In a strongly worded Report and Order, Further Notice of Proposed Rulemaking, and Order (the “Order”) released on November 26, 2019, the FCC adopted several measures to protect U.S. communications networks from potential national security threats. Likely coming as no surprise to anyone following the proceeding or current news, the FCC identified Huawei Technologies Company (“Huawei”) and ZTE Corporation (“ZTE”), both Chinese telecommunications equipment manufacturers, as national security threats based, in large part, on the companies’ close ties to the Chinese government. Adding to numerous recent federal actions addressing national security concerns, the Order takes three significant steps, within the context of the universal service fund (“USF”) program, to try to mitigate national security threats to the nation’s communications networks.
The FCC proposed sweeping reforms to its process for suspending and debarring entities from participating in its largest funding programs, including the four Universal Service Fund (“USF”) programs, at its meeting on November 22, 2019. If adopted, the proposed rules would mark a sea change in FCC enforcement, allowing the FCC to cut off funding more quickly and for a wider range of alleged misconduct. The FCC also would expand the scope of these rules to cover its Telecommunications Relay Service (“TRS”) program and National Deaf-Blind Equipment Distribution Program (“NDBEP”), in addition to the High-Cost, Lifeline, E-Rate, and Rural Health Care USF programs.
The proposed rules also would impose new disclosure obligations on support recipients and require them to verify that they do not work with suspended/debarred entities. In addition, the proposed rules would create a federal reciprocity system, in which entities suspended/debarred from participating in funding programs administered by other agencies similarly would be prevented from participating in the FCC’s programs (and vice versa). The proposed rules would impact nearly every USF participant and warrant close attention. The FCC has not announced comment deadlines on its proposals, but they will likely occur in early 2020. While the FCC’s proposals are just the first step towards actual rule changes, the agency has shown every indication that it will continue moving full speed ahead on USF reform in the coming year.
At its November Open Meeting, the FCC approved a Report and Order (“Order”) that expands the contribution base for IP captioned telephone service (“CTS”), supported by the telecommunications relay service (“TRS”) Fund, to include intrastate voice communications services. Currently, only interstate voice providers (telecommunications and VoIP) are required to contribute a portion of their end-user revenues to support the TRS Fund. The Order extends that responsibility to providers with intrastate revenues. This rule change, which will be effective for the TRS Fund Year 2020-21, is intended to address an imbalance in the financial obligation on interstate versus intrastate voice providers to support IP CTS costs, which has experienced an approximately $745 million increase from 2013 to the current funding year.
The FCC plans to follow last month’s major 911 location accuracy item with another significant public safety rulemaking at its next meeting scheduled for December 12, 2019. Under the FCC’s plan, all telecommunications carriers and interconnected VoIP service providers would be required to transmit calls to 988 to 24-hour crisis services maintained by the Department of Health and Human Services and the Department of Veterans Affairs. In addition, the FCC anticipates launching two rulemakings aimed at opening up more mid-band spectrum for commercial and unlicensed uses to meet growing consumer demand for wireless broadband. The meeting agenda also includes an item addressing contentious issues surrounding intercarrier switched access charges. Moreover, the FCC will vote on three enforcement actions at the December meeting. Although, per normal practice, the agency provided no specifics on the planned enforcement actions, enforcement meeting items normally entail large fines in high-profile FCC focus areas like robocalling. While not as jam-packed as prior meetings, the December agenda underscores the FCC’s steadfast focus on public safety and spectrum reallocation in 2019.
You will find more information on the most significant proposed December meeting items after the break:
From smart homes and self-driving vehicles to drones and healthcare monitoring, Internet of Things (IoT) capabilities are a hot topic for both manufacturers and consumers. The most recent episode of Kelley Drye’s Full Spectrum podcast spotlights one of the key areas for everyone involved – maintaining security of IoT devices. Partners John Heitmann and Steve Augustino discuss cybersecurity developments, like the National Institute of Standards and Technology’s (NIST) baseline recommendations for securable devices. John and Steve describe how NIST has taken the lead in this area and what the current recommendations might mean for future regulation.
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Editor’s note: CommLaw Monitor primarily addresses developments in communications and technologies in the United States. We provide this special update regarding new regulations in Germany for the benefit of U.S. and foreign service providers alike. The security issues discussed below may have implications for all service providers.
The German Federal Network Agency, Bundesnetzagentur (BNetzA), recently launched a final public consultation on its new draft Catalogue on security requirements for telecommunications service providers and operators of public telecommunications networks. The draft is revamped significantly, but follows the same vein as its predecessors to prevent disruptions and manage security risks, by requiring providers and operators to implement technical security measures and safeguards for operating telecommunications and data processing systems. The deadline for comments on this version 2.0 of the Catalogue is 13 November 2019, but the BNetzA is unlikely to make fundamental changes at this late stage. Consequently, stakeholders should consider the draft as a reliable indicator of the official version, and assess how to best satisfy the requirements.
After a long road that included questions over the scope of FTC and FCC jurisdiction, AT&T finally settled one of two cases challenging the unlimited data plans it offered to consumers. On Tuesday, November 5, 2019 the Federal Trade Commission (“FTC”) moved to settle its October 28, 2014 complaint against AT&T Mobility, LLC (“AT&T” or “Company”) in which the FTC asserted that the Company was reducing the data speeds of customers grandfathered into unlimited plans after they had used a certain amount of data. The stipulated order, approved 4-0 by the FTC and awaiting final approval from the United States District Court for the Northern District of California, will require AT&T to dole out $60 million to eligible customers and prohibit the Company from portraying the amount or speed of mobile data in its plans, including unlimited, without disclosing any material restrictions accompanying such plans.
As we covered extensively in several previous blog posts, one of the primary consequences of the case were questions about the limits of the FTC’s jurisdiction. The case mirrored a time when the Federal Communications Commission (“FCC”) took opposing positions in successive administrations regarding whether mobile data services and other Broadband Internet Access Services (“BIAS”) were subject to FCC regulation. One of the central questions underlying the case was which agency, the FCC or the FTC, could regulate AT&T’s mobile data practices. After the FTC won a Ninth Circuit decision that its jurisdiction reaches to non-common carrier activities of common carriers (and the FCC concluded that mobile BIAS was not a common carrier service), AT&T agreed to settle the FTC case. However, so long as the jurisdiction of particular services remains in doubt, or is subject to changing FCC positions, service providers will face potential overlapping enforcement activities by the two agencies.
The FCC plans to prohibit the use of Universal Service Fund (“USF”) support to purchase equipment or services from foreign entities that it determines pose national security risks at its next meeting scheduled for November 19, 2019. As we previously reported, the ban may severely impact participants in all federal USF programs and involve a costly “rip and replace” process to remove foreign-made equipment from domestic telecommunications networks. The FCC also expects to move forward on its heavily-anticipated E911 vertical accuracy (i.e., z-axis) proceeding and adopt new requirements for wireless carriers to better identify caller locations in multi-story buildings. Rounding out the major actions, the FCC anticipates proposing new rules for suspending and debarring entities from participating in USF and other funding programs; removing longstanding unbundling and resale requirements for certain telecommunications services; and widening the contribution base for the Internet Protocol Captioned Telephone Service (“IP CTS”) to include intrastate revenues.
The draft items cover the gamut of telecommunications issues, affecting everything from the construction of next-generation 5G networks to legacy intercarrier competition rules, and should be closely watched. You will find more details on the most significant November FCC meeting items after the break:
The FCC adopted an Order on Reconsideration at its October 25, 2019 meeting modifying the broadband performance testing requirements for service providers receiving Connect America Fund (“CAF”) high-cost support. Under the Order, the FCC will delay the start of testing for many CAF recipients to better align with network deployment deadlines. The FCC also will create a “pre-testing” period to allow CAF support recipients time to assess how their networks and testing equipment perform without penalty before official testing begins. In addition, the FCC will provide more flexibility for certain testing procedures to reduce the burden on smaller service providers. The Order impacts every CAF program and deserves a close look, not only by service providers that currently receive CAF support but also by those that plan to seek such support through future programs like the Rural Digital Opportunity Fund. The Order is just the latest in a long line of reforms to the CAF since its creation nearly a decade ago and shows that the FCC still is willing to tinker with its high-cost programs to meet its broadband deployment goals. Continue Reading FCC Modifies CAF Broadband Performance Testing Requirements
On Friday, October 4, 2019, Federal Communications Commission (“FCC”) Chairman Ajit Pai circulated a draft Report and Order (“Order”) that would adopt two uncontroversial changes to the FCC’s tariff filing requirements. Specifically, a 2018 Notice of Proposed Rulemaking and Interim Waiver Order (“Notice”) teed up the potential elimination of the requirement to file annual short form tariff review plans (“short form TRP”) and of the prohibition on tariff cross-references. That 2018 Notice also granted an interim waiver of the tariff cross-reference prohibition while the short form TRP has been the subject of separate waivers for each of the past few years. As a result, the proposed Order essentially would simply be codifying the regulatory status quo.