After multiple enforcement actions totaling hundreds of thousands of dollars in penalties against importers and retailers of LED signs last year, it appears that the message has not been fully received. To the contrary, the FCC is back at it in enforcing its equipment marketing rules against importers and retailers of LED signs in 2019. In a recent Enforcement Advisory, the FCC again warned companies marketing noncompliant LED displays that they may be subject to costly investigations and significant monetary penalties. As we previously reported, these warnings should put all importers and retailers of LED signs – many of whom may not know FCC rules apply to them – on notice that their products should be authorized, properly labeled, and contain the required user disclosures before being marketed in the United States. The FCC often uses Enforcement Advisories to set the stage for future enforcement action and the agency appears poised to move forward with another wave of enforcement actions in the coming months. It is therefore critical that companies assess their equipment marketing compliance procedures now to avoid Commission enforcement later.
Back for its 10th year, our most popular webinar offers an in-depth discussion on the federal Universal Service Fund for participants in USF programs and for contributors to the Fund. This webinar will address major developments in the four support funds and discuss the pressures on the USF contribution system in an era of 20% contribution rates. In addition, as usual, we will offer tips and insights into managing audits and investigations in these highly scrutinized programs.
On February 4, 2019, the FCC announced a plan to create a new division housed in its Enforcement Bureau, dedicated to prosecuting fraud in the agency’s Universal Service Fund (“USF”) programs. Citing to recent USF-related proposed fines and voluntary settlements, the FCC asserted that the creation of a specialized Fraud Division was necessary to combat misuse of funds under the High Cost, E-Rate, Lifeline, and Rural Health Care programs that make up the USF. The FCC’s brief, two-page Order leaves many questions unanswered about the proposed Fraud Division’s ambit and the status of the “USF Strike Force” that preceded it. However, the Order signifies that the FCC plans to redouble its fraud enforcement efforts in 2019 following recent setbacks on the USF rulemaking front. As a result, eligible telecommunications carriers and other recipients of USF support should keep a close watch as the scope and function of the new Fraud Division starts to take shape.
On January 30, 2019, Geoffrey Starks was sworn in as the newest FCC Commissioner, restoring the agency to its full complement of five Commissioners for the first time since the summer. In announcing his swearing in, Commissioner Starks stated he intends to focus on strong FCC enforcement “protecting the most vulnerable and holding wrongdoers accountable.” He added that he will “serve the public interest by encouraging innovation, competition, and security, as well as advancing policies to increase the quality, availability, and affordability of our country’s communications services.” Commissioner Starks joins Commissioner Rosenworcel as one of the two Democratic Commissioners at the FCC. He fills the seat vacated by former Commissioner Mignon Clyburn, who left in June 2018 after nearly nine years at the FCC, including a stint as acting Chairwoman in 2013. Commissioner Starks will complete Ms. Clyburn’s five-year term, which expires at the end of June 2022. Although Commissioner Starks’ swearing in is not expected to result in any immediate FCC policy shifts, his addition provides a strong voice in favor of Open Internet regulation, Universal Service Fund reform, and enforcement.
In this edition of Full Spectrum’s recurring series on FCC enforcement, Partner Steve Augustino and Associate Brad Currier highlight some of the major developments in FCC enforcement in 2018 and discuss potential next steps in the year ahead.
Part one of this episode focuses on the big picture in 2018 and the FCC’s use of non-monetary tools to encourage adoption of industry best practices. Part two features a deeper dive into FCC enforcement trends on revocation of authority and inability to pay claims, and takes a close look at the FCC’s expanded robocalling enforcement.
Just before suspending most operations due to the ongoing partial federal government shutdown, the FCC announced its tentative agenda for its next open meeting, scheduled for January 30, 2019. While the January agenda is brief compared to the jam-packed meetings that typified 2018, the FCC plans to adopt items to advance new anti-spoofing measures combating manipulated caller ID information and take further action to address the management and handling of 911 calls for the IP Captioned Telephone Service (“IP CTS”) that aids communication by those with hearing loss. Rounding out the notable meeting items, the FCC would adopt a mechanism to phase down legacy high-cost support for price cap carriers as well as competitive carriers previously subject to the “identical support rule” and transition such support to the winners of the recent Connect America Fund (“CAF”) Phase II auction.
You will find more details on the significant January meeting items after the break:
In this edition of Full Spectrum’s recurring series on FCC enforcement, Partner Steve Augustino and Associate Brad Currier address the legal dangers facing entities that may be unfamiliar with telecommunications regulation. Steve and Brad focus on a multi-million dollar DOJ fraud prosecution involving the E-rate fund and a settlement of inadvertent transfers of FCC licenses occurring as a result of a transaction between two entities that are not traditionally seen as communications entities (in this case, two hospitality companies). They also look ahead to two enforcement items on the agenda for the FCC’s September 26, 2018 Open Meeting. Click here to listen to this episode and click here to subscribe on iTunes.
On August 28, 2018, the FCC’s Enforcement Bureau announced a Consent Decree with Marriott International, Inc. (“Marriott”) to resolve an investigation into unauthorized transfers of wireless radio licenses in connection with Marriott’s acquisition of Starwood Hotels & Resorts Worldwide Inc. (“Starwood”). The civil payment levied against Marriott and the other conditions set forth in the Consent Decree serve as a reminder to companies that may not normally be subject to the FCC’s jurisdiction to thoroughly review the regulatory implications of mergers, acquisitions, or other corporate transactions as part of any due diligence conducted before a deal is reached.
As summer begins to wind down, the FCC will begin considering whether to revise or eliminate decade-old regulations, including certain rules related to the Universal Service Fund (“USF”), equipment authorization procedures, and disabilities access. The FCC kicked off its review with a Public Notice under the Regulatory Flexibility Act, which requires federal agencies to reexamine regulations within 10 years of their adoption to assess the continued need for the rules, the rules’ complexity, and whether the rules overlap or conflict with other federal regulations. The purpose of the review is to ensure that older, unnecessary rules do not remain on the books, lowering the compliance burden for smaller businesses. Although the FCC rarely eliminates a rule outright as part of this review, the comments received can help the agency identify improvements for future rulemakings or flag potential compliance issues.
The FCC recently reached a $5.25 million settlement with AT&T to resolve investigations into two 911 service outages that resulted in thousands of failed emergency calls. This edition of Full Spectrum’s series on FCC enforcement discusses the unexpected settlement and its implications on carrier network practices and the FCC’s enforcement priorities. Partner Steve Augustino and Associate Brad Currier also cover LED sign enforcement, which has recently become an area of focus for the Pai FCC as the signs interfere with communications services. Finally, they cover a rare amateur radio settlement involving both the FCC and the Department of Justice. To listen to this episode, click here and click here to subscribe on iTunes.