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.
[Spencer Elg co-wrote this post]
The current and future definition of what qualifies as an automatic telephone dialing system (“ATDS” or “autodialer”) remains a hotly debated and evaluated issue for every company placing calls and texts, or designing dialer technology, as well as the litigants and jurists already mired in litigation under the Telephone Consumer Protection Act (“TCPA”). Last year, the D.C. Circuit struck down the FCC’s ATDS definition in ACA International v. FCC, Case No. 15-1211 (D.C. Cir. 2018). Courts since have diverged in approaches on interpreting the ATDS term. See, e.g., prior discussions of Marks and Dominguez. All eyes thus remain fixed on the FCC for clarification.
In this post, we revisit the relevant details of the Court’s decision in ACA International, and prior statements of FCC Chairman Ajit Pai concerning the ATDS definition to assess how history may be a guide to how the FCC approaches this issue.
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.
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.
On May 14, 2018, the FCC issued a Public Notice seeking comment on a number of issues regarding the proper interpretation of the Telephone Consumer Protection Act (TCPA) in light of the recent decision by the D.C. Circuit Court of Appeals to overturn most of the FCC’s 2015 Omnibus TCPA Declaratory Ruling. Given Chairman Pai’s strong dissent from the 2015 Declaratory Ruling and his statement praising the D.C. Circuit’s findings regarding it, this comment cycle presents a valuable opportunity for parties who have been adversely affected by the uncertainty surrounding the TCPA in certain years to provide input to the FCC on how it should interpret the statute to best serve its intended purpose.
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.
Today, the U.S. Court of Appeals for the D.C. Circuit issued its long-awaited decision reviewing the FCC’s 2015 TCPA Declaratory Ruling and Order. In the case of ACA International v. FCC, Case No. 15-1211, the Court, in a 3-0 opinion authored by Judge Srinivasan, granted in part and denied in part the various petitions for review. It set aside the FCC’s clarifications of an ATDS and its one-call safe harbor for reassigned numbers but upheld the FCC’s approach to revocation of consent. The case will now be remanded to the FCC, where the Commission will have an opportunity to reconsider the issues and address the court’s criticisms.
In prior briefing and during oral argument, Petitioners and Intervenors challenged the Order’s considerable expansion of the scope of the TCPA. Petitioners and Intervenors focused on three main issues from the 2015 Declaratory Ruling and Order: (1) the expanded definition of what types of equipment serve as an autodialer, leading to liability under the TCPA for using such technology to place calls, (2) the called party/reassigned number provision, which mandates the imposition of strict liability for any call beyond the first call to a reassigned number, and (3) whether the FCC must give clearer guidance relating to how consumers can revoke consent to receive calls or text messages.
To read our full advisory, please click here. We are reviewing the decision in detail and will have a more comprehensive summary available soon. In addition, Kelley Drye will be hosting a free webinar to discuss the implications of the decision and the future of TCPA reform efforts at the FCC and in Congress. More details will follow in the next few days.
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.