In a unanimous decision at its February open meeting, the FCC adopted a Report and Order and Further Notice of Proposed Rulemaking (“FNPRM”) further reforming its IP Captioned Telephone Service (“IP CTS”) program, which is part of the telecommunications relay service (“TRS”). After the IP CTS program grew to 80 percent of the costs covered by TRS, last June the FCC approved a package of reform measures to control costs by imposing interim compensation rates to bring compensation closer to FCC determined actual average provider costs. In the instant Order, the FCC takes steps (over the objections of the IP CTS providers) to address potential waste, fraud and abuse by requiring IP CTS providers to submit user registration information to the existing video relay service (“VRS”) Database to limit program access to only those determined to be eligible to use IP CTS. The Commission also granted waivers of its emergency call handling requirements to reduce the requirements on IP CTS providers to relay certain information to PSAPs and initiate reconnection of a disconnected 911 call. The FNPRM proposes additional changes, including making permanent the emergency call handling requirement changes granted by waiver. Comments will be due 30 days after publication of the item in the Federal Register and reply comments will be due 45 days after publication.
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:
After more than twenty years, VoIP’s unclassified status may be coming to an end. Last month, the Eighth Circuit Court of Appeals issued a decision in Charter Advanced Services LLC v. Lange in which it considered whether an interconnected VoIP service offered by Charter can be regulated like a telecommunications service by the Minnesota Public Utilities Commission (“MPUC”). The court recognized that the Federal Communications Commission (“FCC”) has repeatedly failed to resolve the issue of VoIP service regulatory classification. However, the Eight Circuit upheld the district court’s finding that Charter’s VoIP service is an information service that is federally preempted from state regulation based on its interpretation of the Telecommunications Act of 1996 (the “Act”) and FCC orders.
In an event sure to garner significant attention from tech, consumer protection, and government stakeholders, oral argument on the consolidated appeals of the FCC’s Restoring Internet Freedom Order (“Order”) will take place on February 1, 2019, at the D.C. Circuit. As we previously discussed, the Order largely reversed the FCC’s own 2015 rulemaking to reclassify broadband internet access services (“BIAS”) as telecommunications services subject to a host of Title II common carrier obligations. The Order re-reclassified BIAS as information services subject to “light-touch” Title I regulations, while retaining pared-down transparency requirements on BIAS providers. The challengers allege that the FCC failed to adequately explain its changed regulatory approach, relied on faulty data, and ignored consumer complaints when issuing the Order. The oral argument will provide our first indication of which way the D.C. Circuit, which handled the last three appeals of FCC net neutrality rules with varied results, may go in this latest challenge.
On March 28, 2018, a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit granted an unopposed motion filed by the petitioners to transfer the consolidated appeals of the Restoring Internet Freedom Order to the D.C. Circuit. As we explained in an earlier blog post, the D.C. Circuit decided the last three challenges of the FCC’s open Internet policies, making it a natural venue to hear this appeal. And while this decision will add a dose of familiarity to the case (particularly if the case is heard by judges who participated in the earlier challenges), there still remains significant uncertainty with respect to the ultimate outcome. We will continue to track the appeal as it develops.
On March 8, 2018, the United States Judicial Panel on Multidistrict Litigation randomly selected the U.S. Court of Appeals for the Ninth Circuit to hear the petitions for review of the Federal Communications Commission’s (FCC’s) Restoring Internet Freedom Order. Under FCC rules, petitioners of FCC orders have ten days from the date of publication of the order to file an appeal and notify the FCC that they would like be considered for the judicial lottery drawing. In this case, petitions had been filed in the D.C. Circuit and the Ninth Circuit.
The decision is notable because the last three appeals of previous FCC net neutrality orders were heard in the D.C. Circuit. The last time the Ninth Circuit heard a challenge of FCC net neutrality rules was nearly 15 years ago, in Brand X Internet Services v. FCC, which led to the Supreme Court’s seminal opinion on the FCC’s classification of cable modem service in 2004, National Cable & Telecommunications Association v. Brand X Internet Services. The Brand X decision in turn ushered in a decade of deregulatory policy in the broadband ecosystem.
The Ninth Circuit’s most recent foray into broadband policy came last month when an en banc panel held that the “common carrier exemption” in Section 5 of the Federal Trade Commission (FTC) Act—which prohibits unfair and deceptive trade practices—was “activity-based” and therefore that the FTC could bring a suit against AT&T Mobility for alleged violations of Section 5 related to the company’s non-common-carrier broadband service. A previous panel had held that AT&T Mobility was entirely exempt from Section 5 based on its “status” as a common carrier, raising significant questions about the boundaries of FTC and FCC jurisdiction. The en banc decision brings the Ninth Circuit back into harmony with other circuits that have addressed the issue.
We’re monitoring the appeal and will continue to update this blog with developments.
The Republican-led FCC’s effort to get out of the business of regulating broadband providers’ consumer practices took a step forward on Monday. In an appeal that has been proceeding in parallel with the FCC’s “Restoring Internet Freedom” reclassification proceeding, the U.S. Court of Appeals for the Ninth Circuit issued an opinion giving the Federal Trade Commission (FTC) broad authority over practices not classified by the FCC as telecommunications services. Specifically, the Ninth Circuit, sitting en banc, issued its long-awaited opinion in Federal Trade Commission v. AT&T Mobility, holding that the “common carrier exemption” in Section 5 of the FTC Act is “activity based,” exempting only common carrier activities of common carriers (i.e., the offering of telecommunications services), and not all activities of companies that provide common carrier services (i.e., rejecting a “status-based” exemption). The case will now be remanded to the district court that originally heard the case. Coupled with the FCC’s reclassification of Broadband Internet Access Services (BIAS) in the net neutrality/restoring internet freedom proceeding, the opinion repositions the FTC as top cop on the Open Internet and broadband privacy beats.
On Thursday, February 22, 2018, the Federal Communications Commission (FCC or Commission) published the Restoring Internet Freedom Order (the Order) in the Federal Register.
As we previously discussed, the Order effectively reverses the Commission’s 2015 Open Internet Order, reclassifying broadband Internet access service as a lightly regulated Title I “information service” and eliminating the 2015 Order’s open Internet rules (while retaining a modified version of the transparency requirement).
The Order will not go into effect until after the Office of Management and Budget completes its Paperwork Reduction Act review, which could take several months. However, last Thursday’s publication is significant because it triggers deadlines for challenges to the Order, both in the courts and in Congress.
At the January Open Meeting, the Federal Communications Commission (“FCC”) adopted a Public Notice (“PN”) that sets July 24, 2018 as the start of the Connect America Fund Phase II auction (“Phase II Auction”) in which service providers can compete for up to $1.98 billion annually in financial support over 10 years. This will be the first time a reverse, multi-round auction is used to provide support for high-cost rural areas. The FCC also adopted an Order on Reconsideration (“Recon Order”) that resolves outstanding reconsideration petitions related to the Phase II Auction.
As the second session begins, the 115th Congress will pick up where it left off on some key telecommunications and technology issues. In this episode of Kelley Drye’s Full Spectrum podcast, Partner John Heitmann and Jennifer McCadney, Special Counsel in Kelley Drye’s Government Relations and Public Policy group, examine the current status of these issues and the implications for what is likely to occur in the coming months. The three categories of legislation they cover are (1) Mobile, 5G and Spectrum, (2) Rural Broadband Access, and (3) Internet, Privacy, Cybersecurity and Data Security. To listen to this episode, please click here.