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. 

Limiting the FCC to Case by Case Enforcement.  First, Verizon and Google propose that the FCC "would enforce the consumer protection and nondiscrimination requirements through case-by-case enforcement, but would have no rulemaking authority with respect to those provisions."  This provision would significantly alter enforcement practice today -- where it is well settled that, absent explicit statutory instruction, an agency may choose whether to enforce through adjudication or through rulemaking.  Verizon and Google propose that in this instance rulemaking authority be denied.

Substituting Private Arbitration of Disputes.  Verizon and Google also propose that another entity assume the FCC's primary role in adjudicating alleged violations.  Specifically, Verizon and Google propose that parties be "encouraged" to use "non-governmental dispute resolution processes established by independent, widely-recognized Internet community governance initiatives," with the FCC granting "appropriate deference" to such opinions.   Verizon and Google don't say that parties will be forced to use this alternative, but the clear hope is that the primary enforcement capability will be shifted away from the FCC to this private group.  It is not clear whether Verizon and Google contend that the private group will have more expertise than the FCC, that it is quicker or less expensive than FCC formal complaints, or that some other reason makes this desirable. 

"Knowing Violation" Standard of Liability.  The Verizon-Google proposal preserves FCC forfeiture authority, but it appears to substitute a stricter standard than applies to other forfeitures.  Under the Verizon-Google proposal, the FCC could impose fines for "knowing violations" of the consumer protection and nondiscrimination standards.  This contrasts with Section 503's current standard of "willful and repeated" violations.  The FCC has interpreted the "willful" standard to require only that the party knew it was committing the act (or omission), not that it had any intent to violate the Communications Act. 

Exclusive FCC authority.  Verizon and Google propose that the FCC have "exclusive authority to oversee broadband Internet access service."  This provision apparently would preempt any jurisdiction by the Federal Trade Commission, which has asserted that it may apply its consumer protection standards to information services (which include Internet access services).  But it is not clear what the FCC's "oversight" authority encompasses, since all regulatory authorities would be precluded from "regulating" broadband Internet access services.

Until last Thursday, these provisions seemed to be overlooked in the proposal.  However, two FCC Commissioners made comments at the "Future of the Internet" hearing in Minnesota sponsored by the Free Press Foundation.  Commissioner Clyburn declared that "any proposal that favors the FCC being stripped of the rulemaking authority regarding consumer protection and non-discrimination requirements, and any proposal that would advocate that no agency will have authority over Internet access would be impossible for me to embrace."  Commissioner Copps expressed similar concerns, warning that the Verizon-Google proposal "would eliminate any meaningful, effective FCC oversight of the open Internet [including] such critically-important responsibilities as the setting of standards and the swift resolution of controversies."  I'm sure we will see more discussion of these proposals as we move forward in this debate.