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

There has not been an official announcement, but indications are strong that the FCC is planning soon to issue a number of forfeitures and proposed forfeitures for the sending of so-called "junk faxes."  Under the Telephone Consumers Protection Act of 1991 ("TCPA"), it is unlawful to send "unsolicited advertisements" via facsimile.  In the past two weeks, the Enforcement Bureau has begun "circulating" 11 new orders that appear to be junk fax enforcement orders.  (Circulation is the process of submitting an order for a vote by the Commission.) 

The Commission, rather than the Bureau, must vote on all proposed fines above $100,000, so one may presume that each item involves a significant fine.  Significant fines also are likely because several of the subjects of the draft enforcement orders have histories of prior FCC enforcement actions.  One company -- The Hot Lead LLC -- received a fine of $2.5 million in 2008 for junk faxes.  Pending against it are four proposed fines, of $739,500, $695,000, $47,000 and $51,500.  Another company -- Sunstar Travel and Tours -- received a fine of $169,500 in 2008 and has a proposed fine of $136,000 pending now.

In addition, one potential action appears to be against an alleged "fax broadcaster."  If issued, it would be the first proposed forfeiture issued under the Commission's "high degree of involvement" standard for fax broadcaster liability.

Caveat:  Circulation of an item does not necessarily indicate impending action by the FCC.  Four apparent "junk fax" orders began circulating in June 2009.  14 months later, those orders remain under consideration.

UPDATE 9/3/10:  The FCC is beginning to release the orders.  On Thursday, it released a Notice of Apparent Liability against Clean Credit, Inc. in the amount of $528,000.  The Commission imposed the statutory maximum penalty of $16,000 per violation because

"Clean Credit has exhibited a flagrant disregard for the TCPA and the Commission’s rules and orders, with a lengthy history of violations, and an ongoing pattern of violations extending to as recently as a few months ago."

If the Commission similarly applies the $16,000 maximum forfeiture to the remaining investigations, multi-million dollar forfeitures are on the way.

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In stark contrast to the Bureau's more liberal waiver policy for recipients of Universal Service Funds, the Wireline Competition Bureau recently released orders affirming a tough stance for contributors who miss USF filing deadlines.  In the Waiver Order, the Bureau granted two waviers of the deadline to file 499-A revisions.  In the Denial Order, the Bureau denied ten requests for similar waivers.  The difference?  In the Waiver Order, the Bureau found "special circumstances" -- complex revisions undertaken after a merger and late-filing due to the 9/11 terrorist attacks.  By contrast, in the Denial Order, the Bureau characterized the reasons for late-filing as "simple negligence."

The Bureau's stance is summarized with this quote from the Denial Order:

We reaffirm the importance of filing revisions to FCC Forms 499 promptly and within the windows established by the Commission's rules and requirements.  In order for USAC to process the thousands of forms it receives each year and for contributors to know that their contributions will not dramatically change each year on account of late-filed revisions, filers must comply with the deadlines we have established for filing and revising FCC Forms 499.

As a public service, we remind readers:  Corrections to the quarterly estimates (499-Q) are due within 45 days of the due date.  Revisions that reduce USF liability for a year (499-A) are due within one year of the April 1 499-A filing date.

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Earlier this month, Verizon and Google announced an agreement on the vexing issue of net neutrality.  The agreement has been criticized by net neutrality advocates for allegedly permitting a "private Internet," and for excluding wireless services, among other things.  Until recently, the provisions in the Verizon-Google "Legislative Framework" that radically alter FCC enforcement have been overlooked.

Four elements of the Legislative Framework are described in detail in this post.  These elements would restrict the tools available to the FCC and would raise the standard for FCC fines.  In addition, one provision strips the Federal Trade Commission of any potential jurisdiction over broadband Internet access service. 

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It's official -- FCC regulatory fees are due on August 31.  Here are the links you will need to make payment by the deadline:

FCC announcement of the August 31 deadline

FCC public notice -- Payment methods and procedures

FCC public notice - Fee filer system

FCC public notice -- ITSP fees (with payment code)

FCC public notice -- Commercial wireless fees (with payment code)

FCC Regulatory Fee website

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In February 2009, the FCC proposed $20,000 fines against 600 carriers for failing to file their annual CPNI certifications.   The problem with issuing 600 fines of $20,000 each?  The FCC actually has to issue orders in all 600 cases.  That process has turned into a bureaucratic quagmire, but -- finally -- there are signs that the FCC is making progress toward resolving the cases.

The Commission got off to a good start:  In the summer of 2009, it released 58 orders canceling forfeitures (based on proof that the entity either filed on time or was not required to file) or settling cases against, primarily, very small telcos.  After September 1, 2009, however, the FCC did not release another order resolving the Omnibus CPNI forfeitures for almost a year. 

Beginning in June of this year, the pace picked up again.  Since June 11, the FCC has issued over 40 orders resolving the Omnibus CPNI NALs.  One order canceled 15 NALs, again because the entities provided sufficient proof of timely filing.  The rest have been settlements of the NALs.  They follow essentially the same form:  (1) the carrier agrees to implement a Compliance Plan; (2) for two years, the carrier agrees to provide a copy of its CPNI certifications to the Enforcement Bureau; and (3) the carrier pays a small settlement amount.  Thus far, the settlements have ranged from a few hundred dollars to a few thousand dollars -- far below the $20,000 proposed.

By my count, the FCC has resolved about 110 cases.  It has just under 500 left to go.

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In July, we reported that the FCC had adopted its FY 2010 regulatory fee schedule.  In past years, regulatory fees were due in September, usually in the third week of the month.  However, it looks like this year's fee will be due significantly earlier -- by August 31, 2010.

The first hint of an earlier due date appears in the FCC Regulatory Fee Order released on July 9.  The order did not establish a due date for regulatory fees, but the Commission stated that it intended to collect fees "during an August 2010 filing window."  (see paragraph 1).  That made us curious, but not convinced.  Last week, however, the FCC released a public notice concerning fees for its radio and TV licensees.  That public notice states that the media services fee is "due no later than 11:59 PM, ET, on August 31, 2010."  This seems a pretty good indication that fees for all filers will be due earlier than in years past.

Given that late-paid regulatory fees are subject to a mandatory, non-waivable 25% late payment penalty, carriers should plan accordingly.  

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