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On Friday, May 31, 2019, the FCC released a much-anticipated notice of proposed rulemaking (“NPRM”) to consider the adoption of an overall budget cap on the Universal Service Fund (“USF”), separate from any individual budgets for each of the four USF programs. The NPRM is in response to years-long advocacy on the part of Commissioner O’Rielly to impose budgets on USF spending, and it comes over dissent of the two Democratic Commissioners. While Commissioner O’Rielly justified the proposal as responsible stewardship of public money and said it would not limit funding in the near future, Commissioners Rosenworcel and Starks criticized the proposal as undermining the goals of Universal Service and, at worst, creating a “universal service hunger games” among the support programs.

The release of the NPRM was our first look at the specifics of a proposal that broke a month ago. The NPRM does not propose a specific budget, primarily raises questions about how to proceed, and does not contain any proposed rules. Nevertheless, opponents of the proposal have been most vocal since word of the NPRM came out, and we expect those USF stakeholders to continue in opposition to the approach. Meanwhile, proposals to reform USF contributions remain stalled (and lacking any consensus), while the contribution factor hovers around 20% of assessable revenues.


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At its May 2019 Open Meeting, the FCC approved a Public Notice (“Notice”) that sets the stage for the auction of certain toll free numbers with the dialing code 833—the first time an auction mechanism will be used to distribute any numbering resources. The FCC intends to auction over 17,000 numbers set aside during the opening of the 833-prefix because more than one entity expressed an interest in the number. In 2018, the FCC approved the use of competitive bidding to allocate these numbers. With this Public Notice, the FCC sets proposed ground rules for the auction. Comments on the auction pre-bidding procedures proposed in the Notice are due by June 3, 2019 and reply comments by June 10, 2019.

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Continuing to implement the FCC’s rules to improve service to rural areas, the FCC announced that all “intermediate providers” (i.e., entities that carry, but do not originate, long distance traffic) must register with the agency by May 15, 2019. The registration requirement stems from rules adopted by the FCC last summer designed to increase

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.


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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

“Yes FCC, we meet again old friends” was the message comedian John Oliver had for the FCC on his show Last Week Tonight, when he devoted nearly 20 minutes to an in-depth criticism of “robocalls” and the FCC’s approach to regulating such calls. (Oliver had previously taken aim at the FCC in multiple segments about net neutrality – which included comparing then-FCC Chairman Tom Wheeler to a dingo – and he allegedly crashed the FCC’s comment system after encouraging his viewers to submit pro-net neutrality comments in the proceeding that led to the decision to revert back to light-touch regulation of broadband Internet access service.) He ended the March 10th segment by announcing that he was going to “autodial” each FCC Commissioner every 90 minutes with a satirical pre-recorded message urging them to take action to stop robocalls.

The irony of John Oliver making robocalls in order to protest robocalls is rather funny. But, it raises the question – are these calls legal? The fact that the calls appear to be lawful – and would be legal regardless of the action Oliver called for in the program – highlights that there is an important distinction between illegal calls and unwanted calls. In the end, Oliver’s segment demonstrates some of the problems with modern efforts to apply the Telephone Consumer Protection Act (“TCPA”), a statute that was adopted well before the proliferation of cell phones in America, and seems to deter many legitimate calls while not sufficiently stopping scam calls.


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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.

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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.

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[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.


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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.
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