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

FCC:  As we noted previously, the FCC investigation was started by the Public Safety Bureau, not the FCC's Enforcement Bureau, which suggested to us that the Commission was not looking to impose fines for the outages.  We are left to guess what happened, however, because the FCC has not released any information about the investigation since the February 2011 Inquiry Letter. 

One thing we do know, however, is that the FCC cannot now impose a fine for the outage that sparked the investigation.  Section 503 of the Communications Act limits the FCC to taking enforcement action against common carriers only for violations that occurred within one year of the date of the Notice of Apparent Liability.  The outages in question occurred on January 26, 2011, which would mean that the FCC had to issue a NAL by January 26, 2012 if if sought to impose a fine.  Because it has not done so, the FCC is barred from proposing a fine for that outage. 

Maryland PSC:  The Maryland PSC held a hearing in March 2011 and then ordered Verizon to show cause why a civil penalty should not be imposed.  Subsequently, the Maryland PSC expanded its investigation to include another outage affecting wireless and VoIP 911 calls that occurred on May 30, 2011.  After a hearing into that outage, Verizon maintains that no fines may be imposed.  The Maryland PSC staff is recommending a civil penalty be assessed.  The Maryland case has been under advisement since October 2011. 

Maryland PSC.  Verizon appeared at the Maryland PSC's March 2 hearing, as directed by the PSC letter.  After the hearing, the PSC issued an Order to Show Cause to Verizon, expanding its investigation to include three other outages in addition to the January 26 outage.  The Order to Show Cause stated that Verizon's Network Operations Center was aware of the outage, but did not notify Verizon's customer care center, which, as a result, did not notify the PSAPs of the outage.  The PSC concluded:

Verizon's lack of prompt and timely communications to the PSAPs that some or all of the 911 trunks were not working properly and calls were not being delivered during these emergency situations is unacceptable.

Maryland law permits the PSC to assess a civil fine of up to $10,000 per violation of the public utility law or its rules.  Verizon was ordered to show cause why a fine should not be imposed for each outage.

Verizon responded to the Order to Show Cause on April 4.  In the Response, Verizon admitted that it "needs to do a better job of communicating with PSAPs earlier in the process during 911 events, even if that means initiating communications before all the details are known."  However, Verizon described several improvements it has put in place and contended that Verizon's actions did not rise to the level of a failure to comply with the statutory provision cited by the PSC. 

The PSC held further hearings on April 5 and April 12.  Its decision in the case is under advisement.

FCC.  Unlike in Maryland, the FCC has not released any further information about its investigation of the outages.  The FCC letter called for Verizon to submit a response to the Public Safety Bureau and to meet with its Chief 'within two weeks."  Presumably, those meetings occurred.

As I noted in my previous post, there is no indication that the Enforcement Bureau is participating in the investigation.  This suggests that at least the initial focus is on remedial actions, rather than a fine.  I would expect the Enforcement Bureau eventually to open an investigation, if it has not done so already.  We may not hear more unless or until the FCC fines Verizon or the Commission reaches a settlement via a Consent Decree.

FCC Investigation.  On February 17, the Chief of the FCC's Public Safety and Homeland Security Bureau issued a letter to Verizon requesting "that Verizon provide an explanation of the causes of this and similar failures, provide Verizon's assessment of the possibility of occurrence in other locations and describe what actions Verizon is taking to prevent recurrence of these problems."

Notably, the Bureau is not limiting its investigation to this specific outage.  Instead, the Bureau letter stated:

We are particularly concerned that this problem may be widespread
across Verizon's footprint.  We therefore request that Verizon investigate the extent of the problem across its network and provide [responses to the Bureau's specific questions]

The Bureau Chief requested an in-person meeting "within the next two weeks" to discuss the matter. 

Two things are particularly interesting about this letter.  First, the letter was issued by the Public Safety Bureau, rather than the Enforcement Bureau.  To me, this indicates that the Bureau will press Verizon for remedial actions.  While fines are not out of the question, it appears that the FCC's number one priority is to oversee Verizon's plans to improve its 911 reliability first.  Second, the letter is sent on letterhead from the "Office of the Chairman."  Most likely, this letter got significant attention from Chairman Genachowski's office, and it quite possibly was at one time planned to be sent from the Chairman himself. 

Follow this link for the FCC letter to Verizon.

Maryland PSC investigation.  Maryland's investigation appears to have been prompted by a request from Prince George's County, MD, one of the two counties that experienced 911 outages.  The County had requested information from Verizon, which responded on February 16.  The next day, the Maryland PSC sent its letter to Verizon.  In the letter, the PSC acknowledged the County's letter and stated:

This is not the first time that the Commission has received reports of outages on the Verizon 9-1-1 network. ... The Commission, therefore, directs Verizon to appear before the Commission at its March 2, 2011 Administrative meeting with the representatives needed to explain to the Commission the issues that have caused the outages and the steps that Verizon has taken to correct/repair the network, including additional equipment/lines that have been installed and any other measures required to ensure that there is not a repeat of these outages. 

Follow this link for the Maryland PSC letter to Verizon.

REMINDER:  Maryland PSC documents, and documents from other state commission sites, can be found in the Resource Center. 

As the chart shows, the FCC has imposed many telecom obligations on interconnected VoIP on an individual basis.  In each instance, the FCC relied upon its ancillary authority to impose the obligation, even if it were ultimately to classify interconnected VoIP an information service.  In a few instances, the FCC has not -- yet at least -- imposed a telecom obligation on interconnected VoIP.  VoIP services that do not meet the FCC's definition of "interconnected VoIP" are not subject to any of the telecom service requirements today. 

DISCLAIMER: This chart is for informational purposes only and is not intended to serve as legal advice or a comprehensive review of regulatory obligations.  With that in mind, you may view the chart here.

The issue arises from Section 503 of the Communications Act.  Section 503 gives the FCC power to impose fines (forfeitures) for violations of the Act or its rules.  If the subject of a forfeiture proceeding is not a license or permit holder, such as a broadcast station or a carrier, however, Section 503 requires the FCC to issue a citation for the violation first, and then permits the FCC to impose fines only for a subsequent violation of the type described in the citation.  Further, the potential penalties are different for license holders and non license holders; whereas the FCC can fine carriers up to $150,000 per violation, it may fine non-licensees only $16,000 per violation.

As Vantage Communications illustrates, these provisions are benefiting interconnected VoIP providers greatly.  Because the FCC has refused to determine whether interconnected VoIP is telecommunications service, the Enforcement Bureau has proceeded cautiously with entities that only provide interconnected VoIP service.  Without an FCC classification, the Enforcement Bureau cannot conclude that interconnected VoIP providers are license or permit holders.  Consequently, the Bureau has issued Citations to interconnected VoIP providers, before issuing any proposed fines.

In Vantage Communications, for example, the Enforcement Bureau found that Vantage had failed in at least three instances to provide customers with 911 service.  It warned Vantage that "any failure to provide fully compliant E911 service to your VoIP customers in the future would constitute a further violation of Section 9.5(b) of the Rules that may result in enforcement action, including monetary forfeitures" (emphasis added).  In addition, the Bureau warned Vantage that fines could be issued for failure to comply with other obligations of interconnected VoIP providers, such as CALEA, CPNI, USF contributions and others.  But, even in future violations, the maximum forfeiture Vantage faces for each violation is $16,000, not the $150,000 that applies to telecommunications carriers.

UPDATE:  See our latest VoIP-related post, with a chart comparing the regulatory obligations of traditional telecom, interconnected VoIP and non-interconnected VoIP here.

Related stories:

Outage Reporting Obligations for VoIP

Access Charges and VoIP

State Regulation of VoIP

The Public Notice identifies the following examples of lack of diversity causing outages:

• Placement of all E911 trunks or ALI links on the same Digital Cross-connect System;
• Placement of all E911 trunks or ALI links on the same DS1 transport facility (which then fails due to a line cut, failure of a control processor or failure of a power supply);
• Failure of E911 due to failure of a single fuse;
• Failure of E911 due to problems with a single Remote Terminal serving a PSAP;
• Failure of E911 due to simultaneous failure of redundant timing cards.

The Bureau cautions carriers to "avoid placing an entire group of 911/E911 trunks or ALI links on one piece of transmission equipment."  It also cites the Network Reliabilty and Interoperability Council (NRIC) best practices as a model in several instances in the Public Notice.  These are not binding rules, but the Bureau is looking toward them for guidance.

Final note:  The Public Notice mistakenly retained a draft date of May 28, 2009 in the footer.  Clearly, the Bureau has been concerned with 911 outages for some time.