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. 39||October 8, 2014|
AWS-3 Auction Upfront Payments Deadline
The deadline for making upfront payments for the AWS-3 auction (Auction 97) is 6:00 p.m. Eastern Time on Wednesday, October 15, 2014. In order to avoid the potential for last-minute problems that might arise on the day of the payment deadline, and because next Monday (Columbus Day) is a bank holiday in many states, we are urging our clients to send their wire transfer of funds by Friday, October 10, 2014. The FCC has repeatedly indicated that they will be “unforgiving” on an applicant’s failure to make its upfront payment in a timely manner. If your financial institution experiences a problem in the wire transfer process, this will give you additional time to fix the problem in advance of the October 15th deadline. Clients that are applicants in Auction 97 and that have questions about the upfront payment process should contact us.
AT&T Settles Cramming Investigation for $105 Million
On October 8, the FCC announced the $105 million settlement of a wireless cramming and truth-in-billing investigation of AT&T Mobility. According to the FCC’s press release, the investigation was launched after receiving consumer complaints alleging that AT&T customers had been billed with months of unauthorized charges for third-party services that they did not request, such as “monthly subscriptions for ring tones, wallpaper, and text messages providing horoscopes, flirting tips, celebrity gossip, and other information.”
The charge for each of these types of subscriptions was typically $9.99 per month. AT&T Mobility’s bills identified the date the customer was purported to have purchased the service, the costs, applicable renewal dates, applicable taxes, the third-party provider, and the short code associated with the service. However, the description sometimes contained only the product provided by the third party, such as “Variety Texts,” “Mobizzo.com,” etc. AT&T Mobility’s practices generated a number of complaints from consumers who contended that they never authorized the charges that showed up on their bills. Some complaints also alleged that when they contacted AT&T Mobility, the company could not explain the charge or how it came to be placed on the bill. In some cases, complaints alleged that AT&T Mobility refused to issue refunds or would only refund one or two months’ worth of such charges, leaving consumers on the hook for the rest.
The $105 million will be divided three ways: $80 million to fund a consumer redress program to give refunds to victims of its unlawful cramming activities; $20 million to the fifty states and District of Columbia participating in the settlement; and $5 million to the United States Treasury. AT&T Mobility is also prohibited from charging customers for third-party products or services, and must (i) develop and implement a system to verify third-party charges via consumers’ express informed consent before charges are placed on bills; (ii) block third-party charges for free when a customer requests a block; (iii) help customers identify unwanted charges by implementing a system to provide separate purchase confirmations for third-party charges; (iv) place clear descriptions of such charges in a dedicated section on customer bills; (v) designate a senior corporate manager as a compliance officer; (vi) implement a training program to ensure customer service personnel resolve customer complaints about unauthorized third-party charges; and (vii) develop and implement a six-year compliance plan.
FCC Providers Additional Information on Rural Broadband Experiments
The FCC has released a Public Notice providing data regarding the types of pricing and usage allowance that are generally available in urban areas for broadband offerings with speeds at or above 25 Mbps/5 Mbps. According to the Public Notice, the purpose of providing this data is to assist parties in truthfully certifying in their Rural Broadband Experiment applications they will meet the threshold service requirements with a usage allowance and pricing reasonably comparable to those in the relevant urban areas.
Based on a review of the data received from the urban rate survey, the FCC noted that of the 109 responses received relating to offerings of 25 Mbps/5 Mbps, the vast majority (87 percent) offer a usage allowance of 250 GB per month. The second most common usage allowance is 300 GB (12 percent). One respondent offers an unlimited usage allowance on its 25 Mbps/5 Mbps offering. When examining urban rate survey responses for only 25 Mbps/5 Mbps offerings, the FCC noted that prices ranged from $56.96 to $74.95. At this time, the FCC has not finalized the methodology for determining a reasonable comparability benchmark for broadband services, but has sought comment on an approach that would set such benchmarks for broadband service offerings at a point two standard deviations above the average.
The Public Notice contains a chart providing specific data for all of the responses used.
TracFone Files Petition for Rulemaking on Lifeline Verification
TracFone Wireless filed a Petition for Rulemaking and Interim Relief, asking the FCC to amend Section 54.410(c)(2) of its rules to allow Lifeline subscribers to establish usage of Lifeline service by sending and receiving text messages. TracFone also requested interim relief “to allow TracFone’s customers to demonstrate their intent to use Lifeline service via text messaging,” pending adoption of the proposed rule amendment. Comments will be due 30 days after the FCC releases a Public Notice for the Petition, and Reply Comments will be due 15 days after that Comments are due.
Section 54.410(c)(2) specifies that an ETC offering prepaid Lifeline service shall only continue to receive universal service support reimbursement for such Lifeline service provided to subscribers who have used the service within the last 60 days. TracFone argues that the FCC should include text messaging as usage of Lifeline service because “[t]ext messaging has increasingly become the preferred means of communications via a wireless phone for the vast majority of consumers, as well as for those consumers who are deaf or hard of hearing or have difficulty with speech, but do not wish to attach a teletype devise to their wireless phones.” TracFone further argues that grant of its petition will ensure Lifeline subscribers who are deaf or hard-of-hearing will not be de-enrolled from Lifeline.
Law & Regulation
Rep. Waxman Proposes Hybrid Approach to Open Internet Rules
In light of the FCC’s currently-ongoing Open Internet Roundtable series, Rep. Henry A. Waxman (D-Calif.) sent a letter to Chairman Wheeler proposing a “promising approach” for Open Internet rules. Specifically, Rep. Waxman suggested that the FCC reclassify broadband Internet access service as a “telecommunications service” under Title II, and then use section 706 to establish three bright-line rules: a no blocking rule, which would prohibit broadband providers from stopping the transmission of lawful content; a no throttling rule, which would prevent broadband providers from slowing down or degrading lawful traffic; and a no paid prioritization rule, which would prohibit broadband providers from entering into “‘pay-for-play’ schemes.”
According to Rep. Waxman, this hybrid approach would solve the problems created by relying on Title II alone, which providers have “vociferously opposed” and which arguably justifies paid prioritization schemes, or on section 706 alone, which limits the FCC’s ability to provide bright-line rules for the provision of broadband Internet access service.
Marriott Pays $600k to Resolve Wi-Fi Blocking Investigation
Marriott International, Inc. and its subsidiary, Marriott Hotel Services, Inc., have agreed to pay $600,000 to resolve an FCC investigation into whether Marriott intentionally interfered with and disabled Wi-Fi networks established by consumers in the conference facilities of the Gaylord Opryland Hotel and Convention Center in Nashville, Tennessee, in violation of Section 333 of the Communications Act. This portion of the Act prohibits willfully or malicious interference to radio communications.
In March 2013, the Commission received a complaint from an individual who had attended a function at the Gaylord Opryland. The complainant alleged that the Gaylord Opryland was “jamming mobile hotspots so that you can’t use them in the convention space.”
The FCC Enforcement Bureau’s investigation revealed that Marriott employees had used containment features of a Wi-Fi monitoring system at the Gaylord Opryland to prevent individuals from connecting to the Internet via their own personal Wi-Fi networks, while at the same time charging consumers, small businesses, and exhibitors as much as $1,000 per device to access Marriott’s Wi-Fi network. In some cases, employees sent de-authentication packets to the targeted access points, which would dissociate consumers’ devices from their own Wi-Fi hotspot access points and, thus, disrupt consumers’ current Wi-Fi transmissions and prevent future transmissions.
Under the terms of the Consent Decree the FCC announced last Friday, Marriott must cease the unlawful use of Wi-Fi blocking technology and take significant steps to improve how it monitors and uses its Wi-Fi technology at the Gaylord Opryland. Marriott must institute a compliance plan and file compliance and usage reports with the Bureau every three months for three years, including information documenting any use of access point containment features at any U.S. property that Marriott manages or owns. Marriott will also pay a civil penalty of $600,000 to resolve the matter.
This consent decree should remind our clients, as well as other property owners, that while they may control the deployment of fixed radio stations on their property, they may not interfere with communications, including Internet wireless access, that occur on their property using mobile devices.
Comment Deadline on Comcast/Time Warner Merger Extended
The FCC has extended the deadline for filing replies and responses and oppositions concerning Comcast’s acquisition of Time Warner Cable. These filings are now due October 29. In addition, the FCC is stopping the informal 180-day transaction clock in this proceeding until October 29, 2014 or until such time as FCC staff has determined that the parties’ responses to the FCC’s information requests are complete, whichever is later.
State Regulators Approve $2 Billion Frontier-AT&T Deal
Multiple news sources are reporting that AT&T and Frontier Communications received approval from the state Public Utilities Regulatory Authority on a $2 billion deal in which Frontier would acquire approximately 900,000 wired telephone connections, 415,000 internet connections and 180,000 U-verse video subscribers in Connecticut (AT&T will be keeping its wireless business in the state).
According the Hartford Courant , the operations that Frontier is acquiring are estimated to have revenues of $1.25 billion in 2014. The acquisition expands Frontier's service territory to 28 states with nearly 17,000 employees. Frontier says adding the Connecticut operations will result in $200 million in cost savings.
Stipulations for the regulatory approval include holding phone and broadband internet rates at or below their current rates for three years. Frontier will also spend $63 million over three years to improve its broadband capabilities, including improving internet speeds for 100,000 households. Interestingly, Frontier has also agreed to donate $500,000 over the three years and make additional gifts to the Connecticut Open tennis tournament in New Haven.
Frontier has already received approvals from the federal Department of Justice, the Federal Communications Commission and the local chapters of the Communications Workers of America, making this one of the final requirements to go through with the deal.
Frontier is generally considered to have erred when it purchased a significant portion of Verizon’s assets back in 2010, which turned out to be in various states of disrepair.
Oct. 1 – FCC Form 477 due (Local Competition and Broadband Reporting).*
Oct. 9 – Webinar on FCC Form 5610 (Rural Broadband Experiments Application).
Oct. 14 – Deadline for applications for rural broadband experiments.*
Oct. 15 – Auction 97 upfront payments are due.
Oct. 17 – Comment deadline for FirstNet RFI.
Oct. 17 – FCC Open Meeting.
Oct. 27 – Comments are due on the Healthcare Connect Fund Public Notice.
Oct. 29 – Replies, responses, and oppositions to Comcast/Time Warner merger are due.
Nov. 3 – FCC Form 499-Q (Quarterly Telecommunications Reporting Worksheet) is due.
Nov. 3 – Reply comments are due on IP Captioning proceeding.
Nov. 3 – Comments are due on Fourth Dormant Proceedings Termination Public Notice.
Nov. 10 – Auction 97 Mock Auction begins.
Nov. 10 – Responses to CAF Phase II Challenges are due.
Nov. 10 – Reply comments are due on the Healthcare Connect Fund Public Notice.
Nov. 13 – Auction 97 begins.
Nov. 14 – Comments are due on USDA Notice on Changes to Guaranteed Loan Program Regulations.
Nov. 14 – Comments are due on Part 32 Accounting Rules NPRM.
Nov. 17 – Reply comments are due on Fourth Dormant Proceedings Termination Public Notice.
Dec. 1 – Deadline to Increase Residential Rate Floor to $16.
Dec. 15 – Deadline for Special Access Data Collection.
Dec. 15 – Reply comments are due on Part 32 Accounting Rules NPRM.