Bureau of Investigation), Department of Homeland Security and the Department of Defense. (Other agencies, such as the Department of Commerce and the Department of State may also be called upon to provide input to these primary reviewing agencies.) In contrast to the FCC review process, which generally has clearly defined procedures, timeframes, and a public record, the Team Telecom review process often lacks any transparency and has no deadline for completion.
Commissioner O’Rielly acknowledges the importance of Team Telecom review, which is not really open to debate. But he underscores, as has the Commission itself in liberalizing its standards applicable to foreign ownership in common carrier wireless licenses, that foreign investment “by benign private entities” provides important benefits, and should not be discouraged by how the Team Telecom review is conducted. What’s important about Commissioner O’Rielly’s criticisms is that, after identifying the problems that accompany the Team Telecom review process, he proposes improvements in an effort to limit delays to a final FCC action. But can a public rebuke by an FCC Commissioner instigate cognizable improvements to the currently unpredictably long Team Telecom reviews?
Commissioner O’Rielly identifies three areas ripe for reform:
“Inextricable Black Hole” –Team Telecom fails to provide any information or identify any areas of concern, either to Applicants, or the FCC, during the review, let alone venture a target for completion. As any business or investor that has undergone Team Telecom review knows, the uncertainty and delays may impact service rollouts and result in lost opportunities.
Lack of Precedent –Team Telecom reviews are not subject to any standard of consistency; there are no written “decisions” to guide future applicants in structuring transactions to speed the reviews. Instead, Commissioner O’Rielly asserts, applicants are essentially left to the “whims” of the Team Telecom agencies.
Political Concerns – Commissioner O’Rielly suggests that absent a “transparent and balanced process”, there are no guarantees that Team Telecom’s decisions do not unduly reflect political influences. He raises legitimate concerns that, absent the ability to show this is not the case, the FCC’s standing among its foreign peers is subject to being undermined, frustrating the agency’s long-time goal of an “independent international telecommunications regulatory structure.”
What does the Commissioner suggest as first steps to ameliorating this situation? First, as to broadcasters, notification to Team Telecom of foreign ownership exceeding 80% and broadcast applications proposing foreign ownership should be constructively approved after 30 days unless Team Telecom submits a formal request to the FCC for an additional 90 day review period (which can be extended, once, for another 90 day period). In addition, he suggests Team Telecom should submit any recommendations to the FCC regarding whether an application should be granted or denied based on foreign ownership within strict guidelines and timelines. Commissioner O’Rielly’s suggestions are focused on broadcast applications, but he invites an extension of these or similar remedies to improve Team Telecom’s review of other FCC applications.While the FCC certainly has no authority to dictate changes to Team Telecom, let alone one Commissioner, it is refreshing to see a senior public official calling for improvements of the sort which the business community would embrace. Perhaps the challenge will provoke a review by those agencies of their practices to reduce the key uncertainty of time faced by almost every common carrier, submarine cable, broadcasting, and aeronautical applicant with proposed new or additional foreign ownership.
]]>As a federal eligible telecommunications carrier (ETC) participating in the Lifeline program, TracFone has certified its compliance with the CTIA Consumer Code for Wireless Service (CTIA Code) to meet the consumer protection and service quality requirements in Section 54.202(a)(3) of the FCC’s rules. The CTIA Code serves as a safe harbor for ETCs to demonstrate they have met their required standards of service. Under the CTIA Code, ETCs must allow consumers to unlock their phones and notify consumers of their unlocking policies. As explained in the CTIA Code, cellphone unlocking simply means allowing consumers to activate their phones on another carrier’s network. The phones, however, may not be interoperable with other networks that may use other technologies or wireless spectrum bands. The FCC alleges that TracFone inaccurately certified itself as complying with the CTIA Code without actually enabling consumers enrolled in the Lifeline Program to unlock their phones.
As TracFone transitions to unlockable phones, eligible TracFone customers can contact the company to receive a new unlocked device, credit for a device upgrade or a partial cash refund in exchange for their locked device.
Under the terms of the settlement, TracFone must also: