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However, Next Century Cities and the Benton Institute for Broadband & Society (Petitioners) challenged that conclusion in a Joint Petition for Reconsideration on February 13, 2023. Petitioners argue that collecting aggregate-level subscriber data fails to meet the statutory requirements for data collection in the Infrastructure Investment and Jobs Act, Pub. L. No. 117-58, § 60502(c)(1) (IIJA), and undermines overall integrity of the ACP. Specifically, Petitioners point out the IIJA does not establish an initial data collection date – it only requires publication of collection rules within one year of the IIJA’s passage. Petitioners assert that the FCC should have enacted rules that deferred the start of ACP data collection until after the FCC could determine the best way to collect subscriber-level data. Petitioners further assert that the IIJA’s statutory directives to the FCC include targeting ACP public awareness and enrollment support and determining local subscription rates, requirements necessitating subscriber-level data. Further, Petitioners assert that subscriber-level data is also needed to investigate complaints and enforce ACP rule compliance. Addressing the “annual” collection component of the IIJA requirements, Petitioner contend that pricing and plan data submitted through NLAD would be an annual collection if the FCC implements snapshot-date approach.

Petitioners’ challenge strikes at the core of ACP providers’ processes for implementing the FCC’s ACP Transparency Data Collection rules. As of this publication, the FCC has not yet taken action on the petition.

A few points regarding the scope of the new rules may be helpful. The term MTE includes both commercial and residential premises, such as apartment buildings, condominium buildings, shopping malls, or cooperatives occupied by multiple tenants, but, in the case of the proscriptions described here, MVPDs are affected only in residential MTEs whereas common carriers are affected in all MTEs. MVPDs include cable operators, satellite cable programming vendors in which a cable operator has an attributable interest, or satellite broadcast programming vendors. Broadband-only providers that do not meet the definition of common carrier or MVPD are not subject to the new rules.

New Rules Proscribing Revenue Sharing and Compensation Arrangements

The rules amended in the Report and Order prohibit common carriers in all MTEs and MVPDs in residential MTEs from entering into or enforcing written or oral contracts that provide an MTE owner compensation on a graduated basis. Compensation is graduated, the Report and Order explains, where the provider pays the MTE owner a greater percentage of its revenues as its penetration in the MTE increases. The Report and Order also prohibits common carriers from entering into or enforcing written or oral contracts by which they receive exclusive rights to provide an MTE owner compensation in return for access to serve the tenants of the MTE.

Both of these proscriptions, to the extent they apply to common carrier and MVPDs, respectively, prevent entry into any new contracts of the sort described above as of April 27, 2022. However, if there are existing contracts of the types described entered into before this date, the proscription against enforcement takes effect on September 26, 2022.

New Disclosure Obligations Concerning Exclusive Marketing Rights

The Report and Order also mandates that a common carrier serving a commercial or residential MTE, or an MVPD that serves a residential MTE, disclose in its written marketing materials the existence of any contract or provision that provides it an exclusive right to market communications service in any particular way to tenants or prospective tenants of the MTE. Any written or oral agreement provision that gives the provider, usually in exchange for some consideration, the exclusive right to certain means of marketing its service to tenants of the MTE will be subject to the new disclosure prohibition. The disclosures must be clear, conspicuous, and legible in all written marketing materials, whether electronic or in print, directed at tenants and prospective tenants of the affected MTE, identifying the existence of the contract, providing a plain-language description of the exclusive marketing arrangement, and explaining that its exclusive marketing right does not mean that the provider is the only entity that can provide such services in the MTE and that service from alternative provider may be available. Because this new rule requires disclosures, before it can take effect, the Office of Management and Budget (“OMB”) must first complete a review pursuant to the Paperwork Reduction Act. The OMB review commenced on March 25, 2022, and comments are due on May 24, 2022.

The disclosure requirement will apply immediately to new contracts or agreements with exclusive marketing rights that are entered into after the compliance date in the FCC’s notice that OMB has completed its review, which will be announced in the Federal Register.

However, for existing agreements or provisions that provide for some measure of exclusive marketing rights compliance with the disclosure requirements will be required 180 days after publication of the Report and Order in the Federal Register, September 26, 2022, or the date that OMB completes its review if that occurs after September 26, 2022, in which case the FCC will publish a compliance date in the Federal Register.

Declaratory Ruling Proscribing Cable Operators from Entering into Sale-and-Exclusive Leaseback Arrangements

The Report and Order was accompanied by a Declaratory Ruling that the Commission’s rules preclude sale-and-exclusive leaseback arrangements by incumbent cable operators in residential MTEs, meaning those operators that are already providing service in the MTE. The FCC described such arrangements as those whereby the incumbent provider conveys its inside wiring—typically both home and home run wiring—to a residential MTE owner and then leases it back on an exclusive basis. Among other things, the FCC found that an incumbent provider entering into such a sale-and-leaseback arrangement would fail to meet the affirmative duty under the Commission’s Rules to take “reasonable steps within [its] control to ensure that an alternative service provider has access to home wiring at the demarcation point” following a voluntary termination of service .

The Declaratory Ruling is effective on April 27, 2022. For purposes of this Declaratory Ruling, the Commission tried to provide some clarity as to its scope by explaining that the types of arrangements of concern do not include “contracts for the installation of new inside wiring and related facilities in which the MTE owner (or affiliate(s)) will have the sole ownership interest” or circumstances in which an MTE owner acquires the cable home wiring pursuant to section 76.802(a)(2) of the Rules “after the subscriber declines to purchase the wiring following their choice to terminate service.”

Closing

The application of the Report and Order and Declaratory Ruling in practice, while often clear, may in some circumstances be more nuanced that the above summary suggests. Common carriers and MVPDs would be well-served to continue to oversee their new contracts, contract amendments, and marketing activities against the background of the Commission’s orders – which may well continue to evolve – concerning services arrangements, revenue sharing, and other practices within MTEs.

Any party contemplating the filing of a petition for reconsideration of the Report and Order or Declaratory Ruling must do so by April 27, 2022.

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

Empowering Broadband Consumers Through Transparency – The ISP NPRM would propose rules to implement certain provisions in the Infrastructure Investment and Jobs Act (“Infrastructure Act”). Specifically, Section 60504 of the Infrastructure Act directs the Commission to “promulgate regulations to require the display of broadband consumer labels” to “disclose to consumers information regarding broadband Internet access service plans.” In accordance with that statutory mandate, the ISP NPRM would propose consumer labels consistent with a 2016 Public Notice (DA 16-357). In the 2016 Public Notice, the Commission set forth various required consumer disclosures related to fixed and mobile broadband services, including information about pricing, data allowances, broadband speeds, network management practices and fees. The Commission would also seek comment on the following issues: whether any changes should be made to the content of the consumer labels contained in the 2016 Public Notice; where the consumer labels should be displayed; how to ensure the accuracy of the content of the labels; and the effective date of the label requirements.

Connecting Tribal Libraries – The E-Rate Tribal Order would amend Sections 54.500 and 54.501(b)(1) of the FCC’s rules to clarify that Tribal libraries are eligible for E-rate support. Pursuant to Section 254(h)(4) of the Communications Act of 1934, as amended, a library may not receive preferential treatment or rates (such as under the E-rate program) unless it is eligible for assistance from a State library administrative agency under the Library Services and Technology Act (“LSTA”). The amended FCC rule would be consistent with a 2018 amendment to the LSTA which provided that Tribal libraries are eligible for assistance from a State library administrative agency. The Commission’s planned clarification about Tribal libraries’ eligibility for E-Rate support is intended to increase Tribal libraries’ participation in the E-Rate program and lead to more affordable access to high-speed broadband and a narrowing of the digital divide in Tribal regions. The E-Rate Tribal Order would also direct the Office of Native Affairs and Policy and the Wireline Competition Bureau, together with the Tribal Liaison at the Universal Service Administrative Company, to focus on outreach efforts and training for Tribal libraries. Finally, the Commission would implement measures to track Tribal libraries’ participation in the E-rate program.

Facilitating Better Use of ‘White Space’ Spectrum – The White Space Order would revise technical requirements governing how white space devices and white space databases work together to ensure that the licensed operation of wireless microphones is not subject to harmful interference. Under Part 15 of the FCC’s rules, unlicensed devices can operate on unused channels within the broadcast television spectrum and certain other areas of the spectrum where licensed wireless operations have not commenced (commonly known as white spaces), so long as they do not cause harmful interference. As a means to prevent harmful interference, white space devices must contact a white space database (administered by Commission-designated private entities) at least once per day to obtain a list of available channels and the associated maximum power level for those channels. In 2015, the FCC adopted rules to further protect the operation of licensed wireless microphones by requiring white space databases to push changes in channel availability to white space devices. In response to petitions asserting that the push notification is burdensome and technically infeasible, the FCC would replace that requirement with a requirement for white space devices to check the white space database once per hour to protect licensed wireless microphones. In addition, the White Space Order would deny a petition for reconsideration of the FCC’s Office of Engineering and Technology’s approval of Nominet UK (now RED Technologies) as a white space database administrator.

Updating Equipment Authorization Rules – The Equipment NPRM would propose to update equipment authorization rules to reference new technical standards. The Commission’s equipment authorization procedures ensure that radiofrequency devices operate without causing harmful interference. The FCC’s rules governing equipment authorization of radiofrequency devices incorporate several standards set by industry standard-setting bodies, such as the America National Standards Institute (“ANSI”) and the International Organization for Standardization (“ISO”). The Equipment NPRM would focus on standards that are referenced in the Commission’s equipment authorization rules that relate to the testing of equipment and accreditation of laboratories that test radiofrequency devices. In particular, the Equipment NPRM would seek comment on the following: (1) incorporating “American National Standard Validation Methods for Radiated Emission Test Sites; 1 GHz to 18 GHz” (ANSI C63.25.1:2018) as a new technical standard; (2) referencing a more current version of “American National Standards of Procedures for Compliance Testing of Unlicensed Wireless Devices” (ANSI C63.10:2020); and (3) transitioning to “Conformity assessment – Requirements for accreditation bodies accrediting conformity assessment bodies” (ISO/IEC 17011:2017) and “General requirements for the competence of testing and calibration laboratories” (ISO/IEC 17025:2017).

Please contact the authors or your Kelley Drye attorney for more information about these items or to participate in the proceedings.

The Chairwoman’s proposal is significant because it signals a potentially more active FCC in consumer protection as the Democrats solidify control of the agency following the Presidential transition and Chairwoman Rosenworcel’s elevation from Acting Chair to Chair. The scope of the proposal appears to be fairly narrow (based on the limited information currently available) but represents the second CPNI-related action proposed in the past three months. Once a fifth commissioner is confirmed, Chairwoman Rosenworcel may be able to press a broader consumer protection agenda for the agency.

At this time, little is known of the draft NPRM, because the draft of the proposal has not been released. The press release provides the best indication of what we can expect to see in the proceeding, if and when it is adopted. The FCC’s announcement explains that the proposal will:

• Eliminate the current seven business day mandatory waiting period for notifying customers of a breach;
• Require notification of inadvertent breaches; and
• Require carriers to notify the FCC of all reportable breaches, in addition to the FBI and U.S. Secret Service.

The move to update the CPNI rules may be motivated in part by T-Mobile's August 2021 disclosure that names, Social Security numbers, and other personal information belonging to more than 48 million current, former, and prospective customers had been compromised.

With the Commission still evenly split while awaiting confirmation of a third Democratic commissioner, Chairwoman Rosenworcel will need the support of at least one of the two Republican commissioners to adopt the NPRM. The proposed changes may be innocuous enough to garner such support.

The NPRM comes on the heels of an FCC proposal in October 2021 to update the CPNI rules to address SIM swap and port-out fraud, which did garner support from the Republican commissioners. The FCC also has yet to take final action on the Notices of Apparent Liability it issued to major wireless carriers in March 2020 proposing over $200 million in fines for allegedly selling access to their customers’ location information in violation of the CPNI rules. Together, these three actions signal that the FCC may be renewing its focus on privacy issues in telecommunications. In 2017, Congress used the Congressional Review Act to rescind the Commission’s 2016 broadband privacy rules. That action restricts the FCC’s ability to adopt substantially similar rules if it reclassifies broadband providers back to Title II telecommunications services.

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

Improving Accessibility and Clarity of Emergency Alerts - The EAS NPRM would propose rules to improve the accessibility and clarity of visual messages distributed to the public through the EAS, which advises the public of emergency alerts issued by government entities. The EAS is comprised of a legacy broadcast system that can only relay audio messages and an internet-based Common Alerting Protocol (“CAP”) system that can relay audio, text and visual messages. Due to the fact that alert initiators using the legacy EAS have some discretion regarding the content of the alert message while EAS participants that use video (such as broadcast or cable television operators) must rely on codes embedded in alerts to create a visual message (usually text), the audio and visual messages associated with the alerts may not match. To improve the clarity of EAS test messages, the EAS NPRM would propose the use of the following script as the visual message for all legacy EAS nationwide tests: “This is a nationwide test of the Emergency Alert System issued by the Federal Emergency Management Agency covering the United States from [time] until [time]. This is only a test. No action is required by the public.” For EAS participants that receive an alert from the CAP system, the FCC would propose to change the nationwide EAS test event code that alert initiators include in the alerts so that the following language is displayed in all visual messages: “Nationwide Test of the Emergency Alert System.” The EAS NPRM would also seek comment on how the legacy EAS can be improved to enable alert originators to relay visual text that matches the audio message and how the EAS can be modified to support greater functionality and accessibility.

Facilitating Satellite Broadband Competition – The Satellite Spectrum Sharing NPRM would grant a petition for rulemaking from SpaceX requesting revisions to the spectrum sharing requirements among NGSO FSS systems. The FCC considers applications for NGSO FSS system licenses, which are used to provide broadband services, in groups based on filing date under a processing round procedure. All NGSO FSS system operators within a processing round that are granted a license must comply with the FCC’s spectrum sharing rules and coordinate with each other in good faith to use commonly authorized frequencies. If the NGSO FSS system operators in a processing round are unable to come to a coordination agreement, then a default spectrum-splitting procedure applies. The Satellite NPRM would propose that the spectrum sharing requirement only be applicable to NGSO FSS systems approved in the same processing round. The FCC would seek comment on a rule that would protect systems processed in an earlier round from being subjected to a certain level of interference from systems processed in a subsequent round and on whether interference protection should end after a period of time. To facilitate analysis of potential interference, earlier-round NGSO FSS system operators would be required to share data regarding their beam locations with later-round NGSO FSS system operators subject to confidentiality or non-disclosure agreements.

Promoting Fair and Open Competitive Bidding in the E-Rate Program – The E-Rate NPRM would propose changes to the E-Rate program rules to improve program integrity. The Schools and Libraries program, or E-Rate, funded by the Universal Service Fund, provides discounted telecommunications and broadband services and equipment to eligible schools and libraries (referenced as E-rate “applicants”). To obtain services and equipment through the E-rate program, an applicant must conduct a competitive bidding process among interested service providers that is commenced by submission of FCC Form 470 to USAC, which then posts the form to its website. Applicants consider bids received directly from interested service providers and then seek funding to pay their chosen service providers by filing an FCC Form 471 with USAC. The E-Rate NPRM would recommend the establishment of a bidding portal through which service providers would provide competitive bidding documentation. The FCC would seek comment on whether applicants also should be required to use the portal to submit other documentation, such as bid evaluation matrices, questions from bidders, and contract documents. In addition, the E-Rate NPRM would ask whether service providers should be required to wait a certain period of time before they could access service providers’ bids. Finally, the E-Rate NPRM would request comment on various issues related to the proposed portal, including how the E-rate’s existing portal could be leveraged to accept service providers’ bids, whether any procurement laws or technical issues would preclude or limit the use of a bidding portal and whether the portal should be used as a repository of documents for purposes of meeting recordkeeping requirements.

The FCC emphasized the importance of resilient networks by hosting a virtual field hearing on improving the resiliency and recovery of communications networks during disasters during its October Open Meeting. The hearing included two panels: “Lesson’s from the Ground” and “Building Resiliency into U.S. Networks.” The panels included experienced public safety and communications stakeholders and provided discussions about opportunities to improve emergency network resiliency.

The NPRM seeks comment on three main topics: (1) measures to help communications services remain operational amid disasters; (2) promoting situational awareness during disasters through a Disaster Information Reporting System (“DIRS“) and the Network Outage Reporting System (“NORS“); and (3) communications resilience strategies to address electric power outages.

Keeping Communications Services Operational Amid Disasters

Currently, there is a voluntary Wireless Network Resiliency Cooperative Framework (“Framework”) that provides participants with access to NORS and DIRS information to aid in public safety. The Commission seeks comment on how the Framework can be improved, activation timing, the scope of Framework obligations and whether participants should be expanded. The NPRM also asks how to better address the use of roaming during a disaster and foster mutual aid. The Commission also contemplates whether to codify portions of the Framework.

Situational Awareness During Disasters

DIRS is a web-based means for service providers to voluntarily report their communications infrastructure status, restoration information, and situational awareness information to the FCC specifically during times of crisis. The NPRM seeks comment on additional methods to increase broader voluntary participation during disasters and whether the Commission should require service providers to participate.

The FCC requires communication providers to report network outages that last at least 30 minutes and meet additional conditions in NORS. The NPRM seeks comment on the public interest benefits and costs of reporting broadband service outages and whether the NORS reporting requirements should be suspended during disasters.

Addressing Electric Power Outages

Power outages are a common factor in disaster and emergency situations and the NPRM seeks comment on the actions the FCC, providers, and power companies can take to coordinate in all stages of emergencies and disasters. The Commission seeks feedback regarding existing requirements for covered 911 service providers to implement central-office backup power measures to help ensure 911 reliability. Currently, covered 911 services must certify their compliance with backup standards for public safety answering points (“PSAPs”) and central offices that have a selective router that directs 911 calls. PSAPs have the opportunity to weigh in and help the FCC develop regulations that take PSAP experience into consideration. Additionally, the FCC requests information about any changed circumstances since the FCC’s last consideration of backup power that may affect the continuity of power and alternative measures that promote continuity of power.

Please contact the authors of this post or your Kelley Drye attorney if you are interested in filing comments on this NPRM, monitoring the proceeding, or understanding how it could impact your business.

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.

The 70/80/90 GHz Bands are allocated on a co-primary basis for Federal and non-Federal use, for terrestrial, satellite, radio astronomy and radiolocation uses. For nearly twenty years, there has been a non-exclusive “light” licensing and registration scheme in the 70/80/90 GHz Bands for high-capacity, ground-based point-to-point links that can be used for any non-broadcast purpose. In a June 2020 Notice of Proposed Rulemaking in WT Docket No. 20133, the Commission launched consideration of changes to the 70/80/90 GHz antenna standards and the link registration processes which proponents believed would increase the utility of the bands. But the record also affirmed that other stakeholders envisioned additional uses of the bands, which they claimed would be compatible with the ground-based point-to-point links such as using the 70/80/90 GHz Bands for point-to-point links to endpoints in motion to facilitate broadband service to ships and aircraft or for high-capacity links between points on the ground using stratospheric platforms.

Now, a year later, the Bureau is particularly “interested in the feasibility of permitting HAPS or other stratospheric-based platform services in these bands” and whether these services could be introduced compatibly with other services in the bands. Among other subjects, the Bureau asks how stratospheric platforms would be used in the bands (including information system operating parameters), what services the platforms can support (e.g., commercial, private, or governmental uses), and whether HAPS or other stratospheric platforms are commercially viable in light of several previous stratospheric platform advocates have indicated they are no longer actively pursuing their plans. The Bureau also asks whether, if it were to authorize stratospheric communications platforms to use 70/80/90 GHz Bands, the FCC should impose certain technical limitations or restrictions on the deployment of such services to protect incumbent operations, such as altitude restrictions, power limits, transmitter design considerations, directional constraints, additional emission limits, coordination, or other requirements. Much like a rulemaking notice, the Public Notice also inquires what licensing and service rules should apply to stratospheric-based communications services and whether they should be limited to services facilitated by nominally fixed stratospheric platforms, one of the defining characteristics of HAPS as described in international and FCC regulations.

The Public Notice also seeks comment on any international implications related to HAPS or other stratospheric-based platform services that might be authorized in the 70/80/90 GHz Bands. The Bureau noted that, at the 2019 World Radiocommunication Conference (“WRC”) of the International Telecommunications Union, additional spectrum bands were identified for HAPS globally at 31.0-31.3 and 38.0-39.5 GHz and in Region 2, the Americas, at 21.4-22.0 and 24.25-27.5 GHz. The Commission has not taken action to date to implement domestically these new international allocations, which supplement much more narrow allocations for HAPS at earlier WRCs in the 2, 6, 27/31, and 47/48 GHz bands.

Continuing the Public Notice’s theme of new means of potential connectivity for internet broadband access, the Bureau’s Public Notice also requests additional information regarding the potential use of the 70/80/90 GHz Bands to provide broadband Internet access to customers on airplanes and aboard ships. One of the subjects in the 70/80/90 GHz rulemaking proceeding initiated last year was consideration of a proposal by Aeronet Global Communications, Inc. to use these Bands for “Scheduled Dynamic Datalinks” (“SDDLs”) to aircraft and ships.

What the FTC will do with the staff report is less clear. The Commission voted unanimously to release the report, which does not make any specific policy recommendations. Members of the Commission, however, drew their own conclusions and articulated starkly different outlooks on the report’s implications. Chair Lina Khan and Commissioner Rebecca Kelly Slaughter declared that the FCC should play a leading role in overseeing ISPs’ data practices, citing the FCC’s industry expertise and legal authority. Commissioner Christine Wilson, however, stated that “oversight of ISPs for privacy and data security issues should remain at the FTC.” ISPs’ data practices – and the broader question of whether the FCC should reclassify broadband service back to a Title II telecommunications service and re-impose strict broadband privacy rules – are likely to be prominent issues as the Biden FCC takes shape in the months ahead.

The FTC Staff Report’s Findings

The staff report is based on information the FTC obtained from the country’s six largest ISPs and three of their adtech companies. The FTC compelled the companies to provide information about their data collection and use practices through orders issued under FTC Act Section 6(b) in March and August of 2019. While this group of ISPs “represents a broad swath of the internet services offered” to U.S. consumers, their practices are not necessarily representative of ISPs in general.

The staff report raises several concerns about ISPs’ practices, beyond generally equating ISPs with large advertising platforms, which include the following examples.

• Scope and Scale of Data Collection. The staff report finds that “many” of the ISPs in the FTC’s study “have access to 100% of consumers’ unencrypted internet traffic,” potentially allowing the ISPs to obtain information about sensitive web browsing behavior. In addition, FTC staff determined that several ISPs in the study collect and use potentially sensitive, real-time location information for advertising. They are also collecting customer information from other products and services they offer—such as voice, content, smart devices, advertising, and analytics—as well as purchasing information about consumers from data brokers. According to the report, several ISPs combine data from across their product lines, though the report did not reach a conclusion about how extensively ISPs combine this data.
• Opacity and Consumer Choices. The staff report concludes that ISPs collect and use personal data more extensively than consumers expect, do not provide clear disclosures about their practices, and generally provide opt-out choices that are difficult to use.
• Potential Consumer Harm. Finally, FTC staff conclude that some of the practices observed among these ISPs could cause harm to consumers. These practices include combining data from distinct services (e.g., video, web browsing, location, and connected devices) in a manner that consumers do not expect, as well as enabling third-party data uses that could harm consumers (e.g., targeting ads in a discriminatory manner, or making location data available to third parties “without reasonable protections”).

The unanimous vote to approve and issue the FTC staff report—an increasingly rare instance of bipartisan agreement on a major issue—does not necessarily signal consensus on further steps the FTC should take on the basis of the report. Chair Khan’s remarks highlight ISPs’ practices as an example of more general problems with the privacy framework the FTC was instrumental in establishing. In her view, the report’s findings “underscore deficiencies of the ‘notice-and-consent’ framework for privacy” and that “[a] new paradigm that moves beyond procedural requirements and instead considers substantive limits increasingly seems worth considering.”

Commissioner Slaughter expressed similar sentiments in her remarks, echoing some of her previous statements calling for “clear rules on data abuses” in general, and FCC-led regulation of ISPs, specifically.

The ISP disclosure practices described by the FTC staff report are subject to the FCC’s Transparency Rule. In 2017, although the Trump FCC classified commercial ISP services as subject to FTC jurisdiction, the FCC retained a transparency rule that, among other things, requires disclosure of “accurate information” regarding commercial terms of broadband internet access services. The FCC stated that disclosure of “commercial terms” included disclosure of information collection practices and privacy policies. If ISPs failed to adequately disclose their practices, as alleged in the FTC Report, the FCC retains jurisdiction to enforce that failure to comply with the transparency rule.

Further oversight by the FTC may not be necessary in the long term if oversight of ISP data practices is moved back under the FCC’s jurisdiction, and they once again become subject to Section 222 of the Communications Act. That statute places privacy restrictions on the use of customer proprietary network information ("CPNI") by telecommunications service providers. (The Obama FCC reclassified broadband as a telecommunications service under Title II of the Communications Act and imposed net neutrality regulations as well as broadband privacy rules. The Trump FCC largely reversed the net neutrality rules, and Congress nullified the broadband privacy rules.)

Commissioner Slaughter and Chair Khan may get their wish to have the FCC jump back into the fray. The White House announced on October 26 that President Biden will nominate Jessica Rosenworcel for another term as FCC Commissioner (and named her as the permanent FCC Chair) and Gigi Sohn as the third Democratic commissioner. Both Rosenworcel and current Democratic Commissioner Geoffrey Starks have expressed support for reclassifying broadband back to Title II, and Sohn was instrumental in orchestrating Title II reclassification in 2015 under former FCC Chairman Tom Wheeler. While Title II reclassification would subject ISPs to Section 222 of the Communications Act, the FCC’s authority to create broadband-specific rules remains unclear because Congress’ repeal of the FCC’s 2016 broadband privacy rules under the Congressional Review Act prohibits the agency from adopting substantially similar rules.

In the meantime, ISPs should be prepared to entertain further oversight activity by the FTC or potential FCC examination of the adequacy of ISP disclosures under its transparency rule.

The Commission’s consumer protection action arises from numerous complaints from consumers who have suffered harm as a result of these practices, and from concerns that consumers are vulnerable to these acts because wireless carriers have not implemented adequate protocols to verify that SIM swap and port-out fraud requests. To mitigate them, the agency suggests revisions to its Customer Proprietary Network Information ("CPNI") and Local Number Portability ("LNP") rules.

Proposed CPNI Rule Revisions to Combat SIM Swapping

Although narrowly-tailored, specifically covering the account information, call detail information, and billing information that voice service providers collect from their subscribers, the FCC’s CPNI rules are among the most robust consumer privacy protections in the technology sector. The rules require voice providers to secure opt-in or opt-out consent for certain uses and disclosure of CPNI, to establish policies and procedures to discover and prevent unauthorized access to CPNI by third parties, to notify customers when certain account changes are made, and to notify law enforcement and customers when a breach of CPNI has occurred. Many of these rules were adopted or strengthened in 2007, when the FCC took action against another practice designed to gain unauthorized access known as “pretexting.”

To reduce the incidence of SIM swap fraud, the NPRM proposes to modify the CPNI rules to prohibit wireless carriers from effectuating a SIM swap unless the carrier uses a secure method of authenticating the customer. As its primary proposal, the FCC puts forth four secure authentication methods that are already familiar to consumers: (1) a pre-established password; (2) a one-time passcode sent via text message to the account phone number or a pre-registered backup number; (3) a one-time passcode sent via e-mail to the e-mail address associated with the account; or (4) a passcode sent using a voice call to the account phone number or a preregistered back-up telephone number.

The FCC also offers two alternative approaches to give carriers flexibility to adopt new and better authentication methods as they are developed and in the event the proposed methods become less secure over time. First, the NPRM asks if the FCC should simply require carriers to adopt “heightened authentication measures” for SIM swap requests, which would allow them to choose from any secure authentication methods available at the time. Second, the NPRM asks whether the FCC should require carriers to comply with the NIST Digital Identity Guidelines, which provide technical requirements for federal agencies “implementing digital identity services” with a focus on authentication—these guidelines are updated regularly in response to changes in technology.

Beyond the authentication methods, the NPRM also seeks comment on other protections to prevent unauthorized SIM swaps. For example, it asks what procedures carriers should be required to adopt in the event there are several failed authentication attempts, whether customers should be notified of requests for SIM changes, and whether SIM swaps should be delayed pending notification or verification from the affected customer. It also suggests that customers be able to disable SIM changes by phone or online and that customers be notified of SIM swap protection methods annually. In addition, the NPRM asks whether the FCC should impose customer service, training, and transparency requirements specifically focused on preventing SIM swap fraud.

Proposed LNP Rule Revisions to Combat Port-Out Fraud

The FCC’s LNP rules allow consumers to retain their phone numbers when switching telecommunications service providers by requiring providers to port phone numbers to a customer’s new carrier upon request. While the FCC has codified requirements for providers to validate requests for wireline-to-wireline and intermodal porting, it has only provided guidance for wireless-to-wireless requests based on common industry practices. Specifically, for wireless-to-wireless port-out requests, the guidance suggests that providers validate requests using telephone number, account number, and ZIP code, as well as a customer passcode, if established by the customer.

In proposing rules to prevent port-out fraud, the FCC is seeking to balance the need to protect consumers from the fraudulent practice with its goals under the LNP rules—namely, ensuring that port-out requests are processed and done so in a timely manner, thereby promoting competition among providers by enabling consumers to choose a carrier that best suits their needs. In striking this balance, the NPRM proposes to modify the LNP rules to require that wireless carriers notify customers through a text message or push notification when a port-out request is received so that customers can take steps to stop unauthorized requests. But it also asks if the FCC should go a step further and require customer verification or acknowledgement of the notification.

The NPRM also asks for comment on several additional items to prevent port-out fraud. For instance, it asks whether other methods currently used by providers are effective in preventing the practice and should be imposed on other carriers. It also proposes codifying the four types of information carriers must use to validate wireless-to-wireless port-out requests. Finally, the NPRM asks what, if any, effect its proposed rules would have on timing of port-out requests and competition.

Wireless providers who are interested in informing the FCC’s decisions regarding changes to its CPNI and LPN rules can file initial comments on November 15, 2021 and reply comments on December 14, 2021.

The adoption of Standard Questions is the FCC’s complements several other reforms in the past year to formalize and streamline the FCC and Executive Branch review process conducted pursuant to Executive Order No. 13913 of April 8, 2020, Establishing the Committee for the Assessment of Foreign Participation in the United State Telecommunications Sector (the “Committee” (commonly referred to as “Team Telecom”)). The Executive Order sets forth procedures and timelines for the Committee to conduct its reviews of referred applications. The Commission’s earlier reforms are detailed in the FCC’s (First) Report and Order in Docket 16-155 Executive Branch Review Order released October 1, 2020 (and Erratum). As noted in the Second Report and Order, the FCC considered comments filed in response to a Public Notice containing proposed Standard Questions.

Matters Detailed in the Second Report and Order

The Second Report and Order largely adopted the Commission’s proposed sets of Standard Questions and a supplement for the provision of personally identifiable information (“PII”), with some refinements and clarifications, resulting the receipt of comments from five interested parties and a series of consultations with the Committee. The sets of Standard Questions are as follows:

• Attachments A and B, for an international section 214 authorization application filed pursuant to 47 C.F.R. § 63.18, including a modification of an existing authorization) and for the assignment or transfer of control of such authorization, respectively;
• Attachments C and D, for a cable landing license application filed pursuant to 47 C.F.R. § 1.767 (including a modification of an existing license) and for the assignment or transfer of control of such license, respectively;
• Attachments E and F for a petition for declaratory ruling for foreign ownership in a broadcast licensee or common carrier wireless or earth station licensee, respectively, above the benchmarks in section 310(b); and
• Attachment G, a supplement to assist the Committee in identifying PII.

• determined based on Committee input that “reportable foreign ownership” for the Standard Questions is a five percent (5%) or greater equity and/or voting interest (indirect or direct) in the applicant or a controlling interest in the applicant, rejecting a ten percent (10%) threshold based on the Commission’s application rules because of the different purposes of national security and law enforcement review of the Committee and the Commission’s own review, and referral threshold, of applications. Indeed, the Second Report and Order explained that the Committee both emphasized to the FCC that, in some instances, “a less-than-ten percent foreign ownership interest – or a collection of such interests – may pose a national security or law enforcement risk” and observed that “when ownership is widely held, five percent can be a significant interest.”
• clarified that the Standard Questions for transfers of control or assignments of licenses are only applicable to prospective owners or licensees and not to transferors or assignees of authorizations or licenses.
• clarified certain definitions used in the Standard Questions, for example, noting that “Senior Officer” refers to “any individual that has actual or apparent authority to act on behalf of the entity,” and is not title-dependent, although the Second Report and Order identified a number of candidate positions.
• explained that a network operations center, or NOC, located outside the United States is part of the “Domestic Communications Infrastructure” of a network when it can control other parts of an entity’s Domestic Communications Infrastructure.
• retained the request for information concerning Section 310(b) broadcast petitioners’ prior relationships with foreign principals, including funding and employment arrangements (but not retail customer relationships), with no time limit or “defined look-back period;” as the Committee advised that such relationships may be relevant to an assessment of continuing foreign influence over broadcast content; but the Second Report and Order determined not to adopt a similar requirement for Section 301(b) petitions involving common carrier wireless or earth station licenses.
• clarified that “planned relationships” with foreign entities and individuals which must be disclosed in all of the Standard Questions sets are “current relationships or those reasonably anticipated by negotiations or that are identified under current business plans” including all situations in which contracts have been signed and where parties are already in negotiations.
• modified questions with respect to prior filings with the Commission or Committee on Foreign Investment in the United States (“CFIUS”) to provide that that an “involved” or “associated” individual or entity is either the applicant in a prior Commission or CFIUS filing or listed as an owner in such a prior filing, but reiterated that there is no look-back period cutting off such responses.
• clarified questions regarding an applicant’s provision of services to critical infrastructure sectors and what qualifies as a service.

Applicants with reportable foreign ownership, under the Commission’s Rules, must provide answers to the relevant Standard Questions directly to the Committee prior to or at the same time they file their applications with the FCC. The Second Report and Order underscored that all information submitted in response to the Standard Questions will be treated as business confidential and protected from disclosure without special designation or request by the respondent for business confidential treatment. Similarly, PII will automatically be protected from disclosure outside the Executive Branch agencies in accordance with privacy laws and provisions in Executive Order No. 13913. However, when multiple applicants are required to respond to the Standard Questions, the applicants must, as further guided by the instructions that will accompany the Standard Questions, clearly indicate whether responses are being jointly filed and which responses are being filed separately by a single applicant to ensure that confidential information is not disclosed to the other applicants.

The Commission made clear that, when responding to the Standard Questions, an applicant my not cross-reference information that was previously filed with the FCC. Rather, responses must be self-contained and complete. The Second Report and Order expressly rejected a request that, for petitioners that have previously been granted a declaratory ruling under Section 310(b) approving foreign investment, the petitioner should be permitted to respond to a streamlined questionnaire.

Following the submission of the responses to the Standard Questions, the Committee will have thirty days after referral of the application to the Committee to issue more tailored questions, although it may seek an extension. If no extension is sought, the FCC stated it will begin the 120-day clock for the Committee’s initial review on the 30th day after referral. Otherwise, if tailored questions are issued, the clock will begin when the Committee chair notifies the Commission that the responses to the Standard Questions, and any tailored questions, have been received and are complete.

The Standard Questions and related instructions will be posted on the Commission’s website following OMB approval.

Among the topics Steve will discuss is the FCC’s recent FNPRM proposing to require gateway providers to assist in the battle against illegal robocalls by applying STIR/SHAKEN caller ID authentication and other robocall mitigation techniques to calls that originate abroad from U.S. telephone numbers. The FNPRM, adopted at the FCC’s September 30 Open Meeting, seeks comment on several other proposals aimed at mitigating robocalls, including the following requirements that would be applicable to gateway providers: (1) responding to traceback requests within 24 hours; (2) blocking calls upon notification from the Enforcement Bureau that a certain traffic pattern involves illegal robocalling; (3) utilizing reasonable analytics to block calls that are highly likely to be illegal; (4) blocking calls originating from numbers on a do-not-originate list; (5) confirming that a foreign call originator using a U.S. telephone number is authorized to use that number; (6) including robocall mitigation obligations in contracts with foreign customers; and (7) submitting a certification regarding robocall mitigation practices to the Robocall Mitigation Database. In addition, the FNPRM seeks comment on a requirement that service providers block calls from gateway providers identified as bad actors by the FCC and on whether additional information should be collected by the Robocall Mitigation Database. The FNPRM asks whether there are alternative means to stop illegal foreign-originated robocalls. Finally, while the rulemaking proceeding is pending, the FCC declared that it would not enforce the prohibition in Section 63.6305(c) of the FCC’s rules on U.S.-based providers accepting traffic carrying U.S. NANP numbers that is received directly from a foreign voice service provider that is not in the Robocall Mitigation Database.

In case you missed it:

Guidance for Implementing the STIR-SHAKEN Call Authentication and Robocall Mitigation Mandates in 2021 (December 2020)

The FCC’s Packed September Meeting Agenda Includes Focus on IoT Spectrum and Robocall Prevention (September 2021)

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

Promoting More Resilient Networks - The NPRM would seek comment on various issues related to improving the reliability and resiliency of communications networks during emergencies and natural disasters. The NPRM focuses on whether the Framework (a wireless industry agreement aimed at providing mutual aid during emergencies, ensuring municipal and consumer readiness and communicating about service restoration) can be improved, such as by expanding participation, increasing the scope of participants’ obligations or codifying industry disaster-based coordination obligations. The NPRM would also seek comment on enhancing information provided to the FCC during disasters and network outages through the Network Outage Reporting System and the Disaster Information Reporting System. In addition, the NPRM would ask about communications resilience strategies to mitigate the impact of power outages, including coordination between communications providers and power companies and the use of backup power during disasters.

Reassessing 4.9 GHz Band for Public Safety – The Order on Reconsideration would grant requests by public safety organizations to vacate a 2020 order that permits states to lease spectrum in the 4.9 GHz band (designated for public safety use) to third parties for non-public-safety use. The Order on Reconsideration would also lift a freeze on 4.9 MHz licenses to allow incumbent licensees to modify licenses or seek new permanent fixed sites. The FNPRM would propose to establish a nationwide framework for the 4.9 GHz band to maximize public safety while promoting interoperable communications and interference protection throughout the network. Areas for comment would include how to protect public safety users from harmful interference, the use of the Universal Licensing System or another database to maintain relevant technical data, adoption of consistent technical standards to foster interoperability of equipment using the band and giving public safety uses priority. The NPRM would also seek comment on how to manage the band, incentivize public safety licensees to use the latest commercially available technologies and allow non-public safety use of the band without jeopardizing public safety operations.

Authorizing 6 GHz Band Automated Frequency Coordination Systems - The Public Notice would set forth a process for the OET to authorize AFC systems, which are required to operate standard-power devices in the 6 GHz band. Specifically, unlicensed standard power devices that operate in the 6 GHz band are required to check an AFC system prior to operating to avoid harmful interference to incumbent operations. The Public Notice would explain the approval process for AFC system operators, which would include conditional approval, a public trial period and an opportunity for public comment. The Public Notice would provide detailed information about the content of AFC system proposals and request that such proposals be submitted no later than November 30, 2021 (although proposals will be accepted after that date).

Spectrum Requirements for the Internet of Things - The NOI (which is required to be issued by The William M. (Mac) Thornberry National Defense Authorization Act for FY 2021 (Pub. L. No. 116-28) (the “Act”)) would seek comment on whether there is sufficient spectrum available for current and future IoT needs. As directed by the Act, the LOI would ask for comment on how to ensure that adequate spectrum is available for the increased demand for the IoT, whether regulatory barriers would prevent accessing any additional needed spectrum and the roles of licensed and unlicensed spectrum for supporting the IoT.

Shielding 911 Call Centers from Robocalls – The FNPRM would propose to update the FCC’s rules governing the PSAP Do-Not-Call registry. Although the FCC adopted rules in 2012 to establish the registry as a means to protect PSAPs from unwanted robocalls, the registry has not been fully implemented due to security concerns associated with releasing PSAP telephone numbers to entities accessing the registry. The FNPRM would propose that voice service providers block autodialed calls to PSAP telephone numbers on the PSAP Do-Not-Call registry, as an alternative to allowing entities claiming to use autodialers to access the registry to identify telephone numbers that may not be called. In addition, the FNPRM would seek comment on whether autodialed calls and text messages continue to disrupt PSAPs’ operations, security risks associated with maintaining a centralized registry of PSAP telephone numbers, ways to address security issues (such as enhanced caller vetting and data security requirements) and alternative means to prevent robocalls to PSAPs (such as by utilizing other technological solutions or leveraging the National Do-Not-Call registry).

Stopping Illegal Robocalls From Entering American Phone Networks - The FNPRM would propose to require gateway providers to assist in the battle against illegal robocalls by applying STIR/SHAKEN caller ID authentication and other robocall mitigation techniques to calls that originate abroad from U.S. telephone numbers. The FNPRM would also seek comment on several other proposals aimed at mitigating robocalls, including the following requirements that would be applicable to gateway providers: (1) responding to traceback requests within 24 hours; (2) blocking calls upon notification from the Enforcement Bureau that a certain traffic pattern involves illegal robocalling; (3) utilizing reasonable analytics to block calls that are highly likely to be illegal; (4) blocking calls originating from numbers on a do-not-originate list; (5) confirming that a foreign call originator using a U.S. telephone number is authorized to use that number; (6) including robocall mitigation obligations in contracts with foreign customers; and (7) submitting a certification regarding robocall mitigation practices to the Robocall Mitigation Database. In addition, the FNPRM would seek comment on a requirement that service providers block calls from gateway providers identified as bad actors by the FCC and on whether additional information should be collected by the Robocall Mitigation Database. The FNPRM would ask whether there are alternative means to stop illegal foreign-originated robocalls. Finally, while the rulemaking proceeding is pending, the FCC would not enforce the prohibition in Section 63.6305(c) of the FCC’s rules on U.S.-based providers accepting traffic carrying U.S. NANP numbers that is received directly from foreign voice service providers that are not in the Robocall Mitigation Database.

Supporting Broadband for Tribal Libraries Through E-Rate - Pursuant to Section 254(h)(4) of the Communications Act of 1934, as amended, a library may not receive preferential treatment or rates (such as under the E-rate program) unless it is eligible for assistance from a State library administrative agency under the Library Services and Technology Act (“LSTA”). In 2018, the LSTA was amended to specifically include Tribal libraries as eligible for assistance from a State library administrative agency. The NPRM would propose to amend Sections 54.500 and 54.501(b)(1) of the FCC’s rules to clarify that Tribal libraries are eligible for E-rate support. The NPRM would also seek comment on other measures to enable Tribal schools and libraries to gain access to the E-rate program and ways to increase participation in the E-rate program.

Strengthening Security Review of Companies with Foreign Ownership - The Second Report and Order would adopt standardized national security and law enforcement questions (“Standard Questions”) to be answered by applicants with reportable foreign ownership as part of the Executive Branch review of certain applications filed with the FCC. The issuance of Standard Questions is the FCC’s final step in implementing several reforms to formalize and streamline the FCC and Executive Branch review process consistent with Executive Order No. 13913 (April 20, 2020), which established a Committee for the Assessment of Foreign Participation in the United State Telecommunications Sector (“Committee” (formerly known as Team Telecom)) and set forth procedures and timelines for the Committee to complete its review. The Second Report and Order would include Standard Questions for the following types of applications when reportable foreign ownership (generally a 5 percent or greater equity and/or voting interest (indirect or direct) in the applicant) is present: (1) applications for a new or modified International Section 214 authorization or submarine cable landing license; (2) applications for assignment or transfer of control of an International Section 214 authorization or a submarine cable landing license; and (3) petitions for a declaratory ruling to permit foreign ownership in a broadcast licensee, common carrier wireless licensee or common carrier earth station licensee that exceeds the benchmarks in Section 310(b) of the Communications Act. There would also be a supplement to each set of questions to provide personally identifiable information for individuals with a reportable ownership interest, non-U.S. individuals with access to the applicant’s facilities, corporate officers and directors, and a law enforcement point of contact.

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.

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

Securing Communications Networks – The Third Report and Order would amend the FCC’s rules for the Secure and Trusted Communications Network Reimbursement Program, consistent with the guidance in the Consolidated Appropriations Act (“CAA”). As proposed in a February 2021 Third FNPRM, the Order would increase the eligibility cap for participation in the Reimbursement Program from providers with two million or fewer customers to providers with ten million or fewer customers, and would modify the equipment and services eligible for reimbursement to all communications equipment and services provided or produced by Huawei or ZTE. The Order would also establish June 30, 2020 as the date by which equipment and services must have been obtained to be eligible for reimbursement. Additionally, the Order would make several other changes to the Commission’s rules to align the prioritization scheme and definition of “advanced communications service” with the CAA framework, and would clarify certain aspects of the Reimbursement Program rules.

Radar Sensing Technologies in the 60 GHz Band – The draft NPRM would recognize the recent technological advancements for FDS/radar devices and increased demand for unlicensed mobile radar operations in the 57-64 GHz portion of the 57-71 GHz band. It would therefore ease technical restrictions on the operation of unlicensed FDS/radar devices consistent with recent waivers while continuing to protect other unlicensed users of the 57-71 GHz band like WiGig wireless local area networking (“WLAN”) devices and outdoor fixed point-to-point communication links. The Office of Engineering and Technology (“OET”) has granted several waivers of Section 15.255 of the FCC’s rules for FDS/radar operations to operate at higher power levels without any reported cases of harmful interference, starting with the Google waiver in 2018 for short-range gesture sensing radars incorporated into phones and tablets.

Among other things, the NPRM would (1) allow all unlicensed FDS/radar devices to operate in the 57-64 GHz portion of the band at a maximum of 20 dBm average EIRP, 13 dBm/MHz average EIRP power spectral density, and 10 dBm transmitter conducted output power, along with a maximum 10% duty cycle restriction within any 33 ms interval; and (2) seek comment on whether the Commission could allow FDS/radar devices that use listen-before-talk, spectrum sensing or other similar methods of technical coexistence to operate across the entire 57-71 GHz band at the same power level (40 dBm EIRP) as is currently permitted for communications devices in the band.

Updating International Filing Requirements – The Order would modify the Commission’s rules to require electronic filing of all remaining applications or reports to the International Bureau previously requiring paper filing or alternative filing processes. Specifically, the Order would mandate the electronic filing of Section 325(c) applications, applications for International High Frequency Broadcast (“IHF”) Stations, and Dominant Carrier Section 63.10(c) Quarterly Reports. It would also remove a duplicate paper filing requirement for satellite cost-recovery declarations. With this Order, all applications and filings to the International Bureau would require electronic filing in the International Bureau Filing System (“IBFS”).

The Connected Care Pilot was established in April 2020 to make up to $100 million in Universal Service Fund support available over three years for selected projects to defray costs for projects that will bring broadband connectivity and other connected care information services to eligible health care providers. The program is primarily aimed at supporting services that will benefit veterans and low-income patients. It is a longer term initiative than the short-term COVID-19 Telehealth Program designed to provide financial support for telehealth services, which are expected to remain in demand after the pandemic fully abates.

Second Report & Order

The Second Report and Order, which was released on June 21, 2021, builds on the administrative framework the FCC laid out when it established the Pilot Program and a September 2020 Public Notice that provided initial guidance to applicants. It specifically gives participants guidance on eligible services, funding rules and procedures, and data reporting requirements so they can begin their projects.

• Eligible Services – The FCC previously established that the Pilot Program will cover up to 85% of the costs for eligible services, which include patient broadband Internet access services, health care provider broadband data connections, connected care information services, and certain network equipment. Health care providers are required to cover the remaining 15% of the costs and any ineligible expenses. The Second Report & Order clarifies that the Pilot Program will reimburse network equipment purchases necessary to make already-available broadband services functional and to enable health care providers to make connected care information services functional, even if the Pilot Program is not directly supporting the costs of those services. The equipment must be purchased either because of an increase in Internet traffic caused by the connected care services or because the equipment would be primarily used for connected care information services. This approach is more expansive than the Rural Health Care Program’s reimbursement framework. Pilot Program funds cannot be used to support network deployment, internal connections, or connectivity between health care provider sites, and are also prohibited for end-user connected devices, medical equipment, health care provider administrative costs, personnel costs, and other expenses.
• Funding Rules and Procedures – The Pilot Program’s funding rules and procedures largely mirror those of the Rural HealthCare (“RHC”) Program. Participants need to follow the same competitive bidding rules for the services they are seeking to procure, including rules to ensure the bidding is fair and open and the requirement to select the most cost-effective option. Participants will also need to submit a Request for Funding to the Universal Service Administrative Company (“USAC”), which will evaluate service eligibility and issue a funding commitment decision. Just as with the RHC Program, Pilot Program participants will be able to make site and service substitutions. One notable difference is that the Pilot Program will not follow the typical July 1 to June 30 funding period, and participants will instead need to follow dates and deadlines provided by the FCC or USAC in correspondence or on their websites. The FCC also waived the procedural rule established in the First Report & Order that invoices be submitted monthly, which the agency thought might pose an undue administrative burden for some Pilot Program participants and would be difficult to enforce. Participants can only submit invoices for eligible expenses incurred within three years from the date their projects first begin service and no later than June 30, 2025.
• Data Reporting Requirements – Pilot programs established by the FCC often become permanent if they are successful, and as part of the Connected Care Pilot Program, the FCC will study how connected care can become a permanent part of the Universal Service Fund. To this end, the FCC established three goals for the Pilot Program—determining how USF support can be used to: (1) improve health outcomes through connected care; (2) reduce health care costs for patients, facilities, and the health care system; and (3) support the trend towards connected care everywhere. To help evaluate the Pilot Program, the Second Report & Order directs participants to submit three annual reports to the FCC with anonymized, aggregated data. The final report must summarize final results and include explanations of whether the goals of the participant’s project were met and how the project served the FCC’s Pilot Program goals. The FCC’s Wireline Bureau will use the data to prepare a final report at the conclusion of the Pilot Program.

The Connected Care Program is open to eligible rural non-profit and public health care providers and such non-rural providers that are part of a consortium, including post-secondary educational institutions, community health centers, local health departments or agencies, community mental health centers, not-for-profit hospitals, rural health clinics, skilled nursing facilities, and consortia of health care providers consisting of one or more of these entities.

From the over 200 Pilot Program applications the FCC received, it has so far awarded over $57 million in funding for 59 pilot projects in 30 states plus Washington, DC, leaving nearly $43 million for future project selections. The FCC announced its initial set of 14 projects, awarding $26.5 million in support, on January 15, 2021, and the second set of 36 projects, requesting $31 million in support, on June 17, 2021. It has prioritized projects that will serve a high number of patients in the veteran and low-income populations, serve areas most in need of support for connected care, treat many of the health conditions targeted by the program, and use products and services eligible for support.

At the FCC Open Meeting on June 17, 2021, the FCC took its most visible step yet toward Acting Chairwoman Rosenworcel’s vision. The Commission adopted a Notice of Proposed Rulemaking (“NPRM”) and Notice of Inquiry (“NOI”) to further address national security threats to communications networks and the supply chain. The NPRM and NOI sets its sights on the Commission’s rules relating to equipment authorization and competitive bidding. The Commission’s proposals have seeds of a much broader focus on Internet of Things (“IoT”) devices, cybersecurity and RF fingerprinting, to name a few. All participants in the telecommunications ecosystem should take notice.

The NPRM and NOI initiates an inquiry into many proposals to tighten the focus on network security in FCC procedures. Most notably, the Commission opened inquiry into the following areas:

Equipment Authorization Rules and Procedures – The NPRM seeks comment on a proposal to prohibit all future authorizations of equipment on the Covered List under the Secure and Trusted Communications Networks Act of 2019, including equipment subject to the FCC’s certification and Supplier’s Declaration of Conformity processes associated with equipment authorization. This proposal goes beyond the current rules, which prohibit recipients of Universal Service Program funding to use that funding to purchase, lease or maintain equipment on the Covered List.

Under current rules, despite the USF program prohibition, equipment on the Covered List can still obtain equipment authorization (and has already obtained authorization). The NPRM considers whether to revise the rules to ensure that any “covered” equipment cannot qualify for authorization. It also seeks comment on whether to revoke authorizations that were previously granted for equipment on the Covered List. If approved, the FCC seeks to determine which authorizations should be revoked and through what procedures.

Competitive Bidding Certification – The NPRM also seeks comment on a proposal to require applicants who wish to participate in FCC auctions to certify that their bids do not and will not rely on financial support from any entity that the FCC has designated under Section 54.9 of the FCC’s rules as a national security threat to the integrity of communications networks or the communications supply chain. The certification would require applicants to attest that no equipment (including component part) is comprised of any “covered” equipment, as identified on the current published list of “covered” equipment and would cross-reference section 1.50002 of the FCC’s rules that include the Covered List.

Manufacturing Encouragement Efforts – The NOI portion of the FCC document seeks comment on how the FCC can leverage its equipment authorization program to encourage manufacturers who are building devices that will connect to U.S. networks to consider cybersecurity standards and guidelines. The FCC inquires further about how to address security risks associated with IoT devices. Importantly, as we theorized a while back, the FCC notes the work that the National Institute of Standards and Technology (“NIST”) has done on cybersecurity and, in particular, cybersecurity for IoT devices, and asks whether the FCC’s equipment authorization rules should require manufacturers to certify in equipment authorization applications that they have considered this guidance in the design and manufacturing of their devices. The NOI also includes questions regarding the use of “RF fingerprinting” to help identify and isolate insecure devices.

Commissioner Statements

As expected, the NPRM and NOI received unanimous support from the Commissioners. Acting Chairwoman Rosenworcel cited to the rash of ransomware attacks and emphasized the need for broader cybersecurity considerations of IoT. “We need to acknowledge that the equipment that connects to our networks is just as consequential for our national security as the equipment that goes into our networks,” she said. Commissioner Carr discussed the possibility of Chinese interference with missile defense systems in North Dakota and referred to this proceeding as “closing a loophole” in FCC rules. Commissioner Starks, a former staff member in the Enforcement Bureau, emphasized changes intended to make enforcement against foreign actors easier to implement, citing examples from the past decade involving illegal jamming equipment manufactured overseas. Commissioner Simington took credit for adding “RF fingerprinting” to the NOI, stating that the technology “can play a central role in interdiction and enforcement of hacking and cyber-crime.”

With this proposal’s broad support at the Commission, equipment manufacturers (including IoT device manufacturers should pay close attention to the FCC’s actions. Comments will be received over the summer and the Commission could address its rules by year-end. Affected manufacturers may wish to comment in the proceeding.