BloostonLaw Telecom Update Published by the Law Offices of Blooston, Mordkofsky, Dickens, Duffy & Prendergast, LLP www.bloostonlaw.com Vol. 11, No. 29 | July 23, 2008 |
Martin Announces Tentative Agenda For August 1 Open Meeting FCC Chairman Kevin Martin has circulated the following items for consideration by his fellow FCC Commissioners as part of the tentative agenda for next month’s open meeting scheduled for Friday, August 1, 2008. Last April, Martin announced that he would designate topics for open meetings three weeks in advance, but such announcements do not affect the one-week “Sunshine period” or lobbying prohibition prior to the meeting. The topics Martin has announced for the August 1 meeting are: - Comcast: A Memorandum Opinion & Order that addresses Comcast’s network management practices.
- Regulatory Fees: A Report & Order concerning regulatory fees for Fiscal Year 2008 and a Further Notice of Proposed Rulemaking seeking comment on regulatory fee issues.
- Verizon Wireless/RCC: A Memorandum Opinion & Order and Declaratory Ruling considering the transfer of control of licenses and authorizations from Rural Cellular Corporation to Verizon Wireless.
The formal Sunshine Agenda is expected to be released Friday, July 25. On July 30, the FCC will hold a public En Banc hearing in Brooklyn, N.Y., on Public Safety Interoperable Communications and the 700 MHz D- Block Proceeding. BloostonLaw contacts: Hal Mordkofsky, Ben Dickens, Gerry Duffy, and John Prendergast. Telecom Carriers Must Develop “Red Flags Rules” Program By November 1 The Federal Trade Commission (FTC), the federal bank regulatory agencies, and the National Credit Union Administration (NCUA) have issued regulations (known as the “Red Flags Rules”) requiring financial institutions and creditors, including telecommunications companies, to develop and implement written identity theft prevention programs, as part of the Fair and Accurate Credit Transactions (FACT) Act of 2003. The programs must be in place by November 1, 2008, and must provide for the identification, detection, and response to patterns, practices, or specific activities – known as “red flags” – that could indicate identity theft. The Red Flags Rules apply to “financial institutions” and “creditors” with “covered accounts.” Under the Rules, creditors include utility and telecommunications companies. Covered accounts include utility and cell phone accounts, among other things. Under the Red Flags Rules, financial institutions and creditors must develop a written program (i.e., manual) that identifies and detects the relevant warning signs – or “red flags” – of identity theft. These may include, for example, unusual account activity, fraud alerts on a consumer report, or attempted use of suspicious account application documents. The program must also describe appropriate responses that would prevent and mitigate the crime and detail a plan to update the program. The program must be managed by the Board of Directors or senior employees of the financial institution or creditor, include appropriate staff training, and provide for oversight of any service providers. The Red Flags Rules provide all financial institutions and creditors the opportunity to design and implement a program that is appropriate to their size and complexity, as well as the nature of their operations. Guidelines issued by the FTC, the federal banking agencies, and the NCUA should be helpful in assisting covered entities in designing their programs. A supplement to the Guidelines identifies 26 possible red flags. These red flags are not a checklist, but rather, are examples that financial institutions and creditors may want to use as a starting point. They fall into five categories: - alerts, notifications, or warnings from a consumer reporting agency;
- suspicious documents;
- suspicious personally identifying information, such as a suspicious address;
- unusual use of – or suspicious activity relating to — a covered account; and
- notices from customers, victims of identity theft, law enforcement authorities, or other businesses about possible identity theft in connection with covered accounts.
More detailed compliance guidance on the Red Flags Rules will be forthcoming. Clients with any questions about the red flag rules or the manual requirements should contact the firm. BloostonLaw contacts: Hal Mordkofsky, Ben Dickens, Gerry Duffy, John Prendergast, and Mary Sisak. FCC ANNOUNCES COMMITMENT TO PARTICPATE IN DOD’s OPERATION WARFIGHTER PROGRAM: The FCC has announced its commitment to participate in the U.S. Department of Defense’s (DOD’s) Operation Warfighter Program, a temporary assignment/internship program for Armed Service members who are undergoing rehabilitation therapy at military treatment facilities in the United States. Through the program, military service men and women will be working between 15 and 30 hours per week for two to three months at the FCC. DOD developed Operation Warfighter to assist wounded soldiers with their rehabilitation. The goal of the program is to place the wounded warriors in supportive work settings outside of the hospital/treatment center that positively impacts their recuperation process. The program provides participants with meaningful activity outside of the hospital environment that assists in their wellness and offers a formal means of transition back to the military or civilian workforce. Since 2006, 235 successful placements have been made through the 80 participating federal agencies. The soldiers receive compensation from DOD. BloostonLaw contacts: Hal Mordkofsky, Ben Dickens, Gerry Duffy, and John Prendergast. 3rd CIRCUIT REPEALS CBS’ JANET JACKSON WARDROBE MALFUNCTION FINE: The 3rd U.S. Circuit Court of Appeals in Philadelphia vacated the FCC’s $550,000 indecency fine against CBS for the infamous 2004 Super Bowl halftime show highlighted by pop singer Janet Jackson’s breast-baring “wardrobe malfunction.” The Court found that the FCC orders imposing monetary penalties on CBS for broadcasting indecent material during the Super Bowl halftime show in 2004 had to be vacated because: 1) the FCC's application of a new policy concerning penalties for fleeting broadcasts of indecent material, which went into effect one month after the broadcast, would raise due-process concerns; 2) the FCC acted arbitrarily and capriciously when, without notice, it changed its policy on the types of "fleeting or isolated" broadcast material that could result in the imposition of monetary sanctions to distinguish between fleeting words and fleeting images; and 3) respondent superior liability did not apply because the halftime show performers, Janet Jackson and Justin Timberlake, were independent contractors and not employees of CBS; as well as several other technical points. Interestingly, the Court found that the FCC deviated from its nearly 30-year practice of fining indecent broadcast programming only when it was so "pervasive as to amount to 'shock treatment' for the audience." The court went on to state that “the FCC may change its policies without judicial second-guessing, but it cannot change a well-established course of action without supplying notice of and a reasoned explanation for its policy departure." Further, the 3rd Circuit said the agency’s actions will be set aside as “arbitrary and capricious” if the agency failed to provide a “reasoned explanation” for its decision to change course. It then cited several cases, including Nat'l Cable & Telecomms.Ass’n v. Brand X Internet Servs., 545 U.S. 967, 981 (2005) (“unexplained inconsistency” in agency practice is a reason for holding a policy reversal “arbitrary and capricious” under the APA, unless “the agency adequately explains the reasons for a reversal of policy”). We note it is unusual to see Brand X (which grants extraordinary deference to the FCC) used in this context. [Editorial comment: In finding that flashing the audience during a Super Bowl watched by millions of children is not “shock treatment”, it looks like the court is the boob now.] BloostonLaw contacts: Hal Mordkofsky, Ben Dickens, Gerry Duffy, and John Prendergast. AUGUST 1: FCC FORM 499-Q, TELECOMMUNICATIONS REPORTING WORKSHEET. All telecommunications common carriers that expect to contribute more than $10,000 to federal Universal Service Fund (USF) support mechanisms must file this quarterly form. The FCC has modified this form in light of its recent decision to establish interim measures for USF contribution assessments. The form contains revenue information from the prior quarter plus projections for the next quarter. Form 499-Q relates only to USF contributions. It does not relate to the cost recovery mechanisms for the Telecommunications Relay Service (TRS) Fund, the North American Numbering Plan Administration (NANPA), and the shared costs of local number portability (LNP), which are covered in the annual form (Form 499-A) that was due April 1. BloostonLaw contacts: Ben Dickens, Gerry Duffy, and Mary Sisak. NOVEMBER 1: FCC FORM 499-Q, TELECOMMUNICATIONS REPORTING WORKSHEET. All telecommunications common carriers that expect to contribute more than $10,000 to federal Universal Service Fund (USF) support mechanisms must file this quarterly form. The FCC has modified this form in light of its recent decision to establish interim measures for USF contribution assessments. The form contains revenue information from the prior quarter plus projections for the next quarter. Form 499-Q relates only to USF contributions. It does not relate to the cost recovery mechanisms for the Telecommunications Relay Service (TRS) Fund, the North American Numbering Plan Administration (NANPA), and the shared costs of local number portability (LNP), which are covered in the annual form (Form 499-A) that was due April 1. BloostonLaw contacts: Ben Dickens, Gerry Duffy, and Mary Sisak. NOVEMBER 1: FCC FORM 502, NUMBER UTILIZATION REPORT. Any wireless or wireline carrier that has been assigned an NXX code (10,000 numbers) or one or more 1,000 number blocks; and any wireless or wireline carrier that has received from the North American Numbering Plan Administrator (NANPA) or from another carrier one or more 1,000 number blocks must file Form 502. Such carriers should apply for an Operating Company Number (OCN) from NANPA if they do not already have one. Make sure you send your data to Gerry Duffy at BloostonLaw. |