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. 36||September 17, 2014|
Reminder: Regulatory Fees due Next Tuesday, September 23
Fiscal Year 2014 regulatory fees must be received by the FCC by no later than 11:59 PM, EDT, on September 23, 2014. Fees must be paid via the FCC’s online Fee Filer system; payments in the form of checks, money orders, and cashier’s checks are no longer accepted. A Form 159-E voucher will only be accepted when payment is being made by wire transfer.
FirstNet to Seek Input On Rural Telco Partnership, Non-First Responder Access
FirstNet is set to issue a request for information (RFI) at its Sept. 17 board meeting, seeking input on issues such as whether FirstNet can be accessed by non-public safety users, which may be of interest to public utilities and other companies that may be compatible with the restrictions likely to be imposed on FirstNet participants. The RFI will also seek information on the potential for partnering with other carriers, especially rural telephone companies, to complete the buildout of the nationwide public safety broadband network as quickly and efficiently as possible. As reported by Fierce Wireless, Ed Parkinson, FirstNet's director of government affairs, announced the forthcoming RFI at last week’s CCA convention.
The RFI will also ask a number of detailed questions focused on the core, radio access network (RAN), security and partnerships. The RFI is designed to lead to an RFP to move implementation of the network along.
"It's the vendor community that is going to dictate the best way this is going to be built," Parkinson said. He noted contracts for the network will be subject to a competitive process and will have to follow federal acquisition regulations.
We will update our clients once the RFI is issued.
[See following update.]
Sprint Announces It is Not Bidding in Auction 97; Anti-Collusion Rules Currently In Effect
In a statement issued on Monday, Sprint Corp. confirmed that it had chosen not to bid in the upcoming FCC auction of AWS-3 licenses, known as Auction 97. "Sprint has decided not to participate in the FCC's AWS-3 auction but will continue to evaluate the opportunities presented by the upcoming 600 MHz incentive auction," said Sprint spokesman Jeffrey Silva in a statement.
Wireless industry analysts were generally not surprised by the company’s announcement, since Sprint already has a significant amount of 2.5 GHz band spectrum from BRS/EBS licenses and lease rights it acquired with the closing of its Clearwire purchase in mid-2013. Moreover, compared to other nationwide carriers, Sprint has relatively little spectrum in sub-1 GHz bands, so the company appears to be conserving resources for participation in the 600 MHz incentive auction, which is currently targeted for mid-2015.
Short-form applications to participate in Auction 97 were due by the close of business last Friday (September 12th) so the timing of Sprint’s announcement suggests that the company may have been taking a proactive step to prevent the pending AWS-3 auction from getting in the way of ongoing business discussions with others who may have invested in an auction applicant or who be bidding themselves. However, it is not known whether Sprint has any indirect interests in other auction applicants, so clients that are participating in Auction 97 should still exercise due care in their dealings with Sprint (or any other major carrier for that matter).
With limited exceptions, the FCC’s anti-collusion rules prohibit auction applicants from communicating with each other during the auction (starting from the short-form filing deadline through the post-auction down payment deadline) about bids, bidding strategies, settlement agreements or matters concerning the post auction market structure, unless they have previously identified one another on their short-form applications as parties with whom they have entered into agreements. The rule against prohibited communications applies to all “controlling interests” in an applicant (e.g., officers, board members and key employees) and any individuals or entities that hold direct or indirect investments of 10% or more in a short-form applicant. While the anti-collusion rule provisions do not prohibit discussions regarding non-auction related business matters among auction applicants, the FCC has interpreted the restriction on prohibited communications as applying to any discussions about matters that “may affect” bids, bid strategies, etc., even if the auction is never directly discussed. Please contact us if you have any questions about dealings with other carriers during the pendency of the auction.
USDA Notice Seeks Comment on Changes to Guaranteed Loan Program Regulations
On Monday, the the Rural Business-Cooperative Service (an agency within the Rural Development mission area of the USDA) published a Notice in the Federal Register seeking comment on proposed changes to the regulations for the Business and Industry (B&I) Guaranteed Loan Program in an effort to improve program delivery, clarify the regulations to make them easier to understand and reduce delinquencies. Comments are due November 14.
Specific revisions include:
- strengthening criteria for non-regulated lenders to participate in the program;
- codifying provisions of the 2008 Farm Bill;
- adding provisions for New Markets Tax Credits and the Cooperative Stock Purchase Program;
- changing the loan scoring criteria;
- changing loan servicing, including termination of interest accrual to the lender after 90 days from the delinquency effective date or to a holder 90 days from the date of the first demand letter from any holder of the guaranteed portion;
- reducing the attorney/legal fees that the lender can claim in the liquidation process from full reimbursement to being shared equally between the lender and the agency;
- adding the ability to obtain personal and corporate guarantees from those owning 20 percent of the business when there is a sale of the borrower’s stock.
By way of background, Rural Development provides financial support—including direct loans, grants, and loan guarantees—and technical assistance to help improve the quality of life and provide the foundation for economic development in rural areas. The B&I Guaranteed Loan Program was authorized by the Rural Development Act of 1972. The loans are made by private lenders to rural businesses for the purpose of creating new businesses, expanding existing businesses, and for other purposes that create employment opportunities in rural America. According to the Notice, the proposed changes could also result in increased lending activity, expanded business opportunities and creation of more jobs in rural areas.
FCC Issues Order on Reconsideration for Special Access Data, Partially Grants Blooston Petition
On Monday, the FCC issued an Order on Reconsideration in its special access data collection proceeding in which it amended the collection requirements to reflect the conditional approval received from the Office of Management and Budget (OMB) last month. In revising the requirements, the FCC effectively granted in part a petition for reconsideration filed by the Blooston Private Microwave Licensees. Responses to the data collection are due by December 15, 2014.
Specifically, the FCC has revised the special access data collection questionnaire and instructions at the direction of OMB by: (1) requiring the collection of 2013 data only, rather than 2011 and 2012; (2) revising the definition of “Purchasers” to exclude entities spending less than $5 million on “Dedicated Services” in 2013 in price cap areas; (3) indicating those questions where responses are optional and not required or where information is required only if kept in the normal course of business by the respondent; and (4) adding footnotes to clarify which information is required.
By changing the definition of “Purchaser,” the FCC partially granted the Blooston petition for reconsideration, which sought an exemption from the collection for Part 101 point-to-point, non-common carrier microwave licensees that “are simply consumers of dedicated special access services.” According to the Order, by revising the definition of “Purchasers” to exclude entities spending less than $5 million on Dedicated Services in 2013 in price cap areas, the FCC significantly reduced the estimated pool of respondents that are Purchasers, and therefore, likely significantly reduced the number of entities represented by Blooston that are required to respond to the collection.
Any entity subject to the Commission’s jurisdiction that (a) provides special access service; (b) provides a connection that is capable of providing special access services; or (c) spent more than $5 million purchasing special access service in 2013 in price cap areas must respond to the data collection. A price cap area is an area served by a local exchange carrier that is subject to price cap regulation, such as AT&T or Verizon. Clients seeking assistance with the data collection, including determining whether they are required to respond, should contact the firm without delay.
Law & Regulation
November 14 Deadline Established for Streamlining Part 32 Accounting Rules NPRM
On Monday, the FCC published the NPRM initiating a proceeding to review its Part 32 Uniform System of Accounts in the Federal Register, establishing comment and reply comment deadlines. Comments are due November 14 and reply comments are due December 15.
The major issues on which comment is being sought include consolidating Class A and Class B accounts; aligning the Uniform System of Accounts with Generally Accepted Accounting Principles; requiring price cap carriers to comply with the Uniform System of Accounts; requiring price cap carriers to comply with targeted accounting requirements; state accounting requirements; effects of revisions on rates; timing of implementation of any changes; and legal authority.
FCC Subpoenas Idaho Over School Broadband Contract
A number of news sources are reporting that Federal Communications Commission investigators have joined an inquiry into the state of Idaho's handling of a school broadband contract.
According to the Associated Press article, an Aug. 26 letter from Idaho Department of Administration Director Teresa Luna indicates that “the FCC Office of the Inspector General has subpoenaed the state for documents related to the Idaho Education Network, which has been the subject of a five-year lawsuit alleging the state illegally awarded the contract to provide broadband service to Idaho schools.”
Apparently, concerns arose when Syringa Networks (one of the vendors who bid for the state contract but did not receive a seat) challenged the Department of Administration's decision to award a $60 million contract to Qwest (now CenturyLink) and Education Networks of America. The Idaho Supreme Court in March 2013 cleared Syringa to pursue a lawsuit, prompting Universal Service to stop the federal payments (leaving the state program budget $8.5 million short).
Senators Ask FCC to Reevaluate Local Rate Floor Structure
Last week, U.S. Senators Mark Pryor (D-Ark.), John Boozman (R-Ark.), and a bipartisan group of 14 other U.S. Senators sent a letter to Chairman Wheeler asking the FCC “to re-evaluate its telephone “rate floor” policy in order to protect rural consumers from steep telephone bill hikes.”
According to the letter:
. . . as currently constructed, the rate floor puts rural telephone companies in an untenable position in which they must choose between raising rates to levels that, in some cases, are more than the rates their urban counterparts charge many of their customers, or receiving reduced universal service support. This is in spite of the fact that these rural exchanges often do not resemble their urban areas along key metrics like population, geography, and income, as well as other demographics.
Sens. Pryor and Boozman had previously called upon the FCC to delay the rate floor increase back when it was first announced that the floor was scheduled to increase from $14 to $20.46. In response, the FCC adopted an incremental phase-in of the new rate floor, with the first increase (from $14 to $16) due by December 1 of this year.
FCC Announces Fourth Quarter USF Contribution Factor
Last week the FCC’s Office of Managing Director announced the proposed USF contribution factor for Fourth Quarter 2014 as 16.1 percent, up from 15.7 percent in the previous quarter.
According to the Public Notice, contributions to the federal universal service support mechanisms are determined using a quarterly contribution factor calculated by the FCC, based on the ratio of total projected quarterly costs of the universal service support mechanisms to contributors’ total projected collected end-user interstate and international telecommunications revenues, net of projected contributions.
If the FCC takes no action regarding the projections of demand and administrative expenses and the proposed contribution factor within 14 days following release of the Public Notice, they are deemed approved and the contribution factor will be used by USAC to calculate third quarter 2014 universal service contributions.
Panelists Announced for September 19 Open Internet Roundtables
On September 12 the FCC’s Enforcement Bureau and Office of Strategic Planning and Policy Analysis announced the names of panelists for two events in the Open Internet Roundtable series: “Effective Enforcement of Open Internet Requirements” and “Technological Aspects of an Open Internet,” both of which will be held on September 19. The roundtables will be free and open to the public, and the FCC also will stream them live at http://www.fcc.gov/live .
The Effective Enforcement of Open Internet Requirements roundtable will consider ways to enforce effectively the proposed new Open Internet rules, exploring the utility of various current and proposed enforcement tools in the Open Internet context and discussing how to design fair and accessible FCC, dispute resolution processes for open Internet concerns. Panelists are Rick Chessen , Senior Vice President, Law & Regulatory Policy, NCTA; Steve Coran , FCC Counsel, WISPA; Susan Crawford , Visiting Professor, Harvard Law School & Co-Director, Berkman Center for Internet & Society; Christine Hines , Consumer and Civil Justice Counsel, Public Citizen; Chris Riley , Senior Policy Engineer, Mozilla; and Michal Rosenn , Deputy General Counsel, Kickstarter.
The Technological Aspects of an Open Internet roundtable will consider the technical aspects of ensuring an Open Internet, including questions of scope, transparency, blocking, mobile networks, and reasonable network management. Panelists are Don Bowman , Chief Technology Officer, Sandvine; Al Jette , Head of North American Industry Environment, Nokia Networks; Jim Kurose , Distinguished Professor of Computer Science, University of Massachusetts Amherst; Klara Nahrstedt , Ralph and Catherine Fisher Professor, Department of Computer Science, University Of Illinois at Urbana-Champaign; Andrew Pile , Chief Technology Officer, Vimeo; Hans-Juergen Schmidtke , Vice President, Product Management, Juniper Networks; and Stephen Wolff , Interim Vice President & Chief Technology Officer, Internet2.
Sep. 19 – Reply comments are due on Tenth Broadband Report Notice of Inquiry.
Sep. 19 – Comments are due on fifth Congressional White Paper.
Sep. 19 – Open Internet Roundtable Series.
Sep. 23 – Annual Regulatory Fee Payments for Fiscal Year 2014 are due.
Sep. 29 – Reply comments are due on Rural Broadband Experiment FNPRM.
Sep. 30 – Reply comments are due on E-Rate Modernization NPRM.
Sep. 30 – FCC Form 396-C (MVPD EEO Program Annual Report).
Oct. 1 – FCC Form 477 due (Local Competition and Broadband Reporting).
Oct. 6 – Comments due on IP Captioning proceeding.
Oct. 14 – Deadline for applications for rural broadband experiments.
Oct. 15 – Auction 97 upfront payments 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. 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.
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.
|BloostonLaw Telecom Update||Vol. 17, No. 36||September 18, 2014|
FCC Expands Cable Television Regulatory Fees to Include Internet Protocol TV Operators – Fees due Tuesday, September 23, 2014
We want to remind our clients that, as part of its revisions to the annual regulatory fee program, the FCC has expanded Cable Television regulatory fee to include Internet Protocol TV Operators. The regulatory fee for IPTV operators is $0.99 per subscriber as of December 31, 2014.
New this year, all regulatees that pay annually must make their regulatory fee payments electronically via the Commission’s online Fee Filer payment system or by wire funds transfer directly to the US Treasury. As a result, regulatees will be required to access the FCC’s Fee Filer system ( www.fcc.gov/fees/feefiler.html ) with their valid CORES FRN and password in order to initiate the process of filing their annual regulatory fees. For FY 2014, payment may be made electronically through the Fee Filer system as a credit card transaction or as an ACH Payment that utilizes your bank account information. Wire funds transfers to the US Treasury will be addressed below. The FCC no longer mails invoices for regulatory fees. These invoices are viewable in the FCC’s Fee Filer System.
Any client with questions should contact Richard Rubino at 202-828-5519.
FirstNet Issues RFI Seeking Input on Rural Telco Partnership, Non-First Responder Access; Sets Oct. 17 Comment Deadline
To update yesterday’s BloostonLaw Update, FirstNet voted to adopt a request for information (RFI) at its Sept. 17 board meeting as expected, seeking input on issues such as whether FirstNet can be accessed by non-public safety users, and whether there is a potential for partnering with other carriers, especially rural telephone companies , to complete the buildout of the nationwide public safety broadband network as quickly and efficiently as possible. FirstNet issued the RFI immediately, and the response deadline has been set as October 17, 2014 . Therefore, RLECs and other companies interested in participating in this proceeding, with an eye toward establishing favorable rules for partnering with FirstNet in some fashion, will need to give this matter prompt attention. The text of the RFI is available at firstnet.gov.