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. 16, No. 45 | December 11, 2013 |
Headlines
House Energy and Commerce Committee Wants to Update Communications ActOn December 3, 2013, House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Communications and Technology Subcommittee Chairman Greg Walden (R-OR) announced plans for the committee to examine and update the Communications Act. A replay of the video chat during which the announcement was made can be found here . At this time, details on the reform effort are sparse, but it is clear that the internet will be a main focus of the effort. In a statement, Rep. Walden said, "When the Communications Act was updated almost 18 years ago, no one could have dreamed of the many innovations and advancements that make the Internet what it is today. Written during the Great Depression and last updated when 56 kilobits per second via dial-up modem was state of the art, the Communications Act is now painfully out of date." According to the Committee's press release, it will be a multi-year effort that will involve a series of white papers asking questions about what can be done to improve the laws surrounding the communications marketplace as well as a robust conversation utilizing all platforms of digital media. No Democratic legislators were present at the announcement, but Rep. John Dingell (D- MI) released a statement following the announcement offering cautious support. "As the author of every major telecommunications statute for the past three decades, I caution my Republican colleagues to approach modernizing the Communications Act with great care and attention to detail," he said. "Changes should not be made simply for change's sake, but rather based on clear and documented need." Nevertheless, Rep. Dingell continued, "I am ready, willing, and able to work with my Republican and Democratic colleagues in this effort." FCC Commissioner Ajit Pai also issued a statement supporting the announcement. He said, "In a converged industry, it does not make sense to apply different rules to providers and technologies that compete in the same markets. Convergence is now the norm, and consumers, companies, and the Commission would be better off if our laws and regulations recognized as much." FCC Chairman Delays Incentive Auction Until Mid-2015 Likening the complexity of the multi-part simultaneous bid process to a Rubik's cube, FCC Chairman Tom Wheeler announced in a blog post last Friday a six-month delay in the timetable for the Commission's first-ever broadcast incentive auction. "Getting the right policy and procedures for the auction is only half the job," Wheeler wrote. "For the incentive auction to be a success, we must also ensure that the operating systems and software to run it work from the moment the first bid is placed, until the final broadcast station is relocated or 'repacked.'" In the post, Wheeler said "I believe we can conduct a successful auction in the middle of 2015." Wheeler also said that the Incentive Auction Task Force would provide more details about the timeline and milestones at the FCC's January open meeting. The plan includes policy recommendations in a proposed Report and Order that the Commission will consider early next year. A vote on the R&O is expected in the spring. Among the issues likely to be addressed this spring is whether the Commission will impose any restrictions on the ability of Verizon Wireless and AT&T to participate in the bidding for the 600 MHz band spectrum. Smaller carriers have argued for caps on the amount of spectrum that Verizon and AT&T can acquire below 1 GHz, while larger carriers have said this will deprive the auction of significant revenue. Speaking at an event on Capitol Hill, a top telecommunications policy official from the White House urged the FCC to consider spectrum caps in order to preserve competition in the mobile wireless industry. "Having spent most of the last decade helping technology-based companies from the ground up, I know the incredible challenge of taking a cutting-edge product from concept to market on deadline," wrote Wheeler. "That is exactly what we are doing with the incentive auction." Former FCC Chairman Julius Genachowski previously targeted the incentive auction of broadcast television spectrum for 2014, but the Commission's authority under the Middle Class Tax Relief and Job Creation Act of 2012 (a.k.a. the "Spectrum Act") does not expire until 2020. FCC Issues NAL for Failure to File International Telecommunications Data In a Notice of Apparent Liability for Forfeiture (NAL) issued on December 6, 2013, the FCC's Enforcement Bureau found Start Wireless Group, Inc., d/b/a Page Plus Cellular (Page Plus) apparently liable for forfeiture penalties totaling forty-three thousand, two hundred dollars ($43,200) for failing to file annual reports of its international telecommunications traffic data (the International Traffic Report). According to the NAL, Page Plus sold prepaid phone cards with minutes purchased from Cellco Partnership d/b/a Verizon Wireless cards which enabled its consumers to make domestic and international telephone calls, but had never obtained an international Section 214 authorization, as required by the Telecommunications Act. In further investigating the matter, it came to light that Page Plus had also failed to file any International Traffic Reports, as required by Section 43.61(a) of the FCC's rules. In assessing the forfeiture, the Enforcement Bureau noted that the FCC's Forfeiture Policy Statement and Section 1.80(b) of the FCC's rules establish a base forfeiture amount of $3,000 for failure to file a required form. Since Page Plus missed eight such filings, the Enforcement Bureau began with a $24,000 base forfeiture. However, since the eight offenses occurred over a long period of time (eight years), the Enforcement Bureau upwardly adjusted the forfeiture amount by $19,200, to total $43,200. The NAL highlights the often severe repercussions for missing routine filings, and how repeatedly missing such filings can be even more severe. Companies interested in discussing the filing requirements that may apply to their businesses should contact the firm for more information. Law & Regulation
PRA Comment Sought on new Special Access Information Collection The FCC is seeking Paperwork Reduction Act (PRA) comments on the modified information collection associated with the Wireline Competition Bureau's Clarification Order on the special access data collection requirements. Comments are due January 8, 2014. The purpose of the PRA is to reduce paperwork burdens and to ensure that the information collection requirements implemented by federal agencies are actually necessary, have practical utility, and are not unduly burdensome on regulated entities. The FCC cannot collect information without OMB approval, and therefore the filing deadline for this data collection has not yet been announced. The data collection requirement will require most entities that purchase special access services to file a detailed report with data about their usage. Some exceptions apply, and the full list of exclusions can be found in the Clarification Order. Companies that are interested in filing PRA comments or have questions about whether the data collection requirement applies to them should contact the firm without delay. Committee Approves FCC Process Reform Act, Federal Spectrum Incentive Act On December 11, 2013, the House of Representatives Energy and Commerce Committee announced that it has advanced the FCC Process Reform Act and the Federal Spectrum Incentive Act. The Committee action comes on the heels of Communications and Technology Subcommittee Chairman Greg Walden's (R-OR) announcement that bipartisan agreements had been reached on both pieces of legislation. Chairman Walden and Subcommittee Ranking Member Anna Eshoo (D-CA) had submitted an amendment in the nature of a substitute for H.R. 3675, the Federal Communications Commission Process Reform Act. The amendment is a bipartisan compromise intended to bring additional transparency and predictability to the FCC. It also contains some statutory provisions including changes to the Sunshine Rules and a permanent exception to the Antideficiency Act for the federal Universal Service Fund. Unlike previous versions, the revised bill would not restrict the FCC's ability to impose conditions on mergers and would not require the agency to perform cost-benefit analyses for proposed regulations. However, it would require the agency to set non-binding timelines for completing its proceedings; but the FCC would be required to report to Congress as to whether or not it was meeting its deadlines. The FCC would also have to report to Congress on its compliance with Freedom of Information Act requests. The bill also contains a provision allowing more than two Commissioners to meet privately; current law only allows three or more Commissioners to meet in public meetings. The agency would also be required to create a database for consumer complaints. The Committee also approved H.R. 3674, the Federal Spectrum Incentive Act, authored by Reps. Brett Guthrie (R-KY) and Doris Matsui (D-CA), which creates a new path for government spectrum users to relinquish spectrum and receive a portion on net auction revenues instead of relocation costs. Guthrie and Matsui are co-chairs of the subcommittee's bipartisan Federal Spectrum Working Group, which continues to examine how the federal government can use the nation's airwaves more efficiently. FCC Issues Agenda for December 12 Open Meeting On December 5, 2013, the FCC issued the agenda for its December 12 Open Meeting. The Meeting is scheduled to commence at 2:30pm. For a fee this meeting can be viewed live over George Mason University's Capitol Connection. The Capitol Connection also will carry the meeting live via the Internet. At the meeting, the FCC will: - consider a Report and Order that takes critical steps to improve the reliability and resiliency of 911 networks nationwide;
- consider a Notice of Proposed Rulemaking to provide airlines with the ability to permit passengers to use mobile wireless services via onboard airborne access systems;
- hear a status update on the Technology Transition Task Force's work towards making near-term recommendations related to the Commission's expectations and role in the IP transition; and
- hear an update on FCC and industry efforts to promote mobile wireless device unlocking.
House Subcommittee to Hold FCC Oversight Hearing on December 12 The House Communications and Technology Subcommittee has announced that it will hold a hearing on December 12, 2013 on the oversight of the FCC. The hearing is scheduled to begin at 10:00 a.m. in the Rayburn Office Building, and will be broadcast live online here at that time. All five FCC Commissioners will testify at the hearing. According to the official background memorandum , the following topics will be discussed: - Commercial Spectrum Auctions — fundamental implementation questions about the broadcast incentive auction, including broadcast station valuation and border coordination, and the FCC's intentions on crafting auction rules that comport with the changes made to the Communications Act by the Spectrum Act.
- Government Spectrum — amendments to the Commercial Spectrum Enhancement Act (CSEA) to improve the process of coordinating the relocation of Federal spectrum users in order to clear and auction spectrum to commercial users and to provide Federal users an additional option for relinquishing spectrum for commercial auction.
- Universal Service — continued growth of the fund despite recent reforms and modernization steps; Subcommittee Chairman Walden's letter advocating the implementation of a cap on the overall fund at current levels; referral of expansion proposals to the Federal-State Joint Board on Universal Service; concerns regarding the impact of the use of Quantile Regression Analysis to determine high-cost support for rural rate-of-return carriers and the resulting negative effect on broadband investment in rural America; and the widely-recognized need for comprehensive corrective action and the long delay in Commission action on waivers sought by many of these companies for relief in the interim.
- FCC Reform — multiple bills aimed at minimizing the potential for procedural failings and abuse, and to improve agency transparency, efficiency, and accountability, such as the FCC Consolidated Reporting Act of 2013 (which passed the House by unanimous vote in September), and upcoming legislation that directs the Commission to conduct a rulemaking and an inquiry into several procedural issues, with the goal of improving transparency and accountability within the FCC. In addition, the proposed legislation sets out statutory requirements for agency rulemakings.
- IP Transition — the debate over the regulatory treatment of these new networks within a statutory framework that is arguably premised on monopoly control of the telephone network and the delivery of voice service.
Anti-Patent Troll Legislation Passes House On December 5, 2013, the US House of Representatives voted 325-91 to pass a bill aimed at making procedural changes to the patent system in order to discourage certain legal tactics used by so-called "patent trolls" to obtain settlements for patent disputes. A patent troll is a company that enforces patent rights against accused infringers in an attempt to collect licensing fees, but does not actually manufacture products or supply services based upon the patents it seeks to enforce. Patents are often very broad, and it isn't always obvious who the actual patent owner is, thanks to the use of shell companies. Most importantly, the cost of defending against a patent infringement suit is so high, even before a trial, and the outcome so uncertain due to unpredictable jury determinations that settlement often makes sense even if the claim is obviously meritless. The patent troll relies on this state of affairs to obtain favorable settlements or licensing fees without ever actually demonstrating the validity of their claims. The bill, known as the Innovation Act, would make a number of changes to the patent litigation process to tip the scales to something closer to even. Plaintiffs seeking to enforce a patent in court would need to be more specific about how the defendant has infringed upon the patent, which is intended to help combat the broad nature of many patents. Plaintiffs would also be required to name any entity that has a financial interest in the patent, and a losing plaintiff (and any financially interested parties, if necessary) would be required to cover the cost of the defense. The bill would also cut defense costs by delaying discovery until after the courts have addressed the legal questions associated with the claim, which really should have been the case from the start. Finally, the bill would allow technology vendors to defend against a patent suit on behalf of their customers, in order to prevent patent trolls preying upon relatively defenseless end-users. As we reported in the January 12 edition of the BloostonLaw Telecom Update, a number of rural telephone companies, Internet service providers, and other entities received letters alleging that they were in violation of six DSL-related patents. It appeared that the company alleging the violation had bought several older Bell Labs and other patents that may or may not have been applicable to current DSL equipment and services. Nevertheless, in several instances the letters "ripened" into lawsuits in various U.S. District Courts around the country. The Washington Post recently criticized the bill for not going far enough to curb patent trolling. Rather, according to the article, the bill only targets certain favored litigation tactics of patent trolls and does not address the fundamental problem of the patent system: "the proliferation of low-quality software patents that have turned the system into an impediment to innovation." Although the tactics discussed above feed into the ability of patent trolls to succeed, the real issue, according to the Post, is that the patents they are attempting to enforce are broad to the point of vagueness. Instead, argues the Post, Congress needs to weed out meaningless patents. Industry
FCC Should Adopt Wireless Competition Task Force Say CCA The Competitive Carriers Association last week filed a whitepaper with the FCC concluding that competition in the wireless industry has diminished significantly in recent years, and urging the Commission to convene a specialized Wireless Competition Task Force to promote wireless competition policy in a variety of pending FCC proceedings. The whitepaper, entitled, "A Framework for Sustainable Competition in the Digital Age: Fostering Connectivity, Innovation and Consumer Choice," proposes that the Wireless Competition Task Force should begin its focus on six initiatives: 1) overhauling the FCC's spectrum screen, 2) designing pro-competitive auction rules, 3) ensuring commercially reasonable data roaming agreements, 4) promoting access to devices, 5) maintaining connectivity as the industry moves to an all Internet Protocol world, and 6) ensuring competitive neutrality for universal service mechanisms. CCA says the whitepaper is intended to represent a transparent agenda to stimulate thought and discussions in support of competition. "I strongly encourage the FCC to create a temporary Wireless Competition Task Force to holistically review the six critical policy areas, recognize their interrelationship and impact on competition, and act accordingly," said CCA President & CEO Steven K. Berry. "The very fact that, for the past three years, the FCC has been unable to conclude that the wireless industry is effectively competitive should prompt the Commission to take immediate action. Competition benefits everyone — consumers, small businesses, and the U.S. economy." A copy of the 24-page CCA whitepaper is available HERE . Deadlines
FEBRUARY 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 February 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 are required to include their FCC Registration Number (FRN). 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. Calendar At-a-Glance
Dec. 13 — Comments on Lifeline Biennial Audit Plan are due.
Dec. 13 — Comments are due on intrastate inmate calling rates and practices.
Dec. 18 — Upfront payment deadline for Auction 96.
Dec. 20 — Form 323 (Biennial Ownership Report) is due.
Dec. 20 — Reply comments on Revised 3.5 GHz Licensing Model are due.
Dec. 23 — PRA Comments on Electronic Tariff Filing Requirements are due.
Dec. 30 — Reply comments on Lifeline Biennial Audit Plan are due.
Dec. 30 — Reply comments are due on intrastate inmate calling rates and practices.
Jan. 3 — Papers on System for Sharing 3.5 GHz Band are due.
Jan. 8 — Electronic filing deadline for Form 497 for carriers seeking support for the preceding month and wishing to receive reimbursement by month's end.
Jan. 8 — PRA Comments on Special Access Data Collection are due.
Jan. 9 — Comments are due on the proposal to license 600 MHz Band using "Partial Economic Areas."
Jan. 15 — Annual Hearing Aid Compatibility Report is due.
Jan. 17 — Mock auction for Auction 96.
Jan. 22 — Auction 96 begins.
Jan. 23 — Reply comments are due on the proposal to license 600 MHz Band using "Partial Economic Areas."
Feb. 1 — FCC Form 499-Q is due.
Feb. 1 — FCC Form 502 (Number Utilization and Forecast Report) is due.
Feb. 14 — Inmate calling rules become effective.
Mar. 1 — Copyright Statement of Account Form for cable companies is due.
Mar. 1 — Annual CPNI Certification is due.
Mar. 1 — FCC Form 477 (Local Competition & Broadband Reporting) is due. | 
AT&T, Sprint, T-Mobile, U.S. Cellular and Verizon Wireless have all committed to a new set of voluntary rules regarding customer device unlocking. As CTIA spelled out yesterday in a letter to the FCC, the five biggest U.S. operators will push for the principles to be adopted into the CTIA Consumer Code for Wireless Service. Full Story: 
David George and Bill Noyes
