Telecom Law Monitor

Telecom Law Monitor

Litigation, Enforcement & Compliance Issues Update

FCC Eases Process for Tower Construction and Wireless Infrastructure Deployment

Posted in FCC, Infrastructure, Uncategorized, Wireless

At the FCC’s October Open Meeting on October 17, the Commission unanimously adopted a Report and Order to update its rules and procedures for new and modified antenna structures.   In the News Release following the vote, the Commission noted the new rules are expected to create the foundation for increased advanced wireless broadband deployment nationwide.  In their comments at the Open meeting, the Commissioners focused on the effect the new rules will have to facilitate Distributed Antenna Systems (“DAS”) and small cell deployment.

The full text of the Report and Order has not yet been released.  The new rules will take effect 90 days after it is published in the Federal Register.  The longer period was a concession to  Commissioner Clyburn’s concerns about the burdens on state and local governments to comply with the new rules, which will impose a “shot clock” on state and local government review. Continue Reading

Text-to-911 Rules Now Effective

Posted in 911, FCC, Infrastructure, Interconnection

The Federal Communications Commission’s (“FCC’s” or “Commission’s”) new text-to-911 rules are effective today. As we discussed in a previous post immediately following the adoption of the related order, the FCC has mandated that all messaging services that permit users to send text messages using domestic telephone numbers also enable users to communicate with public emergency response providers via text messages. The FCC adopted its Second Report and Order and Third Notice of Proposed Rulemaking in the Text-to-911 proceeding on August 8, 2014. On September 16, the order and NPRM were published in the Federal Register making the rules effective today and setting the comment deadline on the NPRM for today, with reply comments due on November 17.

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AT&T Mobility Agrees to Pay $45 Million to Settle TCPA Litigation

Posted in Litigation, Telemarketing, Wireless

On September 30, 2014, AT&T Mobility (“AT&T”) asked a U.S. District Court judge to approve a settlement agreement that would resolve a class action arising under the Telephone Consumer Protection Act (“TCPA” or “Act”).  In this case, the plaintiffs alleged that AT&T made auto-dialed calls to wireless phone numbers without receiving the prior express consent of the recipients, as required by the TCPA.  Specifically, the plaintiffs’ allegations concerned collection calls made to former customers at the wireless number provided when the account was established with AT&T.  AT&T disputed the plaintiffs’ claims, arguing that the recipients gave consent to receive these calls when they provided their phone number as the “can-be-reached-at” number for calls regarding AT&T customer accounts.  Nevertheless, according to the joint motion submitted to the court, the company has agreed to pay $45 million to settle the dispute.  This is one of the largest TCPA settlements in recent history, and continues a trend of high profile TCPA class actions. Continue Reading

More Enforcement Action at the FCC: Enforcement Bureau issues $600,000 Penalty for Wi-Fi Blocking

Posted in Enforcement, FCC, Spectrum, Wireless

On October 3rd, the FCC announced a settlement with Marriott International, Inc. and Marriott Hotel Services, Inc. to resolve an investigation into the hotel operator’s use of a Wi-Fi monitoring and blocking system.  In the investigation, the Commission concluded that an operator cannot use such a system to prevent users from connecting to the Internet via their own personal Wi-Fi networks, rather than being limited to the hotel’s own Wi-Fi network, when these users did not pose a threat to the security of the hotel operator or its guests.  This consent decree reminds hotel operators and property owners, as well as other property owners that, while they may control the deployment of fixed radio stations on their property, they may not interfere with communications, including Internet wireless access, that occur on their property using mobile devices.  As part of the consent decree, the hotel operator agreed to pay $600,000 in “civil penalties” and to implement an extensive three-year compliance plan, with quarterly reporting, focusing on the hotel operator’s access point containment features at all of its U.S. properties, including properties owned and/or operated by the company.

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D.C. Circuit Sends a Strong Signal in NAB Case – Public Notices May Not Be Reviewable

Posted in FCC, Litigation

In May of this year, the National Association of Broadcasters (NAB) petitioned the D.C. Circuit to review a Public Notice issued by the Media Bureau.  The Public Notice, entitled “Processing of Broadcast Television Applications Proposing Sharing Arrangements and Contingent Interests,” explained a shift in how the Bureau will review certain broadcast license assignments and transfer applications.  According to the Notice, transactions where two or more broadcasters in the same market plan to enter sharing agreements or create contingent financial interests will be reviewed with “careful” Commission scrutiny, a seemingly higher standard than the Bureau previously used for these types of transactions.

NAB argued that the Bureau does not have the authority to change the level of scrutiny for broadcast transactions that were otherwise “presumptively valid” under the Commission’s existing media ownership rules.  The Association viewed the Public Notice as a “de facto” rule, effectively imposing new regulations without following the proper notice and comment requirements.  NAB believed that the Media Bureau exceeded its delegated authority in issuing the Public Notice and that the Notice was “arbitrary, capricious, and an abuse of discretion,” violating the Administrative Procedure Act.

On September 9, the D.C. Circuit granted the FCC’s motion to dismiss, finding that the Court did not have the authority to review the Media Bureau’s Public Notice.  The Court agreed with the FCC, stating that the Court only has the jurisdiction to review a “final agency order” and that the Public Notice in question was not a final agency order.  Moreover, the Court pointed to a “clear statutory requirement” that the FCC must review a decision by its staff before that decision (or the underlying action) is reviewable by the Court.

Prior to filing its petition, NAB wrote two letters to the FCC’s Secretary, outlining why the Association disagreed with the FCC’s Public Notice.  One of the letters ended with a “respectful request” that the “Commission direct the Bureau to withdraw the Public Notice and immediately cease and desist application of the strict scrutiny standard to sharing arrangements that involve contingent interests.”  Despite this request, the Court found that the Association’s letter was not the “functional equivalent” of an application for review.  To properly obtain judicial review, NAB should have filed a formal application for review with the FCC and waited for the Commission to rule on the application.  The outcome of that ruling would then constitute a “final order,” reviewable by the Court.

In its original petition for review, NAB stated that it would be futile to petition the FCC regarding a Public Notice because by virtue of being published, the Notice was implicitly approved by the Commission.  The D.C. Circuit did not buy this argument and required more concrete evidence to support NAB’s claim of “futility.”

The Court’s decision sends a strong signal to all parties before regulatory agencies, especially those in front of the FCC.  Now, it is clear that if a party disagrees with an agency’s position in a Public Notice, it must file a formal petition for review by the Commission.  Only then, will the Court find it has the jurisdiction to review the agency’s action and possibly the underlying Notice.  Applications for review must be filed within 30 days of a Public Notice and according to the FCC, the party’s application should explicitly state that the petitioner is submitting an application for review pursuant to 47 C.F.R. § 1.115.

FCC Reconsiders New Consumer Signal Booster Rules, Proposes Further Relaxation for Provider-Specific Boosters

Posted in Equipment Authorization, FCC, Spectrum, Uncategorized, Wireless

On Tuesday, September 23, the Federal Communications Commission (“FCC” or “Commission”) released an Order reconsidering certain provisions of its February 2013 order adopting a new regulatory framework for consumer and industry use of wireless signal boosters.  A companion Further Notice of Proposed Rulemaking (“FNPRM”) seeks comment on whether to remove a “personal use” restriction on the operation of certain kinds of signal boosters.  Comments will be due 30 days after Federal Register publication and reply comments 20 days later. 

The February Signal Booster Order adopted new technical, operational and registration requirements for two classes of signal boosters – Consumer and Industrial.  For Consumer signal boosters, the FCC adopted design and manufacturing requirements (the Network Protection Standard or NPS) which must be met before such boosters could be used, with the consent of licensed commercial mobile radio service, CMRS,  providers.  The major CMRS carriers agreed to blanket consent by registration of qualified Consumer Boosters.  The Commission adopted different technical parameters for two categories of Commercial Boosters: Wideband Consumer Signal Boosters (that operate across multiple carriers) and Provider-Specific Consumer Signal Boosters.

First, in the Order, the Commission agreed with the petition for reconsideration filed by a group called the Wi-Ex Petitioners and streamlined its equipment certification process for Wideband Consumer Signal Boosters by amending certain technical requirements related to downlink noise and gain limits.  Second, the Commission agreed with a widely supported joint statement proposing revised technical rules for the manufacture and operation of mobile Provider-Specific Consumer Signal Boosters.  The joint statement was filed after successful negotiations between the group that petitioned for reconsideration (the Verizon Petitioners) and a company called Nextivity that had opposed the petition.  The rules are modified to require all mobile Provider-Specific Consumer Signal Boosters to meet the same noise limits as mobile Wideband Consumer Signal Boosters.  The FCC also modified the applicable kitting and labeling requirements.  With one exception, the rules will take effect 30 days after publication in the Federal Register. 

 In the Further Notice, the FCC seeks comment regarding whether it should relax the rules for Provider-Specific Consumer Signal Boosters and drop the “personal use” restriction applicable to them. The Commission is considering this rule modification given that the booster user will have obtained consent from its CMRS provider, which presumably will allow the carriers to adequately control booster use without continued need for the restriction.  (The “personal use” restriction also applies to Wideband Consumer Signal Boosters, but no change for this category is proposed).  

Checking the Boxes: FCC Proposes Forfeiture of Half a Million Dollars against International Prepaid Calling Card Provider

Posted in Calling Card Industry, Compliance Filing, International, Prepaid cards

On September 16, the Federal Communications Commission issued a Notice of Apparent Liability (“NAL”) against PTT Phone Cards, Inc., (“PTT”) for a litany of alleged violations of rules applicable to international telecommunications carriers in general and one applicable to pre-paid calling card providers in particular. In short, the NAL alleges that, for over three years, PTT violated “virtually all of [the] regulatory obligations” applicable to international carriers and one specifically applicable to pre-paid calling card providers. The proposed forfeiture of $493,327 was arrived at through a straightforward application of the Commission’s base forfeiture amounts or penalties that the agency has recently applied for similar violations. While the Commission normally considers mitigating and aggravating factors to adjust penalties downward or upward, in the NAL it did not expressly do so, despite what it called “PTT’s apparent pattern of noncompliance” and “the seriousness, duration, and scope of PTT’s apparent violations.”  Instead, it simply proposed standard penalties for each apparent violation, giving a casebook glimpse into what awaits entities that provide international and/or calling card services without first obtaining necessary FCC authority and without making requisite filings with the Commission, contributions into applicable federal funds, and payments of federal regulatory fees. Continue Reading

Attention Wireless Operators: FCC Issues $5.25 Million Civil Penalty for Unauthorized Transfer of Control and Operations

Posted in Enforcement, FCC, Infrastructure, Spectrum, Wireless

The FCC’s Enforcement Bureau announced today that the Canadian National Railway, a large diversified rail, trucking, warehousing and distribution services company, has entered into Consent Decree and agreed to pay $5.25 million in civil penalties to resolve an FCC investigation into the company’s wireless radio operations in the United States.

According to the Consent Decree, the Canadian National Railway discovered that on several occasions it had acquired control of a number of wireless radio licenses without securing the FCC’s prior consent to the transactions.  Following this discovery, the company initiated a comprehensive internal audit of its FCC authorizations, uncovering multiple unauthorized transactions and system modifications going back to 1995.  Additionally, the company found it had deployed several hundred wireless radio stations without first obtaining licenses, with some violations dating back as early as 1990.  The Consent Decree indicates that most of the affected radio stations remained in operation in 2013.

In February 2013, the company voluntarily disclosed its findings to the Commission in connection with multiple requests for Special Temporary Authority and remedial filings.  What followed was a Bureau investigation into the full extent of the company’s noncompliance.  The investigation confirmed that Canadian National Railway completed more than a dozen substantial and pro forma transactions and deployed, modified and/or operated hundreds of wireless facilities without FCC approval.

While the investigation did not uncover any evidence of interference complaints resulting from the unauthorized operations, the company nevertheless acknowledged its extensive noncompliance.  The FCC described the  “scope and duration of these unauthorized operations” as “unprecedented in the history of the Commission.”  And the Commission’s response was equally as ground-breaking: Canadian’s civil penalty “represents the largest in FCC history” for a wireless operator’s unauthorized radio operations and unauthorized transfers of control.  In addition to the payment of civil penalties, and an express admission of rule violations, the company also agreed to implement a three-year compliance plan and to maintain the internal compliance plan that was implemented as a result of the internal audit.

While the noncompliance and civil penalty may have been unprecedented, many things included in the consent decree are becoming part of the new normal.  As with several other consent decrees we blogged about in recent weeks, the settlement included an admission of liability by Canadian National Railway and referred to monetary payments as “civil penalties” rather than “voluntary contributions.”  This is further evidence of the substantial shift in the Enforcement Bureau’s policy for settlement like negotiating consent decrees.  Wireless licensees should pay close attention to these actions and take them into consideration when choosing a course of action in the face of discoveries about possible nonconformance.  The Canadian National Railway Consent Decree also serves as a strong reminder that any company or enterprise making an acquisition should always conduct sufficient  due diligence to ascertain whether radio operations requiring FCC licenses are involved and, if so, to ensure that the proper authorizations have obtained and maintained and that any FCC procedural requirements connected to the proposed acquisition are identified and followed.

 

In the Latest TCPA Twist, State AGs Seek FCC Guidance on Legality of Call-Blocking Technology

Posted in FCC, Telemarketing

On September 9, 2014, the National Association of Attorneys General sent a letter signed by 39 state attorneys general to FCC Chairman Tom Wheeler seeking a formal opinion as to whether there are any “legal and/or regulatory prohibitions [that] prohibit telephone carriers from implementing call-blocking technology,” and, if such prohibitions exist, whether a carrier may nevertheless implement such technology if customers “affirmatively ‘opt into’ [the technology] (either for a fee or as a free service).” The letter asserts that call-blocking tools such as NoMoRobo, Call Control and Telemarketing Guard represent “the first major advancement towards a solution” in the ongoing battle to eliminate unwanted telemarketing calls. The signatories hope to see a favorable statement from the FCC regarding call-blocking technology so that they can encourage the private industry to implement it.

The letter seemingly seeks a response from the Commission to statements by representatives of the US Telecom Association which suggest that common carriers are resistant to using call-blocking technology because of legal and regulatory risks that would arise from implementing it. Specifically, during a hearing before the U.S. Senate Subcommittee on Consumer Protection, Product Safety, and Insurance in July 2013, a US Telecom representative said “[t]he current legal framework simply does not allow [phone companies] to decide for the consumer which calls should be allowed to go through and which calls should be blocked.” Additionally, in response to a subsequent inquiry from Sen. Claire McCaskill on the issue, US Telecom claimed that one challenge to implementing call-blocking technology is the FCC’s position that “call blocking is an unjust and unreasonable practice under section 201(b) of the Communications Act of 1934.”

The letter poses the following additional questions to the Commission in response to the US Telecom statements:

  • “At a customer’s request, can telephone carriers legally block certain types of calls (e.g., telemarketing calls) if technology is able to identify incoming calls as originating or probably originating from a telemarketer?”
  • “Is US Telecom’s characterization of the FCC’s position [as one of ‘strict oversight in ensuring the unimpeded delivery of telecommunications traffic’] accurate? If so, upon what basis does the FCC claim that telephone carriers may not ‘block, choke, reduce or restrict telecommunications traffic in any way’?”

The FCC has not yet issued a response to the letter. We expect it to seek public comment on the request in the near future.

 

Do Recent Consent Decrees Indicate a Shift in FCC Enforcement Policy?

Posted in Enforcement, FCC

In August, the FCC adopted consent decrees with three companies (Border Media Business TrustTime Warner Cable, and ASUSTeK Computer Inc.) to resolve investigations into potential violations by each company of the Commission’s rules.  What makes these consent decrees noteworthy is the inclusion of new language and provisions not seen in settlements from prior years.  All three consent decrees include an admission of liability by the company and refer to the monetary payments the company will make as “civil fines” or “civil penalties” rather than “voluntary contributions.”  These changes may indicate a potentially significant shift in the Enforcement Bureau’s policy in resolving allegations of FCC rule violations.  If this indeed becomes Enforcement Bureau policy, it could make it significantly harder to resolve investigations through consent decrees, where often the primary benefit obtained by the regulated entity is a resolution without any findings of liability.

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