Since its adoption, the Telephone Consumer Protection Act (“TCPA”) has periodically been attacked as unconstitutional on grounds that it violates the First Amendment right to free speech due to its content-based restrictions. Until today, those attacks have generally failed, leaving defendants with the threat of potentially crippling statutory damages. Today, the Fourth Circuit announced that part of the TCPA, an exemption for calls to collect government debts, is unconstitutional and will be stricken from the Act.
Highlighting recent network security and corporate espionage issues involving foreign-owned carriers, the FCC plans to take the unprecedented step of denying a Chinese telecommunications provider’s application to offer service in the United States based on law enforcement concerns at its next open meeting on May 9, 2019. The agency would conclude that China Mobile USA, a Delaware corporation ultimately owned by the Chinese government, is vulnerable to foreign exploitation that could undermine the security and reliability of U.S. networks. The proposed denial is in line with the 2018 recommendation of the federal agencies commonly known as “Team Telecom,” which represented the first time the group called for the rejection of a carrier’s application due to security risks. The FCC also anticipates freeing up additional spectrum for commercial wireless operations by allowing shared use of the 1675-1680 MHz band currently allocated for federal weather monitoring operations. Rounding out the major actions on the May agenda, the FCC expects to seek comment on the procedures governing its long-awaited auction of “833” toll free numbers, adopt rules aimed at improving the Video Relay Service (“VRS”) used by individuals with hearing or speech disabilities, and propose the regulatory fees for fiscal year 2019.
You will find more details on the significant May meeting items after the break:
The Federal Communications Commission (“FCC”), at its April 12, 2019 Open Meeting, voted to adopt a Public Notice that proposes application and bidding procedures for the single, simultaneous auction of three mmW spectrum bands—37 GHz (37.6-38.6 GHz), 39 GHz (38.6 GHz-40 GHz), and 47 GHz (47.2-48.2 GHz)—as we previously reported. The Public Notice lays the groundwork for the second-ever incentive auction (in the 37 and 39 GHz Bands) and continues the FCC’s intent to make more mmW band spectrum available for auction. The auction is scheduled to begin on December 10, 2019. Comments on the Public Notice are due by May 15, 2019 and reply comments are due by May 30, 2019.
Among the items being considered at the upcoming April 12, 2019 Federal Communications Commission (“FCC” or “Commission”) open meeting is possible regulatory forbearance of certain legacy regulatory and structural requirements applicable to Bell Operating Companies (“BOCs”), price cap local exchange carriers (“LECs”), and independent rate-of-return carriers (“RoR carriers”). Acting on a nearly year-old USTelecom petition, the FCC’s draft Memorandum Opinion and Order (“Order”) proposes to forbear from enforcement of three regulatory requirements: (i) that independent RoR carriers offer in-region long distance service through a separate affiliate (“structural separations”); (ii) that BOCs and price cap LECs do not discriminate in service provisioning intervals and that they file special access provisioning reports; and (iii) that BOCs provide nondiscriminatory access to poles, ducts, conduits, and rights-of-way (collectively, “pole attachments”). However, the draft Order declines to decide on USTelecom’s request for forbearance from certain network unbundling and resale requirements. The Commission’s deferral on the unbundled network elements (“UNE”)/resale issue is not surprising in light of the significant industry and consumer opposition to this aspect of USTelecom’s petition. With the exception of the few comments supporting USTelecom’s petition, the vast majority of comments were relatively silent regarding the other forbearance requests. If adopted, the draft Order will be effective upon release.
FCC Chairman Ajit Pai has circulated a Notice of Proposed Rulemaking (“NPRM”) for consideration at the agency’s next open meeting on April 12, 2019 to expand protections for over-the-air reception devices (“OTARD”) to include hub and relay antennas that are part of the infrastructure needed for 5G deployments nationwide. The draft was released on March 25th and so far there have been no meetings on the draft reported in the docket, so it remains to be seen whether local governments or homeowners’ association groups, for example, will resist this action.
A new report from the Wall Street Journal on FCC robocall enforcement set off a minor scrum over the effectiveness of the FCC’s TCPA efforts under Chairman Pai. The report claimed that, despite recent eye-popping enforcement actions and policy proposals aimed at curbing unwanted calls, the FCC collected only a fraction of those fines so far. Out of $208.4 million in fines issued since 2015 for violations of the FCC’s robocalling and associated telemarketing rules, the agency collected just $6,790, or less than one-hundredth of one percent. None of the over $200 million in robocall-related fines imposed under Chairman Pai’s leadership have been collected to date, including the record-setting $120 million penalty issued last year against a robocalling platform and its owner for placing over 96 million “spoofed” marketing robocalls.
This report prompted commentary from Commissioner Rosenworcel, who tweeted that these “measly efforts” were “not making a dent in this problem” and called for carriers to provide free call blocking tools to consumers. In our view, however, the report really doesn’t relate to the vigor – or alleged lack thereof – of FCC robocall enforcement efforts. Instead, the small amount of assessed fines that are actually collected starkly demonstrates the internal and external hurdles faced by the FCC, which impact all types of enforcement actions, not just robocalls. The report likely will rekindle Congressional criticism of FCC enforcement processes and calls for more systematic solutions to the problem of unwanted calls.
In February 2019, the FCC issued an Enforcement Advisory warning marketers of LED signs that their products must be authorized, properly labeled, and contain the required user disclosures before being marketed in the United States. The Enforcement Advisory followed a slew of enforcement actions in 2018 totaling hundreds of thousands of dollars in penalties against importers and retailers of LED signs for violations of the FCC’s equipment marketing rules. In this special edition of Full Spectrum’s enforcement series, Partner Steve Augustino and Associate Brad Currier do a deep dive on the FCC’s LED sign enforcement initiative, breaking down the FCC’s equipment authorization rules, how they apply to LED signs, and what importers, retailers, and others in the LED sign supply chain need to do now in order to avoid FCC enforcement action later.
On March 15, 2019 the FCC adopted its Fourth Report and Order (“Order”) establishing rural call completion service quality standards for intermediate providers. While the Order remains largely unchanged from the draft circulated prior to the FCC’s March Open meeting (see our prior post) for more details on the draft Order), the FCC made one significant change that should interest intermediate providers handling calls destined for termination outside of the United States. The adopted Order clarifies that the new rules do not apply to non-U.S. intermediate providers on calls terminating outside of the United States. As a result, the Order eases compliance requirements for the final U.S. intermediate provider in a call path destined for foreign termination.
The FCC plans to adopt an order eliminating the controversial rural “rate floor” that restricts the amount of Universal Service Fund (“USF”) support received by some carriers to build and maintain networks in underserved areas at its next meeting scheduled for April 12, 2019. The rural rate floor, which requires carriers receiving Connect America Fund (“CAF”) support to charge a minimum monthly rate or risk losing subsidies, has been a longstanding target of criticism by Chairman Pai as well as consumer groups, Tribal authorities, and rural carriers. The proposed order follows a nearly two-year freeze in the rate floor implemented soon after Chairman Pai assumed leadership and would avoid an almost 50% increase in the rate floor scheduled to take effect in July 2019. Rate floor elimination would provide significant regulatory relief to rural carriers by increasing flexibility over service rates, while reducing associated reporting and customer notification requirements.
It’s once again full speed ahead on spectrum and 5G deployment at the FCC, as the agency plans to take action at its next open meeting scheduled for April 12, 2019 on a slew of measures aimed at making additional millimeter wave (“mmW”) frequencies available to support 5G wireless technologies, the Internet of Things, and other advanced services. Topping the agenda, the agency expects to propose procedures for the simultaneous auction of spectrum for commercial wireless services in three mmW bands encompassing 3400 megahertz. As we previously reported, the proposal would clear the way for the FCC’s second-ever incentive auction (the first being the March 2017 broadcast spectrum incentive auction) designed to clear out incumbent licensees by offering payments in exchange for relinquishing current spectrum holdings. The agency also anticipates reforming access to mmW bands to facilitate the auction and extending long-standing protections for over-the-air reception devices (“OTARD”) to hub and relay antennas essential to 5G network deployment. Rounding out the major actions on the April agenda, the FCC plans to forbear from certain legacy long-distance regulations in the face of increased competition and eliminate the controversial rural “rate floor” for high cost universal service support.
You will find more details on the significant April meeting items after the break: