Supreme Court Confirms the FCC's Ability to Interpret the Scope of its Own Authority and Allows the Antenna Siting Application "Shot Clock" To Remain in Effect

In a much anticipated decision with potentially widespread ramifications across all federal agencies charged with implementing federal statutes, the United States Supreme Court has permitted the so-called “shot clock” rules of the Federal Communications Commission (“FCC” or “Commission”) applicable to wireless siting applications to remain in effect. By a 5-4 margin on May 20, 2013, in City of Arlington, Texas v. Federal Communications Commission, the High Court affirmed that when the FCC interprets an ambiguous provision of a statute that concerns the scope of the FCC’s regulatory authority, that interpretation is entitled to the same Chevron deference as its interpretation of any other ambiguous statutory provision unambiguously within the agency’s regulatory bailiwick. Under Chevron, if a federal “statute is silent or ambiguous with respect to the specific issue [before an agency], the question for the [reviewing] court is whether the agency’s answer is based on a permissible construction of the statute.” Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). If the agency’s construction of the ambiguous provision is permissible, then the agency’s interpretation is entitled to judicial deference.

Justice Antonin Scalia delivered the opinion of the Court joined by four other justices. Justice Breyer concurred with the Court’s opinion in part and concurred in the judgment. Chief Justice Roberts delivered a dissenting opinion joined by two other justices. The differences among the three opinions are rather fine. Distinguishing among the opinions arguably requires almost as much “mental acrobatics,” to use the majority’s term, as the majority sought to avoid stating that no dichotomy exists, in terms of the deference to which an agency is entitled, between interpretations regarding the scope of an agency’s authority under a statute it administers and interpretations applying the jurisdiction the agency clearly has. Read our full summary of the opinion here.

The impact of the Court’s decision in City of Arlington will go far beyond the bounds of the FCC’s declaratory ruling adopting the antenna siting “shot clock.” The decision is not easily limited to the facts in the case before the Court and will likely affect court review of federal agency actions generally, not just those of the FCC. For example, the pending appeals of the FCC’s 2010 Net Neutrality Order which we have previously covered in this blog involve questions of the Commission’s interpretation of its own authority. City of Arlington may also have the effect of emboldening agencies to make decisions that “push the jurisdictional envelope” under the statutes they administer. In almost any situation involving the scope of the Commission’s authority, where the Act is at least potentially ambiguous as to the FCC’s authority to adopt the regulations in question, parties will need to take heed of City of Arlington.
 

FCC Requires Mobile Phone Manufacturers and Service Providers to Make Internet Browsers Accessible to the Blind and Visually Impaired by October 2013

Josh Guyan contributed to this post.

In the latest of its orders to implement the Twenty-First Century Communications and Video Accessibility Act of 2010 (“CVAA”), the FCC released a Second Report and Order addressing the accessibility requirements of Internet browsers on mobile phones for the blind and visually impaired. This order adopted requirements for which it sought further comment in January 2012 when it released a Report and Order implementing provisions of the CVAA to ensure that people with disabilities have access to advanced communications services (“ACS”). The substantive obligations for mobile phones will go into effect at the same time as the CVAA’s substantive obligations for ACS services take effect, on October 8, 2013. The recordkeeping obligations, however, went into effect on January 30, 2013.

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Tom Wheeler Nominated for FCC Chair

As widely reported yesterday, President Obama has nominated Tom Wheeler to replace Julius Genachowski as FCC Chairman.  Wheeler, currently working for a venture capital firm (bio here, at least for now), was widely seen as the front runner for the position since the Chairman announced his intention to leave the Commission.  Previously, Wheeler headed CTIA, the wireless industry trade group, and, before that, NCTA, the trade group for large cable providers.  (President Obama called him the "Bo Jackson" of telecom because he is a member of both the wireless and cable industry's hall of fame).

Wheeler must be confirmed by the Senate, and his nomination is expected to be paired with an as-yet undetermined replacement for Commissioner Rob McDowell, who also is leaving the Commission. 

Pending Wheeler's confirmation, Commissioner Mignon Clyburn will serve as acting chair of the FCC. 

Appellate Court Upholds 2011 Pole Attachment Order Lowering the Telecom Pole Attachment Rate and Paving the Way for ILEC Complaints against Electric Utility Pole Owners

The suspense did not last long.  Less than five weeks after a spirited oral argument before a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit (the “Court”) on January 23, 2013, the Court today affirmed key aspects of the Federal Communications Commission’s April 2011 Report and Order and Order on Reconsideration (“Report and Order”).  The Report and Order had modified major portions of the Commission’s pole attachment rules implementing the Pole Attachment Act, codified as Section 224 of the Communications Act of 1934 (the “Act”). 

The American Electricity Power Services Corporation and other electric utility companies (“Petitioners”) challenged three aspects of the FCC’s Report and Order.  (1) The Report and Order interpreted Section 224(b)(1) of the Act, which authorizes the Commission to regulate the rates, terms and conditions of “pole attachments” and assure that they are “just and reasonable,” to apply to incumbent local exchange carriers (“ILECs”) as “providers of telecommunications services.”  Building on this interpretation, the Report and Order enabled ILECs to bring complaints before the FCC against investor-owned utility pole owners on whose poles they are attached, even though the statute excludes ILECs from the definition of “telecommunications carrier” for purposes of Section 224. (2) The Commission adopted a new pole attachment rate formula applicable to telecommunications carriers (the “telecom rate formula”) specifically designed to bring the telecom rate down to the same level as that paid by cable operators when the FCC’s presumed number of attachers is used in the telecom rate formula.  (3) The Report and Order modified the FCC’s rules, which had limited to compensatory damages to be awarded only from the date of a complaint to the FCC going forward, to allow damages to be awarded for a period prior to the date of the complaint consistent with the applicable statute of limitations.

The Court denied all three challenges in their entirety, applying Chevron deference to the Commission’s interpretations.  The Court’s opinion, quoting FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515 (2009), underscored that where the FCC modifies its regulations, as it did in the Report and Order, the hurdle the Commission must clear is a “modest” one.  Specifically, the Commission “need not demonstrate to a court’s satisfaction that the reasons for the new policy are better than the reasons for the old one; it suffices that the new policy is permissible under the statute, that there are good reasons for it, and that the agency believes it to be better.”

 

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FCC Lab Offers Major New Guidance on Equipment Authorization and RF Exposure Evaluation Procedures and Announces Notice of Proposed Rulemaking on Circulation at the Commission

On October 24, the FCC Laboratory published a number of new and updated documents through its Knowledge Database (“KDB”) that liberalize further the equipment authorization process for a number of product types, including Software Defined Radios (“SDRs”).  That same day, the Lab released numerous other KDB publications providing guidance regarding both its RF exposure test procedures applicable to cellphones, smartphones, laptops, tablets, and other categories of devices, and the Commission’s “Permit But Ask” (“PBA”) procedures, which enable telecommunications certification bodies (“TCBs”) to test equipment for compliance with RF emissions limits even though the Commission has issued only partial guidance or where a certain amount of FCC oversight is still considered necessary.  Together, these changes are designed to allow a broader range of consumer devices subject to equipment authorization requirements prior to their being offered for sale, imported, or otherwise marketed to reach the marketplace quickly by allowing importers, manufacturers, and service providers to get them certificated more rapidly than in the past through the TCB process.

This wave of KDB publications, which are effective immediately subject to certain conditions in some cases, comes only one week after the FCC announced that a draft Notice of Proposed Rulemaking (“NPRM”) is on circulation among the Commissioners that would consider (a) codification of and refinements to the FCC’s permit-but-ask (“PBA”) procedure, (b) further articulating the post-grant obligations of TCBs, (c) requiring labs that manufacturers and importers use to test radiofrequency equipment to be accredited, and (d) officially recognizing the latest industry testing standards.  The text of the NPRM is not yet available and it is uncertain when the Commission will adopt the NPRM, which it is expected to do.

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Recent Decisions Highlight Importance of Timely Submission of USF Revenue Reporting

As we have discussed on several previous occasions in our blog, there are a number of reviews of substantial universal service fund (“USF”) contribution audits conducted by the Universal Service Administrative Company (“USAC”) pending at the Federal Communications Commission (“FCC”) addressing how revenues from certain offerings should be reported. Similarly, there are a number of universal service fund contribution and reporting enforcement proceedings before the Commission of significance. These pending reviews will potentially have substantial impacts for many providers, depending upon what their reporting and contribution practices have been. On Monday, August 27, however, the Commission issued decisions in two smaller matters that offer some less momentous but important reminders for providers of telecommunications that have an obligation to prepare annual and quarterly reports on Forms 499-A and 499-Q and make contributions to the USF based on their end user revenues.

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Annual FCC Regulatory Fees Due September 13, 2012

As is customary every year, the FCC recently announced the due date for its annual FCC regulatory fees. Regulatory fees must be paid no later than 11:59 PM on September 13, 2012, Eastern Daylight Time. Most federal licensees and other regulated entities must pay these regulatory fees to offset costs associated with the FCC's enforcement, public service, international, policy, and rulemaking activities. Fee amounts change each year and vary by type of activity. Of particular interest is the Interstate Telecommunications Service Provider Fee which must be paid by most companies, including VoIP providers and audio bridging providers. Fees not paid by the due date are subject to a mandatory 25% late payment penalty.

Please reference the Kelley Drye client advisory for more information. Fact sheets detailing the types of fees, fee codes and payment methods and options can be found on the FCC's website.

Tenth Circuit Issues Decision in Qwest Phoenix Forbearance Appeal

Randy Sifers contributed to this blog post.

Yesterday, the U.S. Court of Appeals for the Tenth Circuit issued its long-awaited decision in Qwest v. FCC, Qwest’s appeal of the Federal Communication Commission’s (FCC’s) June 2010 decision denying Qwest’s petition for forbearance from unbundling obligations and dominant carrier regulations pertaining to Qwest’s provision of mass market services in the Phoenix, Arizona metropolitan statistical area (MSA). The Court denied Qwest’s petition for review of the FCC’s decision.

Qwest had attacked the FCC’s decision in two primary ways. First, Qwest claimed that the FCC had impermissibly changed the way it analyzed petitions for forbearance from UNE obligations mid-stream. Specifically, when Qwest first filed its petition seeking forbearance in Phoenix, the FCC was applying an arithmetic “two prong” test first established in granting Qwest’s prior request for UNE forbearance in Omaha. However, in the Phoenix decision, the Commission abandoned the Omaha test and substituted a market power analysis similar to that used by the Commission, the Federal Trade Commission and the Department of Justice in merger reviews. The Court ruled that the Commission was free to determine that its prior approach was flawed and to replace it with a market power analysis approach.

Click here to read the complete Kelley Drye Client Advisory for further information on the Phoenix Order.
 

Revised FCC Debt Collection Processes for Delinquent Support Fund Obligations Shift Burdens to Carriers

The FCC recently announced revisions to its debt collection process for those carriers that are delinquent in contributing to the FCC’s Universal Service Fund (“USF”), Telecommunications Relay Services Fund (“TRS”) and North American Numbering Plan Fund (“NANP”) (collectively the “Funds”). Under the new procedures, the Fund administrators will forward delinquent accounts directly to the United States Department of Treasury (“Treasury”) for collection (where a 28% collection fee is added), rather than forwarding them to the FCC first. In addition, the FCC will no longer send delinquency notices to contributors for these types of debts.

These revisions could have a significant impact on telecommunications providers, who now may receive only a single notice before an outstanding debt is transferred to Treasury for collection. Contributors will have to exercise greater diligence to ensure that they receive notices of delinquent obligations to the Funds and do not mistakenly incur collection fees.
 

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Derecho Storm Leads to FCC 911 Inquiry

The June 29 "Derecho" storm brought significant damage and power outages to the Mid-Atlantic region.  It also brought a number of high-profile 911 outages, which have attracted the FCC's attention.  This week, the Public Safety Bureau launched a broad investigation into the Derecho events.

In the wake of the Derecho, news media reported outages in the 911 system in several counties in Northern Virginia and an West Virginia.  The Public Safety Bureau quickly announced that it would begin meeting with carrier representatives, public officials, and others to investigate the outages.  (This was similar to the Public Safety Bureau's reaction to Verizon 911 outages in 2011.)  Now, the Bureau has expanded its inquiry with an 8-page Public Notice seeking comment on the "reliability, resiliency and availability of communications networks in times of emergency."  The Public Notice was accompanied by a last-minute addition to the agenda of yesterday's FCC's Open Meeting to discuss the inquiry.  Four of the Commissioners released statements praising the Bureau's inquiry.

The Public Notice suggests that the FCC is approaching the Derecho from a rulemaking perspective, rather than an enforcement perspective.  That's great news for Verizon and Frontier Communications, of course, as the two local telephone companies providing services in the areas hit by the outages.  (Again, this is similar to how the Bureau approached the 2011 Verizon outage.  The Maryland PSC investigation of the same outage, by the way, has stalled.  No orders have been entered since the October 2011 staff recommendation that we discussed.) 

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Wireline Competition Bureau Clarifies and Revises the FCC's Rules as Carriers Prepare to Make Transitional Intrastate Access Reciprocal Compensation Rate Reductions

Compliance with the FCC's revised intercarrier compensation rules adopted in its USF/ICC Transformation Order continues to be a work in progress for many carriers. The rules have generated several waves of questions as the July 1, 2012, deadline for reducing certain intrastate terminating switched access rates fast approaches. On June 6, 2012, the Wireline Competition Bureau released an Order designed to answer a number of questions that had arisen regarding this transition. The Bureau clarified and revised a number of rules that had been troubling both carriers and state commissions as they tried to make sense of the FCC's rules and comply with the transition requirements. Carriers preparing their July 1, 2012 tariff revisions should review this order to ensure their filings are consistent with the FCC rules.

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Commissioners Rosenworcel and Pai Take Office

One week after Senate confirmation, new FCC Commissioners Jessica Rosenworcel and Ajit Pai were sworn in to office.  With these appointments, the FCC reaches its full complement of commissioners for the first time in nearly a year.  Both Commissioners released short statements expressing excitement to begin their tenures on the FCC.  The statements are available here and here.

They will get their first opportunity to comment publicly as commissioners tomorrow, when the Senate Commerce Committee will hold an oversight hearing.  Their first full Commission meeting will be May 24th.

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Verizon and Verizon Wireless Pay $200,000 to Settle Outage Reporting Investigations

Randy Sifers contributed to this blog post.

On March 14, 2012, the FCC released two consent decrees settling investigations into Verizon’s and Verizon Wireless’s outage reporting practices. Collectively, the two affiliates will pay $200,000 to resolve a Notice of Apparent Liability for filing inaccurate outage reports and possibly other violations. The release of these two settlements confirms that the Enforcement Bureau views the filing of inaccurate or incomplete network outage reports, not just the failure to file outage reports, as significant violations of the Communications Act.

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FCC Extends Outage Reporting Requirements To All Interconnected VoIP Providers

On February 21, 2012, the Federal Communications Commission issued a Report and Order ("Order") adopting outage reporting requirements for both facilities-based and non-facilities-based interconnected Voice over Internet Protocol ("VoIP") service providers on a mandatory basis in order to further ensure reliable 9-1-1 service. Outage notification and reporting requirements currently apply to a variety of voice providers, including wireline carriers, CMRS providers, cable companies, and satellite providers. The Commission's final action was narrower than had been first suggested in 2011, when the FCC also proposed to extend outage reporting requirements to providers of broadband Internet services. In short, interconnected VoIP providers will be subject to notification and reporting requirements only in the event of complete loss of service. Their reporting obligations do not extend to situations where service is technically available but technical conditions effectively prevent communication. Rather, the FCC deferred action on performance degradation thresholds for measuring an outage of interconnected VoIP service and all action relative to outages of broadband Internet services. Finally, the Commission clarified that Part 4 of its rules relating to outage reporting applies to voice services provided using new wireless spectrum bands.

Click here to read the full Kelley Drye Client Advisory.

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FCC Releases Comprehensive Low-Income Program Reform

The Federal Communications Commission ("FCC" or "Commission") released an Order on February 6, 2012 to comprehensively reform the low-income program of the Universal Service Fund to eliminate Link Up in non-Tribal areas; impose uniform eligibility, certification and verification requirements in part through the use of duplicates and eligibility databases; begin the process of modernizing the program to shift to supporting broadband and constrain the growth of the $2.1 billion low-income fund by $200 million in 2012 and by an estimated $2 billion over the next three years. Many of the new rules will be effective 30 days after publication of the Order in the Federal Register, however, there will be important deadlines for eligible telecommunications carriers ("ETCs") throughout the year. At the same time, the FCC released a Further Notice of Proposed Rulemaking ("FNPRM") seeking comment on a number of issues presented by its reform of the program. Comments and reply comments on the issues raised in the FNPRM are due 30 days and 60 days, respectively, after publication of the FNPRM in the Federal Register.

Click here to read the Kelley Drye Client Advisory outlining the entire Order.

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Tidbits from the FCC's Proposed Budget

Yesterday, the FCC released its proposed budget for fiscal year 2013 (beginning in October 2012).  The budget offers a few interesting insights into the balance of the FCC's functions.  It also offers a preview of what to expect with the FCC's regulatory fees, which are due in September of each year.  See below for more.

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FCC Clarifies USF Reform/Intercarrier Compensation Order

This post was drafted by Chip Yorkgitis and Josh Guyan.

On Friday, February 3, 2012, the FCC's Wireline Competition Bureau and Wireless Telecommunications Bureau jointly released an order revising and clarifying certain aspects of the sweeping universal service and intercarrier compensation reform order adopted last November. The clarifications address the rates applicable to VoIP-PSTN traffic, access stimulation and the CETC phase-down of high-cost support, among other things. 

The clarification order will be effective thirty days after it is published in the Federal Register, which is likely to occur quickly. However, as a practical matter, the clarifications are effective immediately in light of the rules being clarified already having taken effect.

For more information, see Kelley Drye's Advisory on the clarification order.

FCC Affirms 2008 Audio Bridging Classification Order

Back in November, we told you that the FCC was considering an order on reconsideration in the 2008 audio bridging classification appeal brought by InterCall, Inc.  It took over two months, but the FCC last week issued an order denying in full the petitions for reconsideration of the Classification Order.

The petitions were brought by two free conferencing providers, who argued that the FCC had misinterpreted the nature of audio bridging service (or at least their audio bridging services).  In the reconsideration order, the FCC denies the petitions.  While we had hoped that the reconsideration order would provide additional explanation of the rationale for classifying audio bridging as telecommunications, except for a discussion of bundled services, the order does not provide further guidance on the classification of bridging services.  As a result, audio conferencing providers will be left with the existing uncertainty for the foreseeable future when making classification decisions.   

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FCC ICC/USF Reform Order Published in Federal Register

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.

FCC Releases Text of Intercarrier Compensation Order

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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White House Nominates Two New Commissioners for the FCC

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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FCC Adopts Universal Service and Intercarrier Compensation Reform

Today, the FCC adopted its much-anticipated Universal Service/Intercarrier Compensation Reform Order. This order will have significant impacts for all telecommunications carriers, and also for interconnected VoIP providers. The full order, which is approximately 600 pages long, has not been released yet. In the meantime, the FCC released the attached Press Release and Executive Summary for details of the order. For background on the proceeding, see our post from February.

The implications for each carrier will be fact-specific, and we encourage you to contact Kelley Drye if you have any questions or would like assistance.
 

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Implementing Net Neutrality

The Federal Communications Commission adopted the new Open Internet/Net Neutrality regulations on December 23, 2010, which will go into effect on November 20, 2011. These regulations place restrictions on certain providers of broadband Internet access. To listen to Steve Augustino's view on the implementation of the FCC's new Open Internet regulations, please view the Lexblog Network TV interview below. In the interview, Steve addresses the most impactful parts of the new net neutrality regulations, the complaints surrounding the disclosure requirements, and how they will be addressed in the future.
 

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A Practical Look at the FCC's Open Internet/Net Neutrality Regulations

On December 23, 2010, the FCC adopted new Open Internet ("network neutrality") rules that place a variety of disclosure and other obligations on certain providers of broadband Internet access. On June 30, 2011, while required OMB review of the new rules continued, the FCC's Enforcement Bureau and the Office of General Counsel issued a Public Notice to assist with compliance with the new transparency rule. OMB review was completed early in August, the rules were published in the Federal Register on September 23, 2011, and they are effective as of November 20, 2011.

The rules, the justification for the rules, and the Commission's authority to adopt the rules will be the subject of ongoing policy, legal, and legislative battles in the months and years ahead. Petitions for review were filed in numerous federal circuits, and, after a lottery, the D.C. Circuit Court of Appeals was selected to hear the appeals brought by Verizon and Verizon Wireless and numerous consumer and public interest groups. We expect the court to hear the case in 2012.

The Kelley Drye Telecom practice has created a memo titled "A Practical Look at the Federal Communications Commission’s Open Internet (Network Neutrality) Regulations" that provides a practical overview in question and answer format of the substance of the new rules and the obligations they impose on affected providers of broadband Internet access services, as well as general guide for compliance, taking into account the Enforcement Advisory.

If you would like a complete copy of the memo, please e-mail Steve Augustino at saugustino@kelleydrye.com, or John Heitmann at jheitmann@kelleydrye.com.
 

Federal Register Publication Marks Beginning of Net Neutrality Litigation

One long march is finally over, another one begins.  After OMB approval of the rules was announced earlier this week, today, the FCC published the Net Neutrality Order in the Federal Register.  The 44 page summary is available here.  With this notice today, the next stage in the net neutrality saga finally begins. 

First, and most likely, with the publication today, appeals of the rules may finally begin.  Multiple appeals will be filed, most likely in multiple circuit courts of appeals.  The question will be where the appeals will be heard.  On one side, Verizon Wireless has argued that the appeal must be heard in the DC Circuit because it is a "licensing" decision.  Others have argued that the general appeal provision applies, so venue is proper in any of the circuits.  If this latter view is correct, a lottery will be held among the circuits with appeals filed in the first 10 days to determine which circuit will hear the case. 

Second, the publication triggers the effective date of the new rules.  With publication today, the new rules will take effect on November 20th unless stayed by the court.  It is important to recall that Commissioner McDowell wrote a dissent that essentially argued that the rules will create irreparable harm, which is the primary factor examined in determining whether a stay is proper.

Watch this blog for more updates.  We expect today to mark the beginning of a busy litigation period over the new rules. 

2011 Regulatory Fee Update -- Fees Due September 14

As in years, past, we're tracking the FCC Regulatory fees for you.  The Regulatory Fee is an annual assessment mandated by Congress to recover most of the FCC's cost of doing business.  Regulatory fees are recovered directly from the entities the FCC regulates.  As I've noted before, the FCC collects nearly half of its fees from telecommunications carriers, an amount that I believe is disproportionate to the FCC's overall activities.

The due date for regulatory fees varies from year to year, but the FCC must collect regulatory fees before the end of the fiscal year on September 30.  This year, the FCC announced that the fee is due on September 14th by 12 midnight.   As with the past few years, the FCC does not mail invoices and payments are due on-line.  Also, a late fee of 25% of the amount due is assessed on all late payments (no exceptions).

See Kelley Drye's client advisory on the topic for more information.  For those paying regulatory fees, see the links below for more detail on where and how to pay the fees.  As a reminder, our Resource Center contains helpful links to the FCC and other sites of interest to regulated entities.

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'Big Three' Weigh in on Online Privacy: FTC, FCC and NTIA Testify at Privacy Hearing

On July 14, 2011, a joint House Energy and Commerce Subcommittee hearing focused on online privacy policy and perspectives of the ‘big three’ federal agencies with potential jurisdiction over online privacy – the Federal Trade Commission (FTC), the Federal Communications Commission (FCC), and the National Telecommunications and Information Administration (NTIA). The hearing, Internet Privacy: The Views of the FTC, the FCC, and NTIA, offered a comprehensive review of the state of online consumer privacy and the appropriate industry and government response to developments in online behavioral advertising and tracking. The hearing comes on the heels of a flurry of online privacy and data security legislation introduced in recent weeks and months. Witnesses included FCC Chairman Julius Genachowski, FTC Commissioner Edith Ramirez and NTIA Administrator Lawrence E. Strickling.

The hearing touched on issues including the economic impact of privacy regulation, defining the harms caused by data collection, agency jurisdiction and authority, protecting children, data security, and social networking. Click here for more detail regarding the major themes discussed at the hearing, which expanded the growing legislative record on online privacy and security.

Compliance Reminders: FCC Filings Due August 2011; FCC Form 477 Compliance Webinar; FCC Annual Regulatory Fees

Form 499Q: Quarterly Telecommunications Reporting Worksheet

Carriers required to contribute to federal 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 499Q filing, providing historical revenue data for April 1 through June 30 and projected data for October 1 through December 31, is due to USAC by August 1, 2011.

Form 502: North American Numbering Plan Numbering Resource Utilization/Forecast Report

Carriers that receive numbers from

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FCC Reforms Lifeline Program to Prevent Duplicative Subsidies

On June 17, 2011, the FCC adopted a Report and Order seeking to prevent waste and abuse by prohibiting duplicative Lifeline program subsidies for low-income consumers already receiving support. The proceeding was prompted by concerns that qualified low-income consumers may be knowingly or unknowingly receiving Lifeline support from more than one eligible telecommunications carrier (ETC) – something the FCC has determined to be contrary to the goals of the program. These concerns spurred an increase in USAC auditing and an FCC rulemaking proceeding, culminating in the Report and Order.

The Report and Order includes the following provisions:

 

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FCC Announces June 28, 2011 Location Based Service (LBS) Forum

In a May 17, 2011 Press Release, the FCC announced plans to hold a June 28, 2011 public education forum on consumer and privacy issues implicated by mobile Location Based Services (LBS) tracking. The FCC seeks input from consumers, industry, and academia on a variety of related topics, including industry best practices and the use of mobile devices by children.

The forum comes amid growing concerns over consumer mobile privacy, including recent disclosures that Apple and Google mobile devices collected geolocation information without consumer consent. Recent media coverage has drawn attention to the collection, use and disclosure of geolocation information and there is mounting Congressional interest in protecting consumer online and mobile privacy (see Kelley Drye Advisory and chart summarizing federal consumer privacy legislation).

The forum is being conducted in consultation with the FTC. The FCC’s March 2010 National Broadband Plan called for the two agencies to work together on privacy issues and in July 2010, a Joint FTC/FCC Privacy Task Force was formed. The forum will inform a forthcoming FCC staff report that may help shape the ongoing privacy debate and may clarify the role the FCC intends to play in this area. Comments on the LBS forum and the topics raised for inclusion in the proposed FCC staff report are due July 8, 2011.

For more information about this uncharted legal territory and emerging "rules for the road" for developing and marketing mobile apps, click here to view and listen to a recording of the Kelley Drye webinar, Mobile Applications: Privacy and Data Security Considerations.
 

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FCC Commissioner Baker Joining Comcast/NBCU

Today, FCC Commissioner Meredith Attwell Baker announced that she is resigning from the Commission as of June 3, 2011. The Los Angeles Times is reporting that she will join Comcast as Senior Vice President of Government Affairs for Comcast’s newly acquired NBCUniversal unit. Baker voted to approve that merger in January. Her departure already has drawn criticism from those who think that relations in Washington are too cozy between regulators and regulated entities.  Though the proximity of her departure to her vote on approving the Comcast/NBCU deal may raise eyebrows, the "revolving door" is a way of life here in DC, as public servants often find attractive opportunities in the private sector.

Baker’s departure leaves Commissioner Robert McDowell as the FCC’s lone Republican commissioner. And with Commissioner Copps set to depart the Commission by year’s end, the agency may find itself with only three Commissioners presiding over complex matters such as the AT&T/T-Mobile merger, intercarrier compensation and universal service reform. Politics surrounding a potential successor for Commissioner Copps just became more interesting, as Republicans will now need to get a nomination through, too.
 

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FCC Regulatory Fee Proposal May Resolve Long Pending VoIP Petition Too

According to the FCC's weekly list of pending items on circulation, the Commission appears ready to resolve a longstanding petition by an interconnected VoIP provider to cancel its 2007 FCC regulatory fee.  The ruling could have impact on future regulatory fee assessments, but the specific relief relating to 2007 (if the petitioner is successful) is likely to be limited to the petitioner.

See below for more on the pending action.

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FCC Announces Shut Down Plan

With only hours (as of this writing) before a likely government shutdown over the budget, the FCC finally released its shutdown plan. 

UPDATE 4/9/11:  Congress reached a resolution of the FY 2011 budget battle late last night.  The President's discussion is available here, and Speaker Boehner's release is available here.  Congress passed a short-term continuing resolution to avert a shutdown, and are preparing a bill to fund the government through the remainder of FY 2011.  It appears, therefore, that the FCC shutdown plan will not be needed.

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FCC Releases Revised 2011 USF Form 499-A

On March 1, the FCC's Wireline Competition Bureau released its revised Form 499-A, the Telecommunications Reporting Worksheet.  This Worksheet must be used by telecommunications providers and interconnected VoIP providers to report annual 2010 revenues for USF, TRS, NANPA, LNP and FCC Regulatory Fee assessments.  The Form 499-A is due by April 1, 2011.

The 2011 Form 499-A Instructions mark the Bureau's first major revision to the Instructions since the FCC began using the Form 499-A in 2000.  The Bureau has substantially reorganized the Instructions and consolidated some of the discussions.  As a result, a comparison of this year's Instructions to the 2010 Instructions is not an easy task.  We will continue to review the Form and expect to discover any changes over the next few weeks.  Filers should consult their regulatory counsel prior to filing their 2011 Form, just to be sure.   

For the benefit of our readers, we post here the FCC Public Notice, the revised Form 499-A and the revised Instructions.  These forms also are available on the Universal Service Links page of our Resource Center.  For easy "two-click" access to these and other regulatory resources, bookmark our site. 

Compliance Reminder: FCC Filings Due March 2011

Customer Proprietary Network Information Certifications

All telecommunications carriers and interconnected VoIP providers must file an annual report certifying their compliance with the Federal Communications Commission’s (FCC) rules regarding Customer Proprietary Network Information (CPNI). The report covers calendar year 2010 and must be filed with the FCC by March 1, 2011.

The FCC’s Enforcement Bureau recently released a FCC Enforcement Advisory addressing the importance of making timely and compliant filings and noting that filers now have the option of filing CPNI certifications via a new FCC web application, in addition to filing via ECFS, mail or by hand delivery.

Form 477: Local Competition and Broadband Report

The Local Competition and Broadband Report, containing data as of December 31, 2010, must be filed by March 1, 2011. The report requires the submission of information regarding broadband connections in individual states.

Who Must File:
(1) ILECs or CLECs that provide local exchange service to one or more end user customers;
(2) facilities-based providers of mobile telephony services that serve one or more mobile telephony subscribers;
(3) entities (including all commonly-owned or commonly-controlled affiliates) that are facilities-based providers of broadband (i.e., faster than 200 kbps, in at least one direction) connections (including both wired lines and wireless channels) to one or more end users in a state; and
(4) providers of interconnected VoIP services that provide interconnected VoIP service to one or more subscribers in a state.

Reporting Basis:
In addition to specific reporting requirements contained in the Form 477 Instructions, for all broadband technologies other than terrestrial mobile wireless, filers must report broadband subscribership information by Census Tract.

Filing Process:
The Form 477 Report must be submitted via an FCC web-based interface and filers will need to use their Federal Registration Number (FRN) and associated password to access the system.

REVISED Form 499-Q Quarterly Telecommunications Reporting Worksheet

Providers 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 FCC Form 499Q on a quarterly basis. Filers making revisions to the February 1, 2011 Form 499-Q filing must submit the revisions to the Universal Service Administrative Company (USAC) no later than March 18, 2011.

REVISED Form 499-A Annual Telecommunications Reporting Worksheet

All providers of interstate telecommunications service and all common carriers are required to file FCC Form 499-A with USAC each year with limited exceptions. Filers making revisions to their previous year’s Form 499-A Telecommunications Reporting Worksheet filing which result in a decreased contribution must submit the revisions to USAC by March 31, 2011.
 

FCC Releases USF and ICC Reform NPRM

Late yesterday, the FCC released its latest NPRM on high cost USF and ICC reform (see our 2/8 post).  The 289 page item, available here,  sets forth staggered comment dates triggered by federal register publication.  The first -- 30 days after Federal Register publication -- is for comments on intercarrier compensation for VoIP traffic, rules to address phantom traffic and rules to reduce access stimulation.  Reply comments are due 15 days after that.  Comments on the rest of it will be due on the same day (45 days after Federal Register publication).  State members of the Federal-State Joint Board on Universal Service get two extra weeks to file comments.  All reply comments on the remaining sections are due 80 days after federal register publication.

FCC Jump-Starts USF and ICC Reform with Another NPRM

The FCC earlier today adopted (but has not yet released) a substantial NPRM on universal service fund (USF) and intercarrier compensation (ICC) reform, signaling that the agency is ready (again) to engage anew in its decade long quest to reform these interrelated subsidy and compensation regimes that nearly all interested parties agree are unsustainable.

With roughly $4.5 billion/year in play on the high cost USF side and approximately $8 billion/year at stake on the ICC side, this is a proceeding in which many will want to weigh-in or at least track carefully. Yes, we realize that we said this 10 years ago and again back with the last swell of activity in 2008, but the timing and circumstances of today’s action, as well as the remarks of each Commissioner seem to suggest that odds of the agency taking concrete steps toward adopting meaningful reforms are higher now than they ever have been.

That said, it remains unlikely that the agency could adopt an order addressing comprehensive high cost USF and ICC reform before 4Q11. The process will be neither quick nor easy. And, as many will note, conspicuously absent from today’s NPRM are proposals for USF contribution reform. It seems strange that the fund is to be re-purposed to support broadband in advance of adopting a requirement that broadband providers contribute to the fund. Lifeline reform also gets punted to another day, but the agency promises it is working on getting to this soon. With the proposed USF Mobility Fund also on a separate track, it appears that the Commission has liberated itself from the notion that it must address all pieces of the puzzle at one time in one order.
 

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Insights from Kelley Drye's 3rd Annual Privacy Seminar

On January 21, 2011, Kelley Drye & Warren hosted the seminar and audiocast, "Privacy By Design, Choice, and Transparency: What a New Framework Will Mean for Business and Technology." The seminar highlighted key regulatory and legislative developments in privacy and information security law during the past year.

Click here to listen to the audio recording.

Six experts representing the federal agencies and policymakers integral to recent privacy initiatives spoke during two separate panel sessions. The first panel reviewed and expanded upon the separate privacy frameworks released in December 2010 by the Federal Trade Commission and the U.S. Department of Commerce. The second panel included FCC representatives and featured a discussion on the confluence of privacy policy and broadband adoption, along with perspectives on the privacy themes of greatest interest to the new Congress. Click here to read an overview of the key takeaways from each panel.
 

FCC Names Six USAC Board Members

Yesterday, the FCC announced the appointment of six members to USAC's Board of Directors.  Don't expect much change in the way USAC operates, however:  five of the six members are current members of USAC's board.  The only new board member is Jose Manuel Jimenez of Cox Communications, who fills a vacant position reserved for cable operators.  

One position -- a board position reserved for interexchange carriers with more than $3 billion in annual revenues -- remains vacant.  See the FCC's public notice seeking nominations here

The six board members are listed below.  

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FCC Releases Text of Net Neutrality Order

Late yesterday, the FCC released the text of its Open Internet Report and Order (aka the Net Neutrality decision).  We're on vacation already, so we don't have time for any analysis right now.  Nevertheless, for those interested, the Report and Order is available here. 

Readers should review paragraphs 151-160 for the discussion of enforcement of the new rules.  Also, paragraph 161 states that all of the rules will be effective 60 days after the Federal Register notice of OMB's approval of the new information collection requirements associated with the rules.

FCC Adopts Net Neutrality Rules, Endorses Accelerated Docket Complaints for Violations

Today, a divided FCC adopted enforceable "net neutrality" rules for the first time.  By a 3-2 vote, with all three Democrats voting in favor and both Republicans voting against, the Commission adopted a Report and Order in its Open Internet inquiry.  As Chairman Genachowski announced last month, the new rules rely upon the FCC's "Title I" authority to adopt "basic rules of the road" to preserve the open Internet "as a platform for innovation, investment, competition and free expression."

To win the support of the other Democratic Commissioners, the Chairman agreed to several changes from his proposal last month.  Most notably, the Order applies the transparency rule and a limited blocking prohibition to wireless carriers, and -- although the exact extent is unclear -- appears to bar wireline broadband service providers from engaging in paid prioritization of Internet content.  The Order also adopts a definition of the "broadband Internet access services" to which the rules apply.

Commissioners Copps and Clyburn pronounced this action imperfect but sufficient to enable them to permit adoption of the Chairman's proposal.  On the other hand, both Commissioners McDowell and Baker dissented from the Order.  Both strongly objected to the Commission's claim of exisiting authority over Internet network management.  Commissioner McDowell also asserted that the Order would create "irreparable harm" -- a factor considered by courts in granting a stay of agency orders.

The FCC action is described in more detail below.  UPDATED:  A PUBLIC NOTICE WITH THE RULES WAS RELEASED.  SEE BELOW

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FCC's Genachowski Proposes Net Neutrality Rules, Creates Firestorm

Since April, the FCC has been struggling with how to react to the Court's reversal of the Comcast P2P blocking order.  Today, Chairman Genachowski announced that he plans to move forward to adopt net neutrality rules at the FCC's December 21 open meeting.  That announcement was met with prompt condemnation from the Republican commissioners and measured support from his fellow Democratic commissioners.

Genachowski's speech abandons his prior proposal for a "third way" to resolve this issue.  His current approach relies upon the same Title I authority that the court of appeals found lacking, although presumably the Chairman intends to provide a better rationale connecting the rules to the Commission's authority.  One issue that should not get lost in the shuffle, however, is that Chairman Genachowski is proposing to adopt enforceable rules that bind broadband providers for the first time.  This would replace the 2005 Policy Statement, which, as we've pointed out, creates enforcement problems of its own.

Follow the jump below to read the statements released today.

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AT&T Settles Multiple Privacy Investigations for $200,000

Yesterday, the FCC released an Order adopting a consent decree resolving several investigations into failures of AT&T’s CPNI opt-out practices. In the settlement, AT&T agreed to make a $200,000 voluntary contribution to the U.S. Treasury and to adopt a two-year Compliance Plan including monthly testing of its opt-out mechanisms, training and reporting requirements. The Order, which closes out three separate investigations into AT&T’s self-reported lapses in its opt-out mechanisms for small business, can be found here. The Order and others like it (see TLM, June 28, 2010 post) demonstrates that the FCC continues to prioritize taking enforcement action with respect to easily detected failures to comply with its CPNI rules (see TLM, August 4, 2010 post).
 

FCC Clears States to Impose USF Fees Prospectively on Intrastate Nomadic VoIP Services

As has been expected, the FCC late Friday released an order finding that states can require nomadic interconnected VoIP providers such as Vonage to pay state universal service fund contributions on a prospective basis provided that (1) the relevant state’s contribution rules are consistent with the FCC’s universal service contribution rules (i.e., states must allow a provider to treat as intrastate for state USF purposes the same revenues treated by the provider as intrastate under the FCC’s USF contribution rules), and (2) the state does not apply its contribution rules to intrastate VoIP revenues attributable to another state (i.e., no two states can impose USF assessments on the same intrastate revenues).

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GAO Audit Finds USAC Audits Lacking in Controls

The Government Accountability Office (GAO) recently released a study of the FCC's e-rate program controls.  The GAO study recommended that the FCC conduct a "robust risk assessment" of its e-rate program and revise the internal control structure of the program.  What caught our eye, however, was the commentary on USAC's e-rate beneficiary audits.

The GAO criticized USAC's beneficiary audits as lacking documented and approved policies and procedures.  As a result, "[USAC] management may not have the assurance that control activities are appropriate and properly applied."  It specifically criticized USAC for not using information gathered from the audits to assess and modify the e-rate program's internal controls.  As an example, the GAO noted that of 64 beneficiaries that were audited multiple times over a three year period, 56 percent of the beneficiaries (36 of 64) had the same audit finding in multiple years.

The full GAO report is available here.

Nominations Sought for USAC Board Positions

One of the hottest areas in enforcement and litigation is the Federal Universal Service Fund.  In fact, with USAC embarking on an expanded set of audits and investigations since August, USF disputes are about to multiply.  Therefore, news that the FCC is seeking nominations for Board members of USAC is important to this blog.

In a Public Notice yesterday, the FCC announced it is seeking nominations for seven positions on USAC's 19-member board of directors.  Two of the positions are vacant, the other five are for members whose terms are expiring.  The FCC is seeking nominations for these positions:

  • Representative for cable operators (vacant)
  • Representative for interexchange carriers (vacant)
  • Representative for mobile providers
  • Representative for supported schools
  • Representative for supported libraries
  • Representative for consumer advocates
  • Representative for non-rural incumbent LECs

Nominations must be submitted by October 27. 

FCC Settles $100,000 Proposed Fine for Only $250

At Kelley Drye, we handle a lot of FCC investigations, so we know first hand how the Commission develops proposed forfeitures for telecom violations.  In previous posts, I've commented that the FCC should reconsider the proportionality of the base forfeiture amounts it uses in telecom enforcement cases.  A case released today underscores the inherent weaknesses of the FCC's current ad hoc approach to setting these base forfeiture amounts. 

In the case described below, the FCC proposed a $100,000 fine for a telecom carrier's non-compliance with its privacy rules -- namely, the rule requiring carrier to execute annual compliance certifications.  Three years later (and after a shift in administrations), the FCC settled the proposed fine for a mere $250.  There is no mention of mitigating circumstances, of an inability to pay or of any of the statutory factors the FCC is obligated to consider.  The outcome leaves you wondering:  Just what is the base fine for failing to comply with the FCC's privacy rules?

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FTC Seeks to Bring Telecom Carriers within the Scope of New Data Security and Data Breach Legislation

This entry was drafted by Telecom Partner John Heitmann

Yesterday, the FTC testified before a Senate Subcommittee and recommended that proposed data security legislation introduced by Senators Pryor (D., AR) and Rockefeller (D., WV) (The Data Security and Breach Notification Act of 2010, S.3742) be modified so that its requirements and the FTC’s enforcement authority thereunder be extended to telecommunications common carriers.  

The FTC’s testimony – available here – is the latest in a series of FTC actions signaling the agency’s concern regarding the amount of personal information telecom common carriers handle and the FTC's ability – or inability – to take enforcement action against such carriers.

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2010 Regulatory Fee Update -- FCC Begins Accepting Payments

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

FCC Regulatory Fees Likely Due in August

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.  

Final 2010 FCC Regulatory Fees Released

Following on the release of the 2010-11 TRS Fund contribution factor, the Commission today released its final regulatory fee schedule for FY 2010.  The Commission adopted a telecommunications provider fee that is slightly lower than it proposed in April.  The regulatory fee for telecommunications providers (including audio bridging providers) is $0.00349 per revenue dollar reported on the April 1, 2010 Form 499-A.

The Commission acknowledged that telecommunications providers pay 46% of all regulatory fees, which several carriers had argued is a disproportionately large percentage of the total amount collected by the FCC.  (And I agree.)  Recognizing these concerns, the Commission announced that it would be releasing a Further Notice of Proposed Rulemaking to "rebalance" its regulatory fees in the future.

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.  As with last year, the FCC will not mail bills to telecommunications carriers.  Carriers are required to check the FCC regulatory fee web page for payment information before the September due date. 

Telecommunications Relay Service Fund Contribution Factor Decreases

We have a classic "man bites dog" story for you today:  The FCC announced that its contribution factor for the fund that supports the Telecommunications Relay Service -- a telecom assistance service for persons with hearing or speech disabilities -- is decreasing by nearly 50%.  Whereas last year's TRS contribution factor was 1.1% of telecom revenues, the 2010-11 factor is only 0.585% of telecom revenues.

However, this rate was lowered in part by a one-time application of a refund from the 2009-10 fund.  Carriers can expect a slight increase in July 2011, after the one-time refund is exhausted.

The new rate is effective as of July 1.  Carriers subject to the TRS fund (basically, any entity that files a FCC Form 499) should see the lower rate on their next invoice from the TRS administrator.

Kelley Drye's client advisory on the TRS reduction is available here.

The FCC order setting the TRS contribution factor is available here.

FCC Begins Groundwork to Extend Outage Reporting Obligations to Broadband and Interconnected VoIP Providers

Despite issues over the FCC's jurisdiction in light of the Comcast decision, the FCC's Public Safety Bureau took a step toward possible extension of the FCC's outage reporting requirements to broadband service providers and providers of interconnected VoIP services.  In a July 2 Public Notice, the Bureau seeks comment "in advance of" a possible Commission rulemaking proceeding.  The comment request in many ways presumes that the outage reporting rules should apply, and asks a number of questions about how they could apply and what changes might be necessary in light of the different technologies involved.  Clearly, the Bureau is seeking to do its homework before the Commission initiates a rulemaking proceeding.

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FCC Data Innovation Initiative Highlights Compliance Obligations

Yesterday, the FCC launched a review of its data collection practices, which it termed its "Data Innovation Initiative."  Most relevant to the scope of this blog is the inventory of compliance obligations released by each FCC Bureau.  The FCC's notice highlights just how extensive the reporting obligations are for carriers and other regulated entities.

The Data Innovation Initiative public notice is available here.  As described by the FCC, the Initiative is designed "to modernize and streamline how [the Commission] collects, uses and disseminates data."  Accompanying the initiative are three public notices establishing comment periods concerning the data collection requirements adopted by each of the main three bureaus -- Wireline Competition, Wireless Telecommunications and Media.  Each bureau's public notice is accompanied by an "inventory" of data collection activities approved by the Office of Management and Budget ("OMB").  The inventories list the following number of data collection requirements:

Wireline Competition Bureau inventory:  104 data collection requirements

Wireless Telecommunications Bureau inventory:  96 data collection requirements

Media Bureau inventory:  140 data collection requirements

Meet the Enforcement Bureau

Yesterday, I attended a bar association event featuring the FCC's Enforcement Bureau.  There were no newsworthy revelations made during the session, but the Bureau distributed an updated organizational chart and contact list.  I'm attaching the materials here and will be adding them to our resource links on the right hand column of the blog.

Strange Coalition Petitions Court of Appeals to Bypass FCC on VoIP Access Charges

A diverse group of telecom companies and trade groups have jointly submitted a supporting brief to the U.S. Court of Appeals in the Paetec v. CommPartners appeal.  The Joint Brief includes ILECS like AT&T and Verizon, CLECs like Neutral Tandem, and normally contrary trade associations like USTA and the VON Coalition. Although these parties have wildly divergent views on how the VoIP access charge dispute should be resolved, they all agree that the Court of Appeals should decide the issue now.  The Joint Brief states that the parties submitting  "have differing views about the merits" of the district court ruling, "but all agree that a decision from" the Court of Appeals is desirable to clarify the situation for all concerned.  

No one knows for sure, but the many pending cases and disputes on VoIP access charges collectively probably have hundreds of millions of dollars at stake.   The FCC has exerted much effort to avoid making a decision on the court referrals and various petitions that it has received on the subject since 2005. 

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FCC Open Meeting Recap

The FCC took a flurry of actions at yesterday's monthly open meeting.  Fulfilling this blog's role as your resource for news and helpful links, below is your guide to yesterday's actions.

Wireless Market Report:  The  Commission adopted its 14th Annual Report on the state of the wireless market.  Among other things, this report was controversial because it refused to make an "effective competition" judgment on the wireless market.  The report also expands coverage beyond CMRS to address the broader mobile marketplace. 

Number Porting:  The Commission released a Report and Order shortening the time interval for "simple" ports.  This action will particularly affect wireline-to-wireless ports, and might accelerate the trend of "cut the cord" conversions.

Pole Attachments:  The Commission made a number of changes to its rules governing the rights of cable and competitive telecommunications providers to hang facilities on utility poles.  The order also proposes a number of changes to the pole attachment complaint rules.

Universal Service:  The Commission issued a Notice of Proposed Rulemaking to modify its "e-rate" rules, which support discounts for schools and libraries for internet access and other services. 

Broadband Spectrum:  The Commission adopted rules to make available another 25 MHz of spectrum for mobile braodband use. 

REMINDER:  For more information on many of these topics, peruse our links on the right hand side of this page. 

FCC's Genachowski Proclaims a "Third Way" to Apply Net Neutrality

A month after the Court of Appeals reversed the FCC's Comcast decision, FCC Chairman Genachowski announced a "third way" to regulate broadband transmission lawfully.  The Chairman released a statement describing his "third way" along with a memo from the General Counsel asserting its legality.  Commissioner Copps, who publicly advocated reclassification of braodband internet access services to Title II, praised Genachowski's solution (though he still prefers reclassification).  Meanwhile, Commissioners McDowell and Baker, the two Republicans on the Commission, declared the proposal "disappointing" and "deeply concern[ing]." 

The battle has only begun.

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FCC Overrules USAC on USF Application to T-1s

The Wireline Competition Bureau of the FCC has overruled a USAC finding that an internet services provider should pay universal service fund assessments on T-1s that the company uses to provide internet access and voice services.  The order is available here.  In U.S. TelePacific Corp. the Universal Service Adminstrative Company concluded that revenues received by TelePacific Corp from its sale of internet access services, sometimes coupled with voice service, should be subject to assessment for universal service fund contributions.  According to the Bureau, USAC had reached its finding "solely because the facilities (T-1 lines) ... are typically used for basic transmission service."  The Bureau reversed this conclusion, stating that even though TelePacific was utilizing T-1 lines it "is not required to make contribution based on revenues from sales of [internet access] service." 

Notably, the Bureau did not decide an ancillary question raised in the proceeding -- whether TelePacific should have contributed indirectly to the federal universal service fund on T1 wholesale inputs purchased from incumbent LECs.  Instead, the FCC instructed TelePacific to take two further actions within 60 days.  First, it requested a "detailed explanation of the methodology by which TelePacific apportions revenues derived from its sale to end users of voice telephony...and how it reports such revenues" on its USF forms.  TelePacific represented in the inquiry that it allocates its revenue among the services it sells and pays into the universal service fund on the amounts attributed to voice services.  Second, TelePacific was told to "provide USAC with the names and contact information of its wholesale providers of transmission services within 60 days .., so that USAC can assure that all contributions to universal service are promptly paid."   In a footnote, the Order explains that TelePacific may have erroneously certified itself as a resale carrier to its wholesale vendors which, in turn, "may have impacted the amount of revenues that TelePacific's wholesale provider reported."

FCC Issues Universal Service Reform Proposals

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.

Proposed 2010 FCC Regulatory Fees Released

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.

Reminder: FCC Filings Due May 2010

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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FCC Announces Schedule for National Broadband Plan Proceedings

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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Breaking News: Court vacates FCC's Comcast Decision

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.

FCC Releases Anticipated National Broadband Plan

On March 16, 2010, the Federal Communications Commission (“FCC”) announced the release of the National Broadband Plan (the “Plan”). The Plan outlines sweeping proposals intended to accelerate broadband access and adoption throughout the United States that will be implemented over the coming years. Over the coming months, the FCC will launch a series of rulemakings to seek public comment and adopt rules to implement these proposals. Broadband and telecommunications providers should expect these proceedings will be a key focus of the FCC for the next several years.

Among the Plan’s chief recommendations are proposals that would give the FCC and other policymakers an enhanced role in establishing and enforcing pro-consumer policies, including mandating heightened disclosure requirements for broadband service providers, publishing market-by-market analyses of broadband pricing and competition, and enhancing online privacy protections. The Plan also calls for the FCC to: increase the amount of spectrum available for allocation through the use of incentive auctions; expand the amount of spectrum available for unlicensed use; and increase the transparency of spectrum allocation in general. Further, the Plan includes recommendations to speed the development and adoption of technologies that touch on a wide range of policy objectives from health care to public safety to energy efficiency.

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USF Contribution Factor - 15.3%

Today, the FCC released its proposed Universal Service contribution factor for the second quarter of 2010.  As predicted, it is 15.3% The new rate will go into effect starting April 1, 2010. 

 

Enforcement Bureau Settles Outage Reporting Investigations

While the rest of the Enforcement Bureau has not yet fully emerged from the FCC transition, the Spectrum Enforcement Division continues to move investigations along. Last month, the division fined several wireless carriers for failing to file hearing aid compatibility reports. Yesterday, the division settled two outage reporting investigations involving wireless carriers. In both cases, the carriers were alleged to have failed to report outages within the 120 minute deadline. One carrier agreed to a "voluntary contribution" of $40,000. The other carrier agreed to a contribution of $50,000, must implement a compliance training program and must file three compliance reports with the FCC. Clearly, the Commission felt that this carrier's degree of non-compliance was greater. A little prevention can make all the difference in these investigations.

Snow Closes FCC for 4th Day

The DC area has been hit with back to back snowstorms since February 5, causing the FCC to close for four straight days.  This is the first time I can remember the FCC being closed for such a long time period. 

We are starting to see the impact of the closure.  The FCC's open meeting originally scheduled for today has been postponed a week, to February 18th.  The FCC's electronic docketing systems have not been updated since mid-day on Friday, February 5th, putting significant strains on many proceedings before the Commission.  I have one proceeding, for example, where comments were due on the 5th.  Maybe half of all comments appear in the docket so far, and the February 22 reply date is rapidly approaching.  I hope the FCC will grant an extension of the reply date when it finally opens again. 

Kudos to all those snowplow operators, emergency services personnel and utility technicians who have toiled so long and hard in what turned out to be a blizzard we will remember forever.

FCC Seeks Comment on Two USF Appeals

Continuing its recent custom, the FCC quickly sought comment on two Universal Service Appeals.  The issues involved in these appeals include classification of information services, classification of reseller revenues and identification of subscriber line charge (SLC) revenues.  Carriers offering similar services take note.

Telepacific Appeal and Request for Stay.  In this appeal, Telepacific seeks reversal of USAC's classification of an integrated T-1 service as telecommunications.  Telepacific contends that its service is an information service based on the FCC's 2005 Wireline Broadband Internet Access Order. Telepacific also seeks a stay of the instruction that it refile a Form 499-A consistent with USAC's decision.  Comments are due January 29; replies February 3. 

USF filers should note that this appeal did not result from a USAC audit.  Instead, Telepacific attempted to revise its 499-A form, and USAC raised questions about the revision.  Ultimately, USAC disagreed with the classification reflected in the revision and rejected the filing.   In my view, USAC's rejection is procedurally improper.  All Form 499-As are certified by an officer of the company under penalty of perjury.  USAC should be obligated to accept and process a revision properly certified by an officer. 

Grande Communications.  In this appeal, Grande challenges three conclusions made in an audit of its 2004, 2005 and 2006 revenues.  First, Grande challenges USAC presumption that Grande assessed an interstate Subscriber Line Charge (SLC).  Second, Grande challenges USAC's classification of a wireline broadband Internet access service as telecommunications for a portion of the audit period.  Finally, Grande challenges USAC's reclassification of Grande reseller revenues, including at least one instance where USAC is seeking to collect USF from Grande and Grande's reseller customer simultaneously. 

Comments on the Grande appeal are due February 18.  Replies are due March 5.

Full Disclosure:  Kelley Drye represents Grande in its appeal. 

Court of Appeals Upholds FCC on ISP-Bound Calls

The U.S. Court of Appeals for the D.C. Circuit has upheld the FCC's November 5, 2008 ruling continuing the rate cap on CLEC intercarrier charges for dial-up Internet calls.  In Core Communications v. FCC, decided January 12, 2009, the Court found "no legal error in the Commission's analysis" and thus affirmed the agency's decision.  This ruling presumably ends a protracted set of challenges and judicial examinations of the FCC's efforts to limit CLEC charges for receiving ISP bound calls.

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Comcast, Net Neutrality and the Universal Service Fund

Yesterday, the DC Circuit held oral argument on Comcast's appeal of the FCC's ruling that Comcast ilegally blocked P2P traffic in its broadband Internet service.  By all accounts, the argument went poorly for the FCC.  If the FCC indeed loses the case, it could have implications for enforcement of federal Universal Service Fund (USF) contribution obligations too. 

Some of the best summaries appear in MultiChannel News, The Blog of the Legal Times and Enterprise Networking Planet.  The argument went so poorly that FCC Chairman Julius Genachowski issued what amounts to a "vote of confidence" for the enforcement order.  And we know how well those things work out for NFL coaches.

It appears that the FCC might lose because the court feels the FCC lacks authority over broadband Internet service providers. That would have a significant impact on the FCC's activities, particularly with the Commission on the verge of adopting (and then implementing) a National Broadband Plan.

A more narrow ground also could have significant impact on Universal Service.  One argument made by Comcast was that the FCC Order is unlawful because the Commission was enforcing a 2005 Policy Statement, not an actual law.  The FCC can enforce obligations that are legally binding -- statutes, properly adopted rules and lawful FCC orders.  But a policy statement is not itself enforceable.  Its enforceability depends on the underlying legal obligations that the Commission is interpreting.  If the only "authority" relied upon is the Policy Statement, the FCC would lose.

The Policy Statement is a shortcut to the harder task of adopting specific and enforceable obligations, typically through rulemaking.  The FCC is taking a similar shortcut with its Universal Service rules.  In a series of FCC Orders, the Commission has created a federal USF and established rules for who must contribute to the Fund and on what revenues.  Each year, the FCC releases an FCC Form 499A for contributors to report their revenues for assessment purposes.  The 499A comes with 30+ pages of instructions.  The instructions purport to mandate a variety of actions by contributors, and they are frequently modified without any change in the underlying FCC rules or orders. 

The problem is that USAC acts as if the instructions are binding rules.  It is increasingly becoming more aggressive in audits and enforcement actions, relying on specific instructions that never were subject to notice and comment rulemaking, were not adopted by the FCC and could not be appealed.  If the FCC loses the Comcast case because the Policy Statement is not enforceable, it will have to return to enforcing actual law.  Hopefully, such an outcome will reign in USAC's reliance on non-binding instructions, too.  If so, it will not be a moment too soon.

FCC Inspector General Discloses Effort to Identify USF Non-Contributors

Tucked inside a semi-annual report released over the holidays, the FCC's Inspector General revealed that its most recent round of audits of the Universal Service Fund included, for the first time, an effort to identify entities that failed to contribute to the fund.  The IG contracted with an independent accounting firm to compare state PUC listings of active telecom companies with the USAC 499 filer database. 

This led to 50 letters sent in September 2009 to companies that had not filed a 499-A.  Of these 50 targets, 23 had responded by the end of the reporting period (Sept. 30).  The other group -- slightly more than half -- had not yet responded to the IG's letter.  However, this sample was taken from only six states. The IG estimates that as many as 1,000 non-filing companies may exist in 32 states. 

Although the IG lacks enforcement power, potential targets of the IG effort should be cautious.  The IG likely will refer non-filers to the FCC's Enforcement Bureau, where they could be subject to substantial penalties after an Enforcement Bureau investigation.  For example, in January 2009, the FCC proposed a fine against a small provider that filed four months late in the year that it slightly surpassed the de minimis threshold for contributions.  The FCC's proposed fine was $672,000, even though the highest amount of USF owed was alleged to be $22,000.  

With respect to its contributor audits, the IG reports that 12 audits conducted in 2009 are close to resolution.  According to the IG, three of the audits conclude that a wholesale carrier overstated reseller revenues.  This has been a frequent subject of USF appeals, leading to one FCC decision in August 2009 (now subject to an application for review) and a half dozen other appeals pending before the FCC.   It appears that more are on the way.

"To Do List" for the National Broadband Plan

Although advertised as a "policy framework" for the National Broadband Plan, Wednesday's presentation to the FCC looks more like a  "to do" list for Chairman Genachowski's 2010 agenda.  A number of suggestions will be very controversial, including ensuring "productive" use of spectrum (especially TV broadcast spectrum), spurring competition for TV set-top boxes, and measuring "advertised vs. actual" broadband speeds.  Most relevant to this blog's focus are the reforms of USF and the FCC Formal Complaint Process.  

USF Reform.  Staff emphasized that USF should be refocused to support broadband, and suggested a 5-10 year transition.  Increases in broadband support would come with "trade-offs", primarily in the form of cuts in high cost support, but with all funding programs being reformed.  The long-discussed Lifeline support for broadband services may be growing legs.  Finally, "sustainability" would be the driving force for reforming the USF contribution base (no doubt, spurred by concerns over the new 14% USF factor next quarter).

FCC Formal Complaints.  A number of enforcement reforms were discussed to promote infrastructure deployment.  In particular, the Staff urged "timely and predictable" dispute resolution by the FCC's Enforcement Bureau of pole attachment requests and development of a uniform rental rate to replace a rate that varies by the type of provider attaching to the pole.  FCC mandates to decrease the "make-ready" work a pole owner performs and to impose deadlines for current attachers to perform "make-ready" work may be on the horizon too. 

The FCC press release and Staff's presentation are available here and here.  The FCC will adopt the National Broadband Plan by February 17, 2010.

Broadband Plan is Only Item on FCC December Agenda

As we do regularly in this blog, we preview significant items to be presented at the FCC's upcoming monthly meeting.  This month it is easy, because the FCC's agenda includes only one item: an update on the development of the National Broadband Plan. 

At the December 16th meeting, the FCC staff will present an update on the status of the National Broadband Plan, and particularly, on the "policy framework" for the Plan.  With the National Broadband Plan due to be adopted by February 17, 2010, this update likely will include the first disclosure of the major components of the plan.  Word is that the Plan will recommend ways to re-focus the federal Universal Service Fund to support broadband connections, and may include suggestions for phasing out some existing USF support in order to replace it with broadband support. 

In addition, the update may discuss proposals to examine TV broadcast spectrum as a possible source of mobile broadband service.  The possibility of authorizing broadcasters to use or lease spectrum for this purpose, or, even more radically, to reallocate broadcast spectrum to other licensees, has been floated by wireless interests in the past few months.  While certain FCC personnel have indicated a willingness to investigate this possibility, the views of the Commissioners -- the ones whose votes count -- are unclear.  We will be watching the FCC meeting with anticipation.

Compliance Alert -- FCC Sets Regulatory Fees for 2009

As it does annually at this time, the FCC established its regulatory fee assessment methodology for 2009.  For the past few years, Congress has mandated that the FCC recover the majority of its $350 million plus budget from companies within the FCC's jurisdiction via the regulatory fee. 

In the Order, the FCC established a regulatory fee for telecommunications carriers of $0.00342 per dollar of interstate and international end user revenues.  This is a slight increase over the factor from a year ago.  Assessable revenues are determined by a carrier's 2009 Form 499-A, which was filed in April.  Regulatory fee payments are due by the end of September and are subject to a 25% late payment penalty if not paid on time.  Carriers can find payment information here.  

One aspect of the Regulatory Fee Order bears emphasis.  The FCC estimates that it will collect $160 million from telecommunications carriers via this fee.  That is 47% of the $342 million the FCC expects to collect in regulatory fees, and is, by far, the single largest category of contributions via the fee.  This seems disproportionate in view of the many other activities of the Commission.  In future years, telecom carriers should study the FCC's calculations more closely and perhaps seek modifications that more fairly reflect the level of regulatory activity associated with telecom services.

Finally, the FCC has a de minimis threshold for collection of the regulatory fee, but the $10 threshold is far too low.  By contrast, the de minimis threshold for federal universal service fund contributions is $10,000.  Small carriers, especially those that are de minimis for USF purposes, should consider arguing for a higher threshold in future years.  

"New" FCC Taking Shape

Six months after Obama took office, it seems that the FCC is almost, finally ready to get moving.  The Mignon Clyburn (D) and Meredith Baker (R) nominations were approved by the Senate this week.  With these confirmations, we will have the full five-member Commission in place for the August 27 open meeting. 

In addition, Chairman Genachowski continues to designate his Bureau and senior staff.  Yesterday, Genachowski announced two appointments relevant to the scope of this blog.  First, in the Wireline Competition Bureau, Genachowski announced that Sharon Gillett will become Chief of the Bureau.  Ms. Gillett is Director of the Massachusetts Broadband Institute and previously served as head of the Massachusetts equivalent to the FCC and worked as a professor at M.I.T.  The announcement notes her academic work maintained "a particular focus on broadband."  Clearly, at least in the short term, this Commission's number 1 goal (and goals numbered 2, 3 and 4) is going to be broadband deployment.   Ms. Gillett will take office on August 28.

In the Enforcement Bureau, Genachowski announced that Suzanne Tetreault will become Deputy Chief of the Enforcement Bureau.  Ms. Tetreault has served in a variety of positions in the Wireline Competition Bureau, Consumer and Government Affairs Bureau and the Office of General Counsel.  Kris Monteith, the current Bureau Chief, will become Deputy Chief of the Media Bureau, effective August 10.  At that point, Ms. Tetreault will become Acting Chief of the Bureau.  The designation of Ms. Tetreault as an Acting Chief signals that Genachowski intends to fill the Enforcement Bureau Chief slot with a person not currently employed by the Commission.  I would expect that announcement fairly soon.

New FCC General Counsel and Managing Director Named, Final Senate Confirmation Hearing Scheduled

FCC Chairman Genachowski today announced that Austin Schlick will become the next General Counsel of the FCC and that Steven VanRoekel will be its new Managing Director. Mr. Schlick has previously served at the FCC, at the Department of Justice (where he argued seven cases to the Supreme Court), as a legislative assistant to a Senator, in private practice, and he has clerked for the U.S. Supreme Court (Justice O’Connor). Mr. VanRoekel has spent 15 years at Microsoft, including serving as Speech and Strategy Assistant to Bill Gates.

In addition, the Senate Commerce, Science and Transportation Committee has scheduled a hearing for Wednesday, July 15 on the nominations of Mignon Clyburn (D) and Meredith Baker (R) for the remaining two FCC Commissioner slots. The hearing is expected to be non-controversial and, when completed, will put the FCC at full force for the first time this year.

FCC Outlines Upcoming Broadband Activities and Schedule at Public Meeting

After opening remarks from new Chairman Genachowski and Commissioner Copps, the FCC outlined its schedule and process for the creation of a National Broadband Plan by February 17, 2010, as mandated by Congress. The process will involve all Bureaus within the agency and will start with a series of workshops on 21 topics to be held starting August 12 and ending September 3. The FCC also launched a new website, www.broadband.gov, to make information about the process available to the public. That website will give the list of specific workshop topics and dates. For those interested in participating or monitoring the workshops, the FCC promised to post the names of the staff coordinators by July 16, the final list of topics by July 23, and the list of formal participants by August 5. After the workshops have been completed on September 3, the FCC will accept public comments about matters addressed in the workshops until September 11. Following that hectic schedule, the FCC expects to provide a formal response to the GAO by December 8, 2009, issue its “Section 706” Report by February 3, 2010, and then its final National Broadband Plan by February 17, 2010 (as the statute requires). The agency also indicated that it expects the Broadband Mapping project to be done by February 17, 2010 as well, since the mapping is important to the final Plan.

Click here for the full FCC Commission Meeting - The FCC and Broadband: The Next 230 Days.

New FCC Chairman Julius Genachowski Takes Office, Announces Staff

Julius Genachowski became the Chairman of the FCC on June 29. Mr. Genachowski began announcing his staff the same day. His Chief of Staff is Ed Lazarus, most recently a lawyer in private practice in the Washington, D.C. office of the firm of Akin Gump. Like Chairman Genachowski, Mr. Lazarus served as a clerk for the U.S. Supreme Court (Justice Blackmun). In addition, the Chairman’s office announced two senior advisors and two legal advisors.

Colin Crowell will hold the title Senior Counselor to the Chairman. Mr. Crowell has spent more than 20 years working on telecommunications issues as a Congressional staff member for Congressman Ed Markey and the House Subcommittee on Telecommunications.

The other senior advisor is Bruce Gottlieb, who will serve as Chief Counsel to the Chairman. Mr. Gottlieb spent the prior three years as an advisor to FCC Commissioner Copps and, before that, was in private law practice in D.C. with the firm of Harris Wiltshire.

Priya Aiyar will hold the title of Legal Advisor focusing on wireline competition and international issues. She was most recently in private practice with the D.C. firm of Kellogg Huber. Ms. Aiyar also served as a Supreme Court clerk (Justice Breyer) and was a Rhodes Scholar.

Sherrese Smith will be the Legal Advisor for media, consumer and enforcement issues. Ms. Smith most recently was Vice President and General Counsel of Washington Post Digital and, before that, practiced law with the D.C. firm of Arnold and Porter.

Preview of FCC Open Meeting: VoIP, Number Porting Items are on the Agenda

Late last night, the FCC announced its agenda for its May 13 Open Meeting. Highlighting the agenda are items relating to VoIP provider discontinuance obligations and LNP deadlines.

VoIP

The FCC announced that it plans to “consider a Report and Order concerning the requirements of interconnected VoIP providers when discontinuing service.”  This is sort of a stealth item on the agenda, as there has been virtually no discussion in the docket on this issue in the most recent months.

We hear that the FCC is likely to impose notice requirements similar to those that apply for traditional telecommunications carriers. This will continue a trend for interconnected VoIP where the FCC has imposed, one-by-one, obligations traditionally held by telecommunications carriers while steadfastly refusing to classify interconnected VoIP services. In today’s state of affairs, interconnected VoIP has nearly all of the burdens of regulation but few of the benefits. The most significant outstanding issue continues to be the application of access charges to interconnected VoIP. This topic has been a subject of litigation for some time.

Number Porting

The FCC will address porting intervals and related standards for the transfer of telephone numbers between carriers when a customer switches service providers. Cable providers in particular are pushing for a maximum interval of one-day for simple wireline to wireline and intermodal porting requests. The Order could also further address the information that carriers may require in order to implement a porting request, response intervals for customer service requests (CSRs) and other concerns raised regarding fair competition among providers.
 

Genachowski Heads to the Senate; Adelstein to Head to RUS

Changes at the FCC moved one step closer to fruition this week. On March 25, the Senate Commerce, Science and Transportation Committee confirmed that the White House has transmitted the nomination of Julius Genachowski to be Chairman of the FCC. No word yet on when the Senate will conduct confirmation hearings.

Meanwhile, Commissioner Jonathan Adelstein, whose term had expired in 2008, has been nominated to head the Rural Utilities Service (RUS) within the U.S. Department of Agriculture.

The RUS oversees grants and loans to support rural broadband service, and will have the responsibility to distribute $2.5 billion in stimulus money from the American Recovery and Reinvestment Act. Commissioner Adelstein has a history of supporting service in rural America.

We can think of no one better equipped to run the RUS in this important time for the entity.
 

President Obama Announces Nomination of Julius Genachowski as FCC Chairman

The “Obama FCC” took one giant step toward reality today when President Obama formally announced his “intention to nominate” Julius Genachowski as Chairman of the FCC. Genachowski’s nomination has been expected for some time, but apparently was delayed when President Obama revamped his process for vetting candidates after several high-profile withdrawals by key nominees.

Genachowski comes with stellar credentials including two Supreme Court clerkships, a prior stint as advisor to FCC Chairman Reed Hundt and several years at Barry Diller’s Internet company, IAC. Virtually every telecom organization took turns today praising the incoming chairman.

Genachowski is expected to further President Obama’s policies to promote broadband deployment and net neutrality. Genachowski’s nomination must be approved by the Senate, so he may not formally take office for a few months.