Telecom Law Monitor : Washington D.C. Telecom Lawyer & Attorney : Kelley Drye & Warren Law Firm : New York, Chicago, Connecticut, New Jersey, Brussels

On April 21, 2010, the FCC issued a Notice regarding proposed universal service reforms. The document is 28 pages long plus some lengthy appendices.  The Notice itself is divided into a Notice of Inquiry section discussing steps to implement the Connect America Fund proposed in the National Broadband Plan, and a Notice of Proposed Rulemaking addressing specific ideas about reducing amounts currently committed to the High Cost Support portion of the USF program. The High Cost Support aspect of USF consumes about half the total of $8 billion now spent on universal service support each year.  The procedural difference between the NOI and the NPRM portions is this: a Notice of Inquiry generally cannot be followed by the adoption of rules without first issuing a follow-on Notice of Proposed Rulemaking. Thus, an NOI tends to be more ethereal and not focused on near term action. The NPRM portion, on the other hand, can result in rules to be adopted at any time after the expiration of the public comment period.  The FCC itself described the Notice as "the first in a series of proceedings to implement" the National Broadband Plan.   

Public comments on the Notices are due 60 days from publication in the Federal Register, and Reply comments are due 30 days later.

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On April 13, the FCC released its proposed schedule of FY 2010 FCC Regulatory Fees.  By law, the FCC is obligated to collect $335 million in fees in FY 2010 from the entities that it regulates.  This order identifies how the FCC proposes to allocate the fees.  Among the highlights:

• The regulatory fee for telecommunications carriers increases to $0.00351 per dollar of interstate and international revenue.  The FCC projects that it will collect $157 million from telecommunications carriers, 57% of the total it will collect in regulatory fees.  (For my views on the proportionality of this, see my earlier post here.)
• As with last year, the FCC will not mail invoices to telecommunications carriers.  Carriers must submit the fee payment by the deadline. 
• Audio bridging providers must make regulatory fee payments.  However, the FCC again mistakenly refers to audio bridging providers as common carriers (see fn 26). 

The Commission has requested comment on these proposals.  It will adopt a final regulatory fee schedule in July.  Regulatory fee payments will be due by the end of September and are subject to a 25% late payment penalty if not paid on time.

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Even though this blog covers telecom litigation and enforcement, this is the first post about a formal complaint brought before the FCC. Among the reasons are that the FCC does not handle many formal complaints these days (it had only 10 docketed cases in all of 2009), and decisions on the merits are few and far between. But a decision issued last week caught our attention. In the decision, the FCC's Enforcement Bureau took a narrow view of the Telephone Consumers Protection Act (“TCPA”).

The Enforcement Bureau held that unsolicited calls to a consumer were not TCPA violations because the messages were intended for current customers, not as solicitations to obtain new customers. Moreover, the telemarketer’s mistake in directing the calls to a non-customer did not make the calls actionable. This decision will make it harder for a consumer to prove a violation when communications are intended for current customers.

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Form 499-Q Quarterly Telecommunications Reporting Worksheet
Carriers required to contribute to universal service support mechanisms must report their actual and projected end user and wholesale revenues for each calendar quarter by filing Form 499Q on a quarterly basis. The Form 499-Q filing for first quarter 2010 is due to USAC by May 1, 2010.

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Thursday, April 8, 2010, the FCC released its Broadband Action Agenda describing the purpose and timing of more than 60 rulemakings and other actions the agency plans to conduct in order to implement its recently issued National Broadband Plan.  The FCC News Release can be found here and the more detailed, 10 page Agenda is here.  In addition, the Commission issued a one page chart of its proposed action items showing the actions that it hopes to initiate, with each such action listed by the quarter of the year in which it is expected to occur.

Among topics primarily covered by this blog, a few items stand out.  In connection with the Universal Service Fund, reform of USF distribution is scheduled for 2Q 2010 (it is on the April 21 Meeting agenda, actually), but contribution reform is not scheduled to begin until the end of the year.  Access charges, VoIP and other intercarrier compensation issues are given a 4Q 2010 start date.  CLEC interconnection rights with rural ILECs are slated to be "clarified" in 3Q 2010.  Pole attachment reforms -- which presumably will include the formal complaint process improvements we described in a previous post -- are slated for 2Q 2010. 

Continue reading for more detail on the agenda.

REMINDER:  These and other broadband plan documents can be accessed using our Resource Center on the right hand column of this page.

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Late last week, the FCC sent inquiry letters to a number of prepaid calling card providers concerning their marketing practices.  This action represents the first significant entry by the FCC into prepaid calling card marketing practices.  Prior to this action, prepaid card enforcement activities have been conducted in private litigation brought by a large prepaid carrier, before a handful of state attorneys general and, in the case of non-carrier distributors, before the Federal Trade Commission.  However, the FTC is barred from taking action against common carriers.  The FCC's action suggests that the Commission is attempting to close the gap in compliance within the prepaid industry by acting directly against carriers that offer prepaid cards.

Details about the FCC requests are available after the jump.

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The US Court of Appeals for the DC Circuit vacated the FCC's decision declaring illegal Comcast's 2007 blocking of P2P internet traffic.  This decision is not surprising, given how poorly the oral argument went for the FCC.  (see our post here). 

Click here to download the Court's decision.  We will post a discussion of the jurisdictional issue later.

UPDATE 4/6/10:  The Court of Appeals vacated the FCC Order because the Commission had not adequately justified its exercise of Title I "ancillary" authority over Comcast's network management practices.  Discussing at length appellate Title I jurisdiction cases over the last 40 years, the Court in essence held that the FCC failed to relate Internet network management to common carrier telephone service (Title II), broadcast service (Title II) or cable TV service (Title VI).  One quote from the decision sums up the conclusion:  "On the record before us, we see 'no relationship whatever' between the Order and services subject to Commission regulation."  In other words, the FCC must connect its assertion of authority to something that it indisputably can regulate.

Since the decision was released, there has been much discussion about whether the FCC will reclassify Internet access services as Title II common carrier services.  While it is premature to predict these issues with any confidence, one alternative not being discussed is to accept the Court's invitation to connect regulation of Internet access service with regulation of pure transmission services.  In the Wireline Broadband Order, the Martin Commission concluded that Internet access did not have a separate transmission component.  The decision today may lead the Commission to reverse that determination -- and find that a separate transmission component is inherent in the offering -- so that it may then regulate bundled Internet access due to its impact on stand alone transmission services. 

Finally, I note that the Court did not address the enforceability of the Policy Statement itself.  As a result, the potential impact on the Universal Service Fund's Form 499-A instructions did not come to pass.  Maybe next time.

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The VoIP jurisdictional saga continues.  Last month, we discussed a decision by the Pennsylvania PUC asserting jurisdiction over intrastate Voice over IP calls and a decision by a US District Court reaching the opposite conclusion.  Tomorrow, parties are asked to comment on a petition seeking, among other things, to preempt the Pennsylvania decision.  We will be watching the comments and will post on anything of interest in the comments.

4/6/10 QUICK UPDATE:  19 entities filed comments in response to the Global NAPs petition.  Most were ILECs or state commissions opposing the specific rulings proposed.

This latest VoIP proceeding has its origins in the Pennsylvania PUC decision. After the decision was issued, the carrier ordered to pay intrastate access charges, Global NAPs, filed a Petition for Declaratory Ruling with the FCC. The Petition seeks four rulings from the FCC:

1. The Vonage Order prohibits state commissions from subjecting VoIP traffic to intrastate tariffs;

2. Once a carrier’s service has been determined to be “primarily nomadic” VoIP, the remainder of its traffic also is interstate, absent “clear proof of purely intrastate calls”;

3. The Local Exchange Routing Guide (“LERG”) is not a reliable proxy for the geographic point of origination of VoIP calls; and

4. Connecting carriers that forward VoIP traffic are immune from interstate and intrastate switched access charges.

In the alternative, Global NAPs seeks preemption of the Pennsylvania PUC decision and “recent and/or impending” rulings in Maryland and New Hampshire.

The FCC released a Public Notice seeking comment on the Global NAPs Petition.  Comments are due April 2; replies April 12. 

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