CommLaw Monitor News and analysis from Kelley Drye’s communications practice group Wed, 12 Jun 2024 02:47:29 -0400 60 hourly 1 FCC’s November Meeting Agenda Focuses on Enabling Text-to-988 for Suicide Prevention and Spectrum Access to Close the Digital Divide Sun, 14 Nov 2021 18:56:43 -0500 The FCC released a light agenda for its next Commission Open Meeting, scheduled for November 18, 2021. The agency will consider a Second Report and Order to require covered text providers to support text messaging to 988 by routing those texts messages to the National Suicide Prevention Lifeline (“Lifeline”). The FCC will next address a Further Notice of Proposed Rulemaking (“FNPRM”) to adopt an incentive program to encourage licensees to make spectrum available to small carriers and Tribal Nations, as well as to carriers seeking to expand wireless services in rural areas. The FCC will also review a Notice of Proposed Rulemaking (“NPRM”) to assess whether FM and Low Power FM (“LPFM”) broadcast radio license applicants can verify directional antenna patterns by computer modeling instead of by taking physical measurements. The FCC will close its meeting by considering a Declaratory Ruling and Order (“Order”) that would grant Knéis, a French private satellite operator, with access to the United States market so that it can support connectivity for Internet of Things (“IoT”) devices and improved data collection.

You will find more information about the items on the November meeting agenda after the break:

Enabling Text-to-988 - The Second Report and Order would adopt rules that require covered text providers to route text messages sent to 988 to the Lifeline. Covered text providers would include CMRS providers and providers of interconnected text messaging services that enable consumers to send and receive text messages (including through the use of installed or downloaded applications). The implementation date for text-to-988 would be set at July 16, 2022, which is the same deadline for voice providers (i.e., telecommunications carriers, interconnected Voice over Internet Protocol (“VoIP”) providers and one-way VoIP providers) to enable end users to dial 988 to reach the Lifeline. Initially, covered text providers would only be required to support the transmission of text messages to 988 using Short Message Service format because that is the only text format the Lifeline can receive at this time. However, there would be a process whereby the Wireline Competition Bureau could expand the types of text formats that covered text providers must support as the Lifeline becomes capable of handling additional formats.

Enhanced Competition Incentive Program for Wireless Radio Services – The FNPRM would continue the FCC’s efforts to close the digital divide by promoting diversity of spectrum licensees and the availability of wireless services in rural areas. The FNPRM would propose an Enhanced Competition Incentive Program (“ECIP”) that would be available to wireless licenses for which the FCC has auctioned exclusive spectrum rights in a defined geographic area. A wireless licensee would qualify for certain benefits under the ECIP if it entered into an agreement with an unaffiliated entity to assign or lease a portion of its licensed spectrum and (1) the agreement encompassed at least 50 percent of the licensed spectrum and at least 25 percent of the licensed market area, and (2) the agreement was with a small carrier or Tribal entity or the agreement focused on a rural area. Wireless licensees that participate in the ECIP would receive a five-year extension of the license’s term, a one-year extension of the construction deadline and a modified construction requirement in rural areas. The FNPRM would also seek comment on whether a licensee should be required to use Open Radio Access Networks (“RAN”) technologies to receive ECIP benefits, alternative construction options for licensees with certain flexible use licenses (i.e., license that can be used for a variety of applications), and incentives to promote spectrum sharing.

Updating FM Radio Directional Antenna Verification – The NPRM would propose rules to address the FCC’s tentative conclusion that requiring applicants for FM and LPFM broadcast radio licenses or for modifications to those licenses to provide physical measurements to verify directional antenna patterns is outdated. The FCC’s rules currently require FM applicants to either (1) test a full-scale model of an antenna, including the tower or pole on which it is to be mounted and structures that will be in proximity to the antenna, on a test range or (2) construct a smaller, scale model of the antenna, mounting structure, and nearby structures, and then measure the signal in an indoor anechoic chamber. The NPRM would seek comment on whether the use of computer modeling is a viable option for verifying FM radio directional antenna patterns, whether the FCC should require use of a specific computer program, whether antenna manufacturers or broadcast engineers generally prefer a certain computer model to accurately analyze FM radio directional antenna patterns, and whether the FCC’s policies are effective in resolving interference complaints or disputes pertaining to the directional FM antennas.

Knéis Low-Earth Orbit Satellites Market Access - The Order would grant a petition and waiver request by Knéis, a private satellite operator, to access the United States market using a network of 25 low-Earth orbit (“LEO”) satellites authorized by France and operating on frequencies in the non-voice, non-geostationary mobile-satellite service and earth exploration-satellite service. The Order would grant Kinéis permission to use the 399.9-400.05 MHz and 401-403 MHz bands for uplink and the 400.15-401 MHz band for downlink, subject to certain conditions. Knéis would rely on these frequencies to support connectivity for IoT devices used in the maritime, agricultural, logistics, outdoor sports, security, and scientific sectors. The Kinéis satellite system would be compatible with the Argos data collection system (a worldwide network of data collection satellites managed by France’s space agency, together with the National Aeronautics and Space Administration and the National Oceanic and Atmospheric Administration) and would facilitate implementation of the next generation of the Argos system. Five of the satellites would monitor maritime communications in the 156.7625-162.0375 MHz band thereby enhancing maritime domain awareness. The Order would also require Kinéis to obtain approval of its orbital debris mitigation plans prior to commencing service.

FCC Closes Out the Summer With STIR/SHAKEN Revocation in August Open Meeting Thu, 05 Aug 2021 10:54:40 -0400 Today, the FCC is holding its last Open Meeting of the summer. Here is the agenda. The meeting will first consider a Public Notice to establish two new Innovation Zones for experimental licenses in Boston, MA and Raleigh, NC to study wireless technology use cases and test integration with new technologies. The FCC will next consider a Further Notice of Proposed Rulemaking (“FNPRM”) that would propose to adopt clarifications and revisions to the agency’s numbering rules, including requiring additional certifications and ownership disclosures for authorization of direct numbering access. The Commission will also hear a Third Report and Order that would authorize the agency’s private Governance Authority overseeing the STIR/SHAKEN framework to review and revoke a voice service provider’s participation in STIR/SHAKEN. The Order would further establish an appeals process and procedures for providers affected by a revocation. Additionally, the FCC will consider a Notice of Proposed Rulemaking (“NPRM”) that would update the compensation methodology for the Internet Protocol Relay (“IP Relay), a form of Telecommunications Relay Service. Lastly, the FCC will consider an NPRM proposing to update the agency’s political programming rules, followed by a Memorandum Opinion and Order on Reconsideration that would grant three petitions for reconsideration of the Part 95 Personal Radio Services Rules Report and Order.

You will find more information about the most significant items after the break.

Appeals of STIR/SHAKEN Revocation Decisions – The Third Report and Order (“Order”) would establish a process for the FCC’s private Governance Authority that oversees the STIR/SHAKEN framework to review and revoke the ability of a voice service provider to participate in STIR/SHAKEN. The Order would also create an appeals process for voice service providers to challenge any revocation decisions, modeled on the established appeals process and procedures for reviewing decisions by the Universal Service Administrative Company (“USAC”). Voice service providers affected by a revocation could file a request for review with the FCC, and third parties would be permitted to file oppositions and replies to the request in ECFS.

Establishing Two New Innovation Zones – The Public Notice would approve the creation of two new Innovation Zones for experimental licenses in Boston, MA (Northeastern University) and Raleigh, NC (NC State University), and would expand the geographical boundary of the Innovation Zone in New York City. Innovation Zones allow experimental licensees to conduct unrelated experiments at designated locations without requiring explicit FCC approval. The NC State Innovation Zone would be intended to study new use cases for advanced wireless technologies emerging in unmanned aerial systems (“UAS”), while the Northeastern Innovation Zone would allow researchers to use the Colosseum wireless network emulator to extend and accelerate research in wireless networked systems. The two Innovation Zones would also promote platforms to test the integration of Open Radio Access Networks (Open RAN). Both Innovation Zones would be established for a renewable period of five years.

Updating FCC Numbering Policies – The Further Notice of Proposed Rulemaking would adopt clarifications and revisions to the Commission’s numbering rules, consistent with the Congressional directives in the TRACED Act. The FNPRM would propose to require additional certifications as part of the direct access application to numbering resources and would require disclosures of foreign ownership information of applicants, proposing to refer applicants with 10% or greater foreign ownership to the Executive Branch agencies. It would also require direct access authorization holders to more frequently update the FCC of any ownership changes, and would seek comment on expanding the direct access to numbers authorization process to one-way VoIP providers or other entities using numbers.

Updating TRS Compensation – The Notice of Proposed Rulemaking would propose changes to the compensation methodology for the Internet Protocol Relay, a form of Telecommunications Relay Service (“TRS”) that allows an individual with a hearing or speech disability to communicate with voice telephone users by transmitting text via the Internet. The NPRM would propose to modify the compensation methodology to permit recovery of reasonable costs of outreach and operating margins, and would seek comment on permitting recovery of indirect overhead costs. It would also propose to calculate the base compensation level using projected costs and demand over a multi-year compensation period. The NPRM further would seek comment on a proposed potential hybrid compensation model that would rely in part on compensation for state-program relay service.

Competition Policy Gets a Top Spot in the White House Mon, 08 Mar 2021 22:50:39 -0500 Following weeks of speculation about a potential role for Columbia Law Professor Tim Wu in the Biden Administration, the White House announced on March 5 that Wu has been named Special Assistant to the President for Technology and Competition Policy. As an official housed in the National Economic Council ("NEC"), Wu will not directly command staff within federal agencies or set the agencies’ enforcement or regulatory agendas. Instead, Wu will most likely focus on coordinating federal agencies’ efforts to identify and address competition issues. Given his history, Wu could seek to have particular influence on the Federal Communications Commission ("FCC") and Federal Trade Commission ("FTC") as they shape their Biden Administration agendas.

Wu’s history as a law professor and advocate may offer some clues about how he will approach his duties. He rose to prominence as an advocate of “net neutrality,” a phrase he coined in 2002. In general, his scholarship focuses on telecommunications, technology, and competition.

After the 2020 presidential election, Wu and several former federal antitrust officials authored a Washington Center for Equitable Growth (WCEG) report entitled “Restoring Competition in the United States: A Vision for Antitrust Enforcement for the Next Administration and Congress.” The report that concludes the “U.S. economy is plagued by a problem of excessive market power” and “antitrust enforcement has failed to prevent this problem.” Among the report’s recommendations is a suggestion to create a White House Office of Competition Policy within the NEC, to bring a “‘whole government’ approach to competition policy.”

Although the White House has not created such an office, Wu’s title and administrative home in the NEC closely track WCEG’s advice. In the view of Wu and his co-authors, the White House should “pressure agencies to open up closed markets while discouraging agencies from entrenching the industries that they regulate.” Agencies that the WCEG report lists as possessing competition-related rulemaking authority range from the FDA to the Federal Housing Finance Agency.

Wu’s record and the current political environment, however, suggest that the internet and communications industries are likely to be a core part of his focus. The Department of Justice, FTC, and FCC will be central to any ramp-up in competition regulation or enforcement in this arena. These agencies have over time played complementary, but sometimes competing, roles in internet and communications issues, particularly in large communications and media mergers. With the shifting jurisdictional classification of broadband internet services at the FCC, moreover, the dividing line between FCC and FTC jurisdiction over various players in the market has been unclear. Both the FCC and FTC, for example, jointly took an aggressive stance against VoIP gateways through which unlawful robocalls were being transmitted.

These agencies present challenges to an assertive White House coordinating role. The FCC and FTC are independent; the selection of agency chairs and nominations to fill vacancies could indicate how willing the agencies will be to coordinate with the White House. At the same time, the Justice Department’s independence was a prominent issue in Merrick Garland’s confirmation hearings and could affect how the White House attempts to shape the Department’s competition policy agenda.

Wu will also have competition of his own within the White House. For instance, OMB’s Office of Information and Regulatory Affairs has a direct role in reviewing proposed federal regulations and may be more reluctant to issue aggressive regulations. Other White House components, from the Office of Science and Technology Policy to the Domestic Policy Council, are likely to make their voices heard, too.

We will closely monitor developments as Wu’s role and the leadership picture in key agencies become clearer.

FCC Previews a Jam-Packed July Open Meeting with National Suicide Prevention Lifeline, Call Blocking, and Supply Chain Items Leading the Agenda Thu, 02 Jul 2020 19:12:10 -0400 The FCC is moving full steam ahead this summer with a jam-packed agenda for its next open meeting, scheduled for July 16, 2020. Headlining the meeting is the creation of the National Suicide Prevention Lifeline, establishing 988 as the 3-digit dialing code for the suicide and mental health crisis hotline. All telecommunications carriers and VoIP providers would be required to implement 988 on their networks by July 16, 2022. The FCC continues to move forward on eliminating unwanted and illegal robocalls, planning to carve out safe harbors from liability for call blocking based on reasonable analytics and seeking comment on any additional obligations for blocking providers. The supply chain rulemaking would adopt the Commission’s prohibition on using universal service funds to support equipment or services provided by identified companies posing a national security threat, and propose further requirements for securing communications networks. The agency also plans to affirm and build upon vertical location requirements for enhanced 911 location accuracy and to establish procedures for enhanced broadband mapping and data collection. In addition, the agenda includes items to modernize the leased access rate formula and streamline and update the priority service program rules for emergency workers.

While FCC action historically dwindles going into an election year, the July agenda shows no signs of slowing down on the Commission’s main priorities. You will find more details on the most significant July meeting items after the break:

National Suicide Prevention Lifeline: The draft Report and Order would designate 988 as the 3-digit number for the National Suicide Prevention Lifeline and mental health crisis hotline (“Lifeline”). The Commission would require all telecommunications carriers, interconnected VoIP providers, and one-way VoIP providers to make any network changes necessary to ensure that all users can dial 988 to reach the Lifeline by July 16, 2022. Service providers would be required to transmit all calls initiated by an end user dialing 988 to the current toll free access number for the Lifeline (1-800-273-TALK). The Commission would also require covered providers to implement 10-digit dialing in areas that use both 7-digit dialing and 988 as an NXX numbering prefix to ensure direct dialing to the Lifeline and avoid delayed and misdirected calls.

Call Blocking Rules: The draft Third Report and Order, Order on Reconsideration, and Fourth Further Notice of Proposed Rulemaking (“FNPRM”) would continue the Commission’s efforts to stop unwanted and illegal robocalls. Consistent with the TRACED Act, the Commission would establish a safe harbor from liability for terminating providers for blocking wanted calls, as long as the call blocking was based on reasonable analytics indicating that the call was unwanted, including STIR/SHAKEN information when available. A second safe harbor would also enable voice service providers to block traffic from bad-actor upstream voice service providers that continue to allow unwanted calls on their network. Blocking providers would also be required to establish a single point of contact to remedy unintended or inadvertent blocking, and to ensure that calls to 911 are never blocked. The Commission asks for input on how it can further implement the TRACED Act, and proposes establishing obligations for voice service providers to respond to certain traceback requests, mitigate bad traffic, and take affirmative measures to prevent customers from originating illegal calls on their networks. It also would propose requiring terminating service providers that block calls to provide a list of those blocked calls to their customers on demand and at no additional charge.

Secure Networks Act: The draft Declaratory Ruling and Second FNPRM would integrate provisions of the Secure and Trusted Communications Networks Act of 2019 (“Secure Networks Act”) into the Commission’s existing supply chain rulemaking proceeding. The FCC would adopt the prohibition on the use of universal service funds for equipment and services produced or provided by companies, such as Huawei and ZTE, designated as a national security threat, upholding the 2019 Supply Chain Order. The FNPRM would seek comment on implementing certain portions of the Secure Networks Act, proposing several different processes and definitions that will aid the FCC in compiling and publishing a list of covered communications equipment and services. Additionally, the FCC proposes to: (1) ban the use of federal subsidies for any equipment or services on the new list of covered communications equipment and services; (2) require that all advanced communications providers report whether they use any covered equipment and services; and (3) establish regulations to prevent waste, fraud, and abuse in the proposed reimbursement program to remove, replace, and dispose of insecure equipment. These proposed regulations would include penalties for violations of the reimbursement program and repayment provisions for any violations. The FCC Orders issuing final designations of both Huawei and ZTE as covered companies were effective immediately upon release on June 30, 2020.

Z-Axis Location Accuracy Requirements: The draft Sixth Report and Order and Order on Reconsideration would affirm the FCC’s vertical location (“z-axis”) requirements and deadlines, building on the existing Enhanced 911 location accuracy rules to more accurately identify floor level location for wireless calls made from multi-story buildings. The FCC would adopt its proposals to require CMRS providers that elect to deploy z-axis technology meet the 3-meter accuracy metric by April 2021 for the top 25 CMAs, and by April 2023 in the top 50 CMAs, requiring 80 percent coverage of the population in a CMA. Finding that deploying z-axis technology is technically feasible in the near future, the draft ruling would require all nationwide wireless CMRS providers to deploy z-axis technology nationwide by April 2025, and require non-nationwide providers to deploy z-axis technology in their top 50 CMA service areas by April 2026. The FCC also revises its rules to allow CMRS providers to deploy dispatchable location solutions that rely on a range of technical approaches. Additionally, consistent with Kari’s Law and Ray Baum’s Act, the rules would require all CMRS providers to provide dispatchable location for individual 911 calls, if it is technically feasible and cost-effective to do so, by January 6, 2022.

Improving Broadband Data and Maps: The draft Second Report and Order and Third FNPRM would adopt specific measures and requirements to develop the new broadband maps implemented by the Digital Opportunity Data Collection and the Broadband DATA Act. Although the FCC lacks funding to implement the new maps at this time, these actions would meet the requirement to complete the broadband mapping rulemaking within the set deadline and to develop the service availability maps as soon as feasible. The draft action would adopt a number of requirements for fixed and mobile broadband providers, including specific coverage reporting and disclosure requirements and standards for data use and verification. It would also establish a Broadband Serviceable Location Fabric (“Fabric”), creating a nationwide dataset containing geocoded locations for all areas where broadband connections can be installed, as well as a Broadband Map, showing served and unserved areas for both fixed and mobile coverage. The FNPRM would seek comment on other actions that may be necessary to implement other provisions of the Broadband DATA Act, specifically on which providers are subject to the data collection, data reporting standards for fixed and mobile service, a challenge process for map accuracy, and on processes for implementing the Fabric.

FCC/FTC Stake out Aggressive Robocall Position, Tell Gateway VoIP Providers to Block COVID-19 Robocalls – or Be Blocked Themselves Wed, 15 Apr 2020 16:43:18 -0400 The FTC and FCC have taken a number of actions to stem unlawful robocalls generally and, during the COVID-19 pandemic, to stem harmful and deceptive calls that seek to exploit the COVID-19 crisis. Even amid the backdrop of their long-standing commitment, the agencies’ most recent action stands out as an aggressive new approach to unlawful calls. On April 3, 2020, the enforcement arms of each agency jointly sent warning letters to three Voice over Internet Protocol ("VoIP") service providers allegedly facilitating the transmission of international scam telemarketing calls originating overseas. The letters make an unprecedented demand: block the traffic of specific allegedly unlawful actors or have all of your traffic blocked by other carriers. In this post, we’ll take a look at this new approach, and discuss its relationship to the broader provisions of the Telephone Robocall Abuse Criminal Enforcement Act ("TRACED Act"), which institutes a number of measures designed to combat illegal robocalls.

The Warning Letters

The agencies identified the three VoIP gateway providers as the sources of the illegal calls through the efforts of the USTelecom Industry Traceback Group, a consortium of phone companies that help officials identify potentially unlawful calls. The phone companies used a process known as “traceback,” in which they share information to trace unlawful spoofed robocalls to their origination.

In the letters, the agencies reminded the companies that the COVID-19 scam robocalls are in fact illegal and directed them to cease transmitting the traffic immediately, as the calls have “the potential to inflict severe harm on consumers.” The letters warned the companies that if they did not stop transmitting the identified traffic within 48 hours, the FCC would authorize other U.S. voice providers to block all calls from the companies and take any other steps necessary to prevent transmission of the calls. The agencies also sent a separate letter to USTelecom advising the trade association that, if the VoIP providers do not block the traffic, the FCC will authorize other U.S. service providers to block all calls coming from that gateway and will take other actions as necessary to authorize U.S. service providers to block traffic from the originating entities. In addition, the FCC encouraged other service providers to take immediate action to block unlawful calls pursuant to existing legal authority.

This action is a significant – and significantly aggressive – new approach by the agencies. While both agencies have taken actions to prevent and deter unlawful robocalls, the threat to block traffic from the originating carrier is a new tactic in the fight against unlawful calls. Notably, it is not clear under what authority the FCC can or would order the blocking of all traffic from the subject VoIP gateway providers if they failed to block the allegedly unlawful robocalls. The letter does not cite any provision of the Communications Act that would authorize such blocking. Moreover, existing FCC orders relating to call blocking have authorized only limited call blocking practices that were optional for the carriers. Were the FCC to order such blocking (and to make it mandatory), it appears that such action would be the first of its kind by the agency.

Briefly, we will review the agencies’ recent history with anti-robocall activities.

The Educare Services Enforcement Action and Prior FTC Warning Letters

In the three letters to the VoIP gateway providers, the FCC and FTC reference the FTC’s recent enforcement action against VoIP provider Globex Telecom. This action relied upon provisions of the FTC’s Telemarketing Sales Rule ("TSR"), which addresses calls made for a telemarketing purpose. In December 2019, the FTC obtained a preliminary injunction against Educare Services and Globex Telecom Inc. for robocalling consumers to promote allegedly fraudulent credit card interest rate reduction services. The FTC complaint alleges that Globex played a key role in “assisting and facilitating” the illegal credit card interest rate reduction services Educare promoted by providing Educare with the means to call consumers via interconnected VoIP communication services and facilities. For a VoIP company to be liable under a TSR “assisting and facilitating” theory, the FTC must prove that the company “knew or consciously avoided knowing” the robocall campaigns violated the TSR.

A week before the joint letters, the FTC sent letters to nine VoIP service providers and other companies warning them that “assisting and facilitating” in the transmission of illegal COVID-19-related telemarketing or robocalls is unlawful. The agency also sent letters to nineteen VoIP service providers in January with a similar warning about all illegal robocalls.

FCC TRACED Act Implementation and the STIR/SHAKEN Mandate

Like the FTC, the FCC recently shifted its focus in robocall enforcement towards the originating carriers. On February 4, 2020, the FCC’s Enforcement Bureau sent letters to seven VoIP gateway service providers, notifying them that unlawful robocalls had been traced to their networks and asking for their assistance in tracking down the originators of the calls. Although no enforcement action was threatened at the time, the FCC also asked each provider to detail their anti-robocall efforts to the Commission.

More recently, the FCC took several steps in implementing the TRACED Act, which requires the FCC to initiate several near-term rulemakings and other actions aimed at addressing unlawful spoofing and robocalling operations. On March 27, the agency adopted a Report and Order and Further Notice of Proposed Rulemaking establishing rules for the registration of a single consortium to conduct private-led “traceback” efforts, which is expected to formalize the relationship with the USTelecom Industry Traceback Group. Additionally, on March 31, the FCC adopted a separate Report and Order and Further Notice of Proposed Rulemaking mandating that originating and terminating voice service providers implement the STIR/SHAKEN framework in the IP portions of their networks by June 30, 2021. STIR/SHAKEN—the technology framework behind the “traceback” process—allows providers to verify that the caller ID information transmitted with a particular call matches the caller’s number as the calls are passed from carrier to carrier. FCC Chairman Pai previously urged major providers to adopt STIR/SHAKEN technology voluntarily and warned that the voluntary approach would become a mandate if the providers did not move fast enough. Still to come are comments on a “know your customer” obligation for service providers and rules to deny access to numbering resources to originators of unlawful calls.

As we have previously noted, the TRACED Act also requires the implementation of an alternative call authentication framework in non-IP networks, extends the FCC’s statute of limitations for bringing some illegal robocall enforcement actions, and eliminates the requirement to give warnings before issuing certain filings.


These letters, coupled with the recent activity by the FTC and FCC to combat illegal robocalls, signal the agencies’ desire to cause a meaningful reduction in unlawful calling, and in particular, demonstrate a desire to prevent scammers from taking advantage of the COVID-19 crisis to carry out their deceptions. Both agencies can seek civil penalties and take other actions necessary to prevent the proliferation of these calls.

Importantly, the targets of agency action are not necessarily limited to the entities that place the unlawful calls. These federal actions are a good reminder for VoIP and other service providers to assess whether their customers’ practices may indicate unlawful use of VoIP or other services. With the warning letters, and now these blocking letters, the FCC and FTC increasingly are showing an openness to pursuing penalties under vicarious liability theories. If there are facts that support knowledge of the unlawful activity or “red flag” type practices (such as a customer being the target of multiple third party government subpoenas, among other facts), that’s a good indication that further steps by the VoIP provider may be warranted to mitigate the risk of facing an enforcement action by the FTC or FCC. If you have questions about how these enforcement trends and related risk factors are relevant to your business, please contact your Kelley Drye counsel.

FCC Prohibits Carriers Receiving USF Support from Using Providers Deemed to Pose a National Security Risk; Further Notice to Explore Using USF to Replace Equipment Already Installed Thu, 12 Dec 2019 16:52:21 -0500 In a strongly worded Report and Order, Further Notice of Proposed Rulemaking, and Order (the “Order”) released on November 26, 2019, the FCC adopted several measures to protect U.S. communications networks from potential national security threats. Likely coming as no surprise to anyone following the proceeding or current news, the FCC identified Huawei Technologies Company (“Huawei”) and ZTE Corporation (“ZTE”), both Chinese telecommunications equipment manufacturers, as national security threats based, in large part, on the companies’ close ties to the Chinese government. Adding to numerous recent federal actions addressing national security concerns, the Order takes three significant steps, within the context of the universal service fund (“USF”) program, to try to mitigate national security threats to the nation’s communications networks.

First, the Order adopts rules prohibiting the use of USF support to purchase services and equipment from “Covered Companies” deemed to present national security threats and initially designates Huawei and ZTE as Covered Companies. Second, the Further Notice of Proposed Rulemaking (“FNPRM”) solicits comments on a proposal to require eligible telecommunications carriers (“ETCs”) – and possibly all communications providers – to remove and replace Huawei and ZTE services and equipment subject to the FCC establishing a reimbursement program providing financial assistance. Third, the Order establishes an information collection and requires ETCs to submit information regarding their use of Huawei and ZTE equipment and services as well as the costs associated with removing and replacing such services and equipment from communications networks.

The new rules will take effect immediately upon publication in the Federal Register rather than providing the standard thirty-day post-publication waiting period. Federal Register publication of the Order also initiates a thirty-day comment period regarding the initial designations of Huawei and ZTE. The Public Safety Homeland and Security Bureau will issue a “final designation” on Huawei and ZTE – we fully expect that Huawei and ZTE will be designated as Covered Companies – and set a compliance effective date. In light of the potentially short timeframe before the rules and compliance requirements take effect, USF support recipients should be sure to review the Order/FNPRM carefully and assess whether and how the rules will affect the recipient’s specific circumstances.

A Focus on China

Pulling no punches, the FCC made clear its concern about the potential for the Chinese government to engage in industrial and economic espionage and other malicious acts by exploiting Huawei’s and ZTE’s access to U.S. communications networks. Chairman Pai (here and here), Commissioner O’Rielly, and Commissioner Starks, among others, have spoken out regarding the need to protect U.S. communications networks from security threats. Prohibiting USF recipients from using USF support for Huawei and ZTE services and equipment was an easily foreseeable next step.

While the Order received unanimous support from the FCC, Commissioner O’Rielly expressed some reservation regarding the likely significant equipment replacement costs and advocated for a process to challenge future designations of Covered Companies should there be concern that a designation was mistaken. Interestingly, and suggesting the FCC anticipates that the Order will be appealed, the Order appears to methodically respond to Huawei arguments and provide further support for the FCC’s decision.

We highlight below a few of the key takeaways from the Order.

The Order – USF Support Usage Prohibitions

First, the USF support use prohibitions are broad. The new rules prohibit USF support recipients from using USF support to “purchase, obtain, maintain, improve, modify, or otherwise support any equipment or services [including software] provided or manufactured by a covered company.” The FCC defines a “Covered Company” as including not only the particular company at issue but also the company’s affiliates, subsidiaries, and parents. Consequently, USF support recipients will need to understand a Covered Company’s “family” of companies to avoid inadvertently violating the FCC’s rules.

The rules do not bar USF support recipients from using Covered Company services and equipment, although, in practice, the restrictions may have that effect. While the FCC appears to prefer that Covered Company services and equipment not be used at all, the rules are based on the FCC’s authority over the USF program and, therefore, the restrictions are limited to the use of USF support. USF support recipients are permitted to use Covered Company services and equipment but must self-fund purchases, including ongoing maintenance for existing services and equipment. USF support recipients will need to assess whether they are able to completely self-fund ongoing Covered Company equipment and service maintenance, upgrades, etc. or if they will need to replace the services and equipment.

Second, USF support recipients may find compliance with the new rules challenging. For example, the Order dismisses concerns about compliance difficulties where USF support recipients are unaware that their underlying providers are reselling, such as under “white labeling” arrangements, the services and equipment of Covered Companies. Parties to multiyear contracts for Covered Company services and equipment also could face difficulties because, although the rules apply prospectively only, such contracts are not exempted from the new rules, potentially exposing USF support recipients to early termination or other contract modification costs.

Third, USF support recipients will be required to certify compliance with the new rules once the Wireline Competition Bureau (“WCB”) and USAC develop the specific certifications and information collection revisions for the USF programs. USAC audits will be used to confirm compliance and, unless the WCB or USAC provide guidance on acceptable compliance support, USF support recipients will need to consider what records may best support compliance should they be audited. USAC will seek recovery from the entity that violated the rule, potentially including entities such as schools, healthcare providers, or consortiums, rather than a service provider.

The FNPRM – Potential Replacement and Reimbursement of Covered Company Equipment

The FNPRM seeks comment on a wide range of questions related to removing and replacing Covered Company services and equipment from U.S. telecommunications networks. While the initial draft of the FNPRM limited the removal and replacement proposals to ETCs, the final FNPRM takes a much broader approach. The FCC now questions whether the prohibition on the purchase, maintenance, improvement, etc. of Covered Company services and equipment, as well as the remove and replace requirement, should extend to all communications companies, not just those receiving USF support.

The FNPRM proposes conditioning future USF support on an ETC’s agreement not to use Covered Company services and equipment and requiring such services and equipment be removed and replaced, contingent on the FCC’s establishment of a reimbursement fund to aid ETCs with costs of complying with the changes. The FNPRM seeks comment on a variety of issues related to this proposal, including, but not limited to, the scope of the remove and replace requirement, what costs should be reimbursed, who should be eligible for reimbursement, and the timing of compliance with the proposal. Carriers should note that the FCC also seeks comment on whether Huawei and ZTE handsets should be prohibited even though not supported by the USF program.

The FNPRM also seeks comment on the scope, as well as the authority for, a possible expansion of the Covered Company services and equipment remove and replace requirement to all communications networks. The FNPRM also queries how the FCC should treat entities such as interconnected VoIP providers and facilities-based ISPs for purposes of the proposed service and equipment prohibitions.

ETC Information Collection

The final component of the Order requires an information collection to determine the scope of Huawei and ZTE services and equipment currently in use on ETC networks and the cost of removing and replacing the equipment. The information collection is mandatory for ETCs, including their affiliates and subsidiaries, and ETCs should be prepared for the information collection to proceed quickly as the FCC directed the WCB to request emergency collection approval from the Office of Management and Budget if necessary. While not required, USF recipients that are not ETCs voluntarily may participate in the information collection, particularly should they have pending ETC applications or intend to seek ETC designation in the future.

Kelley Drye will be following these rules and proceedings so check back for further updates.

TRS Fund Contributors to Pay on Intrastate Revenues to Support IP Captioned Telephone Service Tue, 03 Dec 2019 10:14:50 -0500 At its November Open Meeting, the FCC approved a Report and Order (“Order”) that expands the contribution base for IP captioned telephone service (“CTS”), supported by the telecommunications relay service (“TRS”) Fund, to include intrastate voice communications services. Currently, only interstate voice providers (telecommunications and VoIP) are required to contribute a portion of their end-user revenues to support the TRS Fund. The Order extends that responsibility to providers with intrastate revenues. This rule change, which will be effective for the TRS Fund Year 2020-21, is intended to address an imbalance in the financial obligation on interstate versus intrastate voice providers to support IP CTS costs, which has experienced an approximately $745 million increase from 2013 to the current funding year.

IP CTS allows individuals who have difficulty hearing but are speech-capable to use a telephone with an IP-enabled device to communicate over the Internet by simultaneously listening to and reading captions of what the other party is saying. The FCC established the TRS Fund specifically to fund the costs of interstate TRS and contributions were limited to the interstate revenues of telecommunications service providers as well as interconnected and non-interconnected VoIP providers. However, to encourage development of emerging forms of TRS, like IP CTS, the FCC adopted an interim measure that allowed for providers of IP CTS (and other Internet-based TRS) to receive compensation for providing the service (whether interstate or intrastate) through the TRS Fund.

In recent years, there has been a significant increase in IP CTS use and similarly, the amount paid to reimburse service providers, which the FCC projects will account for 64.5% of all TRS Fund payments for the 2019-2020 fund year. As a result, the FCC has taken a number of actions aimed at curbing costs for the service. In 2018, the FCC adopted a reform package that included (1) revising the rate methodology used to compensate IP CTS providers and (2) imposing interim compensation rates to bring compensation closer to the FCC-determined actual average provider costs. Earlier this year, the FCC approved additional reforms to address waste, fraud, and abuse by requiring IP CTS providers to submit user registration information to the existing video relay service database to limit program access to only those determined to be eligible to use IP CTS.

With this new Order, the FCC responds to concerns raised by some telecommunications providers about the unfair burden IP CTS support puts on TRS Fund contributors that provide mainly interstate services. Now, the FCC adjusts the contribution mechanism for IP CTS to establish a more permanent approach and make the responsibility for IP CTS support more equitable amongst voice service providers. The FCC explains that IP CTS is available to consumers in every state and captions are provided for interstate as well as intrastate calls. Therefore, the Order expands the required TRS Fund contribution base for IP CTS to include the total interstate as well as intrastate end-user revenues for telecommunications and VoIP service providers. While the total contributions needed to support the TRS Fund is not expected to change, the FCC estimates that this change will result in a 59% decrease in the percentage of interstate end-user revenues on which TRS Fund contributions will be based.

The FCC grounded its authority for this decision in section 225 of the Communications Act, which directs the agency to make sure both intrastate and interstate TRS is available. In the Order, the FCC explains that a state’s decision to offer funding for only some TRS (excluding IP CTS) does not affect the FCC’s authority to direct intrastate funds to the service. To implement the change, the FCC will adopt a single IP CTS contribution factor to be applied to TRS contributors’ revenues. Intrastate telecommunications and VoIP providers must contribute revenue to fund intrastate IP CTS beginning with the TRS Fund Year 2020-21.

FCC to Address Public Safety Concerns at November Meeting Sun, 03 Nov 2019 04:00:16 -0500 The FCC plans to prohibit the use of Universal Service Fund (“USF”) support to purchase equipment or services from foreign entities that it determines pose national security risks at its next meeting scheduled for November 19, 2019. As we previously reported, the ban may severely impact participants in all federal USF programs and involve a costly “rip and replace” process to remove foreign-made equipment from domestic telecommunications networks. The FCC also expects to move forward on its heavily-anticipated E911 vertical accuracy (i.e., z-axis) proceeding and adopt new requirements for wireless carriers to better identify caller locations in multi-story buildings. Rounding out the major actions, the FCC anticipates proposing new rules for suspending and debarring entities from participating in USF and other funding programs; removing longstanding unbundling and resale requirements for certain telecommunications services; and widening the contribution base for the Internet Protocol Captioned Telephone Service (“IP CTS”) to include intrastate revenues.

The draft items cover the gamut of telecommunications issues, affecting everything from the construction of next-generation 5G networks to legacy intercarrier competition rules, and should be closely watched. You will find more details on the most significant November FCC meeting items after the break:

USF National Security Ban: The draft Order and Further Notice of Proposed Rulemaking seeks to fortify the United States’ communications infrastructure from potential foreign surveillance and denial of service attack and would prohibit the use of USF support to purchase any equipment or services provided by a “covered company” that the FCC determines poses a national security threat to the integrity of domestic communications networks. The initial ban only would apply prospectively, but would include spending related to any maintenance or upgrades to existing equipment and services. The FCC would preliminarily designate Chinese equipment manufactures Huawei Technologies Company and ZTE Corporation as covered companies and seek comment on whether the designation should be made permanent. The FCC also would establish a process to designate other covered companies in the future. In addition, the FCC would propose: (1) requiring all USF recipients to stop using existing equipment and services provided by covered companies and (2) creating a reimbursement program to offset the “reasonable” transition costs associated with this requirement. In order to determine the scope of this potential “rip and replace” project, USF recipients would be required to report to the FCC on whether they use equipment and services from covered companies and the estimated costs of transitioning to new suppliers.

E911 Vertical Location Accuracy Requirements: The draft Order and Further Notice of Proposed Rulemaking is designed to push carriers to better identify 911 callers’ locations within buildings and would adopt an E911 vertical location accuracy standard of +/- 3 meters for 80 percent of E911 calls from z-axis location capable handsets. The nationwide wireless carriers would be required to deploy z-axis location capable technology that meets the new standard in the 25 largest markets by April 3, 2021, and in the 50 largest markets by April 3, 2023. Non-nationwide wireless carriers would have an extra year to meet each of these deadlines. The FCC also would seek comment on tightening the E911 vertical location accuracy standard over time and whether carriers eventually should be obligated to report a caller’s floor number.

New Suspension and Debarment Rules: The draft Notice of Proposed Rulemaking would request input on whether the FCC should adopt new suspension and debarment rules to cover a wider range of misconduct, in accordance with federal guidelines adopted by many other federal agencies. The FCC’s current rules generally only allow the FCC to suspend and/or debar individuals from the USF programs after they are convicted or receive a civil judgment involving fraud or certain criminal offenses. The proposed rules would allow the FCC to suspend and/or debar individuals without a conviction or final judgment and for repeat violations of FCC rules, failures to pay regulatory fees, or other offenses “indicating a lack of business integrity.” The proposed rules would apply not only to USF participants, but also to participants in the Telecommunications Relay Service and National Deaf-Blind Equipment Distribution programs. Participants in these programs would be subject to new disclosure obligations and would be required to verify that they do not work with suspended or debarred entities. The FCC also plans to establish a system of reciprocity, in which entities suspended or debarred from participation in funding programs administered by other agencies would be similarly suspended or debarred from participating in the FCC programs. The FCC further asks whether it should be able to apply the new suspension and debarment rules retroactively to cover conduct occurring before their adoption, significantly increasing the potential liability for program participants.

Eliminating Unbundling/Resale Obligations: The draft Notice of Proposed Rulemaking proposes relieving incumbent local exchange carriers of their longstanding obligations to make certain network elements available on an unbundled basis and offer certain telecommunications services on a wholesale basis to competitive carriers. The draft item would address the few remaining unbundling and resale obligations left over from the Commission’s broad forbearance order adopted earlier this year. Specifically, the FCC would propose removing the unbundling requirements for: (1) DS1 and DS3 loops in competitive areas, with an exemption for DS1 loops providing residential broadband and telecommunications services in rural areas; (2) DS0 loops in urban census blocks; (3) narrowband voice-grade loops; and (4) dark fiber transport for wire centers within a half mile of alternative fiber. The FCC also would propose eliminating resale obligations for services offered in non-price cap incumbent carrier service areas. The FCC would argue that such unbundling and resale obligations are no longer necessary in light of increased competition. The FCC anticipates phasing in the reforms over a three-year period.

Expanding IP CTS Contribution Base: The draft Order would expand the contribution base for IP CTS, which provides call captioning for individuals who are deaf or hard of hearing, to include intrastate end-user revenues from contributing telecommunications carriers and VoIP providers. When the FCC initially authorized support for IP CTS, it decided as an “interim” measure to cover the service’s costs based only on interstate telecommunications revenues. The draft item would find that the interim funding mechanism unfairly burdens providers and users of interstate telecommunications services and is insufficient to address the overall decline in contributions. The FCC would note that the statute governing IP CTS provides it with broad authority to support captioning on intrastate as well as interstate calls and the Communication Act’s general reservation of state authority over intrastate communications does not apply in this instance. The FCC also would note that it does not expect the reforms to increase or otherwise affect the total contributions needed to support IP CTS.

FCC Orders Implementation of Direct 911 Dialing and Dispatchable Location for Multi-line Telephone Systems, Extends Location Obligations of Interconnected VoIP and TRS Providers Mon, 19 Aug 2019 15:49:49 -0400 At its August Open Meeting, the FCC adopted a Report and Order (“Order”) implementing portions of two recent statutes—Kari’s Law and the RAY BAUM’s Act—that address ensuring greater access to 911 and emergency services for members of the public. Kari’s Law requires multi-line telephone systems (“MLTS”), like those in hotels and offices, to have the capability for a user to dial 911 directly without having to press “9” (or some other access code) first to call out. Section 506 of the RAY BAUM’s Act requires the FCC to consider adopting rules to ensure a 911 caller’s dispatchable location is properly conveyed from an MLTS to the public safety answering point (“PSAP”). The Commission took the opportunity of implementing these two Acts to also expand 911 dialing requirements for certain VoIP, TRS and mobile text-to-911 services.

With these new requirements, the FCC continues its trend of expanding the availability of emergency services calling to newer technologies. As these new forms of communication become more mainstream – and as they grow as replacements for, rather than complements to, traditional telecommunications services – the FCC has been inclined to make emergency services a “must have” feature of the service. Providers of new communications technologies should carefully review their service offerings to determine how to handle customer attempts to reach emergency services.

Direct 911 Dialing

Kari’s Law is a requirement that multi-line telephone systems provide direct access to 911 dialing, without requiring the dialing of a prefix (such as 9). The law takes its name from an assault and murder of a woman by her estranged husband in 2013. While the woman was being assaulted, her 9-year-old daughter repeatedly tried to dial 911 on the motel room phone, but was unable to reach emergency services because the girl did not know that the motel’s phone system first required the dialing of a “9” to reach an outside line. Kari’s Law attempts to solve this situation by requiring all multi-line telephone systems to allow dialing of 911 without dialing of a prefix before dialing the number.

In the Order, the FCC adopted a rule that restates the Kari’s Law requirement for MLTS system manufacturers and installers to ensure that direct 911 dialing capability is available for systems installed on or after February 16, 2020. Equipment manufacturers, importers or lessors must ensure that their systems are pre-configured so that when properly installed, the systems will be able to dial 911 directly, without dialing an additional digit, code, prefix, etc. Similarly, a person in the business of installing, managing, or operating an MLTS system must configure that system to allow the user to dial 911 without dialing an additional digit, code, prefix, etc.

In addition, Kari’s Law and the Order also requires an installed MLTS system to be configured to provide notification of a 911 call to a central location (or person) at the facility where it the MLTS device is housed, if that configuration is possible without software or hardware change. “MLTS Notification” is defined as a feature “that can send notice to a central location at the facility where the system is installed or to another person or organization regardless of location.” Examples of such a notification can include screen pops with an alarm noise on security desk computers using a client application, text messages, and an email for an administrator. The notification should include (1) the fact that a 911 call has been made, (2) a valid callback number (does not have to be a direct inward dial to the caller’s phone), and (3) the same location information that is conveyed with the call to 911, to the extent technically feasible. The initiation of the notification must be contemporaneous with the call to 911.

Dispatchable Location

In response to Section 506 of the RAY BAUM’S Act, the Order expands the requirement to transmit “dispatchable location” on 911 calls to multi-line systems. Dispatchable location generally means enhanced information about the location of a caller within a building, such as a room number, floor number, or similar information necessary to adequately identify the location of the calling party. The Order adopts requirements to transmit dispatchable location for both MLTS services and interconnected VoIP services.

  • MLTS calls. The FCC acknowledged some parties’ concern that the feasibility of providing location information varied within MLTS depending on the type of device and functionality. As a result, the Order imposes different obligations depending upon the type of MLTS call involved.
    • Fixed MLTS – Providing dispatchable location information for 911 calls is readily achievable and thus, fixed providers should provide automatically provide at least a street address (must be validated). This requirement will be effective one year after the effective date of the Order.
    • Non-Fixed MLTS Devices Used On-Premise – These MLTS devices should be able to provide the automated dispatchable location when technically feasible but otherwise providers, may rely on the user to provide or confirm the information manually. Non-fixed, on premise providers also have the option to provide alternative location information (may include coordinate-based information), which should be sufficient to identify a caller’s civic address and approximate in-building location. This requirement will become effective two years after the effective date of the Order.
    • Non-Fixed MLTS Device Used Off-Premise – When a user is off premises during a 911 call, the MLTS operator or manager must provide (1) dispatchable location, if technically feasible, or, otherwise, either (2) manually-updated dispatchable location, or (3) enhanced location information, which may be coordinate-based, consisting of the best available location that can be obtained from any available technology or combination of technologies at reasonable cost. This requirement will become effective two years after the effective date of the Order.
  • Interconnected VoIP – Similar to MLTS, the FCC recognized in the Order that there might be differences in the feasibility of providing dispatchable location information for fixed vs. non-fixed iVoIP services.
    • Fixed iVoIP – Fixed iVoIP providers will be required to automatically transmit to the PSAP a dispatchable location with a 911 call, but the Commission clarified that the location may be determined by the means of the registered location that customers supply to their provider. This requirement will be effective one year after the effective date of the Order.
    • Nomadic/Non-Fixed iVoIP – Non-fixed providers must automatically provide dispatchable location when technically feasible, but may also rely on the registered location and require the customer to update manually if the calling location is changed or different than the registered location. Non-fixed providers also have the option to rely on alternative location information and as a last resort, the provider may route a 911 call to a national emergency call center for the operator to ask the caller about his or her location. This requirement will become effective two years after the effective date of the Order.
    • Outbound-only VoIP – For the first time, the FCC imposed a 911 dialing requirement on services that only interconnect with the PSTN for outbound calls. (Prior to the Order, only two-way VoIP services had 911 obligations). The FCC also amends the definition of interconnected VoiP in the rules (as it relates to 911 purposes) to include outbound iVoIP. Outbound iVoIP providers must notify subscribers of e911 service limitations and comply with the same location requirements as nomadic/non-fixed providers. This requirement will become effective two years after the effective date of the Order.
  • TRS – Fixed internet-based TRS providers are required to provide automated, validated dispatchable location for each call. This requirement will be effective one year after the effective date of the Order. Non-fixed internet-based TRS providers, however, will only have to comply with the same (more flexible) requirements as a non-fixed iVoIP provider and have the same two-year implementation period.
  • Mobile Text – Text providers already subject to the 911 rules are required to provide (1) dispatchable location, if technically feasible, or, otherwise, either (2) end-user manual provision of dispatchable location, or (3) enhanced location information. This requirement becomes effective within two years after the effective date of the Order.

FCC Seeks Comment on GM Request for Waiver of RTT Requirements for Autonomous Vehicle Chat Feature Fri, 04 Jan 2019 09:58:16 -0500 The FCC issued a Public Notice on December 26, 2018 seeking input on a petition from General Motors Holding LLC (“GM”) that requests partial waiver of the interoperability functionalities for accessible real-time text (“RTT”) technology, as defined by the FCC. GM intends to launch an autonomous vehicle (“AV”) ride-hailing service in the near future that will include real time voice communication capability that riders can use to communicate with customer support. GM will also use RTT for such communications and GM seeks to be exempted from certain required RTT interoperability features based on planned limitations of the communications.

Comments on the Public Notice are due by January 25, 2019; and reply comments are due by February 11, 2019.

Under the 2010 Twenty-First Century Communications and Video Accessibility Act (“CVAA”), advanced communications services (“ACS”) and devices used with ACS must be made accessible and usable for individuals with disabilities. VoIP services, both interconnected and non-interconnected, as well electronic messaging and interoperable video conferencing services are ACS pursuant to the CVAA. In its petition, GM states that its communications platform will meet the FCC’s definition of a non-interconnected VoIP service and thus, will be subject to CVAA requirements. FCC rules permit covered VoIP services to support RTT capability to meet their CVAA obligations if they do not have compatibility with the older text telephony (“TTY”) technology.

GM intends to make its communication platform accessible by including RTT functionality in the form of a chat application. GM states that its chat app will allow users with a disability to do everything with text that they could do in a traditional voice conversation. GM’s customer service chat will not support the full set of RTT minimum functionalities specified in the rules. Specifically, since the communications platform will serve a limited purpose (contacting customer service) while allowing for accessible communications similar to a voice conversation, GM is requesting that the FCC waive its obligations to provide: (i) RTT-RTT interoperability; (ii) RTT-TTY interoperability; (iii) transmission and receipt of RTT communications from PSAPs; or (iv) simultaneous voice and text. GM also emphasizes the overall benefits that its AV ride service would provide to users with disabilities.

GM’s waiver petition reflects the broad, wide reaching impact of the CVAA and accessibility considerations that non-traditional telecommunications providers need to make when offering services with a communications component that may be implicated by the rules. Device manufacturers and service providers that offer a service that could fall into one of the ACS categories should seek legal guidance to understand their compliance responsibilities.

Finally Naming the Duck? Eighth Circuit Decides VoIP is an Information Service, Preempts Minnesota Regulation Fri, 05 Oct 2018 14:54:10 -0400 After more than twenty years, VoIP’s unclassified status may be coming to an end. Last month, the Eighth Circuit Court of Appeals issued a decision in Charter Advanced Services LLC v. Lange in which it considered whether an interconnected VoIP service offered by Charter can be regulated like a telecommunications service by the Minnesota Public Utilities Commission (“MPUC”). The court recognized that the Federal Communications Commission (“FCC”) has repeatedly failed to resolve the issue of VoIP service regulatory classification. However, the Eight Circuit upheld the district court’s finding that Charter’s VoIP service is an information service that is federally preempted from state regulation based on its interpretation of the Telecommunications Act of 1996 (the “Act”) and FCC orders.

This case came about because of an effort by Charter to move Spectrum Voice, its VoIP offering in Minnesota, to a separate corporate entity, Charter Advanced. The MPUC decided to regulate Charter Advanced’s VoIP service as a telecommunications service due to its interconnection with the PSTN. Charter filed suit in response and asserted that its VoIP service is an information service and thus, state regulation is preempted under the Act. The district court decided in Charter’s favor ruling that the VoIP service was an information service and MPUC regulation was preempted.

Here, the Circuit Court affirmed the lower court decision by emphasizing the way in which Charter’s service must transform analog signals into IP information to facilitate a call between a VoIP service and a traditional telephone service. The appellate court found a transformation occurs wherein information (i.e., a phone call) enters Charter’s network in one format and leaves in another via a protocol conversion and such transformation is the “touchstone of the information services inquiry.” The Eighth Circuit’s analysis also briefly assessed the exclusions to Act’s information service definition and found they were not applicable to the characteristics of Charter’s VoIP service. The court specifically noted:

  • The first exception is not applicable because Spectrum Voice is a service that is “between or among users” and the network protocol technology that allows users to call traditional telephony users is critical to the service.
  • Regarding the second exclusion, the service is not aimed at providing backwards compatibility for existing customer premises equipment (“CPE”) but rather provides users with a new type of equipment to use the VoIP service.
  • Finally, the service does not fit the internetworking exclusion because the conversion of information happens outside the carrier’s network, at the point of the CPE.

The Charter v. Lange decision makes a definitive determination, an action the FCC has repeatedly forgone, by concluding that VoIP service like Charter’s is in fact an information service as defined by the federal statue. Notably, Commissioner Michael O’Rielly has recently pushed for the FCC to end its own, self-induced uncertainty and declare VoIP to be an information service. (Former Commissioner Clyburn had a similar plea in 2015 statements). The FCC, while submitting an Amicus Brief supporting Charter in the case, did not go that far – at least not yet.

The issue of appropriate regulatory treatment of VoIP services continues to be a point of disagreement and confusion for telecommunications regulators as well as those possibly subject to this form of regulation in many states. While this case will only have precedential value over a segment of state regulators, it represents an unmistakably clear analysis of the issue that could be referenced in future cases considering regulatory treatment of VoIP. FCC Chairman Pai’s supportive statement in response to the decision bolsters the validity of the decision (and perhaps presages a change in the policy at the FCC) by noting that: “[F]ederal law for decades has recognized that states may not regulate information services. The Eighth Circuit’s decision is important for reaffirming that well-established principle: ‘[A]ny state regulation of an information service conflicts with the federal policy of nonregulation’ and is therefore preempted.” The Chairman has also referenced the decision more recently in supporting a DoJ lawsuit against California’s net neutrality law, calling Internet policy strictly the domain of the federal government.

The MPUC has petitioned the Eighth Circuit for en banc review of the decision in Charter v. Lange. The MPUC argues that Charter’s VoIP service should be treated in the same way as traditional wireline telephone service and be subject to state regulation because otherwise “it invites carriers to artificially alter technical aspects of their service to evade regulation and it undermines competitive neutrality.” Stay tuned for further developments in this matter.

FCC Plans Major Wireless Deployment and 911 Actions at September Meeting Sun, 09 Sep 2018 12:44:56 -0400 Continuing its focus on broadband infrastructure deployment for 5G technologies, the FCC announced that it plans to eliminate regulatory impediments that delay and increase the cost of wireless deployments at its next meeting, scheduled for September 26, 2018. The item would alter the balance of power between wireless broadband providers and state/local governments concerning control over rights of way and deployment fees. The FCC also anticipates initiating a rulemaking aimed at improving 911 dialing and location accuracy for multi-line telephone systems (“MLTS”), potentially imposing new compliance obligations on office building, hotel, and other large facility managers. Rounding out the major actions, the FCC released draft items that would: (1) permit toll free numbers to be auctioned and sold on the secondary market and (2) consolidate rules and expand the spectrum available for so-called Earth Stations in Motion (“ESIMs”) that provide high-speed broadband service to vehicles, aircraft, and vessels. The proposed items will generate input from all corners of the communications industry as well as real estate interests. You will find more details on the significant September FCC items after the jump:

Wireless Infrastructure Deployment: The FCC issued a draft Declaratory Ruling and Order finding that state/local fees for accessing rights of way and other charges associated with deployments may prohibit the provision of wireless service in violation of the Communications Act. The FCC therefore plans to allow such fees and charges only to the extent they are nondiscriminatory and represent a “reasonable” approximation of the state/local governments’ costs related to the deployment. The draft item would further clarify that state/local consideration of aesthetic concerns with deployments are not necessarily unlawful, so long as any aesthetic requirements are: (1) reasonable; (2) no more burdensome than those applied to other deployments; and (3) published in advance. In addition, the FCC will establish two new shot clocks for small wireless facility deployments (60 days for collocation on preexisting structures and 90 days for new constructions) and codify existing shot clocks for larger wireless facility deployments.

911 Dialing and Location Accuracy: A draft Notice of Proposed Rulemaking seeks comment on requiring MLTS to enable users to dial 911 directly, without having to dial a prefix to reach an outside line (e.g., requiring callers to first dial 9). The FCC proposes requiring MLTS to provide a notification that a 911 call has been made to a front desk, security office, or other centralized location. The proposed rulemaking asks whether MLTS, VoIP, and other telecommunications service providers should be responsible for ensuring that “dispatchable location” information is transmitted with 911 calls, such as the calling party’s street address as well as room number, floor number, or similar data necessary to help first responders reach the called party quickly.

Auctioning Toll Free Numbers: The FCC plans to adopt a draft Report and Order that would enable it to auction off toll free numbers. Generally, the FCC has allocated toll free numbers on a first-come, first-served basis at no cost. The FCC claims this process leads to stockpiling and other inefficient uses of toll free numbers, while rewarding parties that “game” the system through computer-assisted number reservation tools. The FCC proposes that its first auction will cover 17,000 numbers recently made available in the 833 toll free code. Importantly, the FCC intends to eliminate the prohibition on secondary market sales of toll free numbers to allow successful auction participants to sell numbers to others, potentially creating a “gold rush” for prime toll free numbers.

ESIM Expansion: Under a draft Report and Order and Further Notice of Proposed Rulemaking, the FCC would consolidate the rules that apply to earth stations on aircraft, vessels, and vehicles, eliminating duplicative regulations and streamlining the application process. It would also expand the frequencies available for ESIMs to include conventional Ka-band spectrum. Operation of ESIMs is currently confined to the conventional C-band spectrum and parts of the Ku-band spectrum. The FCC argues that any potential interference issues involving incumbent satellite operators in the Ka-band can be resolved through prior coordination and industry best practices. The FCC seeks comment on whether ESIMs should be allowed to operate in additional spectrum bands, on both a protected and unprotected basis, to provide even more flexibility.

July 2017 FCC Meeting Recap: FCC Plans to Strengthen and Expand “Slamming” and “Cramming” Rules Tue, 18 Jul 2017 09:45:17 -0400 At its July 2017 Open Meeting, the Federal Communications Commission (“FCC”) adopted a Notice of Proposed Rulemaking (“NPRM”) designed to strengthen and expand consumer protections against “slamming” and “cramming.” Slamming is the unauthorized change of a consumer’s preferred service provider, while cramming is the placement of unauthorized charges on a consumer’s telephone bill. As we reported in our Open Meeting preview, slamming and cramming represent a major source of consumer frustration and a common focus of recent FCC enforcement actions. The NPRM is the agency’s first attempt in five years to strengthen the rules around slamming and cramming – and is the first attempt to specifically define cramming in its rules. Moreover, the agency asks whether these rules should apply to wireless carriers (especially prepaid wireless) and to VoIP providers, potentially expanding the reach of the rules significantly. Wireless carriers and interconnected VoIP providers should therefore pay close attention to the potential compliance obligations and marketing restrictions proposed in the NPRM.

The NPRM highlighted abuses of the third-party verification (“TPV”) process, where carrier agents call consumers to “verify” service provider switches. These agents often misrepresented their identity and the purpose of the TPV call, or prompted consumers to answer questions about unrelated matters (e.g., fake package deliveries) to fabricate consumer consents for provider switches.

The FCC proposes five major reforms in the NPRM:

  1. Banning Unauthorized Charges and Misrepresentations: The FCC proposed new rules that explicitly prohibit cramming and misrepresentations by slammers and their sales agents. Although the FCC previously punished violators for such actions under its general consumer protection authority, it stated that clear prohibitions would deter violators, provide clarity to consumers, and aid enforcement. The explicit prohibitions address criticisms from Commissioner O’Reilly of past enforcement actions imposing large fines for cramming and misrepresentations in the absence of clear rules. The FCC indicated that any misrepresentation made during a sales call would invalidate any subsequent consumer consent to switch. The FCC also asked whether cramming and misrepresentations represented enough of an issue for commercial wireless and interconnected VoIP customers to justify expanding the proposed rules to cover these services.
  2. Default Carrier Freezes: The FCC proposed requiring carriers to automatically “freeze” a consumer’s choice of preferred service provider until the consumer affirmatively consents to a switch. Current FCC rules place the burden on consumers to request a freeze. Current rules also require consumers to request a separate freeze for each service they receive from a provider. The proposed rules would eliminate this distinction and impose the freeze on all services received by a consumer. The FCC sought comment on how best to notify consumers of the default freeze and what steps the consumer must take to lift the freeze. The FCC also inquired whether the default freeze would frustrate legitimate provider switches.
  3. Third-Party Billing Block: The FCC proposed requiring carriers to automatically block third-party fees for local and long-distance services – a frequent source of crammed charges. Consumers would need to affirmatively opt-in to be billed for third-party services. The FCC sought comment on the mechanics of the opt-in process, including whether the opt-in should last indefinitely or expire after some time period. The FCC also inquired whether current third-party billing of consumers should be grandfathered or require new subscriber consent. The FCC acknowledged that changes to subscriber billing systems can be expensive and requested information regarding the costs of updating existing systems. The FCC indicated that most cramming complaints do not involve wireless carriers or interconnected VoIP providers and asked whether the third-party billing block should be extended to these services.
  4. Double-Checking Consumer Switches: The FCC proposed lifting the ban on carriers “double-checking” with their subscribers about whether they want to switch providers before processing a switch. This would give consumers another opportunity to avoid slamming. The FCC previously prevented carriers from performing this double-check, worried they would delay processing switches to try and convince subscribers to stay with their current providers. Consequently, the FCC sought comment on whether service providers should be allowed to engage in retention marketing when performing the double-check. The FCC noted that Section 222(b) of the Communications Act prohibits carriers from using “proprietary” information from another carrier for its own marketing efforts and that switch requests represent proprietary information. But Section 222(b) contains an exception permitting the use of proprietary information to combat fraud, and the FCC tentatively concluded that this exception authorized the proposed double-check.
  5. TPV Reforms: The FCC proposed requiring carriers that rely on TPVs to record the entire sales call leading up to a provider switch to discourage misrepresentations. The FCC indicated that such recordings would be a major resource in enforcement actions. The FCC also asked whether it should go further and ban TPVs entirely in light of prior abuses.
Wireless and VoIP Providers To Be Added?

While the FCC’s initial NPRM draft focused on strengthening protections for traditional landline telephone service subscribers, the final NPRM proposes expanding the protections to cover commercial wireless services (including prepaid services) and interconnected VoIP services. As a result, the FCC may significantly increase both the number and types of service providers subject to its slamming and cramming rules.

Looking Ahead

While slamming and cramming have always been illegal, the new restrictions on consumer marketing and billing proposed by the FCC and their potential expansion to new types of services warrants close attention. The Commission’s proposals could reduce the availability of third party billing as an option for information service providers. In addition, for carriers, the Commission proposes several change to telemarketing sales procedures that have been static for nearly two decades now. Finally, the FCC’s proposals could result in significant new compliance obligations and enforcement exposure for wireless carriers and interconnected VoIP providers. However, it remains to be seen how much of a problem slamming and cramming is for these services and whether the FCC will alleviate some or all of the obligations as they apply to these services.

Comments on the NPRM will be due 30 after its publication in the Federal Register and reply comments will be due 60 days after publication in the Federal Register.

FCC Expands Hearing Aid Compatibility Rules to Wi-Fi Calling and VoIP and Proposes Compatibility for All Handsets Sun, 06 Dec 2015 20:00:17 -0500 businessman is dialing a phone number in officeOn November 19, 2015, the Federal Communications Commission (FCC or Commission) adopted a Fourth Report and Order (R&O) and Notice of Proposed Rulemaking (NPRM), expanding its hearing aid compatibility (HAC) rules to cover additional modes of voice communications access, including Wi-Fi calling and VoIP applications. In the NPRM, the FCC seeks comment on a joint industry proposal (Joint Proposal) to move to 100 percent wireless handset HAC compliance within eight years. Comments are due by January 14, 2016 and replies are due by January 29, 2016.

Mobile Wi-Fi Calling and VoIP Service Providers Now Must Comply with FCC Hearing Aid Compatibility Rules

While the FCC's HAC rules currently apply only to CMRS services or handsets with two-way switched voice or data services, the R&O expands the scope to cover handsets used for other services like Wi-Fi calling and VoIP that are increasingly available to the public as well as those that may be developed in the future. Specifically, any service provider or manufacturer of handsets (mobile devices that contain built-in speakers and are typically held to the ear in any of their ordinary uses) used with any terrestrial mobile service that enables two-way real-time voice communications among members of the public or a substantial portion of the public must comply with the new rules. The new rules will be effective 30 days after publication in the Federal Register, which had not yet occurred as of this post.

These rules will apply to technologies such as interconnected and non-interconnected VoIP services with pre-installed software applications. This includes handsets that enable voice communications through VoIP software applications installed by either the manufacturer or service provider regardless of whether the calling functionality provides interconnection to the public switched telephone network. These rules will also apply to cordless phones as well as handsets offered by wireless resellers (MVNOs), facilities-based providers, and voice communications services over Wi-Fi that do not use an in-network switching facility enabling the reuse of frequencies and seamless handoff.

The Commission opted not to extend the requirements to public safety networks, enterprise networks, and non-terrestrial networks such as Mobile Satellite Service that are not mass-marketed to the public, yet the Commission retains the right to revisit that decision in the future if necessary.

The R&O is clear that the Commission expects manufacturers to account for hearing aid compatibility during the early stages of product development, yet notes that in rare cases where a new technology cannot practicably meet the requirements, section 710 of the Communications Act expressly provides for a waiver of the rules.

Lastly, the Commission requires both manufacturers and service providers to meet defined benchmarks for deploying wireless handsets to ensure a wide selection of models for consumers with hearing loss. The Commission's existing deployment benchmarks will apply to newly covered handsets and air interfaces as of January 1, 2018 for manufacturers and Tier 1 providers, and on April 1, 2018 for handsets offered by non-Tier 1 service providers.

Other deadlines to note: The annual FCC Form 655 filing deadlines for 2015 are still in effect. Manufacturers must electronically file annual compliance reports with the Commission on July 15 of each year and service providers must file on January 15 of each year. The NPRM does ask whether to remove the annual filing requirement, should it adopt the Joint Proposal, for both providers and manufacturers, or alternatively, remove the requirement for service providers, only requiring manufacturers to file annually.

FCC Seeks Comment on Joint Proposal for Full Wireless Handset HAC Compliance in Eight Years

The Commission's NPRM solicits comment on a proposal (Joint Proposal) submitted by three consumer advocacy groups and three trade associations, which seeks to ensure that 100 percent of all new wireless handset models are accessible to consumers with hearing loss within eight years. The Competitive Carriers Association, CTIA – The Wireless Association, the Telecommunications Industry Association (TIA), the Hearing Loss Association of America, the National Association of the Deaf, and Telecommunications for the Deaf and Hard of Hearing submitted the Joint Proposal on November 12, 2015, which the FCC is considering. The proposal includes the following:

  • Within two years, 66 percent of wireless handsets offered to consumers should be compliant with the requirements;
  • Within five years, 85 percent of wireless handsets offered to consumers should be compliant with the requirements; and
  • Within eight years, 100 percent of wireless handsets should be compliant, subject to a finding by the FCC that the goal of 100 percent is achievable using the following process:
In the fourth year, the FCC would launch a task force of stakeholders to identify whether the 100 percent goal is achievable and then issue a report of its findings to the Commission within two years. Upon reviewing the Report, the Commission would determine whether to implement 100 percent compliance based on the concrete data and information about the technical and market conditions collected in years four and five. Any new benchmarks resulting from this determination, including 100 percent compliance, would go into effect no less than 24 months after the determination. Consumer groups and the wireless industry would work together to hold meetings to ensure the process includes all stakeholders.

While the Commission appears to favor the Joint Proposal, it also seeks input on alternative proposals it should consider and whether 100 percent compatibility is the appropriate benchmark. The commenters submitted the Joint Proposal in response to a Public Notice requesting updated information and comment on wireless HAC regulations last November.

FCC Seeks to Update Volume Control Requirements

Last month, the FCC released a related Notice of Proposed Rulemaking, seeking comment on the Commission's HAC rules for wireline handsets. Under this NPRM, the Commission proposes to adopt the Telecommunications Industry Association 2012 ANSI Wireline Volume Control Standard and apply the FCC's wireline telephone volume control and other HAC requirements to handsets used with VoIP services. Second, the FCC also seeks comment on a rule that would standardize volume control for wireless handsets to ensure more effective acoustic coupling between handsets and hearing aids for cochlear implants. Third, the Commission proposes to require manufacturers to exclusively use the 2011 standard developed by ANSI to certify future handsets as hearing aid compatible. Lastly, the FCC seeks comment on a process for enabling industry to use new or revised technical standards for assessing HAC compliance.

Comments on this NPRM are due 60 days after publication in the Federal Register and reply comments are due 90 days after publication in the Federal Register.

It is a busy time at the Commission with respect to HAC requirements. These new rules are extensive. Feel free to reach out to your Kelley Drye Communications Attorneys should you need assistance or having any questions about how these rules may impact your business.

FCC Delays Filing Deadline for International Traffic And Revenue Reports – New Filing Window to be Announced Mon, 20 Jul 2015 16:57:39 -0400 stock_01112012_0284As we discussed in a previous blog post, the Federal Communications Commission’s (FCC) streamlined international telecommunications reporting requirements took effect February 2015. New rule Section 43.62 requires common carriers engaged in international telecommunications service, as well as persons or entities engaged in providing international Voice over Internet Protocol (VoIP) service connected to the public switched telephone network, to file international traffic and revenue reports annually. Due to complications with the FCC’s new filing system, the annual Section 43.62 international traffic and revenue report filing deadline is being postponed from July 31 to a not-yet-announced date.

The FCC requires international traffic and revenue reports be filed using the FCC’s new online filing system. However, the filing system is not ready to accept the report in time for the usual July 31 filing deadline. As a result, and similar to its action with the annual Section 43.62 circuit capacity report filed in April of this year, the FCC is postponing the annual international traffic and revenue report filing deadline. The FCC reports that a special filing window for this year will be announced in the future, and we will provide those dates, in a subsequent blog post, when they become available. The circuit capacity report filing deadline for this year was postponed by a month after its usual date of March 31 (to which it will return next year) and we anticipate a similar multi-week extension for the international traffic and revenue report to be filed this year. Please be aware that traffic and revenue data submitted before the official filing window opens will be deleted, and the filer will need to resubmit its data.


Leah Rabkin, a summer associate, contributed to this post.

FCC Issues Disabilities Access Recordkeeping Compliance Certification Reminder Tue, 03 Mar 2015 22:01:19 -0500 iStock_000036215158LargeYesterday, the Federal Communications Commission (“FCC”) released a Public Notice reminding telecommunications service providers, VoIP providers and advanced communications service (“ACS”) providers and equipment manufacturers of their obligation to maintain records of their efforts to implement accessibility requirements, and to annual certify their recordkeeping efforts. The April 1, 2015 filing will certify to compliance during 2014.

The annual certification requirement applies to traditional telecommunications service providers (wireline and wireless), but also to interconnected VoIP providers, ACS providers (e.g., electronic messaging, video conferencing, non-interconnected VoIP) and equipment manufacturers. Although it is unlikely to be in place for this year’s certification, it appears that the certification obligation will also likely be extended to broadband Internet service providers as part of the Open Internet Order.

The annual certification includes: (1) annual recordkeeping compliance certifications; (2) current contact information for consumers; and (3) current U.S. agent for service contact information. Entities subject to the recordkeeping requirements are required to maintain records regarding: (a) efforts to consult with individuals with disabilities; (b) descriptions of the accessibility features of products and services; and (c) information about the compatibility of products and services with peripheral or specialized devices commonly used by individuals with disabilities. These vague requirements will likely only become clearer through a complaint and enforcement process, so service providers and equipment manufacturers should carefully develop compliance efforts and recordkeeping policies.

The certification can be completed online in the FCC’s Recordkeeping Compliance Certification and Contact Information Registry.

FCC Announces Effectiveness of New International Reporting Requirements, Deadline for Filing Uncertain Wed, 18 Feb 2015 11:39:26 -0500 stock_02032014_0596In January 2013, the Federal Communications Commission (“FCC”) comprehensively revised its reporting rules applicable to providers of international telecommunications, making numerous substantive revisions to the categories of providers subject to the reporting requirements, the information to be reported and the format of the reports. See our advisory on the January 2013 Order. But the effectiveness of the Order had been delayed, in large part, pending approval by the Office of Management and Budget (“OMB”). In a Public Notice issued Friday, February 13, the Commission announced that the new Section 43.62 annual International Traffic and Revenue report and Circuit Capacity report (the “Annual International Reports”) requirements, and the associated revised filing manual, are effective as of February 11, 2015.

Filers, thus, are now required to submit the Annual International Reports in accordance with the processes and specifications of rule 43.62 and the 43.62 filing manual. The reporting changes include creation of an online filing portal. However, it is not certain that the online filing system will be ready in time for the March 31, 2015 annual circuit capacity report filing. Indeed, the Public Notice suggests that the filing date has been suspended for now. The FCC will issue another Public Notice announcing the implementation of the online filing system and the due date for the annual circuit capacity report.

International providers of telecommunications, including interconnected VoIP providers, should review the new filing manual and take time to become familiar with the new reporting obligations in advance of the announcement of the Circuit Capacity report filing deadline for 2015. We have every reason to believe that the annual Traffic and Revenue Report deadline will remain the same, July 31. But the January 2013 Order modified the requirements for this second report as well. So, again, we recommend that providers ascertain whether, under the revised 43.62 and the new filing manual, they must file. If so, then the new requirements concerning Traffic and Revenue Report should be reviewed as well.

Inexperience and Inadvertence No Excuse for Failure to Seek and Obtain FCC Consent to License Acquisitions Wed, 19 Mar 2014 23:51:35 -0400 A recent Enforcement Bureau (“EB”) Order and Consent Decree highlights the perils that attend failure to get FCC approvals to transfer or assign wireless licenses. The March 13, 2014, release, involving Skybeam Acquisition Corporation and Digis, LLC, commonly-owned affiliates providing fixed wireless broadband service and VoIP, also confirmed, once again, that voluntary disclosure does not necessarily count for much once violations are referred to the EB for investigation. The two companies discovered their failure in the context of a subsequent transaction, retained counsel, and self-reported. While the situation was put back on track from a licensing perspective, through requests and grants of special temporary authority followed by curative assignment applications granted by the Wireless Telecommunications Bureau (“WTB”), the EB’s subsequent investigation led to a $50,000 voluntary contribution and a burdensome three-year compliance plan.

In mid-2012, the two companies, subsidiaries of JAB Wireless, Inc., which claims to be the largest fixed wireless broadband provider, acquired microwave licenses from third parties. Skybeam acquired ten licenses from KeyOn Communications, and Digis acquired forty licenses from HJ LLC. The parties proceeded without communications’ counsel and failed to seek approval from the FCC for the assignments. Once they realized in early 2013 that they had failed to obtain approval for the acquisitions, they proceeded to remedy the situation after the fact and voluntarily disclosed the earlier failure, attributing it to inadvertence, lack of experience in such matters, and not having counsel. While the Consent Decree states the two companies will pay a combined voluntary contribution of $50,000, there is no indication whether this number reflects the unlawful assignment of 50 licenses or the failure to obtain authority for two transactions, each involving multiple licenses. The entities selling the licenses are not the subject of the enforcement action.

The three-year compliance plan does not contain any surprises, but reiterates the burden that parties risk should they fail to obtain FCC approval for transactions involving wireless authorizations, even if inadvertently, because the compliance plan extends to compliance with the communications laws generally, not just law and regulations related to transactions involving the transfer or assignment of wireless licenses. The companies must appoint a knowledgeable compliance officer, develop operating procedures to help ensure compliance as well as a compliance manual within 60 days (to be updated at least once annually), implement a compliance training program for all employees that perform or oversee those who perform duties relate to compliance with the communications laws generally – whether or not they are involved in corporate transactions that may involve license transfers – within 90 days and conduct annual training, report non-compliance with the law and rules regarding license assignments and transfers as well as with the consent decree itself, and provide more general compliance reports four times over the thirty-six month compliance plan term. Depending upon how dispersed responsibility for compliance with the communications laws is within a company, administration of such a plan could easily prove to be more costly, especially in the long-run, than the voluntary contribution.

California Requires Most Carriers to Post a Performance Bond Thu, 15 Aug 2013 08:39:45 -0400 A May 2013 California Public Utilities Commission decision requires most companies holding a California CPCN or wireless registration (“WIR”) to submit a $25,000 continuous performance bond. The decision also revises application/registration requirements, increases filing fees and sets a minimum annual User Fee. In addition, the CPUC will convene a workshop to consider whether to require VoIP providers to register with the Commission.

The primary impact of this decision for most providers in California will be the new performance bond requirement. The CPUC's bond requirement takes effect on August 21, 2013. Thereafter, entities failing to obtain a performance bond may be subject to revocation proceedings.

Bond requirement

The new bond requirement applies to every company holding a telecommunications CPCN or WIR in California except incumbent local exchange carriers that are Carriers of Last Resort (“COLR”), their wholly or majority-owned affiliates, and Cox Communications where it serves as a COLR. Currently authorized carriers must submit their bonds as Tier 1 advice letters by August 21, 2013 unless granted an extension. Action will be taken to revoke the CPCN or WIR authority of any company that fails to comply with the requirement. Beginning in 2014, each carrier must submit a copy of its performance bond annually by March 31st.

New licensees and registrants will be required to submit their bonds within five days after their authority is effective.

Note: A request for rehearing, filed by T-Mobile, Cricket and Sprint Nextel, specifically addressing the application of the bond requirement to wireless carriers is pending.

Other Changes
• A minimum $100 payment is established for the annual User Fee.
• The information required for CPCN applications and WIR registrations has been expanded to require more details concerning key management and owners and a more rigorous regulatory history submission.
• Fees for CPCN applications and WIR registrations are being increased.

FCC Highlights Progress in Implementing CVAA Requirements Tue, 23 Jul 2013 07:29:23 -0400 At its open meeting this month, the Federal Communications Commission (FCC) received a status report on the implementation of broad disabilities access obligations passed three years ago. In the presentation, FCC staff members reported that the Commission met all of the implementation deadlines in the Twenty-First Century Communications and Video Accessibility Act (CVAA), and reminded service providers and equipment manufacturers of the upcoming deadlines for compliance with the Act.

The FCC's new disabilities access rules apply potentially significant new obligations to a variety of entities that may not otherwise consider themselves subject to the FCC's jurisdiction. These rules are being implemented in stages, with many obligations taking full effect in the next six months. Providers of advanced communications services and equipment manufacturers should review these obligations carefully to ensure that their services and equipment are compliant with the new requirements.

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The CVAA ensures persons with disabilities have access to digital, broadband and mobile innovations. As we have noted in prior posts, CVAA compliance obligations range from a requirement that mobile phone manufacturer and service providers ensure that web browsers on mobile phones can be accessed and used by the blind and visually impaired, to a closed captioning obligation for service and content providers using Internet protocol (IP) to deliver video programming and for certain consumer devices used to watch video programming, to accessibility, registration, recordkeeping, and product development requirements related to advanced communications services (e.g., electronic messaging services and other communications not traditionally subject to carrier regulation).

Compliance Deadlines Looming. Most importantly, the FCC staff presentation reminded affected entities that most of its compliance obligations, including full compliance with the advanced communications services requirements and mobile phone web browser accessibility, take effect on October 8, 2013. Most apparatuses used to view video programming must be capable of displaying closed captioning by January 1, 2014. Further, pending rulemaking proceedings include, among others, a new proceeding addressing the accessibility by individuals who are blind or visually impaired of user interfaces on digital apparatuses and navigation devices used to view video programming.

Broad Support for Increased Accessibility. In statements on the Report, Acting Chairwoman Clyburn and Commissioners Pai and Rosenworcel pointed out the importance of the CVAA in ensuring people with disabilities have access to video programming and new communications technologies and services, and applauded the work of FCC staff in implementing the CVAA. The FCC’s focus on enabling accessibility to new technologies and services by people with disabilities appears to be part of a bigger trend of ensuring universal access to new communications technologies. From the new E-Rate 2.0 proceeding that will ensure schools and libraries have access to high-speed broadband, to the ongoing Universal Service Reform proceeding that is expanding the availability of broadband service nationwide, it is clear that communications industry will continue to evolve for some time to come.