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. 33 | September 18, 2013 |
REMINDER — Changes in Ownership May Require FCC Approval Now is the time to seek FCC approval for any transaction that you are planning to close before the end of the calendar year. As discussed in the article below, many types of reorganizations and other transactions require prior FCC approval even if the ultimate ownership remains unchanged. Headlines
Ownership Changes May Require FCC Approval We want to remind our clients that many types of reorganizations, estate planning and tax savings activities and other transactions require prior FCC approval; and given the frequent need to implement such transactions by the end of the year, companies engaging in such transactions should immediately determine whether they must file an application for FCC approval, and obtain a grant, before closing on a year-end deal. Transactions requiring prior FCC approval include (but are not limited to): - The distribution of stock to family members in connection with estate planning, tax and other business activities, if there are changes to the control levels discussed above;
- Any sale of a company that holds FCC licenses;
- Any sale, transfer or lease of an FCC license;
- A change in the form of organization from a corporation to an LLC, or vice versa, even though such changes are not regarded as a change in entity under state law.
- Any transfer of stock that results in a shareholder attaining a 50% or greater ownership level, or a shareholder relinquishing a 50% or greater ownership level;
- Any transfer of stock, partnership or LLC interests that would have a cumulative effect on 50% or more of the ownership.
- The creation of a holding company or trust to hold the stock of an FCC license holder;
- The creation of new classes of stockholders that affect the control structure of an FCC license holder.
- Certain minority ownership changes can require FCC approval (e.g., transfer of a minority stock interest, giving the recipient extraordinary voting rights or powers through officer or board position).
Fortunately, transactions involving many types of licenses can often be approved on an expedited basis. But this is not always the case, especially if bidding credits and/or commercial wireless spectrum are involved. Also, in some instances Section 214 authority is required, especially in the case of wireline and other telephony services. Clients planning year-end transactions should contact us as soon as possible to determine if FCC approval is needed. NTIA Files Petition With FCC Regarding Cell Phone Unlocking On September 17, 2013 the FCC came under formal pressure from the Obama Administration to adopt regulations prohibiting cell phone locking where the customer's contract with the provider of the phone has expired. The pressure came in the form of a Petition for Rulemaking filed by the National Telecommunications and Information Administration (NTIA), part of the U.S. Department of Commerce. By way of background, since the 1998 enactment of the Digital Millennium Copyright Act (DMCA), the Librarian of Congress has conducted proceedings every three years to determine exemptions to the prohibition against circumvention of technological measures used to protect copyrighted works. The DMCA requires the Librarian to consult with NTIA during these proceedings. During the last three proceedings, beginning in 2005, the Librarian received petitions to exempt unlocking of mobile phones from the prohibition. The Librarian granted the requests for exemption in 2006 and 2010. In 2012, NTIA recommended that the Librarian grant the exemption for the unlocking of mobile phones, as well as other wireless devices such as tablets. Contrary to NTIA's recommendation, the Librarian denied this request, granting an exemption only for unlocking mobile phones purchased before January 2013, effectively making unlocking of new wireless phones a violation of copyright law. The White House requested that NTIA work with the FCC toward a permanent regulatory solution to this issue. In its Petition, NTIA requests that the Commission add a new section to Part 20 of the regulations to require a provider of commercial mobile radio service and commercial mobile data service, upon request and without charging a fee, to unlock any wireless device furnished by that provider (including an affiliate or an agent of the provider), so that the requesting person ( i.e., a customer or successor) may use the device in connection with another lawfully obtained commercial mobile service. A provider may comply with this requirement by unlocking the device itself or by providing authorization and the technical wherewithal to another provider to unlock the device. According to NTIA, by giving consumers greater freedom to choose among alternative mobile service providers and to use wireless devices that they lawfully acquire from others, the proposed rule would increase competition in the mobile services market and enhance consumer welfare. Last Thursday in a speech at a Competitive Carriers Association event, Acting FCC Chairwoman Mignon Clyburn expressed her support for wireless device unlocking. In remarks, NTIA's Petition was applauded by influential members of the U.S. House of Representatives. CTIA — The Wireless Association was more restrained in its comments. Law & Regulation
Carrier Assessed Late Fees for Failing to Timely Submit Form 499-Q On September 17, 2013 the FCC released an Order denying Assist 123's request for review and reversal of a decision of the Universal Service Administrative Company upholding late fees assessed for Assist's untimely filing of its August 2012 and November 2012 Forms 499-Q. According to the Order, Assist attempted to file its August 2012 Form 499-Q electronically, appropriately entering data into the "Data Entry Form" screen in USAC's E-file system. However, instead of clicking the "Certify" button, Assist apparently printed out a copy of the "Data Entry From" screen (despite the screen's warning: "For Data Entry Purposes Only. Please Do Not Print This Form") and did nothing further. USAC e-mailed Assist on August 22 (21 days after the failed filing attempt) to notify the company that there was no record if its Form 499-Q for that quarter, but apparently received no response until November 14, when it received the printed Data Entry Form from Assist. Now more than three months after the filing deadline, USAC rejected the submission and notified Assist that it had used the wrong format. Assist filed again on November 21, 2012, this time using the proper Form 499-Q, but using data from 2011 instead of 2012. USAC again rejected the form, this time citing the incorrect data. Assist filed attempted to file again January 2013, again using data from 2011 when the filing required 2012 date. The correct form with the correct data was not submitted until February of 2013 — almost six months after the deadline. (Assist apparently made a similar error by providing outdated data with its November filing as well). Accordingly, Assist was assessed late fees. It's worth noting that in denying Assist's petition, the FCC pointed out that Assist not only missed the filing deadline, but the 45-day window to submit revisions to Form 499-Q, suggesting the possibility that the outcome may have been different if the forms were correctly submitted within that 45-day window. Next Technology Transitions Policy Task Force Workshop Scheduled for Oct 15 On September 12, 2013, the FCC released a Public Notice announcing the second workshop for its Technology Transitions Policy Task Force, to be held on Tuesday, October 15, 2013. The purpose of the workshop is to focus on the consumer and competitive impacts of two key technology transitions: the replacement of copper networks with fiber and the shift from wireline services toward greater use of wireless services. Specifically, the workshop will solicit data and analysis on the potential effects on residential and business consumers as well as the competitive marketplace when providers retire or discontinue copper-based services and replace them with IP-based fiber and/or wireless service. Panelists have not yet been announced, but will reportedly include both stakeholders and observers to discuss how these technological changes could potentially affect consumers and competition. Additional details concerning the workshop agenda and panelists is forthcoming. The workshop will be free and open to the public in the Commission Meeting Room (TW-C305) at 445 12th Street, S.W., Washington, D.C., 20554. It will also be broadcast live via the internet at http://www.fcc.gov/live . Industry Europe Considers Net Neutrality and the End of Roaming Fees The New York Times is reporting that the president of the European Commission supports a plan that would phase out wireless roaming fees in the European Union starting in 2014 as part of a wider overhaul of the telecommunications industry. The European Union already caps roaming fees which, according to the Times, are so high that many European travelers often switch off their phone entirely when crossing borders — which in turn hampers development of services in the industry. The charges also reportedly make up a large chunk of telecommunications companies' profits. The plan, proposed by the European Commission's Commissioner for Telecommunications, Neelie Kroes, also includes rules for enforcing Net Neutrality across Europe. As reported in the previous edition of the BloostonLaw Telecom Update, oral arguments on the U.S. Net Neutrality rules were heard on Monday, September 9. According to technology reporting website Engadget, the proposal prevents internet providers from blocking and throttling content. "Firms could offer priority services like IPTV only as long as these features don't slow down other subscribers, who could walk away from contracts if they don't get their advertised speeds." In an increasingly global economy, it will be interesting to see what develops in Europe as a result of this proposal, and whether any effects will ripple across the Atlantic to affect the U.S. industry. The trend of wireless carriers selling their cell towers to raise cash appears to be continuing as a report from Bloomberg indicates that AT&T is structuring a deal with TAP Advisors and JPMorgan Chase that could value these assets at as much as $5 billion. AT&T Reportedly Seeking Sale of Cell Towers Valued at $5 Billion Potential buyers include one of the three major US tower companies: Crown Castle, SBA Communications or American Tower. AT&T indicated last March that it was receptive to the sale of its wireless towers and other non-core assets. According to a recent JP Morgan analyst’s report, AT&T has about 10,000 towers, which generate close to $326 million in annual revenue through lease agreements. A sale of these assets could bolster AT&T’s balance sheet and give the company additional resources as it pursues a reported $14 billion network upgrade as well as a stock buyback that could cost more than $11 billion. AT&T would then lease its tower space back from the new owner. Earlier this month, American Tower agreed to buy the parent company of Global Tower Partners for $4.8 billion, including debt. GTP was previously the largest privately held operator of cell towers in the US. Last year, Crown Castle paid $2.4 billion to T-Mobile USA for exclusive rights to lease and operate 7,200 of T-Mobile’s towers for 28 years, with the option to purchase the towers at the end of the lease. Calendar At A Glance
Sept. 18 – Reply Comments on reforms to protect VRS program are due.
Sept. 18 – Comments are due on FCC’s Notice of Proposed Rulemaking on Advanced Wireless Services.
Sept. 20 – Regulatory fees are due.
Sept. 26 – FCC Open Meeting
Sept. 27 – Challenges to FCC Census Blocks that price cap carriers have requested funding to serve as part of the second round of CAF Phase I are due.
Oct. 7 – Comments on proposed changes to FCC Form 555 (annual Lifeline ETC certification) are due.
Oct. 8 – Electronic filing deadline for Form 497 for carriers seeking support for the preceding month and wishing to receive reimbursement by month’s end.
Oct. 14 – Deadline to seek extension of CALM Act small provider grace period.
Oct. 15 – Filing deadline for FCC Form 481
Oct. 16 – Reply Comments are due on FCC’s Notice of Proposed Rulemaking on E-Rate 2.0.
Oct. 16 – Reply Comments are due on FCC’s Notice of Proposed Rulemaking on Advanced Wireless Services.
Oct. 28 – Responses to FCC Census Blocks that price cap carriers have requested funding to serve as part of the second round of CAF Phase I are due.
Nov. 1 – Reply Comments are due on FCC’s guidelines for human exposure to RF electromagnetic fields.
Nov. 4 – Comments on the continuation of the BroadbandMatch website tool are due. | 
David George and Bill Noyes
