Lucky Number 7? FCC Proposes Section 7 Rules to Fast-Track Review of New Technologies

On February 22, as part of its effort to accelerate the deployment of new and innovative technologies, the FCC adopted a Notice of Proposed Rulemaking (“NPRM”) to develop procedures for implementing section 7 of the Communications Act of 1934 (which was added by a 1983 amendment).  Section 7 states that the Commission “shall determine whether any new technology or service proposed in a petition or application is in the public interest within one year after such petition or application is filed.”  This proceeding presents a valuable opportunity for parties to potentially expedite FCC approval of their services, including petitions or applications that are already pending or are filed before the new rules are adopted. Continue Reading

Support for FTC Jurisdiction Over Broadband:  Ninth Circuit En Banc Rules  Common Carrier Exemption is “Activity,” and not “Status-based,” Reversing Earlier AT&T Victory

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.

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FCC Sets Stage for $4.5 Billion Auction by Resolving Mobility Fund Phase II Challenges

The Federal Communications Commission (“FCC”) took a major step forward on closing the “digital divide” in mobile broadband at its February meeting by unanimously adopting an Order resolving the remaining challenges to the Mobility Fund Phase II (“MF-II”) auction.  The order eases the letter of credit requirements and clarifies the collocation obligations for funding recipients, but generally preserves the MF-II auction budget, disbursement, and performance rules announced last year.  After clearing away these challenges, the FCC will focus on identifying the areas eligible for funding and conducting the auction later this year.

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FCC Net Neutrality Repeal Published in Federal Register, Triggering Deadlines for Challengers

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.

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Updated 499-A Form and Instructions Signal Start of 2018 USF Season

Last week, the FCC released its form and instructions for the 2018 499-A, due April 1st. The 499-A form is filed by almost all intrastate, interstate and international providers of telecommunications in the U.S. and reports historic annual revenue. Notably, the FCC’s Wireline Competition Bureau did not solicit comments on the form and instructions this year, but that may be due to the lack of substantive changes from the 2017 versions.  In previous years, and most recently in 2015, the Bureau sought comment on proposed revisions to the 499-A documents.

Filers, please remember to review your records carefully before filing.  Now is the time to make sure that reseller certifications are in order and to update traffic studies and jurisdictional estimates.  The form should also be reviewed against the prior year’s form for consistency.  Significant changes, such as large increases or decreases in revenue, on a particular line or the absence of revenue reporting on a line where revenue was reported the prior year, are red flags that almost always generate additional USAC scrutiny.

Finally, remember that downward revisions to the 2017 Form must be filed by March 31st.

To learn more about the form, audits and investigations and developments affecting the USF, register for our 9th Annual webinar.

USF Update: Where Are We Now?

In 2017, the Government Accountability Office (GAO) released a report focusing on the Lifeline program. Tucked away in that report was a significant discussion of Universal Service Fund (USF) contributor audits that has received little attention. In a recent episode of Kelley Drye’s Full Spectrum podcast, Partner Steve Augustino and Special Counsel Denise Smith discussed four trends in USF contributor audits that they expect to result from the GAO report.

Kelley Drye’s Communications group continues to monitor this and other USF issues. Join us on March 8th for our 9th Annual USF Update webinar as the group discusses audits, enforcement actions and more.

Beyond the Latest Frontier: Licensed, Unlicensed, and Experimental Operations above 95 GHz

Fulfilling a promise made by Chairman Pai in the fall that the Federal Communications Commission would give a close look to opening up licensed operations in the bands above 95 GHz, the FCC announced tentatively on February 1 that it will consider commencing a rulemaking to do just that at its next Open Meeting on February 22.  The Commission released a draft Notice of Proposed Rulemaking (“Draft NPRM”) with the announcement that details how the Commission may go about fostering investment and innovation in the 95-275 GHz range and beyond.  If approved, the so-called Spectrum Horizons NPRM would seek comment on potential rules for fixed point-to-point use of tens of gigahertz of new spectrum, more than 15.2 gigahertz of unlicensed spectrum, and more flexible experimental licenses in the 95-3000 GHz range. Continue Reading

Ready, Set, Bid: FCC Announces July Start Date for Auction to Provide Support for Voice and Fixed Broadband in Unserved High-Cost Areas

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.

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Does the Rural Healthcare Program Need a Check-Up? Program Under Microscope Following $18.7 Million Proposed Fine for Fraud

The Rural Health Care Program (“RHCP”) is sure to face increased scrutiny in the wake of a $18.7 million proposed fine issued by the Federal Communications Commission (“FCC”) at its January meeting against a telecommunications reseller for allegedly defrauding the program.  The FCC claims that DataConnex, one of the top five recipients of RHCP funding, violated the program’s competitive bidding rules and submitted falsified documents to increase the support it received.  The FCC recently ramped up enforcement involving the RHCP and proposed significant reforms last month aimed at improving oversight and deterring fraud.  The FCC’s actions potentially foreshadow additional restrictions on the use of RHCP consultants and the amount of available funding.

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Crunching the Numbers: FCC to Create Office of Economics and Analysis

On January 30, 2018, by a 3-2 vote, the FCC voted to establish a new Office of Economics and Analysis (“OEA”).  This decision reflects the Chairman’s ideological emphasis on incorporating a greater degree of economic analysis into the agency decision-making process.  Proponents say OEA will bolster the analytical component of FCC rulemaking, but detractors warn that if the Order is not correctly implemented, it will be used selectively or amount to little more than “bureaucratic reshuffling.”  Continue Reading

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