Photo of Michael Dover

Below is Kelley Drye’s preview of the items under consideration at the Federal Communication Commission’s (FCC’s) upcoming monthly Open Meeting, to be held on July 13, 2017.  Consistent with the trend since he took over the Commission, Chairman Ajit Pai continues to schedule a large number of items.  Indeed, for the sixth month in a row, the Commission has six or more items on its agenda.  This month, the agenda consists of eight items, two Notices of Proposed Rulemaking, two Notices of Inquiry, two Reports and Orders, and one Order on Reconsideration.

Each agenda item is summarized below.  Note: these brief summaries are based on draft items, which may differ from the final items released following the Open Meeting.  Please check with Kelley Drye after the meeting for more information on the items below.

Continue Reading What to Expect at the FCC’s July 2017 Open Meeting

iStock_000006131068MediumYesterday, the U.S. Court of Appeals for the Sixth Circuit reversed the FCC’s order preempting Tennessee and North Carolina laws that prevented municipalities from deploying cable services, video services, and Internet services beyond their current territorial boundaries to underserved nearby areas.  The decision is a setback for Chairman Wheeler, who had pushed the preemption decision through as a means to promote broadband deployment.  Republican Commissioners Pai and O’Reilly – who had dissented from the order – hailed the court’s decision as vindication and urged the Commission to change its policy approach to broadband deployment.  The Chairman’s statement appeared to concede that the Commission would not address municipal broadband again, offering instead that he would testify in support of state legislation removing bans on municipally-owned broadband services.

The Court’s decision was based on last year’s preemption by the FCC of most of the Tennessee and North Carolina laws because it would further the statutory interest of increasing broadband investment under Section 706 of the Telecommunications Act of 1996.  However, the Court concluded that “no federal statute or FCC regulation requires the municipalities to expand or otherwise to act in contravention of the preempted state statutory provisions.”  Instead, federal statutes and FCC regulations permitted providers to choose the geographic area that they serve.

The Court found that the FCC’s preemption order merely attempted to decide who gets to make the choice of whether to expand geographically, the state or municipalities. Under these circumstances, the Court found that Congress must clearly articulate the FCC’s power to preempt a state law in a clear statement specifically authorizing preemption, treating the federal statute “with great skepticism and read in a way that preserves a State’s chosen disposition of its own power.”  The FCC’s reliance on Section 706 was therefore found to be fatal to its preemption determination under this analysis.  The Court noted the aspirational nature and absence of express language referencing regulation of public entities in that Section, and concluded that “Section 706 cannot be read to limit a state’s ability to trump a municipality’s exercise of discretion otherwise permitted by regulations.”  However, the Court carefully explained that its decision did not reach whether or not Section 706 has any preemptive power, only that that Section could not be used to preempt state laws regulating municipalities.

Yesterday’s holding is a setback for the FCC and for at least some municipal broadband deployments.  Its ultimate effect on broadband deployment is disputed (among the Commissioners in particular), but appears to end the FCC’s involvement in promoting publicly owned broadband deployments.  Entities deploying broadband services should look to state laws and regulations for guidance on such deployments.

stock_01092015_0377On April 16, 2015, Senior Associate Michael Dover lead a “Workshop on Cloud Computing and Wireless Networks” at the 2015 Wireless Telecommunications Symposium in New York City.  The presentation addressed 21st century concerns with cloud computing and its specific application to wireless networks.

Continue Reading Mike Dover Presents at the Wireless Telecommunications Symposium

After dropping hints for the past two weeks, FCC Chairman Wheeler announced several measures Wednesday to respond to the DC Circuit’s decision in Verizon v. Federal Communications Commission, ____ F.3d ___ (D.C. Cir. 2014) (“Verizon Net Neutrality Order”), which we summarized in an earlier blog post.  Chairman Wheeler seeks to “enhance” the transparency rule that was affirmed by the court, while recasting the anti-blocking and non-discrimination “goals” of the Open Internet Order in a way that their objectives could be fulfilled despite the court’s decision. The FCC also opened a new docket, GN Dkt. No. 14-28, in which parties may offer comments on how the FCC should proceed in light of the court decision. These actions and Commissioners Pai and O’Rielly’s statements appear to set the stage for yet another clash between Democratic and Republican Commissioners on this issue.

In the Verizon Net Neutrality Order, the Court deferred to the FCC’s understanding of its authority with respect to Internet access providers, and affirmed the agency’s finding that Section 706 of the 1996 Telecommunications Act vests the FCC with certain authority to regulate how broadband providers treat edge providers of content and applications. Today’s announcement by Chairman Wheeler invited the Commission to build on this authority by proposing new enforceable rules “that will meet the court’s test for preventing improper blocking of and discrimination among Internet traffic.” Chairman Wheeler also said the Commission will consider how Section 706 can be used to further non-discrimination, including setting an enforceable legal standard, evaluating individual cases to determine whether that standard has been met, and identifying undesirable broadband provider behavior.

In newly-created Docket 14-28, the FCC solicits comments on the conduct of the Verizon Net Neutrality Order’s remand, specifically “what actions the Commission should take, consistent with our authority under section 706 and all other available sources of Commission authority, in light of the court’s decision.” The Public Notice sets no comments timeline, but states that comments filed within the next thirty days (March 21, 2014) “will be especially helpful.” And, while the Public Notice seeks comments on authority in addition to the Commission’s authority under Section 706, Chairman Wheeler’s statement today appears to reserve judgment on reclassifying Internet access service as a telecommunication service, stating that “the Commission has the ability to utilize it if warranted.”

Finally, in light of the new docket and proposed rules, Chairman Wheeler indicated that the Commission would forgo seeking further judicial review of the Verizon Net Neutrality Order, but the agency would hold “major internet service providers” to their commitments to honor the safeguards in the 2010 Open Internet Order during formulation of the new proposed rules.

Not surprisingly, in response to the opening of the new docket, the two Republican Commissioners registered their dismay in separate statements, each voicing a concern that Open Internet rules are a solution in search of a problem. Commissioner Ajit Pai voiced his concern that the Commission did not first seek guidance from Congress before proceeding and “the specter of Title II reclassification hovers ominously in the background.” Commissioner Michael O’Rielly expressed his fear that adoption of further net neutrality rules under authority of Section 706 could “be used not just to regulate broadband providers, but eventually edge providers.”

Earlier this month, the U.S. District Court for the Eastern District of Missouri (“District Court”) made a potentially significant pronouncement regarding the procedure affecting interpretation and enforcement of interconnection agreements and the types of claims that can be brought. In Level 3 Communications, LLC and Broadwing Communications, LLC v. Illinois Bell Telephone Co., et al.,  4:13-cv-01080-CEJ (E.D. Mo. Feb. 4, 2014), the District Court granted in part a motion to dismiss filed by several AT&T ILECs against two CLECs whose complaint claims that the AT&T ILECs were, among other things, violating their interconnection agreements and Sections 201, 202, 251, and 252 of the Communications Act of 1934, as amended, 47 U.S.C. §§201, 202, 251, and 252 (the “Telecom Act”), by not providing interconnection at cost-based rates.

Several aspects of the District Court’s Memorandum Opinion and Order (“Order”) merit mention. In the absence of direct authority in the Eighth Circuit, in which the District Court sits, the Order found that breach of interconnection agreement disputes may directly be filed in federal courts, i.e., without the need to first go to the state commission that arbitrated and/or approved it. The Order noted a split among federal appellate courts on whether disputes regarding interpretation and enforcement of interconnection agreements should first be filed before a state public service commission, and the Level 3 Court adopted the rationale of the Fourth. In contrast, the Third and Eleventh Circuits (and potentially the Seventh Circuit) continue to require such disputes first be filed with a state public service commission.

In addition, the District Court concluded the plaintiffs had successfully stated a claim that the AT&T ILECs violated Sections 251 and 252 as a result of an ILEC’s breach of an interconnection agreement. Relying in part on the Federal Communications Commission’s decision in Core Communications Inc. v. Verizon MD., Inc., 18 FCC Rcd. 7962, 7971-7973 (2003), the Order explained that “Section 251(c)(2) expressly requires defendants to provide interconnection ‘on rates… in accordance with the terms and conditions of any agreement.’” However, the District Court dismissed the CLECs’ claim that the AT&T ILECs violated Sections 201 and 202 of the Telecom Act by engaging in unjust, unreasonable charges, practices, classifications, regulations, facilities, or services, and unjust and unreasonable discrimination. The District Court agreed with the AT&T ILECs’ argument that the incumbent carriers were not acting as “common carriers” under the Telecom Act when providing Section 251 interconnection because fulfillment of the duty to interconnect under Section 251 was equate to the provision of “telecommunications service.” The District Court relied on the analysis in Global Naps, Inc. v. Bell Atlantic-New Jersey, Inc., 287 F. Supp. 2d 532 (D. NJ. 2003) to reach the result.

While the immediate impact of the Order may be limited to within the other federal trial courts of the Eighth Circuit, the Order does highlight the split in authority among the federal appellate courts. Of course, the case may be appealed to the Eighth Circuit which has yet to pass on this issue. Moreover, the Order highlights possibly evolving views on the distinctions between obligations imposed on ILECs under Section 201 and 202, and Sections 251 and 252 in terms of claims for breach of interconnection agreements.

On January 22, 2014 the D.C. Circuit Court of Appeals issued a two-page per curiam decision dismissing a petition by DISH Network, LLC that challenged the FCC’s “guidance” on the interpretation of agency law in the context of Telephone Consumer Protection Act of 1991, 47 U.S.C. § 227 (“TCPA”). In its May 9, 2013 Declaratory Ruling, the FCC held that a seller could be held vicariously liable for a telemarketer’s TCPA violations if the telemarketer acted as an agent of the seller under the federal common law of agency. Declaratory Ruling, ¶ 28; see Kelley Drye Client Advisory: FCC Opens the Door to Vicarious Liability for Third-Party Telemarketing Under Certain Conditions. However, the Declaratory Ruling went on to provide “guidance” to Courts applying the federal common law of agency. The paragraphs of the Declaratory Ruling at issue on appeal provided hypothetical examples which purported to apply the federal common law of agency and to detail factors for a Court’s consideration. Id. at ¶¶ 46, 47. DISH Network, LLC challenged this guidance as beyond the FCC’s authority and as an incorrect application of the federal law of agency.

On review, the FCC asserted that this portion of the order was not intended to be binding, and thus challenged the court’s jurisdiction to hear challenges to the context of the guidance. Relying on the FCC’s concessions in its brief and oral argument, the Court concluded that the FCC’s guidance is not a final order ripe for judicial review. See Fox Television Stations, Inc. v. FCC, 280 F.3d 1027, 1037 (D.C. Cir. 2002).

As a result of the D.C. Circuit’s decision, no Court will be bound by the FCC’s guidance applying the law of agency in the context of TCPA violations. Questions of agency will be litigated in individual cases, but courts may not afford the FCC’s guidance special deference and are free to credit or disregard the FCC’s opinions on the application of agency law.

The Telecommunications Act of 1996 imposes limitations on a local government’s ability to deny permits to construct telecommunication towers. These include, among others, prohibitions against discrimination, a review of applications within a reasonable timeframe, and a requirement that application denials be “in writing and supported by substantial evidence contained in a written record.” See 47 U.S.C. §332(c)(7)(B)(i)-(iv). The statute juxtaposes these restrictions against an express preservation of a local government’s “decisions regarding the placement, construction, and modification of personal wireless service facilities.” Id. at § 332(c)(7)(A).

Recently, some courts have strictly construed Section 332(c)(7)(B)’s prohibitions. For example, last week, the 9th Circuit U.S. Court of Appeals held that a local government’s requirement that municipal voters approve certain constructions was not subject to the prohibitions of Section 332(c)(7). In Omnipoint Commc’ns Inc. v. City of Huntington Beach, — F. – -, 2013 WL 6486240 (9th Cir. Dec. 11, 2013), a seventeen year-old voter initiative amended the local government’s charter to require city council and voter approval before construction costing more than $100,000 occurred on city-owned property. After initially approving the carrier’s siting of antennas in a city park within a reasonable time but discovering that the construction costs exceeded $100,000, the local government required that the construction be approved by voters. The carrier filed suit arguing that Section 332(c)(7)’s restrictions barred applying the voter-initiative requirement to the proposed construction.  Continue Reading Courts Continue to Strictly Interpret the Preemptive Scope of Tower Siting Rules