Selected portions of the BloostonLaw Telecom Update, and/or the BloostonLaw Private Users Update — newsletters from the Law Offices of Blooston, Mordkofsky, Dickens, Duffy & Prendergast, LLP are reproduced in this section with the firm's permission.
|BloostonLaw Telecom Update||Vol. 17, No. 26||July 2, 2014|
|BloostonLaw Telecom Update||Vol. 17, No. 27||July 9, 2014|
CAF Phase II Challenge Process Officially Begins
The FCC has released a Public Notice commencing the Connect America Fund Phase II challenge process for price cap territories. Parties have until August 14 to file challenges. A map of census blocks that have been deemed initially eligible for Phase II support is available online.
Clients should vigorously challenge the areas they serve from being labeled as unserved, and should consider challenging the designation of census blocks they may potentially be interested bidding on in later phases. BloostonLaw is experienced in helping clients participate in both types of FCC challenge proceedings, having helped numerous clients successfully make challenge showings regarding support in their service areas, as well as defeat challenges to their own bids for support.
Comment Deadlines Set for Omnibus USF/ICC Report and Order and Further Rule Making Proposal
The FCC published its Report and Order (and Declaratory Ruling, Order, Memorandum Opinion and Order, Seventh Order on Reconsideration, and Further Notice of Proposed Rulemaking) on USF/ICC Reform in the Federal Register today, establishing August 8 as the initial comment deadline for the Further Notice of Proposed Rulemaking and the effective date for the other portions of the document (except §54.301(e)(1), which requires OMB approval).
The FNPRM seeks comment on a wide variety of topics that are sure to affect rural carriers, including increasing broadband speed requirements to 10/1; excluding areas served by any provider (rather than unsubsidized providers) from funding eligibility; and re-targeting the focus of Mobility Fund Phase II to areas without LTE.
Clients interested in filing comments should contact the firm without delay.
FCC Releases Local Telephone Competition Report, Internet Access Services Report
The FCC’s Wireline Competition Bureau last week released its Local Telephone Competition Report , summarizing information collected on Form 477 from ILECs, CLECs and mobile telephony providers about telephone services as of June 30, 2013.
Highlights of the report show as of June 30, 2013, there were 90 million end-user switched access lines in service, 45 million interconnected VoIP subscriptions, and 306 million mobile subscriptions in the United States, or 441 million retail local telephone service connections in total. Over a three year period, interconnected VoIP subscriptions increased at a compound annual growth rate of 16 percent, mobile telephony subscriptions increased at a compound annual growth rate of 3 percent, and retail switched access lines declined at 10 percent a year.
Retail Local Telephone Service Connections, 2010-2013
Concurrent with the Local Telephone Competition Report, the WCB also released its Internet Access Services Report , summarizing information about Internet access connections over 200 kbps in at least one direction in service in the United States on June 30, 2013, as collected by FCC Form 477.
Notable developments between June 2012 and June 2013 include:
- Internet connections overall are growing. The number of connections over 200 kbps in at least one direction increased by 13% year-over-year to 276 million.
- In June 2013, there were 70 million fixed and 93 million mobile connections with download speeds at or above 3 megabits per second (Mbps) and upload speeds at or above 768 kbps as compared to 57 million fixed and 43 million mobile connections a year earlier.
Form 477 gathers standardized information about subscribership to Internet access services in the fifty states, District of Columbia, and inhabited insular areas (American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and U.S. Virgin Islands). The information is reported by telephone companies, cable system operators, terrestrial wireless service providers, satellite service providers, and other facilities-based providers of advanced telecommunications capability. This is the tenth report to include details about subscribership differences among census tracts and counties, as well as subscribership differences among the states.
FCC Applies Default Comment Cycle to Requests for Review of USAC Contributions
On July 2, the FCC’s Wireline Competition Bureau issued a Public Notice announcing that it will immediately begin applying the “default comment cycle” described in §1.45 of the FCC’s rules to requests for review of USAC decisions concerning USF contributions.
According to the rule, comments will be due ten days after the initial application for review of a USAC decision is filed, and reply comments will be due five days after that. Previously, the comment cycle for such appeals was set when the filing went on Public Notice, meaning an indeterminate amount of time could pass between filing the appeal and the FCC’s taking comment. The Bureau also indicated that it may extend any such comment cycle, on its own volition, in cases of particular complexity or industry significance.
However, an indeterminate amount of time can still pass between the filing of comments and a decision by the FCC.
FCC invites Iowa National Deaf-Blind Equipment Distribution Program Applications
In 2012, the FCC certified 53 programs to distribute equipment under the National Deaf-Blind Equipment Distribution Program (NDBEDP) in each of the 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. For Iowa, the FCC designated the Iowa Utilities Board. However, recently the Iowa Utilities Board informed the FCC that it was unable to continue participating in the NDBEDP, effective July 1, 2014.
To ensure that Iowa is able to continue participating in the NDBEDP, the FCC is inviting applications from entities interested in receiving certification to distribute equipment under the NDBEDP to qualifying residents in Iowa. Any public program or private entity may apply to the Commission for certification to become the sole authorized entity for Iowa to participate in the NDBEDP and receive reimbursement for NDBEDP activities from the TRS Fund. There is no application form or fee to apply for certification in the NDBEDP pilot program.
Law & Regulation
FCC Proposes to Terminate Older Proceedings
The FCC Consumer & Governmental Affairs Bureau (“CGB”) seeks comment on whether numerous docketed Commission proceedings should be terminated as dormant in its third Dormant Proceedings Termination Public Notice. The proceedings to be terminated include dockets in which no further action is required or contemplated by the FCC, as well as those in which no pleadings or other documents have been filed for several years. The termination of a dormant proceeding includes dismissal as moot of any pending petition, motion, or other request for relief that is procedural in nature or otherwise does not address the merits of the proceeding. The records in terminated proceedings remain part of the Commission’s official records, and the various pleadings, orders, and other documents in these dockets continue to be accessible to the public, post-termination.
Parties with pending proceedings at the FCC should review the list and consider filing comments. According to the FCC, proceedings in which petitions addressing the merits are pending should not be terminated, absent the parties’ consent. However, to the extent that a particular proceeding includes a petition addressing the merits or other pending pleadings, a party’s failure to file comments in response to the FCC's Public Notice will be construed as consent to termination of that proceeding.
Comments on the proceedings to be terminated will be due 30 days and reply comments will be due after 45 days after Federal Register publication of the Public Notice.
EPA to Adopt Wage Garnishment Under the Debt Collection Improvement Act
The Environmental Protection Agency (EPA) has published in the July 2, 2014, Federal Register notice that it is taking direct final action to amend its claims collection standards to implement the wage garnishment provisions of the Debt Collection Improvement Act of 1982, as amended by the Debt Collection Improvement Act of 1996 (DCIA). The direct final rule will allow the EPA to garnish non- Federal wages to collect delinquent non-tax debts owed to the United States, such as fines levied by the EPA, without first obtaining a court order. EPA may garnish up to 15 percent of the disposable pay of a debtor to satisfy a delinquent non-tax debt owed to the United States.
Under the rules, employers of an individual subject to wage garnishment must remit payment as directed by the EPA and shall be liable for any amount that the employer fails to withhold from wages due an employee following receipt by such employer of notice of the withholding order, plus attorneys’ fees, costs, and, in the court’s discretion, punitive damages.
The EPA has drawn scrutiny recently for very large fines imposed on individuals for seemingly innocuous actions. For example, The Washington Times reports that the EPA threatened to fine a Wyoming man $75,000 per day for building a pond on his property without a permit from the Army Corps of Engineers and a Missouri man paid a $20,000 penalty to the EPA when his work crew dumped dirt into tributaries of a creek while working on a dam.
The direct final rule will be effective September 2, 2014 without further notice unless EPA receives adverse comments by August 1, 2014. According to EPA, if it receives such comments, "it will publish a timely withdrawal of the direct final rule in the Federal Register and inform the public that the rule will not take effect."
House and Senate Democrats Support Municipal Government Broadband Overbuilds
Eight Democratic lawmakers are encouraging the FCC to eliminate barriers for municipal governments to enter into the broadband marketplace, and have asked that the FCC to report within 30 days on what steps the agency will be taking to promote community broadband.
A June 27 letter sent to FCC Chairman Tom Wheeler by Democratic Sens. Ed Markey (MA), Al Franken (MN), Amy Klobuchar (MN), Richard Blumenthal (CT) and Cory Booker (NJ), and Democratic Reps. Henry Waxman (CA), Anna Eshoo (CA) and Mike Doyle (PA) praised Wheeler for his recent comments asserting that municipal governments should not be inhibited if they wished to pursue the creation of their own networks.
“[L]ocal communities should have the opportunity to decide for themselves how to invest in their own infrastructure,” the lawmakers wrote. Options mentioned in the letter included working with willing incumbent carriers, creating incentives for private sector development, entering into creative public-private partnerships, or buildout of their own networks.
The Congressional letter is a clear signal that key Democratic lawmakers support the FCC Chairman’s previously announced plans to preempt state laws that ban or restrict competition from community broadband. A June 10 blog post by Wheeler described efforts by the City of Chattanooga, Tennessee, to construct its own fiber optic network as a response to network upgrade delays by local cable and phone companies, and despite a state law that is inhibiting the expansion of Chattanooga’s network to adjoining communities.
Chattanooga is sometimes known as “Gig City” because it boasts one of the least expensive and fastest Internet services in the country. The fiber-optic network provides transfer rates of up to one gigabit per second (200 times the speed of the national average) at a cost of less than $70 per month.
“I understand that, like any venture, community broadband there hasn't always been a success,” wrote Wheeler. “But a review of the record shows far more successes than failures. If the people, acting through their elected local governments, want to pursue competitive community broadband, they shouldn't be stopped by state laws promoted by cable and telephone companies that don’t want that competition.”
Republican lawmakers had earlier criticized Wheeler for statements viewed as promoting “taxpayer funded competition” at the National Cable and Telecommunications Association trade show last May.
“Inserting the Commission into the states’ economic and fiscal affairs in such a cavalier fashion shows a lack of respect for states’ rights,” said a June 5 letter signed by eleven Republican Senators.
Laws in at least twenty (20) states either discourage or prevent local governments from constructing broadband networks that compete with incumbent commercial cable companies and other ISPs, according to the Institute for Local Self-Reliance.
Illegal Retransmission of TV Signals leads to $2.25 Million Fine Against Cable Operator
The Federal Communications Commission has issued a $2.25 million fine against TV Max, Inc. and Broadcast Ventures Six, LLC and certain of their affiliates and subsidiaries for illegal retransmission of over the air broadcast televisions signals from six Houston area television stations. In each case, TV Max continued to retransmit the television signals from its head-end to its 10,000 customers in the Houston, Texas Designated Market Area (DMA), in 245 multiple-dwelling unit buildings (MDUs) even though its retransmission agreements with the television broadcast licensees had either been allowed to expire or had been terminated pursuant to the terms of the agreement. This illegal rebroadcasting continued for six months even though TV Max had been notified by the Broadcasters to cease operation and by the FCC’s Media Bureau that its retransmission of the over the air television signals was illegal and in violation of the FCC’s Rules. Despite these warnings, the FCC found that TV Max’s illegal retransmissions continued.
TV Max claimed that its retransmission fell into an exception that is reserved for the use of master antenna television (MATV) systems on multiple-dwelling unit buildings. However, while TV Max was transitioning to the MATV systems on its 245 buildings, it continued to retransmit the signals from its head-end. Additionally, even after it finally converted its buildings, it continued to retransmit television signals from its head-end via fiber ring and the master antennas that had been installed on its buildings rather than just by the master antennas. As a result, the FCC concluded that the retransmissions were illegal, since TV Max was not providing the signal that had been taken off the air at each building.
In calculating the fine that was originally proposed in the Notice of Apparent Liability, the FCC noted that TV Max would have been liable for a fine of over $16 million. However, because of TV Max’s size, it reduced the fine at the outset to $2.25 million even though the FCC had concluded that TV Max’s conduct was egregious.
Office clients with questions regarding retransmission rights and copyright questions in connection with video programming should promptly contact our office.
FTC Sues T-Mobile Over Alleged Bogus Charges on Customer Bills
In a unanimous decision, the Federal Trade Commission filed a lawsuit in the US District Court for the Western District of Washington seeking a court order to (a) prevent T-Mobile from engaging in mobile cramming, (b) require refunds for consumers and (c) disgorge T-Mobile’s ill-gotten gains. In filing its complaint, the FTC noted the valuable assistance that it received from the FCC’s Enforcement Bureau. As a result, it is possible that the FCC could likewise take action against T-Mobile.
According to the FTC, the cramming charges arise out of a variety of conduct by T-Mobile, stemming from its alleged practice of placing charges on its customers’ mobile phone bills for purported “premium” SMS subscriptions that were often never authorized by its subscribers. These “premium” services included subscriptions to services to provide horoscopes, flirting tips and celebrity gossip. The FTC alleges that T-Mobile retained 35 – 40% of the total amount charged for subscriptions – which generally was $9.99 per month. Additionally, the FTC claims that T-Mobile engaged in other misconduct, including: (a) billing customers for third party services offered by scammers after becoming aware of the signs that the charges were fraudulent, (b) designing and/or using invoice structures (both on paper and paperless) that made it difficult for the consumer to find and detect the fraudulent charge, (c) continuing to charge customers for crammed services even though it was issuing refunds for up to 40 percent of the charges in a particular month – which the FCC stated should have been an obvious sign that the charges were most likely never authorized by its customers, and (d) failure to provide requested refunds, either because T-Mobile required customers to seek redress from the 3rd party scammer (without providing accurate contact information) or only provided a partial refund.
Edith Ramirez, Chairwoman of the FTC stated that “[i]t’s wrong for a company like T-Mobile to profit from scams against its customers when there were clear warning signs the charges it was imposing where fraudulent. The FTC’s goal is to ensure that T-Mobile repays all its customers for these crammed charges.” Additionally, the FCC’s Enforcement Bureau stated that “[c]onsumers should not be charged for services they did not order.” Travis LeBlanc, Acting Chief of the FCC’s Enforcement Bureau continued that “[w]e will coordinate our investigation with the FTC, and use our independent enforcement authority to ensure a thorough, swift, and just resolution of the numerous complaints against T-Mobile.” In this regard, over the past four years, the FCC has proposed more than $33 million in fines for cramming in nine separate enforcement actions.
T-Mobile’s website includes a statement calling the charges “unfounded and without merit”, and asserting that all carriers faced the problem of unscrupulous third party scammers. T-Mobile claims it was aggressive in responding to the problem.
Supreme Court Rules Against Aereo Streaming TV Service
In a 6-3 ruling seen as a significant victory for broadcasters, the United States Supreme Court last week held that the TV streaming service known as Aereo violated copyright law by capturing broadcast signals on miniature antennas and transmitting them to subscribers for a fee.
The ruling in American Broadcasting Companies, Inc. v. Aereo, Inc ., delivered by Justice Breyer, overturned lower court decisions that had found in favor of the streaming TV upstart. The Supreme Court found that Aereo's business model was no different than that of a cable television provider, despite differences in the technology.
“We have decided to pause our operations temporarily as we consult with the court and map out our next steps,” said Aereo chief executive Chet Kanojia in a letter announcing suspension of the company’s service last weekend.
By way of background, Aereo’s customers paid $8 to $12 per month to rent one of the company’s dime-sized antennas, which in turn allowed subscribers to stream and record programs to their mobile phones, tablets, personal computers and Internet-connected televisions. The company did not disclose its subscriber counts publicly, but it offered service in ten metropolitan areas as of last January and analysts estimated that Aereo had signed up between 300,000 to 500,000 subscribers. Reviews of the service have been generally positive.
The Copyright Act of 1976 gives a copyright owner the exclusive right to perform the copyrighted work publicly. The Act’s “Transmit Clause” defines that exclusive right as including the right to transmit or otherwise communicate a performance of the work to the public by means of any device or process. Relying on a close reading of that law, Aereo claimed that because it transmits from user-specific copies, using individually-assigned antennas, and because each transmission was available to only one subscriber, that it did not transmit a performance “to the public.”
The majority opinion instead looked at the intent of the Copyright Act and Congress’s regulatory objectives and concluded that behind-the-scenes technological differences did not distinguish Aereo’s system from cable TV systems, which do perform publicly. The Court then concluded that Congress would as much have intended to protect a copyright holder from the unlicensed activities of Aereo as those of cable companies.
Justices Scalia, Thomas and Alito joined in a dissenting opinion that agreed with Aereo on the public performance issue and which criticized the majority for adopting “an improvised standard (“looks-like-cable-TV”) that will sow confusion for years to come.”
Before the decision, Aereo, which was founded in 2012, said that it had “no Plan B” if it lost in court.
Carlos Slim to “Dismantle” Mexican Telecom Empire to Avoid Antitrust Action
Bloomberg and other sources are reporting that Carlos Slim’s telecom giant America Movil SAB is planning a breakup of its phone operations in Mexico in the face of recent regulatory changes in Mexico. The regulations would force America Movil to share parts of its network and eliminate the fees it charges other operators to connect calls to its customers, unless it reduced its Mexican market share below 50%.
America Movil is the largest operator in the Americas, with 272 million wireless subscribers, and the largest in Mexico with 70 percent of Mexico's mobile market and 80 percent of the fixed line business. In response to the new regulations, which the company will divest assets to an independent company, reducing its market share in Mexican landlines and mobile phones to below 50 percent; separate its wireless towers from the rest of the business; and will renounce its rights to acquire control of satellite-TV provider Dish Mexico . Bloomberg reports that America Movil may fetch about $8.6 billion by selling assets and will need to divest about 21 million wireless users and 4 million landlines to reduce its market share below 50 percent.
According to The New York Times , the government hopes that the new law will add an additional $19 billion to $23 billion in telecommunications investment over the course of President Peña Nieto’s six-year term, which ends in 2018.
AUGUST 1: FCC FORM 502, NUMBER UTILIZATION AND FORECAST REPORT: Any wireless or wireline carrier ( including paging companies ) that have received number blocks—including 100, 1,000, or 10,000 number blocks—from the North American Numbering Plan Administrator (NANPA), a Pooling Administrator, or from another carrier, must file Form 502 by August 1. Carriers porting numbers for the purpose of transferring an established customer’s service to another service provider must also report, but the carrier receiving numbers through porting does not. Resold services should also be treated like ported numbers, meaning the carrier transferring the resold service to another carrier is required to report those numbers but the carrier receiving such numbers should not report them. Reporting carriers file utilization and forecast reports semiannually on or before February 1 for the preceding six-month reporting period ending December 31, and on or before August 1 for the preceding six-month reporting period ending June 30.
Jul. 10 – Comments are due on T-Mobile Data Roaming Petition.
Jul. 14 – Comments are due on Citizens Broadband Radio Service FNPRM.
Jul. 14 – Reply comments on Market Analysis for CenturyLink Forbearance Petition are due.
Jul. 14 – Reply comments are due on proposed FCC fee revisions.
Jul. 15 – Comments are due on the Open Internet NPRM.
Jul. 15 – Comments are due refreshing the record on the 2010 Broadband NOI.
Jul. 23 – Comments are due on LMCC Petition to Expand Conditional Temporary Authorization
Jul. 31 – FCC Form 507 (Universal Service Quarterly Line Count Update) is due.
Jul. 31 – Carrier Identification Code (CIC) Report is due.
Jul. 31 – FCC Form 690 (Mobility Fund Phase I Auction Winner Annual Report) is due.
Aug. 1 – FCC Form 502 due (North American Numbering Plan Utilization and Forecast Report).
Aug. 1 – FCC Form 499-Q due (Telecommunications Reporting Worksheet.
Aug. 1 – Reply comments are due on Citizens Broadband Radio Service FNPRM.
Aug. 4 – Reply comments on LMCC Petition to Expand Conditional Temporary Authorization are due.
Aug. 8 – Comments are due on the FCC’s Omnibus USF/ICC Order.
Aug. 11 – Reply comments are due on T-Mobile Data Roaming Petition.
Aug. 14 – Deadline for CAF Phase II Challenges.
Aug. 29 – Copyright Statement of Accounts is due.
Sep. 1 – FCC Form 477 due (Local Competition and Broadband Reporting).
Sep. 10 – Reply comments are due on the Open Internet NPRM.
Sep. 10 – Reply comments are due refreshing the record on the 2010 Broadband NOI.