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

Yesterday, the FCC proposed another $5 million fine for insufficient disclosures on prepaid calling cards.  This action is best understood as an echo to the FCC's action in September, when it proposed four similar $5 million fines against other prepaid calling card providers.  In fact, I believe that this NAL has been circulating at the FCC since shortly before the other four NALs were released.

2011 has been highlighted by an active FCC using Section 201(b) of the Act to engage in consumer-focused enforcement.  Although the FCC's authority to use 201(b) in this way is in doubt, the lesson for carriers is clear, especially in the prepaid market.  Carriers should clearly and conspicuously disclose all material terms and conditions of their services.  Failure to do so risks claims of deceptive marketing or cramming. 

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This morning, the FCC's November 18, 2011 High-Cost USF and Intercarrier Reform Compensation Order was published in the Federal Register triggering an effective date of December 29, 2011 for all parts of the Order and rule changes adopted therein, except for the information collection requirements contained in some of the rules adopted.   Those information collection requirements will not become effective until approved by the Office of Management and Budget.  A subsequent Federal Publication will be made announcing the effective dates of those sections.  A copy of today's Federal Register publication is available here.

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Late yesterday, the FCC released the text of its USF Reform and Intercarrier Compensation Reform Order, which it adopted on October 27.  The FCC's rules, among other things, transition terminating access charges to zero, apply access to VoIP-PSTN traffic, adopt rules addressing access stimulation (prevalent in free conferencing, for example), and tackling the problem of phantom traffic.  

The order is 759 pages long, with over 2,500 footnotes and 84 pages of rules.  As we warned, the impact of these rules on individual business plans is highly fact-specific.  We encourage you to contact your advisor to learn more. 

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Here is another compliance item for our readers.  The FCC's rules requiring all tariffs to be filed electronically takes effect today.  For competitive carriers, this means that you must file tariffs via the new electronic portal; paper tariffs are no longer permitted. 

The FCC released two public notices on the tariff filing procedures earlier this week.  (One notice addressed the effective date, the other the filing procedures.)

All competitive carriers must file their existing base tariff within the next 60 days.  (It's probably not a good idea to file in the first few days or the last few days of this window).  Thereafter, changes to the tariffs must be filed electronically.  Operator service providers, if there are any still out there, also must file the base tariff electronically. 

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Yesterday, the FCC released an order cancelling more CPNI fines proposed in its Omnibus CPNI Forfeiture Order.  Because proposed fines for failing to file the CPNI certification have become an annual event, this is a good time to remind telecommunications carriers of their obligation to file the CPNI certification that is due annually on March 1.

If for any reason, your company is a telecommunications carrier or interconnected VoIP provider and you have not filed the certification for calendar year 2010, you should do so as soon as possible.  And, since this usually is the time during which the Enforcement Bureau sends out its CPNI Letters of Investigation, if you've received a letter, do not delay in responding.  Your window to present evidence and negotiate a settlement will close near the end of February.

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For audio conferencing providers, "round two" of the FCC's regulation has begun.  (Round one was 2008's Audio Bridging Classification Order, which applied direct USF contributions to the audio conferencing industry).  On November 3rd, the Wireline Competition Bureau denied a Universal Service Fund appeal concerning "IP audio conferencing services."  At the same time, the Commission announced it is close to deciding the appeals of the 2008 classification order.

Both developments signal that the inclusion of conferencing in USF is here to stay.  In the appeal, the FCC agreed that USF obligations apply to "IP in the middle" audio conferencing, and denied the conferencing provider's request to apply USF prospectively.  In the upcoming reconsideration order, we don't know what the decision will say, but I would be surprised if it does not uphold the 2008 classification. 

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Last night, the White House nominated replacements for Commissioner Meredith Atwell Baker, who resigned in May, and Michael Copps, whose term has expired.  The nominees are Jessica Rosenworcel and Ajit Pai.  Rosenworcel formerly worked as a legal assistant to Commissioner Copps.  Pai previously worked in the Office of General Counsel and several FCC Bureaus.

Both nominations must be confirmed by the Senate.  There is no word yet about how quickly the Senate might consider the nominations.

UPDATE:  The Senate Commerce Committee will hold a hearing on these nominations on Wednesday, November 30.  Information about the nomination hearing is available on the Senate site at this link.

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